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should be dealt with purely as one of fact. Could the plaintiff have performed concurrently with the defendant? The mere fact that the plaintiff needed the assistance of a third person to enable him to do this is not proof that he could not do it. If the defendant was not aware of the facts at the time he entered into the bargain and finding them out subsequently, before the time for performance, repudiates his agreement, a further question must be asked; namely, was the risk of non-performance which the other party is endeavoring to impose upon him greater than he should reasonably have anticipated as possible when he entered into the contract?

§ 882. Both parties unable or unwilling to perform.

If both parties to a contract are actually or prospectively unable to perform, and the performances of the promises were the price or exchange for one another, neither party can recover from the other; and the order in which their performances were due by the terms of the contract is immaterial. For even though the party whose performance was first due broke his promise without excuse, the subsequent inability of the other party to perform indicates that had the first performance been rendered, there would have been a failure of consideration justifying the recovery back of that performance. And repudiation or other manifestation by either party of unwillingness has the same effect as inability." Therefore, a vendor of real property desiring to claim a forfeit deposited by the other party to a contract for the sale of such property, is not excused from showing that he was prepared (or would have been) to perform on his side by the fact that v. Harris, 209 Fed. 291, 297, 126 C. C. A. 217.

42 In Gerli v. Poidebard Silk Mfg. Co., 57 N. J. L. 432, 31 Atl. 401, 30 L. R. A. 61, 51 Am. St. Rep. 612, the plaintiff sued the defendant for breach of a contract to buy silk on August 15th. The court said: "Conceding that the defendant's repudiation of the whole contract before August 15th absolved the sellers from the duty of

42

tendering an instalment on that date and gave them an immediate right of action against the defendant for a breach of contract, nevertheless, when it appeared, as it did on the trial, that by no possibility could the sellers have made tender of the silk due August 15th, because the silk did not arrive in New York until a later day, it became evident that as to that instalment the sellers suffered no loss by the breach."

the purchaser repudiated his obligation before the time for completing the transfer.43

§ 883. Rules of damages provide for cancellation of mutual obligations to exchange performances.

That performances in a bilateral contract are generally intended as an exchange for one another involves consequences besides those ordinarily classed under the rules of implied conditions. The law of damages takes the same principle into account. Where performances under a bilateral agreement are not intended as an exchange of one another as in the case of a promissory note given in exchange for an insurance policy, on default in the performance of one promise the promisee will recover full amount which was promised, and the defendant in his turn either by cross action, or counterclaim will recover the full amount promised to him.44 Under the common law mutual debts or obligations do not cancel one another pro tanto.45 Where, however, not only the two obligations in question, but the performances of them are in exchange for one another and the parties litigate, the court through the law of damages gives this effect.46

884. An accrued right of action for breach of contract may be discharged by the plaintiff's subsequent inability to perform.

Though a plaintiff whose performance is due subsequently to that of the defendant need not allege or prove either performance or tender on his part, 47 the same fundamental prin

"Wells v. Page, 48 Or. 74, 82 Pac. 856, 3 L. R. A. (N. S.) 103. The court said, at page 80: "A vendor of real estate cannot enforce the contract against a vendee who is in default or has repudiated it, unless he himself is in a condition to perform: Sievers v Brown, 34 Or. 454, 56 Pac. 170, 45 L. R. A. 642; Hampton v. Speckenagle, 9 Serg. & R. 212, 11 Am. Dec. 704; Bigler v. Morgan, 77 N. Y. 312; Gray . Smith, 83 Fed. 824, 28 C. C. A. 168; Mix v. Beach, 46 Ill. 311; Wallace v.

McLaughlin, 57 Ill. 53; Peck v. Brighton Co., 69 Ill. 200; Birge v. Bock, 24 Mo. App. 330." See also Eddy v. Davis, 116 N. Y. 247, 251, 22 N. E. 362; Catlin v. Jones, 52 Or. 337, 97 Pac. 546; cf. Braithwaite v. Foreign Hardwood Co., [1905] 2 K. B. 543. 44 See infra, § 888.

45 See supra, §859.

48 See infra, §§ 1350, 1351.

47 Reard v. Ephrata Orchard Homes Co., 78 Wash. 180, 138 Pac. 678, and see supra, § 829.

ciple is applicable that he ought not to be allowed to recover if the defendant will not get in return for his performance what he bargained for. Here, however, the burden is thrown upon the defendant to allege the failure of consideration which will excuse him from liability. To prevent a cause of action from arising originally on the defendant's promise at the time when performance is due, the only question can be of prospective failure of consideration rather than a failure which has already occurred; for by hypothesis the time for the plaintiff's performance has not yet arrived. But wherever subsequent events show that the plaintiff could not have given or would not have given the performance due from him, even though the plaintiff had performed on his part, the defendant is excused and it makes no difference that the reason why the defendant failed to perform his prior obligation had no connection with the subsequent inability or unwillingness of the plaintiff.48 Even though the plaintiff had acquired a complete right of action on the failure of the defendant to perform as agreed, the right will be lost if subsequent events prove that the plaintiff could not or would not have performed even if the defendant had performed. 49

§ 885. Actual or threatened failure of consideration will discharge liability already accrued.

