A.L.S. Properties, Silver Glen v. Graen, 16952

• Decision Date: 21 September 1990
• Docket Number: No. 16952,16952
• Citation: 465 N.W.2d 783
• Parties: A.L.S. PROPERTIES, SILVER GLEN, Plaintiff and Appellee, v. Daniel P. GRAEN and Beverly J. Graen, Defendants and Appellants. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 783

465 N.W.2d 783

A.L.S. PROPERTIES, SILVER GLEN, Plaintiff and Appellee, v. Daniel P. GRAEN and Beverly J. Graen, Defendants and Appellants.

No. 16952.

Supreme Court of South Dakota.

Considered on Briefs Sept. 21, 1990.

Decided Jan. 30, 1991.

Ivar M. Kaardal of Dornberger Law Office, Sioux Falls, for plaintiff and appellee.

Michael B. Crew of Crew & Crew, Sioux Falls, for defendants and appellants.

PER CURIAM.

Daniel and Beverly Graen (the Graens) appeal from a judgment in favor of A.L.S. Properties (ALS) regarding a contract for title, a lot lease and a storage bin lease. ALS filed a notice of review with the circuit court on the issue of monetary damages. We affirm the trial court on the issues raised by the Graens. For the reasons discussed below we do not reach the issues raised in ALS's notice of review.

FACTS

ALS sold a mobile home to Craig and Cheri Smith (the Smiths) under a Retail Installment Sales Agreement through which ALS retained a security interest in the mobile home. ALS assigned that security interest to Home Federal Savings and Loan (Home Federal). Home Federal required that ALS take a full recourse position (i.e. guarantee payment) on the Smith Retail Installment Sales Agreement. The Smiths were unable to keep up with their payments and surrendered the mobile home in April of 1986. ALS began to try to resell the mobile home. Home Federal did not receive title back from the Smiths until December of 1986.

The Graens wanted to buy the mobile home and unsuccessfully attempted to obtain financing to purchase the mobile home. Despite the Graens' credit difficulties, ALS entered into a contract for title with the Graens for the Smith mobile home. The April 16, 1986, contract for title provided in part:

After 24 months, the account of Mr. and Mrs. Graen will be reviewed and if prompt payment has been made, and park tenancy has been satisfactory, then Silver Glen will cause an Assumption of Mortgage to be completed and the Title transferred to the Graens. The balance of the contract will be approximately 145 remaining payments as of May 1, 1988. (emphasis added).

ALS and the Graens also entered into a lease for a mobile home lot and a separate storage bin lease.

The Graens took possession of the mobile home. The Graens soon became delinquent in their payment obligations under the contract for title. By the end of September 1989, the Graens were delinquent by $4,078.57 on the contract for title and $365.00 on the lot and storage bin leases.

On August 3, 1989, ALS served the Graens with a notice to vacate. On August 31, 1989, ALS commenced an action for forcible entry and detainer under SDCL ch. 21-16 and sought a money judgment. After the Graens answered the complaint, ALS filed an amended complaint. On September 8, 1989, the trial judge sent a letter to notify the parties that a landlord/tenant relationship did not exist and thus the FED action would be dismissed. No order of dismissal was entered but the parties have treated this claim as dismissed.

On September 13, 1989, Home Federal assigned the title of the mobile home to ALS. On September 15, 1989, ALS served and filed a second amended complaint (third complaint) alleging that ALS held a security interest in the mobile home and that the Graens were in breach of the contract for title and the lot and storage bin leases. The Graens answered this complaint and alleged that the mobile home was their homestead and that the contract for title was unlawful because title was not given to the Graens within 15 days of the transfer of possession. A trial was held, with some stipulated facts, on October 10, 1989. On October 26, 1989, Judge Robert C. Heege entered a judgment in favor of ALS in the amount of $4,443.57 for the arrearages on the contract, and lot and storage bin leases. The judgment also gave the Graens ten days to pay the arrearages before their interest in the mobile home would terminate. The Graens did not pay the arrearage within ten days, but did restore possession of the mobile home, lot and storage bin to ALS. At the Graen's request, the trial judge vacated the money judgment. The Graens filed a timely appeal. ALS filed a notice of review with the circuit court. We affirm the trial court.

DECISION

1. WHETHER, IN A CONTRACT FOR TITLE SITUATION, THE SELLER'S FAILURE TO DELIVER TITLE OF A MOBILE HOME WITHIN 15 DAYS OF TRANSFER OF POSSESSION PROHIBITS THE SELLER FROM ENFORCING THE CONTRACT.

The Graens rely on SDCL 32-7A-17 which provides:

Any transfer or reassignment of a mobile home or manufactured home title shall be accompanied by an affidavit issued by the county treasurer of the county in which the mobile home or manufactured home is registered, stating that the current year's taxes are paid. No title may be transferred until the taxes under Sec. 10-9-3 are paid. No transfer of title may be completed unless the mobile home or manufactured home is registered as provided in Sec. 10-9-3. In any event the title or manufacturer's statement of origin shall be transferred within fifteen days of delivery of the manufactured home or mobile home. A violation of this section is a Class 2 misdemeanor. (emphasis added).

Relying on Hento v. Melmer, 73 S.D. 455, 44 N.W.2d 212 (1950), Graens argue that ALS's failure to deliver title within 15 days renders the contract for title unenforceable. In Hento, this Court interpreted a vitally different statutory provision dealing with motor vehicle titles. The statute in Hento made it a misdemeanor to fail to deliver title within 24 hours of the delivery of the resold used motor vehicle. However, the statute also specifically declared that:

No action or right of action to recover upon any such motor vehicle, or any part of the sale price thereof, shall be maintained in the courts of this state by any such dealer or vendor, [who failed to deliver the title within 24 hours.]

This Court noted that the purpose of that provision was to "discourage and prevent, so far as possible, the sale of stolen motor vehicles, and voids a sale made without compliance with its provisions, ..."

The statute relied upon by the Graens, SDCL 32-7A-17, contains no such specific voiding of mobile home sales for failure to deliver title within 15 days. The statute simply makes the failure a class 2 misdemeanor. Moreover, SDCL 32-7A-17 seems to be designed to ensure the payment of all taxes and registration of all mobile homes in a timely and efficient manner after the delivery of a mobile home.

Without the specific language of the statute in Hento, it appears that the only statutory effect of SDCL 32-7A-17 is to make it a class two misdemeanor to fail to deliver title within 15 days. Thus, the contract for title was fully enforceable, despite the failure to deliver title and the trial court is affirmed.

2. WHETHER DEFENDANTS' PURPORTED HOMESTEAD INTEREST IN A MOBILE HOME PREVENTS THE SELLER OF THAT MOBILE HOME FROM RECOVERING ON THE DEBT CONTRACTED FOR THE PURCHASE PRICE OF THAT MOBILE HOME.

The Graens claim that they have a homestead exemption on the mobile home. SDCL 43-31-1 and 2 clearly contemplate the possibility of the creation of a homestead exemption in a mobile home. ^* However, the scope and nature of the homestead exemption is not as broad as that contemplated by the Graens. SDCL...