Southern Realty & Utilities Corp. v. State ex rel. Goldner, 65-266

• Decision Date: 11 January 1966
• Docket Number: No. 65-266,65-266
• Citation: 181 So.2d 552
• Parties: SOUTHERN REALTY & UTILITIES CORPORATION, a corporation, Appellant, v. STATE of Florida ex rel. Arthur GOLDNER, Libby Goldner and Philip Randman, Appellees.
• Court: Florida District Court of Appeals

Page 552

181 So.2d 552

SOUTHERN REALTY & UTILITIES CORPORATION, a corporation, Appellant, v. STATE of Florida ex rel. Arthur GOLDNER, Libby Goldner and Philip Randman, Appellees.

No. 65-266.

District Court of Appeal of Florida, Third District.

Jan. 11, 1966.

Blackwell, Walker & Gray and James E. Tribble, Miami, for appellant.

Kelly, Paige, Black & Black, Miami, for appellees.

Before CARROLL, BARKDULL and SWANN, JJ.

PER CURIAM.

The appellant, Southern Realty & Utilities Corporation, a Delaware corporation doing business in Florida, was the defendant below. The plaintiffs (appellees) were stockholders in the defendant corporation.

The appellant appeals from the entry of a peremptory writ of mandamus directing it to produce certain books and records and to permit attorneys and accountants for the plaintiffs to examine them and make extracts therefrom. stockholder in the appellant corporation, stock in the appellant corporation some five years before the suit was filed. The corporation sustained substantial losses and the value of its stock had declined. In 1964 the plaintiffs were sent a prospectus by Royal American Industries, Inc., a large stockholder in the appellant corporation, which desired to merge with the appellant. This prospectus partially described certain money losing transactions of the appellant. The plaintiffs wrote to the appellant corporation, asking numerous questions concerning these transactions. The corporation's vice-president replied to the inquiry, declining to provide answers to the questions, because to do so would require an amendment to the prospectus which had already been included in a registration statement filed pursuant to the Securities Act of 1933.

The appellant corporation continued to refuse to answer the questions on the ground that the plaintiffs had used the prospectus as a 'cover' for their real intentions which were improper and in bad faith. The plaintiffs then filed a petition for writ of mandamus and prayed for access to some thirty-one different types of books and records of the appellant corporation, in order to determine whether the affairs of the corporation had been managed in the best interest of all stockholders and whether or not the corporation had a cause of action for misappropriation of corporate assets and corporate opportunities.

On the strength of this petition, the trial court on December 28, 1964 issued an alternative writ of mandamus, returnable on January 28, 1965 at 2:30 P.M. On January 27, 1965, one day prior to the return date, appellant filed and served upon the plaintiffs a motion to quash, strike, dismiss and transfer the cause. The motion to quash sought, inter alia, to attack the service of process of the alternative writ purportedly served on the day following the issuance. On January 28, 1965, two and one-half hours prior to the return date, the plaintiffs again attempted to obtain service of process on the appellant. At the hearing the court granted the motion to quash the service of process on December 29, 1964 as to all defendants, and held that the service on January 28, 1965, the day of the hearing, was valid as to the defendant corporation only and continued the hearing until the next day.

At the hearing the next day, Friday, January 29, 1965, the appellant objected to the hearing on the ground that notice was unduly short so as to deprive them of due process of law, and asked for at least ten days within which to respond to the writ. Thereupon the judge denied the...