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Contracts

Kingston v. Preston

1

Kingston
v.
Preston

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E. 13 Geo. 3.
Court of King's Bench, 1773.

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"It was an action of debt, for non-performance of covenants contained in certain articles of agreement between the plaintiff and the defendant. The declaration stated;—That, by articles made the 24th of March, 1770, the plaintiff, for the considerations therein-after mentioned, covenanted, with the defendant, to serve him for one year and a quarter next ensuing, as a covenant-servant, in his trade of a silk-mercer, at £200 a year, and in consideration of the premises, the defendant covenanted, that at the end of the year and a quarter, he would give up his business of a mercer to the plaintiff, and a nephew of the defendant, or some other person to be nominated. by the defendant, and give up to them his stock in trade, at a fair valuation ; and that, between the young traders, deeds of partnership should be executed for 14 years, and from and immediately after the execution of, the said deeds, the defendant would permit the said young traders to carry on the said business in the [2 Douglas 690] defendant's house.—Then the declaration stated a covenant by the plaintiff, that he would accept the business and stock in trade, at a fair valuation, with the defendant's nephew, or such other person, &c. and execute such deeds of partnership, and, further, that the plaintiff should, and would, at, and before, the sealing and delivery of the deeds, cause and procure good and sufficient security to be given to the defendant, to be approved of by the defendant, for the payment of £250 monthly, to the defendant, in lieu of a moiety of the monthly produce of the stock in trade, until the value of the stock should be reduced to £4000.—Then the plaintiff averred, that he had performed, and been ready to perform, his covenants, and assigned for breach on the part of the defendant, that he had refused to surrender and give up his business, at the end of the said year and a quarter.—The defendant pleaded, 1. That the plaintiff did not offer sufficient security; and, 2. That he did not give sufficient security for the payment of the £250, &c.—And the plaintiff demurred generally to both pleas.—On the part of the plaintiff, the case was argued by Mr. Buller, who contended, that the covenants were mutual and independant, and, therefore, a plea of the breach of one of the covenants to be performed by the plaintiff was no bar to an action for a breach by the defendant of one of which he had bound himself to perform, but that the defendant might have his remedy for the breach by the plaintiff, in a separate action. On the other side, Mr. Grose insisted, that the covenants were dependant in their nature, and, therefore, performance must be alleged: the security to be given for the money, was manifestly the chief object of the transaction, and it would be highly unreasonable to construe the agreement, so as to oblige the defendant to give up a beneficial business, and valuable stock in trade, and trust to the plaintiff's personal security, (who might, and, indeed, was admitted to be worth nothing,) for the performance of his part.

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In delivering the judgment of the Court, Lord Mansfield expressed himself to the following effect: There are three kinds of covenants: 1. Such as are called mutual and independant, where either party may recover damages from the other, for the injury he may have received by a breach of the covenants in his favour, and where it is no excuse for the defendant, to allege a breach of the covenants on the part of the plaintiff. 2. There are covenants which are conditions and dependant, in which the [2 Douglas 691] performance of one depends on the prior performance of another, and, therefore, till this prior condition is performed, the other party is not liable to an action on his covenant[1]. 3. There is also [99 Eng. Rep. 438] a third sort of covenants, which are mutual conditions to be performed at the same time; and, in these, if one party was ready, and offered, to perform his part, and the other neglected, or refused, to perform his, he who was ready, and offered, has fulfilled his engagement, and may maintain an action for the default of the other; though it is not certain that either is obliged to do the first act.—His Lordship then proceeded to say, that the dependance, or independance, of covenants, was to be collected from the evident sense and meaning of the parties[3], and, that, however transposed they might be in the deed, their precedency must depend on the order of time in which the intent of the transaction requires their performance. That, in the case before the Court, it would be the greatest injustice if the plaintiff should prevail: the essence of the agreement was, that the defendant should not trust to the personal security of the plaintiff, but, before he delivered up his stock and business, should have good security for the payment of the money. The giving such security, therefore, must necessarily be a condition precedent.—Judgment was accordingly given for the defendant, because the part to be performed by the plaintiff was clearly a condition precedent."

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[1] Vide Duke of St. Alban's v. Shore, C. B. T. 29 Geo. 3, H. Bl. 270, 279, 280, where a rule laid down in Boone v. Eyre, viz. that where a covenant goes to the whole of the consideration on both sides, it is a condition precedent, was adopted and confirmed[2].

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[2] See Glazebrook v. Woodrow, 8 T. R. 366, acc.: where this case of Kingston v. Preston, is referred to by Grose and Le Blanc, Justices, as a leading authority on the construction of covenants as dependant or independant. The converse of this proposition was also maintained in Campbell v. Jones, 6 T. R. 570, where the covenant sued upon was to pay £500, and the covenant which the defendant relied upon was a covenant that be, the plaintiff, would instruct the defendant in bleaching, and permit him to bleach in the same manner, during the continuance of his (plaintiff's) patent.—Defendant demurred to the declaration, because it did not state that plaintiff had so instructed him; but the Court thought it not a condition precedent.

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[3] Acc. per Cur. in Hotham v. E. India Company, 1 T. R. 638. It was there held that a ship owner might recover in covenant against the freighters for short tonnage, notwithstanding a covenant that no such claim should be allowed, unless it should be found upon a survey taken at the end of the voyage, by persons appointed between the parties; of which last covenant no mention was made in the declaration: the Court, considering it in the nature of a defeasance, or condition subsequent, to be shewn by the defendants as matter of defence, if they meant to rely on it. See also Morton v. Lamb, 7 T. R. 125, as to the necessity of averring readiness at least in the declaration, to do the plaintiff's part, (where something is to be done by both parties to a contract at the same time), in order to entitle him to recover against the defendant for not performing his part. But this need not amount to an actual tender to do an act, which the party was not bound to perform, to entitle him to claim performance from the other party. Rawson v. Johnson, 1 East, 203, where the action was for nondelivery of malt at a certain price, on request; and it was held, that an averment that the plaintiff made the request, and was ready and willing to receive and pay for the malt, but that the defendant refused to deliver it, was sufficient, without stating an actual tender of the money.