CHAPTER III.

DISCHARGE OF CONTRACT BY BREACH.

§ 1. Position of parties where a contract is discharged by breach.

DERMOTT v. JONES.

2 WALLACE (U. S.), 1.-1864.

[Reported herein at p. 641.]

NOTE. All of the cases in this chapter will be found to illustrate this topic.

§ 2. Forms of discharge by breach.

(i.) Discharge by renunciation before performance due.

WINDMULLER et al. v. POPE et al.

107 NEW YORK, 674.-1887.

This was an action to recover damages for alleged breach of a contract to purchase a quantity of iron. Verdict for plaintiffs. Judgment affirmed at General Term.

In January, 1880, the parties entered into a contract for the sale by plaintiffs and purchase by defendants of "about twelve hundred tons old iron, Vignol rails, for shipment from Europe at sellers' option, by sail or steam vessels to New York, Philadelphia, or Baltimore, at any time from May 1 to July 15, 1880, at thirty-five dollars per ton, . . deliverable in vessels at either of the above ports on arrival." On or about June 12, 1880, defendants notified plaintiffs that they would not receive or pay for the iron, or any part of it, and advised that plaintiffs better stop at once in attempting to carry out the contract. Plaintiffs

thereupon sold the iron abroad which they had purchased to carry out the contract.

Per Curiam. We think no error is presented upon the record which requires a reversal of the judgment. The defendants having on the 12th of June, 1880, notified the plaintiffs that they would not receive the iron rails or pay for them, and having informed them on the next day that if they brought the iron to New York they would do so at their own peril, and advised them that they had better stop at once attempting to carry out the contract, so as to make the loss as small as possible, the plaintiffs were justified in treating the contract as broken by the defendant at that time, and were entitled to bring the action immediately for the breach, without tendering the delivery of the iron, or awaiting the expiration of the period of performance fixed by the contract; nor could the defendants retract their renunciation of the contract after the plaintiffs had acted upon it, and by a sale of the iron to other parties changed their position. Dillon v. Anderson, 43 N. Y. 231; Howard v. Daly, 61 Id. 362; Ferris v. Spooner, 102 Id. 12; Hochster v. De La Tour, 2 El. & Bl. 678; Cort v. Ambergate &c. Railway Co., 17 Ad. & El. 127; Crabtree v. Messersmith, 19 Ia. 179; Benjamin on Sales, §§ 567, 568..

The ordinary rule of damages in an action by a vendor of goods and chattels, for a refusal by the vendee to accept and pay for them, is the difference between the contract price and the market value of the property at the time and place of delivery. Dana v. Fiedler, 12 N. Y. 40; Dustan v. McAndrew, 44 Id. 72; Cahen v. Platt, 69 Id. 348.

All concur.

Judgment affirmed.1

DINGLEY et al. v. OLER et al.

117 UNITED STATES, 490.- 1886.

Assumpsit for damages for alleged breach of contract. Judg. ment for plaintiffs. Writs of error by both parties.

1 See also Kurtz v. Frank, 76 Ind. 594, ante, p. 358.

Plaintiffs, in 1879, sold defendants a quantity of ice to be returned by defendants the following year. Ice was then worth fifty cents a ton. Next season, in July, when ice was worth five dollars a ton, plaintiffs demanded a return of the amount delivered. Defendants replied: "We must, therefore, decline to ship the ice for you this season, and claim as our right to pay you for the ice in cash at the price you offered other parties here (that is, fifty cents), or give you ice when the market reaches that point." In answer to another demand defendants replied in substance the same and asked for a reply or a personal interview. Plaintiffs thereupon, without waiting for the end of the season, commenced this action.

MR. JUSTICE MATTHEWS. We differ, however, from the opinion of the Circuit Court that the defendants are to be considered, from the language of their letters above set out, as having renounced the contract by a refusal to perform, within the meaning of the rule which, it is assumed, in such a case, confers upon the plaintiffs a right of action before the expiration of the contract period for performance. We do not so construe the correspondence between the parties. In the letter of July 7th, the defendants say: "We must, therefore, decline to ship the ice for you this season, and claim, as our right, to pay you for the ice, in cash, at the price you offered it to other parties here, or give you ice when the market reaches that point." Although in this extract they decline to ship the ice that season, it is accompanied with the expression of an alternative intention, and that is, to ship it, as must be understood, during that season, if and when the market price should reach the point which, in their opinion, the plaintiffs ought to be willing to accept as its fair price between them. It was not intended, we think, as a final and absolute declaration that the contract must be regarded as altogether off, so far as their performance was concerned, and it was not so treated by the plaintiffs. For, in their answer of July 10th, they repeat their demand for delivery immediately, speak of the letter of the 7th instant as asking "for a postponement of the delivery," urge them "to fill our order," and close with "hoping you (the defendants) will take a more favorable view upon further reflection," etc. Here, certainly, was a locus penitentiæ conceded to

