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The exercise of the power by an explicit. direction, or other sufficient act constituting a breach of the contract, or, if performance has been entered upon, not to continue in the carrying out of the contract, or any act preventing such continuance, does not in any exact sense, of itself, effect a rescission of it. By rescission a contract is put an end to and no longer exists as the basis of any right, but by a breach it continues effective for the recovery of damages by the party injured in some cases as his only basis of recovery-in others, as such basis at his option. The distinction is found in the fact that the rights of the party not in fault, as he may elect, are not the same if the breach is effected after, as when it occurs before performance is entered upon. In the latter case there is no recovery of damages eo nomine, upon and for a breach of the contract, but in the former instance it has been often, but not always held-the decisions are not harmonious that the party willing to perform may treat the contract as rescinded from the beginning and recover upon the quantum meruit for the work done. 30 But the rule seems to have its limitations and "the right on a quantum meruit is frequently and emphatically stated to depend on the fact that the contract has been discharged." The principle has been stated thus: "If he has done all or a portion of that which he promised, so as to have a claim to a money payment for such performance, he may deal with such a claim as due upon different contract arising upon a promise which is understood from the acceptance of an executed consideration.''32

to sue

Thus it ap

pears that the party not in default, upon a breach occurring after he has entered upon performance may, in some instances, treat the contract as rescinded from the beginning, and have a recovery of the value of his part performance without regard to the contract. But the general rule of law formulated so as

several liability on the part of each subscriber to the amount of his subscription only, and that in other respects the interests of the subscribers were joint, and that all must unite in order to repudiate and renounce the contract.

Derby v. Johnson, 21 Vt. 17; Hulle v. Hightman,

to embrace all cases under all circumstances clearly is to the effect that where the breach occurs before performance, or after part performance, where damages for the breach of the contract are claimed and not the mere value of part performance, or where consideration for full performance is in something other than money, the action must be predicated upon the contract alone, and a recovery had for damages in the strict sense only. The manner of breach, limited to the narrow question under consideration, must be such that the other party is not at liberty to disregard it, and is usually effected by an explict direction not to commence, or not to continue performance, or notice that the party giving it will not be bound by the contract or that he renounces its obligation. But the renunciation must go to the whole contract.33

At what period with reference to the time when performance is due, the power to stop performance may be exercised, has been much discussed in the courts. The question does not arise except in case of an anticipatory breach. That a contract may be broken by renunciation by a party to it before the time for performance has come seems to be well settled.34 However, instances are found where it seems to be held that if the renunciation or other step constituting a breach is made or taken before performance is due, it is yet incumbent upon the other party to treat the contract as in force up to the time to begin its performance, as before then the party who has signified his renunciation may change his purpose and abide by the contract.35 The point, doubtless, is to some extent dependent upon the acts to be done to effect performance, as whether the mere delivery of something already in existence is required, or whether previous preparation to perform is necessary, as when the party is required to prepare or construct the thing to be delivered before the day of tender. the latter instance clearly any direction given or other act done by one party at whatever

In

33 See cases cited in previous notes. 34 Hochster v. Dela Tour, 2 El. & Bl. 678; Bungee v. Koop, 48 N. Y. 225; Howard v. Daly, 61 N. Y. 362;

87

time whereby the other party is placed under obligation to refrain from increasing the damages must constitute a breach of the contract. The general rule as already shown seems to be that any explicit order, or positive assertion of a wish that performance be abandoned, or of a present intended repudiation of the contract, even before performance is due or any preparation to that end begun, or placing "himself in an attitude of impossibility of performance" is sufficient, and that decisions holding such instances not to be within the rule thus stated are exceptional.36 A perusal of the decisions cited in the several notes hereto will fully disclose the contention for and against the rule. In Marks v. Van Eeghen, Wallace, C. J., writing for the court (Circuit Court of Appeals, Second Circuit), and citing a great number of decisions both English and American, says: "In veiw of the overwhelming preponderance of adjudication, we think it must be accepted as settled law that where one party to an executory contract renounces it without cause, before the time for performing it has elapsed, he authorizes the other party to treat it as terminated, without prejudice to a right of action for damages; and, if the latter elects to treat the contract as terminated, his right of action accrues at once." But it must appear that the intention to repudiate the contract was distinctly signified. It is not enough to prove an equivocal or indeterminate renunciation.

