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 a contract contains two or more covenants on one side, and one or more of such covenants is subject to a condition, the question frequently arises whether a breach of one of such conditions operates as a discharge of the entire contract. This question is to be solved, at least as the problem is stated by the courts, by the application of the principles which determine the validity of contracts when one or more of the covenants are illegal,1 or to oral contracts when one or more of the covenants fall within the scope of the Statute of Frauds,2 or to cases in which there has been performance of one or more covenants of a contract, and breach of one or more of the remaining covenants.8 It is said that if the contract is entire, a breach of one of the conditions will operate as a discharge of all of the covenants of the contract;4 while, on the other hand, if the contract is severable, a breach of a condition which relates to one covenant will not operate as a discharge of the remaining covenants.3 A provision for arbitration as to questions arising on one branch of the contract as a condition precedent to a right of action thereon, does not apply to questions arising on another branch thereof.6
7 See Sec. 8 222 and 2594.
8 See ch. LXXXVIII.
1 See Sec. 1029 et seq.
2 See Sec. 1425 et seq.
3 See ch. LXXXIV.
4 California. Goorberg v. Western Assur. Co., 150 Cal. 510, 10 L. R. A. (N.S.) 876, 89 Pac. 130.
Georgia. Southern Fire Ins. Co. v. Knight, 111 Ga. 622, 78 Am. St. Rep. 216, 52 L. R. A. 70, 36 S. E. 821.
Maine. Day v. Charter Oak F. & M. Ins. Co., 51 Me. 91; Dolloff v. Phoenix Ins. Co.. 82 Me. 266. 17 Am. St. Rep. 482, 19 Atl. 396; Carleton v. Patron's
Androscoggin Mut. F. Ins. Co., 109 Me. 79, 39 L. R. A. (N.S.) 951, 82 Atl. 649.
Minnesota. Parsons, Rich & Co. v. Lane, 97 Minn. 98 [sub nomine, In re Millers' & Manufacturers' Ins. Co., 4 L. R. A. (N.S.) 231, 106 N. W. 485].
Ohio. Germania Fire Ins. Co. v. Schild, 69 O. S. 136, 68 N. E. 706.
West Virginia. Morgan v. American Central Ins. Co., 80 W. Va. 1, L. R. A. 1917D. 1049, 92 S. E. 84.
5 Alabama. Western Assur. Co. v. Stoddard, 88 Ala. 606, 7 So. 379; Manchester F. Ins. Co. v. Feibelman, 118 Ala. 308, 23 So. 759.
The practical difficulty in applying this principle grows out of the difficulty in determining what are entire and what are severable. It has already been pointed out that the courts are likely to employ somewhat different practical tests for distinguishing between entire and severable contracts in cases in which illegality is involved, from cases in which such questions as the application of the Statute of Frauds or the discharge of the contract by breach are involved.7 The breach of a true condition operates as a discharge of the contract without regard to the materiality of the condition,8 and it frequently leaves one of the parties who has furnished valuable consideration without any rights whatever. For these reasons the courts are sometimes unwilling in practice to apply the same tests for determining whether a contract is entire or severable, with reference to the effect of a breach of condition, that they apply when the question is one of the effect of an illegal covenant upon the remaining covenants of the contract.
District of Columbia. Fontano v. Robbing, 18 D. C. App. 402.
Illinois. Commercial Ins. Co. v. Spankneble, 52 III. 53, 4 Am. Hep. 582; Hartford F. Ins. Co. v. Walsh, 54 III. 164, 5 Am. Rep. 115.
Indiana. Phenix Ins. Co. v. Pickel, 119 Ind. 155, 12 Am. St. Rep. 393, 21 N. £. 547; Rogers v. Phenix Ins. Co., 121 Ind. 570, 23 N. E. 498.
Iowa. Taylor v. Anchor Mutual Fire Ins. Co., 116 Ia. 625, 93 Am. St. Rep. 261, 67 L. R. A. 328, 88 N. W. 807.
Kansas. German Ins. Co. v. York, 48 Kan. 488, 30 Am. St. Rep. 313, 29 Pac. 686; Continental Ins. Co. v. Ward, 50 Kan. 346, 31 Pac. 1079; Kansas Farmers' F. Ins. Co. v. Saindon, 63 Kan. 623, 36 Pac. 983.
Mississippi Mitchell v. Mississippi Home Ins. Co., 72 Miss. 53, 48 Am. St. Rep. 535, 18 So. 86.
Missouri. Loehner v. Home Mut. Ins. Co., 17 Mo. 247; Trabue v. Dwelling House Ins. Co., 121 Mo. 76, 42 Am. St. Rep. 523, 23 L. R. A. 719, 25 S. W. 848.
Montana. Wright v. Fire Ins. Co., 12 Mont. 474, 19 L. R. A. 211, 31 Pac 87.
Nebraska. State Ins. Co. v. Schreck, 27 Neb. 527, 20 Am. St. Rep. 696, 6 L. R. A. 524, 43 N. W. 340; German Ins. Co. v. Fairbank. 32 Neb. 750, 29 Am. St. Rep. 459, 49 N. W. 711; Johan-sen v. Home F. Ins. Co., 54 Neb. 548, 74 N. W. 866; Home F. Ins. Co. T. Bernstein. 55 Neb. 260, 75 N. W. 839.
New York. Merrill v. Agricultural Ins. Co., 73 N. Y. 452, 29 Am. Rep. 184.
Ohio. Coleman v. New Orleans Ins. Co., 49 O. S. 310, 34 Am. St. Rep. 565, 16 L. R. A. 174, 31 N. E. 279.
Oklahoma. Miller v. Delaware Ins. Co., 14 Okla. 81, 65 L. R. A. 173, 2 Am. & Eng. Ann. Cas. 17, 76 Pac. 1121; Arkansas Ins. Co. v. Cox, 21 Okla. 873, 20 L. R. A. (N.S.) 775, 98 Pac. 552.
Washington. Herzog v. Palatine Ins. Co., 36 Wash. 611, 79 Pac. 287.
Wisconsin. Loomis v. Rockford Ins. Co., 77 Wis. 87, 20 Am. St. Rep. 96, 8 L. R. A. 834, 45 N. W. 813.
6 Fontano v. Robbins, 18 D. C. App. 402.
7 See Sec. 2083 et seq.
8 See Sec. 2677.