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BUSINESS LAW CHAPTER 9 THIRD PARTY CONTRACTS (CONTRACT LAW) CASES FOR ANALYSIS;
specific performance by virtue of the court; gratiutious

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156 N.W.2d 78 Page 1
83 S.D. 144, 156 N.W.2d 78
(Cite as: 83 S.D. 144, 156 N.W.2d 78)

Cases
Equitable remedy of specific performance is always
Supreme Court of South Dakota. addressed to sound discretion of the court to be
Raymond B. DOLAN and M. Theresa Dolan, granted or denied according to the facts and cir-
Plaintiffs and Respondents, cumstances in each instance.
v.
Douglas M. HUDSON and Arlene E. Hudson, De- [2] Appeal and Error 30 931(1)
fendants and Appellants.
Douglas M. HUDSON and Arlene E. Hudson, 30 Appeal and Error
Cross-Complainants and Appellants, 30XVI Review
v. 30XVI(G) Presumptions
Raymond B. DOLAN, M. Theresa Dolan and 30k931 Findings of Court or Referee
Pfeifer-Drake & Dodge Company, Defendants un- 30k931(1) k. In General. Most Cited
der the Cross-Complaint and Respondents. Cases
No. 10416. In reviewing evidence to determine whether or not
trial court abused its discretion in granting specific
Jan. 30, 1968. performance of contract of sale of realty, Supreme
Rehearing Granted April 11, 1968. Court must accept that version of evidence, includ-
ing inferences which can be fairly drawn therefrom,
Action by owners and sellers against vendees for which is favorable to trial court's action; this is so
specific performance of contract to sell residential because it is for trial court to select testimony and
property. The Circuit Court of Minnehaha County, draw inferences which he relies on.
Francis G. Dunn, J., decreed specific performance
and after failure of vendees to comply property was [3] Appeal and Error 30 931(1)
sold at execution sale and deficiency judgment was
entered against vendees and they appealed. The Su- 30 Appeal and Error
preme Court, Hanson, P.J., held that there was no 30XVI Review
defeating ambiguity in real estate purchase chase 30XVI(G) Presumptions
contract, terms of which were sufficiently certain to 30k931 Findings of Court or Referee
make precise acts of parties to be done clearly as- 30k931(1) k. In General. Most Cited
certainable, which would have prevented specific Cases
performance. The court also held that purchasers'
Appeal and Error 30 1012.1(4)
assent to purchase agreement was not obtained by
misrepresentation, concealment or unfair practice 30 Appeal and Error
on part of vendors or real estate agent. 30XVI Review
30XVI(I) Questions of Fact, Verdicts, and
Judgments affirmed.
Findings
West Headnotes 30XVI(I)3 Findings of Court
30k1012 Against Weight of Evidence
[1] Specific Performance 358 8 30k1012.1 In General
30k1012.1(4) k. Clearly, Plainly,
358 Specific Performance or Palpably Contrary. Most Cited Cases
358I Nature and Grounds of Remedy in General (Formerly 30k1012(1))
358k8 k. Discretion of Court. Most Cited Because trial court's participation in trial reveals to

© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.

156 N.W.2d 78
83 S.D. 144, 156 N.W.2d 78
(Cite as: 83 S.D. 144, 156 N.W.2d 78)
him many things that are helpful and sometimes es-
sential in deciding fact issues, it is presumed that
his findings are correct and Supreme Court is not
free to disturb them unless satisfied that they are
contrary to clear preponderance of evidence.
[4] Trial 388 375
388 Trial
388X Trial by Court
388X(A) Hearing and Determination of
Cause
388k375 k. View or Inspection by Judge.
Most Cited Cases
Although not evidence, view affords trier of facts a
means of more satisfactorily understanding and
evaluating record evidence, and Supreme Court
must assume that view was of some value in assist-
ing judge to determine issues of fact.
