some difference of decision; as for instance where A promises B to do something, B "paying" a certain sum or "performing" a certain service, As matter of English construction such words seem to impose a condition.34 Not infrequently, however, courts have failed to treat them as necessarily conditional.35 But the words which were most troublesome to the early lawyers, are "for" or "in consideration of." It may seem that a promise to pay $100 "for" a horse, necessarily imposes a condition, but it is to be observed that the price is equally paid "for" the horse, whether it is paid before or after the transfer of title or possession to the animal, or simultaneously therewith. 36 Lord Holt in a leading case, 37 laid down certain rules to determine the proper construction of these words, as follows:-"First. If there be a day set for the payment of money, or doing the thing which one promises, agrees, or covenants to do, for another thing, and that day happens to incur before the time the thing for which the promise, agreement, or covenant, is made, is to be performed by the tenor of the agreement; there, though the words be 'that the party shall pay the money,' or 'do the thing for such a thing,' or, 'in consideration of such a thing,' after the day is past, the other shall have an action for the money or other thing, although the thing for which the promise, agreement, or covenant was made, be not performed; but, Secondly. If there be a day for the payment of the money, or doing of other act for another, and that day is to be after the performance of the thing for which the promise, &c., was made, there, if the agreement be to pay the money, or do other thing, 'for,' or 'in consideration,' or such other words that would make a condition precedent, there such things, for the doing or performing of which the other agrees to pay the money, So held in Large v. Cheshire, 1 Vent. 147; Callonel v. Briggs, 1 Salk. 112; Anon., 4 Leon. 50; Thomas v. Cadwallader, Willes, 496. See also Westacott v. Hahn, [1918] 1 K. B. 495. Hays v. Bickerstaffe, 2 Mod. 34; Boone v. Eyre, 2 W. Bl. 1312; Dawson . Dyer, 5 B. & Ad. 584; Edge v. Boileau, 16 Q. B. D. 117; De Lancey v. Ganong, 9 N. Y. 9. 36 In the following cases such words were held to create a condition. Anon., 15 Hen. VII. f. 10 b, pl. 7; Brocas' Case, 3 Leon. 219. See also Peeters v. Opie, 2 Wm. Saund. 350. But otherwise in Anon., 1 Roll. Abr. 415; Pordage v. Cole, 1 Wm. Saund. 319. 37 Thorp v. Thorp, 12 Mod. 455. or do other thing, must be averred to maintain an action.” Later, these rules became the basis for implication of conditions without regard to the use of the word "for" or "in consideration of" 38 It is obvious that performance due by the terms of a contract at a later day can hardly be intended by the parties to be a condition precedent to liability for earlier performance, and though the converse proposition-that the earlier performance is intended to be a condition of the later is not an equally necessary proposition, it would generally hold true. But it does not always appear from a contract at what times or in what order performance is to take place unless the words relied on to establish a condition give an indication. In determining such a question at the present time little stress would be laid on refinements; rather the court would endeavor to interpret the meaning of the words used according to general principles of interpretation. A special rule of construction was established by the early cases which still might have some weight in case of ambiguity. If the performance which is urged to be a condition was also the subjectmatter of a promise by the party from whom the performance was due, so that even though the words were not treated as words of condition there is a remedy to secure the performance of the act, the construction will be favored that no condition is meant; while on the other hand, if there will be no remedy to secure the performance of the act in question, unless the words can take effect as words of condition, because the contract contains no promise to render the performance, the construction will be given that the words create a condition. 39 "Courts are disinclined to construe the stipulations of a contract as conditions precedent, unless compelled by the language of the contract plainly expressed. The reason of this disinclination is that such a construnction prevents the court from dealing out justice to the parties according to the equities of the case. 99 40 38 See infra, §§ 820, 821. 39 Ughtred's Case, 7 Co. 9 b. 10 b.; Pordage v. Cole, 1 Wm. Saund. 319; Lock v. Wright, 1 Strange, 569; Smith v. Shelberry, 2 Mod. 33; Adams v. Guyandotte Valley Ry. Co., 64 W. Va. 181, 61 S. E. 341. 40 Front Street M. & O. R. Co. v Butler, 50 Cal. 574, 577, quoted and followed in Antonelle v. Kennedy & § 672. Aid to interpretation from considering which party uses language. When an act is promised, the person to do the act is generally the promisor. A promise that a third person shall do an act though perfectly possible is not very common. Very rarely indeed will the promisee be the person to do the act. Such a promise is conceivable (as a promise by a tutor to his pupil that the pupil shall pass an examination) though it will always be subject to a condition that the promisee will coöperate in the performance. On the other hand, when the performance of an act (not the mere happening of a fortuitous event) is a condition qualifying a promise, the person to do the act is generally not the promisor, but the promisee. Conversely, if language in a contract is that of the party who is to do the act, the language should be construed as a covenant or promise. If the language is that of the other party, words must constitute a condition. The matter has been well expressed by Professor Langdell:41 "Moreover, the words of such a clause will have, in fact, a different meaning, according to the party who uses them. If they are used in a contract by the party who is to do the act, they plainly import that he binds himself to do it; while, if they are used by the party for whose benefit the act is to be done, they fairly mean that he will require it to be done, i. e., that his own obligation shall be conditional upon its being done. How then shall it be ascertained to whom the language of such a clause is to be imputed? If the contract be clearly unilateral (e. g., a policy of insurance), of course the answer to this question admits of no doubt. In such a contract only one party speaks, and that is the covenantor or promisor. Any clause, therefore, in a policy of insurance, requiring any act to be done by the insured, will be a condition of the covenant or promise of insurance, though its language may more naturally import a covenant or promise by the insured. 