## Facts

- A developer and Orrin P. Fox entered a 1925 land contract for a Detroit subdivision lot for $1,650, with a down payment and monthly installments due within five years.
- The contract required the vendor, at its expense, to provide subdivision improvements, including sidewalks, graded streets, street surfacing (cinders or gravel, at the vendor’s election), and water mains and lateral sewers.
- Fox made payments through February 1931.
- The vendor installed water mains, sewers, sidewalks, and graded streets, but did not cinderize or gravel Westwood Avenue, the street fronting Fox’s lot.
- The vendor’s interest was assigned to Grace H. Palmer, who sued in 1933 at law to recover the unpaid balance plus interest; during litigation, Louis G. Palmer as trustee was substituted as plaintiff.
- Fox defended that (1) the vendor’s failure to surface the streets was a breach of the contract, and (2) plaintiff had not tendered a deed before filing suit.
- After a bench trial, the court entered judgment for plaintiff for the unpaid balance and interest; Fox appealed.

## Issues

1. Whether the vendor’s covenant to make specified subdivision improvements was dependent on, and to be performed concurrently with, the vendee’s covenant to pay the purchase price.
2. Whether the failure to surface the street fronting Fox’s lot constituted a material breach excusing further payments and barring recovery of the balance.
3. Whether the plaintiff’s failure to tender a deed before suit independently barred an action to recover the unpaid balance.

## Decision

- The Michigan Supreme Court reversed the judgment for plaintiff, without a new trial, and awarded costs to Fox.
- The court held the improvement covenants and the payment covenant were dependent and intended for concurrent performance within the contract’s five-year payment period.
- The failure to cinderize or gravel Westwood Avenue was a material breach of the vendor’s dependent covenant, precluding recovery of the unpaid balance.
- Because the vendor’s material breach discharged Fox’s duty to continue performance, the deed-tender argument did not control the outcome.

## Legal Principles

- Whether covenants are dependent or independent turns on the parties’ intent and the practical sense of the transaction.
- Courts generally will not treat covenants as independent unless the contract clearly shows that intent.
- In a land contract for subdivision property, a vendor’s promised improvements may constitute part of the consideration; when performance is tied to the payment schedule, the improvement covenant and the payment covenant are construed as concurrent and dependent.
- A material breach of a dependent covenant by the vendor bars the vendor (or assignee) from recovering the unpaid balance from the vendee.

## Conclusion

Because the subdivision street-surfacing promise was a dependent and material part of the exchange and was not performed as contemplated during the payment period, the vendor’s assignee could not recover the remaining contract balance from the purchaser.


Palmer v. Fox, 274 Mich. 252, 264 N.W. 361 (Mich. 1936)