§ 848. Whether the time for the payment of money is of the

essence.

It is sometimes said that the time for the payment of money is not as essential as the time for other performance.73 The distinction, however, may easily be overemphasized. There seems no reason to suppose that in a contract to buy and sell, which is wholly execuutory on both sides, the buyer's tender of the money at the agreed day is not as essential to his right of recovery as the seller's tender of the goods at the agreed day is essential in the converse case. The decisions relied upon to support the distinction are cases where there had been part performance by the seller and a debt had already arisen. It is doubtless true then that payment of the debt on the precise day when it is due is not of the essence." But such a situation is comparable to one where title to goods has passed, though delivery has not yet been made, and in such a case as has been seen in the preceding section non

of the contract, one is first to be performed as the condition of the obligation of the other, that which is first to be performed must be done, or tendered, before that party can sustain a suit against the other. There is no doubt, that in this case of contracts, if a day is fixed for performance, the party whose duty it is to perform or tender performance first must do it on that day, or show his readiness and willingness to do it, or he cannot recover in an action at law for nonperformance by the other party.

'But, both at common law and in chancery, there are exceptions to this rule, growing out of the nature of the thing to be done and the conduct of the parties. The familiar case of part performance, possession, etc., in chancery, where time is not of the essence of the contract, or has been waived by the acquiescence of the party, is an example of the latter; and the case of contracts for building houses, railroads, or other large and expensive constructions, in which the means of the builder and his labor become com

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bined and affixed to the soil, or mixed with materials and money of the owner, often afford examples at law.

"If A contract to deliver a horse to B on Monday next, for which B agrees to pay $100, A cannot recover by an offer to deliver on Tuesday; but if A agree to deliver a horse, buggy and harness on Monday, and B accepts delivery of the horse and buggy, can he refuse to pay anything, though he accepts delivery of the harness on Tuesday? This is absurd. He waives, by this acceptance, the point of time as to the harness, at least so far as A's right to recover the agreed sum is concerned. If B have suffered any damage by the delay, he can recover it by an action on A's covenant to deliver on Monday; or, if he wait to be sued, he may recoup by setting it up in that action as a cross-demand growing out of the same contract."

73 It is so provided in Sec. 10 of the English Sale of Goods Act.

74 National Machine Co. v. Standard Shoe Machinery Co., 181 Mass. 275, 63 N. E. 900, see infra, § 864.

delivery of the goods at the day is not necessarily fatal. It is of doubtful utility to attempt to make a more specific rule where there has been part performance than to say that in every case unless the parties have made an express provision on the subject the court must consider the materiality of time in view of the nature of the contract, and the surrounding circumstances, and then determine whether justice will best be achieved by depriving the party in delay of all remedy under the contract, or of allowing him to recover subject to a cross claim because of his delay. If the matter is looked at in this light any difference in regard to the payment of money and the performance of a non-pecuniary obligation will be at most one of degree.

Frequently building construction contracts require payments to be made as the work progresses. Such contracts are not divisible, for the several payments are not made in exchange for the work done up to the time of payment (though generally the amount is so calculated as not to exceed the value of the work done) but are part payments on account of a total sum which is the price of the whole work. Non-payment of an instalment of the price justifies the contractor in refusing to continue the work.75 Doubtless a day's delay in the payment of an instalment will not justify permanent cessation of work, but it seems

75 Phillips, etc., Construction Co. v. Seymour, 91 U. S. 646, 23 L. Ed. 341; P. J. Carlin Const. Co. v. Guerini Stone Co., 241 Fed. 545, 154 C. C. A. 321, s. c. sub nom. Guerini Stone Co. v. P. J. Carlin Const. Co., 248 U. S. 334, 344, 39 S. Ct. 102, 63 L. Ed. (1919); Cox v. McLaughlin, 54 Cal. 605; Fairchild-Gilmore-Wilton Co. v. Southern Refining Co., 158 Cal. 264, 110 Pac. 951; San Francisco Bridge Co. v. Dumbarton Land Co., 119 Cal. 272, 51 Pac. 335; Woodruff Co. v. Exchange Realty Co., 21 Cal. App. 607, 132 Pac. 598; Dobbins v. Higgins, 78 Ill. 440; Keeler v. Clifford, 165 Ill. 544, 46 N. E. 248; Geary v. Bangs, 37 Ill. App. 301; Shulte v. Hennessy, 40 Iowa, 352; Finnigan v. Worden-Allen