There is another point of much interest to the effect that if the party not violating the contract keeps it, as he may, in force for his own benefit, up to the time performance is due-it is his right to have his damages ascertained at that date-he also keeps the contract alive for the benefit of the other party. Therefore, if the notice of intention not to perform is withdrawn before it is acceded to or acted upon as a breach, the right to treat the contract as broken is lost, and the rights of the several parties are the same as they were before the notice was given.

36 Roebling & Sons Co. v. Lock S. F. Co., 130 Ill. 660; Kadish v. Young, 108 Ill. 170, 48 Am. Rep. 548, and cases cited; Roehm v. Horst, 91 Fed. Rep. 345, 33 C. C. A. 550, 62 U. S. App. 620, 48 Fed. Rep. 565, and cases cited. This case has recently been affirmed by the United States Supreme Court, but the opinion is not at hand. A brief notice of it may be found in Vol. 51, Cent. L. J. p. 161, dated August 31, 1900. 37 85 Fed. Rep. 853, 30 C. C. A. 208.

And further, such failure or refusal to accede to the anticipatory breach enables the party committing it to take advantage of any intervening circumstances justifying non-performance as where performance becomes illegal or is excused by matter subsequent, or affording him the means of mitigating his loss, as a change in the market.38

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It has been already noticed that cases where a court of equity will decree specific performance of a contract form an exception to the general rule under consideration. That fact alone seems to invest such contracts with other privileges at law. Thus it is said: "If it be a case for specific performance, the plaintiff having the power to perform is at liberty to do so and recover a t law under the contract." It was so ruled in an action to recover an installment due on a contract made by the defendants for the support of their father during his life, though they had given notice that they would pay nothing further under said contract. The circumstances suggest that the recovery at law according to the provisions of the contract was nothing other or different than the specific performmance which equity would have decreed. However, though the result is the same it is reached by proceeding upon other and distinct lines.

The construction of the subject expressed in the title of this article with its immediate incidents is easily susceptible of expansion into a treatise. So it has not been attempted to review in detail all the arguments advanced in support or challenge of the questions presented. However, it is contended that the conclusions reached are shown to be maintainable upon principle and reason, and that they are in harmony with the great weight of authority both in England and in this country. GEO. W. NEWTON.

38 Avery v. Bronson, 5 E. & B. 714; Frost v. Knight L. R. 7 Exch. 111, 1 Eng. Rep. 218; Brown v. Muller, L. R. 7 Exch. 319, 3 Eng. Rep. 429; Roper v. Johnson, L. R. 8 C. P. 167, 4 Eng. Rep. 397.

39 Marsh v. Blackman, 50 Barb. 333.

CARRIERS-PERSONAL INJURIES-FREE PASS

-RELEASE-EFFECT-NEGLIGENCE.

PAYNE v. TERRE HAUTE & I. R. CO.

Appellate Court of Indiana, May 10, 1901. Where a passenger riding on a free pass was injured through the negligence of a railroad company's

employees, an answer in a suit for such injuries that, by an express stipulation indorsed on the pass, the acceptance and use thereof, was a release of any injuries which might be sustained by the person to whom it was issued, will not bar an action brought by such passenger against the company for negligence

