The stockholders and officers of the Old South Engraving Company, wishing to escape a contract whereby that corporation was bound to hire only union labor, organized the Old South Photoengraving Corporation which purchased the business of the Engraving Company, giving therefor 9,000 of the issue of 12,000 no-par shares and issuing the rest to the stockholders of the Engraving Company in proportion to their holdings therein. It was announced that the Engraving Company would cease operating Saturday, June 4, and employees were given due notice. On Monday, June 6, the new company began operating at the same location with non-union labor. Plaintiffs, representing the union, asked that both corporations he enjoined from breach of the labor contract. Held, injunction refused as to both corporations. The Engraving Company was not obligated to hire union labor after it went out of business; the Photoengraving Corporation is not bound by the contract of its vendor-predecessor. Berry v. Old South Engraving Corp., (Mass. 1933) 186 N. E. 601.
CORPORATIONS - IDENTITY AS BASIS FOR ENFORCING CONTRACT OF PREDECESSOR AGAINST SUCCESSOR - FRAUD,
Mich. L. Rev.
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