Clearwater Citrus Growers' Ass'n v. Andrews
| Decision Date | 08 March 1921 |
| Citation | 87 So. 903,81 Fla. 299 |
| Parties | CLEARWATER CITRUS GROWERS' ASS'N v. ANDREWS et al. |
| Court | Florida Supreme Court |
Rehearing Denied April 4, 1921.
Suit by A. G. Andrews and others against the Clearwater Citrus Growers' Association for the appointment of a receiver. A demurrer to the bill was overruled, and defendant appeals.
Reversed with directions to dismiss.
Syllabus by the Court
Voluntary withdrawal of members of corporation not for profit severs interest. The voluntary withdrawal of members of a corporation not for profit severs their membership in the corporation and all connection with or interest in its business, property, and assets.
Members who have voluntarily withdrawn cannot sue for dissolution in opposition to statutory method. Where a statute prescribes a method of dissolving a corporation by certain of its members and they act in opposition to its provisions, they cannot be heard in a court of equity to ask its aid to dissolve the corporation, of which they have voluntarily ceased to be members, notwithstanding they could have accomplished their purpose by proceeding in accordance with the statute.
Minority remaining in corporation not for profit entitled to its property. Upon the withdrawal of a majority from an organization or corporation, not for profit, those remaining in the organization or corporation constitute the true association and are entitled to the use and enjoyment of the association's property.
Appeal from Circuit Court, Pinellas County; O. K. Reaves, judge.
Macfarlane & Macfarlane and N. B. K. Pettingill, all of Tampa, for appellant.
W. A. Carter and James F. Glen, both of Tampa, for appellees.
The Clearwater Citrus Growers' Association, a corporation not for profit, was organized in 1909 under chapter 5958, Laws of Florida. After operating about two years, three-fourths of its members formed a corporation known as the Pinellas Packing Company, and undertook to sell and dispose of all the assets of the Clearwater Citrus Growers' Association to the Pinellas Packing Company, taking in payment therefor the capital stock of the Pinellas Packing Company, which was to be fairly distributed among the members of the Clearwater Citrus Growers' Association.
A deed of conveyance was executed and delivered by the officers of the Clearwater Citrus Growers' Association to the Pinellas Packing Company. This transaction is immaterial to the discussion of this case, as the deed from the Clearwater Citrus Growers' Association to the Pinellas Packing Company was canceled by the decision of this court, and the possession of the property sought to be transferred was restored to the Clearwater Citrus Growers' Association. Pinellas Packing Co. v. Clearwater Citrus Growers' Ass'n, 72 Fla. 592, 72 So. 1028.
A minority of the members of the Clearwater Citrus Growers' Association voted and protested against the action of the majority, and refused to recognize their acts in attempting to dissolve the corporation, and continued the operation and existence of the association by electing officers and transacting the business for which it was organized.
After the execution and delivery of the deed of conveyance to the Pinellas Packing Company, the members of the association who planned and carried out the scheme withdrew from the Clearwater Citrus Growers' Association. It was their intention to dissolve the Clearwater Citrus Growers' Association, and they sought to do so by disposing of the assets of the association and withdrawing membership therein.
After the decision of this court in the case of Pinellas Packing Co. v. Clearwater Citrus Growers' Association, supra, those persons who had withdrawn from membership in the Clearwater Citrus Growers' Association filed their bill setting out that they made a mistake in the method they adopted to dissolve the association, and having failed in their plan, asked the court to appoint a receiver to wind up the business of the Clearwater Citrus Growers' Association and for other relief.
A demurrer to the bill was overruled, and the matter is before us on appeal from that order. The first and third grounds of the demurrer are in effect that the complainants are not entitled in a court of equity to the relief prayed for, and that the individual complainants, by voluntarily withdrawing from membership in the association, forfeited all right or interest in its property and are not entitled to relief.
Chapter 5958, acts of 1909, under which this association was incorporated, provides that it 'may be dissolved and its affairs would up voluntarily by the written request of members representing two-thirds of the total votes, in the manner and with the effect now provided by law.' Section 2836, General Statutes 1906, provides that any corporation not for profit 'wishing to dissolve may present a petition to the circuit judge, who shall direct notice thereof to be published for such time as he may judge to be expedient, and after the expiration of such time he may decree a dissolution and may make all necessary orders and decrees for the winding up of the affairs of such corporation.
The bill presents this aspect: A majority constituting about three-fourths of the entire membership of the association attempted to dissolve it by a method that was foreign to and ignored the provisions of the statute as to how such a corporation could be dissolved. The bill seems to recognize, however, that they did not dissolve the corporation, because it alleges that they 'thereupon gave notice of their withdrawal from the Growers' Association.' Such notice could not have been given to an association that did not exist. It shows that they acknowledged the continued existence of the association and withdrew from any further membership in or connection with it.
The basis for the equitable relief sought in this case is that of mistake. The bill alleges that the 'seceding members'--as they are designated in the bill--consulted an attorney as to the method of securing a dissolution of the corporation, and that the method they adopted was in pursuance of his advice, and that it was by reason of their mistake in following his advice that their plan to dissolve the association partially failed.
Much is said in the brief of appellee about the right of more than two-thirds of the members of the association to effect its dissolution. About this there can be no controversy, but this right could only be exercised in the manner prescribed by law. The bill, however, discloses that those who sought to dissolve the association adopted a method different from that prescribed by the statute. It is immaterial whether they did it on the advice of counsel or on their own initiative. When they adopted a method contrary to that provided by the statute, their action so far as it affected the Clearwater Citrus Growers' Association was a nullity, and their voluntary withdrawal from the association, provided there were enough members left to keep it in existence, had the effect only of severing their membership and all connection with or interest in the association, its business, its property, or its assets.
The statutory method of dissolving the association is so plain that even a layman can understand and follow...
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