Court Opinion

ID: 7875079
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:05:49.747976+00
Date Added: 2024-06-11T16:31:22.020969
License: Public Domain

HENDERSON, Justice
(dissenting).
PROCEDURAL BACKGROUND/HOLDING BELOW
The title to this appeal is deceiving. Plaintiff-appellee, National Boulevard Bank of Chicago, is a plaintiff in one of the actions joined for trial. Several cases were consolidated for trial. This particular appeal is taken from an action wherein the Clark County Cattle Company is plaintiff. Clark County Cattle Company brought an action for specific performance of a contract for deed to sell real estate in Clark County, South Dakota, with an additional request for past-due rent. National Boulevard Bank of Chicago instituted suit against one John J. Makens and others. Clark County Cattle Company is a garnishee-defendant in the latter suit.
Clark County Cattle Company does not dispute that its interest is subject to a lien via a judgment in favor of the National Boulevard Bank of Chicago in the amount of $141,779.86. National Boulevard Bank of Chicago, notwithstanding a judgment awarded below, has filed a Notice of Review. Said Bank joins with the Clark County Cattle Company in its position that the circuit court erred in failing to grant specific performance of the contract for deed in question. However, and pointedly, said Bank maintains that the circuit court should have declared that the Bank has a lien upon all of the land and not on just one-half thereof for the amount of its judgment against John J. Makens and by virtue of the garnishment against Clark County Cattle Company. In the Bank’s briefing and Notice of Review, it essentially supports the legal positions of the Clark County Cattle Company. Conversely, the Clark County Cattle Company appears to support the basic positions of the Bank.
Perhaps it is not conceptually fundamental, in appreciating the legal issue in this case, to totally understand the judgment rendered by the circuit court. Nonetheless, I shall set forth same so that the reader may comprehend an overall view of the case. After violating a cardinal rule of substantive law, the parol evidence rule, and permitting a copious amount of oral testimony to vary, alter, and modify the contract for deed, the circuit court entered a judgment (a) which divided the real property described in the contract in half, a one-half undivided interest to M.B.I., Inc., Michael Robert Makens, Richard Makens, and Shirley Makens, administratrix of the estate of Ramond Joseph Makens, deceased, plus certain monetary credits; and a one-half undivided interest to the Clark County Cattle Company and John J. Mak-ens, less certain monetary credits; (b) which required the Makens nephews to provide abstracts to the property and convey the undivided one-half interest to the Clark County Cattle Company free from all liens except real estate taxes; and (c) which required that the said Cattle Company receive a landlord’s share of crops of the year 1982, and subsequent years.
THE CONTRACT FOR DEED
Its Creation
Exhibit 10, received in evidence, was a contract for deed entered into between M.B.I., Inc., seller, and Clark County Cattle Company, buyer. Seller agreed to sell 2,672.85 acres of farmland for $125,000. Buyer was to have immediate possession. These 2,672.85 acres were formerly partnership ground. In actuality, the Clark County Cattle Company is the John J. Mak-ens family corporation. M.B.I., Inc., is essentially the Makens brothers, the sons of James Makens. The $125,000 consideration set forth in the contract represents the amount upon which the parties agreed was owed by the John J. Makens family to the James Makens family after the partnership assets were divided in accordance with a Memorandum of Agreement, Exhibit 2 *190(also received into evidence), and Exhibit 10, the contract for deed. Valuable consideration passed when this contract for deed was formally entered into; this included quitclaim deeds from John J. Makens to M.B.I., Inc., of approximately 3,200 acres of land. It is unfathomable to me how these brothers — nephews—corporation— call them or it what you will — can seek to rescind or renounce a formal contract upon which they have affixed their signatures and under which they or it keep economic fruits therefrom, including the balance of the 5,850 Clark County acres of land via the quitclaim deeds.
Its Reaffirmation
Per Exhibit 12, received in evidence, in January 1975 an agreement was entered into between the same parties. This document identified the contract for deed, contemplated that an extension of time for redemption had been granted, provided that the contract for deed was to be enforceable by specific performance and gave M.B.I., Inc., an option to purchase the property back. However, this option was never exercised.
