261. The Rule in Scotland. - Turnbull v. McLean1 is very instructive on this point. The purchaser made default in paying for an intermediate instalment, claiming a right to deduct certain demurrage charges from this price instalment, whereupon the seller refused to make further deliveries. The buyer contended that the settlement of the price of one month's deliveries was a matter altogether apart from the obligation to deliver in subsequent months; that the time of payment was not of the essence of the contract. But the court declared this position untenable; that the time of payment was not less of the essence of the contract than the payment itself; that "by the law of Scotland (1) stipulations on either side, in mutual contracts, are the counterparts of and the consideration given for each other; (2) that a failure to perform any material or substantial part of the contract by one will prevent him from suing the other for performance; (3) that where one party has refused or failed to perform his part of the contract in any material respect, the other is entitled either to insist for implement, claiming damages for the breach, or to rescind the contract altogether, except so far as it has been performed." In a concurring opinion, Lord Neaves added: "To say that, where a contract is to be implemented by instalments, the furnishings for one month are totally independent of the next, is an egregious fallacy and contrary to the dealings of ordinary life. In a contract of labor, in which monthly payments are stipulated, could it be said that if the servant has not received payment for the last month, that has nothing to do with his obligations to work during the next month?"

262. Damages recoverable by Vendor upon Vendee's Failure to pay an Instalment. While the prevailing rule in this country, as we have seen, is, that the failure to pay an instalment of the price, at the stipulated time, amounts to a breach of the contract absolving the vendor "from all obligation to further perform on his part," it is held generally that if the vendor elects to rescind the contract because of this default

1 1 Sess. Cas. 4th ser. 730, 738 (1874).

2 Wharton & Co. v. Winch, 140 N. Y. 287, 296; 35 N. E. 589 (1893); Jones v. City of New York, 47 App. Div. (N. Y.) 39 (1900). Supra, ¶ 260.

of the vendee, he can recover as damages only the stipulated instalment with interest. He cannot recover, as an item of damages, the profits he would have made had he performed the contract. To entitle him to recover such damages, he must show, in addition to this breach of contract by the vendor, other "acts, conduct or declarations" by the vendee which are "equivalent to an abandonment by him of the contract in its entirety." 2

Two reasons are assigned for this ruling. One is that "for the breach of contract to pay money, no matter what the amount of inconvenience sustained by the plaintiff, the measure of damages is the interest of the money only." The other reason is that "the rule of law which in some instances permits the innocent party to recover damages in the way of anticipated profits rests upon the fact that one party is prevented by the act of the other from realizing the benefit which the contract furnishes; " and "the breach of a stipulation to pay cannot be treated, in legal effect, as a denial of the vendor's right to proceed with the performance of the contract." 5

263. These Decisions open to Criticism. - Notwithstanding these decisions, it is submitted that the vendor ought to recover prospective profits in such cases. The vendee's engagement to pay an instalment being a condition precedent to his right to insist upon further performance by the vendor, his breach of that engagement is a breach of an essential term of the contract, a breach which goes to the root of the agreement, a breach which not only "would in most cases entirely frustrate the object of the contract," but which actually did frustrate it in some of the cases cited above. The true rule to have been laid down by the Virginia Supreme Court of

1 Keeler v. Clifford, 165 Ill. 544; 46 N. E. 248 (1897).

appears

2 Wharton & Co. v. Winch, 140 N. Y. 287, 296; 35 N. E. 589 (1893); Jones v. City of New York, 47 App. Div. (N. Y.) 39 (1900).

Bethel v. Salem Improvement Co., 93 Va. 354; 25 S. E. 304 (1896). But cf. Prehn v. Royal Bank, L. R. 5 Exch. 92 (1870), allowing additional damages.

Beatty v. Howe Lumber Co., 77 Minn. 272; 79 N. W. 1013 (1899); Burdick's Cases on Sales, 694.

5 Moore v. Taylor, 42 Hun (N. Y.), 45, 59 (1886).

Appeals as follows: "The plaintiffs can recover for prospective profits when they are prevented from going on by being ordered to desist from the work, or by the omission to perform some condition precedent to its further prosecution by the other party." It must be confessed, however, that so much of the rule as is contained in the last clause of the above citation has been rejected by that court in a later decision.2

3

264. Right to rescind may be waived. The right to rescind an instalment contract, because of the other party's default, may be waived if the buyer continues to receive and retain partial instalments; and if, while claiming damages for previous breaches, he accepts later deliveries, his right of rescission is lost. Likewise the seller may lose his right to rescind by insisting upon the purchaser's accepting and paying for instalments which the latter has failed to take, thus showing his election to continue the contract in force.5

264 (a). Alternative Rights of Party not in Default. — Upon the buyer's default in paying an instalment, the seller, if not in default, may sue for damages for the buyer's breach of the entire contract; or, he may treat the contract as still in force and sue for each instalment as it falls due. A like alternative is accorded the buyer, upon the seller's default in delivering an instalment."

265. Manner of giving Possession. What the seller is bound to do in the performance of his duty to give possession

1 Kendall Bank Note Co. v. Commissioners, 79 Va. 563, 573 (1884). 2 Bethel v. Salem Improvement Co., 93 Va. 354; 25 S. E. 304 (1896). McNaughton v. Cassady, 4 McLean (U. S. Cir. Ct.), 530 (1849). Miller v. Moore, 83 Ga. 684, 693; 10 S. E. 360 (1889). Accord, St. Louis Hay & Grain Co. v. Am. Cast Iron Pipe Co., 167 Ala. 442; 52 So. 904 (1910).

