defendant to refuse further deliveries and to rescind the contract.255

The precise nature of a condition or covenant, however, is not of chief importance when the contract contains an express provision authorizing rescission or a forfeiture for the breach of it. It is within the competence of the parties to take any item or detail of their agreement and make the strict and punctual performance of it an absolute condition precedent; and if the contract provides for a termination or forfeiture on failure to perform such a condition, its rescission will be decreed in a court of equity, at least in the absence of a sufficient excuse for non-performance.200 And on the other hand, where the contract expressly imposed conditions or limitations on the right to terminate or rescind it, these also will be given effect in equity, if not contrary to the general principles which govern the courts of chancery. Thus, where a building contract makes a certificate of the architect that the contractor is not properly fulfilling his contract, and that a termination thereof is warranted, a condition precedent to the right of the owner to terminate the contract, the condition must be strictly complied with.26

A warranty is ordinarily an agreement to be responsible for all damages which may arise from the falsity of the statement or assurance of a fact, and, in the absence of fraud or an agreement to rescind, a contract of sale cannot be rescinded for a mere breach of warranty; but the assurance, although called a warranty, may be in reality the condition on which an executory sale is made, and where it is such a condition, the performance of which is precedent to the completion of the sale, the purchaser may reject the article and rescind the contract if such condition is not performed.2 262 But in the case of a machine or other similar

259 H. D. Williams Cooperage Co. v. Scofield, 115 Fed. 119, 53 C. C. A. 23.

260 Schumann v. Mark, 35 Minn. 379, 28 N. W. 927; Carney v. Barnes, 56 W. Va. 581, 49 S. E. 423.

261 White v. Mitchell, 30 Ind. App. 342, 65 N. E. 1061.

262 See McCoy v. Prince, 11 Ala. App. 388, 66 South. 950; Oliver v. Scott (Ark.) 174 S. W. 557; Laser v. Fowler, 114 Ark. 574, 170 S. W. 223; Pepper v. Vedova, 26 Cal. App. 406, 147 Pac. 105; Gay

article, to establish a right to rescind the sale, the buyer must show a breach of warranty, as distinguished from a breach of a contract merely to keep in repair. 263 And where there was a breach of warranty in a contract of sale of land before the delivery of the deed, if the purchaser accepts the deed containing the warranty, with knowledge of the breach, his remedy is limited to the recovery of damages.264

§ 213. Same; Conditions Subsequent; Promise of Future Action.-In numerous cases the courts have refused rescission of a contract on the ground of the breach of a condition subsequent, on the general principle that there is in such cases an adequate remedy at law by an action for damages.265 But the true rule appears to be that rescission or cancellation may properly be ordered where that which was undertaken to be performed in the future was so essential a part of the bargain that the failure of it must be considered as destroying or vitiating the entire consideration of the contract, or so indispensable a part of what the parties intended that the contract would not have been made with that condition omitted. For example, where a lease contains a provision requiring the lessor to furnish the tenant with steam, heat, and uniform power for the operation of his machinery, a failure to comply justifies the tenant in vacating the premises and refusing to pay rent.206 So, where a

Oil Co. v. Roach, 93 Ark. 454, 125 S. W. 122, 27 L. R. A. (N. S.) 914, 137 Am. St. Rep. 95; Brooke v. Cole, 108 Ga. 251, 33 S. E. 849; Larey v. Taliaferro, 57 Ga. 443; Narr v. Norman, 113 Mo. App. 533, 88 S. W. 122; Miller v. Nichols, 5 Neb. 478; Poirier Mfg. Co. v. Kitts, 18 N. D. 556, 120 N. W. 558; Piche v. Robbins, 24 R. I. 325, 53 Atl. 92; Dupree v. Savage (Tex. Civ. App.) 154 S. W. 701; Crislip v. Cain, 19 W. Va. 438. Stevens Tank & Tower Co. v. Berlin Mills Co., 112 Me. 336, 92 Atl. 180; Doornbos v. Thomas, 50 Mont. 370, 147 Pac. 277; Phoenix Hermetic Co. v. Filtrine Mfg. Co., 164 App. Div. 424, 150 N. Y. Supp. 193.

263 Miller v. Zander, 85 Misc. Rep. 499, 147 N. Y. Supp. 479. 264 Luckenbach v. Thomas (Tex. Civ. App.) 166 S. W. 99.

265 Raley v. County of Umatilla, 15 Or. 172, 13 Pac. 890, 3 Am. St. Rep. 142; Roy v. Harney Peak Tin Mining, Milling & Mfg. Co., 21 S. D. 140, 110 N. W. 106, 9 L. R. A. (N. S.) 529, 130 Am. St. Rep. 706; Davison v. Davison, 71 N. H. 180, 51 Atl. 905; Elder v. Sabin, 66 Ill. 126. Breach of promissory representations as constituting fraud, see, supra, §§ 89 et seq.