Co., 201 Mich. 445, 167 N. W. 930; McCullough v. Baker, 47 Mo. 401; Bean v. Miller, 69 Mo. 384; Mugan v. Regan, 48 Mo. App. 461; Lawrence v. Heylman, 85 N. Y. S. 789, 89 N. Y. App. Div. 620; Graf v. Cunningham, 109 N. Y. 369, 16 N. E. 551; Thomas v. Stewart, 132 N. Y. 580, 30 N. E. 577; Nelson v. San Antonio Traction Co., 107 Tex. 180, 175 S. W. 434; Miller v. Sullivan, 14 Tex. Civ. App. 112, 33 S. W. 695, 35 S. W. 1084, 37 S. W. 778; Bennett v. Shaughnessy, 6 Utah, 273, 22 Pac. 156; Preble v. Bottom, 27 Vt. 249; Rioux v. Ryegate Brick Co., 72 Vt. 148, 47 Atl. 406. But see Campbell v. McLeod, 24 N. S. 66.

that the contractor might refuse to perform further until payment was made and if it was delayed for a long and unreasonable time, might refuse to go on with the work altogether.

§ 849. Time in building contracts.

Time is not ordinarily of the essence of a building contractthat is, failure of the builder to complete his work at the time agreed will not deprive him of his right of action for the price.76 The part performance by the builder requires that the owner shall seek redress for the delay by counterclaim or cross action. Completion at a fixed day, however, may be made a condition of recovering payment either by express language or by circumstances showing that any delay deprives the work of value.78 It has indeed been said by the Supreme Court of the United States: 79

78 Buster v. Fletcher, 22 Idaho, 172, 125 Pac. 226; Wiebener v. Peoples, 44 Okl. 32, 142 Pac. 1036; Hunn v. Pennsylvania Institution, 221 Pa. 403, 70 Atl. 812, 18 L. R. A. (N. S.) 1248; Ottumwa Bridge Co. v. Corrigan, 251 Mo. 667, 158 S. W. 39. See also Paton v. Payne, 35 Scot. L. Rep. 112 (H. L.). But see Allen v. Cooper, 22 Me. 133; Pickering v. Greenwood, 114 Mass. 479; Palo Pinto Co. v. Beene (Tex. Civ. App.), 199 S. W. 866. In Brady v. Oliver, 125 Tenn. 595, 147 S. W. 1135, 1140, the court said:

"If he should default in one day, or one week, or one month of the time, this would not necessarily justify a rescission. It would depend upon the effect of the delay upon the essential objects to be accomplished by the performance. A case can be conceived where a default of one day might defeat the whole purpose of the contract. But generally such is not true of working contracts." The court indeed also said that "time was of the essence of this contract," but, as the context shows, meant by those words merely that considerable delay would be a material breach, not that performance ont he exact day stipulated was a

77

condition precedent. The same use of language is to be found in Wood v. Joliet Gaslight Co., 111 Fed. 463, 49 C. C. A. 427. The court said time was of the essence, but allowed the builder to recover subject to recoupment. All it intends to say apparently Iwas that the builder was liable for damages.

77 See, however, supra, § 793.

78 In Slater v. Emerson, 19 How. 224, 15 L. Ed. 626, a railroad contractor was denied recovery because of his failure to complete the contract work on time; but the sum promised by a third party was a bonus as additional compensation, and the court construed the contract as containing an express condition of completion at the day. Cases similar in principle are Cincinnati, etc., R. Co. v. Bensley, 51 Fed. Rep. 738, 2 C. C. A. 480; Ogden v. Kirby, 79 Ill. 555; Burlington R. Co. v. Boestler, 15 Ia. 555; Memphis, etc., R. Co. v. Thompson, 24 Kan. 170; Morrison v. Wells, 48 Kan. 494, 29 Pac. 601; Jordan v. Newton, 116 Mich. 674, 75 N. W. 130; Adams v. Guyandotte Valley R. Co., 64 W. Va. 181, 61 S. E. 341.

