Opinion ID: 374817
Heading Depth: 2
Heading Rank: 2

Heading: The American Cyanamid Transaction

Text: 21 Our review of the district court's determinations is complicated by the terseness of the court's single sentence order granting summary judgment. While we may surmise that the court rejected each of Gee's arguments in favor of liability, we remain unsure of the basis of the order in other respects. We are particularly unclear on how the court viewed the significance of Heyden's sale of the antibiotic division in 1953 to American Cyanamid. 22 Tenneco argued below that liability passed to American Cyanamid when it purchased the antibiotic division, and, therefore, that Heyden retained no liability to be passed along in 1963 when it sold out to HDN and Tennessee Gas Transmission. 2 Tenneco appeared to back off somewhat in arguing this appeal, citing the American Cyanamid transaction mainly as evidence of Tenneco's lack of intent to assume responsibility for Heyden's pre-1953 liabilities. 3 23 To the extent that the judgment below may have been based upon a finding that the sale of the antibiotic division to American Cyanamid relieved Heyden of potential liability for Gee's injuries, which might be passed on to Tenneco, it must be reversed. We are aware of no rule of law which allows a corporate entity to evade liability for its tortious conduct merely by selling the instrumentality which is alleged to have caused the injury, and none has been cited to us in this appeal. It is the general rule that where a corporation is not dissolved following a sale of assets or a reorganization, it remains liable for debts and liabilities incurred by it, unless it is otherwise agreed between the corporation and its creditors. See 15 W. Fletcher, Cyclopedia of the Law of Private Corporations § 7348 (rev. perm. ed. 1973), and cases cited therein. In the absence of citation to any persuasive California authority, we must find that an interpretation of the law of that state which allows Heyden to escape liability in this instance would be clearly wrong. 4 24 We find it unnecessary to address the question of the legal effect of the provision of the agreement whereby Heyden agreed to indemnify American Cyanamid for all liabilities arising from the operation of the antibiotic division prior to the sale. 5 The court below is free to consider the issue should it arise in the course of the proceedings following remand. 25