ing short of a complete repudiation of the contract by the party in default will justify the other in rescinding it or abandoning further performance; that the effect of an omission to pay an installment of the money due depends on the circumstances of the particular case, and the court must determine from an examination of the conduct of the buyer whether it amounts to an absolute refusal to perform his contract; that a mere failure to pay an installment does not necessarily evince a purpose to renounce the contract; but that a refusal to accept any more of the goods, a direction not to ship any more, or a refusal to pay an installment, will warrant a rescission by the seller if so expressed or if accompanied by such other circumstances as plainly reveal the buyer's purpose to renounce the contract or not to perform it any further on his own part.298 Further, there can be no rescission for failure to pay an installment of the price when the circumstances justify the buyer in withholding payment, as, where it is alleged that the articles delivered under the contract were deficient in quantity and inferior in quality, and there was insufficient time to count an inspect them.299 But it is not a sufficient excuse for withholding payment that the other party has been slow and dilatory in performing his part of the agreement, the delay not amounting to an actual breach of the contract.300

ware Co., 147 Ala. 581, 41 South. 806; Flinn v. Mowry, 131 Cal. 481, 63 Pac. 724, 1006; Hansen v. Consumers' Steam Heating Co., 73 Iowa, 77, 34 N. W. 495; Osgood v. Bauder, 75 Iowa, 550, 39 N. W. 887, 1 L. R. A. 655; Iowa Brick Mfg. Co. v. Herrick, 126 Iowa, 721, 102 N. W. 787; Collins v. Swan-Day Lumber Co., 158 Ky. 231, 164 S. W. 813; Gerli v. Poidebard Silk Mfg. Co., 57 N. J. Law, 432, 31 Atl. 401, 30 L. R. A. 61, 51 Am. St. Rep. 611; Blackburn v. Reilly, 47 N. J. Law, 290, 1 Atl. 27, 54 Am. Rep. 159; Empire Rubber Mfg. Co. v. Morris, 77 N. J. Law, 498, 72 Atl. 1009.

298 Monarch Cycle Mfg. Co. v. Royer Wheel Co., 105 Fed. 324, 44 C. C. A. 523; Johnson Forge Co. v. Leonard, 3 Pennewill (Del.) 342, 51 Atl. 305, 57 L. R. A. 225, 94 Am. St. Rep. 86; Quarton v. American Law Book Co., 143 Iowa, 517, 121 N. W. 1009, 32 L. R. A. (N. S.) 1; West v. Bechtel, 125 Mich. 144, 84 N. W. 69, 51 L. R. A. 791; Casey v. Gunn, 29 Mo. App. 14; Bloomer v. Bernstein, L. R. 9 C. P. 588.

299 Alaska Salmon Co. v. Standard Box Co., 158 Cal. 567, 112 Pac. 454; Hime v. Klasey, 9 Ill. App. 190.

300 American-Hawaiian Engineering & Construction Co. v. Butler, 165 Cal. 497, 133 Pac. 280.

And even if good ground for terminating the contract exists, the purchaser's failure to pay an installment when due does not automatically produce that result, but it is necessary, to effect a rescission, that the seller should exercise his election to rescind.301 And even in this he may be restricted by the terms of the contract. Thus, where a contract for the construction of a pavement provided for payment in installments, the last to be paid when the work was completed, and also required the contractor to repair and keep the pavement in order for ten years, it was held that the failure of the promisor to make the last payment did not excuse or release the contractor from his undertaking to maintain the pavement, but only gave him an immediate right of action for the balance.302

A cause of rescission or forfeiture, arising out of the purchaser's failure to pay an installment, may be waived by the vendor. But mere indulgence in a delay, or the acceptance of one installment of the price after it becomes due, does not, as a matter of law, waive prompt payment of subsequent installments, where no element of estoppel is involved.303 But acquiescence in repeated delays in making payments may have this effect, and it is generally held that a waiver may be claimed where the course of dealings between the parties shows that the seller did not intend to insist on prompt payments or to claim the advantages which a delay in payments might give him.304 And in a case where the purchaser of a lot made default in the payment of a monthly installment, and the vendor then wrote to him, saying: "Pay when you can, and it will be all right," it

