Dail v. Vodicka

• Decision Date: 12 December 1975
• Docket Number: No. 11524,11524
• Citation: 89 S.D. 600,237 N.W.2d 7
• Parties: B. H. DAIL, d/b/a Dail Realty, Appellant, v. Joseph VODICKA and Delores R. Vodicka, Respondents.
• Court: South Dakota Supreme Court

Page 7

237 N.W.2d 7

89 S.D. 600

B. H. DAIL, d/b/a Dail Realty, Appellant, v. Joseph VODICKA and Delores R. Vodicka, Respondents.

No. 11524.

Supreme Court of South Dakota.

Dec. 12, 1975.

Fred F. Hendrickson, Rapid City, Marvin D. Thruhe, Rapid City, for plaintiff and appellant.

Charles H. Whiting, Rapid City, for defendants and respondents.

WINANS, Justice (on reassignment).

In this action to recover a commission for the sale of real property the jury at the trial stage found for the defendants. On appeal plaintiff raises questions dealing with the admissibility of parol evidence relating to the contract, with the giving of two jury instructions and with the sufficiency of the evidence to support the verdict. Having considered all questions raised we affirm the lower court's decision.

On August 1, 1973, Defendants Joseph and Delores Vodicka signed a 'uniform sales agency contract' which gave to Dail Realty an exclusive right, until November 1, 1973, to sell a section of land in Pennington County, South Dakota. The agreement required a down payment from a purchaser of twenty thousand dollars ($20,000) with a fifty thousand dollar ($50,000) balance to be paid on a sixteen (16) year contract for deed in annual payments at six and a half percent (6 1/2%) interest. A total cash purchase would not be accepted.

Following the property description these words were included in the contract, in ink: 'TAX DEED ON 160 ACRES 2 EA QUIT CLAIN (sic) DEEDS.' Also included in the contract was this standard machine-printed clause:

'In the event of a sale I will convey, or agree in writing to convey, By warranty deed, a good merchantable title to said property to the purchaser thereof. Further, I will furnish an abstract of title certified to date of sale, or in lieu thereof a policy of title insurance guaranteeing merchantable title.' (emphasis added)

For the production of a purchaser 'ready, willing and able' the owners agreed to pay the realtor a ten percent (10%) commission.

Plaintiff realtor found a potential buyer, apparently after much effort, and on November 1, 1973, Defendants signed an 'offer and agreement to purchase' contract with the 'purchaser' on the full six hundred forty (640) acres. No mention was made in this agreement of tax or quit claim deeds. Rather, the contract provided that

'Merchantable title shall be conveyed by Warranty Deed properly signed and with the necessary State Transfer Fee paid for recording. An Abstract of Title shall be continued to date and furnished promptly to the Buyer for examination, or in lieu of an abstract of Title, Title Insurance may be substituted.'

Terms of sale were substantially as prescribed in the listing contract with prepayment of the contract again being expressly prohibited.

At the time of listing a quiet title action was pending as to the quarter of land to which Defendants held the tax deed and two quit claim deeds. Near the end of November Appellant advised Morris Unger, the would-be purchaser, that the Vodickas did not have merchantable title to the one quarter section in question. It seems that Mr. Unger still wanted to go through with the purchase provided that four thousand dollars ($4,000) of the purchase price be held in escrow pending clearance of title. Unger was informed by Respondents' counsel that this was unacceptable and further that he (Unger) would have to bring the quiet title action on his own behalf. Having reached no mutually satisfactory agreement, the Vodickas returned Unger's one thousand dollars ($1,000) earnest money which had been paid November 1st and negotiations ceased. B. H. Dail of Dail Realty, the real estate broker in question, thereupon claimed that he had fulfilled his part of the broker's contract and sued for recovery of his commission from the Vodickas.

