Crockin v. Boston Store of Ft. Myers, Inc.

• Decision Date: 16 May 1939
• Citation: 188 So. 853,137 Fla. 853
• Parties: CROCKIN v. BOSTON STORE OF FT. MYERS, Inc., et al.
• Court: Florida Supreme Court

188 So. 853

137 Fla. 853

CROCKIN v. BOSTON STORE OF FT. MYERS, Inc., et al.

Florida Supreme Court, Division A.

May 16, 1939

Rehearing Denied June 1, 1939.

Action by Emil Crockin against Boston Store of Fort Myers Incorporated, and others, to cancel certain alleged void and fraudulent debts which Florida corporation in which plaintiff held stock had attempted to create in favor of other stockholders prior to acquisition of stock by plaintiff. From an adverse order, the plaintiff appeals.

Reversed and cause remanded. Appeal from Circuit Court Lee County; W. T. Harrison, Judge.

COUNSEL

Himes &amp Himes, of Tampa, for appellant.

Treadwell & Treadwell and M. A. Rosin, all of Arcadia, for appellees.

OPINION

BUFORD Justice.

The appeal is from an order, the pertinent part of which is:

'That unless the plaintiff's predecessor in ownership of cause of action involved in this suit, to-wit, Wear-Well Corporation, domesticates under the laws of State of Florida, and receives permit from the Secretary of State, authorizing it to do business within the State of Florida, in accordance with statute in such cases made and provided, within sixty days from this date, that said cause stands dismissed at cost of plaintiff.'

Three questions are posed by appellant for our determination as follows:

'Does the acceptance by a foreign corporation, through its attorney in the State of Florida, of a sum of money and a certificate for shares of stock in a Florida corporation, in settlement of a note made by a citizen of Florida and owned by such foreign corporation, violate Section 6026, Compiled General Laws of Florida, 1927, which provides that no foreign corporation 'shall transact business or acquire, hold or dispose of property in this State' until it shall have qualified with the Secretary of State?'

'2. If Question 1 was properly answered in the affirmative, can the plaintiff, an individual citizen of Maryland, in whom said shares of stock in the Florida Corporation became vested upon the dissolution of said foreign corporation, maintain this suit for the purpose of having cancelled certain alleged void and fraudulent debts attempted to be created on the part of the Florida corporation to its other stockholders just prior to the acceptance of said shares by said foreign corporation, it being admitted that said foreign corporation never qualified with the Secretary of State?

'3. If Question 2 was properly answered in the negative, should the trial court order that unless said foreign corporation, which has been dissolved as aforesaid, 'domesticates under the laws of Florida, and receives permit from the Secretary of State authorizing it to do business within the State of Florida, in accordance with statute in such cases made and provided, within sixty days from this date, that said cause stands dismissed at cost of plaintiff'?'

The appellee states the first question thus:

'Does a foreign corporation which is the holder of a note given by a citizen of the State of Florida, violate Section 6026 of Compiled General Laws of Florida, which provides that no such foreign corporation 'shall transact business or acquire, hold or dispose of property in this state' until it shall have qualified as provided in such statute, by sending such note to its attorney in the State of Florida and through its attorney, in the State of Florida, exchanging said note for a sum of money and a certificate representing certain shares of stock in a Florida corporation, which money and shares of stock are delivered to the foreign corporation's attorney in the State of Florida, and where the note is delivered by the foreign corporation, through its attorney to holder of said stock in the State of Florida?'

We think stated in either language the first question must be answered in the negative.

