Court Opinion

ID: 9676553
Source: CourtListenerOpinion
Date Created: 2023-08-24 05:26:53.957439+00
Date Added: 2024-06-11T18:16:49.539585
License: Public Domain

HENDERSON, Justice
(dissenting)
I respectfully dissent. This case was tried to the circuit court without benefit of jury. If this Court reverses this case, it must be predicated upon one of two legal assumptions: Either the Findings of Fact are clearly erroneous, In Re Estate of Hobelsberger, 85 S.D. 282, 181 N.W.2d 455 (1970) or the trial judge entered Conclusions of Law which are mistakes of law, Permann v. South Dakota Dept. of Labor, Unemployment Ins. Div., 411 N.W.2d 113 (S.D.1987). Violating these cardinal rules on scope of review, the majority opinion has retried the case on the facts and failed to point out wherein the Conclusions of Law are fatal.
This case was not tried on an implied contract theory. There is no express contract between Baker, the Appellant, and Wilburn & Steele, the Appellees. It is too late, simply untimely, for Baker to prevail on implied contract. Thus, he must prevail upon an express contract. Baker cannot rely on any implied contract theory, which he argues in his brief, because he then argues, in contra-distinction, express contract. This cannot be under our previous holdings. Thurston v. Cedric Sanders Co., 80 S.D. 426, 125 N.W.2d 496 (1963).
Baker is relying upon several express contracts. Wilburn & Steele never bought Baker’s interest. Baker relies heavily on a contract labeled Exhibit 1. Nothing in that Exhibit requires Wilburn & Steele to pay Jurisch’s debt to Baker. This Exhibit did not include any Escrow Letters of Transmittal. Furthermore, Baker’s Exhibit 1 provides this contract “... constitutes the sole and only agreements between them respecting the property and the obligations of the parties.” (Emphasis supplied mine).
Baker seeks to escape his own Exhibit. He is seeking to elevate an Escrow Letter of Transmittal perforce into an implied obligation for Wilburn & Steele to pay Jurisch’s debt to him (Baker).
I am totally astounded that Appellant has not argued that the Findings of Fact were clearly erroneous or that the Conclusions of Law were mistakes of law. Appellant has three issues briefed and not one of them, in my opinion, touch upon the scope of review which must be exercised by this Court, as it reviews this case, for a determination on the legal propriety of the trial court’s decision.
Before Wilburn & Steele would purchase the Branding Iron Lounge, Wilburn & Steele required Jurisch to obtain Baker’s interest, free and clear of any liens or encumbrances. Wilburn & Steele insisted that a Partnership Dissolution Agreement provide for a release of all security interests and a third party release of liability from Baker. Now, to the most important part of this case. Jurisch and his wife, Rita, with Baker as a party, executed a Partnership Dissolution Agreement and Contract for Sale which contained releases. Baker sold his interest in the business to the Jurischs and waived all rights against future transferees of any interest he might have. How can Baker claim he is owed money when he signed a release? Such advocacy is legal juxtaposition at its zenith.
There was testimony below, by several witnesses, that Wilburn & Steele would not purchase this business unless Baker was completely out. Essentially, Baker is contending that payments made by Wilburn & Steele to Jurisch in escrow were for the benefit of Baker. If one reads the contract documents, no such promise can be found. Importantly, this trial court specifically found that Wilburn & Steele (factually) never made any representations of any kind to Baker. If I understand the transaction correctly, Baker absolutely agreed that if Jurisch did not pay him, his only recourse would be against Jurisch. Without that commitment, Wilburn & Steele would not have entered into the transaction.
On the Wilburn & Steele-Jurisch contract, LeMoine J. Baker signed as a “secondary party.” He signed in two places with his own attorney acting as notary *310public, now deceased, Ken C. Graves. On page 2 of this agreement, Section 4.04 did express “Marlow E. Jurisch has acquired the interest of Rita J. Jurisch and LeMoine J. Baker, free and clear of any liens, encumbrances, security interest, and entitlements whatsoever....” On page 4 of this agreement, Section 8.02 Baker is certainly a part of the agreement (as I previously mentioned, he signed it twice) for it expresses:
LeMoine J. Baker for and in consideration of One Dollar ($1.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, does hereby release any right, title, or interest acquired by Baker in Exhibit “B” and the property subject to this Agreement, including, but not limited to, any security interests, or any interest whatsoever acquired by contract or otherwise.*
