Clem Perrin Marine Towing, Inc. v. Panama Canal Co.

Clem Perrin (plaintiff) leased a mortgage-encumbered boat, with a purchase option, to Panama Canal Co. (defendant). After learning from a broker that Clem had fallen behind on the boat's first mortgage, Panama asked Clem for assurance it could deliver clear title once the purchase option became exercisable, and withheld further lease payments pending that assurance. Instead of responding with assurance, Clem sued Panama for the withheld payments; the district court sided with Clem, ruling Panama had breached the lease.