Mercer v. Hemmings, No. 34373

• Court: United States State Supreme Court of Florida
• Writing for the Court: ROBERTS; THORNAL
• Citation: 194 So.2d 579
• Docket Number: No. 34373
• Decision Date: 23 November 1966
• Parties: Hugh Miller MERCER et al., Appellants, v. Arthur I. HEMMINGS et al., Appellees.

Page 579

194 So.2d 579 Hugh Miller MERCER et al., Appellants,
v.
Arthur I. HEMMINGS et al., Appellees. No. 34373. Supreme Court of Florida. Nov. 23, 1966.
Rehearing Denied Feb. 22, 1967.

Page 580

Hervey Yancey, Cromwell A. Anderson, Louis Bonsteel and Smathers & Thompson, Miami, for appellants.

Chester Bedell, Jacksonville, for appellees.

ROBERTS, Justice.

This cause is before the court on appeal from a 'Supplemental Decree Pursuant to Mandate' entered by the trial court following the going down of the mandate of this court in Mercer v. Hemmings, Fla.1965, 170 So.2d 33.

The facts of the case are stated in considerable detail in our former opinion. Among other things, it concerns the validity of a regulation promulgated by the appellees, as members of the Florida State Board of Accountancy ('the Board' hereafter) respecting the issuance of temporary certificates to out-of-state firms to fulfill 'specific engagements' for accounting services in this state under contracts entered into outside the state, as authorized by Section 473.14, Florida Statutes, F.S.A. The regulation in question--paragraph (3) of Rule 20--9.03 of the Board--was attacked in a suit for declaratory relief filed by the appellants, plaintiffs below, as members of the firm of Price Waterhouse & Co., a large firm of public accountants engaged in a nation-wide accounting business. All members of the firm are licensed as certified public accountants in one or more states of the union; however, none is licensed in Florida as a Certified Public Accountant, nor did any member reside in this state at the time the suit was filed.

Because of the stringency of our statutory regulations respecting the licensing of certified public accountants and the practice of public accounting in this state by such certified public accountants, Price Waterhouse has been unable to perform accounting services in this state for its out-of-state clients engaged in interstate commerce except under the authority of temporary certificates which were routinely issued to it by the Board for a great many years. In 1962, however, their 'specific engagements' had grown to such an extent as to require the establishment of permanent offices in Miami and Tampa, and the permanent assignment of personnel to those areas. Upon learning of this, the Board

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adopted paragraph (3) of Rule 20--9.03, reading in part as follows:

'Temporary certificates will not be issued to firms or persons maintaining a full time staff in the State of Florida, and using facilities for full time practice of public accounting as distinguished from fulfilling specific engagements under temporary certificates.',

and notified Price Waterhouse that it would deny further temporary certificates as long as Price Waterhouse maintained a full time staff resident in Florida.

This suit for declaratory relief followed, in which Price Waterhouse sought a ruling either (1) that the above-quoted provision of Rule 20--9.03 and the statute taken together, as applied to Price Waterhouse, were invalid; or (2) that Price Waterhouse could continue its public accounting practice in this state so long as it did not hold itself out to the public as a firm of Florida certified public accountants. The second contention was made in reliance on the decision of this court in Florida Accountants Association v. Dandelake, Fla.1957, 98 So.2d 323, 70 A.L.R.2d 425. The defendant Board, appellees here, filed a counterclaim, asking the court to enjoin Price Waterhouse from practicing accounting in this state except under the temporary certificates theretofore issued by the Board or such other certificates as might thereafter be lawfully issued by the Board.

The trial court denied the relief sought by Price Waterhouse and granted that sought by the Board. On appeal to this court, the decree of the trial court was affirmed in part and reversed in part and the cause remanded to the lower court. Pursuant to our mandate, and after a hearing, the trial court entered its 'Supplemental Decree Pursuant to Mandate,' which decree has been brought here for review by Price Waterhouse. One of the complaints made here by the appellant is that the Supplemental Decree did not delete the injunction previously entered against Price Waterhouse, upon the counterclaim of the Board, and simply stayed the enforcement thereof until such time as the members of the firm of Price Waterhouse could become certificated in this state by reciprocity or examination. By motion, the Board has asked this court to vacate the stay of injunction, for the reason that it is impossible, under existing statutory provisions, for Price Waterhouse to qualify each and every member of the firm for licensing as a Florida certified public accountant, by examination or by reciprocity, thereby making it impossible for the firm to engage in the practice of public accounting in this state except under temporary certificates.

The problem is not now new here. The activities of the Board have been before this court in Morgan v. Oosterhoudt (Fla.1957) 96 So.2d 139; Florida Accountants Association v. Dandelake (Fla.1957) 98 So.2d 323, 70 A.L.R.2d 425; Mercer v. Hemmings (Fla.1964) 170 So.2d 33, and now again in the Mercer case to review the judgment on remand of the trial court; also before the District Court of Appeal, First District, in Bevis v. Eastland (Fla.1966) 186 So.2d 818, now pending here on writ of certiorari.

In the case sub judice, the litigants have submitted a number of questions. After blowing the chaff from the grain, the controversy to be decided is:

(1) Is it necessary for all the partners in Price Waterhouse to hold Florida certificates in order for such firm to practice in this state?

(2) Is it lawful for a person holding a Florida certificate, to practice accounting thereunder by accepting employment from Price Waterhouse and selling their work product to Price Waterhouse for use in making the master audit of interstate clients?

(3) Are the members of Price Waterhouse entitled to the issuance of a reciprocal certificate upon displaying

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a certificate issued by another state which does not necessarily have the same admission requirements as Florida and which members are not two-year residents of this state?

(4) Are members of Price Waterhouse, who do not meet the two-year residence requirement, but who meet the other admission requirements entitled to take the Florida examination?

(5) Does Price Waterhouse have the Right, as distinguished from the Privilege, to continue to receive temporary certificates notwithstanding Board Rule 20--9.03?

Upon the authority of Morgan v. Oosterhoudt, supra, we held that a non-resident firm of accountants cannot practice as a firm or under a firm name unless every member of such firm holds a Florida certificate. Section 473.16, Florida Statutes, F.S.A., among other things provides:

'It is unlawful for any person holding a certificate as a certified public accountant * * * to act as the representative, agent or manager, in the state (of Florida), in connection with the practice of public accounting, of any person not authorized under the provisions of this chapter to practice public accounting in this state, or of any firm or association of persons, unless each member of such firm or association of persons shall be authorized to practice public accounting in this state under the provisions of this chapter; * * *'.

However, this statute was certainly not intended to prevent a Florida certified public accountant from making audits within this state under the employment of and for the use of accounting firms in other states in making master audits of clients engaged in interstate commerce. A contrary construction would put the constitutionality vel non of the statute in grave doubt under the constitutions of the United States and the State of Florida. It has long been the policy of this court, where possible, to place such...