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.
District of Columbia. Fontano v. Robbins, 22 D. C. App. 253.
Illinois. Adlard v. Muldoon, 45 III. 193.
New Jersey. Bond v. Newark, 19 N. J. Eq. 376.
Pennsylvania. Memphis, etc., R. R. Co. v. Wilcox, 48 Pa. St. 161.
7 Carper v. United Fuel Gas. Co., 78 W. Va. 433, L. R. A. 1917C, 171, 89 S. E. 12; Western Lime & Cement Co. v. Copper River Land Co., 138 Wis. 404, 120 N. W. 277.
8 Carper v. United Fuel Gas Co., 78 W. Va. 433, L. R. A. 1917C, 171, 89 S. E. 12.
"An implied covenant to prevent drainage, giving a right of action for damages for a breach thereof, is not necessary nor essential to preservation or conservation of the minerals during the specific optional term created by the lease. If a condition less onerous than a covenant will effectuate the manifest intention of the parties, as to a matter not specifically provided for in the lease, and adequately protect the subject-matter of the contract, the court may justly and consistently regard it as the provision intended. Both covenants and conditions are frequently used in all sorts of contracts. They are equally known to courts, lawyers, and laymen, and either may have been intended by the parties, as an unexpressed safeguard against a contingency, and the courts may recognize one of them as an implied provision, with as much propriety as characterizes such recognition of the other. And, if either will accomplish the purpose obviously intended, and one is less burdensome to either of the parties than the other, the adoption of the less onerous one is made obligatory by the rule applicable to the addition of terms to contracts on the theory of implication. White v. Bailey, 65 W. Va. 573, 23 L. R. A. (N.S.) 232, 64 S. E. 1019; United States v. Fisher, 6 U. S. (2 Cranch) 358, 2 L. ed. 304; Jackson ex dem. Boyd v. Lewis, 17 Johns. 475; Waterford & W. Turnp. v. People, 9 Barb. 161; Morgan v. Chicago & A. R. Co., 96 U. S. 716, 24 L. ed. 743; Hamlyn & Co. v. Wood & Co. [18911, 2 Q. B. 488, 60 L. J. Q. B. X. S. 734, 65 L. T. X. S. 286, 40 Week. Rep. 24; The Moorcock, L. R. 14 Prob. Div. 64, 58 L. J. Prob. X. S. 73, 60 L. T. N. S. 654, 37 Week. Rep. 439, 6 Asp. Mar. L. Cas. 373; Sterling v. Maitland, 5 Best & S. 840, 122 Eng. Reprint, 1043, 34 L. J. Q. B. X. S. 1, 11 L. T. X. S. 337, 13 Week. Rop. 76; Butler v. Manchester, S. & L. R. Co., L. R. 21 Q. B. Div. 207, 57 L. J. Q. B. X. S. 564, GO L. T. X. S. 89, 36 Week. Rep. 726, 52 J. P. ON. Accordingly, if it is doubtful whether a clause in a deed is a condition subsequent, breach of which would divest an estate, or a covenant, breach of which would merely create a liability for damages, the courts universally hold it to be a covenant, because less burdensome and drastic in its operation and effect than such a condition. Millan v. Kephart, 18 Gratt. 9; 4 Kent Com. 14th ed. 152. This is only a rule of construction emanating from a general principle, and made to carry it into effect. An exactly opposite rule, applicable in a different situation, may apply the same principle. The rule is subordinate; the principle it enforces, paramount. The latter is the parent of the former. Construction and interpretation always proceed upon lines of equity, fairness, and reason, when the terms of the instrument are broad enough to admit the influence of such considerations. No contract will be so construed as to inflict unreasonable hardship, unless the terms clearly impose it. 'Whether the words amount to a condition, or a limitation, or a covenant, may be matter of construction, depending on the contract. The intention of the party to the instrument, when clearly ascertained, is of controlling efficacy, though conditions and limitations are not readily to be raised by mere inference and argument. The distinctions on this subject are extremely subtle and artificial; and the construction of a deed, as to its operation and effect, will, after all, depend less upon artificial rules than upon the application of good sense and sound equity to the object and spirit of the contract in the given case.' 4 Kent Com., 14th ed. l32." Carper v. United Fuel Gas Co., 78 W. Va. 433, 441, L. R. A. 1917A, 171, SO S. E. 12.
