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ST. LOUIS
LAW REVIEW
Vol. II Published by the Undergraduates of the No.
Washington University Law School
SOME PHASES OF CONDITIONS AND WAR-
RANTIES IN THE LAW OF SALES
OF GOODS.
CONDITIONS.
In the early days of the common (^) law, sales of chattels were abso- lute. The only purpose of a sale was to transfer the ownership of a chattel from one person to another. This was effected by delivery of the possession of an existing, specified chattel.' Sales of goods were for cash or by barter. The buyer always had the privilege of inspec- tion, and the rule of caveat emptor was rigorously applied. It doubt- less often occurred that the seller of an article had no title to convey; that the buyer's inspection failed to disclose the defective quality of the thing sold; or that the thing was unfit for the use intended. In such cases a transfer of the ownership of the chattel did not effectuate the intent of the parties or secure to the buyer a fulfillment of his real purpose. So, the courts, in the interest of trade and fair dealing, early began to recognize exceptions to the rule of caveat emptor, (^) and to raise obligations by implication, especially on the part of the seller, which they called implied warranties. Again, it is obvious that fre- quently a transfer of a chattel would be desired only in the event of the happening of a certain thing, or on condition that^ it^ might^ be returned, if not satisfactory to the buyer. For example: A desires to purchase^ B's^ horse,^ but^ A^ desires^ also^ that^ the^ horse^ be^ first prop-
12 Pollock and Maitland's Hist. of Eng. Law, 179.
54 SOME PHASES OF CONDITIONS (^) AND WARRANTIES
erly shod, and that the horse may be returned to B within (^) thirty days, if A be not elected a member of the Royal (^) Hunting Club; and, further- more, A being mistrustful of his own (^) judgment wants B to promise specially that the horse (^) is sound and suitable for use in hunting. The primary obligation of A's proposed contract of purchase is the trans- fer of the general property in the horse, but he wishes (^) to condition the obligation and to protect himself by (^) a collateral agreement. Stipu- lations in a contract of a sale of goods which modify, suspend or rescind the principal obligation are either conditions or warranties. There is a marked difference between a condition and a warranty both as (^) to their nature and their effect upon the primary obligation of a contract of sale; and yet it is often difficult to determine whether a clause in a contract (^) of sale is one or the other. This difficulty is ascribable to the confusion* caused by some courts calling various stipulations conditions, other courts calling them warranties; (^) while still other (^) courts seem to use the words condition and warranty as synonyms. Thus, that an article shall conform to the description under which it was sold is held to be, in this country, by a decisive preponderance of authority, a warranty;2 in England, and (^) some of our states, a condition. 3 In the case of a sale of five hundred tons of pig iron to be shipped (^) from Glasgow, the court said that the stipula- tion, "to be shipped from Glasgow" was a warranty or a condition prec- edent ;4 but in another case the court recognizes that conditions and warranties are not the same in the statement that a certain (^) provision is not "a (^) mere warranty but a condition precedent."'^ And it has been decided that certain stipulations in a contract of sale were both (^) con- ditions and warranties; (^) that is, the buyer could regard them as con- ditions and refuse the goods, or he could waive them as conditions by
2Gould vs. Stein, 149 Mass. 570, 22 N. E. 47; Whittaker vs. McCormick, 6 Mo. App. 114; Hawkens vs. Pemberton, 51 N. Y. 198; Cordage Co. vs. Rice, '5 N. 3 D. 432, 67 N. W. 298; Fogel vs. Brubaker, (^122) Pa. 7; Sales Act, Sec. 14. Nichols vs. Godts, (^) 10 Ex. 191; 23 L. J., Ex. 314; Shand vs. Bowes, 2 App. Cas. 455; Chanter vs. Hopkins, 4 M. & W. 399; Sales of Goods Act, Sec. 13; Fogg's Adm'r vs. Rodgers, 84 Ky. 588; Columbian Iron (^) Works vs. Douglas, 84 Md. 44; Patrick vs. Lumber Co., 81 Neb. 267, 115 N. W. 780; Springfield Shingle Co. vs. Edgecomb Mill Co., 52 Wash. 620, 101 Pac. 233, 35 L. R. A. (N. S.) 258; and Wolcott vs. Mount, 36 N. J. L. 262, in which the court said: "It will comport with sound legal principles to treat such (^) engagements as con- ditions in order to afford the purchaser a more enlarged remedy by rescission, than 4 he would have on a simple warranty." Filley vs. Pope, 115 U. S. (^) 213. See also Norrington vs. Wright, 115 U. S. 188, where the same expression occurs. 5 Pope vs. Allis, 115 U. S.363.
