has been held that one who purchases a quantity of cotton goods of a quality known as "firsts," to be delivered in instalments, may rescind the contract in case the first few instalments are seconds, which cannot be put to the use for which "firsts" were intended.* 562. Minority View as to Default of Seller.-In a number of jurisdictions in this country following what is said to be the view of the later English cases, it is held that there is no right of rescission by the purchaser for a failure of the seller to deliver one of the instalments, unless the seller's conduct indicates his intention to abandon the contract or a desire no longer to be bound by its terms.5 This is especially true if under the circumstances the usefulness to the buyer of any instalment does not depend on the prompt delivery of the prior instalment and full indemnity for the failure to deliver one instalment may be secured by the recovery or allowance of damages, or if the breach on the part of the seller going to the quality of the commodity is not material.' The rule is held to apply to a failure of the seller in the delivery of the first instalment, thus breaking the contract in limine, as a default in this respect does not make it more certain than do later defaults that the buyer cannot get substantially what he contracted for, and for that default, as well as for others, the buyer may be compensated by suit, and by that default, as readily as by others, he may obtain an unconscionable advantage if he is entitled to rescind or retain the bargain as self-interest may dictate, and therefore as a basis on which a right of rescission is to be supported it cannot, merely because it is first in order, have any greater importance than later defaults. Still in some cases the fact that the default of the seller was not in regard to the first instalment has been emphasized as reason for denying the buyer the right of rescission." In denying the buyer a right of rescission the court has laid stress on the fact that the default of the seller relied on went to the quality of the commodity 1007, 38 L.R.A. (N.S.) 548. See also Thomas-Huycke-Martin Co. v. Gray, 94 Ark. 9, 125 S. W. 659, 140 A. S. R. 93. Note: 38 L.R.A. (N.S.) 541. 4. Enterprise Mfg. Co. v. Oppenheim, 114 Md. 368, 79 Atl. 1007, 38 L.R.A. (N.S.) 548. 5. Johnson Forge Co. v. Leonard, 3 Penn. (Del.) 342, 51 Atl. 305, 94 A. S. R. 86, 57 L.R.A. 225; Gerli v. Poidebard Silk Mfg. Co., 57 N. J. L. 432, 31 Atl. 401, 51 A. S. R. 611, 30 L.R.A. 61; Krebs Hop Co. v. Livesley, 59 Ore. 574, 114 Pac. 944, Ann. Cas. 1913C 758; Ellison v. Flat Top Gro cery Co., 69 W. Va. 380, 71 S. E. 391, 38 L.R.A. (N.S.) 539. Notes: 30 L.R.A. 71; 38 L.R.A. (N.S.) 541. 6. Gerli v. Poidebard Silk Mfg. Co., 57 N. J. L. 432, 31 Atl. 401, 51 A. S. R. 611, 30 L.R.A. 61. 7. Ellison v. Flat Top Grocery Co., 69 W. Va. 380, 71 S. E. 391, 38 L.R.A. (N.S.) 539. 8. Gerli v. Poidebard Silk Mfg. Co., 57 N. J. L. 432, 31 Atl. 401, 51 A. S. R. 611, 30 L.R.A. 61. 9. Ellison v. Flat Top Grocery Co., 69 W. Va. 380, 71 S. E. 391, 38 L.R.A. (N.S.) 539. and not to the time of the delivery.10 As regards the instalment which the seller fails to deliver in the required time, the buyer is under no obligation to accept a subsequent tender, irrespective of whether he is justified in putting an end to the entire contract.11 563. Waiver and Necessity of Notice of Termination Generally.Though the right of one party to terminate the contract for a default of the other party is recognized, still he has the right to treat the contract as continuing, the right to terminate being given for his benefit; and it seems to be generally recognized that if he wishes to exercise this right he must give seasonable notice of his election to do so to the party in default, else he will be deemed to have waived his