indicate an intent not to perform? Do they impose a greater risk upon the buyer than he should have anticipated as a natural possibility when he entered into the contract?

The purchaser may, however, elect to take the risk of waiting until performance is due in the hope that the vendor will be able then to complete his title; and if the vendor acquires title before the purchaser takes objection, the difficulty is cured.25 Indeed, it is said that the vendor when suing for specific performance may perfect his title until the time for decree. 26 This, however, can be so in only three cases: (1) Where the defect in title is of so slight a character that equity would enforce the contract specifically (with compensation if necessary) at the suit of the vendor, 27 or (2) where the defect in title though it would be fatal to the enforcement of the contract if not cured, does not impose so great a risk on the purchaser as to make it unnecessary for him to await the possibility of the vendor's curing it; and time is not of the essence of the contract; or (3) where the purchaser has by silence or otherwise, manifested an election to continue the contract or to take the risk of the vendor's seasonably curing the defect in his title. Such a defect as might justify the purchaser in repudiating the contract if he manifested an immediate election to do so, may not give him the right to do so if he unreasonably delays to repudiate the contract after learning the facts. 28 It has been suggested that the purchaser's right of repudiation "must be distinguished from the common-law right of rescission, and arises out of that want of mutuality which, unless waived, is generally fatal to relief by way of specific performance." 29 But a suggestion that any different result would be reached in an action at law cannot be accepted. The purchaser's right or excuse is obviously based on the principle of prospective failure of consideration which is applicable in actions of law as well as in suits for specific performance. It cannot be admitted that a vendor whose title is so defective as to justify a purchaser in

inferring that the defect is not likely to be cured can compel the purchaser to wait until the day fixed for performance in order to see whether by any chance the vendor may be able to cure the defect, on penalty of being subject to an action for damages.

§ 880. Insolvency or bankruptcy.

If one party to a contract is insolvent or bankrupt, he probably will not be able to carry it out even if he so desires, unless his contract relates to specific property, and the solvent party has acquired a legal or equitable property right in the subject-matter of the contract which will be valid against seizure by creditors or by a trustee in bankruptcy of the insolvent contractor, 30 or unless the contract requires of the bankrupt only personal services which insolvency will not prevent him from rendering. Accordingly, the rule is general that a contractor need not trust to the credit of a co-contractor whom he finds to be insolvent, even though he has agreed to do so. As it is possible, however, that the insolvent or the representative of his creditors may find it advantageous to carry out the contract, and as they may be able to do so (since insolvency does not necessarily mean total lack of assets), the solvent party is not excused from the obligation of his contract altogether, but only from any obligation to give credit,31 unless the contract is

30 A contract to subscribe to the stock of a corporation is not excused by the insolvency of the corporation. Busch v. Stromberg-Carlson Telephone Mfg. Co., 217 Fed. 328, 133 C. C. A. 244.

31 Ex parte Chalmers, L. R. 8 Ch. 289; Bloomer v. Bernstein, L. R. 9 C. P. 588; Morgan v. Bain, L. R. 10 C. P. 15; Mess v. Duffus, 6 Comm. Cas. 165; Re Phoenix Bessemer Steel Co., 4 Ch. D. 108; Watson v. Merrill, 136 Fed. 359, 69 C. C. A. 185; Robertson v. Davenport, 27 Ala. 574; Brassel v. Troxel, 68 Ill. App. 131; Rappleye v. Racine Seeder Co., 79 Iowa, 220, 44 N. W. 363, 7 L. R. A. 139; Hobbs v.

of such a personal character

Columbia Falls Co., 157 Mass. 109, 31 N. E. 756; Lennox v. Murphy, 171 Mass. 370, 373, 50 N. E. 644; Pardee v. Kanady, 100 N. Y. 121, 2 N. E. 885; Vandegrift v. Cowles Engineering Co., 161 N. Y. 435, 55 N. E. 941, 48 L. R. A. 685; Diem v. Koblitz, 49 Ohio St. 41, 29 N. E. 1124, 34 Am. St. Rep. 531; Dougherty Bros. v. Central Bank, 93 Pa. St. 227, 39 Am. Rep. 750; Lancaster Bank v. Huver, 114 Pa. St. 216, 6 Atl. 141; Lincoln v. Charles Ashuler Mfg. Co., 142 Wis. 475, 125 N. W. 908, 28 L. R. A. (N. S.) 780. See also Sale of Goods Act, §§ 18, 41. Compare Ex parte Pollard, 2 Low. 411; Stokes v. Baars, 18 Fla. 656;

that an assignee could not carry it out.32 Mere doubts of the solvency of the other party, even though reasonable, afford no defence.33

