Uploaded March 2025 | Updated September 2026, 3 weeks ago
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Monroe Street Properties Inc. v. Carpenter
United States Court of Appeals for the Ninth Circuit
407 F.2d 379 (1969)
A first mortgage, is an initial mortgage loan for a property.
One party to a contract needed to provide the other with first mortgages, but failed to perform.
The other party failed to perform too, leading to a suit for breach of contract and a performance in court. In Monroe Street Properties versus Carpenter, Western Equities provided Monroe Street Properties with a written offer to buy ten first mortgages and notes.
The mortgages and notes had a face value of one million two hundred fifty thousand dollars. Under Western's offer, Union Title Company needed to verify that the mortgages were valid first mortgages, and Monroe would purchase title insurance for the properties.
According to the offer, Monroe would accept one million dollars worth of Western stock as an investment stock, so Monroe couldn't make plans to redistribute the stock. Monroe accepted the offer. Pursuant to the contract, Western needed to have its stock listed on the American Stock Exchange.
In compliance with the contract, the parties opened an escrow account with the union title company. An escrow account is an account held by a neutral third party. The escrow agreement required Monroe and Western, to comply with the other terms and conditions of their agreement, on or before Western's stock was listed on the American Stock Exchange.
Western stock appeared on the American stock exchange by June twenty ninth, nineteen sixty two. But Monroe didn't deposit ten valid first mortgages into the escrow account, and Western didn't deposit its stock.
However, Monroe deposited mortgage instruments, but the mortgages weren't for valid first mortgages. The properties were heavily encumbered.
After making the deposit, Monroe sent Western a demand, seeking the deposit of the stock in the escrow account.
Western didn't deposit the stock.
Monroe sued Orville Carpenter, Western's trustee, for breach of contract.
Carpenter filed a motion for summary judgment. Monroe opposed the motion with affidavits.
These affidavits showed that Monroe didn't have the money to pay off the encumbrances on the properties.
So Monroe couldn't deliver valid first mortgages and buy title insurance without hypothecating Western stock to raise the needed funds.
Hypothesis refers to pledging something to secure a loan without delivering the item. But Western didn't deposit the stock, so Monroe couldn't hypothecate the stock and had no way to obtain the money.
Carpenter's summary judgment filings didn't contradict Monroe's affidavits regarding the availability of funds for Monroe to perform. Monroe didn't have the means or ability to perform on the contract and was unable to supply the first mortgages and insurance, unless Western performed first by depositing the stock.
Monroe didn't perform or tender performance, so Western wasn't in breach of contract. The court granted Carpenter's motion.
Monroe appealed, arguing there was a genuine issue of material fact on whether Monroe could have delivered first mortgages during the contract's life. The ninth circuit heard the appeal.
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Get more case briefs explained with Quimbee. Quimbee has over 42,700 case briefs (and counting) keyed to 988 casebooks ► quimbee.com/case-briefs-overview
Monroe Street Properties Inc. v. Carpenter
United States Court of Appeals for the Ninth Circuit
407 F.2d 379 (1969)
A first mortgage, is an initial mortgage loan for a property.
One party to a contract needed to provide the other with first mortgages, but failed to perform.
The other party failed to perform too, leading to a suit for breach of contract and a performance in court. In Monroe Street Properties versus Carpenter, Western Equities provided Monroe Street Properties with a written offer to buy ten first mortgages and notes.
The mortgages and notes had a face value of one million two hundred fifty thousand dollars. Under Western's offer, Union Title Company needed to verify that the mortgages were valid first mortgages, and Monroe would purchase title insurance for the properties.
According to the offer, Monroe would accept one million dollars worth of Western stock as an investment stock, so Monroe couldn't make plans to redistribute the stock. Monroe accepted the offer. Pursuant to the contract, Western needed to have its stock listed on the American Stock Exchange.
In compliance with the contract, the parties opened an escrow account with the union title company. An escrow account is an account held by a neutral third party. The escrow agreement required Monroe and Western, to comply with the other terms and conditions of their agreement, on or before Western's stock was listed on the American Stock Exchange.
Western stock appeared on the American stock exchange by June twenty ninth, nineteen sixty two. But Monroe didn't deposit ten valid first mortgages into the escrow account, and Western didn't deposit its stock.
However, Monroe deposited mortgage instruments, but the mortgages weren't for valid first mortgages. The properties were heavily encumbered.
After making the deposit, Monroe sent Western a demand, seeking the deposit of the stock in the escrow account.
Western didn't deposit the stock.
Monroe sued Orville Carpenter, Western's trustee, for breach of contract.
Carpenter filed a motion for summary judgment. Monroe opposed the motion with affidavits.
These affidavits showed that Monroe didn't have the money to pay off the encumbrances on the properties.
So Monroe couldn't deliver valid first mortgages and buy title insurance without hypothecating Western stock to raise the needed funds.
Hypothesis refers to pledging something to secure a loan without delivering the item. But Western didn't deposit the stock, so Monroe couldn't hypothecate the stock and had no way to obtain the money.
Carpenter's summary judgment filings didn't contradict Monroe's affidavits regarding the availability of funds for Monroe to perform. Monroe didn't have the means or ability to perform on the contract and was unable to supply the first mortgages and insurance, unless Western performed first by depositing the stock.
Monroe didn't perform or tender performance, so Western wasn't in breach of contract. The court granted Carpenter's motion.
Monroe appealed, arguing there was a genuine issue of material fact on whether Monroe could have delivered first mortgages during the contract's life. The ninth circuit heard the appeal.
Want more details on this case? Get the rule of law, issues, holding and reasonings, and more case facts here: quimbee.com/cases/monroe-street-properties-inc-v-carpenter
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