301 Farmers' Cotton Oil & Trading Co. v. W. L. Ward & Son, 170 Ala. 491, 54 South, 513.

302 Nelson v. San Antonio Traction Co. (Tex. Civ. App.) 142 S. W. 146.

303 Long v. Clark, 90 Kan. 535, 135 Pac. 673; True v. Northern Pac. Ry. Co., 126 Minn. 72, 147 N. W. 948; Ohio Valley Buggy Co. v. Anderson Forging Co., 168 Ind. 593, 81 N. E. 574, 11 Ann. Cas. 1045. But see Little Rock Cooperage Co. v. L. N. Lanier & Co., 83 Ark. 548, 104 S. W. 221.

304 Fairchild-Gilmore-Wilton Co. v. Southern Refining Co., 158 Cal. 264, 110 Pac. 951; Tetley v. McElmurry, 201 Mo. 382, 100 S. W. 37; Edward Thompson Co. v. Vacheron, 69 Misc. Rep. 83, 125 N. Y. Supp. 939.

was held that this was an unconditional waiver of the vendor's right to claim a forfeiture under the contract, and that he could not thereafter exercise such right until he had revoked his waiver by fixing some definite date at which the purchaser would be required to pay.

305

Similar rules obtain in the case where a rescission is claimed by the vendee. That is to say, where one who has contracted to sell or to supply given articles in installments fails to make punctual delivery of the first or any subsequent installment, the purchaser may rescind the contract, and refuse to accept or be bound for any further deliveries, if he gives prompt and plain notice of his intention to terminate the contract.306 And he has the same right where a delivery is insufficient in quantity or inferior in quality, as measured by the requirements of the contract; and in this case, the election to rescind having been exercised and due notice thereof given to the seller, the latter cannot reinstate himself and insist on completing the contract by afterwards making up the required quantity or replacing the inferior articles, or offering to do so.307 In a case in Maryland, the evidence showed that one Burt, a manufacturer of iron, agreed to supply to Bollman, a consumer, two hundred tons of pig iron of a specified quality, at a stipulated price, "to be delivered in quantities of about 18 tons per month," which Bollman agreed to take and pay for. Twosmall consignments of iron were delivered about two months after the signing of the contract, but no further deliveries were made. About two months later, Bollman wrote to Burt that he considered the contract at an end. The court said: "We do not hold that a mere failure or omission by Burt to deliver one installment of the iron would, standing alone, have authorized Bollman to declare

805 Gray v. Gurley, 252 Mo. 410, 159 S. W. 1076.

306 McDonald v. Kansas City Bolt & Nut Co., 149 Fed. 360, 79 C. C. A. 298, 8 L. R. A. (N. S.) 1110; Norrington v. Wright (C. C.) 5 Fed. 768 (affirmed, 115 U. S. 188, 6 Sup. Ct. 12, 29 L. Ed. 366); Gerli v. Poidebard Silk Mfg. Co., 57 N. J. Law, 432, 31 Atl. 401, 30 L. R. A. 61, 51 Am. St. Rep. 611; Sumwalt Ice & Coal Co. v. Knickerbocker Ice Co., 112 Md. 437, 77 Atl. 56. But see Hanes v. Kentucky Distillery Co., 6 Ky. Law Rep. 451.

