Gibbons v. Bente

Collins, J. The contract out of which this litigation arises was an executory one, entered into by Davis & Eankin, of the first part, (by plaintiff, who was then their agent, and has succeeded to their rights under the contract by assignment,) and defendant, with some sixty other persons, as parties of the second part. In it the parties of the first part agreed to erect and complete a butter and cheese factory for those of the second part within ninety days after the amount of the contract price had been obtained by subscription, — the scheme being to secure subscribers to the stock of a corporation in shares of $ 100 each; and the parties of the second part agreed to pay the contract price in three installments, commencing upon the completion. The defendant subscribed for one share, and is sued for the sum of $100. Without stopping to consider other points referred to by counsel for appellant, we proceed to an examination of one which goes directly to respondent’s right to maintain an action for any part of the contract price, as such, although the factory has been completed [505] in accordance with the terms of the contract. It was undisputed that soon after it was entered into, but before Davis & Bankin had commenced to perform, a meeting of those who had signed as parties of the second part was held. The plaintiff attended and participated. At this meeting a large majority of those present — defendant being of the number — voted and determined that they would go no further in the enterprise, and that the factory should not be built. The plaintiff was then and there notified not to erect the factory, and to proceed no further under the contract. He responded in somewhat vigorous language, and declared that the factory should be erected inside of two weeks. As agent of Davis & Bankin, he then proceeded to erect and equip the plant. Defendant and others refused to accept it when completed, or to pay. The question is as to the power of the parties of the second part to repudiate and arbitrarily break their contract, by refusing to perform, and by renouncing all liability under it, and thereby prevent Davis & Bankin from recovering the full contract price, should they disregard the breach and fully perform on their part. There seems to be no room for doubt upon this subject. While a contract is executory a party has the power to stop performance on the other side by an explicit direction to that effect, subjecting himself to such damages as will compensate the other party for being stopped in the performance on his part at that stage in the execution of the contract. The party thus forbidden cannot afterwards go' on, and thereby increase the damages, and then recover such damages of the other party. Danforth v. Walker, 37 Vt. 239; Clark v. Marsiglia, 1 Denio, 317; Butler v. Butler, 77 N. Y. 472; Collins v. Delaporte, 115 Mass. 159. The question is very fully considered in the recent ease of Davis v. Bronson, 2 N. Dak. 300, (50 N. W. Rep. 836,) in which cases other than those above noted are referred to. The legal right, on general principles, of either party, to violate, abandon, or renounce his contract, on the usual terms of compensation to the other for the damages which the law recognizes and allows, — subject to the jurisdiction of equity to decree specific performance in proper cases, — is universally recognized and acted upon. [506] Among the many authorities which might be cited on this, see Bish. Cont. § 837; Leake, Cont. 868, 1044; 1 Suth. Dam. 113; 2 Suth. Dam. 193, 526; Hinckley v. Pittsburgh Bessemer Steel Co., 121 U. S. 264; American Life Insurance Co. v. McAden, 109 Pa. St. 399, (1 Atl. Rep. 256;) Frost v. Knight, L. R. 7 Exch. 112; Roper v. Johnson, L. R. 8 C. P. 167; Laird v. Pim, 7 Mees. & W. 474; Hochster v. De la Tour, 2 El. & Bl. 678. Prom an examination of the adjudged cases just cited, it will be seen that ordinarily the party who is willing to abide by an executory contract may treat it as subsisting up to the time when performance should commence, for the purpose of insisting that the other party, who has previously repudiated it, shall then and finally determine whether he will comply with its terms, or persist in his resolution not to perform upon his part. But the party who has not broken his compact is not allowed to treat it as in force, for the purpose of performing in direct opposition to the refusal of the other to abide by its terms, and then enforce the payment of the contract price. One reason for this is found in the general rule that a person who has been injured by a breach of contract must put forth reasonable exertion to render the injury as light as possible. He cannot negligently or willfully allow the damages to be unnecessarily enhanced; or, if' he does, the increased loss falls upon him. Order reversed. (tileillan, C. J., absent, (sick,) took no part.