WILEY, J. The only question involved in this appeal is the sufficiency of the second paragraph of answer, a demurrer to which was overruled. The complaint is in three paragraphs, and charges that appellant was a passenger upon one of appellee's trains, and while so riding as a passenger he was injured by the carelessness and negligence of appellee's servants in charge of the train. In the second paragraph of answer it is charged that, at the time appellant was injured in the manner stated in the complaint, he was riding upon the car and train of the appellee, and was entitled to be there solely by virtue of a pass theretofore issued to and accepted by him and used as a pure gratuity, and that by an express stipulation indorsed on the back of said pass, it was provided that by its acceptance and use any and all claims for injuries that might accrue to the person named on the face of the pass should be released. The answer further avers that the appellant was the only person named on the face of said pass, and that he was riding upon said pass at the time he was injured, and had paid no fare, nor was any expected of him. A copy of said release was indorsed upon the pass, as set out in full in the answer, and is as follows: "By its acceptance and use any and all claims for injuries to person or for loss or damage to baggage that might accrue to the person or persons named on the face thereof are released." It is then averred that the appellant accepted said pass as a pure gratuity, that he paid nothing therefor, and that he had full knowledge of the express release above set out and indorsed thereon. After the court had overruled a demurrer to this paragraph of answer, the appellant refused to plead further, and suffered judgment to be entered against him for costs. It is obvious, therefore, that the question for determination is simply this: Can a railroad company exempt itself from liability to a passenger on one of its trains who is injured by the negligence of its employees while he is being carried as such passengers upon a gratuitous pass? This question must be answered in view of the fact that the passenger accepts such pass with a full knowledge of the limiting clause indorsed upon its back; for the answer avers that

discussion of the proposition would be useless. We are bound by the law as declared by the supreme court. In Railway Co. v. Faylor, 126 Ind. 126, 25 N. E. Rep. 869, it was held that an answer pleading a contract of release indorsed on a free pass upon which appellee was riding at the time he was injured would not bar an action for damages based upon the negligence of the company. The answer in that case was in principle the same as the second paragraph of answer here. To the same effect are the following cases: Railway Co. v. Nickless, 71 Ind. 271; Railway Co. v. Selby, 47 Ind. 471. Upon the authority of these cases the answer was fatally defective. In our judgment, the ruling in the cases cited is not in conflict with the more recent case of Railway Co. v. Keefer, 146 Ind. 21, 44 N. E. Rep. 796, 38 L. R. A. 93, as urged by appellant; nor is a different rule there declared. Judgment reversed, and the court below is directed to sustain appellant's demurrer to the second paragraph of

answer.

NOTE.-Limitation of Carriers' Liability for Injuries to Passengers.-No more difficult or controverted question of law arises more often to perplex the courts of the present day than the one covered by the subject of this annotation. The authorities cannot be reconciled.

The old rule at the common law prohibited any attempt whatever on the part of a common carrier, either by notice or contract, to limit the liabilities imposed by the common law. Cole v. Goodwin, 19 Wend.(N. Y.) 257, 32 Am. Dec. 470; Fish v. Clapman, 2 Ga.1349, 46 Am. Dec. 393. One modification of this rule has been made and universally recognized and conceded,-that a common carrier may limit its liability, by special contract, for injuries not arising from its own negligence or that of its servants. Merrill v. Express Co., 62 N. H. 514; New York Central R. R. Co. v. Lockwood, 17 Wall. (U. S.) 357; Louisville, etc. R. R. v. Gilbert, 88 Tenn. 430; Christenson v. Express Co., 15 Minn. 270; Rosenfeld v. Rai.road, 103 Ind. 121, 53 Am. Rep. 500. This limitatation of liability by the carrier, however, cannot be affected by notice or otherwise that by special agree ment, oral or written. Baltimore, etc. R. R. v. Campbell, 36 Ohio St. 647, 38 Am. Rep. 617; Smith v. Railroad, 64 N. Car. 235; Kansas City, etc. R. R. v. Rodebaugh, 38 Kan. 45, 5 Am. St. Rep. 715; Solon v. Railroad (Iowa, 1895), 63 N. W. Rep. 692; St. Louis, etc. R. R. v. Weakly, 50 Ark. 397, 7 Am. St. Rep. 104. Contra in Pennsylvania: Lake Shore, etc. R. R. v. Rosengweig, 113 Pa. St. 519; Camden, etc. R. R. v. Baldauf, 16 Pa. St. 67, 55 Am. Dec. 481. The rule is well stated in New Jersey Navigation Co. v. Bank. 6 How. (U. S.) 344, where the court said: "The common carrier is in the exercise of a sort of public

