act for him.142 And further, although one of the parties announces that for the future he will not pay at the price fixed by the contract, but at a lower rate, yet if he continues to accept deliveries, he will be considered as having receded from the declared intention, and will be liable for the full contract price.143 § 205. Performance Prevented by Wrongful Act of Other Party. When one of the parties to a contract is ready and able to perform his part of the agreement, but is prevented from doing so by an act of the other party which is wrongful in the sense of being a violation of the contract or inconsistent with its due execution, this gives to the party so prevented from performing a right to consider the contract as abandoned or rescinded, and to resort to an action for his damages.144 This rule has many important applications, some of which we now proceed to illustrate. Where the contract is for the erection of a building, and the contractor is discharged without good and sufficient cause before completion, or the further progress of the work is wrongfully stopped by the owner, the contractor is entitled to regard the contract as rescinded, and he may recover the value of the work done and materials furnished, giving credit for such sums as he may have received. 145 So also, in contracts of this kind, any unjustifiable interference with the contractor's work, rendering its proper completion impossible or causing him serious loss or injury, will war 142 Taylor v. Provident Sav. Life Assur. Soc. (C. C.) 134 Fed. 932, affirmed, 142 Fed. 709, 74 C. C. A. 41. 148 Cooper Cotton Oil Co. v. Cooper Oil Co. (Tex. Civ. App.) 160 S. W. 401. 144 Connelly v. Devoe, 37 Conn. 570; Stoneking v. Long, 142 Ill. App. 203; Lake Shore & M. S. Ry. Co. v. Richards, 40 Ill. App. 560 (affirmed, 152 Ill. 59, 38 N. E. 773, 30 L. R. A. 33); Schillinger Bros. & Co. v. Bosch-Ryan Grain Co., 145 Iowa, 750, 122 N. W. 961; Wright v. Haskell, 45 Me. 489; McDonough v. Almy, 218 Mass. 409, 105 N. E. 1012, Ann. Cas. 1915D, 855; Koerper v. Royal Inv. Co., 102 Mo. App. 543, 77 S. W. 307; Tibbetts v. Sartwell, 67 N. H. 418, 29 Atl. 411; Frost v. Clarkson, 7 Cow. (N. Y.) 24; Wilt v. Ogden, 13 Johns. (N. Y.) 56; Dubois v. Delaware & H. Canal Co., 4 Wend. (N. Y.) 285; Powers v. Hogan, 6 N. Y. St. Rep. 239; Suber v. Pullin, 1 S. C. 273. 145 Lossing v. Cushman, 123 App. Div. 693, 108 N. Y. Supp. 368; Cochran v. Yoho, 34 Wash. 238, 75 Pac. 815. rant a rescission. Thus, in one of the cases, the plaintiff entered into a contract with the owner of a building to take it down, and while he was at work within the building, the owner stripped it of sheathing, rafters, purlines, and braces, so that the trusses and spars fell, killing two of plaintiff's employés, and it was held that plaintiff was justified in abandoning the contract.146 Again, where it is a part of the contract that one party shall from time to time make advances in money to the other, which are necessary to enable such other to carry out his part of the agreement, a refusal to make such advances, not warranted by the circumstances, prevents performance by the other party in such sense as gives him the right to rescind.147 On the same principle, where the continued use of a building for the purpose for which it was rented is made impossible by the fault of the landlord, the tenant is justified in terminating the lease and vacating the premises.148 So, one buying from the owner of a vessel a one-eighth interest in it, with the privilege of making the deferred payment out of his wages as master of the vessel, may rescind the contract and recover back the money paid when the owner wrongfully discharges him and takes possession of the ship.149 Again, one who is employed by the promoters of a corporation to sell on commission the bonds of the company, secured by real estate which the promoters represent to be owned by them and which they are to transfer to the corporation, may rescind his contract on failure of the corporation to obtain title to the property.150 In a case in Maryland, it appeared that defendant contracted to allow plaintiffs to remove tar from its lands, the agreement being that if the plaintiffs should suspend work for ten days, defendant might terminate the contract and hold any buildings or im 146 Lynch v. Sellers, 41 La. Ann. 375, 6 South. 561, 5 L. R. A. 682. 147 Tinsley v. Foster (Tex. Civ. App.) 25 S. W. 298; St. Regis Paper Co. v. Santa Clara Lumber Co., 105 App. Div. 341, 85 N. Y. Supp. 1034, 93 N. Y. Supp. 1146. But see this last case on appeal, 186 N. Y. 89, 78 N. E. 701. 148 Adams v. Werner, 120 Mich. 432, 79 N. W. 636. 149 Moore v. Curry. 112 Mass. 13. 150 Church v. Wilkeson-Tripp Co., 58 Wash. 262, 108 Pac. 596, 109 Pac. 113, 137 Am. St. Rep. 1059. provements made by plaintiffs. Plaintiffs suspended work for nine days, but on the tenth day they were ready to resume operations, and would have done so had it not been. for the fact that defendant had given its employés a holiday, so that there was no one to do the weighing. It was held that defendant was not justified in terminating the contract.151 So, a case for equitable relief is stated by a bill which alleges that the parties entered into a contract, the performance of which was to extend over a term of years, and that defendant, which is a corporation, has conspired with others to take such action as will render it impossible to perform the contract on its part, and will also render it insolvent, for the purpose of defeating the rights of the complainant.152 And again, where a plaintiff has performed work pursuant to a contract with the defendant, and has been prevented from completing it by the defendant's failure to perform a portion stipulated to be done