It has even been held that the solvent party must perform any precedent act which the contract requires of him (such as shipping the goods to the point where a sale was to be made) or be liable if it turns out that the insolvent or his representatives desire to perform the contract, and are able to do so.34 But the contracts of insolvents and of bankrupts are not usually carried out, and the solvent contractor should be justified in assuming that they will not be carried out unless some indication is made to him that they will be. To require him to make expensive preparations or part performance which will be futile if the contract is not carried out, is an unreasonable hardship. The Supreme Court of the United States has held that bankruptcy is an immediate anticipatory breach of contract 35 and though this mode of statement seems to go too far 36 since, if the contract is not one of a personal character, the trustee in bankruptcy may assume it and carry it on, the decision at least shows an indisposition to require a tender by the solvent party.37 If the contract

Chemical Nat. Bank v. World's Columbian Exposition, 170 Ill. 82, 48 N. E. 331; Jewett Pub. Co. v. Butler, 159 Mass. 517, 34 N. E. 1087; Bank Commissioners v. New Hampshire Trust Co., 69 N. H. 621, 44 Atl. 130. In all these cases the seller's performance was first due, but there can be no difference in result when the buyer's performance is first due.

"Mess v. Duffus, 6 Comm. Cas. 165; Ex parte Pollard, 2 Low. 411; Chemical Nat. Bank v. World's Fair Exposition, 170 III. 82, 48 N. E. 331; Bank Comm. v. New Hampshire Trust Co., 69 N. H. 621, 44 Atl. 130.

3 C. F. Jewett Publishing Co. v. Butler, 159 Mass. 517, 34 N. E. 1087, 22 L. R. A. 253. See also on the point that generally the test of the right to refuse to go on with a contract is objective and not the subjective one of

reasonable belief, Jefferson v. Paskell, [1916] 1 K. B. 57.

34 Gibson v. Carruthers, 8 M. & W. 321; cf. Ex parte Tondeur, L. R. 5 Eq. 160; Ex parte Agra Bank, L. R. 9 Eq. 725; New England Iron Co. v. Gilbert R. Co., 91 N. Y. 153; Pardee v. Kanady, 100 N. Y. 121, 2 N. E. 885; Vandegrift v. Cowles Engineering Co., 161 N. Y. 435, 55 N. E. 941, 48 L. R. A. 685; Diem v. Koblitz, 49 Oh. St. 41, 29 N. E. 1124, 34 Am. St. Rep. 531.

35 Central Trust Co. v. Chicago Auditorium, 240 U. S. 581, 60 L. Ed. 811, 36 Sup. Ct. Rep. 412. See also Kamps &c. Drug. Co. v. United Drug Co., 164 Wis. 412, 160 N. W. 271.

36 See infra, § 1327.

37 So in Hanna v. Florence Iron Co., 222 N. Y. 290, 118 N. E. 629, 630, the court said: "It is undoubtedly the law as claimed by plaintiffs that mere

requires personal service by the insolvent which cannot be adequately rendered by such a person, the co-contractor may refuse to continue performance, 38 but with this qualification it seems that insolvency or bankruptcy of the employee would not excuse the employer from continuing to perform a contract of employment.