Its Redeclaration
Per Exhibit 13, received in evidence, a “Supplement to Contract for Deed” was executed in January 1977, which again identified the contract for deed and extended the time for making the final payment for one year plus it specified the terms of rental by which the Makens brothers were renting the land from the Clark County Cattle Company. Surely, then, these brothers recognized that they did not own the land and were bound by their previous agreement, for, as disclosed, they were renting the land. Exhibit 13 redeclared the original contract for deed.
Summarizing, the contract for deed was validly created with a valuable consideration flowing, was reaffirmed once, and later redeclared as being a binding agreement between the parties. As I have above written, the parties specifically placed in writing that the contract for deed was enforceable by specific performance.
ISSUE PRESENTED
Factually and procedurally, this case appears extremely complicated. It is elementary, after reading through the historical morass spawned by the oral testimony, that this appeal arises from one document (a contract for deed) and one claim for requested relief (specific performance) with one basic ruling. We are simply confronted with this issue: Was it error for the circuit court to entertain evidence of prior or contemporaneous negotiations or agreements to vary and change a contract for deed? I would hold that it was error and would reverse and remand with instructions.
APPLICABLE LAW
We have before us, to examine, a contract for deed dated January 24, 1974, which appears to be complete, clear, unambiguous, and containing mutual contractual covenants. Valuable consideration passed. Parties thereto altered their position. True, the circuit court has read this contract for deed and permitted parol evidence to decide that the contract was only a memorandum. However, this Court may read the contract for deed without any presumption in favor of the circuit court’s determination. McCollam v. Littau, 307 N.W.2d 144, 145 (S.D.1981). We should recognize, additionally, in reviewing the circuit court’s action and workings upon this contract, that the circuit court did not make any finding of ambiguity. As the contract for deed contemplates a specific agreement between the parties, it was error for the circuit court to force a compromise upon the parties. No litigant questions that the circuit court did not specifically enforce the contract; yet, the circuit court saw fit to impose radically different terms on both parties within the framework of the contract which it refused to enforce.* This *191cannot be. The circuit court cannot make a new contract for the parties. Pam Oil, Inc. v. Travex Int’l Corp., 336 N.W.2d 672 (S.D.1983).
The circuit court made a finding that the contract for deed was intended to be a memorialization of the fact that John J. Makens had an interest, the value of which was to be later determined. Of course, this is contrary to what the parties agreed upon. Basically, the circuit court decision was that a formal contract for deed was nothing more than a memorandum and a memorandum which attempted to trace the realistic interests of John J. Makens and others. Parol evidence was considered by the circuit court to vary and change the terms of the written contract which was unambiguous on its face. This is contrary to state statute, namely, SDCL 53-8-5, and the decisional law of this state. As recent as 1983, this Court in Flynn v. Flynn, 338 N.W.2d 295, 296 (S.D.1983), expressed:
This court has repeatedly held that parol evidence should not be admitted where the meaning of a contractual provision is patently clear. North River Ins. Co. v. Golden Rule Const., 296 N.W.2d 910 (S.D.1980), citing Delzer Const. Co. v. South Dakota State Bd. of Transp., 275 N.W.2d 352 (S.D.1979).
The circuit court took evidence concerning the intention of the parties as to their contractual agreement by receiving parol evidence. The circuit court did not enforce the contract as it was written and, in my opinion, it should have. The oral negotiations or stipulation of the parties, which preceded or accompanied the execution of the contract for deed, are all superseded by the parties entering into the formal contract for deed.
Contrary to the label affixed unto it, the parol evidence rule is not a rule of evidence; it is a substantive rule of law. It requires that the final expression of parties shall prevail over antecedent or contemporaneous deals, negotiations, expressions, and understandings. 9 Wigmore, Evidence § 2400 (Chadbourn rev. 1981); Janssen v. Tusha, 66 S.D. 604, 287 N.W. 501 (1939).
