Smith v. Ga. Loan

• Decision Date: 20 July 1901
• Citation: 113 Ga. 975,39 S.E. 410
• Parties: SMITH et al. v. GEORGIA LOAN, SAVINGS & BANKING CO. Supreme Court of Georgia.
• Court: Georgia Supreme Court

39 S.E. 410

113 Ga. 975

SMITH et al.

v.GEORGIA LOAN, SAVINGS & BANKING CO. Supreme Court of Georgia.

Supreme Court of Georgia.

July 20, 1901.

GEORGIA LOAN, SAVINGS & BANKING CO.

CONTRACTS—RESCISSION-ACTIONFOR BREACH —PERFORMANCE OB' OBLIGATIONS. 1. After the renunciation by one party of a continuing contract consisting of mutual obligations, the other party is at liberty either to immediately treat such renunciation as a breach of the contract, and sue for any damages he has sustained by reason of the breach, or to treat the contract as still binding, and wait until the time arrives for its performance in order to give the party who has repudiated the contract an opportunity to comply with its terms.

2. If, after the attempted renunciation by one party to the contract, the other party elects to treat the contract as still binding, and await the time for full performance, it is incumbent upon the party making such election to perform such of the obligations as may, in the meantime, devolve upon him under the terms of the contract. Especially is this true when such performance is demanded by the party who had attempted to renounce.

3. Applying the principles above laid down to the facts of the present case, the plea of the defendants was properly stricken on motion.

(Syllabus by the Court.)

Error from city court of Atlanta; H. M. Reid, Judge.

Action by the Georgia Loan, Savings & Banking Company against Burton Smith and others. Judgment for plaintiff. Defendants bring error. Affirmed.

Rosser & Carter and Burton Smith, for plaintiffs in error.

Dorsey, Brewster & Howell and Hugh M. Dorsey, for defendant in error.

COBB, J. It was argued for the defendants that, as the plaintiff had made what is known to the law as a renunciation or anticipatory breach of the contract, the defendants were no longer bound thereby, and could repudiate the contract whenever the plaintiff endeavored to enforce it. The rule of law-sought to be invoked was laid down by the supreme court of the United States in a recent case after an elaborate consideration of the authorities. The conclusion reached by the court is thus succinctly stated in the headnotes: "After a careful review of all the cases, American and English, relating to anticipatory breaches of an executory contract, by a refusal on the part of one party to it to perform it, the court holds that the rule laid down in Hochster v. De la Tour, 2 El. & Bl. 678, is a reasonable and proper rule to be applied in this case. That rule is that, after the renunciation of a continuing agreement by one party, the other party is at liberty to consider himself absolved from any future performance of it, retaining his right to sue for any damages he has suffered from the breach of it, but that an option should be allowed to the injured party, either to sue immediately, or to wait till the time when the act was to be done, still holding it as prospectively binding for the exercise of this option." Roehm v. Horst, 178 U. S. 1, 20 Sup. Ct. 780, 44 L. Ed. 953. This rule was expressly limited by the court to contracts containing mutual obligations. See page 17, 178 U. S., page 786, 20 Sup. Ct., and page 959, 44 L. Ed. The agreement under consideration in the present case is of such a character. But giving to the defendants' plea that construction which is most favorable to their conten-tion, we do not understand that they have brought themselves within the rule above quoted. They did not immediately, upon the renunciation of the contract by the plaintiff, elect to repudiate the contract, and sue for...