—Judgment unanimously reversed on the law with costs, motion denied, cross motion granted in part, complaint dismissed and judgment ordered in accordance with the following Memorandum: Supreme Court erred in directing specific performance of the contract for the sale of real property. Under the contract, it was plaintiffs duty to convey both an insurable title and title that was free of all liens and encumbrances except those specified in the contract.
Title insurance had been obtained prior to closing, but the property remained subject to a lien for unpaid franchise taxes owed by plaintiffs predecessor in title (see, Carey v Minor C. Keith, Inc., 250 NY 216, 219). Because plaintiff breached its obligation to tender marketable title, defendant was not required to perform under the contract (see, Hudson-Port Ewen Assocs. v Chien Kuo, 78 NY2d 944, 945).
The contract further provides that, in the event plaintiff is unable to convey marketable title, the amount paid in escrow must be returned to defendant. Under that provision, defendant is entitled to the refund of its downpayment.
Thus, we reverse the judgment, deny plaintiffs motion for summary judgment, grant in part defendant’s cross motion for summary judgment, dismiss the complaint and order that 907 judgment be entered in favor of defendant on its second counterclaim in the amount of $10,000, together with interest at the statutory rate (see, CPLR 5004). (Appeal from Judgment of Supreme Court, Herkimer County, Tenney, J. — Summary Judgment.) Present — Green, J. P., Pine, Fallon, Callahan and Boehm, JJ.
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