Renner v. Crisman
Decision Date | 22 April 1964 |
Docket Number | No. 10102-R-R,10102-R-R |
Citation | 127 N.W.2d 717,80 S.D. 532 |
Parties | Dean F. RENNER and Loraine Renner, Plaintiffs and Appellants, v. Delbert T. CRISMAN and Laura B. Crisman, Defendants and Respondents. em-FJH. |
Court | South Dakota Supreme Court |
Whiting, Lynn, Freiberg & Shultz, Rapid City, for plaintiffs and appellants.
Gunderson, Farrar, Carrell & Aldrich, Rapid City, for defendants and respondents.
Specific performance of a real estate contract was denied plaintiffs and they appeal.
The subject property is a ranching unit of about 380 acres in Pennington County known as the Medicine Mountain ranch. On February 2, 1957, it was sold by L. M. Test and Lois L. Test to plaintiffs under contract for deed for $35,000. A down payment of $1,000 was made with the execution of the contract, $2,000 was paid March 15, 1957 and the balance was payable in annual installments of $1,100. One of plaintiffs testified payments were current at the time of trial which would mean that $25,400 remained unpaid on the contract. Plaintiffs had the privilege of prepaying all or any part of the unpaid purchase price with accrued interest to date of payment at any time. The contract for deed is not a part of the record except as portions are shown in one of the abstracts of title. On February 28, 1962, plaintiffs granted defendants a written two-month's option to purchase the ranch for $40,000. In the option plaintiffs covenanted that they were the owners of the property; that the title was to be conveyed free and clear of all encumbrances; that it was given to enable defendants to obtain a government insured FHA loan; that seller was to pay all expenses of title clearing, if required, abstracts, etc., and that all taxes, liens, encumbrances, or other interests of third persons were to be satisfied, discharged, or paid by plaintiffs; title evidence was to be obtained from persons and be in such form as the government shall approve; that conveyance was to be by general warranty deed in the form, manner and at the time required by the government and buyers were to receive a valid, unencumbered, indefeasible fee simple title meeting all government requirements; that the purchase price was to be paid at the time of recording such deed. On April 27, 1962, defendants accepted the option and shortly afterwards plaintiffs delivered abstracts of title to the loaning agency. On May 22, 1962, defendants through their counsel served notice of rescission upon plaintiffs claiming misrepresentation. This action was commenced on September 14, 1962. In their complaint plaintiffs allege ownership of the ranch on date of option, execution and acceptance of option, delivery of abstracts, service of notice of rescission, refusal to perform by defendants, and that plaintiffs are ready, willing and able to perform and offer to perform. By answer defendants admitted granting of the option to them and written acceptance thereof, but otherwise denied the allegations of the complaint. They affirmatively alleged misrepresentation of the ranch boundaries by plaintiffs' agent and asked for cancellation of the contract.
The trial court found that plaintiffs were not the owners of the fee title to the subject property and were unable to deliver title in accordance with the terms of the option agreement. Also, that plaintiffs did not have good and merchantable title and could not give defendants a title free from reasonable doubt. These findings are challenged by proper assignments of error.
Although an option to purchase real estate is initially unilateral in its nature, upon timely acceptance it becomes a mutually binding contract capable of enforcement and subject to the same rules as a bilateral contract. Tennant v. Rafferty, 44 S.D. 235, 184 N.W. 195; Alfson v. Anderson, N.D., 78 N.W.2d 693; 81 C.J.S. Specific Performance Sec. 47.
The remedy of specific performance is available to the vendor of real estate although the relief actually sought is the recovery of money, the purchase price, for which he may also have a remedy at law. 49 Am.Jur., Specific Performance, Sec. 94; Marso v. Heck, 50 S.D. 332, 210 N.W. 153. Utilization of this equitable remedy is not an absolute right, but rests within the sound discretion of the court. Watters v. Ryan, 31 S.D. 536, 141 N.W. 359. However, this discretion is a judicial discretion and controlled by established principles of equity J. I. Case Threshing Mach. Co. v. Farnsworth, 28 S.D. 432, 134 N.W. 819. Denial of specific performance in the instant case does not appear to have been predicated on equitable principles.
It is obvious the trial court took the position that since the Tests had not conveyed the legal title to plaintiffs, they were not entitled to specific performance and this was a condition precedent to their right to ask for specific performance. The relationship between an installment vendor and his vendee is essentially that of secured creditor and debtor. The vendee for all practical purposes is the owner of the property, generally with the right of possession and use, and the vendor's sole remaining interest is to be paid the agreed consideration in the form and manner provided by the instrument used to secure payment thereof. The security device employed may curtail or broaden the scope of remedies available in case of default of payment, but the final interest of the seller is nothing other than the right to payment of whatever sums are still owed him on the sale of the property. The vendee's interest has been termed an equitable interest, Phillis v. Gross, 32 S.D. 438, 143 N.W. 373; 39 S.D. 434, 164 N.W. 971, or an equitable title. Paynesville Land Co. v. Grabow, 160 Minn. 414, 200 N.W. 481; Miller v. Dyer, 20 Cal.2d 526, 127 P.2d 901, 141 A.L.R. 1428. Courts have not hesitated in granting the vendee specific performance in cases where the vendor holds an executory contract from a third person either by proceeding against the immediate vendor alone with proper compensation for the deficiency in performance, if any, or by joining the holder of the legal title in the action. Vaughn v. Rosencrance, 73 S.D. 36, 38 N.W.2d 822. Cutler v. Lovinger, 212 Mich. 272, 180 N.W. 462. See also annotation 141 A.L.R. 1432.
In the Paynesville Land Co. case, supra, the court, in disposing of the same contention urged by defendants herein, said:
In Riley v. Wheat, 45 S.D. 320, 187 N.W. 425, vendor sought specific performance where time was of the essence and an $8,000 mortgage was unsatisfied at time of performance. The court summarily dismissed the vendee's contention that failure to pay such encumbrance excused his compliance with the contract by stating 'Where the incumbrance can be removed merely by the application of the purchase money, and the court can provide for a conveyance of a clear title to the vendee, the mere fact that an incumbrance exists which the plaintiff has not removed, or even is unable to remove without the application of the purchase money, will not prevent a decree for specific performance. * * *' The use of installment land contracts on sales of real estate and the rights and remedies of parties thereto is the subject of articles appearing in Vols. 6 and 7 of the 1961 and 1962 South Dakota Law Review. Their popularity and frequent usage in South Dakota and other midwestern...
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