depends in each case on the terms of the contract and the circumstances of the case whether the breach of contract is so material as to justify the injured party in refusing to proceed further and suing for damages for breach of the entire contract, or whether the breach is severable, giving rise to a claim for compensation, but not to a right to treat the whole contract as broken."

$ 170. Illustrations. What Breach Authorizes Rescission. A contract to deliver 50,000 tons of coal in a year, the shipments to be made at the rate of 6,000 tons per month, at buyer's option, upon notices to be furnished on a certain day in each month for the quantity required for the succeeding month, is a severable contract. When part performance of such contract has been made, the fact that other and inferior coal was substituted for that contracted for, in a delivery, does not give a right to rescind the proper remedy being by way of set-off or by an action for damages. So an agreement for the sale of 300 barrels of flour, to be delivered in lots of 100 barrels each, payable on delivery, is severable.2

3

1

If inferior goods are substituted in one instalment the other party is not bound to accept them. But if he does accept them, the receipt of a subsequent instalment is not a waiver of the right of action growing out of such improper delivery. There are in a divisible contract as many causes of action as there are breaches." But a failure to deliver all of one instalment does not entitle the buyer to demand that the deficiency be made up upon the delivery of the next instalment.

While mere non-payment of an instalment, or the mere improper delivery of one, will not authorize a rescission of

1 Scott v. Kittaning Coal Co., 89 Pa. 231.

2 Sawyer v. Chicago & N. W. Ry Co., 22 Wis. 402.

3 Cahen . Platt, 69 N. Y. 348.

4 Sawyer v. Chicago N. W. Ry. Co., 22 Wis. 402. Cf. Gill v. Benjamin, 64 Wis. 362.

5 Broumel v. Rayner, 68 Md. 50. Cf. Lorillard Clyde, 122 N. Y. 41. 6 Johnson . Allen, 78 Ala. 387.

the contract, yet if the default in an item be accompanied by an announcement that the party will not fulfil the contract according to its terms, the other party is at liberty to rescind the same, whether such default be after part performance or not.8 So when the contract was for the sale of six carloads of corn, each carload to be paid for as delivered, the refusal to pay for any carload, without sufficient reason, authorizes a rescission by the seller."

There was a contract for the sale of 6,000 to 8,000 tons of coal to be delivered into plaintiff's wagons at defendant's collieries in equal monthly instalments during twelve months. During the first month, plaintiff sent wagons for only 158 tons, and thereupon defendant annulled the contract. It was held that he was not entitled to do so because each delivery of coal was required to be delivered under a separate contract and to be paid for separately.10

In Mersey, etc., Co. v. Naylor,11 the contract was for the sale of 5,000 tons steel blooms, delivery to be of 1,000 tons monthly, commencing January, payment within three days after receipt of shipping documents. The buyer failed to pay for the first shipment because there had been certain proceedings in the affairs of the vendor company and he was advised by a solicitor not to do so. It was held that the seller was not entitled, on account of this default in payment, to rescind the contract. The precise point decided "was that the failure of the buyer to pay for the first instalment of the goods upon delivery does not, unless the circumstances evince an intention on his part to be no longer bound by the contract, entitle the seller to rescind and to decline to make further deliveries under it.11

When the contract is to furnish bricks for paving purposes, payment to be made monthly for those delivered in

7 Freth 7. Burr, L. R. 9, C. P. 208.

8 Withers r. Reynolds, 2 B. & Ad. 882. See also, Stephenson v. Cady, 117 Mass. 6.

9Rugg . Moore, 110 Pa. 236.

10 Simpson r. Crippen, L. R. 8. Q. B. 14.

11 L. R. 9, App. Cases, 434.

the preceding month, the contract is divisible, and a failure to pay for one instalment does not in itself entitle the seller to rescind the contract.12

The failure of a buyer to pay for several deliveries justifies a rescission of the contract by the seller. 13 When inferior and defective goods are substituted in three deliveries for those called for by the contract, the buyer is entitled to rescind.14 His right to rescind is not waived or lost unless he delays for an unreasonable time in notifying the seller of his purpose after he acquires knowledge of the defective deliveries, nor is the right to rescind lost because the buyer made use of such defective goods before he acquired knowledge of the defect.

