of merchants is not uniformly followed. In some States, it is true that it is held a suit may properly be brought against the maker or acceptor after demand made at any reasonable hour on the day of the maturity and refusal of payment." A contrary view, however, has been accepted in England and several States. 18 Though this rule seems opposed to the custom of merchants in regard to negotiable paper, it undoubtedly expresses the rule of the common law as to other obligations. Consequently, where a demand is to be made under such an obligation by a creditor upon a debtor, as in case of concurrent conditions where a conditional tender is made, a refusal to perform at the beginning of the day does not necessarily involve a breach of duty, or serve as an excuse for a further conditional tender later in the day. It is true that a total refusal ever to perform or to perform at any later hour of that day would excuse a further tender, but so would such a statement if made on a previous day; and in either case unless the refusal had been acted on, it might be withdrawn at any time prior to the last convenient hour of the day of maturity.19 Until then there is no default. What is a reasonable hour and what is the last reasonable hour of the day are questions of fact, 20 and doubtless vary according to the nature of the business.21 v. Duvall, 7 Gill & J. 78; Widgery v. Munroe, 6 Mass. 449; Shed v. Brett, 1 Pick. 401, 11 Am. Dec. 209; Gilbert v. Dennis, 3 Met. 495, 38 Am. Dec. 329; Smith v. Little, 10 N. H. 526; Manchester Bank v. Fellows, 28 N. H. 302; Corp v. M'Comb, 1 Johns. Cas. 328; Etheridge v. Ladd, 44 Barb. 69; Lawson v. Farmers' Bank, 1 Oh. St. 206; Coleman v. Carpenter, 9 Barr, 178, 49 Am. Dec. 552; Haslett v. Ehrick, 1 N. & McC. 116; Garland v. West, 9 Baxter, 315; Thorpe v. Peck, 28 Vt. 127. 17 Holland v. Clark, 32 Ark. 697; Heise v. Bumpass, 40 Ark. 545; Veazie Bank v. Winn, 40 Me. 62; Church v. Clark, 21 Pick. 310; Staples v. Franklin Bank, 1 Metc. 43, 35 Am. Dec. 345; Fletcher v. Thompson, 55 N. H. 308; McKenzie v. Durant, 9 Rich. 61; Coleman v. Ewing, 4 Humph. 241. See also infra, § 1173. 18 Kennedy v. Thomas, [1894], 2 Q. B. 759; McFarland v. Pico, 8 Cal. 626; Davis v. Eppinger, 18 Cal. 378, 79 Am. Dec. 184; Smith v. Aylesworth, 40 Barb. 104; Osborn v. Moncure, 3 Wend. 170; Coleman v. Carpenter, 9 Barr, 178, 49 Am. Dec. 552. 19 See extract from Hall v. Whittier, 10 R. I. 530, 534, quoted supra. 20 This is so provided in the Uniform Sales Act, Sec. 43 (4). This is copied from Sec. 29 (4) of the English Sale of Goods Act. 21 Lancashire v. Killingworth, 12 Mod. 530; s. c. 1 Ld. Raym. 686; Rutland v. Hodgson, 2 Str. 777; Hall v. Whittier, 10 R. I. 530, 534. § 858. Partly bilateral contracts. A contract which consists of a promise on one side which was given in consideration both of a promise and of some performance on the other side, may be called a partly bilateral contract. It is in effect like a wholly bilateral contract which has been partly performed on one side. It has been urged that in a partly bilateral contract the performance of the promises on one side and on the other are obviously not an equivalent exchange for one another, and that therefore the basis for implying conditions fails. 22 It is of course true that the performance of the promises cannot be regarded as equivalent to one another, but the performance of one promise is equally clearly the equivalent of the performance of the other promise plus the performance rendered when the contract was entered into. There can be no difference in principle between a case where part of the exchange of equivalents contemplated by the parties is made at the inception of the contract, and the case where similar performance is made shortly after its inception. In both cases a party to a proposed exchange of equivalents has received something—much or little and has given nothing. It is as true in cases of partly bilateral contracts as in the case of wholly bilateral contracts, that the parties contemplate an exchange of equivalents, though part performance on one side is given as consideration at the outset. Therefore, there would be the same failure of consideration if either party were allowed to obtain the performance due him while failing to give the performance due the other side. It cannot be doubted that American courts at least would hold an essential breach by the plaintiff fatal to his cause of action. 