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Vanadium Corp. v. Fidelity & Deposit Co.

    Brief Fact Summary.

    Plaintiff sued Defendant to recover the purchase price of the assignment of two tracts of land after the Department of the Interior declined to approve the assignments of the tracts of land because Defendant filed to provide assurances to the Department of the Interior that it intended to cooperate with Wade and Curran in operating the leaseholds. The jury found for Defendant. Plaintiff appealed.

    Synopsis of Rule of Law.

    Wherever the cooperation of the promisee is necessary for the performance of the promise, there is a condition implied in the fact that the cooperation will be given.

    Facts.

    The case involved two tracts of land held as mining leases by Redington (Defendant), Wade, and Curran. Defendant and Vanadium Corp. (Plaintiff) entered into a contract whereby Defendant assigned to Plaintiff his interest in the two leases, subject to approval by the Secretary of Interior. The contract provided that if the assignments were not approved, the agreement would be cancelled and Defendant would refund the purchase price. Defendant apparently failed to provide assurances to the Department of the Interior that it intended to cooperate with Wade and Curran in operating the leaseholds, and the Department eventually declined to approve the assignments. Plaintiff sued to recover the purchase price. Defendant was the principle on the bond issued by Fidelity & Deposit. The jury found for Defendant. Plaintiff appealed.

    Issue.

    Whether, when the cooperation of the promisee is necessary for the performance of the promise, the promisor’s obligation is discharged if the promisee fails to cooperate.

    Held.

    Yes. The trial court’s ruling is affirmed. Wherever the cooperation of the promisee is necessary for the performance of the promise, there is a condition implied in the fact that the cooperation will be given.

    Discussion.

    Plaintiff agreed to secure the Secretary's approval, and the parties clearly assumed that he would seek the approval in good faith and refrain positive actions to prevent approval. Defendant’s persistent refusal to cooperate with the Department in securing its approval discharged Plaintiff’s contractual duty to refund the purchase price.


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