McDonald v. Sealift Terminals, Inc.

Full title: FRANK B. McDONALD, III, APPELLANT, v. SEALIFT TERMINALS, INC., APPELLEE

Court: District Court of Appeal of Florida, First District

Date published: Apr 21, 1987

505 So. 2d 675 (Fla. Dist. Ct. App. 1987)

Opinion

No. BM-307.

April 21, 1987.

Appeal from the Circuit Court, Duval County, Harold R. Clark, J.

D. Chanslor Howell, of Howell Skeels, Jacksonville, for appellant.

Douglas D. Chunn, of Commander, Legler, Werber, Dawes, Sadler Howell, Jacksonville, for appellee.

PER CURIAM.

This cause is before us on appeal from an order granting a summary final judgment in an action for a conversion, theft, and breach of fiduciary duty. We find there is a disputed issue of material fact regarding appellant's authority as the sole corporate director to set his own compensation as president, accordingly we reverse the order on appeal.

The rule in Florida is that directors cannot fix their own salaries, as officers, unless expressly authorized to do so by the stockholders or the corporate charter. Flight Equipment Engineering v. Shelton, 103 So.2d 615 (Fla. 1958).

Here the corporate charter did not grant express authority to the Board of Directors to set the salary of the officers; however Article III, Section 7 of appellee's bylaws states that "officers shall receive such salary, or compensation as may be fixed by the Board of Directors." Accordingly, appellant's authority as sole director, to set his own salary, as president, is a disputed issue of fact which precludes entry of summary judgment. Based on the foregoing we reverse and remand for further proceedings consistent with this opinion.

ZEHMER, J. and HALL, J. LEWIS, Jr., Associate Judge, concur.

WENTWORTH, J., dissents with opinion.

WENTWORTH, Judge, dissenting.

I find no disputed issue of material fact presented for our review, and would affirm the order appealed. Appellant admitted appropriating the contested funds. While the corporate bylaws provide that the salary of corporate officers may be fixed by the Board of Directors, self-compensation of officers who are also directors is permitted in Florida only upon express authorization by the stockholders or the corporate charter. See Flight Equipment Engineering Corp. v. Shelton, 103 So.2d 615 (Fla. 1958). Since neither the stockholders nor the corporate charter authorized such self-compensation in the present case, I would conclude that the court below properly determined as a matter of law that appellant's appropriation of the contested funds was an unauthorized act which would support a summary judgment.