tures have been made by the contractor in the construction and repair of river dams, bridges, and roads belonging to the corporation, for the driving and hauling of timber, and upon timber partially prepared for delivery under the contract, and a sale of the corporate property, free and discharged from the contract, is made under a decree of the court, directing it to be offered for sale both subject to and free from the contract, the contractor is entitled to compensation and reimbursement as aforesaid out of the assets of the company, although he afterwards purchases the corporate property and obtains the benefit of such improvements.

4. When a contract is broken, it is the duty of the injured party to minimize the loss and injury, when it is practicable to do so, by a reasonable outlay of money; this series, to wit, the note on Recovery for services on contract interrupted by sickness or death, appended to the case of Parker v. Macomber, 16 L. R. A. 858, and the note on Effect on contract of the death of a party thereto, appended to the case of Drummond v. Crane, 23 L. R. A. 707.

In addition to these notes, the reader also should consult the note to Lenoir v. Linville Improv. Co. 51 L. R. A. 146, on Effect of the appointment of a receiver or an assignee for creditors of a corporation on the compensation of officers, agents, or employees for unexpired term of employment, to which this note is, in a sense, supplementary.

II. Breaches of contracts in general.

if a survey of the decisions as to what in general constitutes a breach of contract calling for the performance of services with incidental expenditure on the part of the employing party, ignoring the circumstance that such employer was a corporation and the contract came to an end by its insolvency and civil death, be made, the following citations will exemplify the current of the authorities, and disclose the underlying principles which prevail.

It is familiar law that "if, at the time of making the contract, the thing promised be possible in itself, it is no excuse for nonperformance that its performance became subsequently impossible from causes beyond the contro! of the promisor." Southern Bldg. & L. Asso. v. Price, 88 Md. 155, 42 L. R. A. 206, 41 Atl. 53.

Where the obligation of a contractor requires an expenditure of a large sum in preparation to enable him to perform his contract, and a continuous readiness to perform it, the law implies a duty in the other party to do whatever is necessary to enable him to comply with his promise or covenant. United States v. Speed, 8 Wall. 77, 19 L. ed. 449.

If a construction contract requires payments to be made on account from time to time as the work progresses, and such payments are not made, the contractor is justified in stopping work, and may recover for what he has done. Stringtown & B. Turnp. Road Co. v. Riley, 8 Ky. L. Rep. 267.

Where one agrees to perform a service or work for another, which necessarily requires time and progress in its performance, and is to

but such outlay is to be allowed him as a part of his damages.

5. When a contractor, by reason of the termination of a partly executed contract, is entitled to compensation for services and outlay, part of which have been made in effecting permanent improvements, the services and expenditures relating to such improvements are not apportioned between the executed and unexecuted parts of the contract.

6. When, in the prosecution of work under his contract for cutting logs and hauling and driving them to a mill by means of a railroad, tramroads, and booms and dams in a river, constructed by him for the purpose, the contractor puts in timber to the same mill, by means of the same improvements, for others, not keeping separate accounts of the expenditures, it is not error to allow him, upon an inquiry as to receive compensation therefor if that other puts an end to the performance either before it begins or while it is in progress, the first party, though able and willing to proceed, cannot recover the stipulated compensation, but only damages for a breach of the contract; and such damages will, in general, consist of his outlay already incurred and the profits he would have realized had he been permitted to finish the work; or, in case the compensation is divisible, he may recover for the work already performed, and damages for being prevented from completing his contract. Hambly v. Delaware, M. & V. R. Co. 21 Fed. 541.

It is a misapprehension of law to suppose that the death of one of the contracting parties puts an end to a contract in course of performance. For a breach after, as well as before, the death of such party, his estate will be liable to respond in damages. Smith v. Wilmington Coal Min. & Mfg. Co. 83 Ill. 498.

Generally speaking, contracts bind executors and administrators, though not named. Where, however, personal considerations are of the foundation of a contract, as in cases of principal and agent, master and servant, the death of either party puts an end to the relation, and, in respect of service after death, the contract is dissolved, unless there is a stipulation to the contrary. Farrow v. Wilson, L. R. 4 C. P. 744.

It is the general rule that death does not absolve one from his contracts; but an exception to this rule is that, when performance of a contract depends upon the continued existence of a person or thing, if such person or thing perish before the contract is performed, the impossibility of performance terminates the contract. Yerrington v. Greene, 7 R. I. 589, 84 Am. Dec. 578.

Where a contract creates between the parties to it merely a personal relation, the death of either party dissolves that relation. Howe Sewing Mach. Co. v. Rosensteel, 24 Fed. 583.

When the performance of a contract depends upon the continued existence of a person or thing, and such continued existence is assumed as the basis of the agreement, the death of the person, or destruction of the thing, terminates the obligation. L'eople v. O'Brien, 111 N. Y. 1, 2 L. R. A. 266, 7 Am. St. Rep. 684, 18 N. E. 692; Lorillard v. Clyde, 142 N. Y. 456, 24 L. R. A. 113, 37 N. E. 489.

