143 Iowa 517 | Iowa | 1909
On or about March 17, 1901, one George E. .Clarke entered into a written contract with the defendant, a law publishing house, which contract reads as follows: “The American Law Book Company, 120 Broadway, New York. Algona, Iowa, 3 — 17—1901. Please send me O. O. D., carriage paid, as published, the Cyclopedia of Law and Procedure, in (law sheep) binding, for which I agree to pay you $6.00 per volume upon delivery. The publishers guaranty to complete said work in not to exceed thirty-two Poyal Octavo volumes, or to furnish free of charge any volumes in excess of that number necessary to complete the same. The publishers further agree to publish annual annotations to said work, which' will keep the same up with the current decisions of the courts of last resort, and to furnish the said annotations to subscribers at the annual rate of twenty cents for each published volume of the Cyclopedia of Law and Procedure, and subscriber agrees to take said annotations at said price. All representations by agents, to be binding, must be written on the face of the contract. Subscribers may have either binding mentioned above. Erase the one not desired. [Signed] Geo. E. Clarke, Agent J. A. Yeager.” Shortly thereafter the first volume of the work was published, and, pursuant to order, delivered to the purchaser, who paid for the same upon delivery. In the same year another volume was issued and delivered to Clarke, and in the year 1902 volumes three and four were issued and delivered. Pay
In the later part of the year 1904, defendant enlarged the number of volumes which it proposed to issue from thirty-two to thirty-six and in January of the year 1906 again raised the number from thirty-six to forty and advanced the price from $6 to $6.50 per volume, and on June 1, 1907, it increased the price from $6.50 to $7 per volume. About January 1, 1907, Clarke orally assigned his contract to the plaintiff herein. Some time in December of the year 1906, defendant placed its claim for the $18 against Clarke in the hands of a mercantile agency for collection, and a local attorney for said agency at Algona, Iowa, presented the same to Clarke. We now quote from
That said Swetting [the local attorney] made demand upon Geo. E. Clarke for the payment of said $18 on account of volumes two, three and four of Cyc., and on or' about January 5, 1907, the plaintiff herein paid said bill to E. V. Swetting, and took a receipt therefor, showing the payment by Geo. E. Clarke of volumes two, three and four of Cyc., and the plaintiff herein, at the time of paying the $18 to the said E. V. Swetting, demanded of the said E. V. Swetting that he furnish the balance of the volumes of the Cyc. then published, and offered to pay therefor in cash under the terms pf the Clarke contract. That the said E. V. Swetting conveyed said request and demand to Wilber Mercantile Agency, and said Wilber Mercantile Agency conveyed said demand and request to the defendant herein, and the defendant refused to furnish any additional volumes to the plaintiff herein, or to Geo. E. Clarke under said contract with the said Geo. E. Clarke entered into in 1901. That on January 5, 1907, W. B. Quarton, for himself and Geo. E. Clarke, paid to E. V. Swetting for and on behalf of the defendant $18 for volumes two, three and four of said Cyclopedia of Law and Procedure.
Defendant at all times refused to deal with plaintiff as an assignee of the contract, claiming that it had been canceled and annulled, and that in no event was it assignable by Clarke to any other person. This action was commenced December 5, 1907, and upon trial plaintiff was granted the relief prayed. Eor a reversal appellant contends: That the contract was not assignable; that it was cancelled and forfeited before the attempted assignment was made; that Clarke, the assignor, by reason of his conduct after notification from defendants of the cancellation of the contract, is barred and estopped from enforcing the said contract; and that plaintiff is not entitled to damages for defendant’s failure to deliver subsequent volumes.
In view of the full discussion contained in the authorities cited it is useless to review all of them, for, after a careful examination of the different opinions, we are constrained to hold that the following section of what is known as the “sales act,” adopted by Great Britain in the year 1903 (St. 55 & 57, Victoria, chapter 71, section 31), and by several states of our own country since, announces the true weight of American authority: “It depends in each case on the terms of the contract whether the breach of contract is so material as to justify the injured party .in refusing to proceed further and suing for damages for breach of the entire contract, or whether the breach is sever-able giving rise to a claim for compensation but not a right to treat the whole contract as broken.” See, also, sales act prepared by the American commission of which Hon. Amasa Eaton is president.
