the other hand, they may expressly declare that a breach of any instalment obligation by one shall give to the other party the right to rescind the entire agreement.1 But in the absence of any such express stipulations, the courts generally construe an instalment contract as an entire and not as a divisible contract.2

Accordingly, a breach as to any instalment may give the party not in default a right to repudiate the whole contract, if the breach relates to the first instalment; or, if it is connected with a subsequent one, to repudiate the contract so far as it is unperformed.

254. Unsatisfactory State of Authorities. — It must be admitted that judicial authority upon this subject is in an unsatisfactory state on both sides of the Atlantic; and that British legislation has failed to provide a complete solution of the difficulty for that country. The Uniform Sales Act, while preferable to the Sale of Goods Act, on this topic, fails to give effect to the prevailing judicial view in this country, as will appear a little later.3

255. How far they are agreed. — Upon one proposition, however, the courts appear to be in accord. If the breach is of such a nature as to show an intention on the part of the one committing it to renounce the contract, or his inability to perform, the other party may decline further performance. They are

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1 Cherry Valley Iron Works v. Florence Iron Co., 64 Fed. Rep. 569 (1894).

2 Rugg v. Moore, 110 Pa. St. 236; 1 At. 320 (1885). Cf. Harris Lumber Co. v. Wheeler Lumber Co., 88 Ark. 491; 115 S. W. 168 (1908), where the instalments were held severable.

In order to give effect to that view, § 45 (2) should read: "(2) Where there is a contract to sell goods to be delivered by stated instalments, which are to be separately paid for, and the seller makes defective deliveries in respect of one or more instalments, or the buyer neglects or refuses to take delivery of or pay for one or more instalments, such breach of the contract justifies the injured party in refusing to proceed further, and in suing for damages for breach of the entire contract, unless the terms of the contract and the circumstances of the case disclose a different intention of the parties as to the consequences of such breach."

4 Otis v. Adams, 56 N. J. L. 38; 27 At. 1092 (1893).

Morgan v. Bain, L. R. 10 C. P. 15 (1874). Insolvency, unaccompanied by any subsequent intention to perform the contract on the part of the insolvent or his assignee, may justify the other party in concluding that the insolvent has abandoned the contract (p. 28). Hobbs v. Co

A

agreed also that, if the language of the contract, or the circumstances of the case, disclose a mutual intention that a breach with respect to any instalment shall give to the party not in default a right to withhold further performance, such intention is to be respected and carried out.

256. Default must amount to a Renunciation of the Contract. -But in many jurisdictions the courts refuse to recognize a right to repudiate a continuing contract for the breach of an instalment provision in any other case. This appears to be the rule in Britain, notwithstanding considerable authority to the contrary. In a recent decision of the House of Lords, it is said, "You must look at the actual circumstances of the case in order to see whether the one party to the contract is relieved from its future performance by the conduct of the other; you must examine what that conduct is, so as to see whether it amounts to a renunciation, to an absolute refusal to perform the contract, such as would amount to a rescission if he had the power to rescind, and whether the other party may accept it as a reason for not performing his part." Accordingly, it was held that the failure of the buyer to pay promptly for one instalment, his postponement being in good faith and due to erroneous legal advice, did not entitle the seller to refuse further deliveries.2

257. Followed in some American Jurisdictions. This rule has been adopted by some American courts. In the case last lumbia Co., 157 Mass. 109; 31 N. E. 756 (1892); Florence Mining Co. v. Brown, 124 U. S. 385; 8 Sup. Ct. R. 531 (1888). The mere insolvency of one party, however, is not equivalent to a rescission or a breach, although the vendee's insolvency does relieve the vendor from his agreement to give credit, and entitles him to cash on delivery. Pardee v. Kanady, 100 N. Y. 121; 2 N. E. 885 (1885).

1 Mersey Co. v. Naylor, 9 App. Cas. 434 (1884); Lord Ch. Selborne, at pp. 438, 439, and see opinion of Lord Watson. This view seems to have received approval in Welsh v. Mich. Maple. Co., 161 Mich. 16; 125 N. W. 692 (1910).

