to perform the contract,120 and so is the action of a purchaser who brings a suit at law for the breach of the contract or an action to recover back the money paid by him,121 or who insists on the return of a deposit given to secure the performance of the contract on his part.122 And so, under a contract with a ditch company to furnish a consumer with a certain amount of water year after year, so long as he should pay the annual rental therefor, it was held that his act in causing the county commissioners to fix a rate for water from the company's ditch, and in declining to pay more than such rate, was a termination of the contract, although the contract itself was not returned or canceled.128 But where property is sold payable in installments, a refusal by the vendor to give a receipt for a payment made will not justify a rescission by the vendee, even if a receipt is required by the contract.124

When one of the parties thus refuses to comply with his part of the contract, and the other declines to proceed with it on the ground of such refusal, the contract is definitely terminated, and any subsequent acts or conduct by the party first refusing, in the line of performance of the contract, will not reinstate it or renew its obligation, unless concurred in by the other,125 although of course, the contract may be resumed and continued, even after such a rescission, by the mutual consent of the parties. 126 And it has been held that, where a contractor has unadvisedly refused to perform his contract, he may, while the situation of the matter is unchanged, retract the refusal and go on with the contract, though the other party thereto has notified him that he will hold such refusal to be a default, and will sue to dissolve the contract.1 127

120 Textor v. Hutchings, 62 Md. 150.

121 Herrington v. Hubbard, 1 Scam. (2 Ill.) 569, 33 Am. Dec. 426. 122 El Paso Cattle Co. v. Stafford, 176 Fed. 41, 99 C. C. A. 515.

123 South Boulder & R. C. Ditch Co. v. Marfell, 15 Colo. 302, 25 Pac. 504.

124 Weintz v. Hafner, 78 Ill. 27.

125 Byrd v. Craig, 1 Mart. (La.) N. S. 625; Moreau v. Chauvin, 8 Rob. (La.) 157.

126 Grove v. Donaldson, 15 Pa. 128.

127 Perkins v. Frazer, 107 La. 390, 31 South. 773.

§ 203. Anticipatory Breach of Contract.-An anticipatory breach of a contract occurs when one of the parties, before the time arrives for performance on his part, declares his positive intention not to perform the contract according to its terms. This will not of itself terminate the contract, but it will give to the other party the right, at his election, to treat the contract as rescinded and to seek his appropriate remedies. 128 "Where one party to a contract to be performed in the future, before the time for performance arrives, refuses to perform, or declares his intention not to perform, he thereby, so far as he is concerned, declares his intention then and there to rescind the contract. Such renunciation, however, in and of itself, does not work a rescission, for one party to a contract cannot by himself rescind it. But by making the wrongful renunciation he entitles the other party, if he pleases, to agree to the contract being put an end to, subject to the retention by him of his right to bring an action in respect to such wrongful rescission. A declaration by the promisor, before the time for performance has arrived, of his intention not to perform. is not in itself, and unless acted on by the promisee, a breach of the contract. Such declaration only becomes a wrongful act if the promisee elects to treat it as such. If he does so elect, it becomes a breach of contract, and he can recover upon it as such." 129 So, in an English case, it was said: "The other party may adopt such renunciation of the contract by so acting upon it as, in effect, to declare that he too treats the contract as at an end, except for the purpose of bringing an action upon it for the damages sustained by him in consequence of such renunciation. He cannot, however, himself proceed with the contract on the footing that it still exists for other purposes, and also treat

128 Roehm v. Horst, 178 U. S. 1, 20 Sup. Ct. 780, 44 L. Ed. 953; Supreme Council v. Lippincott, 134 Fed. 824, 67 C. C. A. 650, 69 L. R. A. 803; Supreme Council v. Daix, 130 Fed. 101, 64 C. C. A. 435; Blakely v. Fidelity Mut. Life Ins. Co. (C. C.) 143 Fed. 619; Northwestern Nat. Life Ins. Co. v. Hare, 26 Ohio Cir. Ct. R. 197; Johnstone v. Milling, L. R. 16 Q. B. Div. 460; Hochster v. De La Tour, 2 El. & Bl. 678.

129 Supreme Council v. Lippincott, 134 Fed. 824, 67 C. C. A. 650, 69 L. R. A. 803.

BLACK RESC.-34

such renunciation as an immediate breach. If he adopts the renunciation, the contract is at an end, except for the purposes of the action for such wrongful renunciation. If he does not wish to do so, he must wait for the arrival of the time when, in the ordinary course, a cause of action on the contract would arise. He must elect which course he will

A life insurance company, doing business on the assessment plan, commits an anticipatory breach of its contract with a policy holder by making a higher assessment against his policy than is authorized by the contract and announcing its intention to continue to do so, and in such case the insured has his election to accept such action as a rescission of the contract and sue for the breach, or to refuse to rescind and continue to treat the contract as in force, by tendering payment of the amount lawfully due.181 In another case, an insurance society, having issued to the plaintiff a certificate for $5,000, passed a by-law reducing certificates of $5,000 to $2,000, and thereafter refused to consider plaintiff's certificate as in force for more than the lastnamed sum. The plaintiff protested against such attempted reduction, offered to pay assessments on the full face value of his certificate, and thereafter paid assessments based on the reduced amount under protest for a period of over two years, when he notified defendant of his intention to cancel the insurance and demanded repayment of the assessments paid. It was held that the plaintiff would have been entitled to this relief on the defendant's breach of its contract in the first instance, but as he had elected to treat the contract as continuing, notwithstanding defendant's breach, by paying assessments during that time, he was not entitled to make a second election to rescind.182 But in a case in Connecticut, it appeared that a contract required one of the parties to furnish to the other a specified amount of pulp before a certain date, shipments to be made as ordered. For a considerable time during the term of the contract, no

