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.
If the condition is one which the law will recognize and enforce,1 full effect is given to the provisions of the contract which provide for such condition, and breach of condition operates as a discharge of the contract in whole or in part, according to its terms.2
6 United Brokers' Co v. Southern Pac. Co., 86 Or. 607, 169 Pac. 114.
7 Robinson v. Pierce, 34 Colo. 500, S3 Pac. 624.
8 Robinson v. Pierce, 34 Colo. 500, 83 Pac 624.
9 Union Health & Accident Co. v. Anderson, - Colo. -, 180 Pac 81; Jaques v. Order of United Commercial Travelers, 104 Kan. 612, 180 Pac. 200; Taylor v. Illinois Commercial Men's
Association, 84 Neb. 799, 24 L. R. A. (NS) 1174, 122 X. W. 41.
10 Holt v. Silver, 169 Mass. 435, 48 N. E. 837.
11 See ch LXXXIV.
12 Union Saw Mill Co. v. Lake Lumber Co, 120 La. 106, 44 So. 1000.
13 Union Saw Mill Co. v. Lake Lumber Co., 120 La. 106, 44 So. 1000.
14 Union Saw Mill Co v. Lake Lumber Co., 120 La. 106, 44 So. 1000.
1 See Sec. 719 et seq.
Whether the breach of condition terminates the rights of the parties finally and absolutely, or whether it merely suspends such rights as long as such specified state of affairs exists, depends upon the intention of the parties as expressed in the words of the contract. By the terms of the contract, the breach of the condition may destroy the right of one of the parties under the contract absolutely and finally, either in whole or in part. If the contract is so worded as to have this effect, the happening of the event terminates the rights of one or both of the parties under the contract,3 and the fact that such state of affairs ceases to exist does not revive the contract and confers no rights upon the parties thereunder.4 If a policy of fire insurance provides that it shall be void in case of vacancy and if the courts construe the word "void" literally, such policy does not revive when the building becomes occupied.5 If, by the terms of a policy of fire insurance, it is void from the beginning because of the existence of prior insurance, a renewal of such policy is without legal effect, although in the meantime such prior insurance has ceased to be in effect.6 If, by the terms of the contract of fire insurance, it becomes void if an inventory is not taken within a specified time, it does not revive on the taking of such inventory at a later time.7
2 Canada. Liverpool & London & Globe Ins. Co. v. Agricultural Savings & Loan Co., 33 Can. S. C. 04.
United States. Baltimore & Ohio Railroad Co., v. Leach, 249 U. S. 217, - L. ed. - [reversing, 173 Ky. 452, and citing, St. Louis, Iron Mountain & Southern Ry. Co. v. Starbird, 243 U. S. 592, 61 L. ed. 685].
Kansas. Burns v. Alliance Co-operative Ins. Co., 103 Kan. 803, 176 Pac. 985.
Maryland. Linthicum Heights Co. v. Firemen's Ins. Co., - Md. -, 106 Atl. 165.
Nebraska. Schmidt v. Williams-burgh City Fire Ins. Co., 95 Neb. 43, 51 L. R. A. (N.S.) 201, 144 N. W. 1044.
New Jersey. Wildwood Board v. Bright, 91 N. J. L. 579, 103 Atl. 422.
New York. Clark v. West, 193 N. Y. 349, 86 N. E. 1.
Ohio. Germania F. Ins. Co. v.' Werner, 76 O. S. 543, 12 L. R. A. (N.S.) 456, 81 N. E. 980.
Oregon. Hinkson v. Kansas City Life Ins. Co., - Or. -, 183 Pac. 24.
Tennessee. American Steam Laundry Co. v. Hamburg-Bremen F. Ins. Co., 121 Tenn. 13, 21 L. R. A. (N.S.) 442, 113 S. W. 394.
West Virginia. Bronson v. New York
F. Ins. Co., 64 W. Va. 494, 19 L. R. A. (N.S.) 643, 63 S. E. 283.
If a building or construction contract contains a provision to the effect that upon the happening of a certain event the owner may end the contract and may take possession of such material as is necessary to perform the contract, and that he may under such circumstances complete the performance of the contract himself, the owner acquires title to such material when he takes posession thereof under such pro-vision. Wildwood Board v. Bright, -N. J. -, 103 Atl. 422.