23 As in the case of a wholly bilateral contract partly performed, what amounts to an essential breach inevitably becomes a question of degree. § 859. Mutual debts do not cancel one another. In the Civil Law the smaller of two mutual debts extin 22 Langdell, Summ. Cont., §§ 109111 23 Promises in partly bilateral con tracts were held dependent in Allen v. Sanders, 7 B. Mon. 593; Jones v. Marsh, 22 Vt. 144. guishes pro tanto the larger without judicial action. 24 This is not true in the Common Law.25 That cross debts do not cancel one another is shown, for instance, by the fact that where there are cross debts, the lapse of time may bar recovery of one and leave the other still enforceable; and if one of the claims thus becomes barred, it cannot be asserted as a set-off in an action on the unbarred claim; 26 though a claim thus barred is recognized by the law as still an existing, if unenforceable right." In order that a claim shall cancel a cross-claim pro tanto, it must not only be pleaded by way of set-off or counterclaim or recoupment but judgment must be rendered for the difference between the two claims. From this it follows not only that a failure of a party to pay one debt or to perform one contract gives no right to the injured party to refuse to pay another debt or to perform a separate contract, and that, therefore, for instance a conditional sale or mortgage is broken by nonpayment though the creditor owes the debtor on another 24 It was an axiom in the later Roman law that set-off took place ipso jure. The meaning of this was disputed; one school maintaining that without any act of the parties the set-off took place at the instant of the coexistence of the two debts; the other school contending such cancellation took place only when asserted by one of the parties. Dernburg, Compensation (2d ed.), 283. The former view finds expression in the French Civil Code, Art. 1290. Even under the latter view, the assertion of a party, not a decree of court, is all that is necessary for cancellation. See Swiss Code of Obligations, Arts. 122-124. Under the German Civ. Code it is necessary that the claims shall have arisen out of the same legal relation. Bürg. Gesetzbuch, § 273. 25 In Searles v. Sadgrave, 5 El. & Bl. 639, to an action for money had and received, the defendant pleaded a tender of a certain sum, and the defendant made replication that a larger entire sum was due from the defend ant. To this the defendant rejoined that the plaintiff was indebted to the defendant in a sum equal to the whole of the larger sum except the amount which had been tendered. On demurrer the rejoinder was held bad. See also Phillpotts v. Clifton, 10 W. R. 135; L'Hommedieu v. The H. L. Dayton, 38 Fed. 926; Cotton v. Scott, 97 Ala. 447, 12 So. 65; Faylor v. Brice, 7 Ind. App. 551, 34 N. E. 833; Rand v. Harris, 83 N. C. 486; Pershing v. Feinberg, 203 Pa. 144, 52 Atl. 22; Greenhill v. Hunton (Tex. Civ. App.), 69 S. W. 440. But see Smith v. Curtiss, 38 Mich. 393. 26 Harwell v. Steele, 17 Ala. 372; McFaddin v. Bice, 58 Colo. 173, 146 Pac. 244; Gilchrist v. Williams, 3 A. K. Marsh. 235; Nolin v. Blackwell, 31 N. J. L. 170; Hinkley v. Walters, 8 Watts, 260; Taylor v. Gould, 57 Pa. 152; Verrier v. Guillou, 97 Pa. 63; Turnbull v. Strohecker, 4 McCord, 210; Trimyer v. Pollard, 5 Gratt. 460. 27 See infra, § 2002. account a greater amount than that due him, 28 but also that where under a contract an absolute debt has arisen, failure to perform an independent promise even in the same contract affords no excuse for non-payment of the debt. A business man doubtless assumes that when he has a claim against one who also has a claim against him, that he need pay only the difference between the amounts of the two obligations. As a practical matter he would generally be foolish to pay in full the debt which he owes and to trust to his ability to collect later his own claim; for all that can happen to him is that he may be sued, and if sued for the full amount of his debt he can set up his cross claim by set-off counterclaim or recoupment, at any rate if the claims are liquidated or arise out of the same transaction. Where, however, the existence of some right is dependent on the payment of