Wiggins v. Shewmake, 14565

• Decision Date: 29 November 1984
• Docket Number: No. 14565,14565
• Citation: 374 N.W.2d 111
• Parties: Stephen WIGGINS and Jane Wiggins, Husband and Wife, Plaintiffs and Appellees, v. Roger A. SHEWMAKE and Jean C. Shewmake, Husband and Wife, Separate Defendants, Third Party Plaintiffs and Appellants. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 111

374 N.W.2d 111

Stephen WIGGINS and Jane Wiggins, Husband and Wife, Plaintiffs and Appellees, v. Roger A. SHEWMAKE and Jean C. Shewmake, Husband and Wife,

Separate Defendants, Third Party Plaintiffs and

Appellants.

No. 14565.

Supreme Court of South Dakota.

Considered on Briefs Nov. 29, 1984.

Decided Sept. 6, 1985.

George S. Mickelson of Mickelson & Helsper, Brookings, for plaintiffs and appellees.

Robert G. Fite, Brookings, for separate defendants, third party plaintiffs and appellants.

MORGAN, Justice.

Defendants appeal a grant of specific performance and consequential damages by the circuit court following trial of an action for the breach of a contract for purchase of residential real estate. We affirm.

Plaintiffs, Stephen and Jane Wiggins (Wiggins), listed their home in Brookings, South Dakota, for sale on July 7, 1983, with Wendell Thompson (Thompson), doing business as Brookings Real Estate Center. This listing was obtained by Marie Harlan (Harlan), an agent of Thompson. Through various contacts, Harlan learned that the defendants Roger and Jean Shewmake (hereafter collectively Shewmakes, or Roger or Jean individually as appropriate), would be moving to Brookings and wrote them offering her services in helping them obtain housing. On July 17, 1983, Jean arrived in Brookings and called Harlan, who then took Jean on a tour of Brookings. During this tour, Harlan and Jean discussed what the Shewmakes were looking for in a house and what financing requirements were needed by the Shewmakes.

The following day, Jean and Harlan looked at approximately fifteen houses in the Brookings area, with the Wiggins home being the most attractive to Jean. She decided to make an offer on the Wiggins home and, with the help of Harlan, prepared a standard offer to purchase. Jean offered $64,500 for the home, including certain personalty. The offer, however, was contingent upon the buyer (Jean) obtaining a "13% conventional loan," and was subject to the approval of Roger. Wiggins rejected this offer and made a counteroffer. The counteroffer removed the contingency of Roger's approval. Jean accepted the counteroffer on July 19, 1983.

According to Shewmakes, the "13% conventional loan" contingency in the agreement meant fixed-rate financing amortized for a period of thirty years. Shewmakes inquired into the availability of such financing in the Brookings area and found that local financing institutions were not offering such terms at this time. Other, shorter term financing arrangements at the requested interest rate were available. Shewmakes were leery of governmentally insured financing programs and declined to investigate these.

Although Shewmakes were unable to obtain financing acceptable to them at this time, Roger informed Thompson that he intended to go through with the contract. In reliance upon Roger's conduct, the Wiggins entered into a one-year lease and took possession of another home.

Subsequently, Shewmakes became interested in financing through the South Dakota Housing Authority and applied for that financing through Norwest Bank. It then became apparent that Shewmakes would not arrive in Brookings and close on the house until after the original closing date, so closing was postponed approximately one month, to September 16, 1983. Additionally, by that date, Shewmakes would know whether they had secured the loan through the South Dakota Housing Authority.

On August 21, 1983, Shewmakes arrived in Brookings and took possession of the Wiggins home under an "Agreement to Occupy Prior to Close." In this agreement, seller (Wiggins) and purchaser (Shewmakes) agreed to allow purchasers possession of the premises prior to taking of title. The agreement specifically referred to a purchase agreement dated July 18, 1983, and was signed by both Roger and Jean Shewmake.

On September 14, 1983, Shewmakes were informed that their South Dakota Housing Authority loan application had been denied. Jean then informed Wiggins that she and her husband did not intend to close on the home. Two days later, the agreed date for closing passed. Four days after that, Norwest Bank in Brookings, after being contacted by Thompson and Wiggins, executed a letter committing the bank to a 13% mortgage. Shewmakes vacated the home and it was again listed for sale. Approximately two months later, Shewmakes purchased a home in Brookings, financing the purchase with a loan at 11.75% interest for a seven-year term, ending in a balloon payment.

