Court Opinion

ID: 9566593
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:41:08.374632+00
Date Added: 2024-06-11T09:38:37.379927
License: Public Domain

HENDERSON,
Justice (dissenting).
The majority opinion is based upon a faulty peg of conceptual rationale: namely, that de facte approval by the FmHA of an increase in interest rates existed.
There was a written Contract of Guarantee relating to the Swiers (a farming couple) and the FmHA on a loan. Prior to said contract, Northwestern National Bank (Bank) accepted an interest rate for a loan to farmers at 9¾%. This document was called a Conditional Commitment for Emergency Livestock Loan Contract of Guarantee. There were to be no changes in the interest rates unless approved by FmHA county supervisor. Approval was never obtained. Yet, the majority opinion holds there was a de facto approval of the increased interest rates. Bank (which became Morwest Bank at Brookings, South Dakota) increased the interest rates over and above the written agreed amount of interest until the farmers paid an excess of $30,555.12.
It is this type of banking activity which has precipitated, inter alia, the economic downfall of the American farmer. Bank wanted to maintain the FmHA guarantee of 90% but did not want to adhere to the 9¾% interest agreement. Bank behaved as it did because of a squeeze placed upon it *124by the credit department of bank in Sioux Falls, South Dakota (Norwest at Sioux Falls). This squeeze resulted in an increase in the market rate. Bank, faced with this market rate jump, attempted to raise interest rates or call in as many low interest loans as possible. According to the sworn deposition of Bank Officer Zaske, he made no prior request to the FmHA as he did not know “it was necessary”; and he further testified that had he known it was necessary to secure approval, he would not have increased the interest rate. This is strong testimony against Bank and the majority’s holding. “It is settled law in South Dakota that a party to a lawsuit cannot claim the benefit of a version of relevant facts more favorable to his own contentions than he has given in his own testimony.” Connelly v. Sherwood, 268 N.W.2d 140, 141 (S.D.1978). Accord: Swee v. Myrl & Roy’s Paving, Inc., 283 N.W.2d 570 (S.D.1979); Drier v. Perfection, Inc., 259 N.W.2d 496 (S.D.1977). It appears to me that Bank is trying to elevate its legal position above the facts of the case and its own testimony. “As a former trial lawyer and circuit judge, I remember well the adage in the trial courtroom [here, a deposition]: A party is bound by his (her) testimony. 30 Am.Jur.2d Evidence § 1087 (1967); Miller v. Stevens, 63 S.D. 10, 256 N.W. 152 (1934).” Martin v. Martin, 358 N.W.2d 793,802 (S.D.1984) (Henderson, J., concurring in part and dissenting in part). See also Lalley v. Safway Steel Scaffolds, Inc., 364 N.W.2d 139, 141 (S.D.1985) (Henderson, J., concurring in result); Northwest Digest Evidence Keynote 591; 30 Am.Jur.2d Evidence § 1087 (1967); 32 C.J.S. Evidence §§ 1040, 1045 (1964); Annot., 169 A.L.R. 799 (1947).
Under SDCL 53-2-6, a contract for the benefit of a third person is permitted which may be enforced by him at any time before the parties thereto rescind it. Indeed, the key to identifying a third party beneficiary is whether the contract was “made expressly for [his] benefit_” Id. See Restatement (Second) of Contracts § 302(1) (1981); J. Calamari and J. Perillo, The Law of Contracts § 17-2, at 607 (2d ed. 1977). Essentially, the trial court ruled that the farmers were incidental beneficiaries and were thereby barred from recovery under a third-party beneficiary theory. Conceptually, I disagree with that theory. Emergency livestock loans were established for farmers and ranchers — not bankers. See 7 C.F.R. § 1980.221 (1987).
Certainly, the provision mandating prior FmHA approval was intended to primarily benefit Swiers, as farmers. It is absolutely conceded that no such approval existed. Therefore, Swiers, as third-party beneficiaries, should be entitled to redress in the courts. Ironically, as per the majority opinion, although Swiers were intended beneficiaries of a contract entered into by an agency of the United States government, they are thwarted in their pursuit of its benefits and instead are made victims of it.
This farming couple had their case dismissed via an order granting Bank’s motion to dismiss. The majority opinion applies summary judgment review standards. Surely, there are material questions of fact to be decided in light of the factual showings below, both as to (1) breach of contract and (2) negligence on the part of Bank. Bank’s employee, Zaske, admitted to making a mistake because he was unaware of Bank’s obligations. This is a defense in law? Facially, it appears Bank’s officer was negligent in altering the interest rates without FmHA approval and the negligence should be presented to a jury for its ultimate resolve.* Regarding the contract cause of action, the contracts related specifically to the Swiers — the farmers — on a loan agreement of seven years at 9¾% interest; all loan documents, to include the interest restriction, were for their benefit and not for the benefit of either Bank or the FmHA. These farmers are entitled to be fully heard on every cent of the $30,555.12 excessive interest which they claim they have been overcharged.
*125Ergo, a jury of their peers should decide if a bank can treat people like this in the State of South Dakota and get away with it.

Actions founded in negligence are rarely suitable for summary judgment. Stoltz v. Stonecypher, 336 N.W.2d 654, 657 (S.D.1983); Wilson v. Great N. Ry., 83 S.D. 207, 213, 157 N.W.2d 19, 22 (1968).