a debt, such a course as that suggested is dangerous. As the debts do not cancel one another, even pro tanto, the full obligation must be satisfied in order to perform the condition on which the existence of the right in question depends. Thus it seems that where rent is due under a lease, the tenant must pay the rent even though he has been obliged to spend money on repairs which the landlord had covenanted to make. It is true that if sued for the rent he would in most jurisdictions now be allowed to recoup or counterclaim the damages due from the landlord, but the landlord may not merely sue for the rent. If the lease or a statute, as is usually the case, allows a landlord to eject a tenant for the non-payment of his rent the landlord may pursue this remedy, and it cannot be said that the tenant has paid or tendered the rent due, if he has deducted even a valid cross claim.28 So in a divisible contract, if a debt has arisen for one instalment furnished to the buyer, 28 Doody v. Pierce, 9 Allen, 141; Benham v. Columbia Canal Co., 74 Wash. 110. So a tender of his own overdue paper to a creditor is not equivalent to a tender of cash. Hughes v. Daniells, 87 Mich. 190, 49 N. W. 542. 551, 34 N. E. 833; D'Armond v. Pullen, he may not refuse to pay this because of a later default by the seller. If he does so, his failure to pay may operate as an excuse to the seller for refusing to continue performance.29 A contrary conception undoubtedly is popular and though it cannot be justified in view of the settled principle of the Common Law, finds some slight support in decisions. 30 In a number of cases against beneficiary associations it has appeared that by charter or custom, the society was entitled to apply in satisfaction of premiums due from the insured, a debt due to him and where this is the case it has generally been held that the society, having the power to pay itself, cannot elect not to do it, and declare the insurance forfeited for breach of a condition requiring payment of dues or assessments.31 There is no conflict in such decisions with N. E. 115 (cp. Bradley v. King, 44 Ill. 339; Hess v. Dawson, 149 III. 138, 36 N. E. 557); National Contracting Co. v. Vulcanite etc., Co., 192 Mass. 247, 255, 78 N. E. 414; J. K. Armsby Co. v. Gray's Harbor Comm. Co., 62 Oreg. 173, 123 Pac. 32, 36. 29 In Rodgers v. Wise, 106 Ark. 310, 153 S. W. 253, 254, the court stated with approval the earlier decision of Harris Lumber Co. v. Wheeler Lumber Co., 88 Ark. 491, 496, 115 S. W. 168, 171, saying that there, "it was decided that where H contracted to sell to W 11 cars of lumber, and to ship same as fast as lumber accumulated upon vendor's yard, and that each car should be billed separately, and the purchase price for the lumber contained therein should be due 60 days after delivery, but W retained $100, which was past due, to force H to ship the remainder, if 'H had not performed his contract in shipping the lumber as promptly as the contract required, and refused to ship any more lumber under it, W could have abandoned same and sued for damages for the breach; but W could not stand on the contract and insist on further shipments of lumber, where he was in default in making payments that were past due under it, at least without tendering those payments.' See also Freeth v. Burr, L. R. 9 C. P. 208; Harber Bros. Co. v. Moffat Cycle Co., 151 Ill. 84, 96, 37 N. E. 676, 679; Chicago Washed Coal Co. v. Whitsett, 278 Ill. 623, 116 30 This was so ruled in Robertson v. Davenport, 27 Ala. 574. In Sperry, etc., Co. v. O'Neill-Adams Co., 185 Fed. 231, 107 C. C. A. 337, the plaintiff was held not to have waived its right to sue for breach of a trading stamp contract by withholding as security for damages a monthly instalment due the defendant thereunder, after it became manifest that the defendant had broken the contract and intended to continue to do So. No authority is cited to support this conclusion. In Burgie v. Hicks, 203 Fed. 340, 347, Ray, J., ruled that a buyer under an instalment contract had a right to retain a payment due for an instalment already delivered because of failure to make another delivery. See also Central Lumber Co. v. Arkansas Valley Lumber Co., 86 Kans. 131, 119 Pac. 321; Hjorth v. Albert Lea Mach. Co., (Minn. 1919), 172 N. W. 488. 31 The cases are collected in 55 |