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 at one time this principle was rarely applied except in contracts for personal services, promises of marriage, and contracts for the sale of personalty, the courts have not confined the application of this principle to these classes of contracts; and indeed no reason appears, or principle, why cases of these classes should be distinguished, for this purpose, from other classes of contracts. No such distinction is made except as to contracts for the payment of money only;1 and in other classes of contracts the doctrine of breach by renunciation in advance is generally recognized.2 The principle has been applied to contracts which involve work and labor but which are not, properly speaking, contracts for personal services,3 such as a contract to furnish livery and baggage service at a hotel and to pay a certain compensation for such privilege in consideration of a monopoly of such business at such hotel,4 and to contracts for the reduction of garbage.5 The principle has been applied to contracts for the sale of realty,6 as whore the vendor declares that he will be unable to construct the improvements on the realty, which, by the contract, are to be completed when the last instalment of the purchase price is due;7 and such renunciation may entitle the adversary party to a cancellation of the contract in equity.8 A contract whereby A agrees to hold certain property for life, with remainder in trust to B, is broken during A's lifetime by renunciation of B's contract so that B can maintain an action thereon at once.9 A repudiation of liability under a lease may give to the party who is not in default the right to bring an action at once and to recover damages on the theory of a total breach, although by the terms of the lease performance is to continue for a considerable period of time.10
3 United States. Roehm v. Horst, 178 U. S. 1, 44 L. ed. 053.
Arkansas. Wendt v. Ismert-Hincke Milling Co., 107 Ark. 106, 154 S. W. 194.
Georgia. Oklahoma Vinegar Co. v. Carter, 116 Ga. 140, 04 Am. St. Rep. 112, 50 L. R. A. 122, 42 S. E. 378.
Illinois. Rocbling's Sons Co. v. Lockstitch Fence Co., 130 111 660, 22 N. E. 518.
Iowa. Sprague v. Iowa Mercantile Co., - la. - , 172 N. W. 637.
Kansas. Kansas Flour Mills Co. v. Brandt, 08 Kan. 587, L. R. A. 1017A, 1000, 158 Pac. 1120.
Kentucky. Globe Fertilizer Co. v. Tennessee Phosphate Co. (Ky.), 85 S. W. 1177.
North Dakota. Hart-Parr Co. v. Fin-ley, 31 N. D. 130, L. It. A. 1915E, 851, 153 N. W. 137 [overruling, on this point, Stanford v. McGill, 6 N. D. 536, 38 L. R. A. 760, 72 N. W. 0381.
Pennsylvania. Unexcelled Fire Works Co. v. Polites, 130 Pa. St. 536, 17 Am. St. Rep. 788, 18 Atl. 1058.
4 Kansas Flour Mills Co. v. Brandt, 98 Kan 587, L. R. A. 1017A, 1000, 158 Pac. 1120.
5 Wendt v. Ismert-Hincke Milling Co., 107 Ark. 106, 154 S W. 194
6 Roehm v. Horst, 178 U S. 1, 44 L. ed. 653 [affirming, 01 Fed 345, 33 C. C A. 550].
7 Globe Fertilizer Co. v. Tennessee Phosphate Co. (Ky.), 85 S W 1177.
8 Hart-Parr Co. v. Finley, 31 N. D. 130, L. R. A. 1015E, 851, 153 N W. 137 [overruling, on this point, Stanford v. McGill, 6 N. D. 536, 38 L R A 760, 72 N. W. 938].
9 Sprague v. Iowa Mercantile Co., - • la. - , 172 N. W. 637.
10 Northrop v. Deposit Co, 110 Fed. 060. I See Sec. 2981.
2 United States. Central Trust Co. v. Chicago Auditorium Association, 240 U. S. 581, L. R. A 1917B, 580, 60 L. ed 811; Colorado Yule Marble Co. v. Collins, 230 Fed. 78; In re Mullings Clothing Co., 238 Fed. 58, L R. A. 1918A, 545; Dixon v. Anderson, 252 Fed 694.
California. Walker v. Harbor Business Blocks Co., - Cal. - , 186 Pac. 356.
Connecticut. Bridgeport v. Aetna Indemnity Co., 01 Conn. 107, 00 Atl. 566.
The principle is also applied to a renunciation of a building contract,11 or a contract to furnish insurance at a certain rate,12 or to a contract to lend money.13
Florida. Hall v. Northern & Southern Co., 55 Fla 235,46 So 178 (obiter).
Hew Jersey. Holt v. United Security Life Ins Co., 74 N. .J. L 795, 11 L. R. A (NS.) 100, 67 Atl 118.
New York. Tanenbaum v. Federal Match Co., 180 N. Y. 7."), 81 N. E 565.
On the other hand, the doctrine of renunciation in advance is said to be limited to contracts to intermarry, contracts of employment and contracts for the sale of goods. Kelly v. Security Mutual Life Ins. Co., 186 N. Y. 16, - N. E. - .
3 Central Trust Co. v. Chicago Auditorium Association, 240 U S. 581, L. R. A. 1917B, 580, 60 L. ed. 811; Bridgeport v. Aetna Indemnity Co., 91 Conn. 197, 09 Atl. 5C6.
4 Central Trust Co. v Chicago Auditorium Association, 240 U. S. 581, L. R. A. 1917B, 580, 60 L. ed. 811.
5 Bridgeport v. Aetna Indemnity Co., 91 Conn. 197, 99 Atl. 566.
6 Dixon v. Anderson, 252 Fed. 694; Hall v. Northern & Southern Co., 55 Fla. 235, 46 So. 178 (obiter).
7 Walker v. Harbor Business Blocks Co, - Cal. - , 186 Pac. 356.
8 Contract for the sale of land. Hol-ingreen v. Piete, 50 Minn. 27, 52 N. W. 2G6.
See eh. XC.
9 Schmitt v. Schnell, 14 Ohio C. C. 153, 7 Ohio C. D. 657 [distinguishing, Maud v. Maud, 33 O. S. 147].
10 In re Mullings Clothing Co., 238 Fed. 58, L. R A. 1918A, 539; McGraw v. Union Trust Co., 135 Mich. 609. 98 N. W. 390; Kalkoff v. Nelson, 60 Minn. 284, 62 N. W. 332; People v. St. Nicholas Bank, 151 N. Y. 592, 45 NT. E. 1129.
11 Colorado Yule Marble Co. v. Collins, 230 Fed. 78.
1 2 Tanenbaum v. Federal Match Co., 189 N. Y. 75, 81 N. E. 565.
13 Holt v. United Security Life Insurance Co., 74 N. J. L. 795, 11 L. R. A. (N.S.) 100, 67 Atl. 118.
If an insurance company repudiates liability on an insurance policy before loss, the insured or the beneficiary may treat the policy as discharged and may recover the premiums, which have been paid thereon,14 or he may bring a suit in equity to have the right under the policy declared in advance,15 or he may treat the policy as still in effect and when the loss occurs the beneficiaries may recover the value of the policy less unpaid premiums;16 whether the beneficiary can bring an action upon the implied promise of the insurance company to accept the premiums and to treat the policy as in effect is a question on which there is a division of authority.17 If this remedy were granted, the insurance company would be obliged to repay the premiums or the value of the policy, and the policy would apparently be left in force, or at least the insurance company would be obliged to pay the value of the policy before the loss had occurred.18