Reed & Cheney Co. v. Richards-Wilson Co.

Fellows, J. (after stating the facts). We do not find it necessary to consider the last reason advanced by the trial judge or the assignments of error which do not go to the main question, the right of the plaintiff to recover. Undoubtedly plaintiff’s counsel is correct in his statement that the trial judge in using the term “conditional sale” did not refer to conditional sales of the kind considered by this court in Young v. Phillips, 203 Mich. 566; but we doubt that he had in mind the provisions of the uniform sales act (Rule 3, § 11850, 3 Comp. Laws 1915) or had reference thereto. It is more likely that he had reference to conditional contracts referred to by Story in his work on contracts (1 Story on Contracts [5th Ed.], §§ 39, 40), where he said: “Contracts are also divided into conditional and absolute. An absolute contract requires no explanations.It is simply an agreement to do or not to do something, at all events. A conditional contract is an executory contract, the performance of which depends upon a condition. It is not simply an executory contract, since the latter may be an absolute agreement to do, or not to do, something; but it is a contract whose very existence and performance depend on a contingency and condition. “A condition may be either precedent or subsequent. A condition precedent is a condition which must happen before either party becomes bound by the contract. Thus, if a person agrees to purchase the cargo of a certain ship at sea, provided the cargo prove to [631] be of a particular quality, or provided the ship arrives before a stated time, or at a particular port, each proviso is a condition precedent to the performance of such a contract, and unless the cargo prove to be of the stipulated, quality, or the ship arrive within the agreed time, or at the specific port, no contract can possibly arise.” Plaintiffs counsel is correct in his contention, and the trial court so held, that the intent of the parties is to be gathered from the instrument itself without extrinsic evidence. Examining this agreement we find that it is not a present sale of the devices. It is an agreement to give the devices a trial. If the conditions are fulfilled, if they do the work, the agreement becomes a binding contract for the purchase and sale of the devices. If the condition did not happen, if the devices did not do the work, the contract did not bind. The condition therefore is a condition precedent. Under the contract the title to the devices remained in the defendant. Pierce v. Cooley, 56 Mich. 552. It is an agreement for a sale of the devices upon condition, upon contingencies. Plaintiff was in no way obligated to buy unless the ’devices worked a saving of 25% of the fuel; the contract depended upon this as its condition. There was no sale unless this condition was fulfilled; it was a condition precedent to the sale, to the taking effect of the terms of the agreement. That the condition failed is admitted. No obligation, therefore, rested on the plaintiff by the terms of the contract and so far as it was concerned the agreement was at an end, the condition had not been fulfilled, the contingency upon which liability on its part depended had not happened. The plaintiff agreed to purchase on the happening of the condition. Likewise, the defendant company agreed to sell on'the happening of the condition, and the guaranty was as dependent on the sale, on the happening of the con [632] dition, as were the other terms of the contract. The defendant’s guaranty that there would be a saving on coal for a period of 10 years from the time the devices were installed was not a guaranty separate and apart from the contract, independent from it and without reference to the sale, but was as much dependent upon the condition, upon the sale, as was the plaintiff’s agreement to purchase. When the contract failed as to the plaintiff for breach of condition precedent, it failed as to the defendant for a breach of condition precedent. These views being -in accord with those entertained by the trial judge, it follows that the judgment must be affirmed. Bird, C. J., and Ostrander, Moore, Steere, Brooke, Stone, and Kuhn, JJ., concurred.