2 It is not necessary, however, that a party use express words of repudiation. If his conduct shows his inability to perform or his determination not to perform, his intention to repudiate is inferable from his conduct and justifies the other party in treating such conduct as a repudiation. Millar's Karri & Co. v. Weddel & Co., 13 Com. Cas. 25; 100 L. T. 128 (1908).

Gerli v. Poidebord Silk Co., 57 N. J. L. 432; 31 At. 401; 30 L. R. A. 61 (1894); Burdick's Cases on Sales, 461; Empire Rubber Mnfg. Co. v.

cited, the seller had failed to deliver the first of three instalments of silk, owing to the lateness of the crop, but he showed no intention to abandon the contract. On the other hand, he expressed a willingness to compensate the buyer for this default and to deliver the other instalments on time. The majority of the court held that the delivery of one instalment - even of the first was not a condition precedent to the continuing obligation of the contract, and that a breach as to any instalment, unless amounting to an intentional abandonment of the contract by the party in default, did not give the other party the right to repudiate the contract. In an able dissenting opinion, Van Syckel, J., declared that this rule perverts "a contract for goods in instalments into an agreement to engage in a succession of lawsuits, if the vendor so elects, for such damages as the purchaser may be able to recover, as a substitute for what he expressly bargains for, and during all this period the purchaser cannot safely secure his needed supplies elsewhere, because he cannot know until the due days arrive whether the vendor will make further default."

258. Breach going to the Whole Consideration. — In other jurisdictions it is held that a breach of an instalment contract, which does not show abandonment by the party in default, will not entitle the other party to repudiate the contract unless the breach goes to the whole consideration. The reasons for this view have been admirably stated by an eminent English judge: "Such a contract for the successive deliveries of goods at a sum per measure, is a somewhat modern kind of contract, but it has now been in existence for many years. It has been frequently considered, and the rule with regard to its construction seems to me to be this, that when the deliveries Morris, 77 N. J. L. 498; 72 At. 1009 (1908); Rock Island, etc. Co. v. Moore, 147 Ala. 581; 41 So. 806 (1906); Quarton v. Law Book Co., 143 Ia. 517, 523-29; 121 N. W. 1009 (1909); J. W. Ellison, Son & Co. v. Flat Top Grocery Co., 69 W. Va.; 71 S. E. 391 (1911).

In New Jersey this rule has been abolished by the Uniform Sales Act. Corey Co. v. Minch, - N. J. L.; 82 At. 304 (1912), applying L. 1907, § 45 (Compiled Statutes, p. 4657).

1 Osgood v. Bauder, 75 Ia. 550, 558; 39 N. W. 887 (1888). In Hanley Co. v. Combs, 48 Ore. 409; 87 Pac. 143 (1906), this was held to be a question for the jury.

are to be so made, and the price of each to be so determined, then, inasmuch as the failure to perform one of the deliveries can be satisfied by damages, the failure in respect of one delivery does not prevent the party from having the other deliveries.

. . The courts have not laid down that doctrine as an abstract proposition of law, but they have gathered it from the course of business amongst merchants." 1

259. Breach of any Essential Term of an Instalment Contract. -Still a third rule has been laid down by other courts, to the effect that the breach of an essential term of an instalment contract, whether evincing an intention to abandon it or not, gives to the party not in default a right to refuse further performance on his part, and to treat it as repudiated. This rule appears to be sound in principle, to be supported by the weight of authority in this country, and to be gaining in favor. If the breach consists in failure to deliver the first instalment, it is clearly one which goes to the root of the agreement; "it would in most cases entirely frustrate the object of the contract."4 The same view has been taken of the breach of a subsequent instalment, even where the defaulting party claimed

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1 Honck v. Muller, 7 Q. B. D. 92, 103, 104 (1881); dissenting opinion by Brett, L. J.

* Enterprise Mnfg. Co. v. Oppenheim, O. & Co., 114 Md. 369; 79 At. 1007 (1911); Nat. Mach. & T. Co. v. Standard Shoe Mach. Co., 181 Mass. 275; 63 N. E. 900 (1902); Uniform Sales Act, Mass. L. 1908, ch. 237, § 45.

3 Norrington v. Wright, 115 U. S. 188; 6 Sup. Ct. 12 (1885); Burdick's Cases on Sales, 451; Pope v. Porter, 102 N. Y. 366; 7 N. E. 304 (1886).

