Beatty v. Depue

• Decision Date: 17 May 1960
• Docket Number: No. 9795,9795
• Citation: 103 N.W.2d 187,78 S.D. 395
• Parties: , 1 A.L.R.3d 531 Mary D. BEATTY, Ernest D. Beatty and F. J. Breslin, Plaintiffs and Appellants, v. Ralph A. DEPUE and Dorothy M. Depue, Defendants and Respondents.
• Court: South Dakota Supreme Court

Page 187

103 N.W.2d 187

78 S.D. 395, 1 A.L.R.3d 531

Mary D. BEATTY, Ernest D. Beatty and F. J. Breslin Plaintiffs and Appellants, v. Ralph A. DEPUE and Dorothy M. Depue, Defendants and Respondents.

No. 9795.

Supreme Court of South Dakota.

May 17, 1960.

Rehearing Denied June 15, 1960.

Whiting, Lynn, Freiberg & Shultz, Rapid City, for plaintiffs and appellants.

T. R. Lehnert and Bangs, McCullen & Butler, Rapid City, for defendants and respondents.

RENTTO, Judge.

This litigation grows out of a contract for deed entered into on April 2, 1956 under which the plaintiffs agreed to convey to the defendants a mountain acreage about eight miles west of Custer, South Dakota, generally referred to as the Bellemare Ranch. The defendants made the payment required on the execution of the contract and went into possession of the premises, after which they made the payment due May 1. Subsequently they discovered that three portions of the ranch did not belong to the plaintiffs and could not be conveyed by them. On December 2, 1957 they gave notice of rescission of the contract and tendered restitution.

After giving notice of their intention to do so on April 23, 1958, plaintiffs on June 4, 1958 commenced this action to foreclose the contract. Defendants in addition to denying plaintiffs' cause of action counterclaimed for rescission of the contract and offered to do equity. The court granted the rescission because of a unilateral mistake as to the land that was to be conveyed and adjusted the equities by requiring repayment to the defendants of the sums paid by them under the contract with interest and the value of the improvements made on the premises. It also determined the value of the use and occupation of the premises and ordered this offset against the amount due the defendants. This balance was made an equitable lien against the premises.

In appealing from such judgment plaintiffs' principal contentions are that (1) the findings that there was a unilateral mistake; that defendants' negligence did not contribute to it; and that they would not have executed the contract except for this mistake are not sustained by the clear preponderance of the evidence (2) that the unilateral mistake found by the court does not constitute grounds for rescission and (3) that the defendants did not act with the required promptness upon discovering their mistake.

The fee owned land of the ranch consists of three parcels: Homestead Entry Survey 495, Lode Mining Claims designated as Mineral Survey 1968 and the Eldorado Placer mining claim designated as Lot No. 1297. They contain about 522 acres of which about 100 acres are tillable, and make up a unit that is uniquely irregular in shape. 1968 runs generally north and south and is about two miles long with an average width of approximately one-fourth mile. It constitutes the easterly portion of the ranch. To the west of it is higher ground, apparently a mountain or a hill, which is not a part of the ranch. 495, shaped like an are that bends south, lies northwest of this elevated area but its northeasterly extremity does not connect up with the north end of 1968. This hiatus is government land about three-eighths of a mile wide at its widest portion and about one-eighth of a mile wide at its narrowest part. 1297 which lies to the southwest of the elevated area is the most irregular of these three tracts. It is shaped like an arc that bends north. Its southeastern part, which makes up the bulk of its area, connects up with the southwesterly extremity of 1968. From that a fingerlike projection extends northwest within one-half mile of the south end of 495. Between these latter points is a sliver of government land which was a part of the ranch unit by lease. Probably the best way to describe this unit is to say that it is a rough semicircle with 1968, on the east, the diameter. The hill or mountain which separates this diameter from the rest of the semicircle is about a mile east and west and a mile and one-half north and south in its widest area. Speaking generally it may be said that the ranch encircles the elevated area at its base. In other words, it runs around the mountain.

While the Beattys, residents of Nebraska, are the owners of the ranch, Breslin had an interest in it and had resided thereon for about 50 years when this sale was initiated. He made a deal with one Alseth to find a buyer. In March of 1957 the defendants in company with Alseth went to the ranch to look it over. There they met Breslin and in company with him and under his guidance they were shown the ranch during the course of which they were driven over and near parts of it and in a few places viewed it on foot and looked over the buildings. At that time it was agreed that the defendants would return in a week and if everything was satisfactory an agreement for its purchase would be entered into. They returned at the agreed time but because Breslin was ill nothing was done on that occasion.

