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 primary object of the parties is to secure the payment of a debt, the amount of which is measured by money, and the provision for payment in work or articles at a specified valuation is inserted as an alternative method of payment, the debtor has the election of paying in money or such other medium of payment up to the time which is fixed by the contract for payment,1 if the contract does not show either by express terms or by fair implication that the right of election is given to the creditor. Under such a contract, and before breach, the creditor can not elect to receive payment in money.2 A contract to pay debts, estimated in money, by means of a certain amount of lumber to be delivered, one half during each of two years, no place of delivery being specified, gives the debtor the election to pay in lumber, and the creditor can not demand payment in money until he has made demand for the lumber, which has been refused.3 Under a contract to pay in bonds,4 or in lime,5 the creditor can not enforce payment in money before breach.
Before breach a contract to pay a certain debt in work can not give to the creditor a right of action to recover money. Thus a contract to pay a debt by grinding corn,6 or by sawing lumber,7 can not be collected in money where the payee refuses to furnish corn or lumber for such purpose.
1 Alabama. Ragland v. Wood, 71 Ala 145, 46 Am. Rep 305.
Georgia. Sims v. Cos, 40 Ga. 76, 2 Am. Rep. 500
Illinois. Owen v. Barnum, 7 111. 461.
Indiana. Leiter v. Emmons, 20 Ind. App. 22, 50 N. E 40
Maine. Strout v. Joy, 108 Me. 267, 80 Atl. 830.
North Carolina. Oldham v. Kercbner, 79 N. Car. 106, 28 Am. Rep. 302.
South Carolina. Choice v. Moseley, 1 Bail. L. (S. Car.) 136, 10 Am. Dec. 661.
2 Alabama. Ragland v. Wood, 71 Ala. 145, 46 Am. Rep. 305.
Arkansas. Bradley v. Farrington, 4 Ark. 532.
Colorado. Widner v. Walsh, 3 Colo.
Indiana. Farmers' Loan & Trust Co. v. Canada & St. Louis Ry., 127 Ind. 250, II L. R. A. 740, 26 N. £. 784;
Leiter v. Emmons, 20 Ind App. 22, 50 N. E 40
Maine. American Gas & Ventilating Machine Co. v. Wood, 90 Me. 516, 43 L. R. A. 449, 38 Atl. 548
Minnesota. Beede v. Proehl, 34 Minn. 407, 27 N. W. 101.
Missouri. State v Mooney, 65 Mo. 494.
Pennsylvania. Pierce v. Marple, 148 Pa. St. 69, 33 Am St. Rep 808, 23 Atl. 1008.
Wisconsin. Drake v. Harrison, 60 Wis. 99, 2 Am St. Rep. 717, 33 N. W. 81.
For the minority view, see Sec. 2800.