Story, in his work on Sales (2d Ed.), said with reference to this subject:
Sec. 244. So, also, where an indefinite quantity or mass is sold at a certain price per measure, upon a warranty that it is of a certain quality, it would seem that the contract would be entire for each measure only, and sever-able in respect to the whole quantity, so that the vendee would be obliged to take so much as corresponded to the warranty; that is, it would seem to be an agreement to pay so much per measure for as much as satisfied the whole terms of the contract. If, indeed, in such a case, there be a special agreement to take the whole quantity or nothing, it constitutes an essential consideration of the purchase, and the parties would be bound to abide by such agreement.*524 So, also, if the agreement were absolutely and unconditionally to take the whole of an indefinite quantity, without any warranty of quality, at a certain price per measure, the contract would be considered as an entirety; the measure being considered as a mere means of estimating the gross sum which should be paid. And the distinction between the cases where an indefinite quantity is actually bargained for, upon a warranty, and where tire whole is bargained for absolutely and without condition, is that in the latter case the taking of the whole is absolute, and makes a necessary part of the contract; while, in the former case, the taking of the whole depends upon a condition, namely, that the whole shall comply with the warranty. If it do comply with the warranty, the contract is entire. But, in case of a failure of warranty, the contract would be several, inasmuch as its very terms import a merely conditional sale of the whole, so that, if the condition be not performed, the contract is modified and altered, and, also, because its terms afford a means of exactly estimating the value of .the portion taken. But if there be no warranty, and no condition broken, the contract must be considered as entire and indivisible. Analogous to these cases is the case where a horse dealer sold two horses for one entire price, and warranted both to be sound; and it was held that, as Tespected the warranty, the contract was several, and that the vendee was not obliged to keep the horse which did not answer to the warranty.
Sec. 244(a). In the diversity of the cases upon this subject, it is difficult to lay down any clear rule. The distinctions adverted to are the only means that suggest themselves to reconcile the cases; but, upon the whole, the weight of opinion and the more reasonable rule would seem to be thát where there is a purchase of different articles, at different prices, at the same time, the contract would be several as to each article, unless the taking of the whole was rendered essential either by the nature of the subject-matter, or by the act of the parties. Where a bill of parcels is taken, and includes the articles bought, under one whole price, it- would, if accepted, afford evidence of an intention by both parties to treat the contract as entire. And wherever the failure as to a part would materially defeat the objects of the contract, and would have affected the sale,*525 had such failure been anticipated, the contract would be entire. This rule would found the interpretation of the contract on the intention of the parties, as manifested by their acts, and by the circumstances of the case. Of course, if two articles be bought at the same time, under the agreement that one may be returned if it do not prove satisfactory, there would be no entirety of contract
The true rule, as we understand it, was announced by Lord Selborne in Mersey Steel Co. v. Naylor, 9 App. Cas. 438, as follows: “You must look at the actual circumstances of the case in order to see whether the one party to the contract is relieved from its future performance by the conduct of the other. You muát examine what that conduct is, so as to. see whether it amounts to a renunciation, to an absolute refusal to perform the contract, such as would amount to a rescission if he had the power to rescind, and whether - the other party may accept it as a reason for not performing his part.”