right of termination on account of such past breaches.12 And the federal supreme court, though holding under the circumstances that the buyer was justified in terminating the contract for the default of the seller, expressly attached the proviso that the right must be distinctly and seasonably asserted.18 If the right of the seller to rescind for the default of the buyer is recognized and has been asserted, the buyer's subsequent tender or even payment of the amount in arrears will not reimpose upon the seller the duty to continue deliveries; in such a case the money being due and owing to the seller at the time it was paid, he has the right to accept it without forfeiting any of his legal rights.14 It has been held, however, that unless the seller notifies the buyer of his intention to rescind the contract on the latter's failure to pay for an instalment, according to the terms of the contract, an acceptance of the overdue payment is a waiver of his right to cancel the contract.15 564. Acceptance of Prior Deliveries Defective in Quality.—If the buyer accepts delivery of and retains an instalment which is defective it is generally held that he cannot on account of the defects in the delivery repudiate the further performance of the contract and refuse 10. Ellison v. Flat Top Grocery Co., 69 W. Va. 380, 71 S. E. 391, 38 L.R.A. (N.S.) 539. Note: 38 L.R.A. (N.S.) 540. 11. Gerli v. Poidebard Silk Mfg. Co., 57 N. J. L. 432, 31 Atl. 401, 51 A. S. R. 611, 30 L.R.A. 61. See supra, par. 246, as regards the general duty of the seller to make delivery at the time specified, so as to impose a duty on the buyer to accept. 12. McDonald v. Kansas City Bolt, etc., Co., 149 Fed. 360, 79 C. C. A. 298, 8 L.R.A. (N.S.) 1110; Johnson v. Allen, 78 Ala. 387, 56 Am. Rep. 34; Miller v. Moore, 83 Ga. 684, 10 S. E. 360, 20 A. S. R. 329, 6 L.R.A. 374; Henningsen v. Tonopah, etc., R. Co., 33 Nev. 208, 111 Pac. 36, 119 Pac. 774, Ann. Cas. 1913D 1008; Scott v. Kittanning Coal Co., 89 Pa. St. 231, 33 Am. Rep. 753. Notes: 8 L.R.A. (N.S.) 1110; 38 L.R.A. (N.S.) 542; 11 Ann. Cas. 1049; 20 Ann. Cas. 531; Ann. Cas. 1913D 1021. 13. Norrington v. Wright, 115 U. S. 188, 6 S. Ct. 12, 29 U. S. (L. ed.) 366. 14. Ohio Val. Buggy Co. v. Anderson Forging Co., 168 Ind. 593, 81 N. E. 574, 11 Ann. Cas. 1045; Quarton v. American Law Book Co., 143 Ia. 517, 121 N. W. 1009, 32 L.R.A. (N.S.) 1. Note: 51 A. S. R. 616. 15. Note: 11 Ann. Cas. 1049. to accept other deliveries. Thus if the default of the seller in the delivery of an instalment is in the quality of the commodity delivered, and the instalment has been accepted and retained by the buyer, the latter cannot for such reason alone repudiate the contract and refuse to accept further delivery of instalments of the required quality.16 It has also been expressly held that, even though the seller in the prior deliveries was guilty of fraud in substituting an inferior grade, this would not justify the buyer in his refusal to take subsequent instalments. It seems, however, that if the conduct and acts of the seller are such as to justify a reasonable belief on the part of the buyer that the seller intends thereafter to continue to tender or deliver a quality inferior to that required by the contract, the buyer may terminate the contract for such prior defaults. 18 And the broad view has been taken in some cases that though the buyer has accepted and retained the inferior goods involved in an instalment he may still repudiate the contract for the default of the seller with respect to such instalment. 19 It has been held that a buyer of white cotton goods to be shipped to a process mill for treatment does not, by ordering instalments into process, waive the right to rescind because the goods are not of the quality called for by the contract, where, according to custom, the only inspection made is by the manufacturer, on which the buyer has a right to rely until notified of defects.20 565. Acceptance of Prior Deliveries Defective in Quantity.