3 Ragland v. Wood, 71 Ala. 145, 46 Am. Rep 305.
4 Farmers' Loan & Trust Co. v. Canada & St. Louis Ry, 127 Ind. 250, 11 L. R. A. 740, 26 N. E 784.
5 Pierce v. Marple, 148 Pa. St. 69, 33 Am. St. Rep. 808, 23 Atl 1008.
Before the debt is due, the debtor may elect to pay in money. Thus a contract to deliver a certain amount of cotton at a certain price per pound, may be discharged by paying the amount of money obtained by multiplying this price by the number of pounds to be delivered.8 Under a contract to pay fifteen hundred dollars in wool at twenty cents a pound, the payor may pay the money at his election.9
If the contract is broken, the debtor loses his right to elect, and the creditor may enforce payment in money.10 After breach, the creditor may enforce payment in money under a contract to pay a certain sum in land,11 or in merchandise.12 A bought a bicycle of B, and subsequently, by agreement, returned it, and took from B a receipt for sixty dollars to apply on any new wheel which A should select from B's stock. Subsequently, A selected a wheel for which B refused to honor the receipt as a part payment. A then had a right to recover such amount of money.13 A agreed to pay for a certain amount of advertising, by allowing the price thereof as a credit upon any steam launch to be selected from such stock. The holder of the order which A gave for such price transferred it to X. X then bought the launch from A at a price estimated on a cash basis. When X offered the order in part payment, A refused to honor it. It was held that X could recover the amount of such order in money.14 A debt payable in confectionery becomes payable in money where an order for confectionery is not filled.15 A took a note from B, for value, payable one half in coin or cotton at twenty cents a pound, at the maker's option; and one half in coin or cotton at twenty cents a pound, at the payee's option. After the note fell due it was held that the creditor may recover the entire amount thereof in coin.16 A contract specifically giving a party the option to deliver a certain amount in bonds of a corporation to be organized, or of paying the amount in money, such option to be exercised by a certain date, must be performed by delivering the bonds by such date, or else the creditor will have the right to enforce payment in money. Accordingly, delivery of an order upon the treasurer of the company for certain bonds, is not performance where the corporation has not yet issued bonds, and the capital actually invested in the corporate business is very small.17 If an option given in a railroad bond, whereby the railroad may pay scrip for the interest on July 1st of each year, is not taken advantage of by that date, the creditor may enforce payment of the interest in money.18 If a note for one hundred bushels of corn containing a provision, "this corn is estimated at twenty dollars," is not paid at maturity, the creditor may recover twenty dollars, though corn is then worth only fifteen cents a bushel.19 On breach of a contract to pay a certain amount of money in labor or stock, the payee can on breach recover the amount of money specified.20 B sold a printing outfit to A, agreeing to take payment in printing. A sold the outfit to a third person and refused to do the printing. It was held that B could recover the purchase price.21 If the creditor has a right, by reason of a breach of the contract, to demand payment in money, his act in subsequently accepting payment of part of the indebtedness in goods does not waive his right to enforce payment of the rest in money.22
6 Oldham v. Kerchner, 79 N. Car. 106, 28 Am Rep. 302.
7 Nipp v. Diskey, 81 Ind, 214, 42 Am. Rep 124.
8 Sims v. Cox, 40 Ga. 76, 2 Am. Rep. 560.
9 Trowbridge v. Holcomb, 4 O. S. 38.
10 United States. McGillin v. Bennett, 132 U. S. 445, 33 L. ed. 422; Guss v. Nelson, 200 U. S. 298, 50 L. ed. 489.
Colorado. Hannan v. Anderson, 15 Colo. App. 433, 62 Pac. 961.
Connecticut. Brooks v. Hubbard, 3 Conn. 58, 8 Am. Dec. 154.
Indiana. Farmers' Loan & Trust Co. v. Canada & St. Louis Ry., 127 Ind. 250, 11 L. R. A. 740, 26 N. E. 784.
Iowa. Wroughton v. Waffle, 122 la. 486, 08 N. W. 307.
Kentucky. Outline v. WicklifTe, 6 Ky. (3 Bibb.) 81.
Maine. Wyman v. Winslow, 11 Me. 308, 26 Am. Dec. 542.
Michigan. Crowl v. Goodenberger, 112 Mich. 683, 71 N. W. 485.
New York. New York News Publishing Co. v. National Steamship Co., 148 N. Y. 39, 42 N. E. 514; Hand v. Gas Engine & Power Co., 167 N. Y. 142, 60 N. E. 425.
Utah. Haskins v. Dern, 19 Utah 89, 56 Pac. 953.
Vermont. Smith v. Coolidge, 68 Vt. 516, 54 Am. St. Rep. 902, 35 Atl. 432.
West Virginia. Womack v. Agee, 79 W. Va. 22, 90 S. E. 702.
11 McGillin v. Bennett, 132 U. S. 445, 33 L. ed. 422.
12 Anderson v. Mason, 36 Ky. (6 Dana) 217.
13 Hannan v. Anderson, 15 Colo. App. 433, 62 Pac. 961.
14 Hand v. Gas Engine & Power Co., 167 N. Y. 142, 60 N. E. 425.
15 Smith v. Coolidge, 68 Vt 516, 54 Am. St. Hep. 902, 35 Atl. 432.
16 Russell v. McCormick, 45 Ala. 587, 6 Am. Rep. 707.
17 Barrett v. Twin City Power Co., 118 Fed. 861.
So under a contract to pay money or return stock. Patent Tile Co. v. Stratton, 89 Fed. 174.
18 Texas & Pacific Ry. v. Marlor, 128 U. S. 687, 31 L. ed. 303.
19 Hise v. Foster, 17 la. 23.
20 Sperry v. Johnson, 11 Ohio 452.
21 Wroughton v. Waffle, 122 la. 486 98 N. W. 307.
22 Smith v. Coolidge, 68 Vt. 516, 54 Am. St. Rep. 902, 35 Atl. 432.