Palmer v. Fox

264 N.W. 361

 

RULE:

Stipulations in a contract are to be construed to be dependent or independent according to the intention of the parties and the good sense of the case. Technical words should give way to such intention.

FACTS:

Defendant vendee appealed from a judgment of the trial court (Michigan), which found in favor of plaintiff vendor in an action to recover the balance of the purchase price due on a land contract. The vendor sold a subdivision lot to vendee for a price to be paid over a period of five years. The purchase agreement required the vendor to make certain improvements in the subdivision. The improvements were not completed. The vendee failed to make the required payments and the vendor filed suit to recover the balance of the purchase price. The trial court found in favor of the vendor and the vendee appealed. On appeal, the vendee contended that the failure to make the improvements was a material breach of the covenant to make improvements, which barred the vendor's recovery.

ISSUE:

Was the covenant of the vendor to make improvements a dependent covenant?

ANSWER:

Yes.

CONCLUSION:

The court reversed the trial court's judgment in favor of the vendor, without a new trial, and awarded the costs to the vendee. The court found that the vendee's covenant to pay and the vendor's covenant to make improvements were concurrent and dependent upon each other. The court held that the vendor was guilty of a substantial breach of a dependent covenant and thus, could not maintain the action.

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