Medico – Dental Building Co. v. Horton & Converse case brief

Medico – Dental Building Co. v. Horton & Converse, Supreme Court of CA, 1942

1. P and D had commercial lease that P lessee use as drug store and lessor agrees not to lease or sublease to anyone else for purpose of drug store. Dr. B. leases 9^th floor and maintained a drug room where drugs were sold. D demanded P to take action and P was unable to make any arrangements and D sent a written notice of rescission and vacated store. P sued for the rent due under the balance of the lease.
2. P claims D had breached a covenant to pay – Lease is a conveyance
   1. Rule – P argues Law of Independent Covenant (property rule): In a conveyance, any promise is independent and beach of one covenant does not terminate the entire lease

Can only sue for the loss of value of the lease made by the breach

D claims Dependent Covenants

Rule of Contract: Whether covenant/promise are dependent or independent test: Look to the intent of the parties (understand of the parties as to the inter-balancing considerations existing between the respective covenants)

Holding: Court says lease is both conveyance and contract (creates set of rights and duties); covenants are dependent

1. Privity of Estate and Privity of Contract
2. If one breached a dependent covenant, then it releases the other part of the covenant upon which the originally breached covenant depended on

It was breached and it was material

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