Ziehen v. Smith

Brief Fact Summary.

The Plaintiff, as vendee, sought to recover damages under an executory contract for the sale of real estate from Defendant, the vendor, when he was unable to deliver clear title on the agreed upon date.  

Synopsis of Rule of Law.

The general rule is that in order to entitle a party to recover damages for the breach of an executory contract he must show performance or tender of performance on his part.  However, tender of performance on the part of the vendee is dispensed with in a case where it appears the vendor has disabled himself from performance, or that on the day fixed by the contract for that purpose, he is unable to perform.

Facts.

Under the contract, Defendant was to convey a country hotel and some adjacent land to the Plaintiff.  Plaintiff was to pay $500 down at the execution of the contract and $300 more on September 15, 1892; to assume an existing mortgage of $1,000; and $1,700 by his bond and mortgage on the property.  

The lower courts assumed that the payment of $300, execution of the bond and mortgage and delivery of the conveyance by the Defendant were to be concurrent acts, and that they were to take place on September 15, 1892.  The lower court allowed the Plaintiff to recover.

Issue.

Did the Plaintiff establish such a breach of the contract as to entitle him to recover?

Held.

Judgment reversed and a new trial ordered. 

·         At the execution of the contract, there was a $1,500 mortgage on the property that had not been disclosed to the Plaintiff.  Defendant was not the maker of the mortgage, and was not aware of its existence, either, but his title was subject to it when he contracted to sell to the Plaintiff.  

·         The Plaintiff had to prove that he was ready and willing to perform, and have demanded performance by the other party.  There was no proof that the Defendant waived such tender.  The only difficulty in performance on the Defendant’s part was the existence of a lien that neither party was previously aware of. 

·         The contract is not broken by the mere fact of the existence on the day of performance of some lien or encumbrance which it is in the power of the vendor to remove.

Dissent.

None

Concurrence.

None

Discussion.

In cases where the terms of the contract require concurrent acts by the parties, it is the duty of him who seeks to maintain an action for breach of the contract not only to be ready and willing to perform on his part, but he must demand performance by the other party.