This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Independent covenants are those in which the obligation of one party to perform is not conditioned upon either prior or contemporaneous performance by the adversary party of the covenants on his part to be performed. Breach of an independent covenant gives rise to an action for damages but does not operate as a discharge of the contract.1 There are three common classes of independent covenants. (1) Covenants in "which the acts to be done by each party are to be done at different times which do not necessarily bear any definite relation of priority each to the other.2 Thus a covenant to construct a railroad is not a condition precedent to the payment of royalties, under a lease, which are to be paid beginning two months after possession is taken under the lease, while no part of the. road is to be built till twelve months after possession is taken, part eighteen months after possession is taken, and another part six months after demand by the lessee.3 So where A gave to B his non-negotiable note, secured by mortgage, and B agreed in consideration thereof to satisfy certain debts due from A which were liens on the mortgaged realty, no time being fixed for such payment, B's covenant is independent and if broken is not the basis for a suit to cancel the note for failure of consideration.4 So if covenants by a land company to build a side-track "promptly" to a certain factory, and when such factory was completed and in successful operation to buy certain stock, the first covenant is independent and the completion of the factory is not a condition precedent thereto.5 Thus A agreed "to pay to B a certain note on February 15, 1819, under a contract, a consideration for which was B's promise to deliver to A a certain amount of lumber, one half in the year 1818 and the other half during the year 1819 as A should require it. It was held that inasmuch as A might require the lumber, deliverable in 1819, either all before the date on which the note came due, or all after that date, or part before and part after, his promise to pay the note was a covenant independent of B's covenant to deliver.6 If two acts are to be done at different times and there is a necessary priority of one over the other in point of time, performance of the prior covenant is a condition precedent to enforcing the later covenant. Thus if A agrees to complete a railroad for B by December first and B is then to give notes payable six months thereafter, A's performance is a condition precedent to B's liability.7 (2) A covenant by A which is only a part of the consideration for B's covenants is an independent covenant.8 Thus A sold land to B in consideration of which B (1) made a money payment, (2) agreed to introduce settlers, (3) reclaim lands, and (4) pay A's debt to X. Covenants (2), (3) and (4) were held to be independent.9 A leased to B, in consideration of which B was to (1) erect a building which cost twenty thousand dollars,
19 Glenn v. Rochester, 156 N. Y. 161; 50 N. E. 785.
20 Bohall v. Diller, 41 Cal. 532.
21 Hill v. Grigsby, 35 Cal. 656.
1 Emigrant Company v. Adams County, 100 U. S. 61; Kauffman v. Raeder, 108 Fed. 171; 54 L. R. A. 247; 47 C. C. A. 278; Barr v. Little, 54 Neb. 556; 74 N. W. 850. "The agreement is an independent one.- a part of the consideration of the contract, it is true; but its nonperformance raises an action merely and does not annul the entire contract." Emigrant Company v. Adams County, 100 U. S. 61, 71.
2 Wilks v. Smith, 10 M. & W. 355; Campbell v. Jones, 6 T. R. 570; Goldsborough v. Orr, 8 Wheat. (U. S.) 217; Central Appalachian Co. v. Buchanan. 73 Fed. 1006; Tronson v. Colby University. 0 N. D. 559: 84 N. W. 474.
3 Central Appalachian Co. v. Buchanan. 73 Fed. 1006.
4 Tronson v. Colby University, 9 N. D. 559; 84 N. W. 474. For a similar case, except that the decision rests on the principle that B's covenant goes to part of the consideration only, see Emigrant Company v. Adams County, 100 U. S. 61.
5 Southern Pine Fibre Co. v. Land Co., 53 Fed. 318.
6 Goldsborough v. Orr, 8 Wheat. (U. S.) 217.
7 Slater v. Emerson, 19 How. (U. S.) 224.
8 Emigrant Company v. Adams County, 100 U. S. 61; Kauffman v. Haeder, 108 Fed. 171; 54 L. E. A. 247; 47 C. C. A. 278; Palmer v. Britannia Co., 188 111. 508; 59 N. E. 247.
9 Emigrant Company v. Adams Coupty, 100 U. S. 61.
(2) pay rents which aggregated a hundred thousand dollars,
(3) perform certain other covenants. The group of covenants numbered (3) were independent, and by reason of B's breach thereof A could not treat a covenant whereby he agreed to pay five thousand dollars for the building at the end of the term as discharged.10 A had leased a building to B. B wished to assign to X who was organizing a corporation. A and X agreed that A should release B from liability for rent, X would pay the rent at the end of the year, A would waive his right to eject for non-payment of rent, and X would assign to A a certain amount of stock in the new corporation which at a certain time A would reassign to X. The covenant to reassign is an independent covenant and a breach thereof does not discharge the contract.11 A hired B to work for him in consideration of a carriage which A delivered to B and a certain sum per month. The covenant to pay wages was an independent covenant, breach of which did not discharge the contract as to B.12 A agreed to deliver a certain number of logs to B to be sawed and to pay a certain price therefor. B agreed to saw them at that price and to saw for no other person during that season. B's sawing for others is a breach of an independent covenant, and if he saws all the logs furnished by A, A is not justified in treating the entire contract as ended and refusing to deliver more logs.13 (3) The covenant may be an absolute promise; that is, the contract may show that the party making such promise relied as the consideration thereof upon the promise of the adversary party and not upon the performance thereof. Covenants of this sort are independent of the promises made in consideration thereof, and a breach of the latter does not discharge the former.14
10 Palmer v. Britannia Co., 188 111. 508; 59 N. E. 247.
11 Kauffman v. Kaeder, 108 Fed. 171; 54 L. R. A. 247; 47 C. C. A. 278.
12 Gould v. Brown, 6 0. S. 538.
13 Reindl v.Heath, 115 Wis. 219; 91 N. W. 734.
14 Bean v. Atwater, 4 Conn. 3; 10
Am. Dee. 91; .Runkle v. Johnson. 30 111. 328; 83 Am. Dec. 191; Gillum v. Dennis, 4 Ind. 417; Hutchings v. Moore. 4 Met. (Ky.) 110; Clougta v. Baker, 48 N. H. 254; Tracy v. Exchange Co., 7 N. Y. 472; 57 Am. Dec. 538; Adrian v. Lane, 13 S. C. 183; Kettle v. Harvey, 21 Vt. 301.