Taylor v. Gallup

The opinion of the court was delivered by Redfield, J. It is well settled, that where the plaintiff sues upon a bond or sealed instrument, depending upon a condition precedent, he cannot recover unless he shows strict performance on bis part. Even where the act, constituting the condition precedent, becomes unlawful by legislative restriction, or was originally unlawful or even impossible, or has become so by act of God or lapse of time, the rights and obligations depending upon the performance of such conditions, must fail, unless they be strictly performed.' — (See the case of Porter et al. vs. Stewart, 2 Aik. R. 424, and cases there cited by the court and counsel.) — That case is so satisfactorily determined upon principle, and so fully sustained by authority, that it would be useless to go farther in discussing its propriety than to say, it is satisfactory to the court and to the profession. If the matters relied upon in the defendants’ plea in bar, as a condition precedent, be such, and no excuse is offered by plaintiff in his replication, sufficient to excuse the performance of such con [350] ditions,then the defendants are entitled to recover. If those matters do not form a condition precedent, or the replication contains sufficient excuse for not performing them as such, then the plaintiff is entitled to recover. No excuse will exonerate one from the performance of a condition precedent, unless it be the act of the other party. And the act of the other party, in order to excuse such performance, must be either a positive interference and actual hindrance, or some distinct and tangible fraud. No such excuse is contained in the plaintiff’s replication. It amounts, at most, to mere neglect or omission of duty, carelessly but innocently committed by defendant. This could not in any sense excuse the plaintiff for not performing a condition precedent, especially as this neglect was that of one of the defendants, and before the execution of the contract. The only remaining question then, is, Do the facts relied upon by defendants in their plea in bar, amount to a condition precedent? This must be determined by reference to the words of the contract, as set forth in the plea, (and they are the same in both,) with regard to the general subject matter of the contract, and the supposed intention of the parties. The subject matter of the contract is the settlement of a partnership concern between plaintiff and one of defendants. If the funds put into plaintiff’s hands proved sufficient to meet the outstanding liabilities of the firm, then the defendants promised to pay one half of their debt to the firm, to go to plaintiff for his share of the profits; but if there should be a deficiency of funds in plaintiff’s hands,after deducting his capital stock, then defendants promised to make up the deficiency to the amount of their whole account. And in either case they were to make payment in one year from the date of the bond in suit in this action. And if the parties did not agree upon any of these matters, they named two persons, to whom such matters, at ibe call of either party, should be referred. These persons too were named to state the amount due from defendants to the firm. The matter relied upon by defendants in excuse for not performing their part of the contract is, that the plaintiff failed to procure the arbitrators to state the amount due from the defendants within one year from the date of the bond, whereby it became impossible for defendants to perform their part of the contract in the manner stipulated. The cases upon the subject of conditions precedent, are undoubt [351] edly very unsatisfactory, and in many instances very contradictory and almost wholly irreconcilable. But from all the cases, certain general maxims are deducible, which will enable us very fully to determine how far the matters relied upon as such, really form a condition precedent. Where a covenant goes only to part of the consideration on both sides, and a breach of such covenant may be paid for in damages, it will be treated as a condition subsequent, or independent covenant, and not as a condition precedent, unless so stipulated in express terms. — Boon vs. Eyre, 1 H. Black. 273 — 1 Saund. Rep . 320, c. d. It is apparent here that the plaintiff did not, in express terms, covenant to procure this settlement within one year, or indeed to procure it at all. It is only by inference from the fact that it was for his benefit, we make out that he was to procure it, rather than the defendants, in whose power it equally was. And if it were to be procured by plaintiff, it is clear that it formed no part, even of the consideration of defendants’ covenant.— That consisted in obtaining a release from the liabilities of the firm. It is equally evident, from the whole tenor of the instrument, that the parties never once suspected that the obligation of defendants to pay depended upon plaintiff’s procuring the settlement within one year. This term of one year is not affixed to the plaintiff’s but to defendants’ obligation ; nor could it in any sense have been introduced for the ease of plaintiff to extend the time of his performance of his part of the contract; but on the contrary, it must have been introduced for the ease of the defendants, to prevent their being called upon immediately, as they otherwise might have been, for the payment of half at least of the amount of their account. And it would almost involve an absurdity to say that because the negligence of plaintiff gave them a still longer term, they were thereby exonerated from all obligation whatever. So far from the breach of this implied covenant, as it is termed, being on the part of defendants irreparable in damages, it is not a matter from which, in the very nature of things, any pecuniary loss could accrue to defendants. It is but giving a debtor longer day,of payment; and if it be in one sense an injury to suffer a man to remain in debt beyond the time stipulated for payment, it is not the foundation of an action, but damnvm absque injuria. The contract on the part of defendants was to pay one half the amount of their debt to the firm at all events, and the other half in a certain contingency. If they wished to know the extent of their [352] possible or absolute liability, they should have proceeded to ascertain the amount in the manner pointed out in the contract. And it has always been held that mere limitations as to time, introduced in the manner here stated, although one party failed to perform by the day set, the other was not thereby exonerated.— Cock vs. Castoys, M. S. cases, decided in K. B. Mich. 2 Geo. IV. — 1 Saund. Rep. 320, a. The case of Eaton vs. Stone, 7 Mass. R. 312, is almost the same case with the present. The case of Mawman vs. Gillet, 2 Taunt. 326, is much in point, although not the case of a bond, or sealed instrument. Courts will never construe a contract so as. to defeat the object of the parties, or make conditions precedent, unless clearly so expressed. We feel satisfied such is not the present case. The result is, (as this case comes here by appeal,) this court takes no notice of the judgment below, but only proceed to enter such judgment as that court should have rendered, which is, that defendants’ plea in bar is insufficient, and that plaintiff recover the penalty of the bond; and the case, on motion of defendants, was removed to the county court for the final ascertainment of the sum due the plaintiff.