Sidebilder
PDF
ePub

§ 1303. Practical importance of distinction.

To be sure it frequently makes little practical difference whether this is the case or whether the contract is in fact rescinded. Where the only question that arises is in regard to the liability of a defendant for his refusal to perform the result is the same whether the whole contract is rescinded or whether it still subsists subject to a defence on the part of the defendant. But if the defendant seeks by counter-claim or cross-action to establish a right on his part to damages, his success depends on the existence of the contract. And more than one court has been led into the error of holding that no such right of action existed that a voluntary exercise of the right to refuse to continue performance necessarily involved a total termination of the contract.66 Citations need not be multiplied to prove the error of the foregoing statement and the right of the plaintiff to cease performance upon the defendant's repudiation and yet sue upon the contract.67 In this respect an ordinary bilateral also the remarks of Bowen, L. J., in Boston &c. Co. v. Ansell, 39 Ch. D. 339, 365.

66 Cox v. McLaughlin, 54 Cal. 605; Porter v. Arrowhead Reservoir Co., 100 Cal. 500, 502, 35 Pac. 146; Palm v. Ohio, etc., R. Co., 18 Ill. 217; Howe v. Hutchison, 105 Ill. 501; Lake Shore, etc., Ry. Co. v. Richards, 32 N. E. Rep. 402 (Ill. Sup. Ct. 1892. But see s. c. reversed on rehearing 152 Ill. 59, 80, 82); Chicago Title & Trust Co. v. Sagola Lumber Co., 242 Ill. 468, 90 N. E. 282; Jones v. Mial, 79 N. C. 164. These cases hold that though a serious breach of contract will justify the other party in treating the contract as rescinded and so refusing to continue to perform, yet at least unless the breach amounts to actual prevention the party aggrieved cannot, if he ceases to perform, sue on the contract. The first California decision was chiefly based on the early Illinois case. So in Hochster v. De La Tour, 2 E. & B. 678, counsel for the defendant, though their case did not require it, based their whole argument on the assumption

that repudiation was equivalent to an offer to rescind, and that if the gagrieved party did not continue to hold himself ready and willing to perform he could not sue upon the contract.

In Bethel v. Salem Improvement Co., 93 Va. 354, 25 S. E. 304, 33 L. R. A. 602, 57 Am. St. Rep. 808, also, the plaintiff was not allowed to recover for loss of profits, after having ceased to perform owing to the defendant's breach of contract. See also Beatty v. Howe Lumber Co., 77 Minn. 272, 79 N. W. 1013.

67 Mayne's Case, 5 Coke, 20b (3d Resolution); Cort v. Ambergate, etc., Ry. Co., 17 Q. B. 127; Ripley v. McClure, 4 Ex. 345; Marshall v. Mackintosh, 78 L. T. 750; Leeson v. North British Oil, &c. Co., Ir. R. 8 C. L. 309; Anvil Mining Co. v. Humble 153 U. S. 540, 38 L. Ed. 814; McElwee v. Bridgeport Land, &c. Co., 54 Fed. 627, 4 C. C. A. 525; Cherry Valley Works v. Florence &c. Co., 64 Fed. 569, 12 C. C. A. 306; Martin v. Chapman, 6 Port. 344; Baldwin v. Marqueze, 91 Ga. 404, 18 S. E. 309; Weil v. American

contract differs from a lease. A landlord who rightfully ejects a tenant 68 or a tenant who for just cause surrenders the leased premises, 69 though entitled to recover damages suffered by breach of the other party's covenant before the termination of the lease cannot recover damages for the failure to continue the agreed relation till the end of the term unless there is an express covenant in the lease to pay such damages.70

§ 1304. No manifestation of election necessary.

