Lewis v. Moorhead

• Decision Date: 26 April 1994
• Docket Number: No. 18507,18507
• Citation: 522 N.W.2d 1
• Parties: Dean LEWIS and Dorothy Lewis, d/b/a LEWIS, INC., Plaintiffs and Appellants, v. Gerald MOORHEAD and Mary Ann Moorhead, Defendants and Appellees. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 1

522 N.W.2d 1

Dean LEWIS and Dorothy Lewis, d/b/a LEWIS, INC., Plaintiffs and Appellants, v. Gerald MOORHEAD and Mary Ann Moorhead, Defendants and Appellees.

No. 18507.

Supreme Court of South Dakota.

Considered on Briefs April 26, 1994.

Decided Sept. 14, 1994.

Paul E. Jensen of Jensen and Massa, Winner, for plaintiffs and appellants.

J.M. Grossenburg of Grossenburg Law Office, Winner, for defendants and appellees.

CALDWELL, Circuit Judge.

Dean and Dorothy Lewis appeal from the judgment of the trial court which awarded property, to which the Lewises had legal title, to Gerald and Mary Ann Moorhead under a theory of adverse possession. We affirm.

This dispute arises over the ownership of a triangular wedge of property dividing lots owned by Dean and Dorothy Lewis (Lewises) and Gerald and Mary Ann Moorhead (Moorheads) in Winner, South Dakota. In 1971, Cecil Dreyer (Dreyer) was the sole owner of all of the property in question. In October of that year, Dreyer entered into an oral agreement with the Moorheads that he would deed over the lot on which they resided in exchange for Gerald's services. To the east of the lot stood a white wooden fence, which bordered a portion of the property approximately the length of Moorheads' residence. The parties agreed that the fence line formed the eastern border of the lot.

In 1981, Dreyer quitclaimed the property, consisting of all of Lot E and the West 20' of Lot A of Dreyer's subdivision. In September of 1982, Dreyer sold the remainder of Lot A to Ray I. Risseeuw who subsequently sold it to the Lewises in April of 1987. In 1990, Lewises had the property surveyed and discovered that the white fence was not the lot line, but enclosed a wedge of property to which Lewises had legal title. The actual property line ran approximately 10 feet east of Moorheads' residence and bisected a rental trailer which they had moved onto the lot sometime prior to 1974. In 1991, Lewises erected a fence across the disputed area which was torn down by the Moorheads and subsequently replaced.

On October 1, 1991, Lewises instituted a small claims action seeking compensatory and punitive damages for Moorheads tearing down Lewises' fence. Moorheads removed the small claims action to circuit court pursuant to SDCL 15-39-57. Lewises moved to amend the complaint on October 30, 1991 adding a request for a boundary determination. Lewises' motion to amend was granted on November 7, 1991 and was filed on November 8. The trial court found for Moorheads on their counterclaim of ownership by adverse possession because Lewises failed to bring their boundary determination action within the required twenty year period.

On appeal, Lewises contend that permissive occupation of land under an oral contract for deed is not "exclusive of any other right" such that it may ripen into adverse possession because there was unity of title in Dreyer from 1971 until 1981. In addition, they assert that the doctrine of boundary by acquiescence does not alter this conclusion. Finally, Lewises contend that their amended complaint relates back to the filing of the small claims trespass action, bringing the suit within the twenty year limit. ¹ We affirm the circuit court.

ISSUE I: ADVERSE POSSESSION

In South Dakota, property is subject to adverse possession when it has been actually and continually occupied under a claim of title exclusive of any other right. SDCL 15-3-12. ² The original claim of title need not be founded on a written instrument, but the land in question must either have been protected by a "substantial inclosure" or must have been "usually cultivated or improved." SDCL 15-3-13. ³ The traditional elements of adverse possession require the "actual, open, visible, notorious, continuous and hostile" occupation of the property for the statutory period. Estate of Billings v. Jehovah Witnesses, 506 N.W.2d 138, 141 (S.D.1993); Lien v. Beard, 478 N.W.2d 578, 579 (S.D.1991) (citing Forest Home Cemetery v. Dardanella Fin. Corp., 329 N.W.2d 885, 888 (S.D.1983). In South Dakota, the statutory period of possession is twenty years. SDCL 15-3-1.

Proof of the individual elements of adverse possession present questions of fact for the trial court, while the ultimate conclusion of whether they are sufficient to constitute adverse possession is a question of law. Lien, 478 N.W.2d at 580. Proof of adverse possession must be supported by "clear and convincing" evidence. Id. at 579. The trial court's findings of fact are presumed correct and we defer to those findings unless the evidence clearly preponderates against them. Cuka v. Jamesville Hutterian Mut. Soc., 294 N.W.2d 419, 421 (S.D.1980). Those findings will not be overturned unless clearly erroneous. Lien, 478 N.W.2d at 580. However, no deference is given to the trial court's conclusions of law which are freely reviewable by this court. Rusch v. Kauker, 479 N.W.2d 496, 499 (S.D.1991).

