McPherson v. Fargo

• Decision Date: 05 April 1898
• Citation: 74 N.W. 1057,10 S.D. 611
• Parties: McPHERSON et al. v. FARGO.
• Court: South Dakota Supreme Court

74 N.W. 1057

10 S.D. 611

McPHERSON et al. v. FARGO.

Supreme Court of South Dakota

April 5, 1898

Appeal from circuit court, Lawrence county.

Action by Donald A. McPherson and another against Charles G. Fargo. Judgment for defendant, and plaintiffs appeal. Reversed.

William R. Steele, for appellants. Martin & Mason, for respondent.

CORSON P. J.

This was an action to enforce the specific performance of a contract for the sale of certain real property in the city of Deadwood. The trial was by the court, and judgment was entered for the defendant, and the plaintiffs appealed.

The only errors assigned, discussed by counsel for appellants in his brief, are that the court erred in its conclusions of law and in entering judgment for the defendant, and these are the only errors necessary to be considered on this appeal. The question presented, therefore, is, should the court, upon its findings of fact, have stated its conclusions of law in favor of the plaintiffs, and entered judgment thereon in their favor?

The material facts found may be briefly stated as follows: On February 8, 1890, and for some days prior thereto, the defendant, Fargo, the owner of the property in controversy and plaintiff McPherson, had negotiations in reference to a sale of property, and on the last-mentioned day, the terms having been agreed upon, a lawyer was employed to draw up the contract; and on the 10th day of February the contract was signed and acknowledged by said Fargo, "and left in the hands of McPherson, with the understanding on the part of said Fargo and McPherson that the contract should be thereupon signed by the plaintiffs; that the alleged contract was not signed by the plaintiffs at that time, nor until April 7, 1890, and the said contract was not *** assented to or agreed to by them at the time or until April 7 1890;" "that on the 10th day of February *** said instrument was placed upon record by plaintiff McPherson, but without the knowledge or direction of the plaintiff Franklin or defendant, Fargo; that on the 7th day of April, 1890, at 1 o'clock p. m., the said instrument was by the plaintiffs without the knowledge or consent of the defendant, signed and acknowledged, and upon the same day again placed upon record." The court further finds that, on the forenoon of the 7th day of April, the plaintiff McPherson, without the direction or consent of the defendant, placed the sum of $6,000 (the amount specified in the contract to be paid) in the First National Bank of Deadwood to the credit of the defendant, and that notice of such deposit was at once mailed to said defendant, who received the same in the afternoon of the same day; that on April 1st the defendant learned that said contract had not been signed by the plaintiffs, and on April 7th, at 12:20 o'clock p. m., he notified the plaintiffs that he would not consent to be longer bound by said contract; that on June 14th the plaintiffs tendered to a clerk in defendant's store, at Deadwood, $6,000; that at that time the defendant resided at Hot Springs, Fall River county, and had resided there since June 6th. The court also finds that there was no consideration for said contract. It will thus be seen the contract was executed by defendant on February 10th, and recorded by McPherson on the same day that, on the forenoon of April 7th, $6,000 was deposited to the credit of the defendant, of which he received notice in the afternoon of that day; that at 12:20 p. m. the defendant notified the plaintiffs that he would not longer be bound by the contract, and that at 1 p. m. the plaintiffs executed the contract, and caused the same to be recorded. This action was commenced in July, 1890, but was not argued in this court until January, 1897.

The learned counsel for the appellants contends that, as the contract recites and acknowledges the receipt of a consideration, the defendant is estopped from denying the receipt of such consideration for the purpose of defeating the contract; and the fact of the consideration being so received appearing by the contract made a part of the complaint, which is admitted by the answer, the court's finding was unauthorized, and must be disregarded by this court. We are of the opinion that by the recital of a consideration, and acknowledgement of the receipt thereof in the contract, the defendant is estopped from denying the payment of the same for the purpose of defeating this action, and the court's finding upon that question must be disregarded by this court. The recital and acknowledgment of the receipt is in the contract made a part of the pleadings. The pleadings, on an appeal from the judgment, are always before the court for review in connection with the findings and judgment. If, therefore, the defendant was estopped from denying the payment of a consideration, the receipt of which is acknowledged in the contract, the court was not authorized to make a finding in conflict with such admission. Mr. Washburn, in his work on Real Property, says: "It is believed that, however the cases may conflict, they all agree, in effect, in this: that it is not competent to prove that no consideration has been paid where one has been acknowledged in the deed, for the purpose of impeaching the validity of the deed, unless it is for the purpose of establishing fraud against the grantor. The true doctrine is stated in Grout v. Townsend, 2 Hill, 554, that, where the deed acknowledges the receipt of a consideration, the grantor, and all claiming under him, are estopped from denying that one was paid for the purpose of destroying the effect and operation of the deed, although they may disprove the payment for the purpose of recovering the consideration money." 3 Washb. Real Prop. (5th Ed.) 400, 401; McCrea v. Purmort, 16 Wend. 460; Ballard v. Walker, 3 Johns. Cas. 64; Bank v. Housman, 6 Paige, Ch. 535; Lawrence v. McCalmont, 2 How. 452.

But in this case the plaintiffs agreed to pay for the property $6,000 by the terms of the contract accepted by them, and which by their acceptance, with the provision therein that they "covenant and agree to pay to said party of the first part, his heirs, executors, administrators, and assigns, the further sum of six thousand dollars," became binding upon them, as will more fully appear in the course of this opinion. There was therefore not only a valuable consideration, but full and ample consideration, appearing by the record, which was binding upon the trial court and conclusive in this case.

The counsel for appellants further contend that the question of whether or not the plaintiffs assented to the terms of the contract is one of law, to be determined by the court from the facts found in the case, and that the court's finding that they did not assent to it is purely a legal conclusion and not the finding of a fact. We are of the opinion that the counsel is correct in this contention. This court is at liberty, therefore, to review the facts found, and determine therefrom whether or not the acts of acceptance on the part of the appellants did constitute in law such an assent as would bind them to perform the covenants and agreements contained in the contract to be by them performed. What, then, was the effect of the acceptance of the contract by McPherson and placing the same upon record? The appellants contend that the plaintiffs thereby became bound by the terms of the contract, and that the failure to execute it on their part does not prevent them from enforcing it as against the defendant. The respondent, on the other hand, insists that, as the agreement was left with McPherson upon the understanding that it should be executed by the plaintiffs, and it not having been executed by them until after the respondent notified them he would not be longer bound by the contract, it never became a binding contract as between them. Conceding the rule to be as stated by respondent, in ordinary contracts, it seems to be well settled that this class of contracts constitutes an exception, and that the acceptance of the contract is, in effect, an agreement on the part of the vendees to perform the stipulations in the contract which they have agreed or covenanted to perform. It is clear, from the findings in this case, that the terms of the sale were agreed upon between McPherson and Fargo, and the contract embodied those terms, and was satisfactory to them. That being so, the agreement, when executed and left with McPherson, and accepted by him and placed on record, bound Fargo and the plaintiffs,--Fargo, for the reason that he had executed it and did not intend to further exercise control over it, and the plaintiffs, because in law they accepted it by placing it upon...