#### Kamps & Sacksteder Drug Company, Appellant, vs. United Drug Company, Respondent.

*November 15*

December *5, 1916.*

*Contracts: Executory: Termination: Bankruptcy of one party.*

1. Where one party to an executory contract repudiates it, or puts it out of his power to perform it, the other party may at his option treat it as terminated at once.

2. The involuntary bankruptcy of a party being the result of acts or omissions of the bankrupt and regarded in the law as the equivalent of a voluntary act disabling the bankrupt from performing his executory business contracts, the other party thereto may at once treat such contracts as terminated.

3. The fact that in such a case the other party to an executory contract shared in a dividend or joined in a composition proceed*413ing did not interfere with Ms right to treat the contract as ter-’ minated.

4. A notification in such case that the contract (which was one of agency) would not he revived or continued in force until the account of the agent was entirely adjusted, amounted to an unequivocal declaration that the contract was terminated.

Appeal from a judgment of the circuit court for Waupaca county: ByeoN B. Pare, Circuit Judge.

*Affirmed.*

Action for damages for breach of a written contract to supply the plaintiff with proprietary- remedies, toilet preparations, etc., known as the “Bexall” products. The refusal was admitted, and the court on the trial submitted to the jury a single question as to the amount of the damage sustained by the plaintiff, which question was answered by the jury, but the court afterwards granted defendant’s motion for judgment on the uncontradicted evidence, and the plaintiff appeals.

The facts appearing without, dispute were as follows: Plaintiff is a domestic corporation carrying on a retail drug business at Appleton. The defendant is a Massachusetts corporation doing business at Boston and making and vending large quantities of proprietary remedies, toilet prepara-' tions, and miscellaneous articles usually kept in drug stores,-' under the name “Bexall” products, which are extensively advertised and widely sold. The defendant will only allow one firm in each city to handle its output, such store being known as the “Bexall” store. In July, 1904, in consideration of the plaintiff’s purchase of four shares of' the preferred stock of the defendant at $50 each, the parties entered into a written contract by which it was agreed (1) that defendant appointed the plaintiff its agent at Appleton and agreed not to sell its products'to any other dealer there so long as the plaintiff performed the temps of the agreement; (2) that the plaintiff would uphold the prices set by the defendant for the goods and not sell them to any one except at *414full retail prices; (3) that the plaintiff would confine ita sales to its own retail store and its own customers, and in ease of violation of either the second or third provision would pay $100 liquidated damages for each violation; (4) that the agreement should remain in force as long as plaintiff continued to hold stock in the defendant corporation. There were certain other provisions of the contract which have no bearing on the present controversy and need not be stated. This contract was carried out by both parties until the year 1913. On July 28th of that year the plaintiff was adjudged a bankrupt on petition of four of its creditors (not including the defendant). It then owed the defendant $603.50 on open account. In September following plaintiff’s creditors accepted a composition settlement of twenty-five cents on the dollar, and the bankruptcy proceedings were dismissed and the store reopened. The defendant received its share, viz. $150.88, upon this settlement. October 1st following the plaintiff ordered a quantity of “Rexall” goods, and the defendant declined to deliver them, stating in substance that it- was a rule of the house, when a loss had been suffered on any account, the agency would not be reopened nor any shipments made until the account had been entirely adjusted.

*Francis 8. Bradford,*for the appellant.

For the respondent there was a brief by *Greene, Fairchild, North, Parker & McGillan,*and oral argument by *John W. Gauerlce.*

WiNsnow, O. J.

In this case it is held:

1. Where one party to an executory contract repudiates it, or puts it out of his power to perform it, the other party may at his option treat it as terminated at once. *Merrick*v. *Northwestern Nat. L. Ins. Co.*124 Wis. 221, 102 N. W. 593; *Woodman v. Blue Grass L. Co.*125 Wis. 489, 103 N. W. 236, 104 N. W. 920.

*4152. The involuntary bankruptcy of a party disables'bim from performing bis executory business contracts and is regarded in tbe law as tbe equivalent of a voluntary act, inasmuch as it is tbe result of acts or omissions of tbe bankrupt *bimself;*benee it follows tbat sucb contracts may at once be treated by tbe other party as terminated. *Central T. Co. v. Chicago A. Asso.*240 U. S. 581, 86 Sup. Ct. 412.

3. Sharing in a dividend or joining in a composition proceeding does not interfere with this right.

4. In tbe present case it appears.tbat tbe defendant at once notified tbe plaintiff tbat tbe agency would not be reopened except upon compliance with certain conditions and this amounts to an unequivocal declaration tbat tbe contract was terminated.

*By the Court.*— Judgment affirmed.