he has received cannot ask for dissolution, though it may be decreed at the suit of the other party.69 907. Influence of the French Law in other countries. The wide influence of the Code Napoléon on the legislation of other countries has made the preceding discussion of the law of France applicable not to that country alone. In Belgium the Code Napoléon as such is in force, and the law of the country is regarded as French law.70 In Holland the Code Napoléon is the foundation of the civil code in force, and Art. 1302 of the latter corresponds to Art. 1184 of the former." In Italy the Codice Civile has the same basis. Art. 1165 of the latter corresponds to the French Art. 1184,72 and Art. 1469 to the French Art. 1612.73 In Baden and some of the German Rhine provinces the Code Napoléon remained in force until the year 1900.74 In Spain the first part at least of the French Art. 1184, authorizing dissolution for breach seems to have been early adopted 75 and the provision was carried across the ocean in that form to Mexico, Peru, and doubtless other Spanish-American colonies.76 In Spain itself, however, Art. 1124 of the latest Civil Code," contains in substance the whole of the French Art. 1184, and the French Art. 1612 69 Bordeaux, 7 Mar. 1845, Jl. du Pal. 1846, 2, 67. 70 Saleilles, Ann. de Droit Comm. VII. 27; Zachariä von Lingenthal und Crome, Handbuch des Französischen Civilrechts (8th ed.), I. 49, note 4. 72 Zachariä von Lingenthal, I. 49, n. 4. A decision of the High Court of the Netherlands, 14 Dec. 1893, Jl. du Pal. 1894, 4, 29, shows a minor difference between the law of the Netherlands and France referred to, supra, n. 39. 72 The Italian article is a literal translation of the French, except that four words are inserted for greater clearness. See supra, n. 62. Giorgi Teoria delle Obbligazioni, IV. 212, n. 1. 73 Giorgi, IV. 203. 74 Aubry-Rau, I. 20; Entscheidungen des Reichsgerichts, I. 217. 75 Schmidt, Law of Spain and Mexico, 2, 96. "If the contract be synallagmatic, or one by which the contracting parties have assumed reciprocal obligations, the failure of one to comply with his agreement entitles the other to demand the rescission of the contract." 78 Schmidt, 98: Code Civil Méxicain, Résumé analytique, R. de la Grasserie (Paris, 1895), 114; Code Civil Péruvien, Résumé analytique, R. de la Grasserie (Paris, 1896), 166. The Mexican Code also expressly provides a right to recover damages in connection with the dissolution of the contract, and gives a right to specific performance as an alternative. 77 Promulgated July 24, 1889. is repeated in the Spanish Art. 1466. In Poland the Code Napoléon was introduced and is still in force for the most part.7% In America the Code of Louisiana, drawn chiefly from the same source, repeats, almost literally, the provisions of the French law on the matter in question.79 And in Lower Canada the Civil Code allows at least a general right to treat a broken contract as dissolved.80 § 908. German Common Law. In Germany (except in the Rhine country where French law prevailed), the law until changed by Imperial codes, following the rule of the Roman law, denied to one party to a bilateral contract the right to withdraw from it or treat it as dissolved because of breach of the contract by the other party.81 Breach of express or implied warranty of goods sold authorized this remedy and it was also allowed where performance by the party in default had no longer any value for the other party. Further, where performance had become impossible by lapse 78 Lehr, Droit Civil Russe, Introduction; Zachariä von Lingenthal, I. 50; Foucher, Code Civil de Russie, Art. 890. 79 Arts. 2046 and 2047 are equivalent to Art. 1184; and Art. 2487 is equivalent to Art. 1612 of the French Code. Arts. 1911 et seq. of the Louisiana Code provide for formal methods of putting a party in default, similar to those of the French law. Specific performance is not allowed in Louisiana when compensation can be made in damages. Code, Art. 1927; Mirandona v. Burg, 49 La. An. 656. 80 Art. 1065 provides that the party aggrieved may have damages, or specific performance if that is possible "or that the contract from which the obligation arises be set aside." Art. 1066 allows him to "require also that anything which has been done in breach of the obligation shall be undone, if the nature of the case will permit." 