must, therefore, we think, seek redress by a cross-claim for damages. Judgment for the plaintiff. NATIONAL CABLE & MFG. CO. v. FILBERT. (Supreme Court of South Dakota, 1913. 31 S. D. 244, 140 N. W. 741, 45 L. R. A. [N. S.] 258.) Action by the National Cable & Manufacturing Company, a corporation against W. F. Filbert. From judgment for plaintiff, defendant appeals. POLLEY, J. This action grew out of a contract entered into between the plaintiff, and the defendant, a hardware and implement dealer at Twin Brooks, S. D. The contract was entered into on the 18th day of December, 1907, and provided for the sale, by the plaintiff to the defendant, of a quantity of copper cable and other material and equip-ment of lightning rods. The contract provided for the delivery, by the plaintiff, of the goods at the railway station at Niles, Mich. The contract gave the defendant the exclusive right to sell the merchandise described in the contract, and other merchandise of a similar character to be purchased from the plaintiff, but restricted the territory within which he might sell to Twin Brooks, Milbank, Corona, and Marvin, and limited the time within which he might sell to the period between the acceptance of the contract by the plaintiff and the last day of December, 1908. The defendant was also bound by the contract, during the above period, not to purchase any similar goods from any other manufacturer. It contained a covenant fixing the minimum price for which he should sell said copper cable, and also contained the following covenant, to wit: "That said first party (plaintiff) agrees to furnish a salesman to assist in starting the business as soon as possible after re- . quested by said second party, and that said second party in case a salesman is furnished at his request, agrees that on arrival of said salesman, he, said second party, will furnish a man and team and at once proceed to canvass jointly with said salesman, exclusively for the sale of lightning rods, and that, as soon as said canvass is terminated, he, said second party, hereby agrees to pay said salesman, as compensation for his services, an amount equal to one-half of the profits arising from the sale of the goods during said canvass." Plaintiff's agent, also, in addition to the numerous restrictions contained in the written contract, gave defendant positive instructions not to attempt to put up any rods until they (meaning some of the plaintiff's agents) were there to show him how to put them up. * * * The goods were shipped by the plaintiff and received by defendant at his place of business in Twin Brooks, S. D. No question was ever raised as to the value of the goods, or that they were not shipped according to contract; but the defendant claims that the plaintiff never furnished him with a saleman to assist in starting the business, as provided for in said contract, and justifies his refusal to pay the bill solely upon that ground. * * The case was tried to a jury. The plaintiff, on the trial, treated the agreement to furnish the expert as one of the "conditions precedent" to be performed by it, and directed the greater part of its somewhat voluminous testimony to an attempt to prove that it had complied with this requirement of the agreement. At the close of all the testimony, the plaintiff moved the court to direct a verdict for it. motion was granted, and the defendant took exceptions. This As the case appears on appeal, the question involved depends wholly upon the construction to be put upon the above-quoted clause of the contract. It is strenuously contended by the respondent that this clause in the contract is an independent covenant to be performed by the plaintiff at some subsequent time, and without reference to defendant's liability, and that therefore the court was justified in taking the case from the jury. On the other hand, it is just as strenuously contended by the appellant that this covenant is one of the material elements of the contract, or was a "mutual and dependent condition," to be performed by it to entitle it to the purchase price. If this contention is correct, then the question should have been submitted to the jury. We may state, at the outset that the fact that the defendant undertook to rescind by returning the goods to the plaintiff would ordinarily be wholly immaterial to a determination of the issues in the case. If it were necessary, as contended by defendant, that the plaintiff must comply with the disputed condition in the contract before it became entitled to the purchase price, it was unnecessary for him to rescind in order to avoid liability. He would have a perfect right to wait until the plaintiff had performed all of its obligations before he became liable for the purchase price. On the other hand, if the disputed clause in the contract was an independent covenant or "condition subsequent," then the defendant became fully liable upon plaintiff's delivery of the goods, and his attempted rescission would have been of no avail. * * * The contract does not specifically state upon its face that this provision is a condition precedent, and therefore, whether it is such or not is a matter of construction for the court, and depends upon a consideration of the entire contract and the intent and understanding of the parties themselves, as disclosed by their conduct relative hereto. The court having directed a verdict for the plaintiff, all the evidence of the defendant must be taken as true, and he must be given the benefit of all legitimate inferences therefrom. * * * Provisions in contracts like the one in dispute in this case have been much litigated in the courts; but, owing