In this case, the trial court was able to see the witnesses and view the premises in question. It determined that clear and convincing evidence supported the facts that Moorheads' occupation of the disputed tract had been actual, open and continuous from October 1971 until October 1991. It further found that the boundary was protected by a substantial enclosure and that the Moorheads had cultivated and improved the property. ⁴ In addition, the court determined that the Moorheads' possession had been under a claim of title exclusive of any other right and that the lot line had been acquiesced in by the Lewises and their predecessors in interest. Lewises do not dispute that the Moorheads have been in possession of the property since 1971, but assert that their occupancy has not been exclusive of any other claim.

Lewises contend that Moorheads did not have a claim of title exclusive of any other right based upon the following: (1) their original contract for deed was oral, and therefore invalid under the statute of frauds; and (2) possession under a contract for deed is permissive and not adverse in the fact that Dreyer maintained a unity of title in both lots until the 1981 quitclaim deed.

The first contention presumes a claim of adverse possession based on a defective written instrument, or "color of title." See SDCL 15-3-10, 15-3-11. ⁵ However, the trial court found that Moorheads' claim was based on actual occupancy and not upon a written claim of right, and thus the requirements of SDCL 15-3-12 and 15-3-13 apply. These sections do not require any written instrument or "color of title" in order to claim adverse possession. All that is required is that the portion of the land which is claimed has been actually and continuously occupied by the adverse party. Lien, 478 N.W.2d at 579.

Even when a property claim is based upon "color of title," the doctrine of adverse possession presupposes a defective title. Creel v. Hammans, 234 Iowa 532, 13 N.W.2d 305, 307 (1944); Sioux City Boat Club v. Mulhall, 79 S.D. 668, 117 N.W.2d 92, 96 (1962). "Where the possession of real estate is actual, it may commence in parol without deed or writing...." Walker v. Sorenson, 64 S.D. 143, 265 N.W. 589, 592 (1936). Therefore, the question is not whether Moorheads could have sought specific performance of their oral contract, but rather, what was the nature of their claim of title under the circumstances.

The exclusive test of adverse possession is the physical exclusion of others under a claim of right. Labore v. Forbes, 59 S.D. 12, 238 N.W. 124, 125 (1931). Under South Dakota law, once a contract for deed is entered, the vendor holds legal title in trust for the purchaser under an obligation to convey upon payment of the purchase price. Tarpinian v. Wheaton, 79 S.D. 473, 113 N.W.2d 472, 475 (1962). In addition SDCL 43-26-1 provides that an agreement to sell real property binds the seller to execute a conveyance in a form sufficient to pass title to the property. The vendee under a contract for deed acquires equitable title and the right to use and possess the property. First Federal Sav. & Loan Ass'n, etc. v. Wick, 322 N.W.2d 860, 862 (S.D.1982). Thus, even under an oral contract for deed, the purchaser has a claim of equitable title exclusive of other rights.

Moorheads' claim of title to the property was recognized by Dreyer in that he allowed them to enter, take possession, and maintain the premises until 1981 when he conveyed the deed. During that time, Moorheads resided on the land as owners, cultivated and improved it and moved a rental trailer onto the property. In Barclay v. Tussey, 259 Ark. 238, 532 S.W.2d 193, 196 (1976) the Supreme Court of Kentucky held that a party who entered onto property claiming a right based upon an oral swap of land could assert a claim for adverse possession even though the agreement was not enforceable because of the statute of frauds. The test is whether the person "honestly enters into possession of land in the belief that the land is his own." Id. 532 S.W.2d at 195. Clearly, the Moorheads entered into possession believing the land to be their own.

While there is a split of opinion as to whether a purchaser under a contract for deed can hold adversely to the vendor or his successors in interest, ⁶ the trial court found that this case also involved acquiescence in a mistaken boundary. Even if we accept the view that adverse possession cannot be asserted under a contract for deed, the extent of permissive use and occupation is determined by the terms of the grant. Travis v. Madden, 493 N.W.2d 717, 719 (S.D.1992). ⁷

We have long recognized that a claim for adverse possession does not require a good faith belief or an intention to claim another's land, but can be founded upon ignorance, inadvertence, or mistake as to the actual boundary between two parcels. Lien, 478 N.W.2d at 580; Taylor v. Tripp, 330 N.W.2d 542, 545 (S.D.1983); Labore, 59 S.D. 12, 238 N.W. at 125-26; Sullivan v. Groves, 42 S.D. 60, 70, 172 N.W. 926 (1919); Lehman v. Smith, 40 S.D. 556,...