This Court has always strictly applied the parol evidence rule. Here, per the majority opinion, it appears that we will have a deviation from long-settled precedent because of a new concept allegedly fostered by the unique facts in this case. The majority opinion relies upon outside authority to open up the door on parol testimony to establish that the written document here, namely, a contract for deed, was never intended to be a contract or to be of any binding force between the parties. In effect, the majority opinion sustains the circuit court in its holding that parol evidence was admissible to change a contract. For, the inconsistency of all of this, under these facts and circumstances, is that the circuit court has recognized the contract for deed enough and to such extent to build a new contract arising from it. Not wishing to engage in pedantic discourse nor in scholarly miniutiae, but sorely concerned with the practical outfall of the majority opinion’s approval of the Colorado authorities, I would ask: Where does this take us down the road — to a point in time where critical evidentiary rulings are made in our South Dakota trial courts? To that evidentiary crucial moment when the trial judge must decide: Should I permit this parol evidence to establish that the parties really did not intend to contract at all? Musing further, with that trial judge who finds himself in that tender moment, should this extrinsic evidence be received into evidence to establish that there exists another agreement— perhaps establishing that the contract vividly before me is simply a memorialization and not a contract at all? If such evidence is a progenitor of that which is admissible hereafter in the courts of our state, then it would best serve the stability of contract law that certain findings be first established. As subsequently noted, such findings were not established here and the record is silent upon which to predicate an *192about-face on law that is soundly entrenched in this state.
During the course of this trial, the circuit court expressed that it would receive testimony for the purpose of showing “that the Contract for Deed is not an instrument at all_” There is no finding, in the decision, that the contract for deed was not an instrument at all. Furthermore, the court made no finding of fraud, mistake, or accident, and did not find that the contract was ambiguous. In the absence of fraud, mistake, or accident, a written agreement which is complete, clear, and unambiguous in its terms and contains mutual contractual covenants (such as found here and which were implemented) cannot be changed or modified by parol or extrinsic evidence. Farmers’ Elevator Co. v. Swier, 50 S.D. 436, 210 N.W. 671 (1926). As I mentioned above, our Court has historically applied the parol evidence rule in a most strict manner. In Janssen v. Tusha, 287 N.W. at 504-05, we quoted Judge Learned Hand in his opinion in Eustis Mining Co. v. Beer, Sondheimer & Co., Inc., 239 F. 976, 984 (S.D.N.Y.1917):
It makes not the least difference whether a promisor actually intends that meaning which the law will impose upon his words. The whole House of Bishops might satisfy us that he had intended something else, and it would make not a particle of difference in his obligation. That obligation the law attaches to his act of using certain words, provided, of course, the actor be under no disability. * * * Hence it follows that no declaration of the promisor as to his meaning when he used the words is of the slightest relevancy, however formally competent it may be as an admission. Indeed, if both parties severally declared that their meaning had been other than the natural meaning, and each declaration was similar, it would be irrelevant, saving some mutual agreement between them to that effect. When the court came to assign the meaning to their words, it would disregard such declarations, because they related only to their state of mind when the contract was made, and that has nothing to do with their obligations.
Additionally, we should observe that there were no findings below that this contract for deed was in violation of public policy, a sham, or unsupported by a valuable consideration. Neither were there findings that the contract was vague, indefinite, or incomplete. Under SDCL 21-9-3, if a contract is unfair and unreasonable, a court will not require a party to specifically perform; here, there was no finding that the contract was unfair and unreasonable. Under SDCL 21-9-4, if there is a lack of mutuality of remedy, a court will not require specific performance against a party; here, there was no finding that there was a lack of mutuality. In essence, there are no findings in the circuit court’s decision (a) to base the unenforceability of the contract or (b) upon which to predicate a foundation for the admission of parol evidence. Therefore, the equitable powers of the circuit court “in adjusting the equities of the parties” — to use the vernacular of the majority — could not be inceptually or conceptually induced. This contract for deed, fairly bargained for, certain in expression, and formally entered into, and thereafter implemented by the passing of valuable consideration, not to mention two express declarations in writing that the contract for deed was reaffirmed and redeclared and subject to specific performance, is entitled to enforcement. McDonald v. Miners & Merchants Bank, Inc., 310 N.W.2d 591 (S.D.1981). Ultimately, an equity brush, with strokes of compromise, painted a different picture inside the framework of the contract than intended by those who bargained.
I would reverse and remand for an order commanding specific performance of the contract for deed; and further require the circuit court to determine the past-due rent owed to the Clark County Cattle Company with a concomitant duty to enter a money judgment in its favor.

 The circuit court cut the baby in half. In this action of specific performance to require a conveyance of approximately 2,672.85 acres of land (less one conveyance of 320 acres therefrom, *191agreed upon by the parties), the circuit court ordered a conveyance of an undivided one-half of the aforementioned 2,672.85 acres unto buyer.