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 which is made up of two or more covenants on each side has been broken as to one of such covenants only, the question of the effect of such breach upon the remaining covenants of such contract may turn in part on the question of the entire or severable character of the contract. Subject to the controlling principles, such as the relation of the covenants between themselves,1 and the relation of the covenant which has been broken to the contract taken as a whole,2 it may be said that no recovery can be had upon the covenants of an entire contract by a party who has broken a vital precedent or concurrent covenant.3 A, the owner of timber, agreed to cut and haul it to B's mill and there to make it into lumber, and pile it in B's yard. B was by the contract then to pay six dollars a thousand feet therefor. This was so far entire that A could recover nothing for cut-ting and hauling, where the logs were burned before they were made into timber.4
Massachusetts. French v. Boston National Bank, 179 Mass. 404, 60 N. E. 793.
Michigan. Gilbert v. Lichtenberg, 98 Mich. 417, 57 N W. 259.
Missouri. Earl Fruit Co. v. McKin-ney, 05 Mo. App. 220.
Nebraska. Farmer v. Gray, 16 Neb. 401, 20 N. W. 276.
12 Iowa. Hess v. Dicks, 181 la. 342, 104 N. W. 639.
Maine. Weeks v. Crie, 94 Me. 458, 80 Am. St. Rep. 410, 48 Atl. 107.
Michigan. McCormick Harvesting Machine Co. v. Cusack, 116 Mich. 647, 74 N. W. 1005; Brown v. Snider, 126 Mich. 198, 85 N. W. 570.
Minnesota. Hershey Lumber Co. v. St. Paul Sash, Door & Lumber Co., 66 Minn. 449, 69 N. W. 215.
New York. Tompkins v. Sheehan, 158 N. Y. 617, 53 N. E. 502.
13 Cochran v. Ward, 5 Ind. App. 89, 97, 51 Am. St. Rep. 229, 29 N. E. 795, 31 N. E. 581; Graves v. Goldthwait, 153 Mass. 268, 10 L. R. A. 763, 26 N. E. 860; Myers v. Croswell, 45 O. S. 543, 15 N. E. 866; Webster-Tapper Co. v. Eastern Hay Co., 39 R. I. 482, 98 Atl. 50.
14 Miller v. Ball, 64 N. Y. 286; Smith v. Underdunck, 1 Sandf. Ch. (N. Y.) 579.
15 Cochran v. Ward, 5 Ind. App. 89, 97, 51 Am. St. Rep. 229, 29 N. E. 795, 31 N. E. 581; Graves v. Goldthwait, 153 Mass. 268, 10 L. R. A. 763, 26 N. ' E. 860; Myers v. Croswell, 45 O. S. 543, 15 N. E. 866; Webster-Tapper Co. v. Eastern Hay Co., 39 R. I. 482, 98 Atl. 50.
1 See Sec. 2941 et seq.
2 See Sec. 2977 et seq.
3 California. Sterling v. Gregory, 149 Cal. 117, 85 Pac. 305.
If, on the other hand, the contract is severable, it is in legal effect a number of distinct contracts; and a breach of one covenant does not operate as a discharge of other covenants between the same parties.5 In some cases the severable contract seems to be identified with the independent covenant.6
If two parties enter into two contracts at the same time, by one of which A sells a certain mine to B, in consideration, of a certain portion of the net proceeds, and by the other of which B agrees to hire A as superintendent of a mine for a certain period of time, a breach by the employer, of the contract of employment, does not amount to a breach of the contract concerning payment of the net proceeds.7 If two parties enter into contracts, by one of which A
Georgia. Spalding County v. Cham-berlin, 130 Ga. 649, 61 S. E 533.
Michigan. Mailhot v. Turner, 157 Mich 167, 133 Am. St. Rep. 333, 121 N. W 804.
Minnesota. Benson v. Larson, 95 Minn. 438, 111 Am. St. Rep. 470, 104 N. W 307.
North Carolina. Cogglns v. Aetna Ins. Co., 144 N Car. 7, 119 Am. St. Rep. 924, 8 L. R. A. (N.S ) 839, 56 S. ¥. 500 (breach of condition).
Ohio. Tiernan v. Beam, 2 Ohio. 383; Petersburg Fire, Brick & Tilo Co. v. American Ciay Machinery Co, 89 O. S. 365, L. R A. 1915B, 536, 106 N. E. 33.
Oklahoma. Hart-Parr Co. v. Duncan, - Okla. -, 4 A. L R 1434, 181 Pac. 288.
Pennsylvania. Martin v. Fridenberg, 169 Pa St. 447, 32 Atl 429; East on v. Jones, 193 Pa. St. 147, 44 Atl. 264.
Wisconsin. McDonald v. Bryant, 73 Wis. 20, 40 N. W. 665; Widman v. Gay, 104 Wis. 277, 80 N. W. 450.
4 McDonald v. Bryant, 73 Wis. 20, 40 N. W 665.
5 Arkansas. Less v. English, 75 Ark. 288, 87 S W. 447.
California. Katz v. Bedford, 77 Cal, 319, 1 L. R. A. 826, 19 Pac. 523.
Massachusetts, Mark v. Stuart-How land Co., 226 Mass. 35, 2 A. L. R. 678, 115 N. E. 42.
Michigan. Gates v. Detroit & Mackinac Ry. Co., 147 Mich. 523, 111 N. W. 101.
Minnesota. McCrath v. Cannon, 55 Minn. 457, 57 N. W. 150.
Nebraska. Burwell & Ord Irrigation & Power Co. v. Wilson, 57 Neb. 396, 77 N. W. 762.
Nevada. Hutchens v. Sutherland, 22 New 363, 40 Pac, 409.
New York. Ming v. Corbin, 142 N. Y. 334, 37 N. E. 105.
Oregon. Pacific Mill Co. v. Inman, 46 Or. 352, 114 Am. St. Rep. 873, 80 Pac. 424.
Tennessee. Bradford v. Montgomery Furniture Co., 115 Tenn. 610, 9 L. R. A. (N.S ) 979, 92 S. W. 1104.
Virginia. Solenberger v. Gilbert, 86 Va. 778, 11 S. E. 789.
West Virginia. Dillon v. Suburban Land Co., 73 W. Va. 363, 80 S. E. 471.
6 Pacific Mill Co. v. Inman, 46 Or. 352, 114 Am. St. Rep. 873, 80 Pac. 424.
7 Hutchens v. Sutherland, 22 Nev. 363, 40 Pac. 409.
and B agree to form a stock company to manufacture machines, and by the other of which A guarantees that the machines manufactured can be placed on the market at a certain price, and the contracts are severable contracts, a breach of the contract of guarantee is not a breach of the contract for the organization of the corporation so as to justify abandonment thereof by the other party.8 The party not in default may treat default as discharging one branch of a severable contract without seeking to avoid it all. Under an agreement to use "say ten thousand dollars" of certain negotiable paper, the discounting of three notes amounting to more than eleven thousand dollars constitutes severable contracts. Accordingly, the party who is to discount the notes is discharged as to one of the notes to be discounted if the maker is insolvent; and he may avoid such contract, recovering what he has paid thereunder.9