Tipton v. . Feitner
20 N.Y. 423 (1859)
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Rule of Law:
When a contract is divisible, consisting of several distinct and independent items, a party who has performed one part may recover for that part, even if they have failed to perform another part. The non-breaching party's remedy for the unperformed part is to seek damages, either through a separate action or by recoupment.
Facts:
- The plaintiffs agreed to sell both dressed (slaughtered) hogs and live hogs to the defendant under a single contract.
- The contract stipulated different prices per pound for the dressed hogs and the live hogs.
- Under the agreement, the dressed hogs were to be delivered immediately.
- The live hogs, which were in transit from Ohio, were to be delivered upon their arrival at a later time.
- The plaintiffs delivered the dressed hogs to the defendant, who accepted them.
- Subsequently, the plaintiffs failed to deliver the live hogs as agreed.
Procedural Posture:
- The plaintiffs initiated a lawsuit against the defendant in a trial court to recover payment for the delivered dressed hogs.
- The case was referred to a referee, who found that the plaintiffs were entitled to payment for the dressed hogs.
- The referee also ruled that the defendant could recoup (deduct) damages resulting from the plaintiffs' failure to deliver the live hogs.
- A judgment was entered based on the referee's findings in the New York Supreme Court (a lower court at the time).
- The defendant, as appellant, appealed the judgment to the New York Court of Appeals (the highest court).
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Issue:
Does a party's failure to perform one part of a contract for the sale of goods prevent them from recovering payment for another, separate part of the contract that they have already performed?
Opinions:
Majority - Unspecified
No. A party's failure to perform one part of a divisible contract does not excuse the other party's obligation to pay for the part that was performed. The court determined the contract was 'distributive' or divisible, not entire, because it involved different kinds of property, different prices, and different delivery times. These factors indicated the parties intended to treat the deliveries as separate transactions. Therefore, the promise to deliver the live hogs was not a condition precedent to the defendant's obligation to pay for the dressed hogs. The defendant's proper remedy for the plaintiffs' breach regarding the live hogs is to recover damages, which can be deducted (recouped) from the payment owed for the dressed hogs.
Concurring - Unspecified
No. The fact that several promises are made in 'one and the same contract' does not automatically make the contract indivisible or the promises dependent on each other. Courts disfavor construing contractual terms as conditions precedent because this can lead to inequitable forfeitures. In this case, the contract was plainly divisible into two distinct parts with no necessary connection. It is unreasonable to assume the plaintiffs intended to extend indefinite credit for the dressed hogs until the live hogs, which might have been delayed or never arrived, were delivered. The referee's finding that it was 'one contract' merely means the agreements were made at the same time, not that the performance obligations were legally interdependent.
Analysis:
This case solidifies the doctrine of divisible contracts, providing a crucial exception to the general rule that a breaching party cannot sue on the contract. It establishes that courts will look to the substance of an agreement—such as separate prices, delivery times, and subject matters—to determine if it can be broken into independent parts. This prevents the harsh result of forfeiture where a party has substantially performed one part of a complex agreement but failed on another. The decision promotes fairness by allowing recovery for performance rendered, while still protecting the non-breaching party by allowing them to recoup damages for the part that was breached.