[5] Appeal and Error 30 77(1)
30 Appeal and Error
30III Decisions Reviewable
30III(D) Finality of Determination
30k75 Final Judgments or Decrees
30k77 Nature or Form of Action or
Proceeding
30k77(1) k. In General. Most Cited
Cases
Interlocutory judgment that decreed specific per-
formance of real estate purchase contract and spe-
cial execution to foreclose vendor's lien at public
auction in event purchasers failed or refused to pay
purchase price constituted final and appealable
judgment.
[6] Appeal and Error 30 76(1)
30 Appeal and Error
30III Decisions Reviewable
30III(D) Finality of Determination
30k75 Final Judgments or Decrees
30k76 In General
30k76(1) k. In General. Most Cited
Cases
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 2
Test of finality of judgment for appeal purposes is
substance of decision rather than its form or name.
[7] Specific Performance 358 28(2)
358 Specific Performance
358II Contracts Enforceable
358k27 Certainty
358k28 In General
358k28(2) k. Contracts Relating to
Real Property. Most Cited Cases
There was no defeating ambiguity in real estate
purchase contract, terms of which were sufficiently
certain to make precise acts of parties to be done
clearly ascertainable, which would have prevented
specific performance. SDC 37.4602(6).
[8] Vendor and Purchaser 400 33
400 Vendor and Purchaser
400I Requisites and Validity of Contract
400k32 Misrepresentation and Fraud by
Vendor
400k33 k. In General. Most Cited Cases
Although real estate agent was legally vendors'
agent, where he was in fact purchasers' long-time
friend and vendors gave purchasers every opportun-
ity to fully inspect house and premises and
answered every question put to them about house
and premises preliminary to real estate sale contract
agreement purchasers' assent to purchase agreement
was not obtained by misrepresentation, conceal-
ment or unfair practice on part of vendors or real
estate agent.
[9] Vendor and Purchaser 400 31
400 Vendor and Purchaser
400I Requisites and Validity of Contract
400k31 k. Mistake. Most Cited Cases
Where legal access road was pointed out to pur-
chasers of house and they were alerted to facts that
developer did not own one of access routes their
mistake which involved general access routes was
self-induced and not result of any unfair practice or
misrepresentation on vendors' part and where there
156 N.W.2d 78
83 S.D. 144, 156 N.W.2d 78
(Cite as: 83 S.D. 144, 156 N.W.2d 78)
were other sufficient access routes the mistake was
not so material that it would justify rescission of
contract.
[10] Contracts 95 93(5)
95 Contracts
95I Requisites and Validity
95I(E) Validity of Assent
95k93 Mistake
95k93(5) k. Mutual Mistake. Most
Cited Cases
Although unilateral mistake of material fact is
ground for rescinding contract where consent to
contract is mistakenly given, the mistake must be so
fundamental in character that because of it minds of
parties did not meet.
[11] Vendor and Purchaser 400 44
400 Vendor and Purchaser
400I Requisites and Validity of Contract
400k44 k. Evidence. Most Cited Cases
To rescind real estate purchase contract party seek-
ing rescission has burden of proving: (1) a mistake
was made and (2) it was material.
[12] Specific Performance 358 66
358 Specific Performance
358II Contracts Enforceable
358k63 Contracts Relating to Real Property
358k66 k. Enforcement by Vendor. Most
Cited Cases
Statute which denies specific performance unless
vendor can give title free from reasonable doubt
refers to condition of title at time fixed for perform-
ance and requires title free from defects which actu-
ally impair title or which may reasonably be expec-
ted to expose purchaser to adverse claims or litiga-
tion but does not mean title free from every tech-
nical defect that can be conjured up. SDC 37.4610.
[13] Specific Performance 358 95
358 Specific Performance
358III Good Faith and Diligence
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 3
358k95 k. Sufficiency of Title of Vendor.
Most Cited Cases
Vendors who tendered policy of title insurance and
warranty deed to premises on day fixed for closing
sale complied with requirements of statute that
denies specific performance to vendor who does not
give to buyer title free from reasonable doubt. SDC
37.4610.
