Engle v. Heier, 10629

• Decision Date: 12 January 1970
• Docket Number: No. 10629,10629
• Parties: Edgar G. ENGLE and Ursula C. Engle, Plaintiffs and Appellants, v. George J. HEIER, Defendant and Respondent.
• Court: South Dakota Supreme Court

Page 454

173 N.W.2d 454

84 S.D. 535

Edgar G. ENGLE and Ursula C. Engle, Plaintiffs and Appellants, v. George J. HEIER, Defendant and Respondent.

No. 10629.

Supreme Court of South Dakota.

Jan. 12, 1970.

George J. Rice, Aberdeen, for plaintiffs and appellants.

Ronayne & Richards, Aberdeen, for defendant and respondent.

HANSON, Judge.

This is an appeal by plaintiffs from a summary judgment entered in favor of defendant upon the pleadings, affidavits, exhibits, and depositions of record.

The plaintiffs, Edgar and Ursula Engle, allege in their complaint, in substance, that on or about July 1, 1964 they entered into an agreement with the defendant, George Heier, for the lease of a store building located at 214 South Main Street in the City of Aberdeen for a term of five years at a monthly rental of $250.00 per month; that defendant repudiated the agreement, refused to execute the lease agreed upon, and refused to give plaintiffs possession of the property, all to their damage in the amount of $4,994.33. Defendant's answer contains a general denial and the statute of frauds is pleaded as an affirmative defense.

In the spring of 1964 plaintiff, Edgar Engle, a resident of Denver, Colorado, was in Aberdeen, South Dakota, looking for a suitable location to establish a franchised restaurant. He contacted a realtor who introduced him to the defendant. At the time Mr. Heier was considering the purchase of a business building located at 214 South Main Street from or through the realtor. Heier and his wife subsequently purchased the property. Before the sale was consummated Heir and Engle conferred and negotiated regarding the possibility of leasing a portion of the building. A proposed lease was prepared by defendant's attorney, but it was never signed by both parties. In the course of the negotiations defendant signed a blank form entitled 'ASSIGNMENT AS SECURITY'. However, this instrument referred to property located at 101 South Main Street and was never completed or signed by plaintiffs. Later on defendant notified plaintiffs by telegram the building at 214 South Main was not available for leasing.

Plaintiffs' cause of action is based upon defendant's refusal to perform an alleged oral agreement for a lease. It was contemplated the oral agreement would be embodied in a later formal written lease. This was never done. Our court has said that 'Whether a particular transaction constitutes a lease or a mere contract for a lease is a question of intention of the parties. If parties intend that an agreement be one of leasing, it so operates notwithstanding a written formal lease is to be later executed. Grigsby v. Western Union Tel. Co., 5 S.D. 561, 59 N.W. 734. On the other hand, if they intend that an agreement should be as finally evidenced by a written lease, there is only an agreement for a lease. Laabs v. Scholl, 43 S.D. 515, 180 N.W. 963'. Shaw v. George, 82 S.D. 62, 141 N.W.2d 405. To be binding, an agreement for a lease must be certain as to the terms of the future lease. 32 Am.Jur., Landlord and Tenant, § 28, p. 51. If it appears that any of the terms of the future lease are left open to be settled by future negotiation between the lessor and lessee "there is no complete agreement; the minds of the parties have not fully met; and, until they have, no court will undertake to give effect to those stipulations that have been settled, or to make an agreement for the parties respecting those matters that have been left unsettled." Cypert v. Holmes, 81 Ariz. 64, 299 P.2d 650.

In this respect the undisputed facts show plaintiffs failed to produce evidence of a...