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Business Organizations Keyed to Ragazzo
Morris Oil Co. v. Rainbow Oilfield Trucking, Inc.
Citation:106 N.M. 237
The Defendants Rainbow Oilfield Trucking and Dawn Enterprises came to an agreement where Dawn would gain full control over Rainbow’s business operations. The two Defendants agreed that Rainbow would not be Dawn’s agent through the course of acquiring debt. However, Rainbow was not authorized to incur additional debts for Dawn that were outside the ordinary course of business. Defendant Rainbow agreed to purchase fuel from Plaintiff Morris Oil however, Rainbow did not disclose to Plaintiff the relationship with Dawn. When Rainbow’s business failed, it still had an outstanding debt to Plaintiff. Once Plaintiff learned about Dawn’s involvement, Dawn told Plaintiff that it would pay its debt. Dawn did not pay Plaintiffs debt. Plaintiff sued both Defendants to collect the debt they were owed. Trial court found in favor of the Plaintiff. Dawn (Defendant) appealed.
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