Following Shewmakes' refusal to close, Wiggins initiated this action on September 28, 1983, asking for relief by way of specific performance and consequential damages. Trial was held to the court in January, 1984, at which time the court granted the prayed for relief. Shewmakes claim several assignments of error in this determination.

We first note that the findings of the trial court will not be disturbed on appeal unless they are clearly erroneous. SDCL 15-6-52(a); Jankord v. Jankord, 368 N.W.2d 571 (S.D.1985). In applying this standard, we will overturn the findings of the trial court only when, after review of all the evidence, we are left with a definite and firm conviction that a mistake has been made. Mobridge Community Ind. v. Toure, 273 N.W.2d 128 (S.D.1978).

Initially, Roger contends that any oral agreement between himself and Wiggins is barred by the statute of frauds. ¹ The trial court found that the "Agreement to Occupy Prior to Close," signed by Roger, constituted a memorandum sufficient to satisfy the requirements of the statute.

SDCL 53-8-2 requires that an agreement for the sale of real property be in writing, and subscribed by the party to be charged, before the agreement will be enforceable. The agreement itself need not be the writing relied upon, a memorandum evidencing the obligation is sufficient. SDCL 53-8-2. "The memorandum serves to furnish written evidence of the obligation to be enforced against the party who subscribes his name to the memorandum; that is, a memorandum is not required to make a contract but merely to evidence in writing that a contract has been entered into." Drake v. Sample, 279 N.W.2d 685, 689 (S.D.1979) citing 72 Am.Jur.2d Statute of Frauds Sec. 285 (1974). The memorandum need not embody the exact terms of the contract; "it is sufficient that the substance of a contract for the purchase of real property is inferred from the writing[.]" Drake, 279 N.W.2d at 689. See also Aamont v. Eneboe, 352 N.W.2d 647 (S.D.1984).

On August 21, 1983, Roger signed an "Agreement to Occupy Prior to Close." This agreement referred to Shewmakes as "purchasers" and the Wiggins as "sellers." The purpose of the agreement was to allow purchasers to enter into possession of the premises prior to obtaining title. The agreement specifically noted that seller and purchaser had "executed a purchase agreement dated July 18, 1983." Although Jean actually accepted Wiggins' counteroffer on July 19, 1983, this defect in the "Agreement to Occupy Prior to Close" is not fatal. Portions of the July 19, 1983, purchase agreement specifically incorporated terms of the July 18, 1983, offer. The writing referred to in SDCL 53-8-2 need not be in one document, the writings may consist of disjointed memoranda or protracted correspondence. Aamont, supra; Drake, supra. As long as the substance of the contract can easily be inferred from the various writings, the requisites of the statute are met. Aamont, supra; Drake, supra.

Taken together, we conclude the writings constituted sufficient memoranda to charge Roger as a party to the purchase agreement and hold that the provisions of SDCL 53-8-2 have been met.

The trial court also found that Roger became a party to the purchase agreement under the doctrine of promissory estoppel. Roger contends the trial court erred in this determination. Because of our conclusion on the statute of frauds issue, we need not consider this question. See Aamont, supra.

Shewmakes next argue that the purchase agreement was not a sufficiently definite agreement so as to be enforceable by specific performance. Specifically, they contend that the contingency of the purchaser "obtaining a 13% conventional loan" is too ambiguous to give rise to the remedy of specific performance. See SDCL 21-9-2(6). ²

The equitable remedy of specific performance is always addressed to the sound discretion of the trial court, according to the facts and circumstances in each case. Estate of Gosmire, 331 N.W.2d 562 (S.D.1983); Dolan v. Hudson, 83 S.D. 144, 156 N.W.2d 78 (1968) aff'd reh'g 83 S.D. 331, 159 N.W.2d 128 (1968). This court, in examining an award of specific performance on review, looks to see whether the trial court abused its discretion. Dolan, supra. The presumed remedy for the breach of an agreement to transfer real property is specific performance. SDCL 21-9-9.

Shewmakes delineate two assignments of error surrounding the contingency clause of purchaser being able to obtain a "13% conventional loan." First, they argue that the clause is too ambiguous to allow an award of specific performance. Second, they contend that they made a sufficient effort to obtain such financing, were unable to do so, and are thus excused from performance on the contract.

There is no ambiguity to preclude specific performance of a contract if its terms are sufficiently certain to make the precise acts of the parties to be done clearly ascertainable. Dolan, supra; Crawford v. Carter, 72 S.D. 514, 37 N.W.2d 241 (1949). In construing a subject to financing clause the Supreme Court of Wisconsin stated that the circumstances...