56 SOME PHASES OF CONDITIONS AND WARRANTIES
to remedies for their non-fulfillment, as^ follows:^ First,^ those^ which^ are available as defenses, but not^ as^ causes^ of^ action;^ second,^ those avail- able to the party in whose favor they were made, as defenses, or as causes of^ action;^ third,^ those^ which^ are^ never^ available^ as^ defenses^ to the primary obligation,^ but^ are^ causes^ of^ action^ for^ damages^ only.^
12 A contingent condition in a contract of sale is a casual event, or something which will or will not happen independently of the power or will of the buyer or seller. A has a cow with calf, and B obligates himself to take the calf when dropped and pay fifty dollars therefor, if it^ be^ a^ heifer^ calf.^ This^ sale^ is^ contingent^ on the sex of the calf, a thing beyond the control^ of^ the^ parties.^ The condition suspends the obligation of each party to the contract until the condition is fulfilled; and if it be not fulfilled, the contract becomes a nullity, and neither party can maintain an action against^ the^ other. A more classical illustration of a contingent condition is the case of the sale of thirty-two tons of hemp on arrival per ship Fannie. In this sale there were two^ such^ conditions,^ namely,^ the^ arrival^ of^ the^ ship, and the hemp on board. 13 When the price of goods is^ to^ be^ fixed^ by a third person, action by him in that regard is a contingent condition, and if he refuse^ to^ fix^ the^ price,^ there^ will^ be^ no^ sale.^1 "^ So,^ in^ the case of a sale of two hundred tons^ of^ potatoes^ to^ be^ raised^ on^ a^ cer- tain sufficient piece of ground, but which quantity was^ short^ eighty tons because of a potato blight, it was held that the growth of^ the potatoes was^ a^ condition^ of^ the seller's^ liability^ for^ non-delivery.^16 A promissory condition is a promise which, until performed, sus- pends, modifies or rescinds the contract of sale. A offers to B for sale a^ fire^ proof^ office^ safe,^ which^ B^ agrees to^ buy,^ if^ A^ will^ paint B's name on the safe in gold letters free of charge, to which A as- sents. In such a contract of sale there are^ two^ obligations,^ one, called the main obligation, which binds A to transfer the general property in the^ safe^ to^ B,^ and^ binds^ B^ to^ acc:!pt^ and^ pay^ for^ the^ safe;^ and another, called the collateral obligation, which^ binds^ A^ to^ paint^ B's name as above stated. These two obligations are indissolubly^ con- nected, and^ A's^ failure^ to^ perform^ his collateral^ promise^ will^ excuse B's rejection of the safe, if delivered, and^ will^ also^ enable^ him^ to sue A for damages for a breach of his obligation td furnish the safe
(^2) Burdick on Sales, (2nd ed.) 87. (^13) Boyd vs. Sifikin, 2 Camp. 326. 14 Fuller vs. Bean, 34 N. H. (^) 290; Davis vs. Davis, 49 Mo., 282. IsHowell vs. Coupland, L. R. 92 B, 462; Dexter vs. Norton,^47 N.^ Y.^ 62.
