Krebs Hop Co. v. Livesley , 51 Or. 527 ( 1908 )

Opinion by

Mr. Chief Justice Bean.

1. The stipulation that certain payments on the purchase price of the hops were to be made by defendants, prior to the time of delivery, is a separate and independent covenant, upon which an action can be maintained by plaintiff, without waiting for the time for final performance to arrive: Faber v. Hougham, 36 Or. 428 (56 Pac. 547, 1111). But defendants claim that, prior to the time any of such payments became due and payable, plaintiff had put it out of its power to comply with its contract by assigning to Ladd & Bush the payments referred to, and by conveying to that firm the land upon which the hops were to be grown, and hence they had a right’ to rescind the contract.

2. If, before the time for performance of an executory contract has arrived, one of the parties by his own act makes it impossible for him to perform, the other party may treat the contract as at an end, and proceed accordingly: Clark, Contracts (2 ed.), 448; Lovelock v. Franklyn, 7 Q. B. 371 (55 Eng. Com. Law); Newcomb v. Brackett, 16 Mass. 161. But not every slight or partial dereliction of one party will entitle the other to rescind or abrogate a contract. To justify such a course of procedure there must be a failure in some substantial particular, which goes to the essence of the contract, and renders the defaulting party incapable of performance, or makes it impossible for him to carry out the contract as intended. “In order,” said the Supreme Court of Illinois, “to justify an abandonment of a contract, and the proper remedy growing out of it, the failure of the opposite party must be a total one. The object of the contract must have been defeated or rendered unattainable by his misconduct or default”: Weintz v. Hafner, 78 Ill. 27. And in Light, Heat & W. Co. v. City of Jackson, 73 Miss. 598 (19 South. 771), it is held that: “Equity will not rescind a continuing contract for an occasional and immaterial breach not going to the very substance of the contract.” The same principle was thus announced in Bloomington Elec. Light Co. v. Radbourn, 56 111. App. 165: “It is not every failure or refusal of one party to comply with some of the terms of a contract which will entitle the other to abandon it upon notice to the delinquent, or by any other means he can use. To justify an abandonment, the failure must be total; that is, such as to defeat the object of the contract or make it unattainable.”

3. In order, therefore, to justify defendants’ attempted abandonment or rescission of the contract between them and plaintiff, it is incumbent upon them to show that plaintiff had rendered itself incapable of performance. This they sought to do by proving the conveyance to Ladd & Bush of the land upon which the hops were to be grown, and the assignment to that firm of all future payments accruing under .the contract. But neither of these facts were such as to render the performance of the contract by plaintiff impossible. There is no stipulation that plaintiff shall remain the owner of the land upon which the hops were to be grown; nor, indeed, does it appear that they were such owners at the time the contract was made. The only provision is that the hops, which plaintiff contracted and agreed to sell to the defendants, should be produced on a certain farm, and it is not clear but that plaintiff could have complied with its terms by delivering to defendants, at the time and place agreed upon, the hops grown on such farm, whether by it or some one else. But assuming it was contemplated that plaintiff should be and remain in possession of the land and produce the hops, the performance thereof would not be rendered impossible by a conveyance of the land, so long as it remained in actual possession and control thereof. A mere conveyance would not of itself render impossible the performance of the contract by the plaintiff, or put it out of its power to produce and deliver the hops, and, unless it would have that effect, it afforded no ground for a rescission of the contract by defendants. Nor did the assignment of the payments render performance by plaintiff impossible, even if such payments were intended to be used in cultivating and harvesting the hops. Notwithstanding an assignment thereof, plaintiff would still proceed to cultivate, produce, and deliver the hops in accordance with the terms of the contract, and thus comply therewith. It is true the contract, by its terms, was made nonassignable, and, properly, plaintiff could not transfer its rights thereunder and vest a right of action in the assignee; but an assignment would not make it impossible for plaintiff to perform, and nothing short of that would justify an abrogation or rescission of the contract by defendants. It does not appear that plaintiff was necessarily dependent upon the advance payments for cultivation, or without such payments it could not have produced the hops. We are clear, therefore, that the conveyance of the land and the assignment of the payments to Ladd & Bush were not such a breach of the contract as entitled defendants to abandon or rescind it.