3 Canada. Liverpool & London & Globe Ins. Co. v. Agricultural Savings & Loan Co., 33 Can. S. C. 94.
Kansas. German Ins. Co. v. Russell, 65 Kan. 373, 58 L. R. A. 234, 69 Pac. 345
Maine. Dolliver v. Granite State-Fire Ins. Co., Ill Me. 275, 89 Atl. 8.
Maryland. Reynolds v. German-American Ins. Co., 107 Md. 110, 15 L. R. A. (N.S.) 345, 68 Atl. 262.
Nebraska. Home Fire Ins. Co. v. Kuhlman, 58 Neb. 488, 76 Am. St. Rep. 936, 78 N. W. 936.
New Hampshire. Moore v. Phoenix Ins. Co., 62 N. H. 240, 13 Am. St. Rep, 556.
In cases of this sort, the contract can take effect again only by the mutual agreement of the parties thereto, whether such agreement is expressed formally or informally.8 This, however, is probably to be regarded rather as a new contract than as a waiver of the right of each party to take advantage of such breach of condition.
In many cases the provisions of the contract which prescribe the condition are so worded that the rights of the parties are merely suspended during a given state of affairs, and accordingly the rights of the parties revive when such state of facts ceases to exist.9 A policy of fire insurance may contain a provision against vacancontract.4 If, on the other hand, the condition is a condition subsequent, the burden of proof is upon the party who alleges the breach of such condition and who is resisting the enforcement of the contract. Unless such party is able to establish the facts which amount to such breach by a preponderance of the evidence, his defense is insufficient.5 Under a condition in a policy of fire insurance by which such policy is to terminate if the ownership of the insured shall become other than sole and unconditional, the burden of proving breach of such condition rests upon the insurer.6 If a lessee of a mine seeks to avoid his covenant to pay royalties by pleading a condition subsequent which discharged him from such obligation in case of unavoidable casualty, the burden of proving an unavoidable casualty rests upon such lessee;7 and it is not sufficient if he alleges or proves inability to secure railway cars unless he also shows due diligence on his part in attempting to secure them.8 Under a building contract by which the contractor agrees to construct a building within a certain time unless certain events happen, it is said, however, that the burden of proof rests upon the property owner, and that if he merely shows failure to perform in such time without also showing that such events did not happen, he can not recover.9
Washington. Port Blakely Mill Co. v. Springfield Fire & Marine Ins. Co., 59 Wash 501, 110 Pac 38.
4 Canada. Liverpool & London & Globe Ins. Co. v. Agricultural Sayings & Loan Co., 33 Can. S. C. 04.
Kansas. German Ins. Co. v. Russell, 65 Kan. 373, 58 L. R. A. 234, 60 Pac. 345.
Maine. Dolliver v. Granite State Fire Ins. Co., Ill Me. 275, 89 Atl. 8.
Maryland. Reynolds v. German-American Ins. Co. 107 Md 110, 15 L. R. A. (N.S.) 345. 68 Atl. 262.
Nebraska, Home Fire Ins. Co. v Knhlman. 58 Neb. 488, 76 Am St. Rep. 936. 78 N. W. 936.
New Hampshire. Moore v. Phoenix Ins Co, 62 N. H. 240, 13 Am. St. Rep. 556.
5 German Ins. Co. v. Russell. 65 Kan. 373, 58 L. R. A. 234, 69 Pac. 345;
Dolliver v. Granite State Fire Ins. Co., Ill Me. 275, 50 L. R. A. (N.S.) 1106, 89 Atl. 8.
6 Liverpool & London & Globe Ins. Co. v. Agricultural Savings & Loan Co., 33 Can. S. C. 94.
7 Reynolds v. German-American Ins. Co., 107 Md. 110, 15 L. R. A. (N.S.) 345, 68 Atl. 262.
8 Home Fire Ins. Co. v. Kuhlman, 58 Neb. 488, 76 Am. St. Rep. 036, 78 N. W. 936
9 Kentucky. Phoenix Ins. Co. v. Lawrence. 45 Ky. (4 Met.) 9, 81 Am. Dec 521.
Maine. Lane v. Maine Mutual Fire Ins Co, 12 Me. 44.
Maryland. U. S. Fire & Marine Ins. Co. v. Kimberly, 34 Md. 224.
Massachusetts. Worthington v. Bearse, 94 Mass. (12 All ) 382; Hinckley v. Germania Fire Insurance Co., 140 Mass. 38.