180 Johnstone v. Milling, L. R. 16 Q. B. Div. 460.

131 Blakely v. Fidelity Mut. Life Ins. Co. (C. U.) 143 Fed. 619. 132 Supreme Council v. Lippincott, 134 Fed. 824, 67 C. C. A. 650, 69 L. R. A. 803.

shipments were ordered by the purchaser, and at length the purchaser telegraphed a direction that no shipments. should be made. But his letters were to the effect that all pulp purchased would be taken from the other party, that he hoped to have use for a large quantity of pulp, etc. It was held that there had been no anticipatory breach by the purchaser which would warrant the seller in rescinding the contract and suing for damages.133

§ 204. Declared Intention Not to Perform.-A party to an executory contract may always stop performance by the other party by giving an explicit direction to that effect, but in so doing, he renders himself liable for such damages as the other may sustain in consequence.184 Hence a declared intention to repudiate a contract, or to refuse to perform it, excuses the other party from the necessity of tendering performance, though this is not technically a rescission nor the acceptance of a rescission, since it leaves the contract in existence so far as to sustain an action for damages for its breach. "Where one party to a contract renounces it and refuses to perform, the other party may treat the contract as broken and abandon it without demand or tender of performance, and recover as damages the profits he would have received through full performance. Such an abandonment is not a rescission of the contract, but a mere acceptance of the situation which the wrongdoing of the other party has brought about." 185 According to a slightly different view, the party who declares his intention not to perform may be considered as having rescinded the contract, but it is a wrongful rescission, for which an action will lie. The other party may "agree to the contract being put an end to, subject to the retention by him of his right to bring an action in respect of such wrongful rescission." He "may adopt such renunciation of the contract by so acting upon it as in effect to declare that he, too, treats the con

183 Wells v. Hartford Manilla Co., 76 Conn. 27, 55 Atl. 599.

134 Wigent v. Marrs, 130 Mich. 609, 90 N. W. 423; Bixler v. Finkle, 85 N. J. Law, 77, 88 Atl. 846.

135 Anvil Min. Co. v. Humble, 153 U. S. 540, 14 Sup. Ct. 876, 38 L. Ed. 814; Hayes v. City of Nashville, 80 Fed. 641, 26 C. C. A. 59; Bixler v. Finkle, 85 N. J. Law, 77, 88 Atl. 846.

tract as at an end, except for the purpose of bringing an action upon it for the damages sustained by him in consequence of such renunciation." 136

An intention to refuse performance of a contract may be manifested by an explicit declaration to that effect, as where a buyer of personal property refuses for two years to pay a deferred installment of the price, and, in his pleading in an action by the seller to recover possession, repudiates any further obligation.137 But a refusal in so many words is not necessary. For if the party, while the contract remains executory, does an act, or pursues a course of conduct, which shows indubitably that he does not intend to perform his part of the contract, this justifies the other party in treating it as ended.13 And where one party to a contract violates some of its substantial provisions, so as to deprive the other party of the benefits of the contract, and manifests an intention to continue such breaches, the other party may abandon further performance of the contract and sue for future profits, although such breaches do not amount to a physical obstruction or prevention of performance by such other party.1 139 But a mere unexecuted intention on the part of one of the parties to decline further performance of the contract does not amount to an actual abandonment of it, nor justify the other party in treating it as abandoned,11 nor would he be warranted in acting on a mere suspicion that the other party does not intend to perform.141 And even an express statement that one does not mean to abide by his contract will not give the other party a right to consider it as terminated, unless made directly to him or to some person having charge of his interests or the right to

140

136 Roehm v. Horst, 178 U. S. 1, 20 Sup. Ct. 780, 44 L. Ed. 953; Johnstone v. Milling, L. R. 16 Q. B. Div. 467; Wester v. Casein Co. of America, 206 N. Y. 506, 100 N. E. 488, Ann. Cas. 1914B, 377. 137 Rayfield v. Van Meter, 120 Cal. 416, 52 Pac. 666.

138 Drake v. Goree, 22 Ala. 409; American Type Founders' Co. v. Packer, 130 Cal. 459, 62 Pac. 744; Peters Grocery Co. v. Collins Bag Co., 142 N. C. 174, 55 S. E. 90. See Trotter v. Heckscher, 40 N. J. Eq. 612, 4 Atl. 83; Murphy v. Murphy, 189 Ill. 360, 59 N. E. 796.

139 Lake Shore & M. S. Ry. Co. v. Richards, 152 Ill. 59, 38 N. E. 773, 30 L. R. A. 33.

140 Donaldson's Adm'r v. Waters' Adm'r, 30 Ala. 175. 141 Plummer v. Kelly, 7 N. D. 88, 73 N. W. 70.