807 Elting Woolen Co. v. Martin, 5 Daly (N. Y.) 417; Moses Lobe & Co. v. Abraham Reinach & Co., 2 McGloin (La.) 170.

the contract at an end, although under some circumstances such might be the case. But we think that repeated failures to make any delivery would defeat the purposes and objects of the contract, and that an action at law would not give an adequate compensation for such breaches." 208 In such cases as these, an acceptance of an installment after the proper time for its delivery, or which is insufficient in quantity, is not necessarily a waiver of the right to insist on strict performance of the contract, and does not prevent a rescission of the contract in case of failure thereafter to perform in accordance with its terms.309 But where deliveries repeatedly fall short of the required amount, but are nevertheless accepted, and this course is acquiesced in by both parties, its effect is a mere postponement, and not an abandonment, of performance as to the balance, and the buyer is bound to accept the seller's offer of the residue at the rate of delivery agreed on.810

§ 216. Failure of Punctual Performance; Time of the Essence. Any condition or stipulation in a contract which is mutually understood and agreed by the parties to be of such vital importance that a sufficient performance of the contract cannot be had without exact compliance with it is said to be "of the essence" of the contract. And time is of the essence of a contract when the intention of the parties was that a punctual performance, at the precise time named, should be vital to the agreement and one of its essential elements. Where time is of the essence of a contract, and one of the parties fails to perform his part of the agreement punctually, at or within the appointed time, the other party, not being himself in default, will thereupon have the right to rescind the contract and treat it as at an end,311 which

308 Bollman v. Burt (Md. 1884) 17 Reporter, 749.

309 Norrington v. Wright, 115 U. S. 188, 6 Sup. Ct. 12, 29 L. Ed. 366; Wolfert v. Caledonia Springs Ice Co., 195 N. Y. 118, 88 N. E. 24, 21 L. R. A. (N. S.) 864.

310 Haines v. Tucker, 50 N. H. 307. 311 Seibel v. Purchase (C. C.) 4 Cal. Unrep. 256, 34 Pac. 327; Co., 122 Ga. 458, 50 S. E. 402; 194; Frommel v. Foss, 102 Me. well, 122 Md. 539, 89 Atl. 940;

134 Fed. 484; Freeman v. Griswold, Lytle v. Scottish American Mortgage Ashford v. Meyer (Iowa) 125 N. W. 176, 66 Atl. 382; Sullivan v. BosTruesdail v. Ward, 24 Mich. 117;

right will be recognized and enforced by the courts, unless the circumstances of the particular case show that it would be grossly inequitable to do so.312 Thus, where land is sold under a contract making time of the essence, and calling for payment by installments under penalty of forfeiture for non-payment, and every installment has been paid except the last, which is not paid at the time fixed, the vendor may declare a forfeiture, unless he has agreed to perform some act necessary to complete his contract, such as giving an abstract of title or tendering a deed, in which case his right to forfeit depends on his offer and ability to perform, his duty to tender performance being in that case concurrent with the duty of the purchaser to make the final payment.

313

A clause making the time of performance essential may be inserted in the contract, and this is a proper precaution, if such is the intention of the parties. But the fact that time is regarded as of the essence may also be a proper inference from the circumstances of the case, although it is not so expressed. This was ruled, for instance, in a case where a contractor had undertaken to deliver iron pipe to a city for its use, under a penalty for each day's delay, and he gave a written order for such pipe to a manufacturer, which was accepted the same day. The time of delivery was left blank, but the understanding of the parties was that the contractor was to telegraph the date the next day, which he did, fixing the delivery "within nine weeks from date," and the order was then entered by the manufacturer. Great delay was experienced in securing deliveries of the pipe, and finally, after the expiration of the period so fixed, the contractor rescinded the contract as to all pipe not then delivered. It was held that he was within his rights in so doing, as time was of the essence of the manufacturer's contract.314 In a somewhat similar case, the plaintiff had con

Frost-Trigg Lumber Co. v. Forrester, 124 Mo. App. 304, 101 S. W. 164; Fratt v. Daniels-Jones Co., 47 Mont. 487, 133 Pac. 700; Douglas v. Hanbury, 56 Wash. 63, 104 Pac. 1110, 134 Am. St. Rep. 1096. Contra, Attorney General v. Purmort, 5 Paige (N. Y.) 620.

312 Cue v. Johnson, 73 Kan. 558, 85 Pac. 598.

3,13 Reese v. Westfield, 56 Wash. 415, 105 Pac. 837, 28 L R. A. (N. S.) 956.

314 Camden Iron Works v. Fox (C. C.) 34 Fed. 200.