Pederson v. McGuire

333 N.W.2d 823 (S.D. 1983)

 

RULE:

S.D. Codified Laws § 22-30A-2 provides that any person who transfers property of another, or any interest therein, with intent to benefit himself or another not entitled thereto, is guilty of theft. And S.D. Codified Laws § 22-30A-3 provides in part that any person who obtains property of another by deception is guilty of theft. A person deceives if with intent to defraud he fails to disclose a known lien, adverse claim or other legal impediment to the enjoyment of property which he transfers or encumbers in consideration for property he obtains, whether such impediment is or is not valid, or is or is not a matter of official record. The term "deceive" does not, however, include falsity as to matters having no pecuniary significance, or puffing by statements unlikely to deceive reasonable persons.

FACTS:

When a seller contracted to sell property to a buyer, there was a railroad easement abutting the property. The only access to the property was over the easement. The seller got a license for such access, which license had several conditions. The license and easement were recorded. The seller did not tell the buyer of the easement and license but the buyer's president saw the railroad tracks. The trial court entered a judgment of specific performance ordering the buyer to buy real estate from seller.

ISSUE:

Did the district court err in its judgment of specific performance ordering the buyer to buy real estate from seller?

ANSWER:

No.

CONCLUSION:

The court held that specific performance was proper because the seller had a reasonable time to cure title defects, despite the fact that the contract provided that time was of the essence. The contract could not be closed until mortgage proceeds were disbursed. Also, while the contract required the seller to furnish insurance covering good and merchantable title, it also provided that the sale was subject to conditions, restrictions, and easements of record, if any, which included the easement and license. Further, the failure to disclose the easement or license was not fraud under either S.D. Codified Laws §§ 22-30A-2 or 22-30A-3 because there was no intent to defraud.

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