It may seem that where performance on one side of a contract is precedent to that on the other, and the time for the prior performance has arrived and, no defence then existing, a right of action has arisen, this right of action cannot afterwards be destroyed except by payment, or release, or accord and satisfaction. Such, however, is not the case. Circumstances may arise subsequently which would justify the

48 Gray v. Sims, 3 Wash. C. C. 276, 280; Gray v. Smith, 83 Fed. 824, 28 C. C. A. 168; Dosch v. Andrus, 111 Minn. 287, 126 N. W. 1071; Gerli v. Poidebard Silk Mfg. Co., 57 N. J. L. 432, 31 Atl. 401, 30 L. R. A. 61, 51 Am. St. Rep. 612. See also Winston v. Brown, 247 Fed. 948, 160 C. C. A. 138. Cp. Braithwaite v. Foreign Hard Wood

Co., [1905] 2 K. B. 543; Mitsui & Co., Ltd., v. Watts, Watts & Co., Ltd., [1916] 2 K. B. 826; Watts, Watts & Co., Ltd., v. Mitsui & Co., [1917] A. C. 227 (stated supra, § 877).

49 See Gerli v. Poidebard Silk Mfg. Co., 57 N. J. L. 432, 31 Atl. 401, 30 L. R. A. 61, 51 Am. St. Rep. 612, stated supra, n. 42.

recovery back of the prior performance, if it had been given, and, therefore, if it had not been given but a cause of action for it arisen, to avoid circuity of action the court will deny recovery. Failure of consideration gives rise to such a situation. If B agrees to pay on January 1st the price of a horse, title to which A agrees to transfer on January 15th, a right of action will arise on January 2d for the price. B's obligation is unconditional; yet if the horse dies on January 10th, A can no longer sue for the price. A right of action which was unconditionally his on January 1st, is lost.

Broadly, it may be stated, that if goods contracted to be sold are destroyed or injured before the time when it was agreed that title should pass, the buyer cannot be held to pay the price.50 And if he has paid the price in advance it may be recovered.51 The same principles are applicable to contracts for the sale of land, except so far as rules of equity treating a contracting buyer as owner from the time of the contract require a different result.52 It is true that land is not often totally destroyed, and therefore a total failure of consideration is not probable, but destruction of buildings is of frequent occurrence, and in a wholly executory contract any considerable partial failure of consideration is as effective an excuse as a total failure. Where a building in course of erection is destroyed by fire, the builder is bound to rebuild, 53

50 Calcutta Co. v. De Mattos, 32 L. J. Q. B. 322, 335; Tillson v. United States, 129 U. S. 101, 32 L. Ed. 636; Hays v. Pittsburg Co., 33 Fed. 552; Peace River Phosphate Co. v. Grafflin, 58 Fed. 550; Jones v. Pearce, 25 Ark. 545; J. S. Potts Drug Co. v. Benedict, 156 Cal. 322, 104 Pac. 432, 25 L. R. A. (N. S.) 609; Crawford v. Smith, 7 Dana, 59; Brown v. Childs, 2 Duv. 314; Phillips v. Moor, 71 Me. 78, 80; Lingham v. Eggleston, 27 Mich. 324; Hahn v. Fredericks, 30 Mich. 223, 18 Am. Rep. 119; Wilkinson v. Holiday, 33 Mich. 386; Slade v. Lee, 94 Mich. 127, 53 N. W. 929; Drews v. Ann River Logging Co., 53 Minn. 199, 54 N. W. 1110;

Fairbanks v. Richardson Drug Co., 42 Mo. App. 262; Towne v. Davis, 66 N. H. 396, 22 Atl. 450; Terry v. Wheeler, 25 N. Y. 520; Kein v. Tupper, 52 N. Y. 550.

51 Logan v. Le Mesurier, 6 Moo. P. C. 116; Stone v. Waite, 88 Ala. 599, 7 So. 117; J. S. Potts Drug Co. v. Benedict, 156 Cal. 322, 334, 104 Pac. 432, 25 L. R. A. (N. S.) 609; Joyce v. Adams, 8 N. Y. 291; Williams v. Allen, 10 Humph. 337, 51 Am. Dec. 709; Kelly v. Bliss, 54 Wis. 187, 11 N. W. 488; Wong Ko v. Hawaiian Government, 7 Hawaii, 690.

52 See infra, §§ 927 et seq.
53 See infra, § 1964.

and if the price "is payable in installments during the progress of the work, he cannot recover an installment earned but not paid at the time of the fire until the reconstruction has proceeded to the stage necessary to make it due." 54

The English law in some cases certainly seems to deny the principles of this and the preceding section, at least where the failure of consideration is due to impossibility. Thus, where freight is payable in advance, the failure to carry the goods does not justify the recovery of freight money paid in advance, and if freight money has been promised as an advance, failure of the carrier owing to excusable impossibility to complete the carriage of the goods would not excuse the shipper from liability.55 Similarly in the so-called "coronation" cases, the English court held that money paid for seats to view the coronation procession before its postponement had been decided upon could not be recovered; 56 and that if a payment had become due before postponement of the procession, it must be paid in spite of the postponement.57 Inconsistently with these cases it is held that if goods are destroyed before the title has passed to a buyer, he is not only not liable for the price, but if he has paid it or any part of it, he may recover the payment.58 There is no more reason to suppose that when money is promised before the performance on the other side is due that the promisor intends to pay for a mere risk in one case than the others. The assumption seems unfounded in all the cases alluded to.

§ 886. Reviving of seller's lien upon actual or threatened failure of consideration.

A seller in possession who has sold goods on credit has no lien upon them and is bound to deliver them immediately and unconditionally. The very meaning of these words is that

54 Ahlgren v. Walsh, 173 Cal. 27, 31, 158 Pac. 748, Ann. Cas. 1918 E. 751.

55 See infra, § 1101.

56 Blakeley v. Muller, 19 T. L. Rep. 186; Chandler v. Webster, [1904] 1 K. B. 493, otherwise if payment had been made the decision to operate upon

the king. Griffith v. Brymer, 19 T. L. Rep. 434.

57 Chandler v. Webster, [1904] 1 K. B. 493.

58 Logan v. Le Mesurier, 6 Moo. P. C. 116, and see American cases, supra, note.

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