81 Although Windscheid regards the right to treat a contract as dissolved and recover back whatever has been given under it because of the failure of the other party to perform, as contrary to the fundamental principles of the bilateral contract, in that a promise or right of action is all that has been bargained for and that is still enforceable (Lehrbuch, II. § 321, 2, note 10), yet he maintains that the doctrines of the modern law in regard to mistake necessarily lead to the conclusion that not only one who performs under the mistaken idea that the other party has already performed, but also one who performs under the mistaken expectation that the other party is going to perform, is entitled to treat the contract as dissolved and recover what he has given. Lehrbuch, II. § 321, 2, note 10 a. But, as Windscheid himself admits, the prevailing view is otherwise. For this see Dernburg, II. § 21, note 6; Römer, in Zeitschrift für Handelsrecht, XIX. 123. of time or other reason, in effect, if not in name, the aggrieved party by refusing to perform until he received performance secured the same result.82 But many cases were outside these limits.83 The right to treat the contract as dissolved might be secured by special agreement (Lex commissoria), 84 and 82 See cases infra, n. 84. 83 In a decision of the Amtsgericht, Celle, 1 July, 1879, Seuffert's Archiv, XXXV. 19, the plaintiff agreed to sell and the defendant to buy real estate. A small instalment of the price was paid and the rest was deferred. Possession was to be given on payment of the second instalment of the price. This was not paid and possession was not given, and the defendant became wholly irresponsible financially. Two years or more later the plaintiff sued for the dissolution of the contract, alleging these facts, and that he was unable to sell his property while the contract was in force. The suit was dismissed. The remedy sought, it was said, is only permissible when, owing to the default, performance of the contract is no longer valuable. If a party wishes the right to dissolve a contract in any case of breach he must make a commissory pact. Nearly as strong a case is a decision of the Oberlandesgericht, Cassel, 9 Apr. 1891, Seuff. Arch. XLVII. 147, where the seller, after making one offer of performance, which on suit was held insufficient, was allowed to enforce specifically a contract for the sale of land, though it was more than four years and a half after the contract before a proper offer was made by the plaintiff. See, however, contra, a decision of the Obergericht, Wolfenbuttel, 2 Oct. 1877, Seuff. Arch. XXIII. 404. In a decision of the Reichsgericht, 15 June, 1896, Seuff. Arch. LII. 144, it appeared that the plaintiff bought from the defendant the business of publishing the Munich Directory, part of the payment being deferred. The plaintiff made default in an instalment of the price, and the defendant at once started a rival publication. The plaintiff sued for the suppression of this and for damages. The defendant made counterclaim for the unpaid price. The court held the plaintiff could not recover because he had not performed. The defendant could not treat the contract as dissolved, but as he had made performance impossible, he could only recover the value of what he had given and the burden was upon him to prove what this was and that it was more than he had received. See also a decision of the Obers. tgerichtshof für Bayern, 30 Apr. 1875, Seuff. Arch. XXXI. 158. 84 See Bürgerliches Gesetzbuch, §§ 346-361. If one entitled by commissory pact to dissolve a contract, and also entitled to sue for its breach, manifests a definite election of one right (as by suit) he loses the other as in the Roman law (see supra note 60). Reichsgericht, 21 May, 1897, Seuff. Arch. LII. 425. But it was held in this case that a dunning letter after default was not a definite election to abide by the contract. In a decision of the Oberamtsgericht, Wiesbaden, 19 Dec. 1856, Seuff. Arch. XI. No. 232, it was held that in the case of perishable goods the agreement upon a fixed time within which the contract must be fulfilled indicates an intention to allow either party to withdraw from the contract for default of the other in performing within this time. A similar decision as to goods intended for consumption or resale and subject to frequent change of price is that of the O. A. G. Mün in some of the states of Germany, notably Prussia,85 the rule of the common law was changed prior to the enactment of the Imperial codes. § 909. Provisions of the commercial codes. 