CHAPTER XXI. OF ACTS IN CONTRAVENTION OF THE CONTRACT. § 937. In the last chapter we considered cases in which the plaintiff had disentitled himself by default on his part: we shall now consider the closely allied cases where he has disentitled himself, not by default merely, but by acts in fraud or contravention of the contract, or at variance with it, or tending to its rescission and the subversion of the relation established by it. For where the party to a contract who asks the intervention of the court for its specific execution has been guilty of such conduct, that circumstance may be put forward as a defense to the action. Sometimes the facts may be evidence of a mutual agreement between the parties to rescind the contract: but even where not amounting to this, they may be sufficient to disentitle the plaintiff to ask for the intervention of the court in specific performance. S.938. Still more plain is the case, if the acts be such as would have worked a forfeiture of all benefit of the contract if it had been executed; it would be idle for the court to compel a grant of that which, if granted, would have been forfeited, (a)—to create a legal relation which, if created, would be immediately dissoluble. (b)' § 939. The cases by which this principle is most extensively illustrated are on contracts for leases. With regard to these, it is well established that where a person, holding under an agreement, commits waste, treats the land in an unhusbandlike manner, or acts in breach of covenants which would be contained in the lease, and for which acts a right of re-entry would accrue to the landlord, such person can (a) See per Lord Romilly, M. R., in Lewis v. Bond, 18 Beav., 85. (b) Per Turner, V.C., in Gregory v. Wilson, 9 Ha., 687. 1 Forfeiture of estate. ] Equity will not enforce a forfeiture Warner v. Bennett, 31 Conn., 461; Leffoyr v. West, 2 Ind., 514; Smith v. Jewett, 40 N. H., 530; White v. Port Huron R. R. Co., 13 Mich., 356; Fitzhugh v. Maxwell, 34 id., 138; Orr v. Zimmerman, 63 Mo., 72; Palmer v. Ford, 70 Ill., 369; Beecher v. Beecher, 43 Conn., 556. not enforce a specific performance of the contract. (c) The same has been held in respect of covenants to repair.(d)' § 940. It seems that even where the lease, when executed, would contain no provision for re-entry, yet such acts, when amounting to a forfeiture, as for example, a gross case of waste, which is in all cases a forfeiture of the place wasted, would prevent a specific performance of the contract (e) § 941. In order that acts may thus be a bar to the plaintiff's relief, they must, it has been said, be gross and willful. (f) That expression seems to have been originally applied to cases in which the breaches would not work a forfeiture of the legal interest. (g) If applicable at all to cases where there would be a proviso for re-entry for breach, it seems to mean that the acts must be (1) Such as would work a forfeiture at common law, and (2) Such 'as would not justify or permit relief against the forfeiture in a court of equity. § 942. Where the court of chancery found such a conflict (c) Per Lord Eldon in Hill v. Barclay, 18 Ves, 63; Lewis v. Bond, 18 Beav., 85; Gregory v. Wilson, 9 Ha, 683. (d) Nunn v. Truscott, 3 De G. & Sm., 304. (e) See per Lord Eldon in Duke of Somerset v Gourlay, 1 V. & B., 73. (f) Parker v. Taswell, 2 De G. &.J., 559, 573. (g) Hare v. Burges, 5 W. R, 585. 1 Jon v. Banister, 39 Eng. Law and Eq., 599, is an analogous case, though not concerning specific performance. The case was this: In a lease of copyhold house property for twenty-one years, the lessee covenanted, amongst other things, to pay the rent, keep in repair, and insure, etc., and the landlord covenanted that he would, at the expiration of the term of twenty-one years (provided all arrears of rent should then have been paid, and all the covenants should then have been well and truly performed and kept), at the request in writing of the lessee, grant a new lease of the premises for a further term of twenty-one years, at the same yearly rent, and subject to the proviso and agreements in the same indenture contained (including the covenant for renewal), and so from time to time upon the expiration of every subsequent term of twenty-one years, provided such request in writing should be given as aforesaid. The lessee expended large sums of money in building houses on the premises, and at the expiration of the first twenty-one years a new lease was granted in the same terms for twenty-one years. In both leases there were the usual covenants for re-entry on breach of any of the covenants. Some months before the expiration of the second term of twenty-one years the lessee gave notice in writing that he would require a renewal. At that time one of the houses was much out of repair, and the lessee allowed it to remain out of repair, on the ground that from communications with the lessor it was doubtful whether a new lease would be granted, in consequence of an alleged forfeiture, by reason of having failed to keep the fire insurance up for a few days. Held, first, that the condition precedent for the present renewal was twofold-request in writing and compliance with the covenants; and that the double condition was not confined to the first renewal, but applied loties quoties. Secondly, that the court could not grant an injunction to the lessee, to restrain the lessor from recovering in ejectment, because of the lessee's breaches of contract in not repairing the premises within a reasonable time. of evidence as left it in doubt whether there had been such a breach of covenant as to render it proper and expedient to refuse specific performance on that ground, it took the course of directing the lease to bear the date of the contract, and leaving the parties to settle their legal rights at law. (h) § 943. It follows from what has been said that three classes of cases fall to be considered, as arising out of contracts for leases. (1) Where the acts complained of have led to the refusal of relief: (2) Where they have not led to this refusal and (3) Where the relief has been granted and the question of breach left for decision at common law. 1. Where the acts complained of have led to refusal of specific performance. § 944. In Thompson v. Guyon(i) a lease had been granted with a proviso for re-entry on breach of any of the covenants, and a covenant to grant a further term at the end of the original term, if it should not have been sooner determined by the lessee's acts or defaults: the lessee paid all his rent, and continued in possession to the end of the term, but had in fact committed breaches of covenant during the