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1965 News for Corp. Counsel 1 (1965)

handle is hein.barjournals/nwsccptc1965 and id is 1 raw text is: No. 9, March, 1965 MORE ADMISSION DIFFICULTY As this is written, there is pending in the Ma lanff Court of Appeals the matter of Seeley v. Marylan a e Board of Law Examiners wherein the issue is whether, under reciprocity, Robert B. Seeley of the B & O Rail- road Company Law Department was engaged in the general practice of law and maintained an office there- for, in Michigan prior to his transfer to Maryland. In 1962 the Maryland Court of Appeals adopted a defini- tion of practitioner, with respect to admission to prac. tice by the reciprocity route, which embodies the fore. going elements although they are not specifically set forth in the pertinent statute. In the Seeley case the State Board of Law Examiners have expressed a major- ity (2 to 1) opinion to the Court that the applicant is not qualified for admission on the ground that he did not maintain an office for the general practice of law because his employer paid the rent therefor. The opin. ion conceded however, that the applicant's previous practice qualified as the general practice of law. The dissenter pointed out that payment of rent for the ap. plicant's office has no bearing upon his qualifications as a lawyer. COFFEE -RICH OR BLACK In Coffee-Rich, Inc. v. Commissioner of Public Health & Others, 204 NE 2d 281, the plaintiff manu- facturer sought to enjoin defendants from enforcing Massachusetts statutory provisions proscribing the sale of a substitute for cream or milk which was completely safe for human consumption and which was sold as a frozen food product in Massachusetts in small contain. ers. In deciding the statute is unconstitutional as ap. plied to Coffee-Rich, the Supreme Judical Court held that, since the product was admittedly wholesome, there was nothing to justify an embargo of it on the basis of protecting the public health or safety and that the pro- hibition of the sale of Coffee-Rich was not a reasonable means of protecting the public from the risk of mis- taking for cream, milk or skimmed milk, something that is not that product as defined by statute. TRUTH - IN -PACKAGING Hearings will likely begin in April, 1965, on the so. called Truth-in-Packaging bill, which would grant broad new powers to the FTC and the Food and Drug Administration over size, shape, weight and quantity in packaging and label descriptions of nondurable con. sumer commodities. The latest revision of the bill is S. 985, introduced by Senator Philip A. Hart (See Con- gressional Record, Feb. 19, 1965, pages 3152-3163). STOCK REDEMPTION A stockholder whose stock was redeemed by the cor- poration in a step which made the corporation insol- vent is liable to injured creditors to the extent of the re- demption price, even if there was no proof of fraud, according to the Illinois Supreme Court. Reilly v. Segert, 31 III. 2d 297 (1964) . ESCHEAT CLARIFICATION The United States Supreme Court in an opinion aeTivered February 1, 1965, has provided guide lines for corporations holding monies owed to persons which the Company cannot locate. In the Case of Texas v. New Jersey, et al. (No. 13, Original) 85 S. Ct. 626, 33 U.S.L. Week 4189, the Court established rules for determining which one of various competing States (Texas, New Jersey, Pennsylvania and Florida) had the paramount right to escheat abandoned intangible personal property consisting of unclaimed debts owed by the Sun Oil Cor- poration to a large number of persons who never ap- peared to collect. The books of the Sun Oil Corporation showed that for from 7 to 40 years the Company had owed approxi. mately $26,500 to about 1,730 creditors. The debts in. cluded uncashed checks payable to employees for wages and reimburseable expenses, uncashed checks payable to suppliers for goods and services, and unclaimed divi- dends. The Court, in an avowed attempt to formulate a rule of easy application, held that each item of prop- erty in question in this case is subject to escheat only by the State of the last known address of the creditor, as shown by the debtor's books and records. The Court also enunciated a rule for dealing with the situation when there is no record of any address or when the last known address is in a State which does not provide for escheat of the property: The .. . State of the debtor's corporate domicile could escheat the property subject to the right of the State of last known address to recover it if and when its law makes provision for the escheat of such property. The lone dissenter, Mr. Justice Stewart, believed the question to be settled by prior opinions, and com- mented that the rule adopted in the case awarded the disputed property to the State within which is located the one place where we know a creditor is not. INTERNATIONAL For corporations with international operations, the Supreme Court reversal of the Second Circuit in Banco Nacional de Cuba v. Sabbatino, 11 L ed 804 (1964), is an important decision. An excellent comment on the decision appears in the January, 1965, issue of MICH- IGAN LAW REVIEW. RECIPROCAL BUYING The Supreme Court has agreed to review the Sev- enth Circuit's position in Consolidated Foods Corp. v. FTC, 329 F. 2d, 623 (1964) . The U. S. Solicitor General, in supporting the Commission's petition, emphasizes the questions that are said to be raised by conglomerate mergers which may create a danger of foreclosing a sub- stantial market through reciprocal buying. Although the practices challenged by the Commission would ap- pear to be more appropriate under a Section 5 FTC action, this case could lead to a further broadening of the power of Commission and the Department of Jus- tice to attack acquisitions under Section 7. See 175 ATRR A-5 (11/17/64).

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