Company in the manufacture of incubators, and (2) whether the successor company had maintained any relationship with the customers of Gordon Armstrong in servicing units sold before the date of acquisition and in attempting to sell new units manufactured by the Air Reduction Company after the date of acquisition. In light of my view of the relevant standards for evaluating the responsibility of a successor corporation, these questions should have been considered by the court in Chadwick.
Under the facts of the present case, the application of the Good Samaritan approach of Chadwick to the product liability and negligence questions presented here would be inappropriate. In the case before me, the defendant can hardly be said to be an innocent bystander, "in no way connected with defendant's conduct or enterprises or undertakings, past or present." Here, it is alleged that after the purchase of the assets of the Smith Company, Hobam continued to operate this company under its original name (John E. Smith's Sons Co.,) as one of the divisions of Hobam.
The Agreement provided that "the entire right to the use of Smith's corporate name and all good will of Smith's business" was "expressly included in the assets" purchased by Hobam. (11) Further, the agreement contemplated that Hobam would continue to have responsibility for servicing equipment previously manufactured and sold by the Smith Company. Paragraph 14 of the Agreement provides: "Anything to the contrary notwithstanding, Smith shall not be liable to Hobam for any expense incurred in the normal servicing and adjusting of machines sold by Smith even though they may have been sold prior to June 30, 1962." In light of these circumstances, there is no basis to treat Hobam as an innocent bystander in regard to the affairs of the Smith Company. As to any products sold after taking over the manufacturing operations of the Smith Company, Hobam had the responsibility to test and where necessary improve the product in light of contemporary advances in product safety, design and manufacture.
In conclusion, defendant is entitled to a partial summary judgment but several gaps in this case preclude my granting defendant's motion for summary judgment on other issues. First, the record is unclear as to whether the meat grinder in question was ever serviced by Hobam after Hobam's acquisition of the Smith Company in 1962. Further, it is not clear whether Hobam, in the period between its acquisition of Smith and the date of the accident, acquired knowledge which indicated the meat grinding machine manufactured in 1948 was defective.
If Hobam actually knew that the previously manufactured machine was significantly defective, was Hobam obligated to advise all of Smith's previous customers of the nature of the defect? Was Hobam obligated to notify all original purchasers of the nature of the defect even when the original purchasers were no longer serviced by Hobam and had no other business relationship with Hobam? Plaintiff is treading on uncharted precedential seas and while there may be a serious question as to whether he has tipped the balance of precedent in his favor, I am reluctant to, and therefore will not, grant a summary judgment before pertinent factual gaps in the present case are filled in, thereby permitting the above questions to be answered with greater precision.
On the issue whether Hobam is liable for the present product liability claim solely by reason of its purchase of Smith's assets, defendant's motion for summary judgment is granted. As to the issue whether Hobam is responsible on a product liability or negligence rationale by reason of any knowledge which Hobam acquired or should have acquired of any significant defect in meat grinding equipment after Hobam's acquisition of Smith, the issue is left open for further discovery. Therefore, as to that issue alone, defendant's motion for summary judgment is denied. In denying defendant's motion for summary judgment on the latter issue I do not mean to imply that even on the present state of the record plaintiff would be entitled to have the issue submitted to a jury.