CHARLES BUCHANAN AND WILLIAM F. HOWARD, APPELLANTS,
v.
FLORIDA AIR CONDITIONERS, INC., A FLORIDA CORPORATION, AND COLONIAL SUPPLY COMPANY, A FLORIDA CORPORATION, APPELLEES
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Individual defendants Buchanan and Howard appealed a judgment finding them personally liable for corporate debts under Florida Statutes Section 607.397, which imposes joint and several liability on persons who assume to act as a corporation without authority. The court reversed, holding that Section 607.397 was not effective until January 1, 1976, and therefore could not apply to debts that accrued before that date.
Section 607.397 did not become effective until January 1, 1976, and therefore could not be applied to debts that accrued prior to that date. The trial court erred in denying the motion to dismiss and in instructing the jury on the statute.
[1] A statute imposing joint and several liability on individuals acting as a corporation without authority does not apply to causes of action that accrued before the statute…
[2] A trial court errs by denying a motion to dismiss based on the inapplicability of a statute to the cause of action.
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Join FLexlaw to unlock all legal intelligence“All persons who assume to act as a corporation without authority to do so shall be jointly and severally liable for all debts and liabilities incurred or arising as a result thereof.”
The statutory provision at issue in the case establishing personal liability for those acting as corporations without authority.
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Join FLexlaw to unlock all legal intelligenceBuchanan and Howard conducted business under the name Colonial Supply Company, which was never incorporated under Florida law. Florida Air Conditioner…
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BERANEK, Judge.
This is an appeal by individual defendants from a final judgment entered for plaintiffs after a jury trial. By amended complaint, Florida Air Conditioners, Inc., sued Charles Buchanan and William F. Howard, claiming these two individual defendants were liable under Section 607.397, Florida Statutes (1975), which provides: “All persons who assume to act as a corporation without authority to do so shall be jointly and severally liable for all debts and liabilities incurred or arising as a result thereof.” It was alleged that defendants, Buchanan and Howard, had assumed to act as a corporation by carrying on business in the name of Colonial Supply Company. Colonial Supply Company had never been incorporated under Florida law. The defendants, Buchanan and Howard, took the position that they as individuals had not carried on business as Colonial Supply Company but that this business (Colonial Supply) was really a subsidiary of another corporation owned by them and known as Tropic Air Heating and Cooling, Inc. This latter company was a properly incorporated entity.
The individual defendants have at all times in this suit asserted that Section 607.-397, Florida Statutes (1975), did not become effective until January 1, 1976. The cause of action in question accrued prior to January 1, 1976, and the defendants assert the statute was improperly applied by the trial court in this case. We agree and reverse.
The trial court herein denied a motion to dismiss the complaint filed against the individual defendants which was based solely upon Section 607.397. This initial denial of the motion to dismiss was error, and this error permeated the entire procedure thereafter. At all times the defendants continued to object, taking the position that the statute was not in effect and did not govern the debt in question. We agree and find that the trial court erroneously held the statute to be applicable and to be a proper basis for liability. The court further erroneously instructed the jury on the statute and the defendants were clearly prejudiced by this improper instruction. The final judgment below is reversed and the matter remanded for further proceedings consistent herewith.
REVERSED AND REMANDED WITH INSTRUCTIONS.
CROSS and DAUKSCH, JJ., concur.
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Fla. AIR Conditioners, Inc. v. Colonial Supply Co., 390 So. 2d 174 (Fla. 5th DCA 1980)…chanan and Howard appealed and that judgment was reversed because the motion to dismiss should have been granted on the ground urged and the case was remanded “for further proceedings consistent herewith.” Buchanan v. Florida Air Conditioners, Inc., 374 So. 2d 1017 (Fla. 4th DCA 1979). Upon remand plaintiff moved to amend its complaint to re-allege its original claim that Buchanan and Howard were liable in debt as partners or proprietors of the business incurring the debt. From the denial of the motion to amen…