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.
While the courts generally repeat the formula that the intention of the parties is decisive as to the entire or severable character of the contract, and while apportionment of consideration is generally said to be merely an indication of the intention of the parties upon this point, as a matter of fact more weight seems to be given to such evidence of intention in some types of contract than in others. If the question of the entire or severable character of the contract arises with reference to the consideration, it follows from the nature of the case that the test of the apportionment or non-apportionment of the consideration is practically final. If by the terms of the contract a consideration on the one side is to support two or more covenants on the other, and no attempt is made to apportion such consideration, the contract is regarded as entire.1 If, on the other hand, the consideration is avowedly apportioned to certain covenants, full effect must be given to such provision, and if the effect thereof is to leave the
West Virginia. Jameson v. Board of Education, 78 W. Va. 612, L. R. A. 1916F, 926, 89 R. E. 255.
Wisconsin. Prautsch v. Rasmussen, 133 Wis. 181, 113 N. W. 416.
23 Johnson v. Fehsefeldt, 106 Minn. 202? 20 L. R. A. (N.S.) 1069, 118 N. W. 797; Waite v. Shoemaker, 50 Mont 264, 146 Pac. 736.
24 Prautsch v. Rasmussen, 133 Wis. 181, 113 N. W. 416.
25 Stein v. The Prairie Rose, 17 O. S. 471, 93 Am. Dec. 631.
26Ollinger & Bruce Dry Dock Co. v: Gibbony, - Ala. - , 81 So. 18.
27 Newman Lumber Co. v. Purdum, 41 O. S. 373; Jameson v. Board of Education, 78 W. Va. 612, L. R. A. 1916F, 926, 89 S. E. 255.
28 Jameson v. Board of Education, 78 W. Va. 612, L. R. A. 1916F, 926, 89 R. E. 255.
Standard Underground Cable Co. v. Electric Co., 76 Fed. 422, 22 C. C. A. 258; Bowen v. Bank, 87 Fed. 430; 8. Jarvis Adams Co. v. Knapp, 121 Fed 34; Tuttle v. Cedar Rapids, 176 Fed. 86, 99 C. C. A. 606; Fleischman v. Rahmstorf, 226 Fed. 443, 141 C. C. A. 273.
Alabama. McCurry v. Gibson, 108 Ala. 451, 54 Am. St. Rep. 177, 18 So. 806; Harris v. Theus, 149 Ala. 133, 123 Am. St. Rep. 17, 10 L. R. A. (N.S.I 204, 43 So. 131.
Arkansas. Williams v. Perkins, 21 Ark. 18; Johnson v. Wilkerson, 96 Ark. 320, 131 S. W. 690; Wilkes v. Stacy, 113 Ark. 556, 169 S. W. 796.
California. Lompoc Valley Bank v. Stephenson, 156 Cal. 350, 104 Pac. 449.
Colorado. Gibbs v. Wallace, 58 Colo. 364, 147 Pac. 686.
Georgia. Cothran v. Witham, 123 Ga. 190, 51 S. E. 285.
Idaho. Blackwell v. Kercheval, 27 Ida. 537, 149 Pac. 1060.
Illinois. Dillman v. Nadelhoffer, 160 Ill. 121, 43 N. E. 378; Bates Machine Co. v. Bates, 192 Ill. 138, 61 N. E. 518; Ryan v. Hamilton, 205 Ill. 191, 68 N. E. 781 [reversing, Hamilton v. Ryan, 103 Ill. App. 212]; Rohling v. Thole, 256 Ill. 425, 100 N. E. 138; Schlatter v. Triebel, 284 Ill. 412, 120 N. E. 289; Hills v. Hopp, 287 Ill. 375, 122 N. E. 510.
Indiana. Souffrain v. McDonald, 27 Ind. 269; Eisel v. Hayes, 141 Ind. 41, 40 N. E. 119; Koh-i-moor Laundry Co. v. Lockwood, 141 Ind. 140, 40 N. E. 677; Beatty v. Coble, 142 Ind. 329, 41 N. E. 590; Jordan v. Indianapolis Water Co., 159 Ind. 337, 64 N. E. 680.
Iowa. Boyd v. Watson, 101 Ia. 214, 70 N. W. 120; Merchant v. O'Rourke, Ill Ia. 351, 82 N. W. 759.
Kansas. Winans v. Mfg. Co., 48 Kan. 777, 30 Pac. 163; Carlisle v. Farmers' Elevator & Business Association, - Kan. - , 180 Pac. 280; Bank v. Rowlinson, 2 Kan. App. 82, 43 Pac. 304.
Kentucky. Allen v. Pryor, 10 Ky (3 A. K. Mar.) 305; Queen City Coal Co. v. Ry. (Ky.). 44 S. W. 103; J. I. Case Threshing Machine Co. v. Patterson, 137 Ky. 180, 125 S. W. 287; Turner v. Frazier, 157 Ky. 388, 163 S. W. 245; Montanus v. Buschmeyer, 158 Ky. 53, 164 S. W. 802; Fairbanks v. Tafel, 159 Ky. 602, 167 S. W. 887.
Maine. International Harvester Co. v. Fleming, 109 Me. 104, 82 Atl. 843.
