Monroe Street Properties, Inc. v. Carpenter – Case Brief
Monroe Street Properties, Inc. v. Carpenter, 407 F.2d 379 (9th Cir. 1969).
Facts: Carpenter (D1), acting as the trustee for Western Equities (D2), offered to purchase ten insured first mortgages and notes from Monroe Street Properties (P) in exchange for shares of Western Equities’ common stock. Monroe was unable to obtain title insurance policies because the properties were subject to prior encumbrances. P needed to use D’s stock as collateral to pay off the prior encumbrances and therefore would not be able to perform until D performed.
P sued for breach of contract in diversity in federal district court. The court granted D’s motion for summary judgment on the grounds that the performances of each party were concurrent conditions. P had not performed on its side and therefore D was not in breach. P contended that a material issue existed under Rule 56 as to whether it could have performed within the life of the contract.
Issue: In a contract requiring concurrent performances, does a party have a cause of action for breach if it has tendered only partial performance?
Holding and Rule: No. In a contract requiring concurrent performances, a party does not have a cause of action for breach if it has tendered only partial performance.
The court held that where concurrent performances are required, both parties are obligated to tender performance at the same time. The performances are concurrent conditions. If one party cannot tender performance, the other party’s duty to perform is excused. In this case P had only partially performed and therefore D’s counter performance was not due.
Notes: If both performances can be accomplished in relatively the same time frame, most courts will construe the contract to require concurrent performances. A party’s duty to perform manifests only when the other party has tendered his performance.