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is real estate, and there is a clause in the contract for forfeiture for non-payment, the vendor cannot safely dispose of the property elsewhere without taking steps to declare a forfeiture.235 But he is not obliged to wait indefinitely for a dilatory purchaser to pay his money. If the purchaser's default in payment has continued for an unreasonably long time, he may be estopped to object to the sale of the property to a stranger, or to claim it for himself under his contract, especially if the property as in the mean time greatly increased in value,238 or if there are circumstances tending to show that such purchaser acquiesced in the sale of the property by his proposed vendor.237 On the other hand, it has been said that the purchaser is not justified in treating the contract as abandoned until the time for its performance arrives, although the vendor may in the mean time have conveyed the property away, presumably because of the possibility that he may regain the title.288 In a case in New York, however, it was held that a purchaser in this situation might rescind as soon as the land was conveyed to a third person, and that it was immaterial that the latter had conveyed it back to the grantor before the time when the purchaser was bound to take it and pay for it under the original contract.239 It should be added that a vendee under a contract of sale waives his right to rescind by reason of a conveyance of the land by the vendor to another, who took subject to such contract, where, with knowledge of the facts, he negotiates with him as to the payments under the contract.240

§ 212. Breach of Covenant or Condition, in General.—It has been stated in general terms that the breach of a condition or covenant in a contract is no sufficient reason for its rescission in equity, in the absence of fraud, mistake, or

235 Musham v. Musham, 87 Ill. 80.

236 Evans v. Bentley, 9 Tex. Civ. App. 112, 29 S. W. 497, 36 S. W. 1070.

237 Moran & Co. v. Palmer, 36 Wash. 684, 79 Pac. 476.

238 Garberino v. Roberts, 109 Cal. 125, 41 Pac. 857.

239 James v. Burchell, 82 N. Y. 108. And see Nes v. Union Trust

Co., 104 Md. 15, 64 Atl. 310.

240 Kreibich v. Martz, 119 Mich. 343, 78 N. W. 124.

some other independent ground of equitable relief.241 But the best authorities make a distinction in this respect between dependent and independent covenants. A dependent covenant is one which goes to the whole consideration of the contract, and the breach of such a covenant gives to the injured party the right to rescind the contract, or to treat it as broken and to recover damages for a total breach; but the breach of an independent covenant-a covenant which does not go to the whole consideration of the contract, but which is subordinate and incidental to its main purpose-does not constitute a breach of the entire contract, nor warrant its rescission by the injured party, but the latter is still bound to perform his part of the contract, and his only remedy for the breach is compensation in damages.242 These principles have been more fully stated as follows: "Where the undertaking on one side is, in terms, a condition to the stipulation on the other (that is, where the contract provides for the performance of some act or the happening of some event, and the obligations of the contract are made to depend on such performance or happening), the conditions are conditions precedent. The reason and the sense of the contemplated transaction as it must have been understood by the parties, and is to be collected from the whole contract, determines whether this is so or not, or it may be determined from the nature of the acts to be done, and the order in which they must necessarily precede and follow each other in the progress of performance. But when the act of one is not necessary to the act of the other, though it would be convenient, useful, or beneficial, yet, as the want of it does not prevent performance, and the loss and inconvenience can be compensated in damages, performance of the one is not a condition precedent to performance by the other. The non-performance on one side must go to the entire substance of the contract and to

241 Forster v. Flack, 140 Wis. 48, 121 N. W. 890; Council Bluffs Iron Works v. Cuppey, 41 Iowa, 104.

242 Oscar Barnett Foundry Co. v. Crowe, 219 Fed. 450, 135 C. C. A. 162; Kauffman v. Raeder, 108 Fed. 171, 47 C. C. A. 278, 54 L. R. A. 247; Howe v. Howe & Owen Ball Bearing Co., 154 Fed. 820, 83 C. C. A. 536; Benham v. Columbia Canal Co., 74 Wash. 110, 132 Pac. 884.

the whole consideration, so that it may safely be inferred as the intent and just construction of the contract that, if the act to be performed on the one side is not done, there is no consideration for the stipulation on the other side. When one act is to be done by one party before another act, which is the consideration of it, is to be done by the other, the covenants are dependent, and the other is not bound to perform until the first act has been done, because the first act is a condition precedent to performance of the other; and in all cases where covenants are dependent, they are in the nature of conditions precedent, and must be performed in the order of time in which performance is provided for in the covenant; and in determining whether covenants are dependent or independent, the intention of the parties and the good sense of the case will be regarded, rather than the technical sense of the words used." 243

Applying these principles, it is held that one who executes a conditional agreement to sell land, importing an obligation to transfer title after the performance of certain conditions by the vendee, is entitled to rescind and re-enter after the vendee's failure to perform.244 So, where a contract for the sale of land authorizes the vendor to forfeit it on the purchaser's failure to fence and cultivate as therein required, the condition is essential and its breach warrants a rescission.245 Again, where the plaintiff, a chemical engineer, entered the employment of defendant, a manufacturer, agreeing to devote his entire time and skill to the defendant's business for three years at a salary fixed by the contract, and it was further stipulated that any inventions or discoveries made by plaintiff during the term and relating to the manufactures contemplated should be disclosed to defendant, and if deemed advisable should be patented at his expense for the joint and equal benefit of the parties, it was held that this stipulation was an essential part of the

248 Huggins v. Daley, 99 Fed. 606, 40 C. C. A. 12, 48 L. R. A. 320. And see New Orleans v. Texas & P. Ry. Co., 171 U. S. 334, 18 Sup. Ct. 875, 43 L. Ed. 178; Delano v. Jacoby, 96 Cal. 275, 31 Pac. 290, 31 Am. St. Rep. 201; Green Mountain Falls Town & Improvement Co., 22 Colo. 225, 43 Pac. 1036.

