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GRANTHUM v. TEXTILE MACHINE WORKS (09/23/74)

decided: September 23, 1974.

GRANTHUM, APPELLANT,
v.
TEXTILE MACHINE WORKS, ET AL.



Appeal from order of Court of Common Pleas, Trial Division, of Philadelphia, Dec. T., 1972, No. 535, in case of Helen Granthum v. Textile Machine Works, North American Rockwell, and Micro Switch.

COUNSEL

Harold Rosenthal, and Rosenthal & Gale, for appellant.

Barton L. Post and Robert Britton, for appellee.

Watkins, P. J., Jacobs, Hoffman, Cercone, Price, Van der Voort, and Spaeth, JJ. Opinion by Jacobs, J.

Author: Jacobs

[ 230 Pa. Super. Page 200]

This is an appeal from an Order granting a Motion for Summary Judgment in favor of appellee North American Rockwell.

In 1971 the appellant, Helen Granthum, was seriously injured while operating a "packer-gluer" machine during the course of her employment with Kraft Foods. She brought a strict liability and breach of warranty action against Textile Machine Works [hereinafter Textile] which manufactured and sold the machine to Kraft; Micro Switch, which manufactured a switch used in the machine; and North American Rockwell [hereinafter Rockwell] which she seeks to hold responsible for her injuries under the theory that Rockwell became the "successor corporation" of Textile.

Rockwell admits that subsequent to the manufacture and sale of the machine, but some three years prior to the date of the accident, it purchased the assets of

[ 230 Pa. Super. Page 201]

Textile and continued a manufacturing operation under the name "Textile Machinery Divisions -- North American Rockwell." It states that under an "Instrument of Assumption" it assumed only "the debts, liabilities, obligations and contracts of [Textile] existing on the date hereof . . .," and that it specifically excluded "liabilities against which [Textile] is insured or otherwise indemnified . . . ." Rockwell asserts that this is the extent of its connection with Textile, and that subsequent to the sale, Textile remained in existence for several months under the name "TM Company" and then dissolved.

Rockwell filed a Motion for Summary Judgment*fn1 alleging that no issue of material fact existed as to its liability because under the applicable rule of law the purchaser of the assets of a corporation may not be held liable for the debts and liabilities of the seller unless (1) the purchaser expressly or impliedly agrees to assume such obligation; (2) the transaction amounts to a consolidation or merger; (3) the purchasing corporation is merely a continuation of the selling corporation, or (4) the transaction is fraudulently entered into to escape liability. See Shane v. Hobam, Inc., 332 F. Supp. 526 (E.D. Pa. 1971).*fn2 Rockwell asserts that none of these exceptions is applicable to it; the court below agreed and granted Rockwell's Motion for Summary Judgment.

We find that the court acted prematurely in making its determination that no issue of fact existed as to Rockwell's role in the transaction. A summary judgment is to be entered only in the clearest of cases ...


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