IN THE LAW OF SALES OF GOODS.
contracted for, namely,^ the safe with^ B's^ name^ painted^ thereon^ in gold letters. Contingent conditions may not be waived by one party without the consent of the other; but promissory conditions may be waived by him in whose favor they were made, and he may then call for the performance of^ the^ main^ obligation.^ The^ chief distinction, however, between contingent and promissory conditions is that the latter, if unperformed, are not only a defense to him entitled to per- formance, but are also a basic part of his cause of action for damages. A promissory condition should be carefully distinguished from a warranty. Every collateral engagement which is an integral and essential part of the contract of sale, and is not in itself a cause of action, is a promissory condition; while every engagement collateral to the main obligation which is not so indissolubly united with it but that it may, if unperformed, constitute a cause of action in itself, is a warranty. The difference between promissory conditions and war- ranties will be more obvious on a consideration^ of^ warranties^ in^ the second part of this paper.1 s Again, the main obligation should not be mistaken for a promis- sory condition. It is often said that there is an implied warranty or condition that the buyer shall receive the precise thing purchased. If there be a sale of a specific, designated article,^ and^ some^ other article be delivered, the substitution^ is^ a^ breach,^ not^ of^ a^ condition or warranty, but of the primary contract.^17 The writer submits that the same is true in sales by description. If one buy by description and an article of a different description is supplied, the main obliga- tion is broken. "If a man offers to buy peas of another and he send him beans, he does not perform his contract, but that is not a war- ranty; there is no warranty that he should sell him peas, the contract is to sell peas, and if he sell him anything else in their stead, it is non-performance of it." 13 Promissory conditions are declared by Professor Williston to be promises only and not true conditions, and, if not performed, should be treated like other broken promises.^19 There is no reason apparent to the writer why a promise and performance of it may not be a condition as well as a casual or natural event, and
16 See Williams vs. Robb, 104 Mich. 242, 62 N. 'W. 352, as to the difference between a condition and^ a warranty. 17 Columbian Iron Works vs. Douglas, 84 Md. 44. s This famous illustration now^ widely^ quoted^ was given^ by^ Lord^ Abinger in Chantry vs. Hopkins, 4 M. & W. 399, with respect to warranties. It is equally pertinent to promissory conditions. 19 Williston on Sales, Sec. 179.
IN THE LAW OF SALES OF GOODS.
the seller, the risk in the meantime being in the buyer. 27 A common example of a condition subsequent is^ found^ in^ a^ sale^ or^ return.^28 A condition may^ present^ a^ double^ aspect, being^ both precedent and subsequent. Thus in a sale of goods with reservation of title in the seller^ as^ security^ for^ the^ payment^ of^ the^ purchase^ price,^ and^ pos- session in the buyer, payment according to the terms of the contract is a condition precedent to^ the vesting^ of^ title^ in^ the^ buyer, and^ subse- quent as to the buyer's right of possession. Whether a condition be precedent or^ subsequent^ is^ determined by the intent of the parties making it. The best evidence of^ intent is the terms of the contract which relate to the character of the con- dition; but intent of the^ parties^ may^ also^ be^ gathered^ from^ the^ circum- stances and purpose of the transaction, and^ from the^ application^ of common sense to each particular case.1s^ In the absence of direct evidence the law supplies presumptions of^ intent.^ Thus,^ if^ any^ part of a defendant's promise is to be performed on a day that must or may occur before the^ time^ fixed^ for^ plaintiff's^ performance,^ then^ per- formance by^ defendant^ is^ a^ condition^ precedent^ to^ performance^ by plaintiff, and plaintiff may recover without proving performance or tender of performance s0 on his part. For example,. plaintiff agreed to convey to defendant a certain tract of land when paid^ for,^ pay- ment to be made in four years, with interest payable semi-annually. In an action for the first installment of interest it was held that plaintiff could recover without a tender of a deed." If in such a case, however, it should appear that defendant relied on conveyance rather than on the promise to convey, then payment of the interest sued for and conveyance would have been mutual conditions, and neither party could maintain an action against the other without having tendered performance.3 2
