Cohen v. Kranz, 189
N.E.2d 473 (N.Y. 1963).
Kranz (P) contracted to
purchase Cohen's (D's) home for $40,000; P paid $4,000 down.
Although the original closing date was November 15, P obtained
an adjournment until December 15. On November 30, P's attorney
requested that D return the down payment because of structural
defects that allegedly rendered title unmarketable. D refused
and therefore neither party tendered performance on the
closing date. P sued to recover the down payment plus title
searching costs, and D counterclaimed for breach of contract.
The trial court gave judgment for P because a swimming pool on
the premises lacked a certificate of occupancy and a fence
projected over the property line. Both defects violated
protective covenants. The trial court also found that
defective title excused P from tender of further payment,
since D made no effort to remedy the defects after being
informed of their existence. The appellate division reversed,
finding that P did not
inform D of the specific
defects and that, since the defects were "curable" upon timely
notice, P's rejection of title in advance was a default
precluding recovery of the deposit. P appeals.
Can a vendee recover money paid
on a contract without tendering performance when the vendor's
title is curably defective?
Held. No. Judgment
A tender and demand for counterperformance are required to
put the vendor in default when his title could be cleared
without difficulty in a reasonable time. Since the defects
were curable, P's failure to tender, as well as his advance
rejection of title, work as an anticipatory breach of contract
and preclude his recovery of the down payment.