C. T. BECKHAM, APPELLANT,
v.
HUGH HOLBORN AND HENRY BRILLIANT, APPELLEES
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Beckham, president of Translinear Inc., appeals from a judgment requiring him to refund the purchase price of unregistered stock sold to Holborn in Florida. The court reverses, holding that Beckham is not subject to Florida jurisdiction for the sale of unregistered securities because Translinear itself did not engage in business in Florida, and Beckham's activities cannot be attributed to him individually apart from his corporate role.
Beckham is not subject to Florida jurisdiction and is not liable to Holborn. Because Translinear did not engage in a business or business venture in Florida with respect to the stock sale, service of process on the Secretary of State under § 48.181(1) was ineffectual against both Translinear and Beckham. Beckham's activities did not constitute an individual sale separate from his corporate role, and therefore he cannot be held liable under § 517.21(1) as one who personally participated in the sale.
[1] A corporate officer who personally participates in the sale of unregistered securities may be held directly liable to the purchaser under Florida securities law.
[2] Jurisdiction over a defendant under Florida's long-arm statute requires that the defendant engaged in a business or business venture in Florida.
Previewing 2 of 5 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“the court had no jurisdiction to enforce remedies against Beckham as one who has 'personally participated or aided in any way in making the sale.'”
Establishes that lack of jurisdiction over the corporation precludes individual liability of the corporate officer under the securities statute.
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Join FLexlaw to unlock all legal intelligenceTranslinear Inc., a Texas corporation, sold shares of its common stock to Holborn in Florida. The stock was not registered as a security in Florida. B…
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SMITH, Judge.
Beckham appeals from a judgment refunding appellee Holborn the purchase price he paid Translinear, Inc., a Texas corporation, for shares of Translinear common stock which were not registered as securities in Florida. The court found that the sale by Translinear to Holborn occurred in Florida, that the exemption from Florida registration afforded by § 517.-06(11), F.S., was not satisfied, that the transaction violated ch. 517, F.S., and that appellant Beckham, Translinear’s president who personally participated in the sale of Translinear stock to Holborn, was directly liable to the purchaser by virtue of § 517.-21(1).
Before Holborn’s case against Beckham went to trial, the court dismissed Holborn’s complaint against Translinear on the ground that Translinear had not engaged in a business or business venture in Florida in respect to the sale of its stock and so was not subject to service of process on the Secretary of State by virtue of § 48.-181(1), F.S.1971. But the trial court simultaneously held that Beckham, Transli-near’s president, had engaged in such activity and so was subject to jurisdiction under § 48.181(1).
By interlocutory appeal Beckham attacked the trial court’s order sustaining service of process on him and Holborn sought review of the dismissal of Transli-near. This Court sustained the order dismissing Holborn’s complaint against Tran-slinear for want of jurisdiction, but Beck-ham abandoned his effort to obtain interlocutory relief and went to trial. Beckham v. Holborn (Holborn v. Translinear, Inc.,) 330 So. 2d 101 (Fla.App. 1st, 1976). Having not previously reviewed the interlocutory order affecting Beckham, we now review it on Beckham’s plenary appeal.
Our decision in favor of Transli-near concludes Holborn’s case against Beckham as well, for there is no evidence from which it might be found that Beck-ham, as an individual — but not as Transli-near’s president — engaged in the business or business venture of selling Translinear stock in Florida. In sustaining jurisdiction over Beckham, the trial court perhaps gave undue weight to Holborn’s affidavit reciting that Beckham and another Translinear officer “acted in their personal capacity as individuals” as well as for Translinear. There being no evidence to support that view of the matter, Beckham is the beneficiary of the trial court’s finding that Translinear did not subject itself to service of process by Beckham’s conduct. If Beck-ham’s Florida activities did not for § 48.-181(1) purposes constitute a sale by Trans-linear in Florida of unregistered Translin- ear stock, the court had no jurisdiction to enforce remedies against Beckham as one who has “personally participated or aided in any way in making the sale.” Sec. 517.-21(1), F.S. The service of process on the Secretary of State in this case was as ineffectual against Beckham as it was against Translinear. REVERSED.
RAWLS, Acting C. J., and SWIGERT, WILLIAM T., SR., Associate Judge, concur.