-If the defaul in the delivery of an instalment goes to the quantity it would seem that the acceptance of such defective delivery would, as in case of a defect in quality, defeat the buyer's right to terminate the contract on account of such default. Where, however, the buyer at the time objected to repeated shortages in the deliveries of a number of instalments, he has been permitted to terminate the contract for such default; and it has been held, where a certain quantity is required to be shipped monthly, the total amount for each month not necessarily to be included in a single shipment, that the fact that the buyer 16. Thomas-Huycke-Martin Co. v. Gray, 94 Ark. 9, 125 S. W. 659, 140 A. S. R. 93; Miller v. Moore, 83 Ga. 684, 10 S. E. 360, 20 A. S. R. 329, 6 L.R.A. 374; Blackburn v. Reilly, 47 N. J. L. 290, 1 Atl. 27, 54 Am. Rep. 159; Cohen v. Platt, 69 N. Y. 348, 25 Am. Rep. 203; Scott v. Kittanning Coal Co., 89 Pa. St. 231, 33 Am. Rep. 753; Ellison v. Flat Top Grocery Co., 69 W. Va. 380, 71 S. E. 391, 38 L.R.A. (N.S.) 539. See also Oswego Falls Pulp, etc., Co. v. Stecher Lith. Co., 215 N. Y. 98, 109 N. E. 92, L.R.A. 1916B 1257. Note: 38 L.R.A. (N.S.) 542, 543. 17. Scott v. Kittanning Coal Co., 89 Pa. St. 231, 33 Am. Rep. 753. 18. Blackburn v. Reilly, 47 N. J. L. 290, 1 Atl. 27, 54 Am. Rep. 159. Note: 38 L.R.A. (N.S.) 542. 19. King Philip Mills v. Slater, 12 R. I. 82, 34 Am. Rep. 603. 20. Enterprise Mfg. Co. v. Oppenheim, 114 Md. 548, 79 Atl. 1007, 38 L.R.A. (N.S.) 548. 1. Wolfert v. Caledonia Springs Ice Co., 195 N. Y. 118, 88 N. E. 24, 21 L.R.A. (N.S.).864. 2. Note: 21 L.R.A. (N.S.) 864. accepted and disposed of the part of the commodity shipped in one month in ignorance of the fact that the required amount had not been shipped or would not be shipped, this did not defeat his right to terminate the contract for the failure of the seller to ship the required amount during such month.s 566. Effect of Prior Acceptances on Later Defaults.-The acceptance of instalments which comply with the contract in quality does not affect the right to reject subsequent instalments which in quality do not meet the requirements of the contract. So it would seem on principle that the acceptance of prior instalments defective in quality will not preclude the buyer from rescinding the contract for the default of the seller in the delivery of subsequent instalments also defective in quality. The question of the entirety of the contract of sale is immaterial, where the provisions in the contract as to the quality of the article do not constitute a warranty, but rather an obligation on the part of the seller to sell and deliver, and on the part of the buyer to receive and pay for, articles of a designated quality when delivered. In such case the only obligation on the part of the buyer is to accept articles of the quality described in the contract. This obligation is not affected by the acceptance of prior instalments not of the quality required. 567. General Effect of Rescission.-Though the failure of the buyer to pay for an instalment authorizes the seller to rescind or refuse further performance of the contract, it does not, it would seem on principle, if the buyer has not otherwise repudiated the contract in toto, authorize the seller to treat such nonpayment as such a breach of the contract as to entitle him to recover anticipated profits on the unperformed part of the contract, without a tender of the further instalments in accordance with the terms of the contract. It would be otherwise, however, if the failure of the buyer to pay is accompanied by a repudiation of the entire contract; 8 and the view has been taken that the failure to pay for an instalment is such a breach as to entitle the seller not only to terminate the contract and recover for what has been delivered but also damages with respect to the further deliveries. The seller cannot maintain an action for the aggregate 3. Norrington v. Wright, 115 U. S. 188, 6 S. Ct. 12, 29 U. S. (L. ed.) 366. 