Note the word “otherwise.” “Otherwise” was obviously put into this agreement as a catch-all, so that it would be clearly understood by this general term, that Baker was out lock, stock, and barrel. This would include any escrow language or escrow documents which Baker (in the majority opinion) is trying to use to catapult him into a contractual relationship which he had completely signed away.
Wilburn & Steele agreed to employ the bank as an escrow agent under the terms of the Letter of Transmittal. They did not agree, by said Letter of Transmittal, to pay Jurisch’s debt to Baker.
When the parties were negotiating to purchase and sell the Branding Iron Lounge (Wilburn & Steele plus Jurisch), Wilburn & Steele summarily rejected any proposals by which they would have a financial obligation to Baker. Findings of Fact XII.
Findings of Fact XXII, XXIII, and XXIV are not clearly erroneous. They provide as follows:
XXII.
On or about November 14, 1979, Wilburn and Steele executed a Letter of Transmittal.
XXIII.
Said Letter of Transmittal was not delivered or received by First Bank of South Dakota until April 1980.
XXIV.
A portion of said Letter of Transmittal reads as. follows:
Payments for February and March have been paid and the account is current to April 4,1989, credit all payments directly to Jurisch-Baker escrow account.
This language was typed at a different time and place than was the original typing of said Letter of Transmittal. Wilburn and Steele had no knowledge this language had been inserted in the Letter of Transmittal prior to or upon its delivery to the Bank.
An escrow agent cannot change the terms of a contract between parties. It can only implement the parties' intention. Wilburn & Steele should not be bound by language which was inserted, without their knowledge. The trial judge found that these terms (“Credit all payments directly to Jurisch-Baker escrow account”) were added at a different time and place than the original language of the Letter of Transmittal. The escrow agent cannot create financial obligations more extensive than those set out by contractual agreement. He is absolutely bound by the terms and conditions of the deposit and charged with a strict execution of the duties voluntarily assumed. He is held to strict compliance per the escrow agreement. If the escrow agent violates instructions or acts negligently, he is ordinarily liable for any loss occasioned by his breach of duty. Katleman v. U.S. Communities, Inc., 197 Neb. 443, 249 N.W.2d 898 (1977); see also, 28 Am.Jur.2d, Escrow, § 16, p. 24, and § 18, p. 27.
*311It is noted, by this writer, that Baker has not asserted that the findings concerning the crucial “add on” to the Letter of Transmittal are clearly erroneous. Implanted herein is a sua sponte review triggering a reversal. Spontaneity is great in the arts and athletic endeavors but it is sour tribulation to an appellate advocate. A record must be made below to protect a legal point. Weaver v. Boortz, 301 N.W.2d 673 (S.D.1981).
The trial court entered seven Conclusions of Law which are not mistakes of law:
I.
Plaintiffs status as a secondary party to the Business Sale Agreement does not provide him enforceable rights regarding the payments Wilburn and Steele agreed therein to make to Jurisch.
II.
Plaintiff has failed to meet his burden of establishing that either of the parties to the Business Sale Agreement intended to benefit him by executing such contract.
III.
Plaintiff is not a third party beneficiary of the Business Sale Agreement.
IV.
Plaintiff is not a creditor beneficiary of the Business Sale Agreement.
V.
Wilburn and Steele had an absolute defense to any action by Jurisch to recover sums they agreed to pay pursuant to the Business Sale Agreement in the form of a right of offset or recoupment of the unpaid principal balance of the Animal Hospital contract. Any rights Baker may have had arising through Jurisch are extinguished by this right of offset or recoupment.
VI.
Plaintiff has failed to meet his burden of establishing the elements of an equitable estoppel.
VII.
Plaintiff has failed to establish facts sufficient upon which to recover for any alleged fraud. Defendants Wilburn and Steele made no untrue suggestions nor asserted any facts which were not true, nor suppressed any facts that were bound to disclose, nor made promises without intention of performing the same.
In summary, this case should be affirmed. Baker has no contractual cause of action against Wilburn & Steele for collection of Jurisch’s debt and he has failed to establish that the Findings of Fact are clearly erroneous or that the Conclusions of Law are mistakes of law.

 Exhibit E reflects that Baker’s sole remedy in the event of default would be an action against Jurisch. This document Baker signed but refuses to, and cannot, collect from Jurisch as Jur-isch was bankrupt. Baker, therefore, reaches out to tap the available wallet.