the defendants by the plaintiffs themselves, and a request for further consideration, based upon a renewed demand, instead of abiding by and standing upon the previous one.

Accordingly, on July 15th, the defendants replied to the demand for an immediate delivery to meet the exigency of the plaintiffs' sale of the same ice to others, and the letter is evidently and expressly confined to an answer to the particular demand for a delivery at that time. They accordingly say: "Now you ask us at a time when we are pressed by our sales and by short supply threatening us and others, to deliver to you the equivalent in tons of the ice taken from you under the circumstances stated. This does not seem to us to be fair," etc. "We cannot, therefore, comply with your request to deliver to you the ice claimed, and respectfully submit that you ought not to ask this of us in view of the fact stated herein and in ours of the 7th." This, we think, is very far from being a positive, unconditional, and unequivocal declaration of fixed purpose not to perform the contract in any event or at any time. In view of the consequences sought to be deduced and claimed as a matter of law to follow, the defendants have a right to claim that their expressions, sought to be converted into a renunciation of the contract, shall not be enlarged by construction beyond their strict meaning.

The view taken by the Circuit Court of the correspondence and conduct of the parties, and which we hold to be erroneous, brought the case within the rule laid down by the English courts in Hochster v. De La Tour, 2 El. & Bl. 678; Frost v. Knight, L. R. 7 Ex. 111; Danube & Black Sea Railway Co. v. Xenos, 11 C. B. N. S. 152; and which, in Roper v. Johnson (L. R. 8 C. P. 167, 168) was called a novel doctrine; followed by the courts of several of the States (Crabtree v. Messersmith, 19 Iowa, 179; Holloway v. Griffith, 32 Iowa, 409; Fox v. Kitton, 19 Ill. 519; Chamber of Commerce v. Sollitt, 43 Ill. 519; Dugan v. Anderson, 36 Maryland, 567; Burtis v. Thompson, 42 N. Y. 246); but disputed and denied by the Supreme Judicial Court of Massachusetts in Daniels v. Newton (114 Mass. 530) and never applied in this court. Accordingly, the right to maintain the present action was justified upon the principle supposed to be established by those cases.

The construction we place upon what passed between the parties

renders it unnecessary for us to discuss or decide whether the doctrine of these authorities can be maintained as applicable to the class of cases to which the present belongs; for, upon that construction, this case does not come within the operation of the rule involved.

In Smoot's Case (15 Wall. 36) this court quoted with approval the qualification stated by Benjamin on Sales (1st ed. 424, 2d ed. § 568) that,

"A mere assertion that the party will be unable, or will refuse to perform his contract, is not sufficient; it must be a distinct and unequivocal absolute refusal to perform the promise, and must be treated and acted upon as such by the party to whom the promise was made; for, if he afterwards continue to urge or demand a compliance with the contract, it is plain that he does not understand it to be at an end."

We do not find any such refusal to have been given or acted upon in the present case, and the facts are not stronger than those in Avery v. Bowden (5 El. & Bl. 714; S. C. 6 El. & Bl. 953), which were held not to constitute a breach or renunciation of the contract. The most recent English case on the subject is that of Johnstone v. Milling, in the Court of Appeal (16 Q. B. D. 460), decided in January of the present year, which holds that the words or conduct relied on as a breach of the contract by anticipation must amount to a total refusal to perform it, and that that does not by itself amount to a breach of the contract unless so acted upon and adopted by the other party.

The present action was prematurely brought before there had been a breach of contract, even in this sense, by the defendants, for what they said on July 15th amounted merely to a refusal to comply with the particular demand then made for an immediate delivery.

The judgment is accordingly reversed upon the writ of error sued out by the defendants below, and the cause remanded, with instructions to take further proceedings therein according to law; and upon the writ of error of plaintiffs below judgment will be given that they take nothing by their writ of error.