due-on-sale clause in South Dakota

1982In First Federal Savings & Loan Association of Rapid City v. Kelly, 312 N.W.2d 476 (S.D.1981), we held that in the case of a 180-day redemption mortgage, executed pursuant to SDCL ch. 21-49, the lender need not show an impairment of security before its rights under a due-on-sale clause can be enforced.

1982In both cases we held that under a contract for deed, the installment vendor maintains legal title to the property while the vendee holds equitable title and has the right to use and possession of the property. “[E]ven though a contract for deed only transfers equitable title to the vendee, this is sufficient conveyance to trigger the mortgagee’s rights as provided for in a due on sale clause.” Lovett, 318 N.W.2d at 135 , quoting Kelly, 312 N.W.2d at 481 .

1981Appellants secondly maintain that First Federal should be prevented from enforcing the due on sale clause because of the existence of certain equitable defenses. *480 Even though our state law specifically permits the existence of due on sale clauses, a mortgage situation has been consistently held to be within the field of equity and, as such, subject to equitable defenses. [4] Lipsey v. Crosser, 63 S.D. 185 , 257 N.W. 125 (1934); Occidental Savings & Loan Ass'n v. Venco, 206 Neb. 469 , 293 N.W.2d 843 (1980); Mutual Federal Savings & Loan Ass'n v. Wisconsin Wire Works, 58 Wis.2d 99 , 205 N.W.

1981Appellants secondly maintain that First Federal should be prevented from enforcing the due on sale clause because of the existence of certain equitable defenses. *480 Even though our state law specifically permits the existence of due on sale clauses, a mortgage situation has been consistently held to be within the field of equity and, as such, subject to equitable defenses. [4] Lipsey v. Crosser, 63 S.D. 185 , 257 N.W. 125 (1934); Occidental Savings & Loan Ass'n v. Venco, 206 Neb. 469 , 293 N.W.2d 843 (1980); Mutual Federal Savings & Loan Ass'n v. Wisconsin Wire Works, 58 Wis.2d 99 , 205 N.W.

1982In Kelly , citing Occidental Savings and Loan Association v. Venco Partnership, 206 Neb. 469 , 293 N.W.2d 843 (1980), we stated: Since historically the law has abhored any unreasonable or inequitable restraints on the alienation of property, and the purpose of a due on sale clause is to protect the lender’s security, these courts have generally concluded that absent any such impairment, the lender cannot prevent the borrower from transferring the property involved to a third party.

1982In Kelly , citing Occidental Savings and Loan Association v. Venco Partnership, 206 Neb. 469 , 293 N.W.2d 843 (1980), we stated: Since historically the law has abhored any unreasonable or inequitable restraints on the alienation of property, and the purpose of a due on sale clause is to protect the lender’s security, these courts have generally concluded that absent any such impairment, the lender cannot prevent the borrower from transferring the property involved to a third party.

1982The due-on-sale clause provides that First Federal may accelerate payment “[i]f all or any part of the Property or any interest therein is sold or transferred by Mortgagor without Mortgagee’s prior written consent[.]” This court recently dealt with this issue in First Federal Savings & Loan Ass’n v. Lovett, 318 N.W.2d 133 (S.D.1982), and First Fed.

1982In both cases we held that under a contract for deed, the installment vendor maintains legal title to the property while the vendee holds equitable title and has the right to use and possession of the property. “[E]ven though a contract for deed only transfers equitable title to the vendee, this is sufficient conveyance to trigger the mortgagee’s rights as provided for in a due on sale clause.” Lovett, 318 N.W.2d at 135 , quoting Kelly, 312 N.W.2d at 481 .

1982We are aware of Wicks’ assertion that in Sweet v. Purinton, 40 S.D. 17 , 166 N.W. 161 (1918), this court held a vendee did not become vested with equitable title until he tendered full and complete performance on an executory contract and had acquired legal title.