mon carrier, by special contract supported by a valuable consideration, as for instance, a reduction of fare, limit its liability for its own negligence or that of its servants? The leading case of this subject, and undoubtedly still sustained by the weight of author. ity, is that of New York Central R. R. v. Lockwood, 17 Wall. (U. S.) 317, where the United States Supreme Court clearly and definitely decided the question propounded in the negative, holding, first, that a common carrier cannot lawfully stipulate for exemption from responsibility when such exemption is not just and reasonable in the eye of the law; secondly, that it is not just nor reasonable for a common carrier to stipulate for exemption from responsibility for the negligence of himself or servants; thirdly, that these rules apply both to carriers of goods and carriers of passengers for hire, and with special force to the latter. This decision is undoubtedly supported by the great weight of authority. Louisville, etc. R. R. v. Taylor, 126 Ind. 126; Missouri Pacific R. R. v. Ivy, 71 Tex. 409, 10 Am. St. Rep. 758; Jones v. Railroad, 125 Mo. 666, 28 S. W. Rep. 883, 46 Am. St. Rep. 514, 26 L. R. A. 718; B. & O. R. R. v. McLaughlin, 73 Fed. Rep. 519; Doyle v. Railroad, 162 Mass. 66, 44 Am. St. Rep. 335; Rose v. Railroad, 39 Iowa, 246; Davis v. Railroad, 93 Wis. 470, 67 N. W. Rep. 16; Cleveland, etc. R. R. v. Curran, 19 Ohio St. 1; Louisville, etc. R. R. v. Oden, 80 Ala. 38; Southern Express Co. v. Moon, 39 Miss. 822; Moulton v. Railroad, 31 Minn. 85. The reason of the rule thus announced is well stated in Louisville, etc. R. R. v. Taylor, supra, where the court said: "A stipulation that the carrier shall not be bound to the exercise of care and diligence is in effect an agree ment to absolve him from one of the essential duties of his employment. The law will not allow the carrier thus to abandon his obligation to the public, and hence all stipulations which amount to a denial or repudiation of duties which are of the very es sence of his employment will be regarded as unrea sonable, contrary to public policy, and therefore void."

Another line of authorities hold to a contrary doctrine. This has been called the "New York rule," although it is difficult to see why it should be called the rule of one state over another as each state reached its conclusion without relying particularly on the authority of any state. In fact an examination of the cases will show that these authorities rely more on the English construction of a railroad's right to limit its liability under the Railway and Canal Act than upon any other outside authority. The rule adopted by these authorities is to the effect that a common carrier may make a valid contract with the passenger exonerating itself from all liability not caused by the fraud or willful wrong of the company. Meuer v. Railroad, 5 S. Dak. 568, 59 N. W. Rep. 945, 25 L. R. A. 81; Arnold v. Railroad, 83 Ill. 273, 25 Am. Rep. 386; Higgins v. Railroad, 28 La. Ann. 133; Smith v. Railroad, 29 Barb. (N. Y.) 132; Wilson v. Railroad, 97 N. Y. 87; Bissell v. Railroad, 25 N. Y. 602; Kinney v. Railroad, 32 N. J. L. 407, 90 Am. Dec. 671; Balti more, etc. R. R. v. Brady, 32 Md. 333. The reason of this rule is well stated in the case of Bissell v. Railroad, supra, where the court said: "The principles being established that parties may lawfully enter into contracts of this nature, there is no limit to the extent and variety of modification which may be given to such contracts. The passenger may assume all risks arising from the condition of the track, or of the cars, or from the negligence of the agents, of all of them or of any class of them. There is no danger which the party may encounter, resulting from the journey,

which he may not assume the responsibility of, and he may assume all or any portion of it." A distinc tion sought to be made in the case of Perkins v. Railroad, 24 N. Y. 196, holding a railroad liable for its own negligence, but not that of its servants, has been generally repudiated. See Gulf, etc. R. R. v. McGowan, 65 Tex. 645. It might also be mentioned that there is a line of cases holding that a common carrier may limit its liability for ordinary negligence but not for gross negligence. Chicago, etc. R. R. v. Chapman, 133 Ill. 96, 23 Am. St. Rep. 587; Bosiowitz v. Express Co., 93 Ill. 239, 523, 34 Am. Rep. 191; Black v. Transportation Co., 55 Wis. 322; Amas v. Railroad, 67 Wis. 46, 58 Am. Rep. 848; Meuer v. Railroad, 5 S. Dak. 568; Smith v. Railroad, 29 Barb. 132; Baltimore, etc. R. R. v. Brady, 32 Md. 333. This distinction has also been repudiated as too artificial and vague. See Griswold v. Railroad, 53 Conn. 371, 55 Am. Rep. 115; Philadelphia, etc. R. R. v. Derby, 14 How. (U.S.) 468.

