Wallace v. Antrim Shovel Co. , 44 N.H. 521 ( 1860 )

Bellows, J.

Whether acts like these could be regarded strictly as breaches of the contract or not, we think the court erred in charging the jury that if they found that the plaintiff had broken the contract he could not recover, unless the covenant he had broken was a condition precedent; or unless the defendant had. elected to rescind the contract for the violation of it by the plaintiff’.

But nothing appears in the case to show such rescission, unless it be the brief statement, and that can hardly be considered seasonable.

The instructions, however, were not put upon that ground, and are entirely consistent with the assumption that no such election had been exercised as the contract provides. The correctness of the instructions must then be tested upon grounds wholly independent of a rescission of the contract. Where that right exists, as it does when one party altogether neglects or refuses to perform an essential part of an entire contract; Luey v. Bundy, 9 N. H. 303 ; or where such right is expressly stipulated in the contract, as in the case before us, it must be exercised in a reasonable time, or it will be deemed to be waived. Webb v. Stone, 24 N. H. 282-288, and cases cited; Chitty on Con. 641, and notes; Drew v. Claggett, 39 N. H. 431; Cook v. Gilman, 34 N. H. 556.

The stipulation in this case which provides for a discharge of either party, if he so elect, from the obligations of the contract, in case of any violation by the other, merely operates to enlarge the right of rescission, so as to embrace the case of a failure to perform some portion of the contract not otherwise regarded as an essential part of one entire act. At the same time we are not prepared to say that the parties might not so bind themselves that neither could recover without showing a performance by himself of every engagement made by him, as is intimated in Britton v. Turner, 6 N. H. 493; but to justify a construction that should enable a party to hold the fruits of a contract without compensation, upon the ground that the other pai’ty had failed to perform some unessential stipulation, which might well be compensated in damages, would, to say the least, require language much more explicit than is found in this contract.

The only question, then, is, whether the matters embraced in these instructions stand upon the footing of conditions precedent.

If it were to be assumed that an implied obligation to serve the corporation faithfully stands upon the same ground as an express, promise, we should still be inclined to hold that in this instance it has not the character of a condition precedent, so that a breach of it would preclude the plaintiff’s right of recovery.

The doctrine upon this subject is well stated by Mr. Williams, in note 4 to Portage v. Cole, 1 Saund. 320, in these words: “ Where a covenant goes only to a part of the consideration on both sides, and a breach of it may be paid for in damages, it is an independent covenant, and an action may be maintained for a breach of the covenant on the part of the defendant, without averring performance in the declaration.” And the reason assigned is, that, having received a part of the consideration for which he entered into the agreement, it would be unjust that, because he has not had the whole, he should therefore be permitted to enjoy that part without either paying or doing any thing for it.

This statement of the law is generally followed by the best elementary writers; among them are 1 Chitty Pl. (10th Am. ed.) 323; 2 Smith L. C. 25, note to Cutter v. Powell, and cases cited. The rule is there stated to be, that if the plaintiff’s covenants which form the consideration be dependent, yet if part of the consideration has been accepted and enjoyed by the defendant, and the plaintiff have no other remedy than on the covenant, and the defect on his part cah be compensated by damages, the plaintiff" may recover without alleging performance of the residue. This principle was recognized and applied in Robinson v. Crowningshield, 1 N. H. 76, and in Stevens v. Curling, 3 Bing. (N. C.) 355 ; where the captain of a South Sea whaler covenanted that he would procure a cargo of sperm oil, or as much as he could; would return to London and deliver it at his own cost; would obey instructions; be frugal of provisions, and not dispose of any without accounting for them; would not smuggle nor permit any on board to do so; and at all times act for the interest of the ship; and the defendants covenanted that on the performance of the before mentioned terms and condiditions they would pay, &e.

The suit was brought to recover the proportion, being one twelfth part of the net proceeds of the cargo of three hundred and seventy-four tons of sperm oil. The defendants pleaded that they gave instructions for the management of the stores and the ship police, which were disobeyed ; that he did trade in such manner as to prejudice the defendants, although instructed not to do so. Upon demurrer the pleas were held bad, and upon the principle before stated.

So is Franklin v. Miller, 4 A. & E. 599, and Barnett v. Pixby, 7 Johns. 249; Tompkins v. Elliott, 5 Wend. 496; Foster v. Pardy, 5 Met. 442, 444; Keenan v. Brown, 21 Vt. 86. Where the consideration of the defendant’s promise is the performance of a single act, in its nature indivisible, the rule may be otherwise. Chitty on Con. 636.

In the case before us the implied engagement to serve the defendant faithfully was at most but part of the consideration of the defendant’s promise, and, we think, as the breach of it may be compensated in damages, it is no defense to this suit; and therefore the instructions were erroneous and there must be

A new trial.