Title: Siefkes v. Clark Title Company
Citation: 215 N.W.2d 648
Docket Number: 11246
State: south-dakota
Issuer: south-dakota Supreme Court
Date: March 8, 1974

215 N.W.2d 648 (1974) Allen G. SIEFKES, as an Individual, and Allen G. Siefkes, as a Representative of all persons similarly situated, Plaintiff and Appellant, v. CLARK TITLE COMPANY, a corporation, Defendant and Respondent. No. 11246. Supreme Court of South Dakota. March 8, 1974. Dennis J. Batteen, Faulkton, for plaintiff and appellant. *649 Gale E. Fisher, May, Johnson &amp; Burke, Sioux Falls, George J. Rice, Aberdeen, for defendant and respondent. DOYLE, Justice. This is a class action brought by the plaintiff alleging that the defendant charged him and other members of the class for abstracting services performed by the defendant in excess of the amount authorized by SDCL 36-13-25.[*] From a summary judgment in favor of the defendant plaintiff appeals. Prior to the 1971 amendment SDCL 36-13-25 provided: The defendant alleges, although his charges were in excess of the amount permitted by SDCL 36-13-25, that he performed the following additional services for which he is entitled to receive compensation: We agree that the defendant is entitled to reasonable compensation for additional services when performed at the request of the abstractor's client. However, examination of the settled record indicates that the following interrogatory was posed by the plaintiff: The defendant responded: "INTERROGATORY NO. 9: Yes. See attached schedule." In comparing the above schedule with the one set forth in SDCL 36-13-25, it is readily apparent that there may well have been instances of charges in excess of those statutorily provided. For example, item 2 of the schedule attached to the defendant's answer to interrogatories states that the minimum charge for "Each Subsequent entry" be $1.00, whereas SDCL 36-13-25(2) provided the maximum fee chargeable for this service to be seventy-five cents. *651 The defendant contends, however, that the plaintiff and the other members of the class made their payments voluntarily and therefore cannot recover. The rule is well settled that money voluntarily paid under a claim of right to the payment and with knowledge of the facts by the person making the payment cannot be recovered on the ground that the claim was illegal or that there was no liability to pay in the first instance. 66 Am. Jur.2d, Restitution And Implied Contracts, § 93. This rule is not without exception. We find the exception which has risen from usury cases is applicable. In a case of usurious payments, recovery is allowed where a statute declares the contract void in whole or in part, or punishes a violation of its provisions by the infliction of a fine, penalty or forfeiture upon the person who takes it. Annot., 59 A.L.R.2d, p. 522, 526. The cases cited in the above annotation reflect the rationale supporting the exception to be that payments of usurious interest should be regarded as made under the constraint of a formal, although illegal, contract obtained by taking advantage of the necessities of the borrower and are therefore made under a moral duress; no other proof of duress or oppression is necessary. SDCL 36-13-9 provides: This statute in our opinion clearly prescribes punishment to any person in violation of any provision of Ch. 36-13. We, therefore, find abstracting fees charged in excess of those prescribed by statute analogous to usurious interest payments due to the monopolistic aspects of the abstracting business. Anyone conveying real estate in this state virtually is obliged to employ the services of an abstractor. Since competition is practically nonexistent, strict regulation of fees is necessary in order to protect the conveyor. When an abstractor charges an illegal fee the conveyor is under the same moral duress to pay for the charges as that of the borrower in regard to usurious interest. The defendant's contention that SDCL 36-13-25 is unconstitutional is untenable. The general rule is stated in 1 Am.Jur.2d, Abstracts Of Title, § 4: The authority of the legislature to fix prices exists where a business is affected with a public interest. Application of Richardson, 1947, 199 Okl. 406, 184 P.2d 642. Thus, as this court held in State v. Nuss, 1962, 79 S.D. 522, 114 N.W.2d 633: We are, of course, aware that due process requires reasonableness in the exercise of the police power. The regulatory means adopted by the legislature must bear a real and substantial relation to some actual or manifest evil. We find that SDCL 36-13-25 carries no constitutional impingements. Because the abstractors' product is an indispensable part of real property transfers and due to the reliance which must necessarily be placed upon it by the vendor and vendee alike, the legislature has properly exercised its police power by the enactment of Ch. 36-13. It is evident that there does exist a real and substantial relation between the regulatory means adopted in regard to price regulation and the actual or manifest evil possible due to the monopolistic nature of the business. We, therefore, hold that as a matter of law the plaintiff and other members of the class involuntarily made payments to the defendant for abstracting fees and therefore they have the right to recover any charges in excess of those prescribed in SDCL 36-13-25, except that reasonable compensation is to be allowed the defendant for those services performed at the request of the abstractor's client which are not enumerated in the above statute. Reversed and remanded for trial. BIEGELMEIER, C. J., WINANS and DUNN, JJ., and WUEST, Circuit Judge, concur. WUEST, Circuit Judge, sitting for WOLLMAN, J., disqualified. [*] SDCL 36-13-25 was amended by Ch. 215, S.L.1971, and now provides that a fee schedule shall be established by the South Dakota abstracters' board of examiners.