It is frequently stated that reasonably prompt notice of rescission is a prerequisite to the action for restitution, or that the election of restitution must be manifested without undue delay.6 An examination of the cases, however, will show that in most of them, either the plaintiff had received something from the defendant under the contract, or the contract was of such a nature that unless promptly informed the defendant would naturally proceed with his performance. Under such circumstances, as is pointed out in the preceding section, inaction may well be interpreted as an election not to seek restitution. Hence the statement that unless notice is promptly given restitution will not be enforced.1 Upon the theory that restitution and compensation are alternative remedial rights arising upon the repudiation or material breach of a contract, there is no reason for making notice, as such, a prerequisite to the election of either.2
1 See post, Sec. 298; also 15 Cyc. 259 et seq.
2 Goodman v. Pocock, 1850, 15 Q. B. 576; Graham v. Halloway, 1867, 44 111. 385. And see Bacon p. Moody, 1903, 117 Ga. 207; 43 S. E. 482; Weill v. Fontanel, 1889, 31 111. App. 615; also cases cited in 15 Cyc. 259.
3 Brown v. St. Paul, etc., R. Co., 1886, 36 Minn. 236; 31 N. W. 941; Lawrence v. Taylor, 1843, 5 Hill (N. Y.) 107, 114, 115; Graves v. White, 1882, 87 N. Y. 463. And see Theusen v. Bryan, 1901, 113 la. 496; 85 N. W. 802; Holman v. Updike, 1911, 208 Mass. 466, 94 N. E. 689; Moller v. Tuska, 1881, 87 N. Y. 166; Conrow v. Little, 1889, 115 N. Y. 387; 22 N. E. 346; 5 L. R. A. 693; also cases cited in 15 Cyc. 259, 260.
4 Reynolds v. Nelson, 1821, 6 Mad. 18; Mizell v. Watson, 1909, 57 Fla. Ill; 49 So. 149; Harden v. Lang, 1900, 110 Ga. 392; 36 S. E. 100; Sanford v. Emory's Admr., 1864, 34 111. 468; Axtel v. Chase, 1881, 77 Ind. 74; J. B. Alfree Mfg. Co. v. Grape, 1900, 59 Neb. 777; 82 N. W. 11. And see Graham v. Hatch Storage Battery Co., 1904, 186 Mass. 226; 71 N. E. 532, where it was held that the use of goods after notice of rescission is an "abandonment of the right of rejection."
5 Mills v. City of Osawatomie, 1898, 59 Kan. 463; 53 Pac. 470; Lawrence v. Dale, 1817, 3 Johns. Ch. (N. Y.) 23.
6 See Hennessy v. Bacon, 1890, 137 U. S. 78; 11 S. Ct. 17; Mizell v. Watson, 1909, 57 Fla. Ill; 49 So. 149; Carney v. Newberry, 1860, 24 111. 203; Axtel v. Chase, 1881, 77 Ind. 74; Mullin v. Bloomer, 1860, 11 la. 360; Olson v. Brison, 1906, 129 la. 604; 106 N. W. 14; Mills v. City of Osawatomie, 1898, 59 Kan. 463; 53 Pac. 470; Gaty v. Sack, 1885, 19 Mo. App. 470; World Pub. Co. v. Hull, 1899, 81 Mo. App. 277; J. B. Alfree Mfg. Co. v. Grape, 1900, 59 Neb. 777; 82 N. W. 11; Swazey v. Choate Mfg. Co., 1868, 48 N. H. 200.
In Texas the peculiar doctrine is announced, in cases of the sale of real property, that no notice is necessary where the vendee has abandoned the contract or has so acted as to give the vendor the reasonable belief that he has abandoned it, or where the vendee has not commenced performance; but that where the vendee has partly performed his engagement, as by "paying a portion of the purchase money, or taking possession and making improvements," and then has committed a material breach, he is entitled to reasonable notice of the vendor's intention to rescind. "The reason of this rule," it is said, "is obvious. He [the vendee] may be able to give a reasonable excuse for his failure to fully perform; that would entitle him, in equity, to protection to the extent he had performed." 1
1 Notice of election of restitution should not be confused with the notice that is sometimes necessary in order to make a default substantial. Where time is not of the essence of the contract, as in the case of the sale of land, or where no time is fixed by the contract, the injured party cannot establish such a breach as will justify an action for restitution unless, by notice, he fixes a reasonable time within which the other party is required to perform. Green v. Sevin, 1879, 13 Ch. Div. 589; McFadden v. Henderson, 1901, 128 Ala. 221; 29 So. 640; Walters v. Miller, 1860, 10 la. 427; Higby v. Whittaker, 1837, 8 Ohio 198; Kirby v. Harrison, 1853, 2 Ohio St. 326; 59 Am. Dec. 677. And see note, 50 Am. Dec. 678. But, obviously, this is not notice of rescission.
2 See Ripley v. Hazelton, 1870, 3 Daly (N. Y. Ct. of Common Pleas) 329, where Van Brunt, J., said (p. 330): "The necessity of notice upon the rescission of a contract exists only, as I understand the law, when the party rescinding has received some benefit or advantage from the contract, which he must surrender before he can claim to rescind. He must put the other party in the same position he occupied before entering into the contract."
Whether notice is required or not, it seems clear that an action for restitution need not be preceded by a demand.2 The right arises upon the repudiation or breach, and is barred by the statute of limitations at the same time as is the right to compensation in damages.3