E-P Constructors, Inc. v. Peterson Tractor Co.

Plaintiff appeals from a judgment for defendant in an action to recover two payments made by plaintiff to defendant on account of conditional sales contracts between defendant and Los Gatos Construction Company, a third party. Los Gatos purchased heavy construction equipment from defendant by three conditional sales contracts and was in default on interest and principal payments aggregating approximately $10,000. E. E. Elcloff, an experienced manager of heavy construction projects, together with a Mr. Pouey, president of Los Gatos, formed plaintiff corporation to enter the heavy construction business. They planned to have Los Gatos transfer its interest in five pieces of equipment to plaintiff, and in consideration therefor plaintiff was to assume the balance due on three conditional sales contracts, by which the equipment had been purchased from defendant. Plaintiff also was to transfer shares of its capital stock to Los Gatos. Ekloff was made president and Pouey vice-president of plaintiff corporation which then entered into an agreement with Los Gatos to purchase the equipment. Plaintiff took a bill of sale from Los Gatos subject to the encumbrances and agreed to pay and…