4. It is claimed that, because Ladd & Bush failed to disclose to defendants the deatils of the transactions between it and plaintiff, relating to the conveyance of the land and the assignment of the payments, plaintiff is estopped to enforce the contract sued on, or question the defendants’ right to rescind it. But there is clearly no substantial merit in this contention. Defendants were concerned with the dealings between Ladd & Bush and plaintiff only so far as they might affect the ability of plaintiff to perform its contract with them, and, as such dealings did not render performance impossible, a failure of Ladd & Bush to disclose their private business relations with plaintiff could not have injured defendants in any substantial' manner.

5. This disposes of- the questions made in the court below and brought here by the bill of exceptions. The form of the action is, however, questioned in this court for the first time. It is contended that, because defendants rescinded the contract, before the commencement of the action, plaintiff’s remedy was by an action to recover damages for breach of contract, and not on the contract itself. But we think the objection, even if meritorious, comes too late. It was not made in the court below. On the contrary, the 'cause was tried on the merits in that court without objection that the form of the action and the nature of the remedy was not correct or adequate to the purpose. The cause comes here on appeal for the correction of such error, if any, as made by the trial court, and for that purpose only. It is only when a trial court has acted, and its action is made to appear by the record, that any question is presented in this court for review (Kearney v. Snodgrass, 12 Or. 311: 7 Pac. 309; State v. Tamler, 19 Or. 528: 25 Pac. 71: 9 L. R. A. 853; State v. Foot You, 24 Or. 61: 32 Pac. 1031, 33 Pac. 537), except an objection to the jurisdiction of the court, and that the complaint does not state facts sufficient to constitute a cause (Carver v. Jackson Co. 22 Or. 62: 29 Pac. 77). But neither of these latter questions are here. The court clearly has jurisdiction, and the complaint on .its face states a cause of action. If it appeared from the evidence that plaintiff had misconceived the form of its remedy, that question should have been raised in the court below, and. its ruling, if adverse to defendants, made to appear by the record;. otherwise it will be deemed waived: Bennett v. Bullock, 35 Pa. 364; R. R. I. & S. L. R. R. Co. v. Beckemeier, 72 Ill. 267; Belknap v. Sealey, 14 N. Y. 143 (67 Am. Dec. 120); Gillies v. Improvement Co. 147 N. Y. 420 (42 N. E. 196); Whetstone v. Shaw, 70 Mo. 575; Downie v. Ladd, 22 Neb. 531 (35 N. W. 388); Watson v. Woolverton, 41 Ill. 241. Rockford R. I. & St. L. R. R. Co. v. Beckmeier, 72 Ill. 267, was an action in covenant on a deed poll. It was insisted in the appellate court for the first time that the action was misconceived, and plaintiff’s remedy was either in case or assumpsit, and not in covenant, since the deed was not executed by the defendant. After referring to and discussing the authorities, the court said:

“We are therefore clearly of the opinion that his action was misconceived and will not lie on the facts averred in the declaration or shown in proof on the trial. In this case, however, the record fails to show that any demurrer was filed to the declaration, or a motion in arrest of the judgment entered. Appellants having failed to question the sufficiency of the form of action, either by demurrer or by motion in arrest, they must be regarded as having waived the objection. A party, to avail of such an objection, must raise the question in the court below. He cannot lie by in the court below and raise it for the first time in this court.”

Bennett v. Bullock, 35 Pa. 364, was an action of trespass by one tenant in common against the other. The defendant joined issue, and the cause was tried without objection as to the form of the action. On appeal the court held that the proper remedy was in ejectment, and not in trespass, and said:

“We should have great difficulty in sustaining the plaintiff’s action, if the point had been properly taken. * * But no point was put to the court which touched the form of remedy adopted by the plaintiff. The controversy in the court below turned upon the question whether Bullock had not agreed by parol to keep the dam as well as the mill in repair—notwithstanding the agreement— whether he had not so violated his covenants as contained in the agreement as to forfeit his estate, and whether he had not abandoned and surrendered up the premises. These were questions of fact on which there was a great deal of evidence, and which the court submitted to the jury with instructions that we think the defendants have no reason to complain of. Indeed, where the action is misconceived, or inappropriate, but is submitted to without objection by the defendant, it is very difficult for a court of error to scan closely questions of law arising bn evidence and instructions, for such questions must always depend more or less on appropriate pleadings.”

The other authorities cited are to the same purpose.

6. It follows, from these views, that there was no error in the proceedings in the trial court. It seems, however, that judgment was erroneously entered in favor of plaintiff for interest upon the deferred payments from the time they became due.

This is admitted by counsel to have been an error, and, upon the filing of a remittor of such interest, the judgment will be affirmed. Affirmed.