Smith v. Georgia Loan, Savings & Banking Co.

113 Ga. 975 | Ga. | 1901

Cobb, J.

. It was argued for the defendants that as the plaintiff had made what is known to the law as a renunciation or anticipatory breach of the contract, the defendants were no longer bound thereby, and could repudiate the contract whenever the plaintiff endeavored to enforce it. The rule of law sought to be invoked was-laid down by the Supreme Court of the United States in a recent case after an elaborate consideration of the authorities. The conclusion reached by the court is thus succinctly stated in the head-notes: "After a careful review of all the cases, American and English, relating to anticipatory breaches of an executory contract, by a refusal on the parlrofone party to it to perform it, the court holds that the rule laid down in Hochster v. De la Tour, 2 El. & Bl. 678, is a reasonable and proper rule to be applied in this case. That rule is, that after the renunciation of a continuing agreement by one *977party, the other party is at liberty to consider himself absolved from any future performance of it, retaining his right to sue for any damage he has suffered from the breach of it; but that an option should be allowed to the injured party, either to sue immediately, or to wait till the time when the act was to be done, still holding it as prospectively, binding for the exercise of this option.” Roehm v. Horst, 178 U. S. 1. This rule was expressly limited by the court to contracts containing mutual obligations. See page 17. The agreement under consideration in the present case is of such a character. But giving to the defendants’ plea that construction which is most favorable to their contention, we do not understand that they have brought themselves within the rule above quoted. They did not immediately, upon the renunciation of the contract by the plaintiff, elect to repudiate the contract and sue for whatever damages they had sustained by reason of its breach. Not having so elected, but one other course was open to them, and that was to wait until the maturity of the contract and see if the plaintiff would, notwithstanding its former renunciation of the contract, comply with its terms. As they elected to pursue this course, it was incumbent upon them to comply with the obligations which under the contract devolved upon them from time to time, that is, to pay instalments of interest as they became due. If the contract was valid and enforceable, the plaintiff could, under its express terms, upon default in the payment of interest by the defendants, treat the principal sum as due and collectible. As we understand the law, when the defendants failed to immediately take advantage of the plaintiff’s renunciation of the contract, it left it optional with the plaintiff to afterwards elect to perform notwithstanding its former renunciation. In other words, after the defendants elected not to sue as for a breach, the contract remained valid and enforceable by the plaintiff notwithstanding its former repudiation. This being so, when the defendants made default in the payment of interest, the principal sum for which they were bound became due and collectible. By express terms of the contract, such a default on the part of the defendants released the plaintiff from compliance with its agreement to accept certain bonds in payment of the principal sum due by the defendants. This release was, however, attributable solely to the action of the defendants, and they have no just cause of complaint by reason thereof. When they failed to treat the contract *978as having been broken immediately upon its renunciation by the plaintiff, and elected to give the plaintiff further opportunity to perform when the contract matured, they should have paid up the interest asit matured, and then when the time for performance of the contract arrived they would have been in a position to tender the bonds, and, if the plaintiff refused to accept them, to maintain an action for whatever damages they had thereby sustained; and we apprehend that in such a suit they could have recovered whatever sums they had paid as interest under the assumption that the plaintiff would comply with its agreement.

A construction of the defendants’ plea which would make necessary the foregoing discussion is, however, more liberal to them than they are entitled to. Had it not been for the argument made in this court, we would have been at a loss to understand what rule of law they were invoking. They pray for no relief whatever. They say the plaintiff “declines” to carry out its contract, but no facts are set forth to show upon what this allegation is based, and the court is not informed to what portion of the contract this declination applies. The allegation is a mere conclusion of the pleader. The plea' avers a willingness on the part of the defendants to comply with the obligations imposed upon them by the contract, and to pay any interest due by them. It would seem that a prayer for specific performance would have been appropriate to this allegation. It certainly evidences a desire on the part of the defendants to have the contract enforced, and they do not even now claim the benefit of the plaintiff’s renunciation. Had the plea alleged that the defendants accepted the plaintiff’s renunciation of the contract, and for that reason did not pay the interest instalments as they fell due, that they did not desire to sue the plaintiff for any damages, but that they had all along treated the contract as not being enforceable against them by reason of the renunciation of the same by the plaintiff, a defense to the action might have been presented; but we are clear that the allegations of the plea as framed set up no defense to the action, and that the plea was properly stricken on motion. Judgment affirmed.

All the Justices concurring.