Hargraves v. Brackett Stripping Machine Company

• Decision Date: 11 September 1970
• Docket Number: Civ. A. No. 5485.
• Citation: 317 F. Supp. 676
• Parties: Curtis HARGRAVES v. BRACKETT STRIPPING MACHINE COMPANY, Inc. and Dexter Folder Co., Inc. (Miehle-Goss-Dexter, Inc.).
• Court: U.S. District Court — Eastern District of Tennessee

317 F. Supp. 676

Curtis HARGRAVES v. BRACKETT STRIPPING MACHINE COMPANY, Inc. and Dexter Folder Co., Inc. (Miehle-Goss-Dexter, Inc.).

Civ. A. No. 5485.

United States District Court, E. D. Tennessee, S. D.

September 11, 1970.

Hargraves & Curtis, Chattanooga, Tenn., for plaintiff.

Goins, Gammon, Baker & Robinson, Campbell & Campbell, Chattanooga, Tenn., for defendants.

MEMORANDUM

FRANK W. WILSON, Chief Judge.

This case is before the Court upon the following motions: (1) motion for summary judgment filed by Brackett Stripping Machine Company, Inc., (2) motion for summary judgment filed by Miehle-Goss-Dexter, Inc., acting for Dexter Folder Co., Inc., and (3) motion of the plaintiff to amend so as to substitute Miehle-Goss-Dexter, Inc., as the party defendant in lieu of Dexter Folder Co., Inc.

Taking up first the plaintiff's motion to amend, the plaintiff seeks to amend his complaint by substituting the name of Miehle-Goss-Dexter, Inc., wherever the name Dexter Folder Co., Inc., appears in the pleadings. It appears undisputed from the interrogatories in this case that while Dexter Folder Co., Inc., and Miehle-Goss-Dexter, Inc., were separate and distinct corporations at one time, Miehle-Goss-Dexter, Inc., acquired all of the stock of Dexter Folder Co., Inc., and Dexter Folder Co., Inc., was merged into Miehle-Goss-Dexter, Inc., in 1956. It further appears undisputed that Miehle-Goss-Dexter, Inc., has been responding for and on behalf of Dexter Folder Co., Inc., throughout this litigation and has filed an answer on behalf of the said defendant. Under these circumstances there would appear to be no prejudice to Miehle-Goss-Dexter, Inc., if the plaintiff were allowed to amend his complaint so as to name Miehle-Goss-Dexter, Inc., as the party defendant herein in lieu of Dexter Folder Co., Inc. The motion to amend will accordingly be allowed.

Turning to the respective motions for summary judgment, the motion on behalf of the defendant, Miehle-Goss-Dexter, Inc., asserts the following: (1) that Dexter Folder Co., Inc., was not subject to the jurisdiction of this Court as it was not doing business in Tennessee at the time the lawsuit was filed; (2) that Dexter Folder Co., Inc., ceased to exist in 1956 and that any action based upon a sale made by it in 1928 is barred by the applicable Tennessee Statute of Limitations; and (3) that Dexter Folder Co., Inc., was not a party to any sale to the Times Printing Company of the machine involved in this lawsuit and this lawsuit is accordingly barred by lack of any privity between Dexter Folder Co., Inc., and either the Times Printing Company or the plaintiff.

The motion for summary judgment on behalf of the defendant, Brackett Stripping Machine Company, Inc., asserts the following: (1) that Brackett Stripping Machine Company, Inc., was not incorporated until July 16, 1964, and did not manufacture the machine on which the plaintiff was injured, nor did it have any connection of any kind with the design, manufacture or sale of the machine; (2) that a predecessor of Brackett Stripping Machine Company, Inc., a partnership going under the name of Brackett Stripping Machine Company, received assignment of the patent on the subject machine from the wife of the inventor upon November 5, 1927, and thereafter on January 15, 1934, sold and assigned the patent unto Dexter Folder Co., Inc.; and (3) that the machine sued upon was sold by the Dexter Folder Co., Inc., on August 29, 1928, and that this action is barred by the applicable statute of limitations.

It is apparent that the respective motions for summary judgment raise one issue in common and that is the statute of limitations issue. The Court will accordingly consider the other grounds in each motion separately and then jointly consider the statute of limitations issue. Before taking up the various grounds in the respective motions, however, it would be appropriate at this point to state those matters that appear undisputed in the present record.

Upon June 10, 1922, one John E. Mulroney obtained a patent upon a trimmer machine. Upon the death of the inventor this patent was assigned to his executrix, Margaret B. Mulroney, on July 23, 1927, and she in turn assigned the patent on November 25, 1927, to a partnership consisting of Edward M. Brackett and his son, Fred Brackett, doing business as the Brackett Stripping Machine Company. It appears that in 1928 a business arrangement existed between the Brackett Stripping Machine Company, the above referred to partnership, and Dexter Folder Co., Inc., whereby Brackett Stripping Machine Company manufactured under the above patent Trimmer Machine No. B4-107, being the machine that is the subject matter of this lawsuit, and Dexter Folder Co., Inc., as sole distributing agent for the machine, sold the machine to the Burkhart Company of Detroit, Michigan, on August 29, 1928.

