SEBASTIAN ENTERPRISES, INC., A FLORIDA CORPORATION, APPELLANT,
v.
FLORIDA FIRST NATIONAL BANK AT VERO BEACH, EXECUTOR OF THE ESTATE OF WELLINGTON G. BOSWORTH, DECEASED, ET AL., APPELLEES
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Sebastian Enterprises appeals a judgment against it for money owed to the estate of deceased shareholder Wellington G. Bosworth. The court held that inclusion of the debt on the corporation's balance sheets and tax returns constitutes sufficient written acknowledgment under Florida law to toll the statute of limitations and enforce the debt.
The court held that inclusion of a debt on a balance sheet signed by the corporation's accountant and on a tax return signed by both the accountant and a stockholder constitutes sufficient written acknowledgment under Florida Statute Section 95.04 to toll the statute of limitations and enforce the debt.
[1] The inclusion of a debt on a corporation's balance sheet constitutes a sufficient written acknowledgment to toll the statute of limitations, inferring a promise to pay.
[2] A written acknowledgment of a debt barred by the statute of limitations must be signed by the person sought to be charged to be effective.
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Join FLexlaw to unlock all legal intelligence“an acknowledgement of . . .a debt barred by a statute of limitations must be in writing and signed by the person sought to be charged.”
Establishes the statutory requirement for acknowledging a debt to toll the statute of limitations under Florida law.
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Join FLexlaw to unlock all legal intelligenceBosworth owned 49% of Sebastian Enterprises and frequently loaned money to the corporation during his lifetime. After his death, the corporation's bal…
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DAUKSCH, Judge.
The question is whether or not the inclusion of a debt on a tax return or a financial statement is sufficient acknowledgement to toll the statute of limitations. We hold that it is and that the debt is enforceable here.
Mr. Bosworth died owning 49% of the stock in the appellant corporation. The balance was owned by his secretaries and bookkeepers; the two ladies owned 25% each, and one share was owned by his lawyer. Apparently Mr. Bosworth was the primary operator of the business and saw to the daily operation while he was alive. He started the business and, when necessary, kept it going by loaning money to it. After Mr. Bosworth died the corporation carried on its balance sheet an entry acknowledging notes payable to the Estate of W. G. Bosworth. On its December, 1973 balance sheet (year end) there is a notation that the stockholders “voted ... to cancel a debt alleged to be owed by the corporation to the estate . . .” Further, in response to a request for admissions, the surviving stockholders admitted the corporation received “but not borrowed” the amount of $27,806.50. The trial court entered judgment in that amount plus interest.
It was agreed by all parties and the record supports the fact that the statute of limitations had run on the debts since no notes were produced and the four year limit under Section 95.11, Florida Statutes (1975) was applicable. Section 95.04, Florida Statutes (1975) provides “an acknowledgement of . . .a debt barred by a statute of limitations must be in writing and signed by the person sought to be charged.” Both the balance sheets and the income tax returns were signed by the accountant for the corporation and the return was also signed by one of the stockholders of the corporation who was a party to this suit. It does not appear in the record that Appellants offered any evidence to refute the acknowledgement of the debt.
In Whale Harbor Spa, Inc. v. Wood, 266 F. 2d 953 (5th Cir. 1959) the Fifth Circuit held that the inclusion of a debt on a balance sheet was sufficient acknowledgment to toll the statute and infer a promise to pay. See also Hall v. Brown, 80 Fla. 481, 86 So. 277 (1920). The trial court in this case held likewise and we affirm.
AFFIRMED.
ALDERMAN and LETTS, JJ., concur.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
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Nolden v. Nolden, 650 So. 2d 84 (Fla. 5th DCA 1995)…ition filed in court, or even a voluntary proceeding in bankruptcy have been held insufficient. Id. The only two eases relied on by appellant for the contrary proposition are Sebastian Enterprises, Inc. v. Florida First National Bank at Vero Beach, 345 So. 2d 827 (Fla. 4th DCA 1977), and Whale Harbor Spa, Inc. v. Wood, 266 F. 2d 953 (5th Cir.1959). These cases, however, involve a materially different situation where the acknowledgement of the debt was made before the debt was barred. Such cases are conceptua…
Authorities Cited
- Hall v. Brown, 80 Fla. 481 (Fla. 1920)
- Couret v. Conner (Miss. 1920)
- Whale Harbor SPA, Inc. v. Wood, 266 F.2d 953 (5th Cir. 1959)