Court Opinion

ID: 3409140
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:26:41.77524+00
Date Added: 2024-06-11T13:50:03.127167
License: Public Domain

Upon motion of appellants, a rehearing was granted in this case, and the cause was resubmitted at the Lewiston Term on May 25th, 1944.
Appellants have filed an able and exhaustive brief, devoted almost exclusively to the contention the Court erred in its determination that the contract in question was severable and divisible.
It is urged that the Court has misconstrued the intention of the parties to the contract; that apportionment of consideration is not conclusive or controlling in determining whether a contract is entire or severable, and appellants *Page 692 
cite Page on Contracts, 2d Ed., Vol. 4, p. 3613, sec. 2088, reading as follows: "The rule that apportionment of consideration determines the character of the contract is not an arbitrary rule, however, but it is merely a convenient rule for ascertaining the intention of the parties in most cases. The consideration may be apportioned but the remaining provisions of the contract may show that the contract is entire."
The same authority, sec. 2088, p. 3611, Vol. 4, states: "One of the most certain of the single tests for determining the intention of the parties is whether the consideration on the one side is apportioned to each of the different covenants on the other, or whether the consideration on the one side is the entire consideration for all the covenants upon the other side. If the consideration agreed upon for each covenant is apportioned to each covenant separately, the contract is prima facie severable. If the consideration is not apportioned to the various covenants on the part of the adversary party, the contract is prima facie entire."
In Pettigrove v. Corvallis Lumber Mfg. Co., 143 Ore. 33,21 P.2d 198, the court said: "It is well settled by the decisions cited and by the courts and law writers generally, that, if the part to be performed by one party consists of several distinct and separate items, and the price to be paid by the other is apportioned to each item to be performed, or is left to be implied by law, such a contract will generally be held to be severable."
In considering this matter, Williston on Contracts, Rev. Ed., Vol. 3, p. 2416, sec. 862, states: "In case of a contract naturally and accurately severable (such as a contract for the sale of a bill of goods at certain prices for each article) courts incline to hold the contract severable, and to grant a recovery for that portion of the goods actually delivered, less damages for the non-delivery of any portion not delivered. Under all ordinary circumstances this course will result in exact justice. The vendor will receive payment for his goods which the vendee has retained, and the vendee will receive compensation for any damage which he has actually suffered."
In Mattison v. Connerly, 46 Mont. 103, 126 P. 851, the court said: "In Hughes v. Mullins, 36 Mont. 267, 92 P. 758, 13 Ann. Cas. 209, this question was before the Court and the rule was then announced as follows: 'We think a correct *Page 693 
rule for determining whether a contract is entire or severable is announced in 2 Parsons on Contracts (8th Ed.), p. 517, as follows: 'If the part to be performed by one party consists of several separate and distinct items, and the price to be paid by the other is apportioned to each item to be performed, or is left to be implied by law, such a contract will generally be held to be severable. * * * And if the consideration to be paid is single and entire, the contract must be held to be entire, although the subject of the contract may consist of several distinct and wholly independent items.' "
It is strongly urged here that the contract in question is entire. In many cases it is difficult to determine whether a contract is entire or severable. It is impossible to lay down a rule which will apply to all cases, therefore each case depends upon the terms of the contract involved. (17 C.J.S., Sec. 331, p. 787.)
Appellants direct our attention to specific clauses in the contract and argue therefrom that these clauses indicate the sale of the merchandise and lease of the real property and equipment are so intertwined as not to admit any intendment of any of the parties to the contract that the same were to be severable.
In 17 C.J.S., Sec. 331, p. 786, the author states: "A contract may be indivisible in certain aspects or for certain purposes although divisible in other aspects or for other purposes. Thus a contract may be entire in the sense that there is but one agreement covering all the terms, and divisible in the sense that the performances are divided into different groups, each set embracing performances which are the agreed exchange for each other." See also Bianche Bros. v. Gendron,292 Mass. 438, 198 N.E. 767, 107 A.L.R. 953; In re Marshall'sGarage, CCA (2d) Cir., 63 Fed. (2d) 759; Restatement of theLaw, (Contracts) Vol. 1, Sect. 266, pp. 385, 386; Williston onContracts, Rev. Ed., Vol. 4, Sec. 860-A, p. 2408.