Some 40 years later, on January 22, 1968, the Times Printing Company of Chattanooga, Tennessee, acting through its agent, Griffin Printing Machine Company of Nashville, Tennessee, purchased the Trimmer Machine No. B4-107 from the Burkhart Company. On June 18, 1968, the plaintiff, in the course of his employment with the Times Printing Company, was working about the said trimmer machine when he received injuries that form the basis of this lawsuit.

Following the manufacture of Trimmer Machine No. B4-107 in 1928, the history of the Brackett Stripping Machine Company is as follows. As noted above, the Brackett Stripping Machine Company in 1928 was a partnership consisting of Edward M. Brackett and his son, Fred Brackett. In 1934 Edward M. Brackett transferred his interest in the said partnership to his son, Fred Brackett, for the sum of $1.00. Thereafter Fred Brackett, continuing to operate under the name of Brackett Stripping Machine Company, operated the business as a sole proprietorship from 1934 until 1958. On November 8, 1958, Fred Brackett entered into a partnership agreement with one Boyd C. Blair. This partnership continued to operate the business under the name of the Brackett Stripping Machine Company from 1958 until January 1, 1964, when Fred Brackett sold his interest in the partnership to Boyd C. Blair. From January 1, 1964, until July 16, 1964, Boyd C. Blair operated the business as a sole proprietorship. On July 16, 1964, the defendant corporation, the Brackett Stripping Machine Company, Inc., was first organized with Boyd C. Blair, Jeanie L. Blair, and Harold J. Swenson as incorporators. Boyd C. Blair transferred his interest in the Brackett Stripping Machine Company, the sole proprietorship, to the defendant corporation in return for stock in the corporation and the defendant corporation has since owned and operated the business.

As regards the Dexter Folder Co., Inc., it appears that this corporation was founded in Des Moines, Iowa, in 1890 and moved to Pearl River, New York, in 1894. In 1927 the Miehle Printing Press and Manufacturing Company acquired a 50% interest in the Dexter Folder Co., Inc., and in February 1956 acquired the remaining 50% interest. In September 1956 Dexter Folder Co., Inc., was merged into Miehle Printing Press and Manufacturing Company. Thereafter the name of the corporation was changed to Miehle-Goss-Dexter, Inc., and the former Dexter Folder Co., Inc., is now operated as a division of Miehle-Goss-Dexter, Inc.

Returning to the motion for summary judgment filed on behalf of the defendant, Brackett Stripping Machine Company, Inc., it is contended that the defendant corporation, having been organized only in 1964, could not be held liable for a machine manufactured and sold in 1928 by a predecessor partnership doing business under the name of Brackett Stripping Machine Company. While it does appear undisputed that the defendant corporation is a separate and distinct business entity from the partnership which in 1928 manufactured the trimming machine herein sued upon, the present record does not reflect sufficient facts to permit the Court to determine whether in the successive transfers of the business between the 1928 partnership and the 1964 corporation there was an unbroken chain of assumption of liabilities. The present record is insufficient to establish whether in each successive transfer the liabilities of the previous business entity were passed on to the successor business either by agreement of the parties or by operation of law, such as pursuant to the Bulk Sales Law or the Law of Fraudulent Conveyances. The plaintiff will of course have the burden of proving an unbroken line of assumption of liabilities, either by agreement of the parties or by operation of law, between the business entity manufacturing the subject machine in 1928 and the defendant corporation before the defendant corporation could be held liable in this lawsuit. On the basis of the present record the Court cannot say that no genuine issue of fact exists in this regard.

Turning to the motion for summary judgment filed on behalf of Dexter Folder Co., Inc., it would appear that insofar as the defendant contends that the Court lacks personal jurisdiction over Dexter Folder Co., Inc., the motion has been rendered moot by the plaintiff's amendment substituting Miehle-Goss-Dexter, Inc., as the party defendant. As previously noted, Dexter Folder Co., Inc., was merged into Miehle-Goss-Dexter, Inc., in 1956. Treating the motion for summary judgment as being made on behalf of Miehle-Goss-Dexter, Inc., it does not appear that the jurisdictional issue can be resolved on the present record. Rather than reflecting an absence of doing business in Tennessee, the evidence reflects that Miehle-Goss-Dexter, Inc., has done substantial business in Tennessee in recent years. Accordingly the motion for summary judgment upon the ground of lack of personal jurisdiction will be denied.

The Court is likewise of the opinion that the motion for summary judgment for lack of privity between Dexter Folder Co., Inc., and...