Death, or a disability which renders perform

the amount necessary to compensate him for his services and outlay, when he has been prevented from completing his contract, to charge up his entire outlay on all the work done, and credit all sums received on account thereof, when it is shown that all the work was profitable so far as executed, and that the accounts cannot be separated.

A

(Dent, J., dissents.)

(April 1, 1904.)

PPEALS by plaintiffs and defendant Thompson from a decree of the Circuit Court for Tucker County overruling exceptions to a commissioner's report settling the amounts which should be allowed under a contract of the defendant corporation, which ance impossible, discharges a contract to capitalize an enterprise and look to it for reimbursement when the capitalist is to manage the undertaking, since it involves his personal service and skill. Marvel v. Phillips, 162 Mass. 399, 26 L. R. A. 416, 44 Am. St. Rep. 370, 38 N. E. 1117.

Contracts for personal services must be treated as entire, and not divisible; hence, there can be but one breach and one recovery upon default, no matter if the wages are payable by instalments or at stated periods. Barnes Bros. v. Black Diamond Coal Co. 101 Tenn. 354, 47 S. W. 498.

A servant wrongfully dismissed in the middle of his term may either treat his contract of employment as rescinded and bring indebitatus assumpsit, or he may sue on the contract; but he cannot do both. Goodman v. Pocock, 15 Q. B. 576.

One employed by a mercantile firm for a year upon a fixed salary, and whose employment is terminated within the year by the insolvency and bankruptcy of his employers, is entitled to prove his claim for damages against the estate in bankruptcy, and to participate in the dis tribution thereof, for his right of action is immediate upon the breach of his contract, and the bankruptcy is no defense. Re Silverman, 101 Fed. 219.

To

For admission to proof in bankruptcy a claim necd not arise before the adjudication, nor need the contract upon which it arises be broken before the bankruptcy; it is sufficient that the breach and the bankruptcy be coincident. some extent, bankruptcy operates as a breach of the bankrupt's contracts. Bankruptcy may be treated as a breach of the bankrupt's contracts analogous to a complete repudiation of a contract before the time to perform arises, or to a complete disablement from performing the contract. The test of provability is this: If the bankrupt at the time of his bankruptcy, by disabling himself from performing the contract, or by repudiating its obligation, could give the other party the right to sue at once for damages, to be assessed either at law or in equity, then such other party may prove his damages in bankruptcy on the ground that the bankruptcy is equivalent to disablement and repudiation. Re Pettingill, 137 Fed. 143.

An assignment by an insolvent contractor to trustees for creditors of all his effects, including the contract, is not per se an abandonment

had been annulled by the court. Modified and affirmed.

The case sufficiently appears in the opinion.

Messrs. C. W. Dailey, Taylor Morrison, Benjamin A. Richmond, P. J. Crogan, W. B. Maxwell, and L. D. Strader for appellants.

Messrs. Hubbard & Hubbard, A. G. Dayton, Ira F. Robinson, and William C. Clayton for appellees.

Poffenbarger, P., delivered the opinion of the court:

This is a somewhat complicated and a hotly contested case, which has been in this court on a former appeal. As then passed upon it is reported in 46 W. Va. 56, 33 S. of such contract, so as to justify the other party thereto in treating it as at an end without an attempt to put the contractor in default by performing on its part. New England Iron Co. v. Gilbert Elev. R. Co. 91 N. Y. 153.

A contract with an author to write a book for publication in a particular series of works issued periodically by the publishers is not abrogated by the abandonment of the series before the work is completed, when the author is able and willing to perform. Planché v. Colburn, 5 Car. & P. 58, 8 Bing. 14.

III. The measure of damages in such cases.

It is frequently difficult, in administering the law, to apply a proper rule of damages, and the decisions upon the subject are not harmonious. The cardinal rule undoubtedly is that the one party shall recover all the damages which have been occasioned by the breach of the contract by the other party. But this rule is modified by two others: The damages must flow directly and naturally from the breach, and they must be certain both in their nature and in respect of the cause from which they proceed. Speculative, contingent, and remote damages, not directly traceable to the breach, are excluded,—damages only are allowed which the parties are fairly supposed to have contemplated on contracting as naturally flowing from its violation. Rochester Lantern Co. v. Stiles & P. Press Co. 135 N. Y. 209, 31 N. E. 1018.

The safest rule of damage, and the one supported by the general current of authorities, in cases where a contractor is prevented by the acts of the other party from performing his contract, is the difference between the cost of doing the work and what the contractor was to receive for it, making reasonable deduction for the less time engaged, and for release from the care, trouble, risk, and responsibility attending a full execution of the contract. United States v. Speed, 8 Wall. 77, 19 L. ed. 449.

But this rule is but one aspect of a more gen. eral one. The primary measure of damages is the amount of the contractor's loss, and that loss falls under two heads,-actual outlay and anticipated profits. United States v. Behan, 110 U. S. 338, 28 L. ed. 168, 4 Sup. Ct. Rep. 81.