9 Carper v. United Fuel Gas Co., 78 W. Va. 433, L. R. A. 1917A, 171, 89 S. E. 12.
10 "We have yet to consider the force and effect of the clause in the contract whereby the defendant's predecessor agreed to remove such timber at the rate of 6,000 acres per year, or, in other words, the whole of it within seven years. We deem that provision of the contract to control defendant's rights, both because of the special reference thereto contained in the deed made in execution of the original land contract, and because of the principle, well established in Wisconsin, that the real transfer of title under a land contract and a subsequent deed in pursuance thereof takes place at the time of the contract, at least in case of part payment of the consideration, and that the deed when made relates back to the date of the contract. Krakow v. Wille, 125 Wis. 284, 103 N. W. 1121. The trial-court treated this clause as a mere promise, with no result from its breach except money damages. Appellant contends that the parties intended thereby to limit the right to the timber and that by its breach a forfeiture results. It is urged, on authority, that courts will be slow to import into a mere agreement to do some act, a further agreement that the failure to perform it shall constitute a condition subsequent sufficient to divest an existing title. Nevertheless if from the contract, properly construed, we must conclude that the parties intended and attempted to express an agreement to that effect, it is our duty to so construe and enforce it. Justification for construction of even very plain words in a contract may arise if otherwise the result would be wholly unreasonable or absurd. Corbett v. Joannes, 125 Wis. 370, 387, 104 N. W. 69. It seems to us that in a sale of a large tract of land to a purchaser for the purpose of presently selling the same in parcels to actual settlers, an agreement that the seller might persist in practical possession and occupancy of the whole of said land, so that as to none of it could anything but a bare legal title without right of occupancy and use be transferred to such settlers, would be unreasonable to the extent of absurdity. It would be in practical negation of the acquisition of the rights for which it is apparent the purchaser pays his money. We can not read this clause, so industriously inserted, in any other light than indicating the intention of the parties to express an agreement for some limitation upon the right of the seller to occupy said land with its timber to the exclusion of the purchaser and its anticipated and intended grantees. How it should be effective as a limitation, whether by mere threat of damages, or by way of some termination of the seller's right, is not declared. A right to recover damages for breach of this agreement would not accomplish the obvious purpose of placing the lands in a condition for use by the purchaser, and the amount of the money damages really suffered would be almost conjectural. The situation is not without precedent or at least analogy in several cases which have come before this court with reference to contracts or conveyances separating the title to the standing timber from the title to the soil, and in nearly all of them an expression of a time limit within which the right of severance of the timber from the land is to be exercised has been held sufficient to express a meeting of the minds of the parties upon the intention that the right to the timber and to enter for removing the same should be terminated at the end of such period. In other words, that the declaration of such duty to remove, whether in the form merely of a covenant or a limitation, implied a condition subsequent on the happening of which the right should terminate. Smith v. Scott, 31 Wis. 437, 440; Golden v. Glock, 57 Wis. 118, 13 N. W. 12; Hicks v. Smith, 77 Wis. 146, 46 N. W. 133; Williams v. Jones, 131 Wis. 361, III N. W. 505; Peshtigo L. Co. v. Ellis. 122 Wis. 433, 100 N. W. 834. Another class of cases presents numerous instances where words of mere covenant have been held sufficient to express a real intention of a condition subsequent and resulting forfeiture by reason of the impossibility otherwise to avert inequitable results. Illustrations are: Glocke v. Glocke, 113 Wis. 303, 89 N. W. 118; Wanner v. Wanner, 115 Wis. 190, N N. W. 671; Burgson v. Jacobs on, 124 Wis. 295, 102 N. W. 563. We are convinced that the reasons of such analogous decisions should control the instant situation and lead us to construe this limitation of time as declaring a condition subsequent." Western Lime & Cement Co. v. Copper River Land Co., 138 Wis. 404, 410, 120 N. W. 277.
It has been suggested that the test for determining whether a provision is a condition or a covenant is the remedy which arises in case of breach; and that if the breach operates as a discharge, it is a condition, while if it merely gives rise to an action at law for damages, it is a covenant.12 As a distinction between the condition and the covenant, this test is unsatisfactory, since it looks to the consequences rather than to the nature of the provision in question. It is also unsatisfactory since in some cases the same provision may be a condition as well as a covenant;13 and since in many cases the breach of a covenant, which is an essential term of the contract, may operate as a discharge of the remaining covenants.14
11 See Sec. 2053.
12 Cavanagh v. Iowa Beer Co., 136 1a. 236, 113 N. W. 866.