Thus far the authorities while not in harmony are by an overwhelming preponderance in favor of the rule that in case of passengers for hire, a common carrier will not be permitted to limit its liability for its own negligence or that of its servants. But now the further question arises, is a common carries liable to a person carried gratuitously or at reduced rates, and, even if so, will that fact furnish such a consideration as will validate a contract with the passenger exonerating the carrier from responsibility for its own negligence or that of its servants. The great confusion of authority and argument that exists on this subject is due no doubt in large measures to a failure to distinguish between the carrier's liability on contract and tort. The undertaking of a common carrier to transport a passenger from one point to another is more than a contractual relation between individuals, it is a public relation as well, to which duties and liabilities are attached entirely sepa. rate and distinct from any arising under the contract. These duties to the public the carrier and, indeed, the passenger himself, cannot in principle be permitted to abrogate or modify. The government as parens patriæ, is interested in the life of the citizen and even the latter himself is not justified in making an attempt to take his life by his own hand; much less should a railroad corporation be permitted to exonerate itself from any responsibility to protect the life of the passenger under its care and, by special contract, to place itself in a position where it is free to maim, injure and kill without fear of liability. Such a contract is absolutely against public policy and should be sternly discountenanced. It is evident therefore that persons riding gratuitously by express or implied invitation of the carrier are as much passengers in every sense of that term as passengers for hire. The consideration for such a contract is in the rule that the confidence induced by undertaking any service for another is a sufficient legal consideration to create a duty in the performance of it. This rule was laid down in the leading case of Coggs v. Bernard, 1 Smith's Leading Cases, 199, and is universally sustained by authority. See Waterbury v. Railroad, 17 Fed. Rep. 671; Annas v. Railroad, 67 Wis. 46, 58 Am. Rep. 848; New World v. King, 16 How. (U. S.) 469. Thus, persons riding free by consent of the company, or with consent of the conductor, or where no demand is made for his fare, or on a free pass, have the same rights as other passengers, and the carrier assumes towards them the same respon. sibility and is liable for the same lack of care and to the same degree. Benner Undertaking Co. v. Bus

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son, 58 Ill. App. 17; Jacobus v. Railroad, 20 Minn. 125, 18 Am. Rep. 360; Pittsburg, etc. R. R. v. Caldwell, 74 Pa. St. 421; Sherman v. Railroad, 72 Mo. 62, 37 Am. Rep. 423; State v. Railroad, 63 Md. 433; Rose v. Railroad, 39 Iowa, 246; Buck v. Power Co., 46 Mo. App. 555; Louisville, etc. R. R. v. Taylor, 126 Ind. 126. This rule and the reason for it is well stated in Waterbury v. Railroad, 17 Fed. Rep. 671, where the court held that the right which a passenger by railway has to be carried safely does not depend on his having made a contract, but the fact of his being there creates a duty on the part of the company to carry him safely. It suffices to enable him to maintain an action for negligence if he was being carried by the railroad company voluntarily, although gratuitously, and as a mere matter of favor to him.

