Elle v. Babbitt
Oregon Supreme Court
488 P.2d 440 (1971)

- Written by Rich Walter, JD
Facts
Along with several others, Ralph Elle (plaintiff) was a partner in The Pipe Machinery Company (partnership), formed in 1954. The partnership also included John Beall (defendant), the president and controlling shareholder of Beall Pipe and Tank Corporation (corporation) (defendant), and another corporation manager named E. J. Babbitt (defendant). The partnership made money by leasing its manufacturing facilities to the corporation in return for royalties on the corporation’s sales. In 1963, the corporation needed to cut costs in order to lower its prices and thereby close a major sale. Beall and Babbitt decided, without consulting the partnership’s other members, to temporarily reduce the partnership’s royalties. Elle filed a multicount suit against Beall and Babbitt. One count sought damages for the lost 1963 royalties. The trial court entered judgment for Elle. Beall appealed to the Oregon Supreme Court.
Rule of Law
Issue
Holding and Reasoning (McAllister, J.)
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