English books there has sprung up an astonishing usage of the word "condition" in the law of sales as meaning a certain kind of promise and this usage has to some extent been followed in the United States. It cannot be too strongly deprecated."

§ 666. What it is which conditions qualify.

In the law of property a condition relates generally to the vesting or divesting of title, but may relate to the vesting or divesting of other rights than the right of ownership. In the law of contracts, conditions may relate to the formation of contracts or to liability under them. It is a source of confusion of thought that the word condition is frequently used without exact recognition of what the supposed condition qualifies. Generally in contracts when reference is made to conditions, what is meant is conditions qualifying liability under a contract or promise, not conditions qualifying the existence of a contract or promise. In connection with the formation of contracts, the effect of conditions, imposed by the terms of the offer or by rules of law, on the existence of contracts was considered. In connection with fraud and other circumstances rendering contracts voidable, certain rules of law divesting or destroying existing contracts will be considered, though by a term of a contract also, its existence may be destroyed; but under the head of conditional contracts it is generally understood that the conditions referred to, qualify not the existence of the contract, but the liability under it. A condition may qualify the liability of one party to the contract, or of both parties. The fact that no liability on either side can arise until the happening of a condition,does not, however, make the validity of the contract depend upon its happening. Whether there is a contract depends upon the right of the

'In Chalmers Sale of Goods Act (5th Ed.) 174, the author says: “In conveyancing, a distinction was drawn between conditions and covenants, which in contracts has now become obliterated." Such a statement goes far beyond the facts. See, e. g., Sanitary District v. Chicago &c. Trust Co., 278 Ill. 529, 116 N. E. 161, for the usage in

construing a deed. Except so far as this nomenclature in the law of sales confuses the distinction it is generally recognized. But if it is evident in an instrument that parties used "condition" in the sense of promise, their intention will be effectuated. Green County v. Quinlan, 211 U. S. 582, 29 S. Ct. 162, 53 L. Ed. 335.

parties to revoke their promises. A contract to sell goods to arrive" will impose no liability on either party unless the goods arrive," but each is irrevocably bound by a contract from the outset.

§ 666a. Precedent and concurrent conditions.

A precedent condition in a contract is the typical kind. It must be performed or happen before liability arises on the promise which the condition qualifies. One may also speak of a condition precedent to the existence of a contract. Acceptance is such a condition, but when the question under consideration is the construction of a contract or the duties arising under it, the term means a prerequisite to liability. Liability may arise immediately on the happening of a condition precedent, as in case of a contract to pay if certain work is done; or it may not arise until a later day-as a promise to pay on July 1st, if something has been done or has happened in the previous January. If nomenclature were perfectly consistent, a concurrent condition would be a condition which must happen concurrently with liability, but that is not the meaning of the term. A condition which must so happen is included under the name condition precedent. A covenant to pay A if he jumps six feet, will give rise to liability concurrently with the successful completion of his jump. That there is genuine concurrency in such a case may be seen from supposing such a promise made as an offer. Only on the supposition that the jump and the promise were exchanged at the instant of the jump would the requirements of consideration be satisfied, and the promise by its terms is performable immediately. There must be the same concurrency where the promise is made by covenant and where consequently, the existence of the contract does not depend on the performance of the condition. But as in logic the jump seems prior to the liability, the condition is called a condition precedent. The concurrency indicated by the phrase concurrent condition or conditions, is concurrency in time of the performance of two mutual promisors, or of a promisor and promisee; not a concurrency of the performance of one with the liability of the other. If 8 Williston, Sales, § 188.' See infra, § 667.

two persons are bound to give concurrently, one a book and the other the price, neither party will be liable until performance has either been made or tendered by the other. But though the tender may be absolute, it need be only conditional, that is, subject to receiving concurrent performance from the other side. The obligation of each party, therefore, is subject to the condition precedent to liability thereon of either performance, or absolute or conditional tender, by the other side. Concurrent conditions, then, do not differ from conditions precedent in the relation of time which the happening of the condition bears to liability on the contract. They are, indeed, mutual conditions precedent.10 In the early law where acts were expressly made mutual conditions precedent, either performance or an unconditional tender was necessary.11 But this is not now true, and it is the peculiarity of concurrent conditions that only a conditional tender by one party is a condition precedent to the liability of the other.12

§ 667. Conditions subsequent.

The use of the words "condition subsequent" in contracts was borrowed from supposedly similar use in the law of property. "A condition, as affecting real estate, if precedent, must be performed before any estate vests; if subsequent, it divests an estate vested. If the condition precedent is void or impossible to be performed, nothing vests. If the condition subsequent is void or impossible, the estate, having vested, remains undisturbed." 13 But a distinction should be observed. The term condition subsequent in contracts as used in contrast to condition precedent must mean subsequent to liability,—that

10 Harriman, Cont., § 303. "If either vendor or vendee wish to compel the other to fulfil his contract, he must make his part of the agreement precedent." McGehee v. Hill, 4 Port. 170.

11 Callonel v. Briggs, 1 Salk. 112. The first recognition of concurrency in the modern sense is in the elaborate decision of Turnor v. Goodwin, Fortescue, 145, decided about ten years later, which was soon followed by Merrit v. Rane, 1 Strange, 458.

