Erb v. Flower

[500]

AGEE, J.

Plaintiff appeals from an adverse judgment in this action for damages for breach of contract.

Plaintiff is the assignee for collection of Hanford Industries, Inc., a California corporation, hereafter “Han-ford.” On September 14, 1962 an agreement was entered into whereby Hanford was to sell and deliver and defendants were to buy and accept an aggregate of not less than 75 small boats, called “Wee Craft,” during the period of November 1962 through March 1963 and not less than 20 boats per month for the months of April 1963 through October 1964.

On October 1, 1962 the powers of Hanford were suspended by the Secretary of State for nonpayment of franchise taxes. (Rev. & Tax. Code, § 23302.)

No boats were ever ordered by defendants and no boats were manufactured for them. In latter January 1963, defendants informed Hanford that “We are washing our hands of the entire thing.” Hanford then purportedly assigned its claim against defendants to its president, plaintiff herein, and this action was filed on February 5, 1963.

The corporate powers of Hanford were not revived until November 19, 1964. Thus, during the

entire performance period

of the contract the plaintiff’s assignor was incapable of performing its obligations under the contract.

The trial court made the following finding: “ [T]he Court expressly finds that plaintiff’s assignor, during the entire effective period of the purported contract had been suspended as a California corporation, and repudiation of the purported contract was justified by defendants because of inability of plaintiff’s assignor to perform thereunder up to the time of said repudiation; ...”

Plaintiff calls attention to section 23304 of the Revenue and Taxation Code, which provides: ‘ ‘ Every contract made in violation of this article [art. 7, “Suspension and Revivor”] is hereby declared to be voidable, at the instance of any party other than the taxpayer.”

Plaintiff misses the point. We are not here concerned with the validity of the agreement. It was executed