This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
If the adversary party commits such a breach of the contract as amounts to a discharge, the party not in default may treat the contract as ended and may recover for work done thereunder without performing his part fully.1 Thus under a contract whereby A is to sell a set of forty volumes to B, the title to be in A until all are paid for, if B after twenty-four have been delivered sells them to X, A can treat such sale as a conversion and bring suit against B at once without tendering the remaining eighteen.2 So if the adversary party prevents further performance, the party who has partially performed may ignore the contract and sue for a reasonable compensation for services rendered,3 or for property delivered4 under such contract. Thus one who has partially performed a building contract,5 or a contract of employment,6 and is prevented by the adversary party from completing his contract, may recover the reasonable value of his services where the contract makes no apportionment of the price to be paid therefor. So if A employs B's minor son X under contract with B, and requires X to work on Sunday, B may sue for wages without any setoff for damages caused by B's compelling X to abandon A's employment.7 By statute it has been provided in some jurisdictions that an employe who quits for good cause shall recover such proportion of compensation agreed upon in case of full performance as the work done by him bears to the work required by the contract.8 In a leading case A was to contribute a number of articles to a work which B agreed to publish in installments. After certain installments had been published, B discontinued publication. It was held that A could recover a reasonable compensation for work done.9 One who has paid money under a contract may in case of breach by the adversary party, which may amount to a discharge and is so treated, recover such money in assumpsit.10 So if A makes a payment to B under a contract whereby B is to convey certain realty to A by good and indefeasible title, and B is unable to make such title, A can recover from B the money so paid in.11 In Ohio the rule is that if A prevents B from performing, and further performance under the contract would have resulted in loss to B, B, since he could recover only nominal damages, cannot recover the reasonable value of what he has done under the contract,12 while if further performance would have resulted in gain to B, B may either sue for damages,13 or may recover the reasonable value of what he has done under the contract.14 In most of the cases discussed in this section thus far, compensation in money was provided for by the terms of the contract. Whether such form of compensation is necessary to enable the party not in default to sue for a reasonable compensation is a question upon which there is a conflict of authority. The preponderance of numerical authority is that if compensation is to be made in anything but money, the party not in default can maintain an action for damages only, and cannot waive the contract and sue for a reasonable compensation. Thus A worked for B under an agreement whereby B was to deliver certain property to him when he reached the age of twenty-one. On B's refusal to deliver such property it was held that A could recover damages but that he could not recover the reasonable value of his services.15 There seems to be no reason for this rule, based on any established principle of law. Some courts have therefore refused to follow it.16 Thus if A agreed to work on a ranch in consideration of his receiving the products of the ranch above a specified amount, he may recover a reasonable compensation for his labor if discharged without cause.17 The right of the party not in default to recover a reasonable compensation on breach by the other seems to be denied by some authorities where the compensation was to be made in money, but the amount was contingent upon the happening of future events. A did literary work under an alleged contract that B should publish it and divide the profits with A. It was held that if B broke such contract A could recover only damages and not the value of his labor.18 Other courts allow recovery of a reasonable compensation. Thus if a contract of employment to make sales upon commission,19 or to organize a corporation,20 is broken by the discharge of the employe without cause, he may recover a'reasonable compensation for the work already done.
2 Von Dorn v. Mengedoht, 41 Neb. 525; 59 N. W. 800.
3 Booth v. Ratcliffe, 107 N. C. 6; 12 S. E. 112.
4 Charleston lee Mfg. Co. v. Joyce, 63 Fed. 916; 11 C. C. A. 496; Atlantic Coast Brewing Co. v. Donnelly, 59 N. J. L. 48; 35 Atl. 647.
5 Patnote v. Sanders, 41 Vt. 66; 98 Am. Dec. 564.
6 Thweatt v. McCullough, 84 Ala. 517; 5 Am. St. Rep. 391; 4 So. 399.
1Danforth v. R. R., 93 Ala. 614; 11 So. 60; Theobald v. Burleigh, 66 N. H. 574; 23 Atl. 367.
2 Putnam v. MacLeod, 23 R. I. 373 ; 50 Atl. 646.
3 Cass County v. Gibson, 107 Fed. 363; 46 C. C. A. 341; Joyce v. White, 95 Cal. 236; 30 Pac. 524; Beck v. Spice Co., 108 Ga. 242; 33 S. E. 894; Spaulding v. Navigation Co., 5 Ida. 528; 51 Pac. 408; Southern Pacific Co. v. Wells Works, 172 111. 9; 49 N. E. 575; affirming, 67 111. App. 512; Eakright v. Torrent, 105 Mich. 294, 63 N. W. 293; Mooney v. Iron Co., 82 Mich. 263; 46 N. W. 376; Cadman v. Markle, 76 Mich. 448; 5 L. R. A. 707; 43 N. W. 315; Keyser v. Rehberg, 16 Mont. 331; 41 Pac. 74; Merrill v. Ry., 16 Wend. (N. Y.) 586; 30 Am. Dec. 130; Rioux v. Brick Co., 72 Vt.
148; 47 Atl. 406; Merriman v. Machine Co., 96 Wis. 600; 71 N. W. 1050.
4 Hartlove v. Durham, 86 Md. 689; 39 Atl. 617.
5 Adams v. Burbank, 103 Cal. 646; 37 Pac. 640; George M. New-hall Engineering Co. v. Daly, 116 Wis. 256; 93 N. W. 12.
6 Beck v. Spice Co., 108 Ga. 242; 33 S. E. 894.
7 Hunt v. Adams, 81 Me. 356; 3 L. R. A. 608; 17 Atl. 298.
8 Such a statute applies to a contract to remove a school-house. Burkhardt v. School Township, 9 S. D. 315; 69 N. W. 16.
9 Planche v. Colburn, 8 Bing. 14
10 Bacon v. Green, 36 Fla. 325; 18 So. 870.
11 Adams v. Henderson, 168 U. S. 573.
12 Doolittle v. MeCullough, 12 O. S. 360.
13 See Ch. LXXIII.
14 Wellston Coal Co. v. Paper Co., 57 0. S. 182; 48 N. E. 888.
15 Capps v. Groseclose, 95 Tenn. 329; 32 S. W. 199. See for similar cases Anderson v. Rice, 20 Ala. 239; Allen v. Jarvis, 20 Conn. 38; Cochran v. Tatum, 3 T. B. Mon. (Ky.) 404; Bradley v. Levy, 5 Wis. 400.
16 Brown v. Ry.. 3G Minn. 236; 31 N. W. 941; Keyser v. Rehberg, 16 Mont. 331; 41 Pac. 74.