Case Title: Speck v. Anderson

Citation: 318 N.W.2d 339

Docket Number: 

State: south-dakota

Court: South Dakota Supreme Court

Date: 1982-04-21T00:00:00Z

Document:
318 N.W.2d 339 (1982) Donald SPECK and Joan Speck, Plaintiffs and Appellants, v. George ANDERSON, Defendant and Appellee. No. 13054. Supreme Court of South Dakota. Considered On Briefs January 15, 1981. Decided April 21, 1982. *340 Leonard E. Andera of Andera, Margadant & Erickson, Chamberlain, for plaintiffs and appellants. John B. Wehde and Douglas G. Fosheim of Benson, Wehde & Severson, Huron, for defendant and appellee. On Reassignment. WOLLMAN Chief Justice (on reassignment). This is an action for specific performance of an option agreement to purchase certain real estate. The trial court granted appellee's motion for summary judgment.[1] We reverse and remand. Appellants, Donald and Joan Speck (Specks), operate a farming and ranching operation in Buffalo County, South Dakota. George Anderson (appellee) is the only son of Howard and Wilma Anderson. As a young man, appellee left home and moved to California. As he grew older and his wife's health began to deteriorate, Howard Anderson became less interested in actively farming his 800 acres of grass and farm land. Accordingly, in 1972 he began renting this land to the Specks. On December 8, 1976, Howard Anderson signed an agreement that gave the Specks until March 1, 1981, to exercise the right to purchase the 800 acres at $100 per acre. Howard Anderson died testate on February 8, 1977. By the terms of his will, the land covered by the option was left to appellee. The final decree of distribution was entered on June 19, 1978. Wilma Anderson died on September 25, 1978. No claims were ever filed against either estate regarding the land covered by the option. It was not until October 31, 1978, that the option was filed for record in the office of the Buffalo County Register of Deeds. On January 11, 1979, the Specks gave notice of acceptance of the option and made tender of the purchase price in full to appellee as successor in interest to Howard Anderson. Appellee refused to accept the tender and refused to deliver a deed to the Specks, whereupon the Specks commenced this action praying for specific performance of the option or, in the alternative, for $40,000 in compensation for services rendered in increasing the value of the land. The first question raised by this appeal is whether the Specks were obligated to file a claim against the estate of Howard Anderson pursuant to SDCL 30-21-17 in order to preserve their right to enforce the option. SDCL 30-21-17 provides: In Olsen v. First National Bank, 76 S.D. 605, 613, 83 N.W.2d 842, 847 (1957), this court held that the term "claims," as used in SDCL 30-21-17, refers only to "debts or demands which are collectible from an estate by virtue of having been claims against the decedent in his lifetime." See also Hirning v. Kurle, 54 S.D. 334, 223 N.W. 212 (1929). The purpose of the claims statute is to insure a timely arrangement for full or pro rata payment of claims during the course of administration. Olson v. Altemus, 77 S.D. 429, 93 N.W.2d 7 (1958); Fish v. De Laray, 8 S.D. 320, 66 N.W. 465 (1896). In Estate of Randall v. McKibben, 191 N.W.2d 693 (Iowa 1971), the Supreme Court of Iowa held that a claim to recover specific property is not the type of claim that must be filed against a decedent's estate. Likewise, in Johnson v. Johnson, 87 Colo. 207, 286 P. 109 (1930), in holding that the *341 holder of an option to purchase corporate stock was not required to file a claim against the estate of the optionor, the Supreme Court of Colorado stated: 286 P. at 111 (citation omitted). In Newberger v. Rifkind, 28 Cal. App. 3d 1070, 104 Cal. Rptr. 663 (1972), the plaintiffs sought to exercise stock options three years after the optionor's death. The court, interpreting a statutory provision similar to SDCL 30-21-17, noted that the word "claim" refers to debts or demands that might have been enforced against the decedent during the decedent's lifetime. The court then held that since the cause of action arose three years following the optionor's death, the plaintiffs were not required to file a claim with the probate court. In rejecting the contention that the vendee of a contract to convey real estate was obligated to file a claim against the estate of the deceased vendor, the Supreme Court of Wyoming made an extensive review of the case law on the issue in reaching its conclusion that such filing was unnecessary: Keystone Sheep Co. v. Grear, 72 Wyo. 189, 263 P.2d 138, 144 (1953). In Crockett v. Lowther, 549 P.2d 303 (Wyo.1976), the Supreme Court of Wyoming reaffirmed the holding in Keystone Sheep Company by stating that the "case also stands for the concept, which we continue to approve, that it is not necessary for a purchaser under a contract to convey realty to file a claim with the personal representative of the decedent in order to assert his rights under the contract." 