[14] Vendor and Purchaser 400 137
400 Vendor and Purchaser
400IV Performance of Contract
400IV(A) Title and Estate of Vendor
400k137 k. Approval of Counsel or Other
Person. Most Cited Cases
Vendors were not bound by their election to furnish
abstract showing merchantable title and could re-
exercise option contained in purchase agreement of
furnishing title insurance in lieu of correcting de-
fects in abstract disclosed by their examination of
abstract where purchasers refused to allow time to
correct defects so that they did not breach contract.
*146 **79 Jones & Matthews, E. G. Jones, Sioux
Falls, for defendants and appellants.
*147 May, Boe & Johnson, Sioux Falls, for
plaintiffs and respondents.
HANSON, Presiding Judge.
Plaintiffs, Raymond B. Dolan and wife, as owners
and sellers brought this action for specific perform-
ance of a contract to sell residential property
against Douglas M. Hudson and wife, defendants
and buyers. Defendants answered alleging princip-
ally that the purchase agreement was not specific-
ally enforceable because: Their assent was given
under a mistake of fact; their assent was obtained
by unfair practice; the purchase agreement is am-
biguous; plaintiffs have not performed their under-
takings under the purchase agreement; and title in-
surance tendered was not performance. By cross
complaint defendants also sought recovery of
$1,000 paid **80 down under the purchase agree-
156 N.W.2d 78
83 S.D. 144, 156 N.W.2d 78
(Cite as: 83 S.D. 144, 156 N.W.2d 78)
ment from the plaintiffs and their realtor, Pfeifer-
Drake & Dodge Company.
Trial to the court resulted in entry of an inter-
locutory judgment in favor of plaintiffs decreeing
specific performance of the contract with a direc-
tion to sell the property at execution sale if defend-
ants failed or refused to pay the purchase price
within the time prescribed. Defendants failed to pay
and demanded sale of the property. It was sold to a
third party. The sale was confirmed and a defi-
ciency judgment entered in favor of plaintiffs in the
amount of $18,059.93. Defendants appeal from
both the interlocutory and deficiency judgments al-
leging fifty-two assignments of error.
[1][2][3][4] The equitable remedy of specific per-
formance is always addressed to the sound discre-
tion of the court to be granted or denied according
to the facts and circumstances in each instance.
Vermeulen v. Meyer, 238 Iowa 1033, 29 N.W.2d
232. The ultimate issue in this case, therefore, is
whether or not the trial court abused its discretion
in granting specific performance of the contract of
sale. Renner v. Crisman, 80 S.D. 532, 127 N.W.2d
717. In reviewing the evidence for this purpose we
‘must accept that version of the evidence, including
the inferences which can be fairly drawn therefrom,
which is favorable to the trial court's action. This is
so because it is for the trial court to select the testi-
mony and draw the inferences which he *148 relies
on. Because his participation in the trial reveals to
him many things that are helpful and sometimes es-
sential in deciding fact issues, it is presumed that
his findings are correct. Consequently, we are not
free to disturb them unless satisfied that they are
contrary to a clear preponderance of the evidence.’
Beatty v. Depue, 78 S.D. 395, 103 N.W.2d 187, 1
A.L.R.3d 531. The findings in this case are further
fortified by a view of the premises and area in-
volved by the trial court. Although not evidence, a
view does afford the trier of facts a means of more
satisfactorily understanding and evaluating the re-
cord evidence and we must assume this view ‘was
of some value in assisting the judge to determine
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 4
the issues of fact.’ Weidmeier v. Edelman, 75
S.D. 29, 58 N.W.2d 306.
In summary, it appears that plaintiff, Raymond B.
Dolan, came to Sioux Falls, South Dakota in 1963
as Agency Manager for the Equitable Life Assur-
ance Society. Upon arrival he purchased a suburban
home in Cactus Heights, a development located a
few miles northeast of Sioux Falls in a hilly
wooded area. This development is located in Sioux
Falls Township on the North Half of the Southwest
Quarter of Section 12, Minnehaha County and in-
cludes a golf course and a club house occupied by
the Sioux Falls American Legion Post. The plat of
the area contains lots and streets designated as Fair-
way Place, Fairway Drive, and Cactus Drive. For
the purpose of keeping the area desirable and uni-
form the owners filed a Declaration of Restrictions
in the nature of covenants running with the land
containing limitations and restrictions on the use of
the lots and tracts within the development such as a
restriction against using, improving, or occupying
lots except for private one-family residence pur-
poses.
