Such declaration only becomes a wrongful act if the promisee elects to treat it as such. If he does so elect, it becomes a breach of contract, and he can recover upon it as such." The conception that a breach of contract is caused by something which the promisee does is so foreign to the notions not only of lawyers but of business men that it cannot fail to make trouble.

§ 1323. What constitutes an election to treat repudiation as a breach.

Though an election by the injured party is stated to be a prerequisite of an anticipatory breach, what action constitutes such an election has not been much considered. Logically it would seem that an election, if necessary, must be exercised before an action is brought, but presumably the mere bringing of an action immediately after an anticipatory repudiation would be sufficient; 33 as also would a notice to the repudiator of the election without any other change of position. It is, however, apparently not necessary to bring home to the repudiating party the election of the injured party. Presumably any change of position by the plaintiff whether known to the repudiator or not, would be enough. Thus a resale of goods by a seller for the account of one who had contracted to buy them in the future but who had repudiated his contract, was held a sufficient election, though no notice of the seller's intention to make a resale was given.34

How long delay may be permitted before an election is made is also somewhat uncertain. On the one hand it is not infrequently said that the election must be promptly made; on the other hand, it has been held that unless the repudiation is withdrawn it operates as a "continuing offer" of a breach which may be taken advantage of at any time.35

32 Johnstone v. Milling, 16 Q. B. D. 460, 472, per Lord Bowen. The late authorities continually refer to the necessity of the promisee acting on the repudiation. What action is necessary is not stated. It is to be noticed, however, that in Hochster #. De La Tour, 2 E. & B. 678; Frost . Knight, L. R. 7 Ex. 111, and most of the other cases, there was no mani

festation of election other than bringing an action. This was held enough in Mutual, etc., Life Assoc. v. Taylor, 99 Va. 208, 37 S. E. 854. See also supra, § 686.

33 See Landes v. Klopstock, 252 Fed. 89, 92, 154 C. C. A. 201.

34 Churchill Grain, etc., Co. V. Newton, 88 Conn. 130, 89 Atl. 1121. 35 In United Press Assoc. v. National

§ 1324. Positiveness of repudiation.

37

It is stated in the decisions that in order to give rise to an anticipatory breach of contract the defendant's refusal to perform must have been positive and unconditional.36 In Dingley v. Oler, the defendant had taken a cargo of ice from the plaintiff and agreed to make return in kind the next season, which closed in September, 1880. In July, 1880, the defendant wrote, "We must, therefore, decline to ship the ice for you this season, and claim as our right to pay you for the ice in cash, at the price you offered it to other parties here (fifty cents a ton), or give you ice when the market reaches that point." At the time when this letter was written ice was worth five dollars a ton. One does not need expert testimony to judge what probability there is of ice going down before the close of September to one-tenth of the price for which it is selling in July, and yet the court held the letter constituted no anticipatory breach of contract because the refusal was not absolute, but "accompanied with the expression of an alternative intention" to ship the ice "if and when the market price should reach the point which, in their opinion, the plaintiffs ought to be willing to accept as its fair price between them." Surely a man must be well advised to know when he has the right to regard his contracts as broken by anticipation. So it is said that a mere threat March 10, 1911, as it was on February 7 or 11, 1911. The defendant had not placed itself in any different position than it occupied on those dates."

Newspaper Assoc., 237 Fed. 547, 150 C. C. A. 429, the court said: "It must be borne in mind that the defendant never at any time retracted what was stated in the telegram of February 7th, the letter of February 11th, or the Tammen telegram of March 10, 1911. The evidence shows that the defendant intended, if it was possible, to end the contract, and its president so testified. It never by declaration or act changed its position after sending the telegrams and letter above mentioned. To act on the refusal of the defendant to perform the contract so far as the rights of the defendant were concerned, leaving out of consideration for the present the effect, if any, that the notice of March 11, 1911, would have upon the same, was the same on

36 See especially Johnstone v. Milling, 16 Q. B. D. 460; Wells v. Hartford Manilla Co., 76 Conn. 27, 55 Atl. 599; Listman Mill Co. v. Dufresne, 111 Me. 104, 88 Atl. 354; National Contracting Co. v. Hudson River Water Power Co., 110 N. Y. App. D. 133, 97 N. Y. S. 92; Vittum v. Estey, 67 Vt. 158, 31 Atl. 144; Provident Sav. L. Assur. Soc. v. Ellinger (Tex. Civ. App.), 164 S. W. 1024; Swiger v. Hayman, 56 W. Va. 123, 48 SE. 839, 107 Am. St. Rep. 899.

