GMS, Inc. v. Deadwood Social Club, Inc.

• Decision Date: 18 January 1983
• Docket Number: No. 13796,13796
• Citation: 333 N.W.2d 442
• Parties: GMS, INC., A South Dakota Corporation, Plaintiff and Appellant, v. DEADWOOD SOCIAL CLUB, INC., A South Dakota Corporation, Defendant and Appellee. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 442

333 N.W.2d 442

GMS, INC., A South Dakota Corporation, Plaintiff and Appellant, v. DEADWOOD SOCIAL CLUB, INC., A South Dakota Corporation,

Defendant and Appellee.

No. 13796.

Supreme Court of South Dakota.

Considered on Briefs Jan. 18, 1983.

Decided May 4, 1983.

Raymond J. Voelker, Jr. of Voelker & Adams, Deadwood, for plaintiff and appellant; Mary Anne Kenton of Voelker & Adams, Deadwood, on the brief.

William L. Severns, Deadwood, for defendant and appellee.

MORGAN, Justice.

This action arises from a contract for the sale of a business and the underlying real and personal property from Deadwood Social Club, Inc., appellee (Seller), to GMS, Inc., appellant (Buyer). Buyer defaulted on this contract for deed and brought this action for declaratory judgment. Upon a judgment by the court quieting title to certain personal property in the Seller, Buyer appeals. ¹ We affirm.

On April 30, 1981, Buyer and Seller entered into an agreement for Buyer to purchase from Seller the building known as the Carpetbagger Hotel located on Main Street in Deadwood, South Dakota. The property to be sold included the business located therein, known as the Bandito Restaurant, together with all inventory, equipment and fixtures. The contract provided for a purchase price of $210,000, allocated as sixty-five percent for the building, five percent for the goodwill and non-competition clause, twenty percent for the equipment, and ten percent for the furniture and fixtures. It further provided that should Buyer default, "Seller shall have the right to retake the property and to retain all payments previously made by the buyer and all improvements made by it on the premises as liquidated damages for the breach of this agreement." At the closing, Buyer requested that it receive the bill of sale for the personal property at that time rather than having the bill of sale placed in escrow as provided in the agreement. Buyer's reason for the request was to use the bill of sale as collateral to obtain a loan for the downpayment. ² Seller agreed and the provisions of the contract calling for the bill of sale to be placed in escrow were deleted and initialed by the parties as the contract was signed. Buyer then used the personal property as collateral for a loan from the First National Bank of the Black Hills, Lead, South Dakota. ³ Subsequently, Buyer breached the contract by making only three monthly payments, failing to insure the premises, and making no provision for the payment of its share of the taxes.

Upon Buyer's default the premises were returned to Seller, pursuant to the default provisions under the contract. Since the personal property was located in the premises returned to Seller, Seller also received possession of the personal property. Buyer, however, retained the beer license and brought this action seeking its rights declared to this personal property. Seller counterclaimed, seeking forfeiture of the contract and its title quieted to all of the personal property, including the beer license. The judgment signed by the court decreed that Seller "shall be given immediate possession [of all personal property] including the beer license...." Buyer appeals from this judgment.

Initially, we deal with Seller's contention that Buyer's appeal should be dismissed due to Buyer's failure to object to the findings of fact and conclusions of law on a timely basis. We hold, however, that such failure does not require dismissal of the appeal. Rather, the rule is:

[T]hat where the sufficiency of the evidence was not questioned before the trial court by ... request for findings or other appropriate procedure sufficiency of the evidence cannot be reviewed and appellant is therefore limited to the question of whether the findings support the conclusions of law and judgment.

Application of Veith, 261 N.W.2d 424, 425 (S.D.1978); see Moody County v. Cable, 82 S.D. 537, 150 N.W.2d 193 (1967); Ove v. Hutcheson, 77 S.D. 78, 85 N.W.2d 675 (1957). Consequently, even if Buyer's proposed findings and conclusions were not timely, this failure merely narrows this court's scope of review; such failure does not require dismissal of the appeal. Accordingly, this court reviews the record as to whether the findings of fact support the conclusions of law and judgment.

The issue on appeal, as framed by Buyer, is whether the transfer of the bill of sale from Seller to Buyer vests title to the personal property in Buyer. More accurately, the issue is whether the delivery of the bill of sale negated the provision of the contract for retaking possession of the real and personal property upon Buyer's default. The trial court concluded that Seller had the right to retake the personal property based on the finding that:

At the closing, Plaintiff requested that it receive the Bill of Sale for the personal property at that time rather than having it placed in Escrow so that Plaintiff could use it for collateral for a loan. The provisions of the Contract calling for the Bill of Sale to be placed in Escrow were deleted and initialed by the parties as the Contract was signed. The clause giving Seller the right to retake the property and retain the payments previously made in the event of a default was left unchanged. No additional consideration was given for these changes.

"The primary rule in the construction of contracts is that the court must, if possible, ascertain and give effect to the mutual intention of the parties." ⁴ Huffman v. Shevlin, 76 S.D. 84, 89, 72 N.W.2d 852, 855 (1955) quoted in Johnson v. Johnson, 291 N.W.2d 776 (S.D.1980); Generally, when two or more instruments are executed at the same time by the same parties, for the same purpose and as part of the same transaction, the court...