The last question to be considered is whether the fact that a carrier agrees to carry a passenger gratuitously or at reduced rates furnishes such a consid eration as will validate an agreement on the part of the latter exonerating the carrier from liability. The rule supported by the weight of authority and based, as we believe, on the true principles which distinguish between the contractual and public relations arising upon the agreement to carry, is to this effect, that any indorsement or agreement on the back of any part of the contract of carriage which, on consideration of gratuitous or reduced rate of passage, exempts the carrier from liability for negligence is against the policy of the law and void. Grand Trunk R. R. v. Stevens, 95 U. S. 655; Cleve. land, etc. R. R. v. Curran, 19 Ohio St. Rep. 1; Rose v. Railroad, 39 Iowa, 246; Brush v. Railroad, 43 Iowa, 554; Jacobus v. Railroad, 26 Minn. 125, 18 Am. Rep. 360; Illinois Central R. R. v. Crudup, 63 Miss. 291; Bryan v. R. R., 32 Mo. App. 228; Camden v. Railroad, 7 Atl. Rep. (Pa. 1887) 731; Mobile, etc. R. R. v. Hopkins, 41 Ala. 486, 2 Am. St. Rep. 369. On the other hand, it was held in New York that public policy was satisfied by holding a railroad company bound to take the risk when the passenger chooses to pay the regu lar fare. If he voluntarily and for any valuable consideration waives the right to indemnity, the contract is binding. Bissell v. Railroad, 25 N. Y. 442, 8 Am. Dec. 369. This rule applies particularly to persons traveling on passes, and is upheld by the following authorities: Quimby v. Railroad, 150 Mass. 365, 23 N. E. Rep. 205, 5 L. R. A. 846; Griswold v. Railroad, 53 Conn. 371, 55 Am. Rep. 115; Chicago, etc. R. R. v. Hawk, 36 Ill. App. 321; Rogers v. Steamboat Co., 86 Me. 261, 29 Atl. Rep. 1069, 25 L. R. A. 491; Muldoon V. Railroad, 10 Wash. 311, 45 Am. St. Rep. 787; Annas V. Railroad, 67 Wis. 46, 30 N. W. Rep. 282. Thus, in the case of Rose v. Railroad, 39 Iowa, 246, a railroad was held liable for causing the death of a passenger by the negligence of its employees, although he was riding on a pass releasing the company from all liability for injury to his person and property. In the case of Bissell v. Railroad, 25 N. Y. 442, it was held that a common carrier, in consid

Central R. R. v. .Crudup, 63 Miss. 291, it was held that a railroad company was not relieved from liability for the negligence of its servants by the fact that the injured person, a mail agent running on its road, had accepted a free ticket, by which he assumed the risk of injury.

In conclusion, it may be stated that the weight of authority, sound principle and a safe public policy sustain the following propositions,-that a common carrier may limit its liability by special contract for injuries not arising from its own negligence or that of its servants, but that in regard to the latter a con. tract exempting itself from liability is void as against public policy; that in the case of gratuitous passage the liability of the carrier for its own negligence or that of its servants is not modified or limited to any extent whatever, the liability of the carrier in this regard not arising out of the contract of passage, but out of the relation created by accepting the person as a passenger; and for the same reason any limitation of its liability in cases of gratuitous passage is no more warranted than in cases of passengers for hire, and is as much opposed to a safe public policy in the one case as the other; that any distinction between ordinary and gross negligence in permitting a carrier to limit its liability as to one and not the other is vague and artificial, as all negligence which injures the person and endangers human life may be said to be gross. The fraud and willful misconduct of the carrier or its agents are by all authorities held to subject the carrier to a liability from which it can by no contract claim exemption or exoneration.

A. H. ROBBINS.

JETSAM AND FLOTSAM.

SPECIALISM IN THE LAW.

James B. Dill, the corporation lawyer, writes interestingly in Success on the question, "Are the Three Great Professions Declining?" taking the law as his subject. He says: "The great bulk of the work of the profession has been turned into industrial creation and adjustment, and very often the counsel is as good a business man as his clients. A knowledge of law has, therefore, within the last thirty years, become the side arms of certain classes of the captains of industry. Every good business man knows a good deal of law. Specialism has split it up into a half dozen or more divisions, and a lawyer who is now able to master more than one sort of practice is a genius. The profession has lost nearly all of its old, æsthetic, ostentatious attractions. The civil law pays a practitioner so much more than the criminal law does, that it attracts the ablest men. Juries and courts no longer care for eloquence. Yes, law is business, and if the young man wants to practice it, the sooner he makes up his mind to do so with an eye single to some particular branch of it, the better lawyer will he become."

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