Ives v. Scranton Textile Co.

Citations

• 50 Pa. Super. 83
• 1912 Pa. Super. LEXIS 10

Syllabus

<p>Contract — Composition agreement — Insolvent corporation — Debtor and creditor.</p> <p>1. A composition agreement between a debtor and Ms creditors is valid and binds all parties thereto. The undertaking of the other compounding creditors to release the debtor from a part of their claims is a consideration which supports the agreement of each creditor. After a creditor has thus agreed to relincfuish part of his claim and induced others to become parties to a composition, it would be a fraud on them to permit him to ignore the agreement and collect the full amount of Ms claim.</p> <p>2. Where a proposition is made to the creditors of a hopelessly insolvent corporation that they accept in lieu of their claims twenty-five per cent in cash and seventy-five per cent in the stock of the company, and all of the creditors accept the proposition, but the acceptance of one of them is coupled with a condition that the stock shall be taken off his hands in two years by two persons' designated by name, and such persons execute an agreement to take such stock in two years, the creditor is bound by the composition agreement and must accept the cash and stock as provided by it.</p>