88 Imperial legislation, whenever it has dealt with the subject, has enlarged the scope of the right in question. Thus the commercial code (Handelsgesetzbuch), in force until 1900, contained important provisions in regard to contracts of sale coming under the head of commercial transactions.86 If, in such contracts, the buyer was in default with the price and the goods had not been delivered, the seller had among other remedies that of acting as if the contract had never been entered into. If the seller was in default the buyer had a similar right, and in this case it was not essential that the contract should not have been fulfilled by the party also who was not in default. Whatever had been given under the contract was required to be returned.89 If a party wished to avail himself of this right he was required to give the other party notice of the fact after performance was due, and if the nature of the case allowed, grant a specified term for performance.90 This was unnecessary where the contract itself provided that the goods should be delivered at a time certain or within a fixed period; and in such a case prompt notice was required if it was intended to compel the defaulting party to specific performance, rather than to the payment of damages or the dissolution of the contract. If performance on both sides was divisible, a party could only withdraw from the unfulfilled portion of the contract.92 chen, 21 July, 1856, Seuff. Arch. XI. No. 141. The court, distinguishing the case from a contract in regard to land, say the non-performance is not simply mora but breach of contract. 85 Förster-Eccius, Preussisches Privatrecht (4th ed.), II. 90 (note 75), 307, 318; Entsch. R. G. XXXVI. 222; Seuff. Arch. XXIV. No. 228; Ibid. XXI. No. 114. 86 Such contracts are substantially contracts for the purchase and sale of personal property in order to resell it, whether in the same form or not. Handelsgesetzbuch, Arts. 271, 272; Hahn, Commentar zum Handelsgesetzbuch, II. 3-42, 76. 87 H. G. B. Art. 354; Hahn, II. 352. 88 H. G. B. Art. 355; Hahn, II. 359. 89 Hahn II. 358. 90 H. G. B. Art. 356; Hahn, II. 363. 91 G. H. B. Art. 357; Hahn, II. 375. 92 H. G. B. Art. 359; Hahn, II. 390But he may withdraw from perform Besides being applicable to but a limited number of cases, the value of the remedy of withdrawing from the contract or treating it as dissolved was much decreased by the rule that one who adopted this remedy not merely freed himself from any obligation to perform, but discharged the other party from liability in damages for failure to perform.93 The remedy was, therefore, of practical value only when the party seeking it had made a bad bargain, and was consequently not damaged by the loss of it. Further a party who had received anything under a contract could not treat it as dissolved unless able to return uninjured what he had received.94 Since January 1, 1900, statutory rules have become of wider application. On that day a practically complete codification of German law took effect. The then existing Commercial Code was superseded by a new one, and the Civil Code, which had been in process of formation for nearly twenty years, became operative. Owing to the general provisions of the Civil Code the new Commercial Code does not contain the special provisions of the previous one. Commercial contracts are thus made, so far as the matter in question is concerned, subject to the same rules as other contracts. One special provision, however, is retained. If a commercial sale provides for delivery at a fixed time or within a fixed period, the buyer may withdraw from the contract if delivery is not made promptly; and if he desires specific performance instead of damages or dissolution of the contract, he must notify the other party promptly.95 ance of all the remaining instalments. Failure by either the buyer or seller to perform as to any instalment justifies the other party in refusing to deliver or receive any further instalments. Reichsoberhandelsgericht, 7 Mar. 1871, Entsch. II. 84; 14 Mar. 1874, Entsch. XIII. 78; 21 Mar. 1874, Entsch. XIII. 102; 5 Apr. 1875, Entsch. XVI. 190, 193; Oberlandesgericht, Braunschweig, 9 Jan. 1891, Seuff. XLVI. 339. In a decision of the R. O. H. G. 25 Jan. 1873, Entsch. VIII. 423, it was even held that failure on the part of the seller to deliver the stipulated quantity, justified refusal to pay for what had been delivered until the remainder was delivered, though the price was not a lump sum. 93 Hahn, II. 358; Entsch. des R. O. H. G. XVII. 422, 13 Feb. 1875; Entsch. des Reichsgerichts, XXXIX. 170, 11 May, 1897. 94 Thus temporary use of a machine debars the buyer from returning it after it has proved unsatisfactory. Case last cited. 95 § 376. This corresponds to § 357 of the present H. G. B. |