266 Trenkmann v. Schneider, 26 Misc. Rep. 695, 56 N. Y. Supp. 770.

company which was the owner of much real estate in a town, and largely engaged in building, sold a house and lot to a house painter, agreeing to give him the painting for the company so long as his work was satisfactory, he may rescind on showing that no such work was given to him, although he was ready and able to perform it and was willing to do so for a reasonable compensation.267 Again, where it is a part of the consideration for the purchase of stock in a corporation that the purchaser, as soon as qualified, shall be appointed treasurer and business manager of the company, and this agreement is not fulfilled, it is cause for rescission on his part.268 This rule is also applicable where the stock is purchased on the express agreement that those who formerly controlled the company shall not be connected with it after its reorganization,209 and where stock is delivered to an officer of the corporation under an agreement that it shall be transferred by him to a certain capitalist to induce him to give the corporation financial and other assistance.270 Again, where the consideration of a contract includes an agreement on the part of one of the parties to make loans or advances to the other, to pay his debts, or to furnish him money for living expenses, and performance of such agreement is refused, a case for rescission arises.271 And rescission was decreed in a case where one conveyed a farm to another for a nominal consideration, and the grantee un

267 Westview Sav. Bank & Building Co. v. Zook, 16 Ky. Law Rep. 158.

268 Schwab v. Esbenshade, 151 Wis. 513, 139 N. W. 420; Seymour v. Detroit Copper & Brass Rolling Mills, 56 Mich. 117, 22 N. W. 317, 23 N. W. 186. And see American Union Life Ins. Co. v. Wood (Tex. Civ. App.) 57 S. W. 685. But it is held that the act of part of the promoters of a corporation in promising a subscriber for stock that he should be manager of the company when formed does not amount to a misrepresentation or fraud, avoiding the written subscription not containing such condition, where the promoters were not authorized by any one to make such promises. Collins v. Southern Brick Co., 92 Ark. 504, 123 S. W. 652, 135 Am. St. Rep. 197, 19 Ann. Cas. 882.

269 Meinershagen v. Taylor, 169 Mo. App. 12, 154 S. W. 886. 270 Slayback v. Raymond, 93 App. Div. 326, 87 N. Y. Supp. 931. 271 Key v. National Life Ins. Co., 107 Iowa, 446, 78 N. W. 68; Dorthy v. Strauchen, 20 App. Div. 89, 46 N. Y. Supp. 951; Norgren v. Jordan, 46 Wash. 437, 90 Pac. 597.

dertook to cultivate the farm and to deliver to the grantor a portion of the produce, which he failed to do.272 And under an agreement to supply a certain commodity under conditions restricting the buyer from selling again, the seller may refuse to supply him after his breach of the condition.273

But if the promissory undertaking, in the nature of a condition subsequent, does not go to the whole consideration of the contract, but affects only a subordinate or incidental part of it, so that its breach can be compensated in damages, such breach will not give cause for rescission. Thus, in a case in Missouri, the complainant conveyed to the defendant railroad company certain property on which the company was wrongfully maintaining a switch, releasing his right to damages in consideration of the payment of a specific sum, and the contract further provided that the defendant should not use the switch to stand cars on, but should keep it open and free from cars except when in actual use. And it was held that the railroad's breach of this latter requirement was not a failure to perform the whole consideration, and that the complainant could not maintain a suit to cancel the contract and the deed on that ground, but was limited to a suit for damages.274 In another case, a gas company contracted with a brick manufacturing company to furnish the latter with free gas for a certain period and with gas at a reduced price for an additional period. The condition was that the brick company should construct a plant at a designated place, of such extent and capacity that it would regularly and permanently employ not less than 25 persons, and if, at any time, the plant should be found operating with less than that number of hands, the gas company might charge three cents per thousand cubic feet of gas, and should not be held to furnish the gas free until the brick company should have at least the full number of employés on its pay roll. The brick

272 Leach v. Leach, 4 Ind. 628, 58 Am. Dec. 642.

273 New York Ice Co. v. Parker, 21 N. Y. Super. Ct. 688.

274 Haydon v. St. Louis & S. F. R. Co., 222 Mo. 126, 121 S. W. 15, affirming 117 Mo. App. 76, 93 S. W. 833. And see Cheney v. Bierkamp, 58 Colo. 319, 145 Pac. 691.

BLACK RESC.-36

company did not at all times employ the full number of hands required by the contract. But it was held that this did not justify the gas company in rescinding the contract entirely, but merely gave it the right, upon the happening of that contingency, to charge and collect for the gas supplied at the price named.275 And so, where an owner of property is induced to grant a lease of it to another by the latter's assurance that he intends to use the premises for a certain purpose, though in fact the lessee means to use them for an entirely different purpose, and does so use them, this is not such a fraud or breach of condition as will justify relief in equity.276

Much conflict of opinion has arisen in cases where a contract for the sale of land includes an agreement, on the part either of the vendor or vendee, to erect buildings on it, make other improvements, or devote the premises to a specified use. The rule appears to be that if a covenant of this kind affects the entire consideration of the contract, insomuch that the contract would not have been accepted if the covenant had been omitted, then the breach of it will give ground for rescission. Thus, in a case in Colorado, the plaintiff conveyed unplatted land worth at least $6,000, to defendant, an improvement company, for $100, and took a bond in the penal sum of $500 only, conditioned to be void if the defendant should survey, grade, and improve the streets on said land, make other valuable improvements thereon, and begin within thirty days to plat and divide the land into lots and deed to the plaintiff onetenth of the lots, to be divided by alternate drawing. The evidence showed that the improvements contemplated were a system of waterworks and a hotel to cost $75,000. It was held that the consideration of the deed to the defendant was the expenditure of money in improving the land, and that, upon the defendant's failure to make the improvements, the plaintiff was entitled to rescind.277 But this principle has

275 Minnetonka Oil Co. v. Cleveland Vitrified Brick Co., 27 Okl. 180, 111 Pac. 326.

276 Feret v. Hill, 15 C. B. 207.

277 Boyes v. Green Mountain Falls Town & Imp. Co., 3 Colo. App. 295, 33 Pac. 77. And see Emery v. De Golier, 117 Pa. 153, 12 Atl. 152. And see, supra, § 91.