The Dolan property faces east and abuts on Fairway
Place. It consists of Lot 4 and the Northeasterly 36
Feet of Lot 5 in Block 1 of Cactus Heights with
easements relating to a well and easements of in-
gress and egress over and upon Fairway Place, Fair-
way Drive, Cactus Drive, and the South 66 Feet of
the N 1/2 of the S.W. 1/4 of Section 2, Township
101, Range 49. The latter easement describes an ac-
cess road to Cactus Heights from *149 U.S. High-
way 16. From the south end of Cactus Drive it ex-
tends west for about 1/2 mile and then south 1/4
mile on a township road. This road runs along side
the golf course and conforms to the hilly terrain it
traverses. It was referred to as the ‘legal’, ‘scenic’,
or ‘roller coaster’ road. Another access **81 route
called the McLiman road runs about 1/4 mile
straight south to Highway 16. Both roads were con-
structed, graveled, maintained and are kept open in
the winter by the Cactus Heights developer. The
McLiman road, however, is not appurtenant to the
156 N.W.2d 78
83 S.D. 144, 156 N.W.2d 78
(Cite as: 83 S.D. 144, 156 N.W.2d 78)
Cactus Heights property and is located on land be-
longing to Mr. R. L. McLiman. It leads directly to
the American Legion Club House and carries the
bulk of that traffic. There are utility poles and wires
located on one side of the road. It has been used as
a road since 1958 by permission and under a rental
agreement cancelable at the end of any year after
1963. Mr. McLiman claims the right to stop the use
of this road by the public and residents of Cactus
Heights at any time, but has no present intention of
doing so. Although the McLiman road provides a
shorter route to Highway 16 the other access road
comes out on Highway 16 one half mile closer to
Sioux Falls so the distance from Cactus Heights to
the City of Sioux Falls is approximately the same
over either route.
In October 1965 Dolan was notified of his transfer
to the home office of his company so he listed his
home for sale with the Sioux Falls Multiple Listing
Service. This is an association of realtors whereby
one listing constitutes a listing with all. The cross
complainant defendant. Pfeifer, Drake & Dodge
Company, is a member and W. J. Comstock is one
of their agents. Comstock was a long time friend of
defendants, Douglas Hudson and his wife, who
owned and resided in a home at 2222 South Main in
Sioux Falls. Mr. Hudson was General Agent for the
Paul Revere Life Insurance Company in South
Dakota. When the Dolan residence came on the
market Comstock contacted the Hudsons and ar-
ranged for an inspection. He took them out on
Tuesday, October 19, 1965. Both Mr. and Mrs.
Dolan were at home and took the Hudsons on a tour
of the house. This was the first time Comstock met
the Dolans. The next day the Hudsons again inspec-
ted the house by themselves. The day following
*150 they made another trip out with Mr. Com-
stock. In addition the Hudsons drove out to Cactus
Heights several times that week by themselves.
The Dolans listed their home for sale for $52,500.
On Saturday, October 23, 1965 there were some
preliminary negotiations handled by Comstock
whereby the Hudsons offered to trade in their home
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 5
as part of the purchase price. The Dolans refused
the trade offer, but reduced their asking price to
$47,500. This offer was accepted by the Hudsons
on the following day which was Sunday, October
24, 1965, by the preparation and execution of a
Real Estate Purchase Agreement. The Agreement
was prepared by Mr. Comstock at his home in the
presence of Mr. and Mrs. Hudson. Comstock went
over the terms of the contract with the Hudsons be-
fore they signed. Afterwards it was accepted and
signed by the Dolans.
The Purchase Agreement provided the closing date
of the sale and possession was to be given on Janu-
ary 15, 1966 or as agreed with the buyers' option of
an earlier closing date. After agreeing to purchase
the Dolan residence the Hudsons then offered their
Sioux Falls home for sale. However, they were ap-
parently unable to find a buyer prior to January 15,
1966.
