Vulcan Furniture Mfg. Corp. v. Vaughn

• Decision Date: 12 November 1964
• Docket Number: No. F-335,F-335
• Citation: 168 So.2d 760
• Parties: VULCAN FURNITURE MANUFACTURING CORPORATION, a corporation, Appellant, v. Thomas W. VAUGHN and Gordon Brantley, etc., Appellees.
• Court: Florida District Court of Appeals

Page 760

168 So.2d 760

VULCAN FURNITURE MANUFACTURING CORPORATION, a corporation, Appellant, v. Thomas W. VAUGHN and Gordon Brantley, etc., Appellees.

No. F-335.

District Court of Appeal of Florida, First District.

Nov. 12, 1964.

Rehearing Denied Dec. 7, 1964.

Lewis & Harding, Jacksonville, for appellant.

Cleveland & Goodfriend, Jacksonville, for appellees.

WIGGINTON, Judge.

Plaintiff has appealed a final judgment dismissing with prejudice its amended complaint against defendant partners operating as a limited pertnership, seeking judgment for goods, wares and merchandise sold and delivered. Appellant insists that its amended complaint states a cause of action against both partners, and that the court erred in holding to the contrary.

The complaint alleges that on April 2, 1959, the defendants, Thomas W. Vaughn and Gordon Brantley, together with Ernest C. Vaughn, now deceased, filed with the Secretary of State of Florida a certificate of limited partnership pursuant to which the partners commenced operation of a retail furniture business, which business terminated on the first day of August, 1963; that under the Certificate of limited partnership Thomas W. Vaughn and Ernest C. Vaughn were designated general partners, and defendant Gordon Brantley a limited partner, the term of which partnership was perpetual; that Ernest C. Vaughn died in 1960, and his share in the partnership was purchased by Thomas W. Vaughn. The crucial allegations of the complaint on which its sufficiency depends state that the partnership failed to secure a renewal of its certificate of limited partnership as required by law at any time subsequent to April 2, 1959, as a result whereof the rights, privileges and benefits granted to it as a limited partnership ceased to exist, the business became a general partnership and the parties thereto became general partners who continued to operate as a partnership to the date it ceased doing business on August 1, 1963; that on April 27, 1963, plaintiff sold to the partnership goods, wares and merchandise of the value of $658.21 for which, together with interest and court costs, judgment is prayed.

The defendant Thomas W. Vaughn failed to answer the complaint as a result of which default and final judgment was entered against him . Defendant Gordon Brantley's motion to dismiss the amended complaint for failure to state a cause of action was granted, and plaintiff was allowed ten days in which to file a second amended complaint if it was so advised. Upon failure of plaintiff to further amend its complaint, final judgment dismissing the amended complaint with prejudice was entered in favor of defendant Brantley. It is from that final judgment that this appeal is taken.

Before discussing the position taken by the respective parties to this appeal regarding the correctness of the judgment here assaulted, it may be considered appropriate to briefly review the uniform limited partnership act adopted by the legislature as the law of Florida in 1943, and appearing as Chapter 620 in our statutes . The act provides that in order to form a limited partnership, the proposed partners shall sign and swear to a certificate containing the information outlined in the statute, including a designation as to which members are general partners, and which are limited partners. Upon filing such certificate with the Secretary of State, and paying the fee prescribed, the Secretary of State shall issue to the partnership his certificate of authority to do business, which fee shall be paid and certificate of authority renewed annually on the first day of January of each year. The statute declares that such certificate of authority shall be prima facie evidence of the right of such limited partnership to do business under the terms and provisions of the statute, and shall be considered as payment to the state for the rights, privileges, protection and benefits conveyed by the provisions of the statute, and no such limited partnership shall do business in this state without first having obtained a certificate of authority for the ensuing year ¹. The statute prohibits a limited partnership from using the surname of a limited partner in the partnership name except upon stated conditions, and further provides than a limited partner whose surname appears in a partnership name contrary to the provisions of the statute is liable as a general partner to partnership creditors who extend credit to the partnership without actual knowledge that he is not a general partner ². The act provides that a limited partner shall not become liable as a general partner unless, in addition to the exercise of his rights and powers as a limited partner, he takes part in the control of the business or violates that provision of the statute regarding the use of his surname in the name of the business under which the partnership operates ³. A limited partner is given the right to have the partnership books kept at the principal place of business of the partnership and at all times to inspect and copy them; to have on demand true and full information of all things affecting the partnership, and a formal account of partnership affairs whenever circumstances render it just and reasonable; to require dissolution of the partnership and the right to recevie a share of the profits or other compensation by way of income and a return of his contribution as provided by the statute ⁴.

Under the act the Secretary of State is required to compile and publish the names of all limited partnerships which fail for six months to secure a new or renewal certificate of authority. It is the declared policy of the statute that the rights, privileges, and benefits granted to limited partnerships are on an annual basis, or from year to year, and are granted only after such limited partnership has met the requirements regarding securing certificate of authority or renewal thereof ⁵. The statute declares that the rule of law which provides that statutes in derogation of the common law are to be strictly construed shall have no...