79 Phillips, etc., Const. Co. v. Sey

"If the builder has done a large and valuable part of the work, but yet has failed to complete the whole or any specific part of the building or structure within the time limited by his covenant, the other party, when that time arrives, has the option of abandoning the contract for such failure, or of permitting the party in default to go on. If he abandons the contract, and notifies the other party, the failing contractor cannot recover on the covenant, because he cannot make or prove the necessary allegation of performance on his own part. What remedy he may have in assumpsit for work and labor done, materials furnished, &c., we need not inquire here; but if the other party says to him, 'I prefer you should finish your work,' or should impliedly say so by standing by and permitting it to be done, then he so far waives absolute performance as to consent to be liable on his covenant for the contract price of the work when completed." This puts the matter wholly on the basis of waiver, but the doctrine of part performance is not wholly based on waiver, but in part at least on the inequity of excusing altogether the defendant from performing his promise (not in terms expressly conditional on exact performance by the plaintiff) because of any slight default whatever by the plaintiff in his duty. In building contracts the forfeiture of the builder's work which would result if the rule were otherwise, furnishes a good illustration of the propriety of the rule.

§ 850. Time is not of the essence in contracts of service.

In contracts of service time is not essential in the sense that any deviation by an employee from the agreed times of service is fatal. This is obviously true after part performance, since otherwise a contract of service could be abrogated by absence or tardiness for a single day.80 Even though the breach is in limine, the question of materiality in the particular case must be considered, unless the employer's obligation is in terms made conditional on strict performance

mour, 91 U. S. 646, 651, 23 L. Ed. 341.

80 In Fillieul v. Armstrong, 7 A. & E. 557, unexcused absence of a teacher

for two days longer than an allotted vacation was held not to justify his discharge.

by the employee. The kind of service to be performed, however, is an important element to consider in arriving at a conclusion. If the service relates to a commercial adventure, time may be very important. In a charter party, for instance, the time agreed for loading or sailing is vital.82

§ 851. When time is essential in performing collateral stipulations.

Sometimes by the terms of a contract some performance other than the main performance of the contract is to be made at a fixed day or within a fixed period. If this provision is not by the express terms of the contract, a condition stated to be of the essence, the materiality of the provision in view of the nature of the case and the surrounding circumstances is the guide for the court.83 Thus where a contract for the sale of wool provided that the names of the vessels in which it was shipped should be declared as soon as the wool was shipped, the court said of this stipulation that "looking at the nature of the contract, and the great importance of it to the object with which the contract was entered into with the knowledge of both parties, we think it was a condition pre

81 In Bettini v. Gye, 1 Q. B. D. 183, by the contract the plaintiff agreed "to be in London without fail at least six days before the commencement of his engagement for the purpose of rehearsals." Breach of this agreement was held not to justify the plaintiff's dismissal. In Lewis v. West Viginia Pulp & Paper Co., 76 W. Va. 103, 84 S. E. 1063, 1064, the court said: "The time within which an act is to be done is not always essential, and, when the time specified for performance of a contract is relatively unimportant, it is not of the essence thereof, unless made so in express terms, or it appears to be a condition rather than a covenant. Adams v. Railway Co., 64 W. Va. 181, 61 S. E. 341. No terms used by the parties imported intent to make the time of arrival essential. Though the plaintif

promised to arrive on Thursday, and the defendant expressed satisfaction with that date, neither used any word signifying intent to make the contract depend upon that fact for its binding force or validity. On the contrary, the defendant's conduct indicated allowance of reasonable latitude as to time. It first said, Come at once, and then allowed a day or two for preparation."

82 In Barker v. Borzone, 48 Md. 474, the owner of a ship agreed that laydays for loading should begin “not later than 31st January." A tender of the ship a single day too late was held to justify refusal of the charterer to load.

83 Meier Dental Mfg. Co. v. Smith, 237 Fed. 563, 150 C. C. A. 445; Jennings v. Bowman, 106 S. Car. 455, 91 S. E. 731.