Drake v. Sample, 12159

• Citation: 279 N.W.2d 685
• Decision Date: 07 June 1979
• Docket Number: No. 12159,12159
• Parties: Dale E. DRAKE and Shirley Drake, Plaintiffs and Respondents, v. Ernest SAMPLE and Carrie Sample, Defendants and Appellants.
• Court: Supreme Court of South Dakota

Page 685

279 N.W.2d 685

Dale E. DRAKE and Shirley Drake, Plaintiffs and Respondents, v. Ernest SAMPLE and Carrie Sample, Defendants and Appellants.

No. 12159.

Supreme Court of South Dakota.

Argued April 13, 1978.

Decided June 7, 1979.

Irving A. Hinderaker of Austin, Hinderaker & Hackett, Watertown, for plaintiffs and respondents.

Dale E. Bradshaw of Loucks, Oviatt, Bradshaw, Green & Schulz, Watertown, for defendants and appellants.

DUNN, Justice (on reassignment).

This case involves an action brought by Dale and Shirley Drake for a declaratory judgment seeking a declaration of the rights of the parties under an alleged oral agreement, which was supported by written memoranda, with Ernest and Carrie Sample for the sale of real property. The Samples pled the statute of frauds and rescission prior to acceptance as defenses. The trial court found in favor of the Drakes and rendered a judgment accordingly. We affirm.

The real property that is the subject of this litigation is owned by the Samples and was leased to the Drakes in 1973. Sometime during 1973, the parties discussed the sale of the real property. This discussion arose out of an earlier negotiation between the Samples and a third party regarding the sale of the property. When negotiations with the third party were terminated, the Drakes and the Samples entered into an oral contract for the sale of the property under the same terms and conditions as those the Samples had offered to the third party. The terms and conditions of the agreement were that the property would be sold for $75 per acre for 375 acres on a contract for deed, a down payment of $5,000 would be made, annual payments would be $1,000, plus interest at 7% per annum, and there would be a prepayment privilege. The transaction was to be entered into after January 1, 1974, for tax purposes. The Drakes, who were already in possession as lessees, were to have possession under the contract for deed for the 1974 season and were to pay the 1974 and subsequent real estate taxes.

In an effort to reduce the oral agreement to writing, the parties went to some financial institutions seeking out forms upon which to transcribe their contract. When these forms proved to be unsatisfactory, Mr. Sample hired attorney Gordon Gunderson to reduce the agreement to writing. After several contracts were drafted, Mr. Gunderson was unable to reduce the agreement to writing to the satisfaction of the Samples. The difficulties were aggravated further because of the fact that the Samples spent the winter of 1973-74 in Texas. The Samples wrote letters to Mr. Gunderson and to the Drakes specifically referring to the contract for the sale of the property and embodying the exact terms agreed upon. Additionally, Mr. Sample made corrections on one of Mr. Gunderson's contract drafts and affixed his signature to the corrections. Upon their return from Texas in July of 1974, the Samples attempted to withdraw from their agreement to sell the property to the Drakes.

The trial court concluded that there was an oral agreement between the parties for the sale of the real property and that there were sufficient written memoranda evidencing the existence of a contract to satisfy the statute of frauds. Judgment was entered accordingly, and the Samples appeal from the judgment.

On our review of the appeal, the successful party is entitled to the benefits of his version of the evidence and of all inferences fairly deducible therefrom which are favorable to the judgment of the trial court. Mobridge Community Industries v. Toure, 1978, S.D., 273 N.W.2d 128; Cunningham v. Yankton Clinic, P. A., 1978, S.D., 262 N.W.2d 508. The findings of the trial court upon conflicting evidence are presumed to be correct, and we will not set such findings aside unless they are clearly erroneous. SDCL 15-6-52(a). In applying the clearly erroneous standard of review, the question is not whether we would have made the same findings as those of the trial court but whether, on the entire evidence, we are left with a definite and firm conviction that a mistake has been committed. Mobridge Community Industries v. Toure, supra; Cunningham v. Yankton Clinic, P. A.,supra.

After reading the record and with this standard of review in mind, we must come to the conclusion that the parties entered into an oral agreement for the sale and purchase of the real property in question during the spring and summer of 1973. The Samples agreed to sell their land to the Drakes on the same terms which had been offered to another neighbor. The fact that an oral agreement was indeed entered into by the parties was evidenced in part by Mr. Drake's reliance on the representations of Mr. Sample that they had an agreement in that Mr. Drake contacted adjoining landowners, including the railroad, the state, and private neighbors, regarding the joint improvement and repair of fencing along the boundaries of the property which is the subject of this litigation. The fact that an oral agreement was entered into by the parties was further evidenced when Mr. Sample accompanied Mr. Drake to the Farmers Home Administration and the Production Credit Association in order to secure forms upon which the contract could be transcribed. Inasmuch as the forms were not satisfactory to Mr. Sample, he turned to Gordon Gunderson, an attorney who had handled family business on a previous occasion, to prepare a written contract for deed incorporating the terms which had been orally agreed upon by the parties. The terms of the contract were fully understood by the parties. In fact, Mr. Sample testified that there was never any misunderstanding between the parties about the purchase price to be paid for the property or about any of the other terms. It appears from the record that the only one who did not fully understand the terms agreed upon was Mr. Gunderson. ^* The record reveals that the Samples left a contract for deed with the Drakes. The contract had been prepared by Mr. Gunderson and was signed by the Samples prior to their annual vacation in Texas in the fall of 1973. The Drakes were to read the contract, and if it was satisfactory, they were to mail it to Mr. Gunderson and go to his office after January 1, 1974, to sign it. This delay in signing by the Drakes was purportedly for the benefit of the Samples on their 1973 income taxes. When the Drakes went to Mr. Gunderson's office on January 22, 1974, to sign the contract already containing the Samples' signatures, Mr. Gunderson could not locate...