27 Strauss Saddlery Co. vs. Kingman & Co., 42 Mo. App. 208; Sturm vs. Boker, 150 U.^ S.^ 312. "Gay vs. Dare, 103 Cal. 454; Scroggin vs.^ Wood,^^87 Ia.^ 497;^ Foley^ vs. Falrath, 98 Ala. 176; State vs. Bets, 207 Mo. 589; House vs. Beak, 141 Ill. 290; 30 N. E. 1065. " Griggs vs. Moors, 168 Mass. 354; Leonard^ vs.^ Dyer,^26 Conn.^ 172. 30 The word tender as here used does not mean (^) the same kind of offer as when it is used with^ reference^ to the^ payment^ or^ offer^ to^ pay^ an ordinary debt due to a creditor. "It only means a^ readiness^ and^ willingness,^ accom- panied with an ability on the part of one of the parties, to do the^ acts which the agreement requires him to perform, provided the^ other^ will^ concurrently do the things which he is required by it to do, and a notice by the^ former^ to the latter of^ such^ readiness."^ Smith^ vs.^ Lewis,^^26 Conn.^ 110. 31 Wilks vs. Smith, 10 M. & W. 355. ,s Larimore vs. Taylor,^88 Mo.^ 661.
60 SO'ME PHASES OF CONDITIONS AND WARRANTIES
It is also a presumption of law that a promise^ which^ goes^ only to a part^ of^ the^ consideration^ for^ the^ defendant's^ promise^ will^ not be regarded as a condition precedent, if^ plaintiff's^ breach^ of^ such promise can be remedied by payment of damages. Plaintiff agreed to sell and ship to defendant ten car loads of barley, the sale being by sample, for^ seventy^ cents^ per^ bushel,^ on^ board^ of^ cars^ at^ shipping point. On receiving the first car load, defendant found that the barley was not equal to the sample, and refused to pay for it. There- upon plaintiff^ declared^ the^ contract^ at^ an^ end^ and^ refused^ to^ ship the remaining nine car loads. In an action for^ the^ price^ of^ the^ first car load, the court decided that the^ contract^ was^ divisible^ and that defendant's promise to pay for the car load did not go to the whole consideration of the contract, and that non-payment of the first car load did not justify plaintiff's refusal to deliver the remainder of the barley.
33 Where the reliance of a promise is based on a remedy for^ dam- ages for non-performance of a condition rather than on performance itself, performance will not be regarded as a condition precedent. A sold five hundred bales of cotton to^ B,^ he^ agreeing^ to^ pay^ one^ hun- dred dollars as part payment for each fifty bales procured by A, and to pay interest on delayed payments. In an action for non-delivery A defended^ on^ the^ ground^ that^ B^ failed to^ make^ payments.^ It^ was decided that payment by B was^ not^ a^ condition^ precedent^ to^ his right to the cotton,^ for^ A^ had^ agreed^ to accept^ interest^ as^ a^ remedy for B's failure to make payments when due.3 4^ When, however, time of performance of^ a^ condition is^ of^ the^ essence^ of^ a^ contract-and it is so in the contracts of merchants 3 1-the^ condition^ will^ be^ held to be precedent, even though the contract is severable, and^ payment of damages would^ suffice.^3
3 Meyer vs. Wheeler, 65 Ia. 390; Hansen vs. Heating Company,^73 Ia. 77, 34 N. W. 495; Holt vs. United Security Life Ins. Co., 76 N. J. L. 585; 72 At. 301, 21 L. RL A. (N. S.) 691; Newton vs. Winchester, 16 Gray,^ 208; Bettini vs. Gye, 45 L. J. Q. B. 209; DeKay vs. Bliss, 120 N. Y. 91; Ritchie vs. Atkinson, 10 East. 295. 3 Benj. on Sales, Sec. 562. 35Pope vs. Porter, 102 N. Y. 366; Norrington vs. Wright, 115 U. S. 188. At law the time fixed for the performance of a condition is^ deemed^ to^ be^ of the essence of the contract. Shinn vs. Roberts, 20 N. J. L. 435. Time is usually of the essence of an executory contract for the^ sale^ and^ delivery^ of goods, where no^ right^ of^ property^ in^ the^ same^ passes on^ the^ bargain^ from the vendor to^ the^ purchaser.^ Jones^ vs.^ United^ States,^96 U.^ S.^ 24;^^24 L. Ed. 644. 36 Roberts vs. Brett, 18 C. B. 561; 11 Eng. Reprint, 1363; 84 E. C. L. 533; Tompkins vs. Elliot,^5 Wend.^ 496.
