Spector v. Hart

• Decision Date: 13 April 1962
• Docket Number: No. 2635,2635
• Citation: 139 So.2d 923
• Parties: Samuel SPECTOR, Appellant, v. Lester HART and Lester Hart Galleries, Inc., Appellees.
• Court: Florida District Court of Appeals

Page 923

139 So.2d 923

Samuel SPECTOR, Appellant, v. Lester HART and Lester Hart Galleries, Inc., Appellees.

No. 2635.

District Court of Appeal of Florida, Second District.

April 13, 1962.

Harry G. Carratt, Morgan, Carratt & O'Connor, Fort Lauderdale, for appellant.

Merle Litman, Talianoff, Waller & Litman, Miami Beach, for appellees.

ALLEN, Acting Chief Judge.

This is an appeal from a summary final judgment entered in favor of defendant-appellee Lester Hart, and against the plaintiff-appellant Samuel Spector.

The plaintiff filed his amended complaint against the defendants Lester Hart and Lester Hart Galleries, Inc. seeking to recover from defendants certain sums allegedly due plaintiff for the rental of his property, under lease executed by the defendant corporation. Hart was joined as a defendant because he, as president of the corporation, executed for the corporation the lease in question when said corporation had been dissolved for failure to pay its franchise taxes. The lower court entered a summary judgment in favor of Hart since the corporate status had been restored by the payment of the taxes due the state.

Counsel on each side have cited no Florida case directly on point, nor had we found one by our own research. However, we have the benefit of an opinion written by Judge Hutcheson in the case of McClung v. Hill, 96 F.2d 236 (5th Cir. 1938) to which we will hereinafter allude.

The appellant states the points on appeal as follows:

'1. 'Whether or not defendant, Lester Hart, is personally liable for having executed a lease as president of and on behalf of a dissolved corporation, though its corporate entity was thereafter restored, and consequently, whether or not the lower court erred in granting summary judgment in favor of defendant and in denying plaintiff's motion for summary judgment.'

2. 'Whether or not the pleadings, exhibits and affidavits in this cause support the entry of a summary final judgment in favor of the defendant, Lester Hart, and consequently, whether or not, the lower court erred in granting a summary judgment in favor of said defendant.'

Section 608.37, Florida Statutes, F.S.A., provides as follows:

'(1) Any domestic corporation which has been dissolved or foreign corporation which has had its permit to do business within the state cancelled by operation of § 608.36 for failure to pay the capital stock tax may have its corporate entity or its permit to do business restored by filing with the secretary of state the reports required by § 608.32 and payment of the three years capital stock tax which was due at the time of dissolution or cancellation of permit. The receipt of the secretary of state shall be issued for such payments and in such cases shall state that the corporation has been fully restored or its permit to do business in the state fully revived and restored. Restoration shall be effective from the date of dissolution or cancellation of permit.'

It is the contention of the appellant that since the corporation was dissolved at the time the president executed the lease in question, that the president was individually liable on the lease. Counsel for appellant, in their excellent brief, cite, among other cases, Leibson v. Henry, 1947, 356 Mo. 953, 204 S.W.2d 310, wherein it is stated:

'* * * It seems to us a court should recognize plaintiffs' personal liability for obligations so incurred by them in such unlawful transaction of business in the corporate name, transgressing their powers as trustees. If a court should otherwise rule, such a ruling would be in violation of the plain purpose of the law, open the door to fraud, and sanction the former directors' operation of the business, without liability, affording opportunity for wasting or diverting the corporate assets, thus subjecting stockholders, creditors and the State to a remediless loss of their rights to avail themselves of the corporate property. It seems no Missouri decision supports or opposes our decision upon this very question, but the bases of the decisions of courts of other jurisdictions lend support to our ruling. Ewald Iron Co. v. Commonwealth, 140 Ky. 692, 131 S.W. 774; Jones v. Young et al., 115 W.Va. 225, 174 S.E. 885; Poritsky v. Wachtel, 176 Misc. 633, 27 N.Y.S.2d 316; Trower et al. v. Stonebraker-Zea Live Stock Co. et al., D.C., 17 F.Supp. 687.'

In 13 A.L.R.2d at 1220 there is a discussion of cases pro and con with reference to the reinstatement of repealed, forfeited, expired, or suspended corporate charters as validating acts performed in the name of a corporation prior thereto. It is stated on page 1220:

'That the reinstatement or revival of the corporate powers of a corporation validates its acts during such interim would seem to follow sometimes from the plain language of the applicable statute, as where it provides that, upon the issuance of a certificate reviving a corporation whose charter has expired, 'the acts and doings of such corporation, in the period between the date of expiration and the date of reviver, shall be thereby confirmed and held as the acts and doings of the original corporation so revived,' which statute has been construed in Huey v. National Bank of Fitzgerald (1933) 177 Ga. 64, 169 S.E. 491, and West v. Flynn Realty Co. (1936) 53 Ga.App. 594, 186 S.E. 753, holding that a corporation whose charter has expired must be treated, during the period within which it may be revived, as a de facto corporation.'

In 2 Hornstein, Corporation Law and Practice § 812 (1959) at page 354, it is stated:

'Whether the penalty for franchise tax delinquency be suspension or forfeiture, its objective is simply to produce revenue--to prevent use of the corporate form without compensation to the state. Reinstatement, therefore, is usually permitted nunc pro tunc upon payment of the tax arrears (plus penalties). Under such statutes the corporation's existence as a legal entity is not completely extinguished. Under other local statutes (some of which have since been altered), courts have refused to recognize any acts qua corporation during the period of forfeiture until the date of revivor except so far as necessary to protect creditors. There is some uncertainty in at least one state (Illinois) whether even revivor can give the corporation...