A week later they returned again and while Breslin was in a convalescent home he was well enough to do business. At his suggestion the defendants went to attorney Hoagland who had previously done legal work for the plaintiffs. The contract sued on was drawn and signed by the defendants and Breslin on that date, after which it was sent to the other plaintiffs for execution. They returned it to attorney Hoagland who put it in escrow along with the deed to the premises. The defendants then took possession of the premises on April 17, 1956. In the following September defendants in the course of operating the ranch discovered that the fence on the south end of the property enclosed an area of Forest Service land. They immediately notified attorney Hoagland. Early the next year they discovered that there was a hiatus in the northern portion of the ranch between 495 and 1968 which was Forest Service land. This they also promptly reported to the attorney. In the spring of that year they discovered that an area of the ranch joining 1968 on the north did not belong to the plaintiffs. This was similarly reported.

In this state it is provided that a party to a contract may rescind the same if his consent was given by mistake. SDC 10.0802. Mistake of fact is defined in SDC 10.0312(2) as consisting in belief in the present existence of a thing material to the contract which does not exist. It seems to us that these statutes authorize rescission for a unilateral mistake of fact. Any doubt as to the validity of this view is removed when we consider SDC 10.0313 which states when a mistake of law renders consent to a contract voidable. That section specifically provides that the misapprehension of law must be by all parties or if by only one party the other must be aware of it. The mistake of fact which renders consent to a contract voidable is not similarly circumscribed.

Our statutes also declare that the consent of a party to a contract must be free, SDC 10.0301(1), and that consent which is not free is not void but voidable and may be rescinded in the manner prescribed by the statute on rescission. SDC 10.0302. We also have the further provision that an apparent consent is not real or free and is voidable when obtained through mistake, SDC 10.0303(4), and that consent is deemed to have been obtained through mistake only when it would not have been given except for such mistake. SDC 10.0304. A mistake caused by the neglect of a legal duty on the part of the person making it is not a mistake of fact. SDC 10.0312.

Apparently rescission is permitted where the mistake of fact is unilateral on the theory that because of such mistake there was no meeting of the minds of the parties under the conditions actually existing. Where the mistake of fact is mutual this court has said that no contract results because there is no meeting of the minds. Iowa Loan & Trust Co. v. Schnose, 19 S.D. 248, 103 N.W. 22; Nilsson v. Krueger, 69 S.D. 312, 9 N.W.2d 783. It is obvious that the same situation results when the mistake of fact is unilateral. Annotation 59 A.L.R. 809. See also Fransen v. State, 59 S.D. 432, 240 N.W. 503; 12 C.J.S. Cancellation of Instruments Sec. 27; and 9 Am.Jur., Cancellation of Instruments, Sec. 33; Williston on Contracts Rev.Ed. Sec. 1578; Corbin on Contracts Sec. 608.

As to the determinations that there was a unilateral mistake not caused by defendants' negligence and that except for this mistake they would not have executed the contract, it is the claim of the plaintiffs that they are not supported by a clear preponderance of the evidence. See Byrne v. McKeachie, 29 S.D. 476, 137 N.W. 343. In our review in this regard we must accept that version of the evidence, including the inferences which can be fairly drawn therefrom, which is favorable to the trial court's action. This is so because it is for the trial court to select the testimony and draw the inferences which he relies on. Because his participation in the trial reveals to him many things that are helpful and sometimes essential in deciding fact issues, it is presumed that his findings are correct. Consequently, we are not free to disturb them unless satisfied that they are contrary to a clear preponderance of the evidence.

At the conclusion of the testimony the defendants suggested that the court 'view the premises in order to determine the materiality of what has been testified to as to the boundaries.' This the court did. While eminent authorities consider knowledge derived from a view as evidence, Wigmore on Evidence, 3rd Ed., Sec. 1168; McCormick on Evidence, p. 391, this court does not so regard it. However, we have held that it does enable the trier of facts to more satisfactorily weigh the evidence given in court and is of assistance to him in determining the issues of fact. Weidmeier v. Edelman, 75 S.D. 29, 58 N.W.2d 306. Accordingly, it too is a factor to be borne in mind in our assessment of the sufficiency of the evidence.

That the view of the...