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.
Opinion No. 40.