Court Opinion

ID: 3837956
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:06:56.551272+00
Date Added: 2024-06-11T15:47:05.914244
License: Public Domain

I am unable to concur in the majority opinion. The note was originally payable to Fletcher Tire Company and assigned for collection, after maturity, to the plaintiff. The defense claimed by defendant, Roberts Fuel Oil, Inc., is that this note was not given for a corporate obligation, but for the personal obligation of its president, C.H. Roberts, and that the defendant corporation is therefore not liable on the note.
Prior to April 25, 1930, C.H. Roberts was engaged in the retail fuel oil business as an individual under the name Roberts Fuel Oil Service, and had become indebted to the Fletcher Tire Company for merchandise consisting mainly of tires to the extent of $548.14. On that date Mr. Roberts filed a voluntary petition in bankruptcy and was adjudicated a bankrupt. On May 12, 1930, the defendant corporation, Roberts Fuel Oil, Inc., was formed. C.H. Roberts subscribed to one share of the stock of this corporation, of the par value of $100, paying for his stock by transferring to the corporation certain office furniture and equipment. His attorney, J.M. Hickson, also subscribed for one share of stock, and Roberts' wife subscribed for the balance of the stock and paid into the corporation the sum of $2,400. Mr. Roberts became president and manager *Page 653 
of this corporation. Thereafter Roberts continued the business in the name of Roberts Fuel Oil, Inc., and, on August 20, 1930, the note in question was signed by "Roberts Fuel Oil, Inc., C.H. Roberts, President". The note was executed and delivered to the Fletcher Tire Company, the consideration being merchandise, which had been furnished to Roberts Fuel Oil Service, and $18 of merchandise, which had been purchased by Roberts Fuel Oil, Inc. Mr. Roberts testified that he paid several of the bills owing by him when he was adjudged a bankrupt. A few months after the note was executed Roberts and his wife sold the stock in the defendant corporation to the Albina Fuel Company.
The action was commenced in the district court of the state of Oregon for Multnomah county. Judgment went for plaintiff, and defendants appealed to the circuit court. In the circuit court, the plaintiff moved to amend his reply so as to allege that the merchandise was furnished to Roberts personally, and that the defendant "The Roberts Fuel Oil, Inc., is the successor to Roberts Fuel Oil Service, and is now estopped to deny the said obligation and/or the authority of said C.H. Roberts". The amendment was allowed and the defendants assign error based thereon.
Section 1-906, Oregon Code 1930, provides as follows:
"The court may, at any time before trial, in furtherance of justice, and upon such terms as may be proper, allow any pleading or proceeding to be amended by adding the name of a party, or other allegation material to the cause; and in like manner and for like reasons it may, at any time before the cause is submitted, allow such pleading or proceeding to be amended, by striking out the name of any party, or by correcting a mistake in the name of a party, or a mistake *Page 654 
in any other respect, or when the amendment does not substantially change the cause of action or defense, by conforming the pleading or proceeding to the facts proved."
Section 16-410, Oregon Code 1930, directs that the appellate court may, in furtherance of justice, and upon such terms as may be just, allow the pleadings in the action to be amended so as not to substantially change the issue tried in the justice's court, or to introduce any new cause of action or defense.
The testimony shows that the Roberts Fuel Oil, Inc., took over the business that the Roberts Fuel Oil Service conducted, by C.H. Roberts, consisting of the good will and a contract for the distribution of oil from the Texas Oil Company and contracts with individuals to supply oil. The Roberts Fuel Oil, Inc., was therefore interested in the condition of the business and obtained an advantage by having, what appears to have been, an established business, and was in a position to assume the obligation of the Roberts Fuel Oil Service for the main portion of the account with Fletcher Tire Company, adding its own account, and, by the execution of the note, which is a solemn obligation to pay the same, it thereby assumed the payment of that portion of the indebtedness of Roberts Fuel Oil Service, or C.H. Roberts. There was, therefore, a valid consideration for the execution of the note. The corporation was owned by the Roberts family, and C.H. Roberts was the manager thereof and was authorized to conduct its business and to execute the note. Therefore, the second assignment of error, based upon the contention of defendants, that the court erred in entering its findings of fact and conclusion of law, is not well grounded. Upon an appeal *Page 655 
from a cause tried to the court without a jury, the evidence will be reviewed only to ascertain if it is competent to support the finding. Findings of fact have the same force as a verdict of a jury and will be sustained unless the evidence is insufficient, as a matter of law, to support them: Weigar v. Steen, 81 Or. 72
(158 P. 280); Meyer v. Barde, 112 Or. 197 (228 P. 121). The testimony in the case supports the findings of fact made by the trial court.
A corporation, empowered by its articles to conduct a business, may assume the obligation of one who conveyed its property to it for purposes of such business, and its note given to discharge such obligation is not ultra vires: 14a C.J. 746, § 2795;Western Nat. Bank v. Wittman, 31 Cal. App. 615 (161 P. 137).
The general rule that actions against a corporation abate on dissolution does not apply where the circumstances attending the creation of a new corporation and its succession to the property, and business of the old corporation, or partnership, or individual, show that it is in reality a mere continuance of the old business, since the new corporation impliedly assumes and is liable upon the obligations of the old: Jones v. Francis,70 Wash. 676 (127 P. 307); Curtis, Jones  Co. v. Smelter Nat.Bank, 43 Colo. 391 (96 P. 172).
There is little question but that a corporation will become liable for the debts of its predecessors where it has expressly or by reasonable implication assumed their payment, and in the present case the defendant corporation expressly assumed the payment of a portion of the note by the execution thereof, containing an absolute promise to pay the same: Calumet PaperCo. v. Stotts Inv. Co., 96 Iowa 147 (64 N.W. 782, 59 Am. St. Rep. 362); Northwest Perfection Tire Co. v. Perfection TireCorp., 125 Wash. 84 (215 P. 360). *Page 656 
The corporation's assumption of the payment of the indebtedness of Roberts Fuel Oil Service, in consideration for the business and property of its successor, is entirely different from the signing of an accommodation paper and endorsements given for the benefit of another not related to the business of the corporation. See Western National Bank v. Wittman, supra.
The fact that the Albina Fuel Company purchased the stock of the defendant corporation does not change the liability of the defendant corporation in the least.
The defendant Roberts Fuel Oil, Inc., executed the note in question for a valid consideration in the ordinary course of its business.
The judgment of the circuit court should be affirmed. *Page 657