Story Case

Mr. Julius L. Rink was the owner of a department store in Bloomington, Illinois. He had always managed the business himself. But in January, 1915, he decided that he would retire from active management of the business and procure a good man to look after it for him. He conferred with M. W. Daly, who was then manager of a department store in the same city, with a view of procuring the services of the latter. At this time, Daly was receiving a salary of $1,500 per year. Mr. Rink offered him $1,800, if he would accept the management of his store. After some further negotiations, Mr. Daly agreed to accept. A written contract was drawn up, by which Mr. Daly agreed to act as manager of Mr. Rink's department store for a period of three years, at a salary of $1,800 per year, beginning on the 1st day of June, 1915. In February, 1915, Mr. Rink received an attractive offer for his business, and sold it at once. Three days later, Daly started suit against Rink for damages for breach of contract of employment. Rink contended that the suit was prematurely brought. He insisted that this suit could not be brought until the end of the three years, when the period of employment would have ended; or at least not until June, when the period of service would begin. "What should be the decision of the court?

Ruling Court Case. Hochster Vs. De La Tour, Volume 2 Ellis & Black-Burn Reports, Page 678

On the trial of this case, it appeared that Hochster was a courier, who, in April, was engaged by De La Tour to accompany him upon a European tour. By the terms of the agreement, the tour was to begin on June 1 of that year and continue for three months. De La Tour agreed to pay Hochster ten pounds a month for his services in this capacity. On the 11th day of May, De La Tour wrote Hochster that he had changed his mind and declined his services. He refused to pay Hochster anything by way of compensation for the preparation he had made. This action was begun to recover damages for the breach of the contract. It was begun on the 22nd day of May, before the time set for performance had come.

De La Tour claimed that the action was prematurely brought. He contended that the action should not have been brought until after the full time for performance had elapsed.

Decision

Where a person repudiates a contract before the time set for performance, the other party may do one of two things. He may refuse to recognize the breach, and wait until time for performance has come and passed, and then sue for damages resulting therefrom. Or he may accept the breach immediately and bring suit for the damages which he will probably suffer therefrom. The person responsible for the breach has no right to complain if the suit is thus brought.

Lord Campbell, Chief Justice, said: "The man who wrongfully renounces a contract, into which he has deliberately entered, cannot justly complain if he is immediately sued for a compensation in damages by the man whom he had injured; and it seems reasonable to allow an option to the injured party, either to sue immediately, or to wait till the time when the act was to be done, still holding it prospectively binding; for the exercise of this option may be advantageous to the innocent party and be allowed to be prejudicial to the wrongdoer".

The Court gave judgment for Hochster.

Ruling Law. Story Case Answer

When a contract is entered into, the obligation of which contemplates some future acts, the person upon whom this obligation rests must usually be prepared at the time, when the acts are to be done, to do them. His readiness and willingness at this time is generally a condition precedent to his right to recover anything under the contract. If in the meantime, the other party announces that he repudiates the contract, the courts permit the performer one of several remedies. He is under no duty to accept the repudiation and may present himself at the time of performance. If, at that time, he is not permitted to proceed, he may then bring suit for the damages he may suffer. Or he may still treat the contract in existence, wait until the period of employment ends and sue on the contract for what he has suffered. But he is under no obligation to do either. He may accept the repudiation at once, and immediately bring suit for the damages which he will suffer, even though the time has not arrived when he is to begin performing under the contract. So, in the Story Case, the suit was not prematurely brought. Judgment should, therefore, be given for Daly.