1982We are aware of Wicks’ assertion that in Sweet v. Purinton, 40 S.D. 17 , 166 N.W. 161 (1918), this court held a vendee did not become vested with equitable title until he tendered full and complete performance on an executory contract and had acquired legal title.

1981The trial court stated in its findings of fact that First Federal “did not waive its right to declare the default and was not guilty of estoppel or laches in any of its actions.” 5 Although this finding is somewhat conclusionary in nature, Johnson v. Petroleum Carriers, Inc., 90 S.D. 295 , 240 N.W.2d 114 (1976), we also do not perceive the facts to satisfy the aforementioned requirement of the mortgage agreement and, accordingly, cannot say that the trial court was clearly erroneous on this particular issue.

1981The trial court stated in its findings of fact that First Federal “did not waive its right to declare the default and was not guilty of estoppel or laches in any of its actions.” 5 Although this finding is somewhat conclusionary in nature, Johnson v. Petroleum Carriers, Inc., 90 S.D. 295 , 240 N.W.2d 114 (1976), we also do not perceive the facts to satisfy the aforementioned requirement of the mortgage agreement and, accordingly, cannot say that the trial court was clearly erroneous on this particular issue.

1981Von Ehrenkrook v. Midland Federal Savings & Loan Ass’n, 585 P.2d 589 (Colo.1978).

1981Von Ehrenkrook v. Midland Federal Savings & Loan Ass'n, 585 P.2d 589 (Colo.1978).

1981SDCL 15-6-52(a); Cunningham v. Yankton Clinic, P.A., supra. IV.

1981SDCL 15-6-52(a); Cunningham v. Yankton Clinic, P.A., supra. IV.

1981It is urged that we overturn the trial court’s finding and, in its stead, adopt the rationale of the court in Chopan v. Klinkman, 330 So.2d 154 (Fla.App. 4th Dist. 1976).

1981The pertinent portion of the due on sale clause of the mortgage agreement states that First Federal may exercise its right to accelerate payment "[i]f all or any part of the property or an interest therein is sold or transferred by the borrower." Our South Dakota Code offers guidelines on this issue: [SDCL 43-4-1] Transfer is an act of the parties, or of the law, by which the title to property is conveyed from one living person to another. [SDCL 43-25-16] An instrument purporting to be a grant of real property, to take effect upon condition precedent, passes the estate upon the performance of

1981Appellants secondly maintain that First Federal should be prevented from enforcing the due on sale clause because of the existence of certain equitable defenses. *480 Even though our state law specifically permits the existence of due on sale clauses, a mortgage situation has been consistently held to be within the field of equity and, as such, subject to equitable defenses. [4] Lipsey v. Crosser, 63 S.D. 185 , 257 N.W. 125 (1934); Occidental Savings & Loan Ass'n v. Venco, 206 Neb. 469 , 293 N.W.2d 843 (1980); Mutual Federal Savings & Loan Ass'n v. Wisconsin Wire Works, 58 Wis.2d 99 , 205 N.W.

1981Appellants secondly maintain that First Federal should be prevented from enforcing the due on sale clause because of the existence of certain equitable defenses. *480 Even though our state law specifically permits the existence of due on sale clauses, a mortgage situation has been consistently held to be within the field of equity and, as such, subject to equitable defenses. [4] Lipsey v. Crosser, 63 S.D. 185 , 257 N.W. 125 (1934); Occidental Savings & Loan Ass'n v. Venco, 206 Neb. 469 , 293 N.W.2d 843 (1980); Mutual Federal Savings & Loan Ass'n v. Wisconsin Wire Works, 58 Wis.2d 99 , 205 N.W.

