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SCHENLEY DISTILLERIES CORP. V. UNITED STATES, 326 U. S. 432 (1946)

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U.S. Supreme Court

Schenley Distilleries Corp. v. United States, 326 U.S. 432 (1946)

Schenley Distilleries Corp. v. United States

No. 560

Decided January 2, 1946

326 U.S. 432

Syllabus

In order to obtain a determination as to whether it was a "contract carrier by motor vehicle" as defined by § 203(a)(15) of Part II of the Interstate Commerce Act or a "private carrier of property by motor vehicle" as defined by § 203(a)(17), one of the appellants applied to the Interstate Commerce Commission for a permit under § 209(b) to operate as a "contract carrier." In the proceedings before the Commission, it moved to dismiss its own application on the ground that the proposed operations were not such as to make it a "contract carrier," introduced no evidence to prove compliance with § 209(b), and sought a ruling by the Commission that it could carry on its operations as a "private carrier" without obtaining a permit. It contended that it was a "private carrier" because its operations were to be performed for its parent corporation (which owned all of applicant's stock) and for other corporations owned or controlled by the parent. The Commission ruled in its report that applicant was a "contract carrier," and not a "private carrier," and made this report a part of an order denying the application because of failure to show compliance with § 209(b). Applicant and its parent corporation sued to set aside the Commission's order.

Held:

1. The parent corporation had no standing to sue, since it did not apply for a permit and its sole interest in the permit sought by the applicant was that of a stockholder. P. 326 U. S. 435.

2. The parent corporation is adequately represented for the purposes of such a suit by the subsidiary, whose conduct of the litigation it controls. P. 326 U. S. 435.

3. It was appropriate for the Commission to treat the filing of an application under § 209(b), with a request that it be dismissed on the ground that it is not required, as a proper method of raising the issue whether the applicant is subject to the Act. Cornell Steamboat Co. v. United States, 321 U. S. 634, 321 U. S. 635, reaffirmed. P. 326 U. S. 436.

4. The Commission's order determining that applicant is subject to the Act is a reviewable order . P. 326 U. S. 436. chanroblesvirtualawlibrary

Page 326 U. S. 433

5. Applicant's proposed operations would clearly constitute it a "contract," rather than a "private," carrier. P. 326 U. S. 436.

6. While corporate entities may be disregarded when they are used to avoid a clear legislative purpose, they will not be disregarded where those in control have deliberately adopted the corporate form in order to secure its advantages and where no violence to the legislative purpose is done by treating the corporation as a separate legal person. P. 326 U. S. 437.

7. The fact that several corporations are used in carrying on one business does not relieve them of their several statutory obligations. P. 326 U. S. 437.

61 F.Supp. 981 affirmed.

Appeal from a judgment of a district court of three judges dismissing a suit to set aside an order of the Interstate Commerce Commission.





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