In the American notes to Benjamin on Sales (6th Ed.) 568, it is said:
On the other hand, there is abundant authority in America, as in England, that, if the buyer hot only refuses to pay for one installment, but puts his refusal on such ground as justifies the inference that he repudiates the entire contract, or insists upon new terms different from the original agreement, the vendor may be released from any subsequent delivery. Thus in Stephenson v. Cady, 117. Mass. 6, C. sold S. two lots of yarn, by two successive agreements, payable on delivery, and by the terms of the contracts the delivery under the second was to' commence when all had been shipped under the first. The whole of the first having been delivered and payment demanded, S. refused to pay ‘unless O. would give security for the entire fulfillment of the contracts/ which C. declined to do, and did not ship any under the second agreement. Held, that S.’s refusal to pay for the yarns on the ground stated would justify the inference that he did not himself intend to be bound by the original contract, and so he could*526 not hold the other liable for noneompletion of it. Curtis v. Gibney, 59 Md. 131, is much like it. So a refusal to pay for one installment because of an alleged counterclaim for damages, for some previous default of the vendor in another matter, may justify the vendor in rescinding. Bradley v. King, 44 Ill. 339. In Rugg v. Moore, 110 Pa. 236 (1 Atl. 320), the buyer of six carloads of corn refused to pay for the second carload (as he was bound to do), 'because he wanted to see if the. vendor would ship all the corn purchased.’ As he did not ship any more after receiving this word, the buyer sued for nondelivery; but it was held that the vendor was justified in refusing to send any more corn, and many cases were cited. A continued refusal or neglect to pay, by one who is pecuniarily irresponsible, and where evidently payment is of the essence of the’ contract, might well excuse the other party from continuing to send and so increase the indebtedness of the buyer. Stewart v. Many, 7 Ill. App. 508, furnishes an excellent illustration. See, also, Reybold v. Voorhees, 30 Pa. 116; Branch v. Palmer, 65 Ga. 210; Landeche v. Sarpy, 37 La. Ann. 835; Dwinel v. Howard, 30 Me. 258; Robson v. Bohn, 27 Minn. 333 (7 N. W. 357); Florence Milling Co. v. Brown, 124 U. S. 385 (8 Sup. Ct. 531, 31 L. Ed. 424), where the buyer became insolvent, and unable to pay for the prior installment. A refusal to pay, accompanied by a refusal to receive and accept any more goods, even if tendered according to the contract, would be still more satisfactory evidence of a repudiation or abandonment of a contract, and authorize the vendor to treat it as no longer binding on him. See Fletcher v. Cole, 23 Vt. 114; Haines v. Tucker, 50 N. H. 309.”
In Blackburn v. Reilly, 47 N. J. Law, 290 (1 Atl. 27, 54 Am. Rep. 159), it is said:
The other question discussed on the argument was whether the defendant had the right to refuse to receive any more bark in case he could satisfy the jury that the five loads of bark delivered were not equal in quality to the requirements of the contract. The contract provided that the plaintiff should deliver and the .defendant should receive, one carload of bark' weekly for a year at $18 a*527 ton, payable on delivery. It belongs to a class of agreements sometimes called ‘continuing contracts of sale,’ because they are to be completely performed, not by single acts of delivery and payment, but ■ by a series, of such acts at stated intervals. The rule to be applied in determining whether the express obligations of such contracts remain after one or more breaches by either party has been the subject of much discussion of late years, and has given rise to some contrariety of judicial opinion. We do not feel constrained by the phases of the present case to enter at any length upon the details of this discussion. In our opinion the rule established in England by the judgment of the House of Lords in Mersey Steel & Iron Co. v. Naylor, 9 App. Cas. 434, affirming the judgment of the Court of Appeals in s. c. 9 Q. B. Div. 648, is one which in ordinary contracts of this nature will work out results more conformable to reason and justice. The rule is that defaults by one party in making particular payments or deliveries will not release the other party from his duty to make the other deliveries or payments stipulated in the contract, unless the conduct of the party in default be such as to evince an intention to abandon the contract, or a design no longer to be bound by its terms. This rule leaves the party complaining of a breach to recover damages for his injury on the normal principle of compensation, without allowing him the abnormal advantage that might inure to him from an, option to rescind the bargain. It also accords with the ancient doctrine laid down by Sergeant Williams in his notes to Pordage v. Cole, 1 Saund. 320b, that where a covenant (of the plaintiff) goes only to part of the consideration on both sides, and a breach of such covenant may be paid for in damages, it is an independent covenant, and an action may be maintained for a breach of the contract on the part of the defendant without averring performance in the declaration. It, of course, is inapplicable where the parties have expressed their intention to make performance of a stipulation touching a part of the bargain a condition precedent to the continuing obligation of the contract; and peculiar cases might arise where the courts would infer such an intention from the nature and circumstances of the bargain itself — cases in which the courts would see that the*528 partial stipulation was so important, so went to the root of the matter (to use a phrase of Blackburn, J., in Poussard v. Spiers, 1 Q. B. Div. 410), as to make its performance a condition of the obligation to proceed in the contract.