549 P.2d at 307. We agree with the reasoning of the above-cited cases. Accordingly, we hold that the Specks were not required to file a claim against Howard Anderson's estate as *342 a condition precedent to exercising the option and maintaining the present suit for specific performance.[2] Appellee contends that SDCL 43-28-17 and 43-25-3 bar the Specks from maintaining this action inasmuch as they failed to record the option. We do not agree. SDCL 43-28-17 provides in part: SDCL 43-25-3 provides: Putting aside the questions whether appellee was a "purchaser" within the meaning of SDCL 43-28-17 and whether the distribution to him by the final decree was a "grant" within the meaning of SDCL 43-25-3, we are satisfied that appellee is bound by the terms of the option pursuant to SDCL 43-25-14, which provides: In Woods v. Ely, 7 S.D. 471, 475, 64 N.W. 531, 532-33 (1895), this court interpreted the provisions of SDCL 43-25-14 (at that time S.D.Comp.Laws § 3254) as follows: The Hill case, cited in Woods v. Ely, supra, involved a suit for the specific performance of an agreement to convey real estate. The decedent had entered into an agreement for the purchase and sale of a farm to the plaintiff. A good and sufficient deed was to be conveyed on April 15, 1851, but the decedent died in October of 1850. On April 15, 1851, the plaintiff tendered the purchase price to the heirs, who refused to convey the property to the plaintiff. In holding that the heirs of the decedent were bound to convey the real estate to the plaintiff, the court stated: Hill v. Ressegieu, supra, 17 Barb. at 164-65. It certainly would work no great hardship on appellee to convey the real *343 estate to the Specks. It is a basic premise of property law that a devisee or heir can take no better title than that of the decedent. 3 Bancroft's Probate Practice § 531 (2d ed. 1950). Moreover, requiring appellee to convey the property would only follow the express wish of decedent, who added the following language to the standard option form: We conclude, therefore, that appellee is bound by the terms of the option. A more troublesome question is whether the absence of Wilma Anderson's signature on the option bars the Specks' claim for relief. South Dakota Constitution Article XXI § 4 provides: The homestead exemptions carrying out the foregoing provision of the constitution are found in SDCL ch. 43-31. The purpose of the homestead exemption is, of course, to provide the security of a home to a family against the claims of creditors. See, e.g., Ramsey v. Lake County, 70 S.D. 61, 14 N.W.2d 125 (1944); Morgan v. Beuthein, 10 S.D. 650, 75 N.W. 204 (1898); Kingman v. O'Callaghan, 4 S.D. 628, 57 N.W. 912 (1894). There is no question but that this court has over the years jealously and assiduously protected the homestead exemptions guaranteed by our constitution and statutes. As stated by Judge Rudolph for the court in In re Schneider's Estate, 72 S.D. 174, 179, 31 N.W.2d 261, 264 (1948): See Comment, Creditors and the South Dakota Homestead Exemption, 17 S.D.L.Rev. 483 (1972). Among the statutory enactments designed to protect the homestead exemption is the requirement that both the husband and wife must join in a conveyance or encumbrance of the homestead as a condition precedent to the validity of such conveyance or encumbrance. SDCL 43-31-17 provides: Read literally, this court's decisions have declared that any attempted conveyance of the homestead that is not joined in by both husband and wife is absolutely void from the beginning inasmuch as the sole-signing vendor is entirely lacking in power and authority to transfer the property. See O'Neill v. Bennett, 49 S.D. 524, 207 N.W. 543 (1926). Upon further reflection, however, we are persuaded that given the circumstances of the case at bar an ab initio voiding of the otherwise arguably valid option would extend the protection of the homestead exemption to a class of persons needing no such protection. The requirement of SDCL 43-31-17 that a spouse must join in the conveyance of a homestead does not create in the non-owner spouse any estate in the land represented by the