by him before the plaintiff's further performance was practicable, the latter may treat the contract as rescinded, and recover the value of the work done.153 It is to be observed, however, that no cause for rescission arises, merely because a party is prevented from completing his contract in the time, place, or manner in which he had begun its performance, where this is brought about by changes in the arrangements which the other party is authorized to order under the terms of the contract itself.154 And a mere improbability that the contractor will be able to perform, arising from changes of plan, is not enough to justify abandonment.155 In effect, to warrant such a course, the acts of the other party must be such as will render performance of the remainder of the contract impossible, or a thing different in substance from that which was contracted for, 156 or at least there must be such an interference with 151 Brown v. Rasin Monumental Co., 98 Md. 1, 55 Atl. 391. 152 Berliner Gramophone Co. v. Seaman, 113 Fed. 750, 51 C. C. A. 440. 153 Belshaw v. Colie, 1 E. D. Smith (N. Y.) 213. 154 Lewman v. United States, 41 Ct. Cl. 470; Howe Sewing Machine Co. v. Layman, SS Ill. 39. 155 Lewman v. United States, 41 Ct. Cl. 470. 156 Lewman v. United States, 41 Ct. Cl. 470. the contractor, and such a hindrance of him in the performance of the contract as will render his performance of it difficult and greatly decrease his profits.157 In a case in Oregon, the plaintiff contracted to sell to defendant a certain quantity of hops from his farm during each of the following five years, at a certain price, the contract not to be transferable except by the written consent of both parties, and the defendant agreed to pay the purchase price in several installments in each year, and cultivation advances were to bear interest. After the first year, the plaintiff sold the farm to one L., and assigned to him payments to become due under the contract. L. notified the defendant of the assignment, but failed to give the particulars of the transaction, the facts as to the ownership of the farm, the provisions made for money to cultivate the hopyard, etc., although repeatedly asked for such information. For this reason, defendant notified L. and the plaintiff that he rescinded the contract because of plaintiff's violation of it in selling the land and assigning the contract contrary to its provisions. But it was held that L.'s refusal to disclose to defendant the details of the transaction relating to the sale of the land and assignment of the payments did not estop him from enforcing the contract or from questioning defendant's right to rescind it, since the transaction did not render a performance impossible.158 On the same principle, where a plaintiff contracted to excavate a canal for defendant, and agreed to begin work whenever notified to do so, and he was notified to commence and was put in possession, and there was no interference with him, it was held that he could not defend against a forfeiture claimed because of his failure to begin, on the ground that defendant had not acquired title to the lands when the notice was given, as it could make no difference to plaintiff what was the state of the title.159 On the other hand, a breach of contract on the part of a plank-road company, in obstructing or hindering 157 Anvil Min. Co. v. Humble, 153 U. S. 540, 14 Sup. Ct. 876, 38 L. Ed. 814. 158 Krebs Hop Co. v. Livesley, 51 Or. 527, 92 Pac. 1084. 159Harley v. Sanitary Dist. of Chicago, 226 Ill. 213, 80 N. E. 771. And see Butt v. Tuthill, 10 Iowa, 585. the stages of a mail contractor while running on the road, gives the party thereby injured a right either to abandon the contract, or to treat it as still subsisting and claim damages for the breach.160 When an order for work is wrongfully countermanded without cause, the party injured generally has his election whether to complete the work and claim the contract price or to abandon the work and recover damages for the breach of the contract. But it has sometimes been said that he is equitably bound to choose that course which will be least burdensome to the other party. In an early case in New York, it appeared that the defendant agreed to pay the plaintiff a certain sum of money for cleaning and repairing a number of paintings, and after the work was begun, the defendant desired the plaintiff not to go on with it, as he had concluded not to have the work done. But the plaintiff continued and finished the work, and then claimed to recover the agreed price, contending that the defendant had no right to countermand the order originally given. But the court said: "The defendant, by requiring the plaintiff to stop work upon the paintings, violated his contract and thereby incurred a liability to pay such damages as the plaintiff should sustain. But the plaintiff had no right, by obstinately persisting in the work, to make the penalty upon the defendant greater than it would otherwise have been. To persist in accumulating a larger demand is not consistent with good faith towards the employer.” 181 § 206. Inability to Perform.-It will be shown in the following sections that when the performance of a contract according to its terms has become impossible, this will justify a rescission, as, for instance in case of the destruction or perishing of the subject-matter, and so also in cases where one of the parties has disabled himself from fulfilling his part of the agreement, as, for example, by disposing of the subject of a sale to a third person.102 At present, we are concerned with the general rule that, as soon as it has 160 Powell v. Sammons, 31 Ala. 552. 161 Clark v. Marsiglia, 1 Denio (N. Y.) 317, 43 Am. Dec. 670. 162 Infra, §§ 208-211. |