Further, in order to exercise his right to rescind a contract, an injured party must indicate his election so to do by positive action,71 but if he only wishes to refrain from performing his part of the contract, he is not seeking to assert an affirmative

Metal Co., 182 Ill. 128, 54 N. E. 1050; Riley v. Walker, 6 Ind. App. 622, 34 N. E. 100; Morris v. Globe Refining Co., 22 Ky. L. Rep. 911, 59 S. W. Rep. 12; Lowe v. Harwood, 139 Mass. 133, 22 N. E. 538; Lee v. Briggs, 99 Mich. 487, 58 N. W. 477; Armstrong v. St. Paul &c. Co., 48 Minn. 113, 49 N. W. 233, 50 N. W. 1029; Berthold v. St. Louis Construction Co., 165 Mo. 280, 65 S. W. 784; Brazell v. Cohn, 32 Mont. 556, 81 Pac. 339; Vickers v. Electrozone Commercial Co., 67 N. J. L. 665, 52 Atl. 467; Wharton v. Winch, 140 N. Y. 287, 35 N. E. 589; Reynolds v. Reynolds, 48 Hun, 142; Davis v. Tubbs, 7 S. Dak. 488, 64 N. W. 534; El Paso &c. R. Co. v. Eichel (Tex. Civ. App.), 130 S. W. 922; Young v. Watson (Tex. Civ. App.), 140 S. W. 840.

Another instance of the confusion of ideas due to the improper use of words here criticised may be found in Fox v. Kitton, 19 Ill. 519, where the court says that there is no conflict between the views of Parke, B. and the decision of Hochster v. De La Tour, 2 E. & B. 678, since Parke, B., said in Phillpotts v. Evans, 5 M. & W. 475, 477: "The notice (that he will not receive the wheat) amounts to nothing until the time when the buyer ought to

receive the goods, unless the seller acts on it in the meantime and rescinds the contract." This, the Illinois court adds, "is in strict accordance with the principles recognized in . . . . Hochster v. De La Tour." Now Parke was usi g the word "rescinds" in its true sense. What he meant and what he said was that the seller might at his option terminate the contract. The Illinois court thought he was using the word in the improper way in which Lord Cockburn did, and that his meaning was that the seller might, without himself performing, so act as to entltle himself to sue the buyer immediately for breach of the contract-a doctrine Parke expressly denied both in Phillpotts v. Evans, and Ripley v. M'Clure, 4 Ex. 345, 359. The mistake made in Fox v. Kitton is repeated in Kadish v. Young, 108 Ill. 170, 48 Am. Rep. 548.

68 Wender &c. Co. v. Louisville &c. Co., 137 Ky. 339, 125 S. W. 732; Spetton v. Goodman, 194 Mass. 389, 80 N. E. 608; R. H. White Co. v. Remick, 198 Mass. 41, 84 N. E. 113. 69 Leavitt v. Fletcher, 10 Allen,

119.

70 See further in regard to leases, supra, §§ 890-892.

71 See infra, § 1469.

right, but standing on the defensive. He need do nothing except refrain from performing or receiving performance until he sues or is sued, when he should plead the cause which justifies his non-performance.72 Of course he may by manifesting an election to continue the contract deprive himself of this justification, but positive action on his part is necessary to bring this about.73

§ 1305. Prospective inability to perform should excuse.

If it is clear that one party to a contract is going to be unable to perform it the other party should be excused from performing. The excuse is the same as in cases where a wilful intention not to perform is manifested. The party aggrieved is not going to get what he bargained for in return for his performance. It is immaterial to him, and it should be immaterial to the court whether the reason is because the other party cannot or because he will not do what he promised. Even if the prospective inability is due to vis major this should be true.74

§ 1306 Time when right of action accrues.

The final question remains, after a repudiation before the time for performance, when may the injured party bring his action upon the contract? If a technical declaration were as much thought of to-day as it was once, the question could hardly have become troublesome. From a technical point of view, it seems obvious that in an action on a contract the plaintiff must state the defendant broke some promise which he had made. If he promised to employ the plaintiff upon June 1, the breach must be that he did not do that. A statement in May by the defendant that he is not going to employ the plaintiff

72 Where the ground of non-performance is an actual breach of contract by the other party, it is an obvious consequence of the rule of common-law pleading which required the plaintiff to allege and prove his own performance, that he would fail if he had not duly performed, though the defendant had not manifested any election. Changes in modern pleading cannot have

affected the substantive law on this point. Where the ground of nonperformance is repudiation or a prospective breach, there should be no difference for the essential nature of the defense is the same.

