Saffold Bros. Produce Co. v. Winn & Lovett Grocery Co.

• Decision Date: 14 June 1933
• Parties: SAFFOLD BROS. PRODUCE CO. v. WINN & LOVETT GROCERY CO. et al.
• Court: Florida Supreme Court

149 So. 1

111 Fla. 60

SAFFOLD BROS. PRODUCE CO. v. WINN & LOVETT GROCERY CO. et al.

Florida Supreme Court, Division A.

June 14, 1933

Suit by the Saffold Bros. Produce Company against the Winn & Lovett Grocery Company and others. From a decree dismissing the bill, complainant appeals.

Affirmed. Appeal from Circuit Court, Hillsborough County L. L. Parks, judge.

COUNSEL

Hampton Bull & Crom, of Tampa, and C. O. Andrews, of Orlando, for appellant.

T Paine Kelly, of Tampa, and Kay, Adams, Ragland & Kurz, of Jacksonville, for appellees.

OPINION

ELLIS Justice.

Saffold Bros. Produce Company, a Florida corporation, obtained a judgment in the circuit court for Hillsborough county during April, 1931, against Bailey Produce Company, a Florida corporation, in the sum of $15,263.15.

The cause of action rested upon a series of trading transactions in merchandise extending over a period of several years. The complainant sold the goods and the Bailey Produce Company bought them.

Then during the same month in which the judgment was obtained April, 1931, the complainant exhibited its creditors' bill in the circuit court for Hillsborough county against the Bailey Produce Company, Winn & Lovett Grocery Company, a Florida corporation, Paul B. Bailey, W. R. Lovett, and Seminole Grocery Company, a Florida corporation. The bill prayed that certain personal property which the Bailey Produce Company had transferred to the Seminole Grocery Company, consisting of certain automobile trucks and passenger vehicles, a cold storage plant, a safe, and office equipment, be restored to the Bailey Produce Company; that the value of it be ascertained and that the complainant's judgment be declared to be a superior lien upon the property to that claimed by the defendants or either of them, and in the event of the failure to restore the property that the complainant have a decree against the defendants for the value of it; and that a receiver be appointed to take possession of the property and hold it subject to the order of the court.

There was also a prayer for a decree to the effect that when the Bailey Produce Company purchased the merchandise from the complainant, resulting in the judgment in the latter's favor, the Bailey Produce Company was acting as the agent of the other defendants named, or such of them as may be shown to have been principals in the transactions, and that the Bailey Produce Company was all the while owned and controlled by Winn & Lovett Grocery Company and W. R. Lovett and used by them as an agent for them in the transactions resulting in the judgment in favor of the complainant and for the fraudulent purpose of concealing their identity in the purchase of the merchandise and to avoid their liability for the same and to defraud and hinder other creditors in the collection of their claims.

For the purpose of disposing of this case it is needless to recite the allegations of the bill upon which the prayer as above stated rests.

There was no demurrer but the defendants answered denying such allegations which, if found to be true, would have justified the relief prayed.

The bill was framed upon the theory that it is not permissible in law for a person or a combination of persons to use the fiction of a corporate entity for the promotion of fraudulent schemes to avoid personal liability for obligations incurred to innocent persons with whom they dealt in the name of the corporate entity to their exclusive personal advantage. That in such cases the corporate entity, a formal fiction in law, is a fiction in reality, the mere alter ego of the designing traders to whom chancery will look through the veil of the corporate fiction and place the responsibility where in conscience and in law it belongs.

The doctrine has recently been discussed and approved by this court in Biscayne Realty & Insurance Co. v. Ostend...