## Facts

- Erickson performed accounting and related professional services for Grande Ronde Lumber Co., which did not pay his fee.
- While the debt remained unpaid, Stoddard Lumber Company purchased all assets of Grande Ronde and agreed to assume Grande Ronde’s indebtedness.
- Erickson sued both Grande Ronde (the original debtor) and Stoddard (the assuming company) in a single action to recover the same unpaid debt.
- The trial court imposed liability on both defendants.
- On rehearing, defendants argued Erickson was required to elect between suing the original debtor or the assuming company and could not obtain judgment against both.

## Issues

1. Whether a creditor beneficiary may obtain judgment against both the original debtor (promisee) and the assuming promisor for the same debt, or must elect between them.
2. Whether allowing judgments against both obligors violates the rule against double recovery.

## Decision

- The Oregon Supreme Court denied the petition for rehearing.
- The court held a creditor beneficiary may obtain judgment against either the promisee or the promisor, or against both, on their respective duties.
- The creditor is limited to one complete satisfaction; payment on one duty or judgment reduces the other to the same extent.
- The judgment holding both defendants liable was reaffirmed, subject to the single-satisfaction limitation.

## Legal Principles

- When a promisor agrees with a promisee to assume the promisee’s debt to a creditor, the creditor (as a creditor beneficiary) may enforce the promise.
- A creditor beneficiary with an enforceable claim against the promisee may obtain judgment against the promisee, the promisor, or both.
- Satisfaction in whole or in part of either obligor’s duty (or judgment) discharges the other duty (or judgment) to the same extent.
- An “election of remedies” rule does not bar a creditor beneficiary from pursuing and obtaining judgments against both obligors for the same debt, so long as there is no double satisfaction.

## Conclusion

The court confirmed that a creditor beneficiary may sue and obtain judgments against both the original debtor and the assuming promisor on their respective obligations, with recovery capped at a single full satisfaction of the debt.


Erickson v. Grande Ronde Lumber Co., 94 P.2d 139 (Or. 1939)