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El Dorado Hotel Props. v. Mortensen - 136 Ariz. 292, 665 P.2d 1014 (Ct. App. 1983)

Rule:

Where all or part of the performances to be exchanged under an exchange of promises can be rendered simultaneously, they are to that extent due simultaneously, unless the language or the circumstances indicate the contrary. Except to the extent stated above, where the performance of only one party under such an exchange requires a period of time, his performance is due at an earlier time than that of the other party, unless the language or the circumstances indicate the contrary.

Facts:

Defendant debtors, three married couples dba H.S.L. Properties, had executed a promissory note and deed of trust in connection with their purchase of the El Dorado Country Club property. The agreements provided that upon payment of an installment of the note, a partial release of the property would be made. The time for payment was extended for five days. When the debtors conditioned their tendered payment on the recording of the release, plaintiff creditors, El Dorado Hotel Properties, Ltd., a limited partnership, and United Bank of Arizona, refused the payments and instituted their collection and foreclosure action. The trial court granted summary judgment to the creditors in the amount of $1,900,000 principal and $ 56,219 interest found to be due on a promissory note plus $ 20,000 attorney fees. The debtors appealed.

Issue:

Did the trial court err in granting summary judgment in favor of the creditors?

Answer:

Yes

Conclusion:

The court reversed the summary judgment, which found for the creditors in their collection and foreclosure action against the debtors, and remanded for further proceedings, holding that when a contract did not specify a time for performance, the performance was to be simultaneous. Therefore, it was an issue of fact whether the creditors had time to prepare the release so as to have it effective when the payment was tendered.

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