The Hudsons did not elect to have the sale closed
early so the Dolans waited until after the close of
the year to have the abstract continued. On January
6, 1966 the abstract was delivered to the First Na-
tional Bank of Sioux Falls where the Hudsons ex-
pected to make a loan. The bank had the abstract
examined by attorney E. G. Jones. His opinion was
rendered on January 11th, finding title of the
premises to be in the Dolans, as joint tenants, sub-
ject to some exceptions and objections requiring
correction. Significantly the opinion did not find
the title to be unmerchantable in any particular.
**82 After the attorney's opinion was rendered Mr.
Hudson conferred with Tom Barron and Orville
Bonacker, both Vice Presidents of the First Nation-
al Bank. Barron testified he advised Hudson the
bank was not in a position to make a loan on the
property chiefly because of lack of direct access to
Highway 16 *151 over the McLiman road as poin-
ted out in the attorney's opinion. However, Mr.
Bonacker told Hudson the exceptions to the Dolan
title would have to be corrected before a loan could
be made. Time to make these corrections was re-
quested of and refused by Hudsons' attorney.
156 N.W.2d 78
83 S.D. 144, 156 N.W.2d 78
(Cite as: 83 S.D. 144, 156 N.W.2d 78)
On January 14 the Abstract together with an affi-
davit, Release of Lease, and Release of Easement
were delivered to the Getty Abstract Company and
a policy of title insurance was procured. Sometime
prior the Dolans had moved out and vacated the
premises. They had purchased a new home in Con-
necticut. On the day of closing the sale, plaintiffs
tendered a warranty deed to the premises and the
policy of title insurance. This was refused. At the
same time defendants demanded return of their
$1,000 down payment under the contract which was
refused.
This action for specific performance followed on
January 18, 1966. The trial court found in favor of
plaintiffs and in a so-called Interlocutory Judgment
entered on September 22, 1966 decreed specific
performance of the Real Estate Purchase Contract
and in the event defendants failed or refused to pay
the purchase price within the alloted time for per-
formance a special execution would issue to fore-
close the vendor's lien at public auction after which
plaintiffs would be entitled to judgment for any de-
ficiency.
Defendants failed to pay the balance of the pur-
chase price required in the Interlocutory Decree. In-
stead, they filed an application and obtained an or-
der to show cause why the execution sale of the
property should not proceed forthwith. Thereafter
sale proceedings were held and the property was
sold by the sheriff at public auction to one Derald
Espeland. On January 20, 1967 the trial court
entered its order confirming sale and judgment in
favor of plaintiffs for a deficiency of $18,059.93.
[5][6] All of defendants' assignments of error relate
back to rulings, findings, and proceedings affecting
the Interlocutory Judgment. However, notice of
entry of this judgment was not given and defend-
ants waited until after the sale and entry of the defi-
ciency judgment to appeal. This mode of procedure
complicates*152 consideration and disposition of
the issues on review as the status quo has not been
preserved. The subject matter of the action has been
sold to a third party whose right and title to the
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 6
property cannot now be defeated or disturbed. Des-
pite its name the Interlocutory Decree constituted a
final and appealable judgment as it finally and com-
pletely adjudicated all of the issues of fact and law
involved in this controversy. An appeal immedately
after entry of the Interlocutory Judgment could
have stayed the sale and preserved the status quo of
the parties and the property. The test of finality is
the substance of the decision rather than its form or
name. 4 Am.Jur.2d, Appeal and Error, s 51, p. 573.
See also Brown v. Memorial National Home
Foundation, 158 Cal.App.2d 448, 322 P.2d 600, 72
A.L.R.2d 997.
[7] There was no defeating ambiguity in the pur-
chase agreement within the contemplation of SDC
1960 Supp. 37.4602(6) which would prevent specif-
ic performance. Its terms were sufficiently certain
to make the precise acts of the parties to be done
clearly ascertainable. It was prepared by defend-
ants' friend Comstock. They examined and signed
the contract before submission to plaintiffs for ap-
proval. The parties were knowledgeable experi-
enced businessmen. Both were successful insurance
executives. Contracts were their stock in trade. The
meaning of this one was clearly understood by both
and clearly ascertainable by the court.