ST. LOUIS LAW REVIEW.
ported by a decided weight of authority. 42 Where a condition may be waived without prejudice to an action for damages for its non- fulfillment, it^ is^ immaterial^ whether the^ action^ be based^ on a^ broken warranty or a breach of^ the^ original^ contract^ of^ sale.'^3 Conditions have thus far been viewed in their relations to^ the primary obligation of the contract of sale, and may be now considered in their relations to each other under the head of dependent and in- dependent conditions. A condition which is independent of the pri- mary obligation is not a true condition, but a warranty; and therefore the descriptive words independent and dependent are used only in cases of mutual conditions. Dependence or independence of conditions, as of covenants, is to be construed according to the intention of the parties. 44 Mutual^ con- ditions which are to be performed contemporaneously are dependent or concurrent;45 if to be performed at different times, they are inde- pendent. 46 If promissory conditions are mutual and each goes to the whole consideration, they are dependent;47 but if such a^ condition goes t6 a part only of the consideration, and a breach of it may be redressed by damages, the condition is independent. 4 A promissory condition with a penalty annexed is independent. 4 In cases of mutual dependent conditions neither party can maintain an action against the other until he has performed or tendered performance.^50 But if con- siderations and conditions are independent, although mutual, either party may recover damages for non-performance by the other, even though he himself has failed to perform on his part."^1 W. W. KEYSOR.
42 Mechem on Sales, Sec. 1393; Williston on Sales, Sec. 488, Sales Act, Sec. 49. 43Wolcott vs. Mount, 36 N. J. L. 262; (^) Bagley vs. Cleveland Rolling Mill Co., 21 Fed. 159. 4Loud vs. Pomona Land Co., 153 U. S. 564; Griggs (^) vs. Moors, 168 Mass. 354; Kaufman vs. Roeder, 108 Fed. 171, 47 C. C. A. 278, 54 L. R. A. 247; Freeland vs. Mitchell, 8 Mo. 487. '5Pavell vs. Ry. Co., (^12) Ore. 488, 8 Pac. 544; Phillips Construction Co. vs. Seymour, 91 U. S. 646. Justice Miller said: "Where a specified thing is to be done by^ one^ party^ as^ the^ consideration^ of^ the^ thing^ to^ be^ done^ by^ the other, it is undeniably the general rule that the covenants are mutual and are dependent, 46 if they are to be performed at the same time." Mayers vs. Rogers, 5 Ark. 417; Davis vs. Heady, 7 Blackf. (^) 261; Tur- ner vs. Millier, 59 Mo. 526; Sawyer vs. Christian, 40 Mo. App. 295; Tompklns vs. Elliott, 5 Wend. 496; Goldsborough vs. Orr, 8 Wheat. 217. 47 Butler vs. Manny, 52 Mo. 497. 48Turer vs. Millier, 59 Mo. 526; Smith vs. Crews, 2 Mo. App. 269. 49 Freeland vs. Mitchell, 8 Mo. 488; (^) Gates vs. Ryan, 115 Mass. 596. 50Southwestern Freight and Cotton Press Co. vs. Stanard, 44 Mo. 71. 5111 Cyc.^ 1054;^ Benson^ vs.^ Hobbs,^4 Har.^ &^ J.^ (Md.)^ 285;^ Cook^ v,. Johnson, 3 Mo. 239; Huffcut's Anson on Contracts, 368.