Where a contractor injured by the stoppage of a contract elects to rescind it, he can recover only the value of his services actually performed as upon a quantum meruit, not dam

The commissioner reported that there was due Thompson as of the 12th day of June, 1901, $85,642.02, returning with his report a full statement of all sums paid out and expended by Thompson in the prosecution of said work, and all sums paid to him on account thereof, as well as the proceeds of the

Kenwood Bridge Co. v. Dunderdale, 50 Ill. App. 581.

Where loss of profits cannot be proved, the plaintiff in an action upon the breach of a contract is entitled to recover the expenses and outlay he incurred in preparing to perform on his part. Athletic Baseball Asso. v. St. Louis Sportsman's Park & Club Asso. 67 Mo. App.

653.

One who contracts with another to furnish materials and build therewith a structure at a stipulated price, and who is prevented from completing his work by the acts of the other, is entitled to recover, inter alia items of damage, the expense of preparing such materials for their destined places in the structure. Shulte v. Hennessy, 40 Iowa, 352.

Where anticipated profits are too speculative and uncertain to be shown by competent proof, he who is entitled to recover for the breach of a contract to furnish an ample supply of natural gas wherewith to run his enterprise is entitled to recover his expenses in attempting to run it and the rental value, or, in lieu thereof, the interest on the cost of his plant. Paola Gas Co. v. Paola Glass Co. 56 Kan. 614, 54 Am. St. Rep. 598, 44 Pac. 621.

Where one contracts with a railroad to provide a water supply at a designated station at a stipulated monthly compensation, he undertaking to build and maintain a tank and apparatus for the purpose, upon a breach of the contract by the railroad by abandoning its station at that point, he may recover as damages the difference between the cost of such tank and apparatus and their actual value after the departure of the road, if he retains the property, or the difference between such cost and the sum realized, if he sells for the best obtainable price. New Orleans, J. & G. N. R. Co. v. Echols, 54 Miss. 264.

When, by the terms of a contract for work and labor, the full price is not to be paid until the completion of the work, and that becomes impossible by the act of the law, the contractor is entitled to recover for the amount of his labor. Jones v. Judd, 4 N. Y. 411, Approved in Wolfe v. Howes, 20 N. Y. 197, 75 Am. Dec. 388.

Referring to the case of a person who has contracted to labor for a definite term and is prevented by sickness from fulfilling his contract, Balcon, J., of the New York court of appeals, says: He should have the amount of his

rails, etc. Upon exceptions sustained by the court, the amount so found was reduced to $84,794.91 and a decree entered therefor. Of this amount, about $48,000 is principal. and the balance interest. Numerous exceptions to the report, urged in the court below and overruled, are insisted upon here, and there is much difference of opinion as to the true interpretation of the former decision of this court. For the appellants it is insisted that, under the principles so announced, the item of $14,749.34, mentioned in the opinion at page 65 of 46 W. Va., page 128, 33 S. E., which, without interest, was originally $12,399.63, for work done on recovery reduced from the contract price by the damages sustained by the employer in consequence of his inability to complete the full term of service. This rule, he says, is equitable, and should be applied in such cases. The servant is not to be regarded as violating his contract because sickness or death prevents his fulfilling it. His failure is his misfortune, not his fault. The employer should neither gain nor lose by it. The rule is just to both. It needs no vindication, for it is so well grounded in good sense as to commend itself. It is a commonsense rule, and common sense is the basis of all just law. Clark v. Gilbert, 26 N. Y. 279, 84 Am. Dec. 189.

If the performance of a building contract be suspended by the financial embarrassment of the owner, and not afterwards resumed, the contractor may recover, among other items of damage, the expense he has incurred in making articles necessary to enable him to perform his contract. O'Connell v. Main & T. Streets Hotel Co. 90 Cal. 515, 27 Pac. 273.

A contractor for the construction of a road, whose contract entitles him to payment in instalments from time to time as his work progresses, is justified, upon default in paying the instalments, in stopping further work, and has a right to recover in quantum meruit for the work he has performed. Porter v. Arrowhead Reservoir Co. 100 Cal. 500, 35 Pac. 146.

IV. How corporations are dissolved.

A corporation may go out of existence in one of four ways: (1) By expiration of its term of life as limited in its charter; (2) by act of the legislature repealing or annulling its charter: (3) by the judgment or decree of a court of competent jurisdiction dissolving it for nonuser or misuse of its franchise, or because of some act or omission working a forfeiture; and (4) by voluntary surrender of its charter.

When the time limited by the charter of a corporation expires the corporation is dead de facto, and no judicial determination of the fact is needful; the dissolution in such a case is declared by the act of the legislature itself. Sturges v. Vanderbilt, 73 N. Y. 384.

It is a well-settled principle that a dissolution by forfeiture is effected only by judicial proceedings against the corporation, taken for the purpose, followed by a hearing, or an opportunity to be heard, and a judgment rendered