It appears to be settled, both in England and America, that the repudiation of a contract, though unaccompanied by actual breach, justifies a demand for restitution:

Hochster v. De la Tour, 1853, 2 Ell. & Bl. 678: Crompton, J. (p. 685): "When a party announces his intention not to fulfil the contract, the other side may take him at his word and rescind the contract."

Ballou v. Billings, 1884, 136 Mass. 307: Holmes, J. (p. 308): "Such a repudiation did more than excuse the plaintiff from completing a tender; it authorized him to treat the contract as rescinded and at an end. It had this effect, even if, for want of a tender, the time for performance on the defendant's part had not come, and therefore it did not amount to a breach of covenant. ... It is clear that, apart from technical considerations, so far as the right to rescind goes, notice that a party will not perform his contract has the same effect as a breach."

Drake v. Goree, 1853, 22 Ala. 409: Goldthwaite, J. (p. 415): "if, while the contract was executory, the defendants in error did any act which showed clearly they did not intend to perform their portion of the contract, it would have justified the other party in terminating it."

By repudiation is meant a refusal to perform,1 or an act rendering performance impossible,2 though an admisreading into the conveyance a condition subsequent and treating the action as one to quiet title).

1 Johnstone v. Milling, 1886, 16 Q. B. D. 460; Dingley v. Oler, 1886, 117 U. S. 490; 6 S. Ct. 850; Johnson Forge Co. v. Leonard, 1902, 3 Penn. (Del.) 342; 51 Atl. 305; 57 L. R. A. 225; 94 Am. St. Rep. 86; Harber Bros. Co. v. Moffat Cycle Co., 1894, 151 111. 84; 37 N. E. 676; O'Neill v. Supreme Council, 1904, 70 N. J. L. 410; 57 Atl. 463; Peters Grocery Co. v. Collins Bag Co., 1906, 142 N. C. 174; 55 S. E. 90; Maffet v. Oregon, etc., R. Co., 1905, 46 Or. 443; 80 Pac. 489. For a collection of authorities see South Texas Telephone Co. V. Huntington, 1909, Tex. Civ. App. ; 121 S. W. 242, 247-9. And see Harriman, "Contracts," Sec. 521.

2 Short v. Stone, 1846, 8 Q. B. 358, (contract to marry; defendant married another); Seibel v. Purchase, 1904, 134 Fed. 484, (C. C. D. N. J.), (contract to convey free from incumbrance; renewal of mortgage sion of "entire inability to perform" has been held sufficient.1

In England it is the law, apparently, that nothing short of repudiation will serve: to a breach, and fall short of an election to abandon, which the assent of the other party might make effective, a positive and absolute refusal, a deliberate repudiation of the stipulations of the contract, gives to the other party as an alternative remedy the right to assent to such abandonment and treat the contract as dissolved."1

Ehrensperger v. Anderson, 1848,3 Exch. 148: Action for money had and received. Held, that the failure of the defendant to remit a bill of exchange did not justify rescission of the contract and an action for restitution. Parke, B. (p. 158): "In order to constitute a title to recover for money had and received, the contract on the one side must not only not be performed or neglected to be performed, but there must have been something equivalent to saying 'I rescind this contract,' - a total refusal to perform it, or something equivalent to that which would enable the plaintiff on his side to say,' If you rescind the contract on your part, I will rescind it on mine.' " 2

There are not a few expressions to the same effect - for the most part dicta - in American cases:

Graves v. White, 1882, 87 N. Y. 463: Finch, J. (p. 465): "The doctrine of these authorities is, that the refusal of one party to perform his contract amounts on his part to an abandonment of it. The other party thereupon has a choice of remedies. He may stand upon his contract, refusing assent to his adversary's attempt to rescind it, and sue for a breach, or in a proper case, for a specific performance, or he may assent to its abandonment, and so effect a dissolution of the contract by the mutual and concurring assent of both parties. . . . While, therefore, a mere neglect to perform might sometimes amount by vendor); Woodberry v. Warner, 1890, 53 Ark. 488; 14 S. W. 671, (contract to transfer interest in boat; sale of same by defendant); Smith v. Treat, 1908, 234 111. 552; 85 N. E. 289, (contract to convey; sale to stranger); James v. Burchell, 1880, 82 N. Y. 108, (conveyance to another); Kicks v. State Bank, 1904, 12 N. D. 576; 98 N. W. 408, (contract to convey; sale to another); Krebs Hop Co. v. Livesley, 1907, 51 Or. 527; 92 Pac. 1084, (contract for sale of hops to be grown; sale of land to another). And see Harriman, "Contracts," Sec. 521.

1 Chamber of Commerce v. Sollitt, 1866, 43 111. 519. See also Tague v. McColm, 1909,145 la. 179; 123 N. W. 960.

2 See also Freeth v. Burr, 1874, L. R. 9 C. P. 208, 214; In re Phoenix, etc., Co., 1876, 4 Ch. Div. 108; Mersey Steel & Iron Co. v. Naylor, 1884, 9 App. Cas. 434, 438; Cornwall v. Heuson, [1900] 2 Ch. 298; Rhymney R. Co. v. Brecon, etc., R. Co., 1900, 83 L. T. Rep. 111.

This limitation, as the foregoing quotations show, rests upon two notions: first, that rescission is a matter of mutual consent; second, that unless the party in default actually abandons the contract, his consent to a rescission cannot be implied. It is submitted that the first is false, in that rescission, as the term is here used, is not a matter of mutual consent, any more than is the avoidance of a contract for fraud, but is the act of one party in the exercise of a right conferred upon him by law. The underlying theory is that if one fails in a serious degree to perform his engagement, the other party may disregard the contract and demand restitution (see ante, Sec. 260). It is true that repudiation may evince an immoral purpose not indicated by an unavoidable or even a negligent breach, however substantial; but in its consequences to the other party an unavoidable breach may be quite as serious as a willful abandonment. The second is likewise false, because even in the case of abandonment or repudiation it is not a fair inference that the party in default consents to abrogate the contract and make restitution to the other party. There may be an express agreement of rescission, either in the case of repudiation or in the case of breach, but to say that an agreement to rescind is implied is to resort to a fiction - and one which would serve in the case of substantial breach quite as well as in that of repudiation.2

1 See also Monarch Cycle Co. v. Royer Wheel Co., 1900, 105 Fed. 324; 44 C. C. A. 523 ; McAllister-Coman Co. v. Matthews, 1910, 167 Ala. 361; 52 So. 416; 140 Am. St. Rep. 43; Quarton v. Amer. Law Book Co., 1909, 143 la. 517; 121 N. W. 1009; 32 L. R. A. (N. S.) 1; Wright v. Haskell, 1858, 45 Me. 489; West v. Bechtel, 1900, 125 Mich. 144; 84 N. W. 69; 51 L. R. A. 791; Blackburn v. Reilly, 1885, 47 N. J. L. 290; 54 Am. Rep. 159. Professor Keener accepted the limitation without question. "Quasi-Contracts," pp. 303, 304.

2 See Bannister v. Reed, 1844, 1 Gilman (6 111.) 92.

There is no sound reason, then, for allowing the remedy of restitution in one case and denying it in the other. As a matter of fact, restitution is generally enforced in America where there has been such a substantial breach as would constitute a defense to an action by the party in default to enforce the contract:

Porter v. Arrowhead Co., 1893, 100 Cal. 500; 35 Pac. 146: Garoutte, J. (p. 504): "A failure to pay an installment of the contract price, as provided in the contract, is a substantial breach of the contract, and gives the contractor the right to consider the contract at an end, cease work, and recover the value of the work already performed."1