but when viewed in the light of the many different interests which are implicated by the concomitant fact of the employment relationship involved in this case, this "contact" becomes vitally important. This additional fact serves to create a matrix which involves the immediate parties to this action as well as the employer who paid workmen's compensation (see deposition of plaintiff, pp. 23-30), the State of New Jersey with its interest in the allocation of risk in the employment relationship, and the insurance carrier which paid the compensation benefits.2a Moreover, interwoven into this matrix is an additional consideration which underlies the ultimate resolution of the tort issue -- the accountability of corporate suppliers of allegedly defective machines which cause injuries and disruption in employment.
Second, at the time of the injury, February 22, 1971, plaintiff had in fact been living in New Jersey, subject of course to the rights and obligations which that state places on its residents. Such rights include those which are based on the correlative duties which the state imposes on corporations which avail themselves of the opportunity to engage in commerce there. The predecessor corporation, Rock Wool, sold the machine in question to the plaintiff's New Jersey employer, and necessarily subjected itself to the applicable laws of New Jersey regulating the allocation of risks from injury caused thereby. The tort liability of a successor corporation, Bemis, bears a logical relationship to these considerations. The fact that plaintiff had resided in Pennsylvania all his life except for the three months prior to the accident and thereafter returned to Pennsylvania does not serve to tip the balance in favor of Pennsylvania in light of the quality and import of the other contacts with New Jersey.
Third, on balance, neither the interests of Indiana nor of Pennsylvania, when closely analyzed, rise to the level of interest which New Jersey has in this litigation. The fact that the machine was manufactured in Indiana by an Indiana corporation which ultimately sold its assets to the defendant under an agreement to be construed under Indiana law does not change the significance of the fact that the machine was destined for use in and caused injury in New Jersey. We are here concerned with the issue of tort liability as to third persons who were not parties to the agreement transferring assets between corporations, an issue which requires us to focus on much more than the contractual niceties of the corporate arrangement inter se. Similarly, the possibility that plaintiff may become a "public charge" to the taxpayers of Pennsylvania is not by itself a contract of sufficient quality to call into play the application of Pennsylvania laws on this issue. See Cipolla v. Shaposka, 439 Pa. 563, 267 A.2d 854 (1970); Cavallaro v. Williams, 530 F.2d 473 (3d Cir. C.A.No. 75-1348, Slip op. December 8, 1975); Zurzola v. General Motors Corporation, 503 F.2d 403 (3d Cir. 1974). See also Suchomajcz v. Hummel Chemical Company, supra ; Kuchinic v. McCrory, 422 Pa. 620, 222 A.2d 897 (1966). Accordingly, we have concluded that we must apply the law of New Jersey in this case.
This brings us to the second issue in this case, whether, under New Jersey law, defendant Bemis is entitled to summary judgment on the question of its alleged liability in tort as successor to Rock Wool, the corporation which manufactured the allegedly defective machine. On a motion for summary judgment, Rule 56(c), F.R.Civ.P., limits our inquiry to whether or not there is a genuine issue as to any material fact. Lockhart v. Hoenstine, 411 F.2d 455 (3d Cir.) cert. denied, 396 U.S. 941, 24 L. Ed. 2d 244, 90 S. Ct. 378 (1969). We are persuaded: (1) that there is no substantial factual dispute on the record which consists, inter alia, of defendant's affidavits, the transfer agreement, interrogatories and depositions; and (2) that defendant is entitled to judgment as a matter of law.
The facts can be summarized as follows: Pursuant to an agreement executed on March 31, 1966, in exchange for cash Rock Wool transferred the bulk of its assets to defendant Bemis.
Thereafter, Bemis continued to manufacture machines similar to the one which plaintiff asserts was defective and supplied former Rock Wool customers with spare parts. Subsequently, in accordance with the agreement, Rock Wool changed its corporate name to Overman & Shovlin and eventually dissolved in late April, 1967, under the applicable provisions of Indiana law. Two employees of Rock Wool, Robert Stoudt and Thomas Shovlin accepted defendant's employment offers. Shovlin, a former Rock Wool director and vice president, became a product manager and Stout was employed as a foreman. Plaintiff's injuries subsequently occurred on February 21, 1971.
Defendant argues that this transfer of assets was simply a sale and nothing more, while plaintiff contends that Bemis must answer for the alleged tortious conduct of Rock Wool because: (1) under the transfer agreement, defendant Bemis impliedly assumed liability for injuries such as the one in question;
(2) defendant Bemis was a mere continuation of the selling corporation and, therefore, must take responsibility for the injuries caused by its product; and (3) the transaction in question constituted a de facto merger.
In turning to the principles of New Jersey law which we conclude must be applied, we find that the rule governing the tort liability of a successor corporation is set forth in McKee v. Harris-Seybold Co., 109 N.J.Super. 555, 264 A.2d 98 (L.Div. 1970); aff'd per curiam, 118 N.J.Super. 480, 288 A. 2d 585 (App.Div. 1972)
"It is the general rule that where one company sells or otherwise transfers all its assets to another company the latter is not liable for the debts and liabilities of the transferor, including those arising out of the latter's tortious conduct, except where: (1) the purchaser expressly or impliedly agrees to assume such debts; (2) the transaction amounts to a consolidation or merger of the seller and purchaser; (3) the purchasing corporation is merely a continuation of the selling corporation, or (4) the transaction is entered into fraudulently in order to escape liability for such debts. Jackson v. Diamond T. Trucking Co., 100 N.J.Super. 186, 241 A. 2d 471 (Law Div. 1968); Andres v. Morgan, 62 Ohio St. 236, 56 N.E. 875 (Sup.Ct.1900); Ruedy v. Toledo Factories Co., 61 Ohio App. 21, 22 N.E.2d 293 (App.Ct. 1939); Kloberdanz v. Joy Mfg. Co., 288 F. Supp. 817 (D.Colo. 1968); 19 Am.Jur.2d § 1546, at 922. A fifth exception, sometimes incorporated as an element of one of the above exceptions, is the absence of adequate consideration for the sale or transfer. 19 Am. Jur. 2d § 1551, at 927; 7 Fletcher, Cyclopedia of Corporations, § 4751 (1919 ed.)."