In re the Receivership of D. Ross & Son, Inc.

Citations

• 10 Del. Ch. 434
• 95 A. 311
• 1915 Del. Ch. LEXIS 22

Syllabus

<p>Where an insolvent corporation had contracted with a pattern company to take its goods, the. contract providing that, upon failure of the buyer to pay for stock within two weeks after demand by the seller, the contract should be deemed broken and the buyer should be assessed liquidated damages in an amount equaling one-third of the purchase price of the patterns which it had agreed to take from the breach of contract until the time originally limited for its duration, and where the pattern company had given notice to the insolvent corporation to pay within two weeks, a receiver for the insolvent corporation being appointed one day before the expiration of such time, the pattern company had a claim for breach of contract provable in the insolvency proceedings, since the standard by which all claims against an insolvent corporation are to be tested in regard to their provability is whether or not they are subject to accurate reckoning within a period that will not delay settlement of the estate to the prejudice of creditors, and, if so, they are provable, even if contingent.</p> <p>Where the contract of a fashion company to furnish patterns provided that upon breach the buyer should be liable in liquidated damages for one-third of the value of the patterns he had agreed original^ to purchase for the time after the breach, stating that such mode of calculating damages was agreed upon “as being the nearest estimate we can make of what will fairly compensate either of us if the. other breaks this contract,” the amount thus established was not a “penalty,” and was recoverable upon breach as liquidated damages; it being impossible to fix with certainty what exact pecuniary injury either party would'suffer from a breach.</p> <p>The appointment of a receiver of an insolvent corporation effects an anticipatory breach of an executory contract of the corporation and gives a cause of action, provided, the receiver does not within a reasonable time after his appointment adopt