*1 cooperative’s of the broad au- al limitation
thority minimum modify the demand Floyd Swier, Eileen SWIER and G. charge, authority it as ex- retained that Appellants, Plaintiffs and by-laws. stated in Oakes pressly the Bros., Farming Ass ’n. v. Martinson (N.D.1982). BANK, Association, NORWEST National by-laws Branch, We find the contract and Brookings Defendant authority gave cooperative the to modi Appellee. did, only it fy the rate structure as but No. 15248. underlying contractual consistent with the irrigators pay not premise that twice Supreme Court South Dakota. consumption electricity. the same question was submitted Considered on Briefs Oct. 1986. it determine when was instructed to wheth July Decided 1987. charges electricity were included er charge. minimum demand We also Rehearing Aug. 13,1987. Denied by-laws gave the contract the co find to increase operative authority charged irrigators for electrici
rates only corresponded if such
ty, but in the cooperative’s
to increases wholesale electricity, prescribed
cost Finally,
contract. the terms the con by-laws, cooperative
tract we find authority
had to increase minimum charge in any
demand reasonable amount violating of
not the doctrine unconscion-
ability. decision, light foregoing
In plain- of the appealed issues
balance germane are not
tiffs and will not be ad-
dressed. trial court is af-
firmed. SABERS, JJ.,
HENDERSON and
FOSHEIM, J., HEEGE, Retired Judge, concur.
Circuit
McMURCHIE, Judge, sitting Circuit J., MORGAN, disqualified.
HEEGE, Judge, sitting for Circuit
WUEST, C.J., disqualified.
FOSHEIM, J., participating. Retired
MILLER, J., having not been a
member the Court at the time this
action was submitted did
participate. *2 they paid would had interest than have original
the remained in Swi- rate effect. 1985, paid in January ers Bank back apparently proceeds with the of a new FmHA loan.
A committing guarantee form FmHA to “[a]ny loans made to stated Swiers that change in interest rates from is- date of by suance of must approved this form be County Supervisor.” the FmHA doc- The ument approximately was dated the same date Bank extended Swiers loan. the FmHA approval prior was never obtained modifications,, However, to the interest agency Bank reports sent the semi-annual kept agency the abreast of inter- est being rates assessed. Neither Swiers Arneson, Gienapp David R. Issenhuth nor Bank of the re- were aware Madison, Gienapp, plaintiffs quirement for ap- and paid until after the loan was off. pellants. Bank, claiming Swiers sued that as bor- third-party rowers beneficiaries Helsper
Richard J.
Erickson & Hel-
guarantee
of the
agreement.
Bank/FmHA
sper, Brookings,
appel-
defendant and
$30,555.12
They claimed the
as
damages,
lee.
physical
well as
and emotional
and
losses
punitive damages. Their action was dis-
FOSHEIM,
Justice.
Retired
upon
missed for
to
failure
state a claim
Floyd
(Swiers)
B.
and Eileen
Swier
granted.
which relief could be
Prior
(Bank)
third-party
sued Norwest
on
Bank
action,
dismissing
grant-
the trial court
beneficiary
negligence
and
theories. The
ed Swiers’
complaint
motion
amend their
granted
court
trial
motions
dismiss both
negligence
include a
cause of action.
causes of action.
affirm.
We
negligence
claim was added after a
In October of
Swiers received a
deposition of a bank official revealed that
$179,982.93 loan
Bank on a
from
demand
agents
Bank’s
were unaware of the FmHA
ninety percent guaran-
note. The loan was
approval provision. Bank did not
resist
by
teed
Home
Farmers
Administration motion to amend.
(FmHA)
paid
over
scheduled
sev-
identify
We
first
true
must
years
originally
en
with an interest rate
nature of the motions before the trial
By
following
established
sum-
9¾%.
deciding
court.
In
Bank’s
dis
motion to
mer,
consistently
Swiers
fell short of meet- miss,
beyond
court went
the face of
ing the
their principal
full amount of
pleadings
deposition
and considered
testi
payments. By
interest
March of
Swi- mony,
contract,
the words of the
and other
$20,000
approximately
delinquent.
ers were
deciding
dismiss,
evidence.