In Armstrong v. Illinois Bankers Life Co., 217 Ind. 601,29 N.E.2d 415, the court said: "In determining whether the questioned instrument shall be considered as constituting but one entire contract or as constituting two or more separate and independent contracts, courts and textbook writers have laid down several rules to guide us. It is said — primarily the question of whether a contract *Page 694 
is entire or severable is one of intention to be determined from the language which the parties have used, and also the subject matter of the agreement. Another inquiry is, whether the parties reached an agreement regarding the various items as a whole or whether the agreement was reached by regarding each item as a unit. (2 Williston on Contracts, Sec. 863.) Another important factor in the determination of the question is whether the consideration is stated to be given for each part as a separate unit or whether there is a single consideration covering the various parts. In Thompson v. Fesler, 1929,74 Ind. App. 80, 123 N.E. 188, 191, the court said: 'The test chiefly relied upon is whether the parties have apportioned the consideration on the one side to the different covenants on the other. If the consideration is apportioned so that for each covenant there is a corresponding consideration, the contract is severable. If, on the other hand, the consideration is not apportioned, and the same consideration supports all the covenants and agreements, the contract is entire. (3 Page onContracts, Sec. 1484.) A contract is entire when by its terms, nature and purpose, it contemplates and intends that each and all of its parts and the consideration shall be common to each other and interdependent. On the other hand, it is the general rule that a severable contract is one which in its nature and purpose is susceptible of division and apportionment.' "
Our attention is also directed to the rule for ascertaining intention as expressed by the Supreme Court of New Mexico, in the case of Fancher v. Board of Commissioners, 28 N. M. 179,210 P. 237, as follows: "It may be stated generally, that the intention of the parties making a contract is the controlling consideration in determining whether the same is severable or entire. This intention, when properly ascertained, will in all cases determine the question. In ascertaining the intention of the parties resort must necessarily be had to the terms of the contract in the first instance. If they clearly indicate the intention, the question is at once settled. But ordinarily the terms of the contract do not settle the question, in cases like this where many units of service are embraced in the contract. Resort may then be had to the nature of the subject matter; whether the whole quantity, service or thing, as a whole, is of the essence of the contract; and perhaps other tests may be resorted to." *Page 695 
Applying the rules above announced, we turn our attention to the specific contract in question, in this case.
Paragraph Three of the contract expresses two desires of the parties of the first part (respondents here), to-wit: To sell, "the stock of goods, good will of the business carried on and conducted at Weippe, Idaho, by said parties, and further, to rent to the party of the second part (St. Clair) the store, warehouse, dwelling, barn and slaughter house located on the real property heretofore described * *"
In Paragraph Four, St. Clair covenants and agrees to purchase the merchandise and pay therefor the sum of $11,389.88 payable in installments, and in Paragraph Five, respondents lease to St. Clair the store, warehouse, furniture and fixtures, for a period of five years from the date thereof, at a monthly rental of $95.00, said rental to continue for five years unless the contract is forfeited as provided by the terms thereof.
In Paragraph Six, St. Clair agrees to maintain the stock of goods as full and complete as at the time of the sale, and to make an inventory twice a year and submit same to the respondents, and respondents retain the right to enter into and upon the premises at reasonable and seasonable times, to check the inventory or to make the same themselves.
Paragraph Seven reads as follows: "That in the event the parties of the first part desire to sell the real property the party of the second part shall be given the first privilege to purchase the said real property. That the price mentioned for the store and warehouse only is seven thousand five hundred dollars."
The contract as a whole is not a model of clarity but in considering the whole contract and the several specific provisions thereof emphasized by appellants in their brief, we cannot conclude that the contract expresses a determination or intention that the parties considered it as entire or inseparable.
In fact the provision of Paragraph Seven reserving the right in respondents to sell the real estate therein mentioned, if exercised, would obviously terminate the lease, since it does not appear that the vendors' right to sell was limited to a sale subject to the terms of the lease. This reservation of the right in vendors to make the sale was in no way limited as to time or otherwise, except that St. Clair was given the first privilege to purchase. St. Clair *Page 696 
and the other parties to the contract therefore, were charged with information that in the event of a sale to a third party he would not have the legal right to remain in possession of the premises and in which event he would necessarily be required to separate the place of operation of the business from the premises.
If we conclude that it was the intention that the business be maintained in the particular premises and the sale of the merchandise had been conditioned upon the right of St. Clair to continue his lease, then, obviously we must disregard Paragraph Seven. This fact, and the further fact that there was a specific price agreed upon for the payment of the merchandise and a specific price agreed upon for the use and rental of the premises, under the rules above announced would characterize the contract as a severable one, under the authorities heretofore cited.
It is likewise clear that the consideration is apportioned so that for each of the covenants, to-wit: the covenant to sell and the covenant to rent, there is a corresponding consideration. The contract therefore, in its nature and purpose, is susceptible of division and apportionment.
We adhere to our original decision.
Holden, C.J., and Ailshie, J., concur.
Budge and Givens, JJ., dissent.