1983Slevin quotes from the annotation, at 605: “[W]here the circumstances other than the mortgagor’s deliberate exercise of the prepayment clause arguably have caused prepayment of the loan, the courts have examined the factual situations presented and have denied enforcement of the penalty where the mortgagor did not voluntarily mature the indebtedness.” 54 Ill.Dec., at 190 , 424 N.E.2d, at 940 . 3 .Slevin describes Uresti as “a case involving acceleration resulting from an election made on the application of a due-on-sale clause, the court concludpng] the obligee was not entitled to a prepayment

1983Slevin quotes from the annotation, at 605: “[W]here the circumstances other than the mortgagor’s deliberate exercise of the prepayment clause arguably have caused prepayment of the loan, the courts have examined the factual situations presented and have denied enforcement of the penalty where the mortgagor did not voluntarily mature the indebtedness.” 54 Ill.Dec., at 190 , 424 N.E.2d, at 940 . 3 .Slevin describes Uresti as “a case involving acceleration resulting from an election made on the application of a due-on-sale clause, the court concludpng] the obligee was not entitled to a prepayment

1983First Federal Savings & Loan Ass’n., Etc. v. Wick, 322 N.W.2d 860 (S.D.1982); First Federal Savings & Loan Ass’n. v. Kelly, 312 N.W.2d 476 (S.D.1981).

1982SDCL 44-8-28 reads: No lender may enforce a due-on-sale clause unless the real estate mortgage includes such clause. [3] La Sala v. American Sav. and Loan Assn., 5 Cal.3d 864 , 97 Cal.Rptr. 849 , 489 P.2d 1113 (1971); Tucker v. Lassen Sav. & Loan Assn., 12 Cal.3d 629 , 116 Cal.Rptr. 633 , 526 P.2d 1169 (1974); Wellenkamp v. Bank of America, 21 Cal.3d 943 , 148 Cal.Rptr. 379 , 582 P.2d 970 (1978). [4] While the source annotated under SDCL 43-3-5 does not refer to the California Civil Code, as do other sections in SDCL ch. 43-3, nevertheless California Civil Code § 711 is specifically cited as t

1982SDCL 44-8-28 reads: No lender may enforce a due-on-sale clause unless the real estate mortgage includes such clause. [3] La Sala v. American Sav. and Loan Assn., 5 Cal.3d 864 , 97 Cal.Rptr. 849 , 489 P.2d 1113 (1971); Tucker v. Lassen Sav. & Loan Assn., 12 Cal.3d 629 , 116 Cal.Rptr. 633 , 526 P.2d 1169 (1974); Wellenkamp v. Bank of America, 21 Cal.3d 943 , 148 Cal.Rptr. 379 , 582 P.2d 970 (1978). [4] While the source annotated under SDCL 43-3-5 does not refer to the California Civil Code, as do other sections in SDCL ch. 43-3, nevertheless California Civil Code § 711 is specifically cited as t

1982SDCL 44-8-28 reads: No lender may enforce a due-on-sale clause unless the real estate mortgage includes such clause. [3] La Sala v. American Sav. and Loan Assn., 5 Cal.3d 864 , 97 Cal.Rptr. 849 , 489 P.2d 1113 (1971); Tucker v. Lassen Sav. & Loan Assn., 12 Cal.3d 629 , 116 Cal.Rptr. 633 , 526 P.2d 1169 (1974); Wellenkamp v. Bank of America, 21 Cal.3d 943 , 148 Cal.Rptr. 379 , 582 P.2d 970 (1978). [4] While the source annotated under SDCL 43-3-5 does not refer to the California Civil Code, as do other sections in SDCL ch. 43-3, nevertheless California Civil Code § 711 is specifically cited as t

1982SDCL 44-8-28 reads: No lender may enforce a due-on-sale clause unless the real estate mortgage includes such clause. [3] La Sala v. American Sav. and Loan Assn., 5 Cal.3d 864 , 97 Cal.Rptr. 849 , 489 P.2d 1113 (1971); Tucker v. Lassen Sav. & Loan Assn., 12 Cal.3d 629 , 116 Cal.Rptr. 633 , 526 P.2d 1169 (1974); Wellenkamp v. Bank of America, 21 Cal.3d 943 , 148 Cal.Rptr. 379 , 582 P.2d 970 (1978). [4] While the source annotated under SDCL 43-3-5 does not refer to the California Civil Code, as do other sections in SDCL ch. 43-3, nevertheless California Civil Code § 711 is specifically cited as t