37 117 U. S. 490, 29 L. Ed. 984, 6 Sup. Ct. 850.

to abandon a contract will not amount to a breach, 38 and "a mere assertion that the party will be unable to or will refuse to perform his contract is not sufficient."39 One might think a mere assertion that the party will refuse to perform his contract was a pretty definite repudiation. But surely, though it is not a breach of contract to say before the time for performance, "I do not think that I shall perform," it would be a valid excuse to the other party, justifying him in failing to begin or to continue performance.40 A party to a contract is under no obligation in reply to inquiries to state his intentions concerning the performance of his future duties under a contract.41

§ 1325. What amounts to total repudiation.

Such repudiation as will constitute a breach may take various forms besides that of a positive statement of refusal to perform. Thus selling land,42 or goods, 42 to which the contract relates before the time for performance has been allowed as a cause of action. So denying the validity of the contract between the parties, 43 or insisting that its meaning or legal effect are different in a material particular from the true meaning or effect, coupled with the assertion, express or implied in fact, that performance will be made only according to the erroneous interpretation.44 Marriage to another than the one

Oliver v. Loydon, 163 Cal. 124, 124 Pac. 731; Listman Mill Co. v. Dufresne, 111 Me. 104, 88 Atl. 354; Hardeman-King Lumber Co. v. Hampton Bros., 104 Tex. 585, 142 S. W. 867. * Benj. Sale, § 568, quoted in Smoot's Case, 15 Wall. 36, 21 L. Ed. 107. See also McIntosh v. Miner, 37 N. Y. App. D. 483, 55 N. Y. S. 1074.

*See infra, § 1331.

"Ripley v. McClure, 4 Ex. 345. See also Moel & Tryvan v. Weir, [1910] 2 K. B. 844; Street v. Progresso, 42 Fed. 229, 50 Fed. 835, 2 C. C. A. 45; Karran v. Peabody, 145 Fed. 166, 76 C. C. A. 136.

Ford v. Tiley, 6 B. & C. 325; Roehm v. Horst, 178 U. S. 1, 18, 44 L. Ed. 953, 20 Sup. Ct. 780; Adams v.

Bridges, 141 Ga. 418, 81 S. E. 203;
Arlington Heights Realty Co. v.
Citizens' Ry., etc., Co. (Tex. Civ. App.),
160 S. W. 1109.

In Brimmer v. Salisbury, 167 Cal. 522, 140 Pac. 30, it was held in an action by the purchaser for the breach of an executory contract for the sale of land, that an averment merely that the vendor, since the contract was entered into, had sold the land to another, is not sufficient, since it does not negative the possibility that the rights of the purchaser were reserved in such sale.

42 Bowdell v. Parsons, 10 East, 359. 43 Draper v. Miller, 92 Kan. 695, 141 Pac. 1014.

44 But see Mowry v. Kirk, 19 Ohio St. 375, 383.

to whom the defendant was engaged necessarily involves repudiation. 45

§ 1326. Whether anticipatory inability to perform amounts to a breach.