to the peculiar nature of the question, each case must be determined in accordance with the fact involved. No definite rule, other than to determine the real intent of the parties, where the same is not clearly expressed by the terms of the contract, can be laid down; and it is rarely that the conclusions reached in one case can be decisive of another. As was said by Foot, J., in Grant v. Johnson, 5 N. Y. 255: "So many decisions have been made on the vexed question of what are, and what are not dependent. covenants, and so many of them are irreconcilable that they rather perplex than aid the judgment in determining a given case. One rule is universal, and that is that the intent of the parties is to control." While this is true, the principles and reasoning that have been applied in the adjudicated cases are helpful in determining this vexed question. * * * In Ink et al. v. Rohrig, 23 S. D. 548, 122 N. W. 594, this court announced the rule as follows: "The universal rule laid down under the authorities concerning the construction of covenants in contracts, as to whether they are dependent or independent, is that the relation. of covenants is to be determined according to the intention and meaning of the parties as the same appears in the instrument, and by the application of common sense to each particular case, to which intention, when once discovered, all technical forms of expression must give way. It is further held under the authorities that, in case of doubt, the courts will construe such covenants as dependent, rather than independent." And, quoting from Bank v. Hagner, 1 Pet. 464, 7 L. Ed. 219, the court said: "In contracts of this description the undertakings of the respective parties are always considered dependent, unless a contrary intention clearly appears. A different construction would, in many cases, lead to the greatest injustice, and a purchaser might have payment of the consideration money forced upon him, yet be disabled. from procuring the property for which he paid it. Although many nice distinctions are to be found in the books upon the question as to whether the covenants are promises of the respective parties to the contract or to be considered independent or dependent, yet it is evident the inclination of the courts strongly favored the most just. The seller ought not to be compelled to part with his property without receiving an equivalent in return." In the case of Davis et al. v. Jeffris, 5 S. D. 352, 58 N. W. 815, this court used the following language: "Whether or not a covenant is dependent or independent must be ascertained from the contract and attending circumstances; the rule being that such covenants will be construed as dependent, unless a contrary intention appears from the terms of the contract." This was an action to recover on a contract for the construction of a creamery and cold storage plant, according to plans and specifications contained in the contract. The contract provided that the cold storage department should be constructed under the McCray Cold Storage and Refrigerator patents, and' contained the following covenant: "We agree to furnish with said contract a patent deed from the McCray Refrigerator Company, conveying all the rights under said patents." The provisions of the contract, so far as the erection and equipment of the plant is concerned, were carried out by the plaintiff, but the patent deed for the McCray Cold Storage and Refrigerator patents was not furnished; plaintiff contending that the stipulation to furnish the said patent deed was an independent stipulation or covenant, and that the plaintiffs were not required to prove that they had furnished or tendered such deed to entitle them to recover on the contract. The contract provided that the defendants should pay for the creamery and cold storage when "Completed." The court held that the completion of the plant without the patent deed was not a "completion of the contract," and that proof that the patent deed had been furnished was essential to plaintiff's right of recovery, holding that, although the contract, so far as the completion of the plant is concerned, had been fully complied with by the plaintiff, still it would be of no value, and could be made of no use to the defendants, unless the patent deed conferring upon defendants, the right to use the McCray Cold Storage and Refrigerator process was furnished; that they contracted for something that they knew would be valueless to them. when they got it, or else the covenant to furnish the patent deed was one of the essential elements of the contract. This case is directly in point with the case at bar. When all the surroundings and attending circumstances are taken into consideration, it cannot but appear that, when the defendant entered into the contract sued upon, the furnishing of a salesman to help defendant dispose of the goods contracted for was as important an element in the transaction as the goods themselves. The goods sued for were not staple goods; they could not be placed upon the shelves in defendant's store and sold in the ordinary course of business. In order to dispose of them, it was necessary to canvass the territory over which they were to be sold, and to attach them to the buildings of purchasers as they went along. * * * Again a careful examination of the disputed clause in this contract, in view of the attending circumstances, will be instructive. It will show that the covenant contained in this provision was as much in contemplation of the parties hereto, at the time of entering into the contract, as the shipment of the merchandise itself. It was the inducement that led