The order, supra, was entered on motion to dismiss amended bill of complaint. The amended bill alleged in effect that 'Wear-Well Corporation, which was incorporated under the laws of Maryland and of which the plaintiff was President, owned a promissory note for $16,000 which had theretofore been made and delivered by the defendant Simon Rosin to the plaintiff, and which, although not endorsed by the plaintiff, had been transferred and delivered by him to the Wear-Well Corporation in the State of Maryland; that shortly prior to April 4th said note had been sent by the Wear-Well Corporation to its attorney in the City of Tampa, Florida, for collection; that by means of correspondence passing through the mails between the defendant Simon Rosin and the Wear-Well Corporation, an agreement was reached for the settlement of said note by which the Wear-Well Corporation agreed to cause said note to be endorsed without recourse by the plaintiff, the payee therein, to the defendants, Joseph Stern and A. Stern and to be delivered to said last named defendants, in consideration that the defendant Simon Rosin did agree to pay the Wear-Well Corporation the sum of $100 for attorney's fees and to cause to be transferred to the Wear-Well Corporation 62 1/2 shares of the capital stock of the defendant, The Boston Store of Ft. Myers, Inc., a Florida corporation and hereinafter referred to as The Boston Store; that said agreement was to be carried out by the Wear-Well Corporation sending said note, endorsed as aforesaid, to its attorney in Tampa, and by said attorney in Tampa turning said note over to the attorney for the defendants, Simon Rosin, Joseph Stern and A. Stern contemporaneously with the payment to him of the sum of $100 and the delivery to him of a certificate for said 62 1/2 shares made out in the name of the Wear-Well Corporation; and that said agreement for the settlement of said note was in fact carried out in the City of Tampa in the manner last stated.

'It is also alleged, and admitted, that thereafter and about December 31, 1934, the Wear-Well Corporation was dissolved and no longer exists as a corporation; that at the time the Wear-Well Corporation acquired said 62 1/2 shares and at all times thereafter until its dissolution, plaintiff owned all of the capital stock of the Wear-Well Corporation, and that when Wear-Well Corporation was dissolved, all of its assets, including said 62 1/2 shares, were transferred to plaintiff as such sole stockholder, and that he acquired title to said shares in the manner last stated and not by virtue of any sale to him by the Wear-Well Corporation of said shares.

'The amended bill admitted that the Wear-Well Corporation had never qualified in Florida, but expressly alleged that it had never transacted any business in Florida, and had never acquired, held or disposed of any property in Florida, and also alleged as proper conclusion of law based upon the facts set forth, that the Wear-Well Corporation was not required to qualify in order to be able to accept said 62 1/2 shares as aforesaid, and that even if it were, its failure so to do could not legally affect plaintiff's right to maintain this suit, and further, that by reason of its dissolution as aforesaid, the Wear-Well Corporation could not now qualify.'

Other allegations of the amended bill are unimportant for the purpose here involved.

Section 4095, R.G.S., section 6026, C.G.L., provides:

'No foreign corporation shall transact business, or acquire, hold or dispose of property in this State until it shall have filed in the office of the Secretary of State a duly authenticated copy of its charter or articles of incorporation, and shall have received from him a permit to transact business in this State: and any foreign corporation which shall violate the provisions of this section shall render itself, its officers and agents severally liable to the penalties and fines provided in section 7449, but no violation of this law shall affect the title to property thus acquired, held or disposed of in violation of the provisions hereof.'

The legal principles applicable to this situation are found aptly stated in 14A Corpus Juris, Page 1273, as follows:

'In most jurisdictions it has been held that single or isolated transactions do not constitute doing business within the meaning of such statutes, although they are a part of the very business for which the corporation is organized to transact, if the action of the corporation in engaging therein indicates no purpose of continuity of conduct in that respect. Where, however, the single transaction is, or where the isolated transactions form a part of the regular business of the corporation, and the action of the corporation in engaging therein indicates a purpose to continue to engage within the State in the transaction of a part or all of its ordinary business, the foreign corporation is doing, transacting, carrying on, or engaging in business therein within the meaning of such statutes.'

And on page 1278:

'The collection in a state by a foreign corporation of debts due it for goods sold or otherwise contracted does not constitute doing, transacting, carrying on, or engaging in business within the meaning of the statutes under consideration nor does the acceptance in a state of evidence of such debts, or the taking of security therefor come within the meaning of such statutes. The same is true of the action of a corporation in a state in adjusting or compromising such debts.'

And on page 1280:

'Under the rule that the statutes under consideration have no application to acts done within a state which are merely incidental to the prosecution of its ordinary business, it has been held that where such transactions do not constitute a part of its ordinary business, a foreign corporation is not doing, transacting, carrying on, or engaging in business within a state by the acquisition, holding or disposal of real or...