47

One of the first cases relied on as establishing the doctrine of anticipatory breach involved prospective inability to perform because of a lease to a third person of land contracted to be leased to the plaintiff.46 In such a case, however, the inability was caused by a voluntary act of the defendant, and this act indicated intention not to perform as well as inability to perform. Inability, however, may exist without unwillingness to perform. In Johnstone v. Milling, though the promisor stated that he could not get money enough to perform his promise, and though he made this statement "constantly in answer to the defendant's direct question, and at other times in conversation," it was held that this was not such a repudiation as would justify an action. Lord Esher, M. R., made the test, "Did he mean to say that whatever happened, whether he came into money or not, his intention was not to rebuild the premises, as he had promised, and the other judges expressed similar views. A distinction between unexcused inability and wilful intention not to perform is not of practical value. As far as the performance of the contract is concerned they are of equal effect, and should be followed by the same consequences. 49 § 1327. Supreme Court holds bankruptcy anticipatory breach. In Central Trust Company v. Chicago Auditorium Association 50 in discussing the question whether on bankruptcy of a party to a bilateral contract before a breach the solvent party had a provable claim, the Supreme Court of the United States held that he had, and unquestionably any other decision would have been unfortunate.51 But in doing so the court held that 45 See supra, § 1320.

19 48

46 Ford v. Tiley, 6 B. & C. 325.

47 16 Q. B. D. 460. But see Newsum v. Bradley, [1918] 1 K. B. 271.

48 Page 468. There were also other grounds of decision to which the present criticism is not intended to apply.

49 In Louisville Packing Co. v. Crain, 141 Ky. 379, 132 S. W. 575, a statement of probable inability was held a breach.

50 240 U. S. 581, 36 Sup. Ct. Rep. 412, 60 L. Ed. 811, L. R. A. 1917 B. 580.

51 The difficulty in reaching this result was due to a failure of the Bank

the bankruptcy itself amounted to an anticipatory breach, saying: "It is argued that there can be no anticipatory breach of a contract except it result from the voluntary act of one of the parties, and that the filing of an involuntary petition in bankruptcy, with adjudication thereon, is but the act of the law resulting from an adverse proceeding instituted by creditors," and answering this argument thus; 52

"Commercial credits are, to a large extent, based upon the reasonable expectation that pending contracts of acknowledged validity will be performed in due course; and the same principle that entitles the promisee to continued willingness entitles him to continued ability on the part of the promisor. In short, it must be deemed an implied term of every contract that the promisor will not permit himself, through insolvency or acts of bankruptcy, to be disabled from making performance; and, in this view, bankruptcy proceedings are but the natural and legal consequence of something done or omitted to be done by the bankrupt, in violation of his engagement." 53 Decisions of lower federal courts had previously taken the same ground. 54 It is to be observed that in order to sustain the position that the bankruptcy operates as a breach of contract which gives

ruptcy Statute to express clearly that contingent claims should be provable. Unmatured claims are not on that account unprovable (see infra, § 1984), but in an unmatured bilateral contract where the promises are mutually dependent the obligation of each party depends on the continuing performance or ability to perform of the other party. Since the Supreme Court had already held that a contingent claim might nevertheless be provable, if it could be valued (Williams v. United States Fidelity, etc., Co., 236 U. S. 549, 59 L. Ed. 713, 35 Sup. Ct. 289), there would seem to have been no difficulty in holding that though there had been as yet no breach of contract in the case of Central Trust Company v. Chicago Auditorium Assoc. there was nevertheless a provable claim. Such a claim though both unmatured and con

ditional is provable in England. Re Fitz George, [1905] 1 K. B. 462.

52 Central Trust Co. v. Chicago Auditorium Assoc., 240 U. S. 581, 36 Sup. Ct. Rep. 412, 415, 60 L. Ed. 811, L. R. A. 1917 B. 580.

53 The decisions in bankruptcy denying proof of unmatured rent (infra, § 1985), may be considered in this connection.

54 Ex parte Pollard, 2 Lowell, 411; In re Imperial Brewing Co., 143 Fed. 579; In re Inman, 175 Fed. 312, and after the decision of the Supreme Court the same doctrine was followed in Equitable Trust Co. v. Western Pacific Railroad, 244 Fed. 485, 250 Fed. 327, 162 C. C. A. 397, 246 U. S. 672, 62 L. Ed. 932, 38 S. Ct. Rep. 423. See also In re Mullings Clothing Co., 238 Fed. 58, 151 C. C. A. 134, L. R. A. 1918 A. 539, 252 Fed. 667.