• King Philip Mills v. Slater, 12 R. I. 82, 85 (1878).

5 Cresswell v. Martindale, 63 Fed. R. 84, 86; 27 U. S. App. 277 (1894); Burdick's Cases on Sales, 464. "Nor was the vendees' breach of this contract slight or in an immaterial part. It was substantial, and went to the very root of the contract. It consisted in their refusal to accept 282 cattle" (the fourth instalment), "and to pay $7,896 for them, at the time and place they agreed to accept and pay for them under the contract. These cattle had been gathered by the vendor from a range 40 miles square, by the labor of many men for many days, and driven to the railroad station to be delivered to the vendees." Bobrick Chem. Co. v. Prest-O-Lite Co., 160 Cal. 209; 116 Pac. 747 (1911); Enterprise Mnfg. Co. v. Oppenheim, O. & Co., 114 Md. 369, 401; 79 At. 1007; 38 L. R. A. N. s. 548 (1911); Pakas v. Hollingshead, 184 N. Y. 24; 77 N. E. 40; 3 L. R. A. N. S. 1042 (1906); Cleveland Rolling Mill v. Rhodes, 121 U. S. 255, 263; 7 Sup. Ct. 882; 30 L. ed. 920 (1887).

in good faith not to be committing a breach. Inasmuch as the quantity to be delivered and the time of delivery are, ordinarily, of the essence of the contract, it follows that a breach of either of these terms justifies the buyer in refusing to proceed further and suing for damages for breach of the entire contract, unless other portions of the contract or the circumstances of the case show that the parties intended otherwise.3 Such different intention may be shown by the trifling nature of the breach.4

260. Is Time of Payment an Essential Term of Instalment Contracts? In England, the engagement of the buyer to pay for goods at a fixed time is not treated as of the essence of the contract, unless the parties have disclosed a different intention by the terms of their agreement.5 In this country, the time of payment fixed in mercantile contracts is generally deemed an essential term; and a breach of it is attended by the consequences which follow the breach of an engagement to deliver. Such is the rule in Scotland also, where, it is said, the courts pay "greater regard than in England to the unity of the contract and the mutuality of its obligations." 7

1 Cf. Winchester v. Newton, 2 Allen (98 Mass.), 492, 495 (1861). 2 Supra, ¶¶ 189, 251.

* Cases cited in notes to this paragraph, and the American cases cited in the notes to the following paragraph.

4 Barnett & O'Neil v. Grain Co., 153 Mo. App. 458; 133 S. W. 856 (1911).

Sale of Goods Act, § 10;, Mersey Steel Co. v. Naylor, supra, ¶ 256. This doctrine was applied in Strother v. Miller, 124 S. W. 358 (Ky. 1910).

Stokes v. Baars, 18 Fla. 656 (1882); Barnes v. Denslow, 30 N. Y. S. Rep. 315, 318; 9 N. Y. Supp. 53 (1890); K. S. Co. v. Inman, 134 N. Y. 92; 31 N. E. 248 (1892); Hess Co. v. Dawson, 149 Ill. 138; 36 N. E. 557 (1894); Faber v. Hougham, 36 Ore. 428; 59 Pac. 547 (1900); Farmers C. O. & T. Co. v. Ward & Son, 170 Ala. 491; 49 So. 513 (1911); Los Angeles Gas & Elec. Co. v. Amalgamated Oil Co., 156 Cal. 776, 781; 106 Pac. 55 (1909); Murphy v. So. Min. & L. Imp. Co., 130 La. 914; 58 So. 766 (1912); Webster v. Moore, 108 Md. 572, 595; 71 At. 466 (1908); RossMeehan Foundry Co. v. Royer Wheel Co., 113 Tenn. 370; 83 S. W. 167; 68 L. R. A. 829 (1904); Alpha Port. Cem. Co. v. Oliver, 125 Tenn. 135; 140 S. W. 595; 38 L. R. A. N. s. 416 (1911). Cf. Miller v. Steen, 30 Cal. 402, 408 (1866), holding that time of payment is not of the essence of the contract in case of a conditional sale, where title remained in seller, who retook the property and retained the payments which had been made. 7 Brown, Sale of Goods Act (1st ed.), pp. 151, 152.