12 See infra, §§ 832, 833.

13 Mutual Benefit Life Ins. Co. v. Hillyard, 37 N. J. L. 444, 470. A "resolutory condition" as applied to obligations in the civil law seems similar. "It does not suspend the execution of the obligation; it only binds the creditor to return what he has received if the event happens, for which the condition provides." French Code Civil, Art. 1183. See also German Burg. Gesetzbuch, §§ 158 et seq.

is, a condition which divests a liability on a contract after it has once accrued. 14 Such conditions are very rare. They do, however, exist. Where goods are sold with a right to return them a liability for the price arises when the goods are sold (unless a period of credit was agreed upon), but this liability may be divested by the return of the goods. The Statute of Limitations is in effect a condition subsequent since it cuts off a previously existing liability; but this condition is imposed by law not by the will of the parties. In insurance policies, however, a provision is common that suit must be brought within a stated period. The expiration of this time divests a liability previously existing. 15 But it should be observed that though for the reason stated this may truly be classed as a condition subsequent, the fact that the time for bringing suit has not elapsed may be regarded nevertheless as a condition precedent not to the existence of a right of action, but to the maintenance of the particular action which the plaintiff brings; and it seems that even the few true cases of conditions subsequent to liability in contracts, operate in substance as conditions precedent to the plaintiff's right to maintain the particular action which he has brought and this is the only material thing in any case. What are generally called conditions subsequent in contracts are so called with little propriety. They are in substance conditions precedent to the vesting of liability and are subsequent only in form. A bond is a typical instance. The obligor in terms promises absolutely to pay the penal sum of the bond, but is to be excused from liability on the happening of a condition. In legal effect, however, the condition is precedent. No action will lie until default in the performance of the condition. The form which is given to the contract, though immaterial as matter of substantive law, is important in matters of procedure. The plaintiff originally merely had to establish the bond, and the burden of pleading and proving defeasance of the liability by

14 Conditions subsequent to the existence of a contract rather than to the liability upon it are not uncommon, e. g., where a right is given to rescind a contract after its formation, on the happening of a certain event.

15 See Semmes v. Hartford Ins. Co., 13 Wall. 158, 20 L. Ed. 490; Earnshaw v. Sun Mutual Aid Soc., 68 Md. 465, 12 Atl. 884; Board of Education v. Richmond Const. Co., (N. J. L. 1919), 105 Atl. 220.

performance of the condition was thrown on the defendant. But the limitation of the plaintiff's right to recover the full penalty of a penal bond, and the statutes requiring assignment of breaches by him 16 resulted in throwing the burden on the plaintiff," since the legal effect of the instrument became not an obligation to pay the penal sum subject to a condition either precedent or subsequent, but an obligation to perform what is still called the condition of the bond but is treated as a covenant. Where, however, a bond or similar obligation is not penal, so that unless the promisor performs the condition, full recovery can be had upon the obligation, according to its terms, the burden is still upon the defendant, 18 whereas in the case of a condition precedent the plaintiff must set out the condition as well as the promise, and must allege and prove the happening of the condition in order to establish the defendant's breach of contract. The application of this principle to insurance policies is frequent, and the law has been thus stated: "Those clauses usually contained in policies of insurance, which provide that the policy shall become void, or its operation defeated or suspended, or the insurer relieved wholly or partially from liability, upon the happening of some event, or the doing, or omission to do some act, are not in any proper sense conditions precedent. If they may properly be called conditions, they are conditions subsequent, and matters of defence, which, together, with their breach, must be pleaded by the insurer to be available as a means of defeating a recovery on the policy; and the burden of establishing the defence, if controverted, is, of course, upon the party pleading it." 19

1 See infra, § 772.

1 Saund. Pleading (1st ed.) 323; Barrett v. Douglas Park Bg. Assoc., 75 III. App. 98; Young v. Stephens, 9 Mich. 500, 505; Holliday v. Cooper, 1 Sm. & Marsh. (9 Miss.) 633. But see Philbrook v. Burgess, 52 Me. 271; Exeter Bank v. Rogers, 6 N. H. 142; Douglas v. Hennessy, 15 R. I. 272, 3 Atl. 213, 7 Atl. 1, 10 Atl. 583.

Hotham v. East India Co., 1 T. R. 638; Adams v. Way, 33 Conn. 419; Gray v. Gardner, 17 Mass. 188; Thayer

v. Connor, 5 Allen, 25; Root v. Childs, 68 Minn. 142, 70 N. W. 1087; Wooters v. International R. Co., 54 Tex. 294. But see Perkins v. Maurepas Milling Co., 88 Miss. 804, 40 So. 933.

19 Moody v. Insurance Co., 52 Ohio St. 12, 38 N. E. 1011, citing: Lounsbury v. Insurance Co., 8 Conn. 459, 21 Am. Dec. 686; American Fire Ins. Co. v. Sisk, 9 Ind. App. 305, 36 N. E. 659; Daniels v. Insurance Co., 12 Cush. 416; Newman v. Insurance Co., 17 Minn. 123; Mueller v. Insurance Co., 45 Mo.