In
motions to
That same month Bank informed Swiers
15-6-12(c) provides
SDCL
that where “mat
higher
that due to
interest
rates
pleadings
presented
ters outside the
are
market it would
have to
either
raise their
court,
excluded
the motion
interest rate or call in
loan. Swiers
summary judg
shall be treated as one for
increase,
reluctantly
to this
consented
and ment....”
The lower court’s
order
subsequent
during
also
opinion
memorandum
mo
denominated the
term of the loan.
in-
Due
tion as it was framed
Bank—a motion
creases,
$30,555.12
Regardless
paid
Swiers
more
dismissal.1
at-
label
argue
summary judgment.
1. Swiers do not
that this court should
Bank’s motion as one for
failing
reverse the
lower court
to consider
court, however,
tached
lower
“an
EL
ers’
loan are
contained
7 CFR
appellate court will review a dismissal un-
(1978).
1980.201through .294
pro-
These
der
summary judgment
the standards
nothing
visions contain
prohib-
which would
upon."
outside matters were relied
2A J.
raising
the interest rate while the
loan
Lucas,
1980,224
Moore & J.
Moore’s
Prac-
Federal
outstanding.
See 7 CFR §
(2d
1986). Therefore,
tice
ed.
If12.09[3]
Affirmed.
although classified as a motion to dismiss
*3
below, this court
apply
will
the familiar
WUEST, C.J., MORGAN and
Railway Co.,
Wilson Great Northern
83
JJ.,
SABERS,
concur.
(1968),
S.D.
157
19
N.W.2d
standards
applicable
summary judgment
review.
HENDERSON, J., dissents.
Under these standards
must
we
view the
MILLER, J.,
having
not
been a
Swiers,
favorably
evidence most
the non-
member of the Court at
the time this
moving parties,
place
the burden of
action
Court,
was submitted to the
did
proof upon
clearly
Bank to demonstrate
participate.
genuine
that no
issue of material fact exist-
ed and that it
entitled to
was
as a
HENDERSON,
(dissenting).
Justice
E.g. Meyerink
v. North-
matter of
law.
The majority opinion
upon
is based
a
Co.,
western Public
Service
faulty peg
conceptual
of
rationale: namely,
(S.D.1986); Wilson,
supra.
that de
approval
by the FmHA of an
facte
undisputed
It is
that Bank failed to re-
increase in interest rates existed.
quest
approval
FmHA
prior to the interest
There was a written
of
Contract Guaran-
However,
equally undisput-
increases.
it is
relating
tee
(a
to the
farming
Swiers
cou-
ed that FmHA was informed of the interest
ple) and the FmHA on a loan. Prior to said
through
reports
the semi-annual
contract, Northwestern National Bank
Also,
per-
furnished
Bank.
Mr. Swier
(Bank) accepted an interest
rate
a loan
sonally
agents
informed
of FmHA
two
to farmers at
This document
9¾%.
was
the increased
rates while
loan was out-
called a Conditional Commitment for Emer-
standing.2
circumstances,
Under these
we
gency Livestock Loan Contract of Guaran-
approved
hold FmHA
the increased interest
tee. There
changes
were
no
in
Because
complaint
prem-
rates.
Swiers’
is
approved
interest rates unless
by FmHA
alleged injuries flowing
ised on
from
county supervisor. Approval was never
approval,
Bank’s failure to
FmHA
obtain
Yet,
majority
obtained.
opinion holds
correctly
the trial court
dismissed the com-
a de
approval
there
was
of the in-
plaint.
facto
(which
creased interest rates. Bank
be-
Finally, we address
claim that
Swiers’
came
Brookings,
Morwest Bank at
South
regulations
under FmHA
Bank had no
Dakota) increased the interest rates over
right to
increase
rate.
interest
Swiers
agreed
and above the written
amount
1980.170(e)(1)(1986),
cite 7 CFR
which
§
paid
interest until the farmers
an excess of
provides
part:
initially
“The interest rate
$30,555.12.
established for each loan will remain con-
during
type
banking
It is this
activity
stant
the existence of the FmHA
alia,
inter
guarantee.”
precipitated,
has
regulation
governs
This
the economic
type
FmHA
downfall of
question
loans
not in
here
the American farmer. Bank
apply
and therefore does not
wanted to maintain
guarantee
this case.
the FmHA
1980.101(a) (1986).
