Middleton v. Klingler, 15538

• Decision Date: 24 April 1987
• Docket Number: No. 15538,15538
• Citation: 410 N.W.2d 184
• Parties: Joe M. MIDDLETON and Susan M. Middleton, Plaintiffs and Appellees, v. E. Boyd KLINGLER and Norman E. Durr, Defendants and Appellants. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 184

410 N.W.2d 184

Joe M. MIDDLETON and Susan M. Middleton, Plaintiffs and Appellees, v. E. Boyd KLINGLER and Norman E. Durr, Defendants and Appellants.

No. 15538.

Supreme Court of South Dakota.

Considered on Briefs April 24, 1987.

Decided July 29, 1987.

Richard A. Pluimer, Thomas E. Carr, on the brief, of Carr & Pluimer, P.C., Belle Fourche, for plaintiffs and appellees.

Harlan A. Schmidt, Spearfish, for defendants and appellants.

WUEST, Chief Justice.

The sellers brought an action for the breach of two contracts for deeds seeking specific performance, damages and foreclosure of the contracts. The circuit court granted sellers' motion for summary judgment, and entered a judgment and decree of specific performance. Buyers appeal and we affirm.

The dispute centers on the effect of the default provisions in the two contracts for deeds between the parties. The default provisions of the contracts were identical and provided as follows:

Time is of the essence of this agreement, and should the Buyers default in any way in making payments on the balance due to the Sellers herein or should the Buyers default in failing to pay the taxes when due or should the Buyers default in any other manner, the Sellers herein shall then give to the Buyers written notice of the nature of the default, and the Buyers shall then have a period of sixty (60) days thereafter in which to correct such default. All notices of default shall be given by the Sellers to the Buyers by certified mail, or by actually delivering the same to the buyers herein. In the event that a default has occurred and the notice of default has been given, and in the event the default is not corrected within the sixty (60) days thereafter, Sellers may deem this contract cancelled and as null and void and with the immediate right thereupon to take possession of said premises and to retain all payments therefor made by Buyers to the Sellers and to treat said payments as liquidated damages and reasonable rental for the use of said property. In the event the Buyers should refuse to deliver possession, the Sellers may foreclose this contract as provided by the laws of the State of South Dakota or may use such other remedy or remedies as may be authorized by law. Failure on the part of the Buyers to make the payments as provided herein, and in the event of a default on the part of the Buyers and in the event the Buyers have not corrected the default in payment within sixty (60) days following written notice of said default, Sellers may declare the entire balance then remaining due and unpaid to be due and payable forthwith.

No other contract provisions address the rights of the parties upon default of the contract; nor do any other provisions limit the rights of the parties upon default.

The buyers' default arose from their failure to make the 1985 balloon payments required by the contracts. Buyers do not dispute that they were in default in failing to make these payments. On several occasions buyers offered to tender the property back to sellers by deed, once prior to default and twice after default. Sellers refused these offers.

There being no factual dispute about buyers' failure to make the required payments, the question of law is whether the contract provisions or any rule of law entitles the sellers to the remedy of specific performance. ¹

Buyers contend that the contract in this case, specifically, the fourth sentence of the default clause, limited sellers' remedy to foreclosure because buyers had tendered a deed and possession of the property as set out in this sentence. Their argument, however, focuses on a single sentence while ignoring the other parts of the default clause. Generally, a contract should not be construed merely from its detached portions. See Eberle v. McKeown, 83 S.D. 345, 159 N.W.2d 391 (1968); Bedell v. Steele, 71 S.D. 609, 28 N.W.2d 369 (1947).

In construing a contract, disproportionate or undue weight or emphasis should not be placed on particular words, parts, or provisions thereof, to the neglect or detriment of others; such emphasis does not serve the object of interpretation, and no single part, sentence, or clause, when considered alone, will control.

17A C.J.S. Contracts Sec. 297, 127 (1963). In construing the entire default provision we conclude that it gives the sellers the right to possession, and buyers the concomitant obligation to deliver possession, only if sellers elect to "deem this contract null and void." This was simply a reservation of sellers' remedy of the right to possession should they elect to cancel the contract, which in this case they chose not to do.

Having determined that the default provision reserved sellers' remedy of taking possession, we must determine what other remedies they were entitled to. The general proposition is widely accepted that a remedy reserved by a contract does not deprive a party of other lawful remedies.

In most cases in which a special remedy is provided by contract, the issue before the court is not one of "election." Instead, it is whether the remedy so provided is "exclusive" and whether a party should be denied a remedy in damages or other remedy that he is seeking. A common provision is one that gives to a party injured by the other's breach a power to cancel or terminate, with a right to restitution of money paid. The provision takes various forms and is operative in accordance with its own interpretation; but there are many cases holding that the special remedy is not exclusive and sustaining a different remedy.

5A A. Corbin, Corbin on Contracts Sec. 1227, 502 (1964); e.g., Jensen v. Sire, 137 Mont. 391, 352 P.2d 263 (1960). "Where ... there is no limitation in the contract which makes the remedies enumerated therein exclusive, a party is entitled to the remedies thus specified, or he may at his election pursue any other remedy which the law affords." 1 Am.Jur.2d Actions Sec. 31, 567 (1962); See generally Annotation, Contractual Provision as to Remedy as Excluding Other Possible Remedies, 84 A.L.R.2d 322 (1962). "Even where a contract specifies a remedy which will lie for a breach thereof it is generally held that other legally recognized remedies are not thereby excluded. [cites omitted]" Maytag Co. v. Alward, 253 Iowa 455, 112 N.W.2d 654, 657 (1962). "A contract which excludes some remedy given by law should be so definite and positive in its terms as to show the clear intention of the parties to do so." 17 C.J.S. Contracts Sec. 36(2), 655 (1963). Consistent with these principles the Alaska Supreme Court held that sellers' assignee in a contract for deed, who had the right under the terms of the contract to elect to cancel the contract and take possession of the property, could still...