## Facts

- In 1975, 17-year-old Calvin Tift was injured while operating a tractor with a chopper box attachment on his father’s farm.
- Calvin was drawn into the chopper box and suffered severe injuries; the chopper box was alleged to be defectively designed and/or manufactured.
- The chopper box was manufactured in 1961–62 by a business operating as a sole proprietorship under the “Forage King” name.
- The business later transitioned into Forage King Industries, Inc., which continued essentially the same agricultural-equipment business.
- The corporation acquired substantially all assets associated with the predecessor enterprise and continued the same name, product line, and manufacturing operations, producing an almost identical product.

## Issues

1. Whether a corporation that acquires substantially all assets of a predecessor sole proprietorship may be held liable for injuries caused by a defective product made by the predecessor.
2. Whether the “mere continuation” exception to successor nonliability can apply when the predecessor was not a corporation.

## Decision

- The Wisconsin Supreme Court reversed the court of appeals’ decision affirming summary judgment for Forage King Industries, Inc.
- The court held that the predecessor’s status as a sole proprietorship, rather than a corporation, does not bar successor liability analysis.
- The court concluded that the “mere continuation” exception could apply because the successor corporation was substantially the same enterprise and manufactured an almost identical product.
- The case was remanded for further proceedings.

## Legal Principles

- Under the general rule, an asset purchaser does not assume the seller’s liabilities unless an exception applies.
- Traditional exceptions include: (1) express or implied assumption of liabilities; (2) de facto merger or consolidation; (3) “mere continuation” of the seller; or (4) a fraudulent transaction to escape liability.
- The applicability of successor liability turns on continuity of the enterprise; the predecessor’s business form (sole proprietorship versus corporation) is not dispositive where the successor is, in substance, the same business.
- A successor that continues the predecessor’s business and product line after acquiring substantially all assets may face products-liability claims under the “mere continuation” exception.

## Conclusion

The court allowed successor-liability claims to proceed against a corporation that continued a predecessor sole proprietorship’s business and product line, holding that the predecessor’s noncorporate form did not preclude applying the “mere continuation” exception.


Tift v. Forage King Indus., Inc., 108 Wis. 2d 72, 322 N.W.2d 14 (1982)