In their answer to Dail's complaint, the Vodickas admitted signing both contracts, but alleged that when the property was listed they had informed Plaintiff Dail that they 'could and would only give the purchaser of said property a Quit Claim Deed to said 160 acres and that said Uniform Sales Agency Contract expressly excepted the 160 acre tract * * * from the provisions thereof by which defendants agreed that, in the event of a sale, they would convey to the purchaser a merchantable title by Warranty Deed.'

The case was tried at Rapid City before a jury on June 24, 1974. At its conclusion the jury found for the defendants and plaintiff now brings this appeal.

Plaintiff-appellant first charges that the trial judge erred in admitting into evidence the testimony of witnesses as to alleged oral conversations they had with Appellant regarding the terms of the listing and purchase agreements on the sale property. Plaintiff himself had written the words 'TAX DEED ON 160 ACRES 2 EA QUIT CLAIN (sic) DEEDS' into the listing contract. These words, when read with the promise to convey good merchantable title by warranty deed in the same contract surely create an ambiguity for they could well be, at least on their face, inconsistent. It is a fundamental rule of contract construction that the entire contract and each and all of its parts and provisions must be given meaning if that can consistently and reasonably be done. 17 Am.Jur.2d, Contracts § 259, pp. 660--662. Because an ambiguity had been created in the listing contract and because this ambiguity manifestly carried over into the agreement to purchase, parol evidence was admissible at trial to make clearer the intention of the parties to the agreements. In Christiansen v. Strand, 1965, 81 S.D. 187, 132 N.W.2d 386, through Judge Rentto, we said:

'With us the rule that parol or extrinsic evidence may not be admitted to vary the terms of a written instrument is of statutory origin. SDC 10.0604 (now SDCL 53--8--5). However, when the writing is uncertain or ambiguous such evidence is admissible to explain the instrument, but it is not admissible to add to or detract from the writing. (citations omitted) In other words, evidence is resorted to where the ambiguity may be dispelled to show what they meant by what they said, but not to show that the parties meant something other than what they said.'

This was in keeping with our holding in Eggers v. Eggers, 1961, 79 S.D. 233, 110 N.W.2d 339 that:

'Oral negotiations or agreements which preceded or accompanied the execution of a written contract may be employed to explain its uncertain expressions but, except where reformation is sought, not to contradict and nullify its express terms.'

In view of the ambiguity existing in the contracts in question we are in agreement that the trial court did not err in admitting into evidence the testimony of the witnesses with regard to conversations they had had with Appellant concerning the ambiguities.

Appellant next charges that the trial judge erred in giving Instructions Six and Nine to the jury, which instructions stated that if Appellant knew or should have known at the time of listing the property that the title had a possible defect he cannot recover his commission.

The law is well settled that if, at the time of acceptance of a listing, a real estate broker knows of any defects in the owner's title or is aware of facts sufficient to put a reasonably prudent person on inquiry which, if followed with reasonable diligence, would advise him of any such defect, the broker is not entitled to recover a commission if the sale fails because of said defect. Best v. Kelley, 1945, 22 Wash.2d 257, 155 P.2d 794; Orr v. Woolfolk, 1933, 250 Ky. 279, 62 S.W.2d 1029.

In this case both defendants testified that, prior to signing Exhibit 1, the listing contract, they had explained to Plaintiff that they did not possess merchantable title to the 160 acres in dispute. It is further admitted that Plaintiff saw and copied a previous listing agreement in which the Words 'TAX DEED 2 QUIT CLAIM DEED ON 160A' were handwritten Immediately after the standard printed clause which stated:

'I represent that this description is correct, that I have the legal right to sell the property described herein and that I can and will duly furnish a good and sufficient warranty deed and abstract showing a merchantable title (or grant deed and title insurance policy) to said property when sold.'

In other words, it can easily be inferred that the additional writing was to be a modification of this clause. Plaintiff, having surely seen this, was put on notice and cannot be heard to claim ignorance of Defendants' title situation. The instructions were a correct rendition of the law and were properly given.

Finally, Appellant charges that the verdict was unsupported by the evidence in that Appellant had provided a willing and able buyer and that the sale failed for lack of merchantable title and also that...