Opinion
March 21, 1950.
Appeal from the Circuit Court, Duval County, Claude Ogilvie, J.
Smith, Fant Axtell, Jacksonville, for appellant.
Lloyd Bass, Jacksonville, for appellee.
This is an appeal from an order by Circuit Judge Ogilvie, of Duval County, in which order exceptions that have been taken to a report of a Commissioner appointed in supplementary proceedings, were sustained.
The controversy originally arose when the appellant here, who was the plaintiff in the court below, secured a judgment in a damage suit against the defendant, who is the appellee here, a corporation, Merry Go Round, Inc., in the sum of $25,000.00. In the supplementary proceedings, which were had before the Commissioner, it was sought (first) to implead Morris M. Brown and his wife, Bertha S. Brown, and (second) to have a judgment entered against the Browns holding them liable for the judgment that had been obtained against the corporation on the ground that the corporation there was alter ego. It was also sought to implead the Browns and have them show cause why they should not be held personally liable to the judgment creditor in the sum of $36,850.00, by reason of the fact that it was claimed that the illegal act of Brown in selling liquor on Sunday in violation of law, thus causing the revocation of the liquor license, damaged the business of the corporation to that extent. That third thing sought was to recover from the Browns for monies which they had paid out of corporate funds and for monies in which it was claimed they had preferred other creditors after the corporation had become insolvent.
The Commissioner had filed his report in which he had recommended that Morris M. Brown and Bertha S. Brown, be impleaded to show cause why they should not be personally liable on the judgment which the plaintiff had secured against the corporation, Merry Go Round, Inc. and from the facts, the commissioner found that the corporation was the alter ego of the Browns. The Commissioner further found that although it was his belief that Morris Brown personally was responsible to the corporation and his creditors for the loss to the corporate business which resulted from the suspension of the liquor license due entirely to the illegal acts of Mr. Brown that he did not believe that supplementary proceedings were the proper proceedings in which such liabilities could be established. A chronological enumeration of the pertinent pleadings and proceedings is as follows:
August 16, 1946 Plaintiff filed his Declaration, seeking to recover from the Defendant, Merry-Go-Round, Inc., a corporation, and from the aforementioned Morris M. Brown, for an assault and beating of the plaintiff, done wilfully and maliciously, by "the defendant, Merry-Go-Round, Inc., a corporation, and Morris M. Brown by and through their servant and employee". The declaration continued that the person beating the plaintiff was defendant's "bouncer", who acted in the course of his employment in an effort to unlawfully eject the plaintiff from defendant's premises. (R. 1) December 13, 1946 Morris M. Brown filed his pleas making, in effect, a general issue. (R. 2) December 13, 1946 Defendant, Merry-Go-Round, Inc., filed its pleas making, in effect, a general issue. (R. 3) February 20, 1947 Verdict was rendered against the defendant, Merry-Go-Round, Inc., a corporation, for $25,000.00 damages. (R. 4) February 20, 1947 Judgment was entered in the case granting plaintiff's request for a non-suit as to Morris M. Brown, and entering judgment on the verdict against Merry-Go-Round, Inc., a corporation, for $25,000.00 damages and $40.90 costs. (R. 5 and 6) February 24, 1947 Defendant, Merry-Go-Round, Inc., filed its motion for new trial. (R. 7 to 10) March 19, 1947 The Court denied defendant's Motion for New Trial. March 27, 1947 Execution was issued upon the foregoing judgment. August 2, 1947 Plaintiff instituted supplementary proceedings by filing motion therefor, the statutory form of affidavit, and procuring order directing the defendant, Merry-Go-Round, Inc., a corporation, by and through Morris M. Brown, to appear before a Commissioner, there to submit to an examination concerning its property in proceedings supplementary to execution authorized by law. (R. 11 to 14) September 11, 1947 Testimony was taken before the Commissioner (R. 15-36) October 6, 1947 Further testimony was taken before the Commissioner. (R. 37-76) December 8, 1947 Plaintiff filed before the Commissioner Motion to Implead Morris M. Brown and Bertha S. Brown. (R. 232 and 233) December 19, 1947 Foregoing motion was argued before the Commissioner. (R. 77) February 20, 1948 Defendant's testimony taken before Commissioner. (R. 77 to 135) February 27, 1948 Further testimony of defendant before Commissioner. (R. 135 to 183) June 4, 1948 Commissioner's Report filed. (R. 15 to 236) his recommendations appearing at R. 184-192. June 14, 1948 Defendant filed its exceptions to the Commissioner's Report contending (1) that the Commissioner had erred on the facts, and (2) that the scope of supplementary proceedings would not justify judgment on the subject of whether the defendant was the alter ego of the said Browns, because such judgment would be appropriate only in an equitable proceeding. January 12, 1949 Court Order was entered sustaining defendant's Objections on the ground that the facts did not justify the Commissioner's findings. (R. 239 to 241) January 14, 1949 Plaintiff filed its Petition for Rehearing addressed to said Order. (R. 241 to 243) January 21, 1949 Plaintiff filed his motion to Implead the Browns to answer to the matters other than the alter ego question. (R. 243 to 245) January 21, 1949 The Court entered an order denying said petition and said motion and final judgment dismissing the supplementary proceedings. March 22, 1949 Plaintiff took this appeal. This statement not only gives a more or less detailed history of the case, but also states some of the pertinent facts upon which the Commissioner acted.Exceptions were filed to the Commissioner's report and the matter was argued at length before a Circuit Judge, Judge Ogilvie. He sustained the objections to the Commissioner's report and ordered the supplementary proceedings dismissed and declined the recommendation of the Commissioner that the Browns be impleaded on any ground.
The Commissioner was appointed by the trial court under the provisions of Section 55, 52, F.S.A. The Commissioner heard the testimony, observed the witnesses, and settled the disputes and conflicts in the testimony as reflected by his recommendations to the trial court, which are viz:
"Findings.
"The undersigned Commissioner finds that the Merry Go Round, Inc., corporate defendant herein, was the alter ego of Morris M. Brown and Bertha S. Brown.
"Recommendations.
"The undersigned Commissioner respectfully recommends to this Honorable Court that Morris M. Brown and Bertha S. Brown be impleaded as parties herein and directed to show cause why an order should not be entered herein, finding that the corporate defendant herein was the alter ego of Morris M. Brown and Bertha S. Brown, and that the said Morris M. Brown and Bertha S. Brown should be liable to the plaintiff herein for the balance remaining unpaid on the judgment entered herein on February 20th, 1946."
The trial court, in its order and judgment dated January 12, 1949, sustained the objections and exceptions to the findings and recommendations of the Commissioner. It is our view, based on a careful consideration of the whole record, that the findings and recommendations of the Commissioner are sustained by a preponderance of all the evidence and the trial court committed reversible error in sustaining exceptions and objections thereto and entering an order dismissing the proceedings.
In the light of the conclusions reached, the order appealed from dated January 12, 1949, is reversed with directions to enter a judgment based on the findings and recommendations of the Commissioner.
It is so ordered.
ADAMS, C.J., and CHAPMAN and HOBSON, JJ., concur.