Schenley Distillers Corporation v. United States

• Decision Date: 17 November 1945
• Docket Number: No. 560,560
• Citation: Schenley Distillers Corporation v. United States, 326 U.S. 432, 66 S.Ct. 247, 90 L.Ed. 181 (1945)
• Parties: SCHENLEY DISTILLERS CORPORATION et al. v. UNITED STATES et al. On Jurisdictional Statement Distributed
• Court: U.S. Supreme Court

326 U.S. 432

66 S.Ct. 247

90 L.Ed. 181

SCHENLEY DISTILLERS CORPORATION et al.

v UNITED STATES et al.

No. 560.

On Jurisdictional Statement Distributed

Nov. 17, 1945.

Decided Jan. 2, 1946.

Appeal from the District Court of the United States for the District of Delaware.

Mr. Charles Edmond Cotterill, of New York City, for appellants.

Messrs. Sol. Gen., Hugh J. McGrath, and J. Stanley Payne, both of Washington, D.C., for appellees.

PER CURIAM.

This is an appeal from a judgment of a district court, three judges sitting, constituted under the Urgent Deficiencies Act, 38 Stat. 220, 28 U.S.C. § 47, 28 U.S.C.A. § 47, dismissing appellants' petition to set aside an order of the Interstate Commerce Commission. Appellant Schenley Distilleries Motor Division, Inc., applied to the commission for a permit, under § 209(b) of Part II of the Interstate Commerce Act, 49 U.S.C. § 309(b), 49 U.S.C.A. § 309(b), authorizing operation as a 'contract carrier by motor vehicle' of specified commodities in interstate commerce between specified points. At the outset of the proceedings before the commission, the appellant moved for dismissal of the application on the ground that the proposed operations were not such as to constitute applicant a 'contract carrier by motor vehicle', defined by § 203(a) (15) of the Act, 49 U.S.C. s 303(a)(15), 49 U.S.C.A. § 303(a)(15), as 'any person which, under individual contracts or agreements, engages in the transportation (other than transportation referred to in paragraph (14) and the exception therein) by motor vehicle of passengers or property in interstate or foreign commerce for compensation.'

Applicant contended at the hearing that it was a 'private carrier of property by motor vehicle', which is defined by § 203(a)(17) as 'any person not included in the terms 'common carrier by motor vehicle' or 'contract carrier by motor vehicle', who or which transports in interstate or foreign commerce by motor vehicle property of which such person is the owner, lessee, or bailee, when such transportation is for the purpose of sale, lease, rent, or bailment, or in furtherance of any commercial enterprise.'

Applicant introduced no evidence to prove compliance with the requirements set forth by § 209(b) for granting a permit as a 'contract carrier' but sought a ruling by the commission that it could carry on its operations as a 'private carrier' without obtaining a permit. Stating that 'the primary reason for filing this application was to secure a determination as to whether the involved operations were those of a contract carrier of property by motor vehicle or of a private carrier', Division 5 of the commission in its report ruled that the applicant was a 'contract carrier' and not a 'private carrier'. As no evidence had been introduced to show that the proposed operations would comply with § 209(b), Division 5 made its order denying the application, and made the report a part of the order. Reconsideration by the full commission was denied.

This suit to set aside the commission's order was brought by the applicant, Schenley Distilleries Motor Division, and by Schenley Distillers Corporation, owner of all the stock of the former. The district court held that it had jurisdiction to review the order. It dismissed the suit as to the parent corporation on the ground that it had no legal interest sufficient to entitle it to maintain uit. The court held that the commission properly ruled that the applicant was a 'contract carrier', and accordingly dismissed the complaint.

The district Court rightly held that the parent corporation had no standing to sue. It did not ask that a permit be issued to it, and its sole interest in the permit sought for its co-appellant was that of a stockholder. We have held that a minority stockholder of a carrier corporation cannot bring suit to set aside a commission order against the corporation. Pittsburgh & W. Va. Ry. v. United States, 281 U.S. 479, 486-488, 50 S.Ct. 378, 380, 381, 74 L.Ed. 980. A parent corporation which by its stock ownership controls its subsidiary, and which as a party litigant asserts only its stockholder's derivative rights to have its subsidiary secure the permit, cf. American Power Co. v. S.E.C., 325 U.S. 385, 389, 65 S.Ct. 1254, 1256, is even less aggrieved by the commission's order denying the permit than would be a minority stockholder. For the parent is adequately represented for purposes of suit by the subsidiary whose conduct of the litigation it controls. We conclude that the character of a stockholder's interest in this regard is not so altered by the mere facts that it owns all the stock of the corporation against which the commission's order is entered and that the parent manages and controls its subsidiary, as to give the stockholder standing to sue to set...