In Jackson v. Kotax Motor Co.,15 the defendant ordered from a manufacturer in Paris a large number of motor horns of different kinds at prices as specified. The delivery was to be made as required, and to be paid for on delivery. The horns were shipped in nineteen cases on different dates in May and June, the first delivery containing four cases. The buyer accepted the first instalment, but rejected the others, because they were not merchantable, the horns being dented and not polished. It was held that the acceptance of the first instalment did not preclude the buyer from rejecting the later ones, which he was justified in doing, since they were unmerchantable. It was also held that this was not an entire contract for the sale at a lump price of an entire quantity of goods, but was for deliveries from time to time as required, and was much like the case of Simpson v. Crippin, where each instalment was really a delivery under a separate contract; that when the buyer accepts and pays for the first instalment, which is in accordance with the contract, he is not bound to pay for a subsequent instalment not in accordance with the contract; that

12 Brick Mfg. Co. v. Herrick, 126 Iowa, 721.

13 Eastern Forge Co. v. Coburn, 182 Mass. 592; McGrath v. Gegner, 77 Md. 331.

14 Enterprise Mfg. Co. c. Oppenheim, 114 Md. 368.

15 [1910] 2 K. B. 937.

in this case each batch of horns, as and when required, became the subject of a separate contract; that when a part of a batch was defective, the buyer was entitled to reject all of it and was not bound to go picking and choosing in order to select those articles which were merchantable.

A contract for the sale of 2,000 cases of canned tomatoes of a certain quality provided that they should be shipped to the buyer in carload lots of 500 cases, each lot to be paid for upon receipt of bill of lading. The first two lots were paid for, but upon receipt of the third carload of 500 cases, the buyer refused to pay for the same, alleging that the goods received in the first two shipments were not of the quality called for by the contract, and that the third lot also had been rejected by his sub-vendee, and claimed to be entitled to a deduction on that amount. The seller denied this claim and refused to make final delivery, although requested so to do, and brought suit to recover for the third shipment. The defendant claimed to be entitled to recoup against the price of the third carload lot the damages resulting from the seller's failure to ship the fourth lot, as also on account of the inferior quality of those previously delivered. It was held that the failure of the buyer to pay for the third shipment, under these circumstances, justifies the seller in refusing to make the fourth delivery, and that the defendant was not entitled to damages therefor by way of recoupment. 16

§ 171. Default at the Outset. A distinction is made by some cases between a failure to perform a divisible contract at the outset, and a failure in the performance of a subsequent item. When the default is in limine, when the seller, for example, fails to begin performance at the stipulated time, or then makes an improper delivery, the buyer is justified in rescinding the whole contract.1 In January the

16 Webster . Moore. 108 Md. 572.

1 Pope v. Porter, 102 N. Y. 366. And see Houck r. Muller, 7 Q. B. D. 92. But the doctrine of other courts is that there is no difference in legal effect between a breach of a divisible contract at its outset and a breach in the performance of a subsequent item. Gerli v. Poidebard Silk Mfg. Co., 57 N. J. L. 432.

King Philip Mills, which were about going into operation, agreed with S. to sell him the product of 400 looms up to July 1st, the goods to be of a certain width and weight, and to be delivered in lots of 1,000 pieces. Payment was to be made thirty days after the delivery of each lot. The mill was expected to be in full operation by April 1st, but deliveries were to be made earlier if possible. About April 17th two lots of 1,000 pieces each were delivered, which pieces were deficient in width and weight. It then appeared that the mills, in order to fulfil the contract, must obtain new machinery, and, upon learning this, S. rescinded the contract. In an action by the Mills against S. for goods subsequently and before July 1st manufactured, tendered and refused, it was held, 1. That the contract was for successive deliveries as manufactured. 2. That the mills having failed to make the first deliveries according to the contract, could not compel S. to take the goods subsequently offered, and S. was justified in rescinding the contract. 3. That in contracts for successive deliveries the vendor cannot fail in the earlier deliveries and still hold the purchaser for the later ones.2

§ 172. Waiver of Default. The failure to perform one of the stipulations may be waived by the other party, and no right then exists to rescind the contract on account of it. Thus, where H. agreed in January to furnish W. with 200 tons of pig iron, to be delivered in quantities of about 18 tons per month, and no deliveries were made until March, when W. sent for two small parcels on trial, and in May W. refused to accept any delivery and rescinded the contract on account of H.'s failures to make deliveries in the preceding four months, it was held, 1. That, as the iron was to be delivcred in monthly instalments, and to be paid for separately, a failure to make one delivery would not necessarily affect the right of the buyer to receive it. 2. That it was reasonable to infer from the fact of sending to H. for iron in March that W. considered the contract as subsisting at that time.