Smothers v. Nelson

Hill, Justice.

In 1976, finding himself in financial difficulty and unable to obtain bank financing, Plezy Lee Nelson turned to his friend Homer Smothers. They agreed that Nelson would convey his farm (about 183 acres) to Smothers for $130,000. Smothers would use the property as security for a loan from the Federal Land Bank, the proceeds of which he would use to pay Nelson the $130,000. This sales agreement was put in writing. They further agreed that Nelson would have the opportunity to repurchase the land from Smothers.

On March 1, 1977, Nelson conveyed the land to Smothers for $130,000, and…