$686. What manifestation of election is final.

The question when election of one of two inconsistent courses has gone so far as to preclude subsequent choice of the second course when the first proves ineffectual, is raised in several classes of cases. If the change from the first alternative to the second involves any substantial injury to the other party, clearly the change ought not to be permitted: but frequently there is no such injury; yet there has been a plain manifestation of the choice of one course rather than the other. Thus one whose goods have been converted may make a demand for the proceeds of the converted property, thereby indicating a choice to affirm the wrongdoer's action. This is ordinarily called an election of remedies merely; but the choice of remedies is also a choice of rights. Though it has been said by high authority that as soon as a party having a right of election "has communicated it to the other side in such a way as to lead the opposite party to believe that he has made that choice, he has completed his election and can go no further," 59 such a demand has been held, not to preclude a subsequent election to enforce the claim in tort.60 On the other hand, prosecuting the claim to judgment is a final election.61 Even bringing an action is by some courts held conclusive.62 The same sort of question arises where one entitled to sue either for

know that which in contemplation of law he ought so know, and one is presumed to waive that which is necessarily implied from his conduct. Constructive as well as actual knowledge of the facts, and implied as well as express intent, satisfies the prime essential of a conclusive waiver." In Reed t. Union L. Ins. Co., 21 Utah, 295, 309, 61 Pac. 21, the court said: "It is said that the plaintiff was bound to know the law, and that he must have known the facts. So far as the written contract alone was concerned, if not ambiguous or contradictory, this may be true."

59 Lord Blackburn in Scarf v. Jardine, 7 App. Cas. 345, 360.

"Valpy v. Sanders, 5 C. B. 886;

Baker v. Hutchinson, 147 Ala. 636, 41
So. 809.

61 Hitchin v. Campbell, 2 W. Bl. 827; Bacon v. Moody, 117 Ga. 207, 43 S. E. 482; Roberts v. Morse, 127 Ky. 657, 106 S. W. 297; Ware v. Percival, 61 Me. 391, 14 Am. Rep. 565; Walsh v. Chesapeake, etc., Canal Co., 59 Md. 423; Nanson v. Jacob, 93 Mo. 331, 6 S. W. 246, 3 Am. St. Rep. 531; International Paper Co. v. Purdy, 136 N. Y. App. Div. 189, 120 N. Y. S. 342. 62 Daniels v. Smith, 15 Ill. App. 339; Thomas v. Watt, 104 Mich. 201, 62 N. W. 345; Carroll v. Fethers, 102 Wis. 436, 78 N. W. 604. See, however, contra-Spurr v. Home Ins. Co., 40 Minn. 424, 42 N. W. 206; Otto v. Young, 227 Mo. 193, 127 S. W. 9.

67

breach of an express contract or for the fair value of what has been given under it 63 manifests a choice of one or the other remedy. Thus, taking judgment is a conclusive choice,64 and even beginning an action is generally held conclusive.65 Beginning a suit for specific performance has also been held an election by the plaintiff (the vendee) to proceed with the contract, in spite of all defects in the title then known to him.66 Any conduct calculated to deceive the other party to his injury in regard to the choice of the party entitled to elect will also conclude the latter." Similarly proof in bankruptcy by a secured creditor of the full face of his claim is an election to surrender the security.68 And where one who enters into a contract is acting for an undisclosed principal, the other party on discovering the facts is put to his election whether he will hold the agent or the principal. According to the generally accepted statement of a promisee's rights on repudiation by the promisor of his obligation under a bilateral contract, the promisee has an election to treat the repudiation as a breach or not to do so.70 The result of the decisions on the subject seems rather inconclusive of the question whether a manifestation of election is final unless a change from the alternative first chosen will work, or may work, an injury to the other party. Perhaps a rule might find support, both on principle and from convenience that after any manifestation of election an inconsistent position cannot be taken as matter of right, but that unless consideration has been given or there is an element of estoppel, a court having equitable powers may relieve from a hard situation by allowing rescission of the election.71

63 See infra, § 1454.

64 Goodman v. Pocock, 15 Q. B. 576; Graham v. Holloway, 44 Ill. 385.

65 Brown v. St. Paul, etc., Ry. Co., 36 Minn. 236, 31 N. W. 941; Graves v. White, 87 N. Y. 463. See also Theusen v. Bryan, 113 Ia. 496, 85 N. W. 802; Holman v. Updike, 208 Mass. 466, 94 N. E. 689.

66 Gray v. Fowler, L. R. 8 Exch. 249. 67 Mizell v. Watson, 57 Fla. 111, 49 So. 149; Harden v. Lang, 110 Ga. 392,

36 S. E. 100; Axtel v. Chase, 77 Ind. 74; Mills v. Osawatomie, 59 Kans. 463, 53 Pac. 470; Graham v. Hatch Storage Battery Co., 186 Mass. 226, 71 N. E. 532; J. B. Alfree Mfg. Co. v. Grape, 59 Neb. 777, 82 N. W. 11.