Let us see how this rule squares with our own cases. It will be observed that our decisions follow those of Michigan and New Jersey, and, in the late cases from each of those states, the rule stated in the English sales act has been held to be the true one. For instance, in West v. Bechtel, supra, it is said: “The Supreme Court of New Jersey takes the same view of. this question. Trotter v. Heckscher, 40 N. J. Eq. 612 (4 Atl. 83); Blackburn v. Reilly, 47 N. J. Law, 290 (1 Atl. 27, 54. Am. Rep. 159). In the latter case the English and American authorities were considered, and the rule adopted in the Mersey case was approved.” In the same ease it is said, referring to our own case of Myer v. Wheeler: “The case of Myer v. Wheeler, 65 Iowa, 390, is closely analogous to the present case. Plaintiffs sold defendants ten carloads of barley. Defendants were to pay seventy cents per bushel for each carload, when delivered. On receipt of the first carload, the defendants refused to pay upon the ground that the barley was not equal to the sample, but. stated that they had given plaintiffs credit for sixty-five cents per - bushel, and would withhold payment until the ten carloads were delivered, and urged shipment of the remainder. It was held that this did not entitle the plaintiff to- rescind the-contract, and that he was liable for damages resulting from nondelivery of the remainder.” See, also, Burge v. Cedar Rapids & M. River R. Company, 32 Iowa, 101. A valuable note upon this subject will be found in Lake Shore & M. S. R. Co. v. Richards, 152 Ill. 59 (38 N. E. 773, 30 L. R. A. 33).
Turning now to the- cases upon which appellee relies, we find nothing running counter to what we believe to be
Defendants were not in default as to the unexecuted portions of the contract. Nor did it appear that they ever would be in default as to them. They expressed a willingness to pay for the other nine carloads as they should be delivered, and there is no claim that they were not able to perform their undertaking in that regard. They did not refuse absolutely to pay for the carload which was delivered, but claimed the right to retain the price until the others should be delivered, and as security for the per*531 formance of the contract by plaintiffs. It was not understood when the parties entered into the contract that plaintiffs were dependent for the means to purchase the subsequent carloads on the money which they would obtain for those first delivered. Nor is it shown that they were so dependent. We think therefore that the circuit court rightfully held that plaintiffs were liable for the damages occasioned by their failure to deliver the remaining carloads. The rule established by the decided weight of authority, both in England and in this country, is that rescission of a divisible contract will not be allowed for a breach thereof, unless such breach goes to the whole of the consideration. Freeth v. Burr, L. R. 9 C. P. 208; Mersey Steel & Iron Works v. Naylor, L. R. 9 Q. B. Div. 648; Simpson v. Crippin, L. R. 8 Q. B. 14; Newton v. Winchester, 16 Gray (Mass.) 208; Winchester v. Newton, 2 Allen (Mass.) 492; Sawyer v. Railway Co., 22 Wis. 403 (99 Am. Dec. 49); Burge v. Cedar Rapids & M. R. Co., 32 Iowa, 101; Hayden v. Reynolds, 54 Iowa, 157. See, also, the collection of authorities on the subject in the note of Mr. Lucius S. Landreth to the case of Norrington v. Wright, 21 Am. Law Reg. 395.
It will be noted first that this case indorses the English rule announced in Freeth v. Burr, L. R. 9 C. P. 208, and also the rule of the Supreme Court of the United States as found in Norrington v. Wright (C. C.) 5 Fed. 768. It also approves of the rule in Wisconsin and Massachusetts.
