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.
Whether a judgment rendered upon a contract necessarily operates as a merger of all subsequent causes of action thereon, or whether separate judgments may be rendered upon the different causes of action, depends upon the nature of the contract and the nature of the breach. The test for determining whether a judgment for a breach of contract merges all rights of action growing out of such contract, is said to be whether the performance is entire or severable.1 A judgment rendered upon a contract for paying money, stocks and bonds, by which the plaintiff is given judgment for a certain amount of money, and it is also decreed that he shall receive a certain amount of stock, but, since such stock has no money value, no money judgment is rendered therefor, does not merge a subsequent cause of action in favor of the original plaintiff to compel a trust company to deliver such certificates of stock to him and to compel the defendant to transfer such stock upon its books. If the breach is one which operates as a discharge of the contract, and, accordingly, the contract is not a continuing contract, a judgment for such breach is said to merge all rights of action upon all matters growing out of such breach, which might have been included in such action, whether they were actually included or not.2 If there have been several breaches of the same contract, a judgment rendered in an action upon one breach, merges the right of action for the remaining pre-existing breaches.3
1 Baumhoff v. St. Louis & Kirkwood Railroad Co., 205 Mo. 248, 120 Am. St. Rep. 745. 104 S. W. 5; Kallberg v. Newberry, - N. D. - 170 N. W. 113.
See also, Hempstead County v. Hope Bridge Co., 132 Ark. 412. 200 S. W. 983.
2 United States. L. Bucki & Son Lumber Co. v. Atlantic Lumber Co., 109 Fed. 411, 48 C. C. A. 455.
California. Van Horne v. Treadwell, 164 Cal. 620, 130 Pac. 5.
Maine. Willoughby v. Furnishing Co., 96 Me. 372, 52 Atl. 756; Maine Cent. Ry. v. National Surety Co., 113 Me. 465, L. R. A. 1916A. 881, 94 Atl. 929.
Minnesota. Przblyski v. Pellowski, 141 Minn. 193, 169 N. W. 707.
Missouri. Leslie v. Carter, 268 Mo. 420, 187 S. W. 1196.
Nebraska. Waldo v. Loekard, 101 Neb. 797. 165 X. \V. 154.
Ohio. Coeklev v. Brucker. 54 O. S. 214, 44 X. E. 590.
Oklahoma. Akin v. Bonfils, - Okla. - , 169 Pac. 899 (obiter).
Pennsylvania. Thompson v. Graham, 246 Pa. St. 202. 92 Atl. US.
Washington. Carmean v. North American Transportation Co.. 45 Wash. 446, 122 Am. St. Rep. 930. 8 L. R. A. (N.S.) 595, 88 Pac. 834.
West Virginia. Jameson v. Board of Education, 78 W. Va. 612, L. R. A. 1916F, 926. 89 S. E. 255.
3 United States. L. Bucki & Son Lumber Co. v. Atlantic Lumber Co., 109 Fed. 411. 48 C. C. A. 455.
California. Van Home v. Treadwell, 164 Cal. 620, 130 Pac. 5.
A judgment against an insurance company on a policy of insurance for a loss for which it is liable, merges a right of action for injury to the credit of the insured, due to delay on the part of the insurance company in settling its losses.4 Where equity can decree damages as relief incidental to specific performance, a decree of specific performance merges a right of action for breach of such contract, and the plaintiff can not split his claim into separate actions for the different elements of damages flowing from the same breach.5 If attorney's fees can be allowed as an item of damages, they must be recovered, if at all, in the original action; and if judgment is rendered in the original action, it merges such claim for attorney's fees, and a subsequent action can not be brought therefor.6 If the injured party seeks to recover full damages, when he institutes his action, he can not, without the consent of the adversary party, withdraw his claim for consequential damages, and maintain a separate action therefor after he has recovered judgment in the original action.7 If a receiver sues on stock liability for less than the full amount due, and recovers judgment for such amount, he can not thereafter recover the residue.8 A agreed to deliver lumber to B, and to perform such contract A purchased lumber from C. C made default and by reason thereof A made default in his contract. B recovered from A the difference between the contract price and the market price, and A recovered from C by a like measure of damages. Both judgments were paid. A then brought suit against C to recover the amount paid by A to B on such judgment. It was held that A could not recover.9
If, on the other hand, the contract is a continuing contract, and the breach does not operate as a total discharge thereof, a judgment rendered upon a prior breach does not merge the right of action for a subsequent breach.10 If a contract provides for publishing a number of books, a judgment in an action to recover profits which were lost by reason of refusing to furnish manuscript for some of such books, does not merge a cause of action to recover profits which were lost by reason of the failure to furnish manuscript for the remaining books.11
Ohio. Cockley v. Brucker, 54 O. S. 214, 44 N. E. 590.
Oklahoma. Akin v. Bonfils, - Okla. - , 160 Pac. 899.
Pennsylvania. Thompson v. Graham, 246 Pa. St. 202, 92 Atl. 118.