§ 881. Inability to perform unless the other party performs. It must generally be true that if one party to a contract is unable to perform unless he first receives performance from the other party which, by the terms of the contract, is not due until the same time that his own performance is due, he cannot recover, and if he has indicated his inability to the other side will be liable himself without the necessity of a tender. Thus one who has contracted to sell goods, cannot rely on obtaining the promised price as a means of purchasing the goods with which to fulfil his concurrent obligation. This principle has been applied in the case of contracts to sell real estate where the buyer's means of paying were insufficient unless he could raise money on the land to be conveyed to him. The rule has been broadly laid down that, under such circumstances, the buyer cannot recover if the seller repu

insolvency of one of the parties to a contract does not relieve the other party from performance thereof, and would not excuse the refusal of defendant to carry out its contract. It is equally true, however, in this case that the steel company had become disabled from carrying on its contract, and that the same with all obligations of performance on the part of the defendant fell, unless the receivers were thorized by the court to approve and adopt the contract with defendant and insist upon its performance. It would not have been enough that after their appointments they did not repudiate and refuse to carry out said contract. It was necessary for them to do more than this and under authority of the court affirmatively indicate their election to proceed with the same and hold

au

the other party to the obligation thereof. Stokes v. Hoffman House of N. Y., 46 N. Y. App. Div. 120, 61 N. Y. S. 821, affd. 167 N. Y. 554, 60 N. E. 667, 53 L. R. A. 870; Breed v. Glasgow Co., 92 Fed. 760; Kansas City South Ry. Co. v. Lusk, 224 Fed. 704, 140 C. C. A. 244; Chicago Dep. Vault Co. v. McNulta, 153 U. S. 554, 14 Sup. Ct. 915, 38 L. Ed. 819; Peabody Coal Co. v. Nixon, 226 Fed. 20, 140 C. C. A. 446; United States Trust Co. v. Wabash Western Ry. Co., 150 U. S. 287, 299, 14 Sup. Ct. 86, 37 L. Ed. 1085."

38 In Kamps &c. Drug Co. v. United Drug Co., 164 Wis. 412, 160 N. W. 271, the defendant was held justified by the plaintiff's bankruptcy in refusing to continue its agency for the defendant's preparations.

diates the contract.39 And a similar rule has been applied where the seller of land requires the buyer's money as a means of perfecting the title which he was to convey.40

It may be questioned whether these statements are not too broad. All that should be necessary for the plaintiff's case is to prove that he would have been able to carry through the transaction concurrently with the defendant. If one who has contracted to buy land has but half the agreed price, but can make arrangements to borrow the remainder on the security of the land to be conveyed, there is no practical difficulty in carrying out the transaction at one instant. The mortgage can be drawn from the buyer to the lender before the land is conveyed; then if the buyer and seller and borrower meet at the same place, the seller can be paid his money while simultaneously he delivers a deed to the buyer, and the buyer delivers a mortgage to the lender. In the same way if the buyer's money is needed to free the title which the seller must offer, a simultaneous execution of the transaction is possible if the person holding the title or encumbrance is willing to aid the seller in carrying out the bargain." 41 The question

"Gray v. Smith, 76 Fed. 525, aff'd in 83 Fed. 824, 28 C. C. A. 168, 48 U. S. App. 581. See also cases in the following note.

40 In Brown v. Lee, 192 Fed. 817, 113 C. C. A. 141, the court said, at page 821: "Lee, the vendor, contends that the proof shows that the Barefields had executed to him a deed conveying a good, unincumbered title, and that the deed was so deposited that if Brown had complied with his agreement he could and would have used the cash received from Brown to have paid the Barefields, and that he would have then been able to make a proper deed to Brown.

We waive the consideration

of Brown's contention that the title to Lee from the Barefields would have been defective if delivered to him. Conceding that it would have been good, Lee's right to recover would depend on his right to require Brown to advance the money with which he

would obtain the title from the Barefields. Brown had not contracted to do this. By his contract he was to pay the purchase money concurrently with his recaipt of the title from Lee.

In Gray v. Smith, 76 Fed. 525, 83 Fed. 824, 28 C. C. A. 168, when that case was tried in the Circuit Court before Mr. Justice McKenna, then Circuit Judge (76 Fed. 525, 534), the plaintiff to show that he was able to perform his contract to convey, relied on proof of what he was to receive from the other party to the contract. But the court held that sufficient ability to perform the obligations of the contract must actually exist independent of the other party to the contract. But qualification of this broad statement is made in Thomas J. Baird Inv. Co. v. Harris, 209 Fed. 291, 297, 126 C. C. A. 217.

41 See Brickles v. Snell, [1916] 2 A. C. 599; Thomas J. Baird Inv. Co.