Friday, March 23, 2012

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 9th 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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