Walling v. James Reuter

• Citation: 321 U.S. 671,88 L.Ed. 1001,64 S.Ct. 826
• Decision Date: 10 April 1944
• Docket Number: No. 436,436
• Parties: WALLING, Administrator of Wage and Hour Division, U.S. Department of Labor, v. JAMES V. REUTER, Inc
• Court: United States Supreme Court

321 U.S. 671

64 S.Ct. 826

88 L.Ed. 1001

WALLING, Administrator of Wage and Hour Division, U.S. Department of Labor,

v JAMES V. REUTER, Inc.

No. 436.

Argued March 10, 1944.

Decided April 10, 1944.

Mr. Douglas B. Maggs, of Washington, D.C., for petitioner.

Mr. Frank S. Normann, of New Orleans, La., for respondent.

Mr. Chief Justice STONE delivered the opinion of the Court.

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., 29 U.S.C.A. § 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, 64 S.Ct. 205.

The present proceeding is a motion to recall the writ of certiorari, submitted by the attorney who has appeared for respondent in this Court and in the two courts below. His motion is based upon the affidavit of James V. Reuter, described as the former president of the respondent corporation, from which it appears that on December 15, 1943, shortly after this Court had granted certiorari, Reuter and two others, being all the stockholders of respondent, duly 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.

In support of the motion it is argued that since the corporation is, by Louisiana law, now dissolved without any prolongation of its life for the purpose of continuing pending litigation against it, see McCoy v. State Line Oil & Gas Co., 180 La. 579, 583, 157 So. 116, the case has become moot; and further that, for want of a party respondent, this Court is without power to render any effective judgment in the appellate proceeding now pending before it.¹

In the present posture of the case we think it plain that the moving papers fail to establish that the case is moot or has abated merely because of the dissolution of the corporate defendant. See United States v. Trans-Missouri Freight Ass'n, 166 U.S. 290, 307-310, 17 S.Ct. 540, 546, 547, 41 L.Ed. 1007; cf. Southern Pac. Co. v. Interstate Commerce Comm., 219 U.S. 433, 452, 31 S.Ct. 288, 294, 55 L.Ed. 283; Southern Pac. Terminal Co. v. Interstate Commerce Comm., 219 U.S. 498, 514-516, 31 S.Ct. 279, 283, 284, 55 L.Ed. 310; Leonard and Leonard v. Earle, 279 U.S. 392, 398, 49 S.Ct. 372, 374, 73 L.Ed. 754. The judgment rendered by the District Court determined, subject only to resort to the prescribed appellate review of the judgment, the right of the administrator to an injunction restraining the corporation and those associated or identified with it from violating the statute. Not only is such an injunction enforcible by contempt proceedings against the corporation, its agents and officers and those individuals associated with it in the conduct of its business, Wilson v. United States, 221 U.S. 361, 376, 377, 31 S.Ct. 538, 542, 543, 55 L.Ed. 771, Ann.Cas.1912D, 558; cf. In re Lennon, 166 U.S. 548, 17 S.Ct. 658, 41 L.Ed. 1110, but it may also, in appropriate circumstances, be enforced against those to whom the business may have been transferred, whether as a means of evading the judgment or for other reasons. The vitality of the judgment in such a case survives the dissolution of the corporate defendant. Southport Petroleum Co. v. National Labor Relations Board, 315 U.S. 100, 106, 107, 62 S.Ct. 452, 455, 456, 86 L.Ed. 718. And see, to like effect, National Labor Relations Board v. Hopwood Retinning Co., 2 Cir., 104 F.2d 302, 304, 305; Interstate Commerce Comm. v. Western New York & P.R. Co., C.C., 82 F. 192, 194, 195; Morton v. Superior Court, 65 Cal. 496, 4 P. 489; Katenkamp v. Superior Court, 16 Cal.2d 696, 108 P.2d 1; City of New York, Mayor v. New York & S. I. Ferry Co., 64 N.Y. 622; Farmers Fertilizer Co. v. Ruh, 7 Ohio App. 430; Sperry & Hutchinson Co. v. McKelvey Hughes Co., 64 Pa.Super. 57, 61, 62; cf. Alemite Mfg. Corp. v. Staff, 2 Cir., 42 F.2d 832, 833; National Labor Relations Board v. Colten, 6 Cir., 105 F.2d 179, 183; Union Drawn Steel Co. v. National Labor Relations Board, 5 Cir., 109 F.2d 587, 589, 594, 595. And these principles may be applied in fuller measure in furtherance of the public interest, which here the petitioner represents, than if only private interests were involved. See Virginian R. Co. v. System Federation, 300 U.S. 515, 552, 57 S.Ct. 592, 601, 81 L.Ed. 789, 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,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, La.App., 182 So. 365, 367; compare Oklahoma Natural Gas Co. v. State of Oklahoma, 273 U.S. 257, 47 S.Ct. 391, 71 L.Ed. 634. 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...