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. 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.

"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,17 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

16 See infra, § 772.

171 Saund. Pleading (1st ed.) 323; Barrett v. Douglas Park Bg. Assoc., 75 Ill. 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.

18 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.

Though the nomenclature of these conditions is fixed as "conditions subsequent," the name should not cause it to be forgotten that except for purposes of pleading they are conditions precedent.2

20

§ 668. Express and implied conditions.

Conditions may be created by the expressed assent of the parties thereto, or they may be created by the law without any manifestation of assent by word or act. An express condition is of the first type; a condition implied in law is of the second. Though these types of conditions in an extreme form are easily distinguished, they are often confused and confusion is the more natural because the two kinds shade into one another by imperceptible gradations. Conditions may be expressed not in the usual and appropriate language for conditions, but by the very nature of the thing promised. A promise to deliver goods necessarily involves the condition

84; Spencer v. Citizens' Mut. L. Assoc., 142 N. Y. 505, 37 N. E. 617; Mumaw v. Western &c. L. Ins. Co., 97 Ohio St. 1, 119 N. E. 132; Insurance Co. v. Crunk, 91 Tenn. 376, 23 S. W. 140; Troy Fire Ins. Co. v. Carpenter, 4 Wis. 20. See also Kidder v. Supreme Commandery, 192 Mass. 326, 78 N. E. 469. In Benanti v. Delaware Ins. Co., 86 Conn. 15, 17, 84 Atl. 109, Ann. Cas. 1913 D. 826, the court said: "It is no part of an insured's duty to negative a condition subsequent. The authorities are practically agreed in holding that the burden of proving the fraud is on the insurer. It is expressly provided, that if there appear any fraud or false swearing, the insured shall forfeit all claim under the policy. It is believed that an averment, that the plaintiff had practiced no fraud nor swore falsely, would sound rather oddly in the ears of a.. . . special pleader;" citing: Schaffer v. Anchor M. F. Ins. Co., 113 Iowa, 652, 656, 85 N. W. 985; Friedman Co. v. Atlas Assurance Co., 133 Mich. 212, 94 N. W. 757; Slocovich v. Orient Mut. Ins.

Co., 108 N. Y. 56, 14 N. E. 802; Western Assurance Co. v. Mohlman Co., 83 Fed. 811, 28 C. C. A. 157, 51 U. S. App. 577, 40 L. R. A. 561.

20 A misleading use of the term condition subsequent may be found in Thompson v. Insurance Co., 104 U. S. 252, 260, 26 L. Ed. 765. "We do not accept the position that the payment of the annual premium is a condition precedent to the continuance of the policy. That is untrue. It is a condition subsequent only, the non-performance of which may incur a forfeiture of the policy, or may not, according to the circumstances. It is always open for the insured to show a waiver of the condition, or a course of conduct on the part of the insurer which gave him just and reasonable ground to infer that a forfeiture would not be exacted. But it must be a just and reasonable ground, one on which the assured has a right to reply." Payment of the annual premium is certainly a condition precedent to liability on the insurer's promise. Of course, this condition precedent, like any other, may be waived.

that the promisee will take delivery; a promise to repair another's house involves the condition that the promisor will be allowed access to the house. Such a condition may be called a condition implied in fact, or a necessary condition. It partakes of the nature of an express condition, except in the mode of proof.21 A step farther away from expressed intention to create a condition may be taken. A promise by one party to pay one hundred dollars, and a promise by the other party to transfer title to a horse, are in terms absolute and unconditional but if the promises were given in exchange for one another, the law will impose concurrent conditions on the ground that the performances must have been intended as the price each for the other, and that justice requires a concurrent exchange. Though this was not formerly the law, it has been so established for a century and a half, and modern business custom is in conformity with this rule of law. Therefore, at the present time a promise to sell not simply by rule of law, but presumably by the understanding of the parties is subject to a condition of contemporaneous payment unless a period of credit is expressly given. Thus it is true not only that custom gradually hardens into law but that a rule of law when once established and become familiar, is adopted in fact by the parties as a term of their bargain.22

§ 669. Importance of distinguishing between express and implied conditions.

An express condition or a condition implied in fact, depends for its validity on the manifested will of the parties. It has the same sanctity as the promise itself. Though the court may regret the harshness of such a condition, as it may regret the harshness of a promise, it must nevertheless generally enforce the will of the parties unless to do so will violate public policy. Where, however, the law itself has imposed the condition, irrespective of the will of the parties, it can deal with its creation as it pleases, shaping the boundaries of the condition in such a way as to do justice and avoid hardship.

21 See infra, § 893.

22 See supra, § 615.