73 See supra, §§ 683-688; Langdell, Summary of Contracts § 177. 74 See supra, §§ 877 et seq.

upon June 1 can be a breach only of a contract not to make such statements. It is perhaps not wholly by chance that the doctrine of anticipatory breach has arisen as the exactness of common-law pleading has become largely a thing of the past; for the science of special pleading, in spite of the grave defects attending it, had the great merit of making clear the exact questions of law and fact to be decided.75

§ 1307. Arguments from principle and precedent.

The matter is so plain on principle that theoretical discussion is hardly possible," but certain distinctions may be made which have not always been observed, and which, if observed, are a sufficient answer to the claims of practical convenience that furnish the only support for the advocates of the doctrine of anticipatory breach. It seems desirable, also, to explain certain early cases which have led to some confusion, and thereby show the lack of historical basis for the doctrine; and of this first.

§ 1308. Early decision.

In Y. B. 21 Edw. IV. 54, pl. 26, Choke, J., says: "If you are bound to enfeoff me of the manor of D. before such a feast, if you make a feoffment of that manor to another before the said

75 In Equitable Trust Co. v. Western Pacific R., 244 Fed. 485, 501 (aff'd. 250 Fed. 327, 162 C. C. A. 397, 246 U. S. 672, 62 L. Ed. 932, 38 S. Ct. Rep. 423), L. Hand, J., in effect accepted this conclusion, but held that there is in every contract an implied obligation not to repudiate. As to this suggestion, see infra, § 1318.

It need hardly be said that the doctrine of anticipatory breach is peculiar to our law.

In Mommsen's Beiträge Zum Obligationenrecht, Abtheilung, 3, § 4, it is said: "The obligation must be already due. So long as the time of maturity has not arrived, the obligor has always a defense in case the creditor should endeavor to enforce the obligation."

And in the typical case of one who regardless of his contract to sell and deliver in the future specific property to A sells and delivers it to B, Oesterlen, Der Mehrfache Verkauf, pp. 17, 18, says: "The temporary impossibility of performance due to the first delivery is wholly immaterial if it is removed at the proper time." "When fulfilment is not made to the latter (i. e. A) at the proper time, then for the first time has a legal injury been done." On the other hand, prospective non-performance, though not giving a cause of action, is to some extent at least recognized as a defence in the Civil law. See infra, §§ 905,

919.

...

feast, notwithstanding that you repurchase the property before the said feast, still you have forfeited your obligation because you were once disabled from making the feoffment." This and similar statements are repeated several times in the early books. 78

§ 1309. Explanation of the decision.

[ocr errors]

What Choke was talking about was a bond with a condition. This appears from the case itself where his remark was made as an illustration, and so it was understood.79 At the present day a bond with a condition to convey before a certain day would be regarded as in substance the equivalent of a covenant to pay on or after the day the penal sum of the bond (for which the law would substitute appropriate damages) if a conveyance was not made before the day. That does not represent the early understanding of such an instrument. The words of a bond, which are still used, acknowledging an immediate indebtedness, and adding a proviso in which case the instrument is to become void, had a literal meaning for our ancestors. "A specialty debt was the grant by deed of an immediate right, which must subsist until either the deed was cancelled or there was a reconveyance by a deed of release." 80 It has been frequently pointed out that a debt was not regarded in our early law as a contractual right but a property right, and a deed creating debt was not looked upon, as it is to-day, as a promise to pay money, but as a grant or conveyance of a sum of the grantor's money to the grantee.81 Accordingly a bond was closely analogous to a mortgage, a conveyance with a provision of defeasance attached. If the condition was or become impossible there remained an absolute debt created by the bond.82 "In Mayne's Case, 5 Coke, 20 b, "Condition." See also, infra, § 1310, 21 a, this passage is literally translated from the Year Book, and it is to Coke, probably, that the later currency of the citation is due.

78 In 1 Rolle's Ab. 447, 448, under the title "Condition," this and several other similar cases are put. See also 5 Viner's Ab. 224.

79 This is evident, e. g., from Rolle's classification of the authority under

n. 84.

80 9 Harv. L. Rev. 56, by Professor Ames.

81 Supra, § 11, 1820. See also Parol Contracts prior to Assumpsit, by Professor Ames, 8 Harv. L. Rev. 252; Pollock & Maitland, Hist. Eng. Law (2d ed.), ii. 205; Langdell, Summary of Contracts, § 100.

822 Vynior's Case, 8 Coke, 81 b,

« ForrigeFortsett »