4 Home Insurance Co. v. Tate Mercantile Co., 117 Miss. 760, 78 So. 709.
5 Waldo v. Lockard, 101 Neb. 797, 165 N. W. 154.
6 Van Horne v. Treadwell, 164 Cal. 620, 130 Pac. 5; Leslie v. Carter. 268 Mo. 420, 187 S. W. 1196.
7 Maine Central Ry. v. National Surety Co., 113 Me. 465, L. R. A. 1916A, 881, 94 Atl. 929.
8 De Weese v. Smith, 97 Fed. 309.
9 Barr v. Henderson, 107 La. 323, 31 So. 762.'
10 Connecticut. Viall v. Lionel Manufacturing Co., 90 Conn. 694, 98 Atl. 329.
Accordingly, the effect of recovering judgment for a breach often turns on the question whether the contract is a continuing one or whether the breach has discharged it. By the weight of authority, the discharge of an employe terminates the contract of employment and leaves only a right of action for the breach.12 Where such theory obtains, the recovery of an installment of his salary prevents recovery of any further damages in a subsequent action.13 Where such contract is treated as a continuing contract on the theory of constructive service, recovery of one installment of salary does not prevent subsequent recovery of installments thereafter due.14
While it is provided by statute in some jurisdictions that actions may be brought for each separate breach of an entire contract, if such breach occurs,15 such statute does not permit the plaintiff to bring an action for part of the breaches which have occurred when he brings his action, to recover judgment therein and then to bring an action upon the remaining provisions which had taken place when the original cause of action was brought.16 Under such circumstances, even under such statute, a judgment rendered in the original action will operate as a merger of such other breaches.17
Kentucky. Chicago, M. & G. Ry. v. Dodds, 167 Ky. 624, 181 S. W. 666.
Massachusetts. Badger v. Titcomb, 32 Mass. (15 Pick.) 409, 26 Am. Dec. (ill.
Missouri. Baumhoff v. St. Louis & Kirkwood Railroad Co., 205 Mo. 248, 120 Am. St. Rep. 745, 104 S. W. 5.
New York. Beach v. Crain, 2 N. Y. 86, 49 Am. Dec. 369.
Texas. Jones v. Gammel Statesman Pub. Co., 100 Tex. 320, 8 L. R. A. (N. S.) 1197, 99 S. W. 701.
11 Jones v. Gammel Statesman Pub. Co., 100 Tex. 320, 8 L. R. A. (N.S.) 1197, 99 S. W. 701.
12 See ch. LXXXVII.
13 England. Beckham v. Drake, 2 H. L. 579; Archard v. Hornor, 3 Car. & P. 349.
Maine. Alie v. Nadeau, 93 Me. 282 74 Am. St. Rep. 346, 44 Atl. 891.
Maryland. Olmstead v. Bach, 78 Md 132, 44 Am. St. Rep. 273, 22 L. R. A. 74 27 Atl. 501.
New York. Howard v. Daly, 61 N Y. 362. 19 Am. Rep. 285.
Ohio. James v. Allen County, 44 O S. 226, 58 Am. Rep. 821, 6 N. E. 246.
Pennsylvania. Allen v. Text Book Co., 201 Pa. St. 579, 88 Am. St. Rep. 834, 51 Atl 323. (Same case, but with controlling facts in doubt upon the record. Allen v. Engineers' Co., 196 Pa. St. 512, 46 Atl. 899.)
Tennessee. Menihan Co. v. Hopkins, 129 Tenn. 24, 164 S. W. 775.
Virginia. Willoughby v. Thomas, 65 Va. (24 Gratt.) 521.
Washington. Carmean v. North American Transportation Co., 45 Wash. 446, 122 Am. St. Rep. 930, 8 L R. A. (N.S.) 595, 88 Pac. 834.
West Virginia. Jameson v. Board of Education, 78 W. Va. 612, L. R. A. 1916F, 926, 89 S. E. 255.
Wisconsin. Ornstein v. Yahr & Lange Drug Co., 119 Wis. 429, 96 N. W. 826.
14 Strauss v. Meertief, 64 Ala. 299, 38 Am. Rep. 8; McMullen v. Dickinson Co., 60 Minn. 156, 51 Am. St. Rep. 511, 27 L. R. A. 409, 62 X. W. 120; Williams v. Luckett, 77 Miss. 394, 26 So. 967; Frost v. International Rubber Co., 37 R. I. 406, 92 Atl. 1022.
In case of mistake on the part of the plaintiff or fraud on the part of the defendant, as a result of which items are omitted from a cause of action, the courts frequently seem to be governed by principles analogous to election rather than those of merger in the proper sense of the term; and they, accordingly, hold that a judgment rendered upon such a cause of action does not merge items which are omitted because the plaintiff did not know of their existence when he brought the original action,18 or items omitted by mistake,19 or items omitted because of the fraud of the defendant.20
A judgment for the principal debt merges interest if interest is merely incidental thereto.21 If, on the other hand, there is an independent covenant to pay interest, a judgment on the principal debt does not merge interest.22 A judgment for principal and interest to the date of the rendition of the judgment, which judgment bears interest at a rate lower than the interest on the obligation, does not merge the right of the mortgagee to retain the mortgage security until he is paid at the rate of interest fixed in the obligation down to the date of payment.23