Advertects, Inc. v. Sawyer Industries
| Decision Date | 14 December 1955 |
| Parties | ADVERTECTS, Inc., Appellant, v. SAWYER INDUSTRIES, Inc., Appellee. |
| Court | Florida Supreme Court |
Sibley & Davis and Milton E. Grusmark, Miami Beach, for appellant.
Marx M. Faber, Miami, for appellee.
Appellant seeks reversal of an order of the trial Judge refusing issuance of a rule nisi which would require the stockholders of appellee corporation to show cause why a judgment held by appellant against the corporation should not be satisfied out of the assets of the individual stockholders. This cause has been before this Court on three previous occasions. See 53 So.2d 671; 54 So.2d 692; and 64 So.2d 300.
Appellant, who was plaintiff below, recovered a money judgment against appellee corporation, which was defendant below. Writ of execution issued and was returned unsatisfied because of the inability of the sheriff to find any assets of the defendant. Thereafter in a proceeding supplementary to execution authorized by F.S. § 55.52 et seq., F.S.A., the statutory affidavit was filed and a Commissioner was appointed to hear testimony and report his findings in the supplementary proceeding.
Among other things, the Commissioner found that A. Neil Sawyer and his wife, Kay Sawyer, hereinafter described as 'the stockholders' organized Sawyer Industries, Inc. as a convenient method of doing business without subjecting themselves to personal liability and recommended to the Court that a rule nisi be issued directing the stockholders 'to show cause why they should not be held personally liable for the judgment heretofore entered against defendant corporation and be impleaded as parties to the cause'.
After an examination of the record, the trial Judge declined to follow the recommendation of the Commissioner and refused the issuance of the rule. He also refused on request to include in his order of denial that it was 'without prejudice of plaintiff's right to seek appropriate relief in equity'.
Appellant seeks reversal on the proposition that the issuance of the requested rule is merely procedural and that the ultimate question of whether the stockholders should be impleaded and a personal judgment entered against them is one that would have to be determined upon the filing of an answer and the taking of testimony after the rule to show cause was issued and served upon them.
Appellee contends that testimony offered before the Commissioner is insufficient to sustain the issuance of the requested rule for the reason that there is no showing that there are any corporate assets in the hands of the stockholders or that there was any fraud or bad faith either in the organization or in the handling of the assets of the corporate entity.
We have held that the proceedings supplementary to execution authorized by F.S. §§ 55.52-55.61, F.S.A., are intended to afford to a judgment creditor the most complete relief possible in satisfying his judgment. Actually, such a proceeding constitutes a separate legal cause from that of the main suit in which the judgment is procured and it may be employed as a substitute for a creditor's bill in equity. Due process is provided by the opportunity given to the stockholders to answer the allegations of the rule nisi. See Johnson v. Merry Go Round, Inc., Fla.1950, 45 So.2d 181; and Riley v. Fatt, Fla.1950, 47 So.2d 769.
In the instant case, however, we are confronted with the problem of whether the factual situation developed by the testimony offered before the Commissioner supports the issuance of such a rule as a procedural approach to piercing the corporate veil and destroying the...
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...do. A contrary finding would "ignore the historical justification for the corporate enterprise system." See Advertects, Inc. v. Sawyer Industries, Inc., 84 So.2d 21 (1955). And this is why Florida, like most jurisdictions, requires a showing of improper conduct in addition to a showing of m......
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