Opinion ID: 1817742
Heading Depth: 1
Heading Rank: 7

Heading: Drafting

Text: [¶ 19.] If Parents had intended to give Donald a first-chance-to-buy after payoff of the contract for deed, careful drafting could have avoided this case. Donald conceded at oral argument that the unrestricted warranty deed is not consistent with his position that the first-chance-to-buy survives payoff of the contract for deed. If Parents wanted Donald's first-chance-to-buy to survive payoff of the contract for by deed, then the warranty deed could simply have stated that the conveyance was subject to Donald's first-chance-to-buy as set forth in the contract for deed dated January 15, 1976, and recorded in the office of the Marshall County Register of Deeds, followed by the recording information. [¶ 20.] 2. Whether Dean quit farming within the life of the contract. [¶ 21.] Donald argues that even if Dean's payoff of the contract extinguished Donald's first-chance-to-buy, Dean quit farming prior to the payoff of the contract, thereby triggering Donald's first-chance-to-buy. [¶ 22.] Dean moved to Watertown and rented his land to his neighbors from 1982-1987. During those years, Mother made no objections and continued to accept Dean's payments. The trial court found that Mother's conduct condoned a broad interpretation of the word farming. We agree. Black's Law Dictionary defines farm as [t]o lease or let; to demise or grant for a limited term and at a stated rental. To carry on business or occupation of farming. Black's Law Dictionary 606 (6th ed 1990). In this case, renting the land is sufficient to constitute farming. Donald conceded at oral argument that Dean's rental of the land to Docter and Dinger from 1982 to 1987 is not the basis for his argument that Dean quit farming. [¶ 23.] Instead, Donald claims that Dean quit farming the Joanita Quarter when he hired Peter Bremmon to custom farm the Joanita Quarter in 1999 and 2000. Bremmon also custom farmed the Landreths' land for them. Dean signed over the proceeds from the crops grown on the Joanita Quarter directly to the Landreths. Donald claims that Dean had actually sold the Joanita Quarter to the Landreths and thereby quit farming it. Donald points out that the Landreths told their bank that they were buying the Joanita Quarter. However, Dean borrowed $90,000 at 9% interest by signing a note to the Landreths when he bought back the Joanita Quarter from his ex-wife. Dean testified he was simply repaying part of the loan by turning the proceeds from the crops grown on the land directly over to the Landreths. [¶ 24.] Dean had a valid reason to have the Joanita Quarter custom farmed. Dean's other three quarters of land were certified organic. The Joanita Quarter was not. If Dean used his machinery to farm the Joanita Quarter, then his machinery would be contaminated and he would lose his organic certification. Faced with the choice of contaminating his equipment and losing his organic certification on three quarters of land or hiring a custom farmer, Dean's decision to hire someone to work the Joanita Quarter seems prudent. We agree with the trial court that Dean did not quit farming by hiring Peter Bremmon to farm the Joanita Quarter. [¶ 25.] While it is undisputed that Dean personally farmed the other three quarters organically in both 1999 and 2000, Donald still argues that Dean quit farming these three quarters when he borrowed the money from Mark Hartinger to redeem them. Hartinger is a stepson of one of the Landreth's. Donald claims that the loan from Hartinger to redeem the land is really a purchase because Hartinger also told his banker he was buying the land. While Dean signed a note and a mortgage to secure the loan from Hartinger and the Landreths, there is no conveyance, only innuendo. What the Landreths intended, anticipated or said to their bankers is irrelevant. While there is an implication that Dean might sell the land to the Landreths in the future, the trial court found that there was no evidence that Dean actually sold [3] the property to Landreths and also found that Dean was not bound by representations that the Landreths made to other people. We agree. [¶ 26.] Part of the reason Dean resorted to the Landreths for help was Donald's conduct. First, Donald tried to buy the Joanita Quarter out from under Dean. Second, Donald's 1998 crop-year lease from Joanita excluded Dean from the Joanita Quarter after he bought and paid for it in 1998. Third, through litigation, Donald has cast a cloud on Dean's title to the Joanita Quarter, which prevented him from obtaining conventional financing to payoff the Landreths. Fourth, Donald has persistently refused to deliver the warranty deed for the other three quarters of land in spite of Dean's payment of the entire amount owing on the contract, which has also prevented Dean from obtaining conventional financing. Dean turned to the Landreths because of Donald's litigation and delays. [¶ 27.] 3. Whether the tender of payment stops the interest from accruing. [¶ 28.] Donald argues that Dean's payoff of the contract was conditioned on obtaining a deed from Donald, and that this condition does not stop the accrual of interest. We disagree. SDCL 20-5-18 provides in pertinent part: An offer of payment or other performance, duly made, though the title to the thing offered be not transferred to the creditor, stops the running of the interest on the obligation.... (emphasis added). Donald argues that he had a right to test the validity of his claim and that interest should continue to accrue during this time. This argument fails. The trial court held, and we agree that upon Dean's tender of the full payment he was entitled to a warranty deed free and clear of any claims or conditions. Pursuant to SDCL 20-5-18, even if title is not immediately transferred, tender of payment stops the accrual of interest. Dean is not required to pay interest on the contract for deed while Donald takes him to court. We agree with the trial court and hold that no further interest is owing.