Sec 553

If there appear on the whole contract an intention that either party is to have redress in damages for the default of the other, irrespective of the question of his own default, then mere formal expressions denoting interdependence will be made to yield to the substantial purpose of the contract. This has been held to be the case with contracts providing that a promise is conditioned on the other party " well and truly performing all and singular his covenants and agreements," or " on the performance of the terms and conditions" imposed on the other party. All this, when from the whole document it appears that a promise made by one party was to have inde. pendent redress irrespective of the default of the other party, will be regarded as purely formal and inoperative.5 - In order to ascertain the intention of the parties, the whole context of the contract is to be taken into consideration, in view of all the extrinsic facts.1 Contracts of this class, as is the case with all contracts, are to be construed consistently with the true intent of the parties,2 so as best to sustain good faith.3

Formal expressions of condition not to overrule real intention.

1 Infra, sec 619.

2 Shinn v. Bodine, 60 Penn. St. 182; see infra, sec 899.

3 Morgan v. McKee, 77 Penn. St. 228.

4 Lucesco Oil Co. v. Brewer, 66 Penn. St. 351.

5 Leake, 2d ed. 652; Boone v. Eyre, 2 W. Bl. 1312; Stavers v. Curling, 3 Bing. N. C. 355; Fishmongers' Co. v. Robertson, 5 Man. & G. 131; Keenan v. Brown, 21 Vt. 86; Tufts v. Kidder, 8 Pick. 537; Kane v. Hood, 13 Pick.

281: Knight v. Worsted Co., 2 Cush. 286; Dodge v. Gardiner, 31 N. Y. 239; Todd v. Summers, 2 Grat. 167. That a general covenant of title is restrained by special covenants among which it occurs, see Browning v. Wright, 2 B. & P. 13, 26; Hesse v. Stevenson, 3 B. & P. 565; Sumner v. Williams, 8 Mass. 162; Whallon v. Kauffman, 19 Johns. 99; Miller v. Heller, 7 S. & R. 32; and see infra, sec 664.

Sec 554

"Whether covenants are to be held dependent or independent of each other is to be determined by the intention of the parties as it appears on the instrument, and by the application of common sense to each particular case; to which intention, when once discovered, all technical forms of expression must give way."4 - Lord Mansfield lays down as a rule, which Mr. Benjamin5 declares to be unchanged, "that the dependence or independence of covenants is to be collected from the evident sense and meaning of the parties, 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." - Hence, where the condition of a bond for £1000 was to render a fair and just account in writing of all sums received, it was held that the word "account" meant payment, since it was not to be supposed that the parties would impose so heavy and solemn a penalty on mere accounting without paying.6 The intention of the parties, as evidenced in the contract, is to determine whether the allegation in question is a condition precedent, whose performance is necessary to make the contract binding on the other party, or a representation, which does not interfere with the contract taking effect, though if false it exposes the party making it to a cross suit.7 Whether the promise is on its face conditional, or whether words used in connection with it subject it to a condition, is a matter of law for the court, supposing those words to be proved.1

Whether a stipulation is a condition depends on intention of parties.

1 1 Wms. Saund. 320 a; Graves v. Legg, 9 Exch. 709; Dicker v. Jackson, 6 C. B. 103; Jowett v. Spencer, 1 Exch. 647; Kingdom v. Cox, 5 C. B. 522; Couch v. Ingersoll, 2 Pick. 292; Kane v. Hood, 13 Pick. 282; Knight v. Worsted Co., 2 Cush. 286.

2 Infra, sec 657-9. 3 Infra, sec 654.

4 Per cur., Stavers v. Curling, 3 Bing. N. C. 368; adopted in Leake, 2d ed. 649; see also notes to Cutter v. Powell, 2 Smith, L. C. 1; see infra, sec 650 et seq.

5 Sales, 3d Am. ed. sec 561, citing Jones v. Barkley, 2 Doug. 684.

6 Bache v. Proctor, 1 Doug. 382.

7 Infra, sec 650; Benj. on Sales, 3d Am. ed. 561; Howland v. Leach, 11 Pick. 151; Mill Dam Foundry v. Hovey, 21 Pick. 439; Knight v. Worsted Co., 2 Cush. 287; Booth v. Mills Co., 74 N. Y. 15; Phillip v. Allegheny Car Co., 82 Penn. St. 368; Brockenbrough v. Ward, 4 Rand. 352; Moore v. Waldo, 69 Mo. 277.

1 Leake, 2d ed. 219, citing Furness v. Meek, 27 L. J. Ex. 34. In Hale v. Finch, Sup. Ct. U. S. 1881, the suit was based on a contract between the California Steam Navigation Company and the Oregon Steam Navigation Company, by which the latter company, engaged in the navigation of the Columbia river and its tributaries, purchased a steamboat, called the New World, from the California Steam Navigation Company, then engaged in like business upon the rivers, bays, and waters of the state of California.

The terms of the sale are embodied in a written agreement, from which it appears that the consideration was $75,000, and the covenant and agreement of the vendees, not only that they would not "run or employ, or suffer to be run or employed, the said steamboat New World upon any of the routes of travel upon the rivers, bays, and waters of the state of California for the period of ten years from the first day of May, 1864," but that its machinery should not be "run or employed in running any steamboat, vessel, or craft upon any of the routes of travel, or on the rivers, bays, or waters of that state for that period. The Oregon Steam Navigation Company, in that agreement, further stipulated, that in case of any breach of their covenant and agreement, they would pay the California Steam Navigation Company the sum of $75,000 in gold coin of the United States " as actual liquidated damages," such stipulation, however, not to have the effect to prevent the latter from taking such other remedy, by injunction or otherwise, as they might be advised.