4. Note: 38 L.R.A.(N.S.) 543. 5. Enterprise Mfg. Co. v. Oppenheim, 114 Md. 368, 79 Atl. 1007, 38 L.R.A. (N.S.) 548. 6. Note: 38 L.R.A. (N.S.) 544. See supra, par. 242, as to the buyer's general duty to accept where the article tendered is not such as is called for by price where on account of the buyer's failure to pay an instalment of the price when due he withholds delivery of the later instalments of the subject matter. 10 Breach of Warranty 568. In General.-If the contract of sale expressly or by implication gives the buyer the right to return the property purchased for breach of warranty as to quality, it is in no way inconsistent with the warranty and will entitle him to make the return and recover what he has paid. In the absence of such an agreement or of a statute conferring the right, the authorities are in conflict as to whether a buyer, who has accepted delivery of the subject matter of the sale, may rescind the sale for breach of warranty as to quality, such acceptance having been made without knowledge of the breach. In England, though the authorities have not been consistent, the rule established in the later cases, which was also the view taken in the very early ones, denies any right on the part of the buyer, in the absence of fraud, to rescind for breach of a warranty as to quality. This rule was so established in the leading case of Street v. Bray (2 Barn. & Ad. 456) decided in 1831 and has since been consistently followed.12 This is also the view taken in most jurisdictions in this country, 18 though in some of them the right of rescission is upheld in case of both express and implied warranties, though unaccompanied by fraud.14 If the 10. Rodgers v. Wise, 106 Ark. 310, 153 S. W. 253, 43 L.R.A. (N.S.) 1009. Note: 43 L.R.A. (N.S.) 1009. As to the seller's action for the price generally, see supra, par. 355 et seq. 11. See infra, par. 571. 123 N. W. 661, 134 A. S. R. 778; Voorhees v. Earl, 2 Hill (N. Y.) 288, 38 Am. Dec. 588; Cary v. Gruman, 4 Hill (N. Y.) 625, 40 Am. Dec. 299; Gillespie v. Torrance, 25 N. Y. 306, 82 Am. Dec. 355; Day v. Pool, 52 N. 12. See H. W. Williams Transp. Y. 416, 11 Am. Rep. 719; Brigg v. Line v. Darius Cole Transp. Co., 129 Hilton, 99 N. Y. 517, 3 N. E. 51, 52 Mich. 209, 88 N. W. 473, 56 L.R.A. 939. Am. Rep. 63; Fairbank Canning Co. 13. Thornton v. Wynn, 12 Wheat. v. Metzger, 118 N. Y. 260, 23 N. E. 183, 6 U. S. (L. ed.) 595; Lyon v. 372, 16 A. S. R. 753; Kase v. John, 10 Bertram, 20 How. 149, 15 U. S. (L. Watts (Pa.) 107, 36 Am. Dec. 148; ed.) 847; Gay Oil Co. v. Roach, 93 Richmond First Nat. Bank v. Badham, Ark. 454, 125 S. W. 122, 137 A. S. R. 86 S. C. 170, 68 S. E. 536, 138 A. S. 95, 27 L.R.A.(N.S.) 914, apparently R. 1043; Allen v. Anderson, 3 Humph. overruling Bunch v. Weil, 72 Ark. 343, (Tenn.) 583, 39 Am. Dec. 197; Hoad80 S. W. 582, 65 L.R.A. 80; Wood- ley v. House, 32 Vt. 179, 76 Am. ruff v. Graddy, 91 Ga. 333, 17 S. E. Dec. 167. But see Kuntzman V. 264, 44 A. S. R. 33; Johnson v. Mc- Weaver, 20 Pa. St. 422, 59 Am. Dec. Lane, 7 Blackf. (Ind.) 501, 43 Am. 740. Dec. 102; H. W. Williams Transp. Line v. Darius Cole Transp. Co., 129 Mich. 209, 88 N. W. 473, 56 L.R.A. 939, explaining Kimball, etc., Co. v. Vroman, 35 Mich. 310, 24 Am. Rep. 558; Wirth v. Fawkes, 109 Minn. 254, Notes: 7 Am. Dec. 131; 38 Am. Dec. 592; 27 L.R.A. (N.S.) 919; 23 Eng. Rul. Cas. 463. 14. Bulkley v. Honold, 19 How. 390, 15 U. S. (L. ed.) 663 (announcing the law of Louisiana); North Alaska Sal |