term, of which the lessor was not cognizant till after its determination: a bill for specific performance of the covenant to renew was dismissed, and an injunction against an ejectment was refused, on the ground that the lessor ought not to be placed in a worse condition at the expiration of the term than he would have been if he had known of the breach, and availed himself of it during the term. § 945. In Gregory v. Wilson(j) possession had been taken under a contract for a lease: breaches were alleged of the covenants which should have been inserted in the lease to insure and also to repair: it was contended as to the first that the receipt of rent after knowledge was a waiver of all the breaches, but the court held such waiver to have no longer operation at law than on the breaches antecedent to the receipt, and not to preclude the effect of the sub (h) Rankin v. Lay, 2 De G. F. & J., 65. See infra, § 954 et seq. (i) 5 Sim., 65. sequent breaches of the continuing covenant: as to the breaches of the covenant to repair, it was urged that they were neither wilful nor obstinate, and that accordingly they might be relieved against in equity: but the court held that as they were not attributable to mistake or accident, and were persisted in, they were, in the contemplation of the court, willful and obstinate. The bill was accordingly dismissed. § 946. In another case the defendant was lessee under a restrictive covenant against carrying on a beer shop. The plaintiff got a contract from the defendant for a sub-lease with knowledge of defendant's title and of the covenant. The plaintiff entered under the contract, and persisted in carrying on a beer shop. His bill for specific performance was dismissed with costs. (k) 2. Cases where relief has not been refused. § 947. There may be cases of breach of covenant for which merely nominal damages could be obtained, or there may be cases where a breach having been committed, may have been waived: and in favor of such cases an exception may be made to the general rule that the plaintiff must prove performance of the contract on his part. (7) On this principle, Jessel, M. R., in a recent case held that trifling breaches by a husband of the covenants on his part in a separation deed did not debar him from enforcing the deed.(m) § 948. But as regards breaches of covenant under contracts for leases, it seems that the breach which the court. would neglect must be either such a breach as would not. work a forfeiture at common law, or such that the legal forfeiture would not be relieved against in a court of equity: for the court will not relieve more readily whilst the whole thing rests in contract than it will after the legal relation has been actually created. (n)' (k) Lewis v. Bond, 18 Beav., 85. (m) Besant v. Wood, 12 Ch D., 605. 1 Breach of condition precedent; rule as to relief.] Scudder, J., said in Grigg v. Landis 21 N. J. Eq, 494: "Penalties, forfeitures and re-entries, for conditions broken, are not favored in equity, and constitute a large branch of equitable relief. Usually they are held to be securities for the payment of money and the performance of conditions, and where compensation can be made for non- § 949. In one case a lessor of mines covenanted to grant a further term, and the lessee covenanted to work the mines: on a suit by the lessee for a specific performance of the covenant to grant a further term, it appeared that the lessee had not worked the mines in consequence of their being drowned out the court, though it did not decide the point, inclined to think that this would be no bar to relief. (0) § 950. The case of Parker v. Taswell(p) may usefully be consulted as the law bearing on this question was there much considered, but the court came to the conclusion that according to the true construction of the contract there had been no breach of covenant. § 951. As regards all cases where the landlord is defendant and raises an objection on the ground of breach of covenants which ought to be in the lease, if the plaintiff shows that the landlord never complained before action, the land(0) Walker V. Jeffreys, 1 Ha., 341. (p) 2 De G. & J., 559. payment and non-performance, equity will relieve against the rigid enforcement of the contract. This is upon the principle that a court of equity is a court of conscience and will permit nothing to be done within its jurisdiction which is unconscionable. But it is not, therefore, to be supposed that a court of equity will lightly dispense with contracts made between competent parties and substitute other agreements more in accordance with variable rules of right and conscience. Every presumption will be made in favor of such contracts, and they will be enforced according to the intention of the parties expressed and implied, unless it can be shown that thereby some hardship or wrong, not within the presumed contemplation of the parties at the time, will result from such enforcement." See, also, Livingston v. Tompkins, 4 John 's Ch., 431; 2 Story's Eq. Juris., §§ 1314, 1316. Breach of condition; subsequent relief.] Where compensation can be made for the failure of exact performance, courts of equity have in general relieved against forfeitures which arose from the breach of a condition subsequent. Popham v. Bampfield, 1 Vern., 79; Woodman v. Blake, 2 id., 222; Walker v. Wheeler, 2 Conn., 299. Conditions precedent and subsequent, how distinguished.] There are no technical words by which conditions precedent and subsequent may be distinguished from each other. It is matter of construction and depends upon the party creating the estate, whether a condition is one or the other. 4 Kent's Com., 124; 1 Term. R., 645; 2 Bos. & Pull., 295; Finlay v King, 3 Peter's, 346; Nicoll v. New York and Erie R. R. Co., 12 N. Y., 121; Underhill ▾ Saratoga R. R. Co., 20 id., 455; Bennett v. Strong, 26 Miss, 116; Roger v. Walker, 1 Wis, 527. For a most instructive case, presenting a learned discussion upon the distinction between conditions precedent and subsequent in contracts or covenants, see Roberts v. Brett, 6 C. B. (N. S.), 611. The main test, with respect to these conditions, is whether the vesting of the estate granted by the instrument in which they are contained is postponed until the happening of the contingent event forming the condition, or is to be divested by it. Towle v. Palmer, 1 Rob., 437. The estate is not divested by the breach of a condition subsequent in such a case; the grantor, or his heirs, have the right of re-entry, and this may be waived. Ludlow v. New York and Harlem R. R. Co.. 12 Barb., 440; Rhoenir v. Com'rs of Emigration, 12 How.. Pr., 1; aff'g 1 Abb. Pr., 466. |