ONE CUSTOMER CANNOT DEMAND THAT CREDIT BE EXTENDED TO ANOTHER.
Question—Lumber corporation No. 1 bought from lumber corporation No. 2 several carloads of lumber for future delivery. Corporation No. 1, before the agreed time of delivery, commenced proceedings of dissolution. Out of corporation No. 1, however, a new corporation, No. 3, was formed. Corporation No. 3 now demands of corporation No. 2 that they deliver this lumber. No. 2 declines on the ground that the personal, as well as the financial, standing of the new corporation is entirely changed. Do you think that corporation No. 2 has a legal right to do this? Where the word corporation is used we mean that one company is incorporated under the laws of one State, while the other two companies are existing under charters from different States.
Reply: If any person or corporation has been willing to extend credit to corporation No. 1 that same person or corporation cannot for this reason be compelled to extend credit to corporation No. 3, or to any other person or corporation. If a corporation has bought goods and paid for them it may assign its right under that contract, which is simply a right to demand delivery of the goods to another corporation; but if it has bought goods on credit, and has then gone into dissolution, it cannot demand that the credit of any other corporation be substituted for its own.
GIVING A BAD CHECK DOES NOT PREVENT DISCHARGE IN BANKRUPTCY.
Giving a worthless check for goods and disposing of them immediately is not a ground for refusing a discharge from bankruptcy. Judge Hough of the United States District Court has recently granted a discharge to a party who filed a petition in bankruptcy on October 24, 1906, with liabilities of $11,577 and no assets. His discharge was opposed by a creditor, who said that on June 6, 1892, the debtor bought $1,964 worth of goods, giving a check in payment, which was deposited in bank and came back marked “no funds.” The creditor went at once to debtor’s place of business and found that he had sold out and left the city. When debtor’s application for a discharge came up for a hearing he excepted to the specifications of objections, and Judge Hough sustained the exception on the ground that the objections are not within the statutory list.