## Facts

- Smith agreed to sell Ziehen a country hotel and adjacent land for $3,500.
- Ziehen paid $500 at contract execution; additional terms included $300 due Sept. 15, 1892, assumption of a $1,000 mortgage, and a $1,700 purchase-money bond and mortgage.
- The parties’ remaining obligations on Sept. 15, 1892 (payment, execution of buyer’s bond and mortgage, and delivery of deed) were treated as concurrent.
- Unknown to both parties at contracting, the property was encumbered by a separate $1,500 mortgage; Smith had not made it and did not know it existed.
- A foreclosure action on the $1,500 mortgage was filed before the closing date, and foreclosure was later granted.
- On Sept. 15, 1892, Ziehen neither tendered the balance nor proved he offered performance or demanded performance from Smith.
- Ziehen sued to recover damages and/or the down payment, asserting Smith could not convey clear title on the closing date.

## Issues

1. Whether a vendee may recover for breach (or recover money paid) under an executory land-sale contract without tendering performance or demanding performance on the closing date.
2. Whether the existence of an undisclosed mortgage and pending foreclosure, without proof the vendor could not cure, constitutes a breach excusing the vendee’s tender.

## Decision

- The Court of Appeals reversed the judgment for Ziehen and ordered a new trial.
- The court held Ziehen failed to prove a breach entitling him to recover because he did not tender performance or show readiness and willingness coupled with a demand for performance.
- The undisclosed lien and pending foreclosure did not, by themselves, establish Smith was unable to perform, because the lien could have been removed.

## Legal Principles

- A party seeking damages for breach of an executory contract generally must prove performance or tender of performance.
- Where performance obligations are concurrent, the plaintiff must show readiness and willingness to perform and must tender or demand performance, absent waiver.
- Tender is excused only if the other party has disabled itself from performance or is shown to be unable to perform on the date fixed by the contract.
- A land-sale contract is not breached merely because a lien exists on the performance date if the vendor has the ability to remove the encumbrance.

## Conclusion

The court held that, in a concurrent-performance real estate contract, the buyer could not recover for breach or reclaim payments without tendering (or at least proving readiness and demanding performance) unless the seller’s inability to convey good title on the closing date was clearly established; a curable lien and pending foreclosure were insufficient, standing alone, to excuse the buyer’s tender.


Ziehen v. Smith, 148 N.Y. 558, 42 N.E. 1080 (N.Y. 1896)