The English rule as announced in Hoare v. Rennie, supra, is the one prevailing in Massachusetts. See Stephenson v. Cady, 117 Mass. 6. In this case it is said: “This is followed in the very recent ease of Bloomer v. Bernstein, L. R. 9 C. P. 588, in which it is held that, where there is a contract for the sale of goods to be delivered by installments, the price of each installment being payable on delivery, and the buyer does not pay for one delivery under such circumstances as to give the seller reasonable ground for believing that he will be unable to
•Going back to Myer v. Wheeler, it will be noted that defendants had not .refused to pay for the carload which had been delivered, that they expressed a willingness to pay for the other nine loads, and that they were at all times demanding the performance of the contract. This clearly brought the case within the English rule, for there was nothing to indicate a renunciation or abandonment of the contract by the defendants in that case. In Hansen v. Heating Co., 73 Iowa, 77, plaintiff agreed to furnish defendant at a certain price all the coal it would need for the season; the coal furnished during any month to be paid for on the 10th of the month following. It was held that plaintiffs could not declare the contract at an end upon a failure of the defendant to pay at-the time agreed and recover the market value instead of the contract price for coal delivered, after notifying defendant that they regarded the contract as resciiided. Myer v. Wheeler was followed. In that case there was no evidence of any abandonment or renunciation of the contract by the defendants, and plaintiffs shipped the coal as promised. This does not run counter to the modern English rule. In Osgood v. Bauder, 75 Iowa, 550, there was a contract for the shipment of coal to be delivered and paid for in installments. It was there said:
The plaintiff alleged in his petition that the coal company was released from all obligation to ship more- cars of coal than it did, for the reason that defendants failed
The general principle there announced is sound. The facts are not very clearly set out; but there was no intent to depart from the rule of the cases cited. Timber Co. v. Windmill Co., 135 Iowa, 308, is not in point; but we may with profit quote from that opinion the following:
As a general rule, it may be said that a contract is entire, when by its terms, nature, and purpose it contemplates and intends that each and all of its parts and the consideration shall be common each to the other and interdependent. On the other hand, it is the general rule that a severable contract is one in its nature and purpose susceptible of division and apportionment. The question •whether a given contract is entire or separable is very largely one of intention, which intention is to be determined from the language the parties have used and the subject-matter of the agreement. The divisibility of the subject-matter or the consideration is not necessarily conclusive, though of aid, in arriving at the intention. Where it reasonably appears from the language of the contract or from its terms that the parties intended that a full and complete performance should be made with reference to the subject-matter of the contract by one party in consideration of the obligation of the other party to the' contract, it is said to be entire. It is very difficult to lay down a rule which, will apply to all cases, and consequently each case must depend very largely upon the terms of the contract involved.
*535 The facts clearly establish gross negligence on the side of the plaintiff, both in executing his part of the contract, and in applying for relief. Save so far as the possession of the premises might, during its continuance, operate to qualify the effect of the long default in making payment of ■the purchase price, this negligence, is unexplained by any equitable circumstance. As to the long-continued failure to make payment, the case is one in which (although time may not have been the essence of the contract) it is eminently proper for a court of equity to have regard to time as it respects the good faith and diligence of the plaintiff. As to the failure to apply sooner for relief, the rule is that where, as in this. instance, one party to the contract gives notice to the other that he will not perform it, acquiescence in this by the other party (not being in possession), by a comparatively brief delay in enforcing his right by an appeal to the courts, will be a bar. ■
See, also: McCabe v. Matthews, 155 U. S. 550 (15 Sup. Ct. 190, 39 L. Ed. 256); Wolf v. Power Co., 15 Mont. 49 (38 Pac. 115); Harrigan v. Smith (N. J. Ch.) 40 Atl. 13; Mahon v. Leech, 11 N. D. 181 (90 N. W. 807); Gish’s Ex’r v. Jamison, 96 Va. 312 (31 S. E. 521); Simpson v. Atkinson, 39 Minn. 238 (39 N. W. 323).
It must be remembered at all times that this is a suit in equity for specific performance, and that such relief is not granted as a matter of right. If Clarke were here asking for specific performance, he would not be granted relief without paying the installments due and showing some excuse for non-performance of his part of the agreement. His conduct was such as to cause a chancellor to deny him specific performance. He did not pay for what he had, he accepted without protest defendant’s notice of cancellation, and neither he nor his assignee demanded performance until defendant had increased the price of its books. It appears that some profit would result if ‘performance were granted. Plaintiff can still obtain the property, but he must pay a higher price. If he and his assignee had met the terms of the contract as promised, they might
For tfie reasons pointed out, tfie judgment must be, and is, reversed.