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Ray v. Alad Corporation

California Supreme Court
560 P.2d 3 (1977)


Facts

In July 1968, Alad Corporation (Alad I), a ladder manufacturer, sold its stock, equipment, trade name, customer lists, inventory, and goodwill to Lighting Maintenance Corporation. Alad I agreed to dissolve its corporate existence and to assist Lighting with organizing a new corporation. Lighting paid Alad I $207,000 for the sale. The sales agreement did not address the new company’s potential liability for defects in products manufactured or sold by Alad I. Thereafter, Lighting formed Alad Corporation (Alad II) (defendant), and a certificate of dissolution was filed for Alad I. Lighting continued to produce the same products as Alad I. After falling from an Alad ladder in March 1969, Ray (plaintiff) filed suit against Alad II on the basis of strict tort liability. The ladder that was the subject of the suit was manufactured by Alad I prior to dissolution. The court granted Alad II’s motion for summary judgment, concluding that Alad II should not be liable as Alad I’s successor under the circumstances. Ray appealed.

Rule of Law

Issue

Holding and Reasoning (Wright, J.)

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