1982SDCL 44-8-28 reads: No lender may enforce a due-on-sale clause unless the real estate mortgage includes such clause. [3] La Sala v. American Sav. and Loan Assn., 5 Cal.3d 864 , 97 Cal.Rptr. 849 , 489 P.2d 1113 (1971); Tucker v. Lassen Sav. & Loan Assn., 12 Cal.3d 629 , 116 Cal.Rptr. 633 , 526 P.2d 1169 (1974); Wellenkamp v. Bank of America, 21 Cal.3d 943 , 148 Cal.Rptr. 379 , 582 P.2d 970 (1978). [4] While the source annotated under SDCL 43-3-5 does not refer to the California Civil Code, as do other sections in SDCL ch. 43-3, nevertheless California Civil Code § 711 is specifically cited as t

1982SDCL 44-8-28 reads: No lender may enforce a due-on-sale clause unless the real estate mortgage includes such clause. [3] La Sala v. American Sav. and Loan Assn., 5 Cal.3d 864 , 97 Cal.Rptr. 849 , 489 P.2d 1113 (1971); Tucker v. Lassen Sav. & Loan Assn., 12 Cal.3d 629 , 116 Cal.Rptr. 633 , 526 P.2d 1169 (1974); Wellenkamp v. Bank of America, 21 Cal.3d 943 , 148 Cal.Rptr. 379 , 582 P.2d 970 (1978). [4] While the source annotated under SDCL 43-3-5 does not refer to the California Civil Code, as do other sections in SDCL ch. 43-3, nevertheless California Civil Code § 711 is specifically cited as t

1982Accordingly, under the mortgage presented here, we hold that no impairment of security need to be shown prior to appellee enforcing the due on sale clause. *136 All remaining issues proffered by the parties were either not raised at the trial court level, Weaver v. Boortz, 301 N.W.2d 673 (S.D.1981), are nonmeritorious, or need not be addressed due to the dispositive nature of our decision.

1982SDCL 44-8-28 reads: No lender may enforce a due-on-sale clause unless the real estate mortgage includes such clause. [3] La Sala v. American Sav. and Loan Assn., 5 Cal.3d 864 , 97 Cal.Rptr. 849 , 489 P.2d 1113 (1971); Tucker v. Lassen Sav. & Loan Assn., 12 Cal.3d 629 , 116 Cal.Rptr. 633 , 526 P.2d 1169 (1974); Wellenkamp v. Bank of America, 21 Cal.3d 943 , 148 Cal.Rptr. 379 , 582 P.2d 970 (1978). [4] While the source annotated under SDCL 43-3-5 does not refer to the California Civil Code, as do other sections in SDCL ch. 43-3, nevertheless California Civil Code § 711 is specifically cited as t

1982SDCL 44-8-28 reads: No lender may enforce a due-on-sale clause unless the real estate mortgage includes such clause. [3] La Sala v. American Sav. and Loan Assn., 5 Cal.3d 864 , 97 Cal.Rptr. 849 , 489 P.2d 1113 (1971); Tucker v. Lassen Sav. & Loan Assn., 12 Cal.3d 629 , 116 Cal.Rptr. 633 , 526 P.2d 1169 (1974); Wellenkamp v. Bank of America, 21 Cal.3d 943 , 148 Cal.Rptr. 379 , 582 P.2d 970 (1978). [4] While the source annotated under SDCL 43-3-5 does not refer to the California Civil Code, as do other sections in SDCL ch. 43-3, nevertheless California Civil Code § 711 is specifically cited as t