1880 Corp. v. Atlas Corp.

Plaintiff corporation was awarded judgment in the amount of $1,918,567.38 on a contract of guaranty.

Plaintiff, The 1880 Corporation (herein called 1880), which was wholly owned by Dollar Associates, Inc., had purchased an airplane in 1957 for two and a half million dollars. Negotiations were commenced between 1880 and Transocean Air Lines (herein called TAL), an operating airline, for leasing of the aircraft for five years with an option to lessee to purchase. TAL was almost wholly owned by Transocean Corporation of California (herein called TCC).

During the period of negotiations for the lease, defendant, Atlas Corporation, a New York based investment company, became interested in selling one of its wholly owned subsidiaries, the Babb Company, a corporation engaged in the sale and maintenance of aircraft, to TCC. The sale did occur, on July 1, 1957. On July 9, 1957, the lease of the airplane from 1880 was made. Performance by TCC was guaranteed by Babb. Atlas admittedly is responsible for whatever may be Babb’s liability. Default in the lease payments occurred in 1959; the aircraft was abandoned by the lessee at Bradley Field, Connecticut; demand was made upon Babb to…