Melrose Distillers, Inc. v. United States

PETITIONER: Melrose Distillers, Inc.
RESPONDENT: United States
LOCATION: U.S. District Court for the Southern District of New York

DOCKET NO.: 404
DECIDED BY: Warren Court (1958-1962)
LOWER COURT: United States Court of Appeals for the Fourth Circuit

CITATION: 359 US 271 (1959)
ARGUED: Mar 30, 1959
DECIDED: Apr 20, 1959

Facts of the case

Question

Media for Melrose Distillers, Inc. v. United States

Audio Transcription for Oral Argument - March 30, 1959 in Melrose Distillers, Inc. v. United States

Earl Warren:

Number 404, Melrose Distillers, Incorporated et al., Petitioners versus United States of America.

Mr. Marx, you may proceed.

Robert S. Marx:

Mr. Chief Justice and members of the Court, I take it that you are all familiar with the question presented so I'll plunge immediately into the statutes that are involved.

The common law, as Your Honors know, when a corporation was dissolved or put to death either by limitation or forfeiture or by its own act, that was the end of the whole situation and the corporation could no longer prosecute any claims that it might have for its property and anyone who had a claim against it for compensation or for money was without remedy.

Therefore, it was an order to relieve against the harshness of the common law that statutes such as we have here in Maryland and Delaware were enacted to enable a corporation to -- for a limited period to recover any property that it might have or to enable those who had been injured by some civil act of the corporation to recover.

The Maryland's -- that is fully set forth at page 15 of our brief where we quote from Fletcher on corporations in which he says, “Statutes of this type are broadly remedial and statutes for whining up the affairs of dissolved corporations or embodiment of equitable doctrine.

They are remedial and should receive liberal constructions.

And that they do not extend the right to sue such corporations on debts not in existence --

Felix Frankfurter:

Do we have to -- do we have to determine what Maryland and Delaware cases (Inaudible)?

Robert S. Marx:

Unfortunately, no, ironically.

Felix Frankfurter:

No?

You said unfortunately --

Robert S. Marx:

Unfortunately, we have no guide.

Felix Frankfurter:

No, no.

But we have to determine what Maryland and Delaware law is.

Robert S. Marx:

Yes.

Felix Frankfurter:

All right.

And that's really is, isn't it?

Robert S. Marx:

That's unfortunately it.

That's why I've said I would plunge immediately into a discussion of those Maryland laws.

Is it quite true if the -- is there anything about the Government's second point?

Robert S. Marx:

I don't think that the Government's second point rises beyond the Maryland law because if these corporations are not in existence for criminal purposes after they have been dissolved then they are not in existence, the government is not (Inaudible) by its alternative contentions.

Earl Warren:

We'll recess now Mr. --

Robert S. Marx:

-- Maryland statute which is referred to at page 4 of our brief, very short.

The dissolution of a corporation shall be effective when the articles of dissolution have been accepted for a record by the commission.

The record here shows that it was accepted.

Provided, however, that the corporation shall continue in existence for the purpose of paying, satisfying and discharging any existing debts and obligations.

Collecting and distributing its assets and doing all other acts required to liquidate and wind up its business and affairs.

Now, there's no other purpose for which exists.

It exists for the purpose of paying, satisfying and discharging any existing debts and obligations.