**83 [8] Likewise, there is no substantial credible
evidence that defendants' assent to the purchase
agreement was obtained by any misrepresentation,
concealment or unfair practice on the part of
plaintiffs or Mr. Comstock. Although Comstock
was legally plaintiff Dolan's agent, he was, in fact,
Hudsons' longtime friend. It is extremely unlikely
he misled, deceived, or unfairly dealt with his
friends in this transaction. The Dolans gave the
Hudsons every opportunity to fully inspect the
house and premises. They answered every question
put to them about the house and premises prelimin-
ary to the sale agreement.
[9] In this same vein defendants contend their as-
sent to the purchase agreement was given under a
mistake of fact. *153 Their mistake involved the
general access routes to Cactus Heights. They do
156 N.W.2d 78
83 S.D. 144, 156 N.W.2d 78
(Cite as: 83 S.D. 144, 156 N.W.2d 78)
not contend plaintiffs had no access to convey, but
if they had known the McLiman road was not a
property right they would never have signed the
Purchase Agreement. In signing they relied upon an
apparent right of access over the McLiman road be-
cause it afforded a more direct access to Cactus
Heights, was more heavily traveled, was safer, and
had the appearance of a public way. This misunder-
standing was not the result of any misrepresenta-
tion. The subject of general access was apparently
never discussed by the parties. Before the sale de-
fendant Hudson asked plaintiff if there were any
negatives about the property. In the course of his
reply plaintiff indicated the biggest deficiency was
the developer and ‘when this new road, the one that
is referred to in unflattering terms by the defendant
but one which I will call the legal road, when it was
put in, it did not have landscaping along the side
and the water had washed down it and had washed
this muck onto the fairway number one fairway and
this bothered a lot of people including myself and
so as we stood there pointing to it, I said here is an
example. There is a road that has been put in by the
developer that runs from the western section line up
through the parking lot and joins this area. I said I
don't know the background but I believe it was put
in by court order over some disagreement on prop-
erty and I said that the road is there and had he
taken the same money and gone to Mr. McLiman
and agreed to buy his property he could have black-
topped that entire road in and the whole thing for
probably the same amount of money * * *.’ From
this testimony it would appear the legal access road
was pointed out to defendants and they were alerted
to the fact the developer did not own the McLiman
road.
[10][11] In Beatty v. Depue, 78 S.D. 395, 103
N.W.2d 187, this court recognized that a unilateral
mistake of a material fact is ground for rescinding a
contract under our statutes where consent to the
contract is mistakenly given. However, the court
further said the mistake had to be so fundamental in
character that because of it the minds of the parties
did not meet. The following test of materiality was
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 7
quoted with approval from Grymes v. Sanders, 93
U.S. 55, 23 L.Ed. 798:
*154 ‘A mistake as to a matter of fact, to warrant
relief in equity, must be material, and the fact must
be such that it animated and controlled the conduct
of the party. It must go to the essence of the object
in view, and not be merely incidental. The court
must be satisfied, that but for the mistake the com-
plainant would not have assumed the obligation
from which he seeks to be relieved.'
Consequently, in order to rescind defendants had
the burden of proving: (1) a mistake was made and
(2) it was material. 36 Am.Jur., Mistake, page 456.
This burden was not fulfilled in either particular.
As the trial court observed in his memorandum
opinion ‘I see no basis for defendants claim of mis-
take of fact. There was a full disclosure of all con-
ditions surrounding the property by the Dolans and
their agents and there was unlimited access given to
the Hudsons to visit the property. I am satisfied that
they were fully aware of all **84 of the restrictions
and conditions surrounding the property they were
purchasing prior to the signing of the contract * * *
From my personal examination of the property and
the routes * * * the legal road, while a little rolly, is
a good graveled highway and comes out onto high-
way sixteen at a corner where vision is greatly im-
proved and where there is no danger of being hit by
an automobile which you cannot see. Plaintiffs, by
themselves or through their agents, have never con-
tended or made any representations that (they) had
any property right in the McLiman road. It provides
another means of ingress and egress, even though
permissive, to defendants. But in the event it is
closed, defendants still have access over the legal
road which is as short, direct and safe as the route
by way of the McLiman road and highway sixteen.