Maryland. Maughlin v. Perry, 35 Md. 352; Union Trust Co. v. Knabe, 122 Md. 584, 89 Atl. 1106; Ziehm v. Frank Steil Brewing Co., 131 Md. 582, 102 Atl. 1005.
Massachusetts. McGaughey v. Richardson, 148 Mass. 608, 20 N. E. 202; Phelps v. Lowell Institution for Savings, 198 Mass. 179, 83 N. E. 989.
Michigan. Up River Ice Co. v. Denier, 114 Mich. 296, 68 Am. St. Rep. 480, 72 N. W. 157; Sax v. Ry., 125 Mich. 252, 84 Am. St. Rep. 572, 84 N. W. 314; Lee v. United States Graphite Co., 161 Mich. 157, 125 N. W. 748; Weickgenaut v. Eccles, 173 Mich. 695, 140 N. W. 513; Weiss v. Stein, 187 Mich. 369, 153 N. W. 810.
Minnesota. Bowen v. Thwing, 56 Minn. 177, 57 N. W. 468; Kronachnabel-Smith Co. v. Kronschnabel, 87 Minn. 230, 91 N. W. 892; First National Bank v. Corporation Securities Co., 128 Minn. 341, 150 N. W. 1084.
Missouri. Drummond Realty & Investment Co. v. W. H. Thompson Trust Co. (Mo.), 178 S. W. 479.
Montana. Rose v. Northern Pacific Ry. Co., 35 Mont. 70, 119 Am. St. Rep. 836, 88 Pac. 767.
remaining covenants without any consideration, it must be regarded as a gratuitous promise and unenforceable.2 However, even in cases of this sort, a recital of an insufficient consideration for one covenant may not render it unenforceable if the contract taken as a whole shows that such insufficient consideration was not the only consideration therefor.3
If the question of the character of the contract arises in connection with the operation of the doctrines of illegality, a somewhat different question is presented. It is assumed in cases of this sort that the contract has all the elements of a valid contract, except for the illegal covenant and the question which is presented is as to the effect of the illegal covenant of the contract upon the remaining covenants, which of themselves would be valid. In cases of this sort the law prefers, if possible, to construe a contract so as to render it enforceable as far as possible, rather than to render it unenforceable.4 Accordingly the courts are inclined to fix upon the apportionment of the consideration as the test, since by applying this test it is generally possible to enforce the contract in many cases where it could not be enforced without such test. If the consideration is apportioned between the legal and the illegal covenants, the contract will be regarded as severable and the legal covenants will be enforced.5 If, on the other hand, the consideration is entire, and is not apportioned among the different covenants, the contract is regarded as entire, and if one of the covenants is illegal, the entire contract is regarded as illegal.6 The fact that the consideration is apportioned is not always conclusive. In some cases in which the consideration is apportioned the contract as a whole may show that the illegal purpose underlies all of the covenants; and in such case the contract will be regarded as entire, and as a consequence none of the covenants can be enforced.7 In a number of cases in which the consideration is not apportioned the contract has nevertheless been said to be severable for the purpose of giving effect to the valid covenants.3 In most of these cases, however, it is probably a misuse of terms to call the contract severable.9 The courts in these cases reach the right result in giving effect to the valid covenants; but they explain the result by calling a contract severable which in its nature is entire. The true explanation of most of these cases is that the objectionable covenant is merely void, but not illegal; that is, no effect can be given to it in law, but its presence does not render invalid the valid covenants of the contract.19 As it is necessary to determine whether the contract is entire or severable, because of the application of the Statute of Frauds, the courts feel obliged to construe the contract and to apply the statute so as best to prevent fraud and perjury. The courts have not always agreed, however, as to the best method of achieving this result. If the contract contains two covenants, one of which is within the statute and the other of which is not within the statute, and the consideration is apportioned between the two covenants, the courts usually give effect to the covenant which is not within the statute, although they are obliged to refuse to give effect to the other covenant because the other party did not comply with the requirements of the statute.11 If the contract is for the sale of a number of different articles of goods at one transaction, the courts generally look to the total price of the goods for the purpose of determining whether the amount is so large that the contract falls within the Statute of Frauds or the Sale of Goods Act, although the parties may have apportioned the consideration to each separate article. If the consideration is not apportioned between the different covenants and the covenants are in the alternative - tfyat is, to do one thing or the other - the courts will ordinarily refuse to enforce the contract if one of such covenants is within the Statute of Frauds and the contract does not satisfy the requirements of the statute.12 In cases of this sort no action can be brought without proving both covenants and proving the breach thereof; and the oral evidence of the covenant which falls within the Statute of Frauds is the very thing which the statute was intended to prevent. If the. consideration is not apportioned between two or more covenants, and one of such covenants falls within the Statute of Frauds while the other does not, the courts usually refuse to give effect to the covenant which does not fall within the statute, even though the promisor has promised performance of both covenants.13 It is generally said that performance is refused in such cases because of the Statute of Frauds. No satisfactory reason is suggested for refusing to give to the promisee less than he bargained for, if he is willing to accept it. The purpose of the Statute of Frauds seems to be carried out fully and completely when relief is refused upon the oral covenant which falls within the statute. The rule that neither of such covenants can be enforced seems to have been adopted through a mistake in analogy to the rules which apply to illegal contracts, although an oral contract which falls within the operation of the Statute of Frauds can not be said in any proper sense to be illegal.14