Same - Delivery By Installments

Where there is a contract for the sale of goods deliverable in installments, which are to be paid for on delivery, and the seller makes defective delivery in respect to one installment, or the buyer fails to take delivery or to pay for an installment, the question arises whether the breach gives rise merely to a claim for compensation, or to a right to treat the whole contract as repudiated. It is difficult to reconcile the English decisions, some of which have held that a refusal to deliver or accept a particular installment is a breach going to the root of the contract,86 and others have held the contrary.86 The leading case in the affirmative is Hoare v. Rennie.87 In that case the defendant agreed to buy from the plaintiff 667 tons of iron, to be shipped from Sweden in about equal portions in each of the months of June, July, August, and September, and the plaintiff shipped only 20 tons in June, which the defendant refused to accept. It was held that delivery at the time specified was a condition precedent, and that the plaintiff could not maintain an action against the defendant for not accepting. The leading case in the negative is Simpson v. Crippin.88 In that case the defendant had agreed to supply the plaintiff with 6,000 or 8,000 tons of coal, to be delivered in the plaintiff's wagons at the defendant's colliery in equal monthly quantities during the period of 12 months from July 1st. During July the plaintiff sent wagons for 158 tons only, and on August 1st the defendant wrote that the contract was canceled on account of the plaintiff's failure to send for the full monthly quantity in the preceding month. It was held, in an action on the defendant's refusal to go on with the contract,

84 Ritchie v. Atkinson, 10 East, 295. See "Contracts," Dec. Dig. (Key-No.) § 171; Cent. Dig. §§ 754-757.

85 Hoare v. Rennie, 5 Hurl. & N. 19; Honck v. Muller, 7 Q. B. Div. 92. See "Sales," Dec. Dig. (Key-No.) § 163; Cent. Dig. §§ 386-388.

86 Jonassohn v. Young, 4 Best & S. 296; Simpson v. Crippin, L. R. 8 Q. B. 14; Freeth v. Burr, L. R. 9 C. P. 208. See "Sales," Dec. Dig. (Key-No.) § 163; Cent. Dig. §§ 386-388.

87 5 Hurl. & N. 19. See "Sales," Dec. Dig. (Key-No.) § 163; Cent. Dig. §§ 386-388.

88 L. R. 8 Q. B. 14. See "Sales," Dec. Dig. (Key-No.) § 168; Cent. Dig. §§ 386-388.

that the breach in failing to send wagons in sufficient numbers in the first month, though a ground for compensation, did not justify the defendant in rescinding the contract. Finally, in Mersey Steel & Iron Co. v. Naylor,89 it was decided that failure of the buyer to pay for the first installment upon delivery, unless the circumstances evince an intention on his part to be bound no longer by the contract, does not entitle the seller to rescind. The rule in England appears to be established by this decision that it is a question depending on the terms of the contract and the circumstances in the case whether the breach of contractus a repudiation of the whole contract, giving a right to put an end to it, or whether it merely gives rise to a claim for compensation.

In this country the same conflict has existed, some cases following Hoare v. Rennie 90 and some Simpson v. Crippin.91 In the Supreme Court of the United States in NORRINGTON v. WRIGHT,92 the rule laid down in the first of these cases was approved. In NORRINGTON v. WRIGHT the contract was for the sale of "5,000 tons of iron rails, for shipment from European port or ports, at the rate of about 1,000 tons per month, beginning February, 1880, but whole contract to be shipped before August, 1880, at $45 per ton, ex ship Philadelphia, settlement cash on presentation of bills," etc. It was held that the seller was bound to ship 1,000 tons in each month, and that only 400 tons having been shipped in February, and 885 tons in March, the buyer, although he had paid for the February shipment in ignorance of the defective shipments in that month and in March, had the right to rescind the whole contract for the defective deliveries in respect to the first installment. The decision rests on the ground that in contracts of merchants time is of the essence, and that the shipment at the time specified in the contract was a condition precedent, on failure of which the buyer might rescind the whole contract. It is to be noted that Gray, J., in commenting on Mersey Steel & Iron Co. v. Naylor, distinguishes that case, pointing out that the grounds of the decision, as stated by the lord chancellor, are applicable only to the case of failure by the buyer to pay for, and not to failure of the seller to deliver, the first installment; that is, that since delivery must precede payment no particular payment can be a condition precedent to the entire contract, and hence the payment cannot be a condition precedent to the subsequent fulfillment of the unfulfilled part, by delivery of subsequent installments.93

89 9 App. Cas. 434, affirming 9 Q. B. Div. 648. See "Sales," Dec. Dig. (Key-No.) § 163; Cent. Dig. §§ 386-388.

90 NORRINGTON v. WRIGHT, 115 U. S. 188, 6 Sup. Ct. 12, 29 L. Ed. 3G6, Throckmorton Cas. Contracts, 386; Cleveland Rolling-Mill Co. v. Rhodes, 121 U. S. 255, 7 Sup. Ct. 882, 30 L. Ed. 920; Pope v. Porter, 102 N. Y. 3G6, 7 N. E. 304; Clark v. Steel Works, 3 C. C A. 600, 53 Fed. 494; Peace River Phosphate Co. v. Grafflin (C. C.) 58 Fed. 550; King Philip Mills v. Slater, 12 R. I. 82, 34 Am. Rep. 603; Rugg v. Moore, 110 Pa. 236, 1 Atl. 320; Rey-bold v. Voorhees, 30 Pa. 116; Robson v. Bohn, 27 Minn. 333, 7 N. W. 357; Providence Coal Co. v. Coxe, 19 R. I. 380, 582, 35 Atl. 210; Cresswell Ranch & Cattle Co. v. Martindale, 63 Fed. 84, 11 C. C. A. 33. See, also, Dwinel v. Howard, 30 Me. 258; Walton v. Black, 5 Houst. (Del.) 149; Bradley v. King, 44 111. 339; Stokes v. Baars, 18 Fla. 656; Higgins v. Railroad Co., 60 N. Y. 553. See "Sales," Dec. Dig. (Key-No.) §§ 62, 163; Cent. Dig. §§ 171-179, 386-388.

91 Bollman v. Burt, 61 Md. 415; Blackburn v. Reilly, 47 N. J. Law, 290, 1 Atl. 27, 54 Am. Rep. 159; Trotter v. Heckscher, 40 N. J. Eq. 612, 4 Atl. 83; Myer v. Wheeler, 65 Iowa, 390. 21 N. W. 692; Hansen v. Steam Heating Co., 73 Iowa, 77, 34 N. W. 495; Gerli v. Manufacturing Co., 57 N. J. Law, 432, 31 Atl. 401, 30 L. R. A. 61, 51 Am. St. Rep. 611; Mayor v. Schaub Bros., 96 Md. 534, 54 Atl. 106. And see West v. Bechtel, 125 Mich. 144, 84 N. W. 69, 51 L. R, A. 791. Sec "Sales," Dec. Dig. (Key-No.) § 163; Cent. Dig. §§ 386-388.

92 115 U. S. 188, 6 Sup. Ct 12, 29 L. Ed. 366, Throckmorton Cas. Contracts, 386. See "Sales," Doc. Dig. (Key-No.) § 163; Cent. Dig. §§ 386-388.

By the Sales Act adopted in England in 1903,94 and since by a number of states in this country,85 the rule prescribed as to the breach of a contract for delivery by installments is that "it depends in each case upon 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."