Source: https://supreme.justia.com/cases/federal/us/321/671/
Timestamp: 2019-04-23 16:28:39+00:00

Document:
Justia › US Law › US Case Law › US Supreme Court › Volume 321 › Walling v. Reuter Co.
1. The motion papers fail to establish that the case is moot or has abated merely because of the dissolution of the corporation, since an injunction against the corporation may, in appropriate circumstances, be enforced against those to whom the business may have been transferred. The extent to which the successor to the corporation here is bound is not decided. P. 321 U. S. 673.
2. By reason of its dissolution, the corporation, the sole respondent here, no longer has capacity to be sued, thus abating the present appellate proceeding. P. 321 U. S. 675.
3. Although this Court may not properly proceed with the appeal, it may nevertheless, in the exercise of its supervisory appellate power, make such disposition of the case as justice requires. P. 321 U. S. 676.
may take such proceedings for the enforcement of its judgment as he may deem advisable and as may be proper in the circumstances. P. 321 U. S. 677.
Certiorari, 320 U.S. 731, to review the reversal of a judgment, 49 F.Supp. 485, enjoining the defendant corporation from violations of the Fair Labor Standards Act.
Petitioner brought this suit pursuant to § 17 of the Fair Labor Standards Act of June 25, 1938, 52 Stat. 1060, 29 U.S.C. § 201 et seq., to restrain respondent, a Louisiana corporation, from violating the Act. The District Court found violations of §§ 6, 7, 15(a)(1)(2) and (5) of the Act, and gave judgment permanently restraining respondent, "its agents, servants, employees and attorneys, and all persons acting or claiming to act in its behalf or interest" from further violations. On appeal, the Circuit Court of Appeals for the Fifth Circuit reversed, 137 F.2d 315, and remanded the cause to the District Court for further proceedings. This Court granted certiorari, 320 U.S. 731.
signed a consent that the corporation be dissolved and that Reuter be designated its liquidator, and that one day later, on December 16, 1943, Reuter, as liquidator, certified that the corporation had been "completely would up and is dissolved." Upon filing the consent and certificate with the Secretary of State, with proof of publication of the notice of dissolution, the Secretary of State issued his certificate of December 31, 1943, certifying that the corporation "stands dissolved." See § 54 of Act 250 of the Louisiana Legislature of 1928 as amended by § 1 of Act 65 of 1932, and §§ 62 and 64 of Act 250 of the Louisiana Legislature of 1928. The purpose of the dissolution is stated to have been to secure tax advantages.
petitioner represents, than if only private interests were involved. See Virginian Ry. Co. v. System Federation, 300 U. S. 515, 300 U. S. 552, and cases cited.
Whether a family business, such as this one appears to be, has successfully avoided all responsibility for compliance with the judgment entered against the family corporation, by the simple expedient of dissolving it and continuing the business under the individual control of members of the family, as appears to have taken place here, is a question which it is unnecessary for us to decide on the basis of the scanty and not entirely enlightening affidavits now submitted to us. It is enough for present purposes, if the appellate procedure, rendered abortive by respondent's dissolution, has not deprived petitioner of the benefits of the judgment rendered in his favor by the District Court, that he is entitled to initiate proceedings to enforce the judgment against individuals who either disobey its command or participate in the evasion of its terms. In such proceedings, the question as to how far the successor to the corporation is bound by the decree may be fully investigated by the District Court, with appropriate appellate review. The decisive question for us then is whether petitioner can be rightly deprived of the benefit of the District Court's judgment by respondent's invocation of the appellate procedure provided by the statute, followed by the frustration of that procedure by respondent's dissolution.
It is true that this Court cannot, in the present state of the record, [Footnote 2] render an effective judgment on the merits, because the sole respondent brought before us by the petition for certiorari, by reason of its dissolution, no longer has capacity to be sued, and no one has sought to procure substitution of any other person as party respondent.
Such is the effect of dissolution under the Louisiana law. See McCoy v. State Line Oil & Gas Co., supra; Ortego v. Nehi Bottling Works, 182 So. 365, 367; compare Oklahoma Natural Gas Co. v. Oklahoma, 273 U. S. 257. But the judgment of the District Court was entered against respondent before it was dissolved and while it was capable of being sued. Hence, it was binding on respondent and, as we have been, on others who, in appropriate circumstances, may be brought within its reach. The dissolution of respondent, so long as the certificate of dissolution is not annulled, precludes enforcement of the judgment against it, but does not foreclose petitioner from asserting his rights against such order persons as may be bound by the judgment. Hence, it does not follow, because the pending appellate proceeding has abated, that the judgment of the District Court has abated because of respondent's dissolution. Nor does it follow, because of this Court's inability to proceed with the appeal on the merits for want of a proper party respondent, that petitioner is to be deprived of the benefit of his judgment in the District Court, which the statute contemplates shall be undisturbed save only by pursuit to completion of the prescribed appellate procedure.
299 U. S. 155-156. When it is without jurisdiction to decide an appeal which should have been prosecuted to another court, it may vacate the judgment and remand the cause in order to enable the court below to enter a new judgment from which a proper appeal may be taken. Gully v. Interstate Natural Gas Co., 292 U. S. 16; Oklahoma Gas & Electric Co. v. Oklahoma Packing Co., 292 U. S. 386, 292 U. S. 392; Jameson & Co. v. Morgenthau, 307 U. S. 171, 307 U. S. 174; Phillips v. United States, 312 U. S. 246, 312 U. S. 254. If a judgment has become moot, this Court may not consider its merits, but may make such disposition of the whole case as justice may require. United States v. Hamburg-American S.S. Co., 239 U. S. 466, 239 U. S. 477-478; Heitmuller v. Stokes, 256 U. S. 359, 256 U. S. 362-363; Brownlow v. Schwartz, 261 U. S. 216, 261 U. S. 218.
of Appeals be vacated, and the judgment of the District Court restored, as though respondent had taken no appeal.
In the McCoy case, it was held at 585, 586 that it is the duty of a liquidator of a corporation in dissolution to "terminate in a legal manner . . . by prosecuting, defending, or compromising it, all litigation pending in which the corporation is a party." The court further stated that "the Legislature had no intention of sanctioning the issuance of a certificate of dissolution" where the liquidator had failed to discharge that duty, to the injury of opposing litigants. The Louisiana court deemed it appropriate in that case to annul the certificate of dissolution of the corporation there involved, in view of its liquidator's failure to terminate in a legal manner, prior to dissolution, the suit there under consideration.
We do not consider whether, in this case this Court has a like power to annul the certificate of dissolution of respondent corporation, so as to permit the continuation of appellate proceedings here, for, as will appear, other disposition of the case seems more appropriate.

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