Monroe Street Properties, Inc. v. Carpenter

Brief Fact Summary. A contract between two parties contained concurrent conditions, one to be satisfied by each party.  Neither party satisfied their respective condition.

Synopsis of Rule of Law. A party cannot place another party in breach if they themselves have not tendered their own performance.

Facts. On March 27, 1962, the Appellant, Monroe Street Properties, Inc. (the "Appellant") agreed to sell to Western Equities, Inc. ("Western") "ten insured first mortgages and notes having a face value of $1,250,000 in exchange for $1,000,000 worth of Western's common stock".  The Appellee, Carpenter (the "Appellee"), is the trustee of Western.  Western's offer was expressly subject to "verification by Union Title Company that the ten first mortgages * * * are valid first mortgages."  On March 30, 1962, the parties opened an escrow account with Union Title Company.  The Appellant never deposited the proper mortgage instruments into escrow, instead it deposited ten mortgages with heavy encumbrances.  The Appellant's goal was to sell the Western's stock to clear title to the mortgages.  The Appellant could not have performed otherwise.  However, Western refused to deposit the stock in escrow. The district court granted the Appellee summary judgment.

Issue. If a party does not adequately tender his own performance can that party claim that another non-performing party is in breach?

Held. No.  The court agreed with the district court that the Appellant never "made an adequate tender of its own performance."  Concurrent conditions were involved in this case.  The Appellant had to deposit the insured first mortgages and Western had to deposit its stock simultaneously.  "Neither party could place the other in breach for failure to perform without a tender of its own performance." The definition of tender is a "a readiness and willingness to perform in case of the concurrent performance by the other party, with present ability to do so, and notice to the other party of such readiness."

Discussion. This case demonstrates how courts require a plaintiff to tender performance prior to a breach of contract action can be sustained.