Supreme Court of Pennsylvania - 151 Pa. 534
In Gill v. Johnstown Lumber Co. (1892), the Pennsylvania Supreme Court resolved a contract disagreement between a log driver, John Gill, and a lumber company. The contract in question was a severable contract, where multiple distinct items are involved with separate prices allocated to each.
Gill was hired by Johnstown Lumber Co. to transport logs and timber to different locations based on a specific rate per item. However, a flood washed away some logs before they reached their destination. Gill sued the company for the payment of successfully delivered logs, while the company argued that the contract was entire and Gill's failure to deliver all logs constituted a breach.
The court determined the contract was severable, and Gill was entitled to compensation for the logs and timber that had been delivered at the agreed rate. Using the apportionable consideration test, the court dismissed the company's claim of a common carriage contract, dependent on delivering goods to a designated place. Instead, they deemed Gill a contractor providing a specific service for an agreed price.
This case illustrates the Doctrine of Divisibility which allows a court to treat a single contract as though it were two or more separate agreements for purposes of allowing recovery for the portion of the contract that was substantially performed.
The legal case concerns whether a contract is entire or severable, and if the lower court's decision to direct a verdict for the defendant was correct. The determination of whether a contract is entire or severable depends on whether the part to be performed by one party consists of several distinct items and if the price to be paid by the other is apportioned to each item. The contract in question is severable because the work to be done by the plaintiff consisted of several items, and the consideration to be paid was apportioned among them. However, the plaintiff is not entitled to compensation for logs that were swept away by the flood, even if they had been driven part of the way by the plaintiff. The judgment is reversed, and a new trial is ordered.
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