DocketNumber: 4779
Citation Numbers: 12 Ga. App. 790
Judges: Hill
Filed Date: 6/10/1913
Status: Precedential
Modified Date: 1/12/2023
The Jasper Trading Company, a corporation under the laws of this State, was placed in the hands of a receiver under a bill filed by the 'Stockholders,' with the usual restraining order enjoining all creditors from suing the corporation or from in any manner interfering with the business of the receiver, and especially restraining and enjoining the plaintiffs in error from prosecuting suits which they had brought against the corporation in a justice’s court for salaries claimed to be due them for services to have been tendered the corporation under a contract made with the corporation. Notwithstanding this restraining order, the plaintiffs in error prosecuted their suits in the justicejs cdurt, and, by consent, their suits were consolidated and an appeal taken to the superior court. In the superior court, a stipulation as to the facts was made, and thereupon the suits were dismissed; and a writ of error brings the case here for review. No question is made as to the right of the plaintiffs in the justice’s court to prosecute their suits in violation
There was no breach of the contracts for wages by the voluntary \ act of the corporation. The contracts were discharged by operation' of law, in that the corporation was placed in the hands of a receiver., ■ Its business was stopped by injunction, and the receiver was ordered to collect its assets to pay existing creditors. No provision was made for continuance of the business of the corporation by the receiver. Under these facts, we do not think the plaintiffs were entitled to recover on their executory contracts, for services which they would have’ performed but for the intervention of the court and the appointment of a receiver. The corporation, by operation"' of law, was discharged from the performance of its executory contracts. In Griggs v. Swift, 82 Ga. 393 (9 S. E. 1062), it is held that “A contract by a partnership with an employé for personal services in the current business of the firm for one year, at a given rate per month, is dissolved by a dissolution of the firm within the year by the act of God. There can be no recovery on such contract for services never in fact rendered, but which the employé would have rendered had the surviving partner not discharged him after the dissolution.” This decision was based by the court upon section 2781 of the Code of 1882 (Code of 1910, § 4319). This section declares that if performance is impossible and becomes so by the act of God, such impossibility is itself equivalent to performance. In the opinion in that case Chief Justice Bleckley said:. “There being no one after the partnership went out of existence to receive the personal services which the plaintiff had contracted to render as inspector of farms and. collector for the partnership, the further execution of the contract was as much impossible as if the plaintiff himself had died before or after a dissolution of the firm had taken
We think the rule announced is much more clearly applicable to a corporation than to a partnership; for, although the partnership might be dissolved, the surviving partner might with greater reason be held to carry out the executory contracts of the partnership than would a corporation, where its business and all of its assets has been placed in the hands of a receiver, with direction to wind up the business of the corporation, and an injunction granted against the interference of third persons with the liquidation of the corporation by the receiver. The corporation would no longer be in business, and therefore could not be expected to carry out executory contracts dependent upon the existence of the business. While the receiver of the corporation might have an election to carry out such contracts as in his judgment would be beneficial to the sue-’ cessful winding up- of the corporation business, and under the order of the court, yet he could not be required to perform the executory contracts of the corporation. Some of them might continue lony after the receivership had been completed. A legal impossibilit to carry out the executory contract of'a corporation arises by th
We conclude that the judgment dismissing these suits' is supported by authority and is in thorough consonance with sound reason. The right to recover for breach of the contract would arise only from a wrongful discharge. The corporation did not discharge the plaintiffs, and, therefore, there was no breach of the contract. The contract was discharged by qperation of law, since the power to perform executory contracts was taken away from the corporation in the appointment of the receiver and the granting .of the injunction. Judgment affirmed.