Providence Coal Co. v. Coxe, 19 R. I. 380; 35 At. 210, 211 (1896), semble; Burdick's Cases on Sales, 470. Accord, Alaska Salmon Co. v. Standard Box Co., 158 Cal. 567; 112 Pac. 454 (1910); McCauliff v. Vaughan, 135 Ga. 852; 70 S. E. 322 (1910); Henningsen v. Tonopah & Goldfield Ry., 33 Nev.-; 111 Pac. 36 (1910), and authorities cited in opinion; Wolfert v. Ice Co., 195 N. Y. 118; 88 N. E. 24; 21 L. R. A. N. s. 864 (1909); Honesdale Ice Co. v. Lake Lodore Imp. Co., 232 Pa. 293; 81 At. 306 (1911); Harding, Whitman & Co. v. York Knitting Mills, 142 Fed. 228 (1905).

• House Cold Tire Setter Co. v. Ingraham, 83 Conn. 31; 75 At.80 (1910). 7 Sumwalt Co. v. Knickerbocker Co., 112 Md. 437; 77 At. 56 (1910).

to the buyer, depends in each case, as a rule, "on the nature of the thing, and the relation of the parties to it at the time. . . . In all cases the essence of delivery is that the deliverer, by some apt and manifest act, puts the deliveree in the same position of control over the thing, either directly or through a custodian, which he held himself immediately before the act."

"1

At present we are concerned with but one species of delivery: that which the seller must make in order to perform his engagement to give possession to the buyer. What constitutes delivery under the Statute of Frauds has been discussed already; what acts of delivery will divest the vendor's lien, or prevent his stopping the goods in transitu, will be considered in the next chapter.

(A) Transfer of Possession without Change of Location.

266. The seller can perform his duty of giving possession of the goods without actually handing them over. Any act on his part which puts the buyer in the same position of control which he has been holding himself, will suffice. Accordingly, if the seller offers the goods to the buyer for removal, and the latter requests the former to retain them as bailee, and this is assented to, the seller's duty to give possession is discharged, and he can maintain an action for goods sold and delivered. But the circumstances must show that the seller's acts were intended to divest his vendor's lien, and to change the nature of his possession from that of unpaid vendor to that of bailee, or of servant of the buyer. There is evidence of such intention where the goods, being on the seller's premises at the time of sale, are to remain on storage for an agreed sum;

Pollock & Wright on Possession, 46, 47.

2 Janvrin v. Maxwell, 23 Wis. 51 (1868); Castle v. Sworder, 30 L. J. Exch. 310 (1861); Burdick's Cases on Sales, 471.

Safford v. McDonough, 120 Mass. 290 (1875); Burdick's Cases on Sales, 233; Mitchell v. LeClair, 165 Mass. 308; 43 N. E. 117 (1896); Burdick's Cases on Sales, 144.

4 Ropes v. Lane, 11 Allen (93 Mass.), 591, 600 (1866).

or where, at the buyer's request, the seller delivers with the bill of sale samples of the goods to be used by the purchaser in reselling them; or where the buyer, after inspecting the goods, declares that he takes possession of them and arranges with the seller for shipping them as the former "should send word; "2 or where the buyer, after examining and accepting them, places placards on them stating that he is their owner, and employs persons to guard them; or where goods are sold, subject to a lien, and the seller uses the price paid by the buyer to discharge the lien; or when the buyer of a flock of sheep brands each animal with his brand, and hires the seller to pasture them and to keep them separate from all other sheep.5

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267. Delivery of Goods already in Buyer's Possession. often happens that the subject-matter of a sale is in the buyer's possession when the contract is made. In such a case it is not necessary for the seller to take the property into his actual possession and then return it to the possession of the buyer. If, with the seller's assent, the buyer holds it, after the sale, as owner, a good delivery is established. And so when one partner or tenant in common sells to another, "the delivery does not so much consist in the actual tradition of the chattels from the one to the other, as in the surrender and relinquishment of the possession by the seller to the purchaser, thereby giving him the absolute and exclusive occupation and control of what before he held in common for himself and others." 7

8

In an English case, the goods were on the purchaser's prem

1 Ingalls v. Herrick, 108 Mass. 351 (1871); Burdick's Cases on Sales, 473.

2 Parry v. Libbey, 166 Mass. 112; 44 N. E. 124 (1896); Burdick's Cases on Sales, 474.

Williams & Co. v. Bristol, etc. Co., 174 Pa. St. 299; 34 At. 442 (1896).

Dubois v. Spinks, 114 Cal. 289; 46 Pac. 95 (1896).

5 Cady v. Zimmerman, 20 Mont. 225; 50 Pac. 553 (1897).

• Snider v. Thrall, 56 Wis. 674, 677; 14 N. W. 814 (1883); Burdick's Cases on Sales, 236.

7 Shurtleff v. Willard, 19 Pick. (36 Mass.) 202, 210 (1837).

9 Manton v. Moore, 7 D. & E. 67, 72 (1796). The arbitrator seems