This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Courts differ as to whether the dissolution of a corporation discharges its contracts. A contract whereby A guarantees to B that a given corporation will pay dividends upon its corporate stock at a certain rate for seven years, is discharged as to the remaining period by the dissolution of such corporation at the end of five years.1 Appointing a receiver for a mutual insurance company and adjudging it insolvent cancels all policies.2 A contract by an insurance company with an agent has been held to be discharged by the dissolution of the corporation by the state as insolvent.3 On the other hand, a contract between a corporation which conducted a drug store to a person who agreed to construct a soda-water fountain in such store at his expense, and to share the gross receipts with the corporation, is not discharged by a decree adjudging the corporation insolvent.4
8 Bland v. Umstead, 23 Pa. St. 316.
9 Mutual Insurance. Kimmel v. Ins. Co., 161 111. 43; 43 N. E. 615; reversing 59 111. App. 532.
10 Drummond v. Crane, 159 Mass. 577; 38 Am. St. Rep. 460; 23 L. R. A. 707; 35 N. E. 90.
11 Cox v. Martin, 75 Miss. 229; 65 Am. St. Rep. 604; 36 L. R. A. 800; 21 So. 611.
12Stumpf's Appeal. 116 Pa. St. 33; 8 Atl. 866.
13 Henry v. Eddy. 34 111. 508. (Though the creditor has died the pledgor must pay the debt in order to obtain the collateral.) 14 Hawkins v. Ball, 18 B. Mon. (Ky.) 816; 68 Am. Dec. 755. (On the death of the creditor, the debtor if willing to do the work cannot be made to pay the money.)
1 Lorillard v. Clyde, 142 N. Y. 456; 24 L. R. A.113; 37 N. E. 489.
2 Boyd v. Fire Association, 116 Wis. 155; 96 Am. St. Rep. 948; 61 L. R. A. 918; 90 N. W. 1086; 94 N. W. 171.
3 People v. Ins. Co.. 91 N. Y. 174. Contra, Spader v. Mfg. Co., 47 N. J. Eq. 18; 20 Atl. 378.