See
7 CFR
but did not
Swiers
90%
want to adhere
§
received
FmHA emergency
agreement.
an
livestock
interest
9¾%
Bank behaved as
(EL)
regulations governing
loan. The
Swi-
it did
squeeze placed
because of a
upon it
agents
Brookings shortly
2. Mr. Swier asked the
whether Bank had
thereafter and never re-
right
According
to raise the rates.
to Mr.
plied
regarding
inquiry.
to Mr. Swier
his
There
deposition,
agents
Swier’s
one of the
told him he
is no evidence in the record whether the second
right
would check into whether Bank had the
raise the rates. This
agent
replied
inquiry.
ever
to his
agent
was transferred out
department
Perillo,
of bank in Sioux J. Calamari and J.
by the credit
The Law of
Falls,
(Norwest
17-2,
Sioux
(2d
1977).
Dakota
at
South
Contracts
ed.
§
Falls).
squeeze
in-
resulted
Essentially, the trial court ruled
that
Bank,
market rate.
faced
crease in the
farmers were incidental
beneficiaries
jump, attempted to
with this market rate
thereby barred
recovery
from
under a
many
in as
interest rates or call
low
raise
third-party beneficiary theory. Conceptual-
possible. According
loans as
I
ly, disagree
theory. Emergen-
with that
deposition
the sworn
Officer
cy livestock loans were established for
Zaske,
prior request
no
he made
farmers and ranchers —not
See 7
bankers.
FmHA as he did not know “it was neces-
C.F.R.
1980.221
further
that had he
sary”; and he
testified
Certainly,
provision mandating prior
necessary
approval,
secure
known was
approval
FmHA
primarily
was intended to
he
have increased the interest
would not
Swiers,
absolutely
benefit
as farmers.
It is
strong testimony against
rate. This is
no
conceded that
such
existed.
holding. “It
majority’s
Bank and the
*4
Therefore, Swiers,
third-party
as
benefi-
party
a
settled law in South Dakota that
ciaries, should be
in
entitled
redress
claim the benefit of a
a lawsuit cannot
Ironically,
per
majority
courts.
as
of
facts more favorable to
version
relevant
although
opinion,
Swiers were intended
given
he
in
his own contentions than
has
beneficiaries of a contract entered into
testimony.” Connelly
own
his
v. Sher
agency
govern-
of
United States
wood,
140,
(S.D.1978).
268
141
Ac
N.W.2d
ment, they
in
pursuit
are thwarted
their
of
Inc.,
Myrl Roy’s Paving,
cord: Swee v.
its benefits and instead are made victims of
(S.D.1979);
Per
a bank can get away
State of Dakota and with South
it.
KOHLMAN, BIERSCHBACH &
ANDERSON, Partnership, Appellee,
Plaintiff and VEIT, Administrator,
Roy Alvin Veit Veit, Individually
Greg doing busi- Sons, Defendants, Veit &
ness as Veit, Appellant.
Alvin Defendant *5 15300.
No.
Supreme Court of South Dakota.
July 1987. 12,1987.
Rehearing Aug. Denied Bormann,
Clark J. Bormann of Buckmei- Mobridge, Bormann, er for plaintiff appellee. Slocum, Mobridge,
Robert for defend- appellant. ant and MORGAN, Justice. brought
Plaintiffs this action to recover bookkeeping preparation and tax servic allegedly provided es defendants. At parties trial none made a motion any prior a directed verdict time returning jury a verdict for defenda After the nts.* returned its verdict defendants, trial granted court plaintiffs’ motion for notwith * Harold, Greg, and were all other counsel at trial. The partic- Alvin Veit named extent jointly ipation defendants attorney representing filed answer. other defendants at trial all three them eventual- clear. ly only represented withdrew and was Alvin