Muhlenkort v. Muhlenkort

393 N.W.2d 292, 1986 S.D. LEXIS 319
South Dakota Supreme Court·Decided September 17, 1986·No. No. 14986·Published

Opinion

MORGAN, Justice.

Defendant Jeffrey Muhlenkort (Jeffrey) appeals from a judgment of the circuit court reforming a contract for deed between Jeffrey and his father, the plaintiff, Marcus Muhlenkort (Marcus) and a judgment for money damages. In addition to reforming said contract, the trial court also [293] foreclosed upon the contract in favor of Marcus. We reverse in part, affirm in part, and remand with instructions.

On or about March 1, 1976, Marcus and Jeffrey entered into and executed a written agreement in the form of a contract for deed for conveyance of two separate tracts in Union County, South Dakota. As consideration for his property, Marcus was to receive forty percent of all crops harvested from the property and also was to receive forty percent of all other proceeds, government payments or other income derived from the real property. This forty percent share to Marcus constituted the annual installment payment due from Jeffrey and was to continue for the life of Marcus. Upon his death, Marcus’ administrator was to deed the real estate to Jeffrey without additional payments. The contract further contained a default provision whereby Marcus could cancel and Jeffrey would forfeit the contract upon Jeffrey’s failure to comply with its terms.

At about the same time, Marcus and Jeffrey also entered into a contract for sale of farm equipment. It provided that the failure of Jeffrey to comply with the farm equipment contract terms would be considered a breach of the terms on the real property contract. The personal property contract also contained a provision that Jeffrey had a right to sell, trade, or otherwise dispose of any of the items of property described in this contract providing that any property acquired by Jeffrey as a result of such sale would remain subject to the terms of the personal property contract.

Jeffrey failed to make the payment due on the farm equipment contract for 1981 and failed to make any payments thereafter. Jeffrey sold a substantial portion of the property subject to the farm equipment contract and failed to pay or account for any of the proceeds to Marcus. On or about August 7, 1981, Marcus served Jeffrey with a notice of intention to forfeit both contracts. The notice was based upon alleged defaults including nonpayment of real estate taxes, failure to equitably divide crops, and failure to make payments on the farm equipment contract. Jeffrey filed a petition for reorganization in bankruptcy court in February of 1982.

Initially, Marcus contends that Jeffrey may not challenge the sufficiency of the evidence as he failed to timely submit proposed findings of fact and conclusions of law. See SDCL 15-6-52(a). This court has previously determined that the standard of review is narrow when the appealing party fails to object to the proposed findings of fact and conclusions of law on a timely basis. See GMS, Inc. v. Deadwood Social Club, Inc., 333 N.W.2d 442 (S.D.1983). “ ‘[Wjhere the sufficiency of the evidence was not questioned before the trial court by ... request for findings or other appropriate procedure sufficiency of the evidence cannot be reviewed and appellant is therefore limited to the question of whether the findings support the conclusions of law and judgment.’ ” Id. at 443 (quoting Application of Veith, 261 N.W.2d 424, 425 (S.D.1978)).

We do not believe that this is an appropriate case to limit the scope of review as suggested in G.M.S., Inc. On the record before us, we cannot say with any degree of certainty that Jeffrey failed to timely submit proposed findings of fact and conclusions of law. We can determine from the record that the trial court’s findings of fact and conclusions of law were signed on April 8 and subsequently filed on April 15. We can also determine from the record that Jeffrey’s proposed findings of fact and conclusions of law were refused by the trial court on April 15 and filed on April 16. What we cannot determine is the date of service of these various documents. The affidavits of service were not included in the settled record.

Jeffrey’s mainstay argument is that the trial court may not make a contract for the parties that they did not make themselves. It is clear that Jeffrey and Marcus intended to and did make a contract for deed and in that contract it is clear that both parties contemplated that the property could be regained by Marcus upon Jeffrey’s default. [294] Marcus was to regain the property through the forfeiture clause in the contract. However, the failure to recite a calculable contract amount1 for purposes of setting a redemption value destroyed the intent of the forfeiture clause. “If by reason of a mistake of law, the legal effect of the words in which a contract or conveyance is expressed is different from that on which the parties were agreed, reformation is a proper remedy.” Essington v. Buchele, 79 S.D. 544, 549, 115 N.W.2d 129, 131 (1962). “In revising a written instrument, the court may inquire what the instrument was intended to mean, and what were intended to be its legal consequences, and is not confined to the inquiry what the language of the instrument was intended to be.” SDCL 21-11-3. See also Garber v. Haskins, 84 S.D. 459, 172 N.W.2d 721 (1969).

It is important to note here, that the trial court did not supply the price term in the contract for deed. The price term in the contract as set forth by the parties was forty percent of the crops raised on the land as long as the vendor was living.2 The trial court in this instance adopted a value stated by the defendant in his 1982 bankruptcy petition as being the redemption value of the land. It is in this valuation that we find error on the part of the trial court.

We do not doubt that the valuations placed on the land in Jeffrey’s bankruptcy petition are fair market values for the lands in question at the time of the bankruptcy petition. It must be remembered, however, that the contract for deed was signed in 1976, whereas the bankruptcy petition was filed in 1982. Absent a specific finding that the 1976 value of the land was equal to its 1982 value, we hold that it was erroneous for the trial court to assign the 1982 valuation to the 1976 land sales contract. As a result, we must reverse and remand for a determination of the value of the lands in question as of the sale date in 1976. We commend the trial court for its otherwise equitable and just rulings in this case.

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Related

GMS, INC. v. Deadwood Social Club, Inc.
333 N.W.2d 442 (South Dakota Supreme Court, 1983)
Application of Veith
261 N.W.2d 424 (South Dakota Supreme Court, 1978)
Essington v. Buchele
115 N.W.2d 129 (South Dakota Supreme Court, 1962)
Garber v. Haskins
172 N.W.2d 721 (South Dakota Supreme Court, 1969)