homestead. *344 Somers v. Somers, 27 S.D. 500, 131 N.W. 1091 (1911); State ex rel. Cain et al v. Toomey, 27 S.D. 37, 129 N.W. 563 (1911). We conclude that what this court said in In re Clouse's Estate, 63 S.D. 147, 257 N.W. 106 (1934), is applicable to the case at bar: 63 S.D. at 150-51, 257 N.W. at 108. In the instant case, the conditions that justified the application of the homestead exemption vanished upon the death of Wilma Anderson. We need not speculate on the results that might have been reached had the Specks attempted to exercise the option prior to Wilma Anderson's death. No doubt she could have presented the defense of the lack of her signature, leaving the Specks to whatever proof they might have been able to adduce on issues such as waiver, Schutterle v. Schutterle, 260 N.W.2d 341 (S.D.1977); estoppel, Hanson v. Fiesler, 49 S.D. 442, 207 N.W. 449 (1926); or assent, Centerville Township v. Jenter, 25 S.D. 314, 126 N.W. 575 (1910). Moreover, the option itself was not a conveyance. Rather, as the Supreme Court of North Dakota held in Larson v. Cole, 76 N.D. 32, 33 N.W.2d 325, 331 (1948): "[T]here was in no event a contract of purchase and sale of the property until the plaintiff had exercised the option to purchase. Obviously, there was in any event no `conveyance or encumbrance' to the plaintiff until he had accepted the option and thus made the contract." Although in a technical sense the option may have been an encumbrance in the sense of being a cloud on the title had it been recorded, it remained an inchoate right until exercised by the Specks. As we held in Renner v. Crisman, 80 S.D. 532, 536, 127 N.W.2d 717, 719 (1964), "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." See also Kuhfeld v. Kuhfeld, 292 N.W.2d 312 (S.D.1980); 77 Am.Jur.2d Vendor and Purchaser §§ 27 and 28 (1975). That being the case, we conclude that whatever impediment may have existed to the validity of the option in the first instance disappeared upon Wilma Anderson's death. To guard the homestead right jealously in order to vindicate and effectuate the purposes of the constitutional and statutory expression of our citizens' concern for the security of the family is certainly a task that the judiciary should not shirk. When those purposes have been accomplished, however, to permit the assertion of the homestead exemption to be raised by those who have no rights under the homestead exemption statutes would be to arm with a sword those who need no such weapon. Accordingly, we hold that the absence of Wilma Anderson's signature from the option in question does not in and of itself render the option void in the circumstances of this case. We note that the trial court also held that the option was given without any consideration. Given the truncated nature of the hearing that was conducted in this matter, we conclude that the trial court erred on this matter. See SDCL 53-6-3 and 53-6-4. We, of course, express no intimation on whether the Specks are indeed entitled to the remedy of specific performance. See, e.g., Stugelmayer v. Ulmer, 260 N.W.2d 236 (S.D.1977); Skjoldal v. Myren, 86 S.D. 111, *345 191 N.W.2d 809 (1971); Dolan v. Hudson, 83 S.D. 144, 156 N.W.2d 78 (1968), aff'd on rehearing, 83 S.D. 331, 159 N.W.2d 128 (1968); Renner v. Crisman, supra. Whether it would be equitable in the present circumstances to grant specific performance or whether some lesser remedy would be appropriate, assuming that the Specks establish the validity of their claim, we leave to the sound discretion of the trial court. The judgment is reversed, and the case is remanded to the circuit court for trial. DUNN, MORGAN and HENDERSON, JJ., and McKEEVER, Circuit Judge, concur. McKEEVER, Circuit Judge, sitting for FOSHEIM, J., disqualified. [1] Although the trial court granted what was denominated a summary judgment, the procedural history of this case is less than clear. No motion for summary judgment was ever served. There was extensive argument and some testimony at a pre-trial motion hearing. Findings of fact and conclusions of law were entered, although they are unnecessary in a summary judgment proceeding. Wilson v. Great Northern Railway Company, 83 S.D. 207, 157 N.W.2d 19 (1968). [2] The plaintiff's claim in Johnson v. Christensen, 292 N.W.2d 101 (S.D.1980), was based upon a cause of action or claim that arose during the decedent's lifetime. Likewise, in both Le Sueur v. Qillian, 56 S.D. 289, 228 N.W. 380 (1929), and Woods v. Ely, 7 S.D. 471, 64 N.W. 531 (1895), the cause of action or claim had arisen during the decedent's lifetime.