42 Shaw Lumber Co., 140 Cal. 309, 319, 73 Pac. 966. Cf. McLaughlin v. Clausen, 85 Cal. 322, 14 Pac. 636. See also Jakel v. Seek, 79 Oreg. 489, 154 Pac. 424, 155 Pac. 1192. 41 Summary Contracts, § 33. 42 Ibid., Citing Worsley v. Wood, 6 T. R. 710; Mason v. Harvey, 8 Exch. 819; Roper v. Lendon, 1 E. & E. 825. This seems to be the true reason why the clauses in marine policies of insurance commonly called warranties have always been held to be conditions. But if the contract be bilateral, the question does not admit of so unqualified an answer, as any clause which the contract contains may be the language of either party. It seems, however, that a clause in a bilateral contract which simply states that a certain thing shall be done, or that a certain event shall happen, or has happened, must be taken prima facie to be the language of the party who is to do the act, or within whose knowledge or power the event is supposed to be. Such a clause clearly cannot be imputed to the other party, unless there is some special reason for so doing. It seems, therefore, that a clause which would be a warranty in a marine policy of insurance will prima facie be a stipulation by the ship owner in a charter-party.43 It seems that a bought note or a sold note, although in strictness a part of a bilateral contract, is to be treated as a unilateral contract for the purpose of the present question. In other words, a bought note is the language of the buyer alone, as the sold note is the language of the seller alone; and, therefore, if a bought note requires anything to be done by the seller, or if a sold note requires anything to be done by the buyer, the doing of it will be an express condition.44 It may be added, that, in a bilateral contract, the same clause may be to some extent the language of both parties, and so be both a stipulation and an express condition; but it seems that that can only be where the clause contains some word or words importing a condition, and some other word or words importing a stipulation." 45 43 Ibid., citing Glaholm v. Hays, 2 M. & G. 257; Ollive v. Booker, 1 Exch. 416; Oliver v. Fielden, 4 Exch. 135; Behn v. Burness, 1 B. & S. 787, 3 B. & S. 751; and adding, "This view may be adopted without impeaching any of the foregoing cases, for the clause upon which the question arose in each of them, assuming it to be a stipulation on the part of the plaintiff, also constituted an implied condition of the covenant or promise sued on." Cf. Grafton v. Eastern Counties Ry. Co., 8 Exch. 699. 44 Ibid., citing: Glaholm v. Hays, 2 M. & G. 257, by Tindal, C. J., and adding, "In Graves v. Legg, 9 Exch. 709, it is not expressly stated that the contract declared on was contained in a bought note, but it may safely be assumed that it was, and therefore the clause upon which the question arose constituted an express condition." 45 Ibid. § 673. Warranties and conditions. Warranty is a word which illustrates as well as any other the fault of the common law in the ambiguous use of terms. The word naturally means promise. It was first used in the law of real property and a distinction exists between the common law warranty in effect a covenant real-properly attached only to freehold estates which bound the warrantor and his heirs to supply other land of equal value in case of breach, and the modern personal covenants of warranty.46 In both cases, however, the primary meaning of obligation is preserved. In the English law of Sales a warranty means a promise generally collateral in form, the breach of which will not excuse performance by the other party to the contract.47 In charter parties the word means a promise of such importance that on breach thereof not only is the warrantor liable in damages 48 but the other party is excused from performance; 49 and in many American jurisdictions a similar meaning is given to warranty in the law of sales.50 A contract of insurance is normally a unilateral contract. In fire or marine insurance the insured customarily pays the full premium when the policy is issued, or at least gives a note therefor. In life insurance though it is customary to pay premiums annually, the insured is under no obligation to make the payment, but may let the policy drop if he sees fit. Undoubtedly many policies in terms assert that the insured covenants and agrees to do certain things. It can hardly be denied that such statements are promises by the insured, though no suit is ever brought on such a covenant, and its only object is to give the insurer an excuse if the covenant is broken. But most of the so-called warranties in insurance policies are not even promises in form, but are conditions. The use of the word warranty, therefore, in insurance law is a misnomer. It means a condition inserted on the face of the policy or a statement of fact, on the exact truth or performance of which the insurer's liability depends. Warranties Tiffany, Real Property, §§ 394–398. * Corkling v. Massey, L. R. 8 C. P. 395; Bentsen v. Taylor, [1893] 2 Q. B. 274. 49 Ollive v. Booker, 1 Exch. 416; Behn v. Burness, 3 B. & S. 751; Bentsen v. Taylor, [1893] 2 Q. B. 274. 50 See infra, § 1462. |