Wednesday, December 11, 2013

Erickson v. Grande Ronde Lumber Co. case brief

Erickson v. Grande Ronde Lumber Co. case brief summary
94 P.2d 139 (1939)

Respondent corporations filed a petition for rehearing, challenging the conclusions reached in an earlier decision on the merits as well as the facts and legal principles employed in reaching it. Appellee creditor had filed suit to recover a debt from both corporations on a third-party beneficiary theory.

Respondents were two corporations. Corporation # 2, the promisor, bought the assets of corporation # 1, the original debtor. The court's previous decision favored the creditor. Upon review of the corporations' petitions for rehearing, the court affirmed.


  • The court rejected the corporations' attack upon its factual conclusion that their corporate stock was largely held by the same individuals; the corporations admitted as much in their rehearing briefs. 
  • The record supported the court's construing the parties' contract by ascertaining their intent from their business relationship. 
  • The record also showed that corporation #2 made a profit when it assumed corporation # 1's assets and liabilities, even though the record did not disclose the actual value of those assets. 
  • On a third-party beneficiary theory, the creditor was entitled to a remedy against both corporations, rather than electing which one to proceed against, and was entitled to a judgment against both; however, the creditor was entitled to only one complete satisfaction. 
  • The court rejected the corporations' argument that the creditor should have sued on a theory of implied novation or on a theory of suretyship.

The corporations' petition for a rehearing was denied.

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