244 Baldwin v. Morey, 41 La. Ann. 1105, 6 South. 796.

245 Benham v. Columbia Canal Co., 74 Wash. 110, 132 Pac. 884.

consideration of the obligations assumed by the defendant, and constituted an implied condition, a breach of which by the plaintiff justified the termination of the entire contract by the defendant.246 And a similar ruling was made in a case where the owner of a patent granted to another the sole right to manufacture and sell the patented articles, in consideration of the payment of a royalty and other agreements, but afterwards proceeded, without cause of complaint against his grantee, to manufacture and sell the patented articles on his own account at reduced prices.247 So, where a landlord fails to perform a covenant to adapt the premises to the tenant's business, the tenant has a right to rescind.248 And where the furnishing of electricity to light the streets of a city day by day and continuously is a condition precedent to the continuance of the obligation of the contract, the city may rescind the contract on the neglect of the contractor to furnish the current.2 249 For similar reasons, where one subscribes for stock in a proposed corporation, the legal organization of the corporation is a condition precedent to any obligation on his part to pay the agreed price, and its failure to effect this justifies him in rescinding.2 So again, where part of the purchase price of land is to be paid in work performed by the vendee, in cutting and transporting the timber standing on it, there is an implied covenant on the part of the vendor that he will permit the vendee to cut the timber, and if he refuses to do so, the vendee will be entitled to rescind the contract.251 And the rule applies also in cases where it is made a part of the contract of sale of goods that the freight charges shall not exceed a certain sum,252 that the articles composing a stock of goods shall be put in at their cost or invoice price,253 that mer

246 Watson v. Ford, 93 Fed. 359, 35 C. C. A. 345.

247 Brusie v. Peck Bros. & Co., 54 Fed. 820, 4 C. C. A. 597. 248 Taylor v. Dinsmore, 68 Misc. Rep. 143, 124 N. Y. Supp. 936. 249 Mills v. City of Osawatomie, 59 Kan. 463, 53 Pac. 470.

250

250 Manistee Lumber Co. v. Union Nat. Bank, 143 Ill. 490, 32 N. E. 449.

251 French v. Bent, 43 N. H. 448.

252 Johnson v. Latimer, 71 Ga. 470.

253 New York Brokerage Co. v. Wharton, 143 Iowa, 61, 119 N. W.

chandise sold shall be measured at the point of shipment and payment made accordingly,254 or that the purchaser of land shall pay half the cost of surveying the premises or of procuring title thereto.255 And in a case where a guarantor, to whom the buyer had transferred the property as security, repudiated his guaranty, it was held that the seller was entitled to treat the contract of sale as rescinded, even though the guaranty might still be binding and enforceable. But here, as in other cases of non-performance, prevention of performance by the wrongful act of the other party is an excuse, and one cannot found any right to rescind on the breach of a covenant or condition precedent when that breach was caused by his own opposition, interference, or refusal.257

We have also to consider the case where one party agrees to furnish, and the other to buy and pay for, a supply of a given commodity during or within a stipulated period, the quantity not being exactly measured, but depending on the needs or requirements of the buyer. Here there are mutually dependent covenants, and a failure of performance by either party will justify rescission by the other. Thus, the purchaser's failure to demand a full supply of the commodity, or so much as he needs for a given purpose, according to the contract, will give the seller a right to rescind.258 So, where the defendant contracted to supply the plaintiff with all the new barrels needed during a certain year, at specified prices, such contract was held to imply a covenant that the plaintiff would order only such barrels as were necessary for his business, which was dependent on the defendant's covenant to supply, so that the breach of the plaintiff's covenant, by his ordering barrels with a view to stocking up for another year, and for sale to other parties, constituted a breach of his contract which entitled the

254 J. Weller Co. v. Columbia Conserve Co., 31 Ohio Cir. Ct. R. 562. 255 Hutcheson v. McNutt's Heirs, 1 Ohio, 14; Davis v. Terry, 114 N. C. 27, 18 S. E. 947.

256 Blair-Baker Horse Co. v. Hennessey, 36 R. I. 132, 89 Atl. 299. 257 Voliva v. Cook, 262 Ill. 502, 104 N. E. 711. And see, supra, § 205.

258 Los Angeles Gas & Electric Co. v. Amalgamated Oil Co., 156 Cal. 776, 106 Pac. 55; Frommell v. Foss, 102 Me. 176, 66 Atl. 382.

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