Leon Schwab v. Bullock's Inc., a Corporation

B. B. S. K. Corporation [“BBSK”] appeals from an order denying its motion under Rule 60(b) of the Federal Rules of Civil Procedure to vacate a $540,000 default judgment. We reverse.

Schwab filed an antitrust action against three cosmetics manufacturers and two retailers, charging them with conspiracy to refuse to sell the manufacturers’ products to his drugstore, for which Schwab sought damages of $250,000, trebled. One of the defendants named was Germaine Monteil Cosmetiques Corporation, a Delaware corporation [“Germaine-Delaware”]. Germaine-Delaware’s counsel advised Schwab that he had sued the wrong corporation. The named corporation two years earlier had acquired all the assets of and the name “Germaine” from Ger-maine Monteil Cosmetiques Corporation, a New York corporation [“Germaine-New York”], and the Delaware corporation had never participated in any of the activities alleged in the complaint.

Germaine-New York changed its name to BBSK after the sale of its assets and thereafter did not operate as a functioning business entity. BBSK was promptly placed in liquidation and finally dissolved in April, 1970, over a year before judgment by default was entered against…