Further, in view of the improvements now served
by the McLiman road, it would appear very doubt-
ful if it is ever closed, but I find that fact immaterial
here.’ Defendants may very well have assumed the
McLiman road provided a legal means of access to
Cactus Heights, but this would not justify rescission
156 N.W.2d 78
83 S.D. 144, 156 N.W.2d 78
(Cite as: 83 S.D. 144, 156 N.W.2d 78)
of the contract. This assumption, misunderstanding,
or mistake was self-induced. It was not the result of
any unfair practice or misrepresentation on
plaintiffs' part. The governing*155 rule is suc-
cinctly stated in 13 Am.Jur.2d, Cancellation of In-
struments, s 32, p. 524, as follows: ‘Equity will re-
lieve a party from a unilateral mistake that was a
result of fraud or duress or was accompanied by
other special facts creating an independent equity
on behalf of the mistaken person, such as inequit-
able conduct of the other party, but cancellation
should not be decreed against a party whose con-
duct did not contribute to or induce the mistake and
who will obtain no unconscionable advantage there-
from.'
[12][13] According to SDC 37.4610 ‘An agreement
for the sale of property cannot be specifically en-
forced in favor of a seller who cannot give to the
buyer a title free from reasonable doubt.’ This
refers to the condition of title at the time fixed for
performance and requires one free from defects
which actually impair title or which may reasonably
be expected to expose the purchaser to adverse
claims or litigation. See South Dakota Standards
For Title Examination. This does not mean a title
free from every technical defect that can be con-
jured up. Tripp v. Sieler, 38 S.D. 321, 161 N.W.
337. ‘Mere possibility or suspicion of defect is not
sufficient, but, if there is a doubt or uncertainty suf-
ficient to form the basis of litigation or color of an
outstanding title which may prove substantial, the
title cannot be said to be marketable.’ Larson v.
Thomas, 51 S.D. 564, 215 N.W. 927, 57 A.L.R.
1246. A marketable title is one free from reasonable
doubt and a purchaser is entitled to ‘have a title that
will enable him to hold his land in peace, and, if he
wishes to sell, be reasonably sure that no flaw or
doubt will arise to disturb its market value.’ God-
frey v. Rosenthal, 17 S.D. 452, 97 N.W. 365.
Plaintiffs complied with these requirements by ten-
dering a policy of title insurance and a warranty
deed to the premises on the day fixed for closing
the sale.
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 8
[14] Although the purchase agreement expressly al-
lows the owner ‘to furnish an abstract of title or
title insurance’ defendants contend plaintiffs were
bound by their election to furnish an abstract show-
ing merchantable title and could not re-exercise the
option of furnishing title insurance in lieu of cor-
recting defects in the abstract disclosed by their ex-
amination *156 of the abstract. This appears to be
the rule in Texas, Cobb v. Nau, Tex.Civ.App., 12
S.W.2d 594, and Giddens v. Moore, Tex.Civ.App.,
348 S.W.2d 404, especially where the seller refuses
to cure or remove objections to the title. That is not
the situation here. Plaintiffs were willing to correct
objections to the title, but defendants refused to al-
low time to do so. To meet the closing time date
plaintiffs were forced to procure **85 title insur-
ance. At the same time they procured affidavits and
releases to meet the title objections. Plaintiffs' prin-
cipal obligation under the contract was to convey
merchantable title to defendants on January 15,
1966. Under the circumstances the means of doing
so was immaterial and did not constitute a breach of
the contract.
We have carefully examined the several other con-
tentions and assertions made by defendants but find
none would justify rescission or prevent specific
performance of the contract. The two judgments ap-
pealed from are therefore affirmed.
BIEGELMEIER and HOMEYER, JJ., concur.
ROBERTS, J., concurs in result.
RENTTO, J., to participating.
S.D. 1968.
Dolan v. Hudson
83 S.D. 144, 156 N.W.2d 78
END OF DOCUMENT