68 First Nat. Bank v. Exchange Nat. Bank, 179 N. Y. App. D. 22, 153 N. Y. S. 818, 164 N. Y. S. 1092.

69 See supra, § 289.
70 See infra, § 1322.

71 On the right to make a new elec

§ 687. Acceptance of continued benefits under a contract with knowledge of a defence is an election; leases. The commonest case of election in the law of contracts arises where, with knowledge of a breach of condition or a defence excusing performance, a promisor either refuses or continues to accept performance from the other party. As the only theory upon which the benefit of such performance can be rightfully received is on the assumption of an election. to continue the contract, that assumption is made if the injured party accepts further performance. This principle was early established in the law of landlord and tenant. Acceptance of rent accruing after breach of condition with knowledge of the breach is a discharge of the breach.72 The principle of election precludes a purchaser in possession of real estate under a contract from refusing to make payments under the contract

tion after bringing action, in cases of waiver of tort, see Woodward, QuasiContracts, § 298; Griffith, Election of Remedies, 15 L. Quar. Rev. 160; Corbin, Waiver of Tort and Suit in Assumpsit, 19 Yale L. J. 221, 239. See also infra, §§ 1469, 1526-1528. In a case of a different character the theory has been adopted that some change of position in reliance on an election is necessary to make it final. In List & Son Co. v. Chase, 80 Oh. St. 42, 49, 88 N. E. 120, the court said: "Mere silence will not amount to waiver where one is not bound to speak. In this case the goods were perishable and exceedingly liable to be damaged by heat. The shipment was in the month of June and therefore the shortest and speediest route was a material condition. It is true that if the contract bound the plaintiff to ship by such a route, the defendant might have rescinded the contract on receiving the bill of lading showing a shipment on another and more hazardous route; but he was not bound to do so then. He might wait until inspection because inspection might show that the goods were not damaged, and he could

then accept them or if damaged reject them. The purchaser therefore waived no right by waiting and the seller lost none, because the latter had already made a breach of his contract and could not remedy it." While the principle that an election may be open to change, if the change works no injury to the other party, seems sound, it may be questioned whether the court did not go too far here in suggesting that the buyer might throw the risk of transit on the seller by deferring his election. True the seller had already irretrievably broken his contract, but the consequences of that breach would vary with the position which the buyer took; and it seems unfair to allow him to say "I will take neither position now, but will wait and see which is more advantageous to me (and more disadvantageous to you)." See infra, n. 80.

72 Marsh v. Curteys, Cro. Eliz. 528; Harvie v. Oswel, Cro. Eliz. 572; Dendy v. Nicholl, 4 C. B. (N. S.) 376; Cotesworth v. Spokes, 10 C. B. (N. S.) 103; Ward v. Day, 4 B. & S. 337; Commercial Trust Co. v. L. Wertheim &c. Co., 88 N. J. Eq. 143, 102 Atl. 448.

or dispute his vendor's title, so long as he retains possession of the property; 73 for the possession can only rightfully be held under the contract, and therefore while he retains possession the purchaser necessarily elects to continue the contract. The familiar principles that a tenant is estopped to deny his landlord's title, and a bailee that of his bailor, are based on the same fundamental principle. So in contracts for the sale of goods, one who voluntarily continues to deliver installments of goods in response to the buyer's orders after the buyer's right has expired by lapse of time cannot refuse without an additional breach by the buyer to fill orders for all the goods for which the contract provided.74 An employer who is entitled to discharge an employee because of the latter's temporary illness, but who nevertheless continues the employment after the illness, in the absence of agreement to the contrary must pay for the period during which the employee was ill.75 Similarly in insurance law, the acceptance of a premium or assessment, liability for which exists only on the assumption that the policy is to continue in force, is an election not to terminate it because of a known breach of condition or defence.76

73 Burnett v. Caldwell, 9 Wall. 290, 19 L. Ed. 712; Union Stave Co. v. Smith, 116 Ala. 416, 22 So. 275, 67 Am. St. Rep. 140; Shorman v. Eakin, 47 Ark. 351, 1 S. W. 559; Coates v. Cleaves, 92 Cal. 427, 28 Pac. 580; Goodwin v. Markwell, 37 Fla. 464, 19 So. 885; Harris v. Amoskeag Lumber Co., 101 Ga. 641, 29 S. E. 302; Page v. Bradford-Kennedy Co., 19 Ida. 685, 115 Pac. 694; Lesher v. Sherwin, 86 Ill. 420; Towne v. Butterfield, 97 Mass. 105; Curran v. Banks, 123 Mich. 594, 82 N. W. 247; Mitchell v. Chisholm, 57 Minn. 148, 155, 58 N. W. 873, 874; Pershing v. Canfield, 70 Mo. 140; Kirtz v. Peck, 113 N. Y. 222, 21 N. E. 130; Nance v. Rourk, 161 N. C. 646, 77 S. E. 757; McPherson v. Johnson, 69 Tex. 484, 6 S. W. 798; Cutler v. Babcock, 79 Wis. 484, 48 N. W. 494.

74 Schulder v. Edward R. Ladew Co.,

178 N. Y. App. D. 458, 165 N. Y. S. 504.

75 Cuckson v. Stones, 1 E. & E. 248; Bassett v. French, 10 N. Y. Misc. 672, 677, 31 N. Y. S. 667.

76 Insurance Co. v. McDowell, 50 Ill. 120, 99 Am. Dec. 497; Bennett v. Union Central L. Ins. Co., 203 Ill. 439, 67 N. E. 971; Watts v. Equitable Mut. Life Assoc., 111 Ia. 90, 82 N. W. 441; Mosiman v. Benefit Association, 82 Kans. 670, 674, 109 Pac. 413; Powell v. Factors', etc., Ins. Co., 28 La. Ann. 19; Williams v. Maine State Relief Assoc., 89 Me. 158, 36 Atl. 63; McNicholas v. Prudential Ins. Co., 191 Mass. 304, 77 N. E. 756; Reed v. Bankers' Union, 121 Mo. App. 419, 99 S. W. 55; Clifton v. Mutual Life Ins. Co., 168 N. C. 499, 84 S. E. 817; Chicago, etc., Life Soc. v. Ford, 104 Tenn. 533, 58 S. W. 239.

§ 688. After election to continue a contract in spite of a known excuse, the excuse cannot be asserted.

The principle is general that wherever a contract not already fully performed on either side is continued in spite of a known excuse, the defense thereupon is lost and the injured party is himself liable if he subsequently fails to perform," unless the right to retain the excuse is not only asserted but assented to.78