defendant to enter into the transaction; it was not an afterthought nor a mere gratuitous act on the part of the plaintiff, to be performed only at the option of defendant. Plaintiff agrees absolutely to do it. True, it is to be done so soon as possible after requested, but it is to be done whether requested or not; and the only option the defendant had in the matter was by making the request to fix the time, or rather to hasten the time, of his coming. Neither is the condition requiring the defendant to furnish a man and to assist such agent and to pay his compensation out of the profits from sales they jointly made an absolute condition to be performed at all events. He is to do this only in case he has made the request to have the agent sent. If plaintiff sent him in compliance with the terms of his agreement, it would be without cost to the defendant. It was to the pecuniary interest of the plaintiff to have the goods shipped to defendant disposed of at as early a date as possible; and it was also to its pecuniary interest to have the lightning rods, when sold, properly attached to the buildings for the purchasers, in order that a market for other similar goods might be created as contemplated. by the terms of the agreement. It was for this reason that plaintiff, through its agents, instructed the defendant not to try to put up any of the lightning rods until they were there to show him how to do it, and for this reason defendant could not dispose of the goods nor derive any benefit whatever from the purchase until this assistance was furnished. Thus, it will appear that the furnishing of the assistance provided for in the disputed clause of this contract is one of the most important and essential elements of the entire agreement. And this is the view taken by both plaintiff and defendant. Ample time for its performance was allowed between the sale of the goods and the time the purchase price was to become due. During this time, one or two of plaintiff's agents visited the defendant, and plaintiff claimed. they had complied with the agreement. Defendant claimed they did not, and refused payment on that account. Later on plaintiff sent other of its agents to defendant, who they claimed rendered defendant the assistance provided for in the contract, but this was disputed by defendant; and whether they did or not was the principal and practically the only issue raised at the trial. That plaintiff so regarded this condition is apparent from the fact that it assumed the burden on its main case of showing that this clause in the contract had been fully complied with. If the intent of the parties, when entering into the contract, is to be gathered from their understanding of and conduct relative thereto, then certainly the agreement to furnish the defendant this assistance in starting the business was one of the essential elements of the contract; and the question whether it had been complied with or not should have been submitted to the jury. The judgment and order appealed from should be reversed, and a new trial awarded. MAYO V. AMERICAN MALTING CO. (United States Circuit Court of Appeals, Fourth Circuit, 1914. Action by the American Malting Company against George D. Mayo, trading as the Mayo Milling Company. Judgment for plaintiff, and defendant brings error. ROSE, District Judge. The parties will be designated as they were below. The malting company was there the plaintiff, Mr. Mayo the defendant. On October 26, 1911, the defendant agreed to buy 6,250 bushels of malt from the plaintiff. He was to pay $1.32 a bushel for it. The terms were sight draft, bill of lading attached. He was to order the malt shipped in approximately equal monthly installments prior to June 1, 1912. * * * * * * * * The defendant never ordered any of this malt. The relations between the parties began in September, 1911. Defendant then wrote to plaintiff for its prices for distillers' malt. An agent of the plaintiff thereupon called upon the defendant. At the interview an understanding was reached that defendant would buy malt from the plaintiff, and that the latter would not quote prices on distillers' malt to other persons in Virginia. For some reason during the season of 1912, the Richmond distillers bought much less than the usual quantity of malt. The barley crop of 1912 was large and of high average quality. The prices of malt fell rapidly. * While things were thus drifting along a car of distillers' malt sold by the plaintiff to the Adams Grain & Provision Company of Richmond arrived in that city. The defendant learned of the incident almost immediately. He at once, on the 23d of October, wrote to the plaintiff that he regarded this sale to one whom he described as a competitor as a breach of the contract with him, and told it that he would not take any of the malt. * In the court below and here he contends that he had the right to take this position, and that it is a complete answer to plaintiff's demand. It is to the refusal to tell the jury that the shipment in question in itself entitled the defendant to rescind, that he makes his most serious objection. It is not every breach of a term or provision of a contract which will justify its rescission by the other party. If the breach did him no hurt, it was immaterial. If the shipment in question forced down the price of defendant's malt, or kept him from selling it, he was injured by it. It could not have harmed him in any other way. Whether it did him that harm was squarely submitted to the jury. They decided against him. We do not see that the defendant has any reason to complain of the action of either court or jury. * * ** Affirmed. |