Wigton v. Climax Coal Co.
| Decision Date | 02 May 1921 |
| Docket Number | 419 |
| Citation | 270 Pa. 420,113 A. 425 |
| Parties | Wigton, Receiver, v. Climax Coal Co., Appellant |
| Court | Pennsylvania Supreme Court |
Argued March 28, 1921
Appeal, No. 419, Jan. T., 1921, by defendant, from order of C.P. No. 5, Phila. Co., Sept. T., 1917, No. 3341, making absolute rule for judgment for want of a sufficient affidavit of defense, in case of F. H. Wigton, receiver of the Morrisdale Coal Co. to use of Morrisdale Coal Co. v. Climax Coal Co. Affirmed.
Assumpsit for breach of contract to sell and deliver coal. Before MARTIN, P.J.
The opinion of the Supreme Court states the facts.
The court entered judgment for $9,784.68, being the portion of plaintiffs' statement of claim as to which the affidavit was insufficient. Defendant appealed.
Error assigned, among others, was judgment, quoting it.
The judgment is affirmed.
E Waring Wilson, for appellant. -- The contract sued on was one which the receiver had no power to make without express authority from the court: Chicago Deposit Vault Co. v McNulta, 153 U.S. 554; Schwartz v. Oil Co., 153 Pa. 283.
Action having been brought in the name of the receiver to the use of Morrisdale Coal Company, no recovery can be had except in his right, and the decree of May 2, 1917, terminated his right to receive or demand further shipments of coal after that date: Jones v. Gordon, 124 Pa. 263; Montgomery v. Cook, 6 Watts 238.
The contract was one involving the responsibility and solvency of the parties thereto and was not assignable: Arkansas Val. Smelting Co. v. Mining Co., 127 U.S. 379; Del. Co. Comrs. v. Diebold S. & L. Co., 133 U.S. 473.
Even if contract is valid, defendant is not liable for delivery of coal prior to termination of strike, which extended from May 2, 1917, to May 15, 1917.
C. J. Hepburn, of Hepburn, Dechert & Norris, for appellee. -- The receiver had authority to make the contract in question: Lewis v. Steel Co., 183 Pa. 248; Cake v. Mohun, 164 U.S. 311.
The contract was assignable: American Bonding & T. Co. v. R.R., 124 F. 866; Honesdale Ice Co. v. Lake Lodore Imp. Co., 232 Pa. 293; Empire Implement Mfg. Co. v. Hench, 219 Pa. 135.
Before FRAZER, WALLING, SIMPSON, KEPHART and SADLER, JJ.
On December 1, 1914, a bill was filed asking that a receiver be appointed for the Morrisdale Coal Company. The appropriate order was made authorizing the temporary continuance of the business, and the appointee, F. H. Wigton, was directed "to complete and fill the contracts entered into by the said corporation remaining unfilled, and to pay for coal purchased from other persons out of the proceeds derived from the sales of such purchased coal." Subsequently, seventeen petitions, beginning in March, 1915, were presented, and decrees made authorizing the borrowing of the necessary funds to carry on the work of the company, which was "the conducting a general coal brokerage business and the purchase of coal in the general market for resale," as well as the mining and selling of coal. The last decree was entered March 1, 1917, and is in terms similar to the one in force, when, on January 18, 1917, the contract, which is the basis of the present suit, was entered into.
By this agreement the defendant sold to the receiver "for the Morrisdale Coal Company," at a fixed price, 30,000 tons of coal, to be delivered prior to the following first of January. On May 1, 1917, the receivership was ended by order of the court, and Wigton was directed to "transfer and deliver to the Morrisdale Coal Company all the property, assets and money in his possession, and all his right, title and interest in and to any and all property, assets and money as to which he now has, or may hereafter acquire, any right or title as receiver." This was made conditional upon the payment of all claims arising from the conduct of the business. In pursuance of this order all of the property, including the contract in suit, was immediately transferred. Notice of this fact was given defendant, but further compliance with the agreement was refused by it on May 12th, on the ground that the contract was one which a receiver could not lawfully make; and, even if so, it was ended by his discharge. This action was subsequently brought to recover damages for the breach, and judgment was entered, for want of a sufficient affidavit of defense, for the entire claim, less the loss sustained between May 1st and May 12th, when the contract was repudiated; during these twelve days, it was contended, a strike at the mines relieved from liability, under the express terms of the written agreement.
The first question for consideration is the power of the receiver to contract for a period of time which extends beyond the limit at the moment fixed for the continuance of the trust. Such officer merely becomes the temporary manager of the company, under the direction of the court, and is legally its agent. The corporation still remains in existence, and is still clothed with its franchises: Bartlett v. Cicero Light Co., 177 Ill. 68. The assets pass to him, subject to the outstanding equities: People v. National Mut. Ins. Co., 46 N.Y.S. 102; Funk v. Young, 5 A.L.R. 79. "The power of a receiver to make [new] contracts depends largely on whether he is a passive receiver, appointed merely to conserve the property, or whether he is an active receiver appointed to run the business": 8 Fletcher Cyc. Corp. 8927.
The court may authorize its receiver to make contracts which are usual and customary in the particular operation, although they extend beyond the probable term of the receivership: Gay v. Hudson River E.P. Co., 173 F. 1003. This rule is subject to the limitation that the agreements shall not be of a character "so extraordinary and unusual as not to be included in the authority to carry on the business of the company": Northern Pac. Ry Co. v. American Trading Co., 195 U.S. 439, distinguishing in this way Chicago Deposit Vault Co. v. McNulta, 153 U.S. 554, an authority relied upon by the appellant. The better course is to secure preliminary sanction from the supervising court, but the power will be...
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