Collins v. Isaacson
| Decision Date | 09 April 1968 |
| Docket Number | No. 52846,52846 |
| Citation | 158 N.W.2d 14,261 Iowa 1236 |
| Parties | Edward W. COLLINS and Winifred L. Collins, Appellants, v. Delaine P. ISAACSON, Appellee. |
| Court | Iowa Supreme Court |
John K. Petersen, Red Oak, and Getscher & Getscher, Hamburg, for appellants.
Genung & Rogers, Glenwood, for appellee.
Edward W. and Winifred L. Collins, husband and wife, brought this action, tried in equity, to recover possession of an 80 acre farm occupied by defendant Delaine P. Isaacson and damages for withholding it following plaintiffs' attempt to forfeit a lease and option to purchase held by defendant. There was a decree for defendant on the grounds plaintiffs' title was for security only and good cause to forfeit defendant's rights was not shown. On plaintiffs' appeal we affirm.
I. On September 20, 1963 Donald Isaacson purchased the land on contract from one Bergstrom for the agreed price of $17,000. $1700 was paid on the execution of the contract, the balance of $15,300 was to be paid March 1, 1964 on delivery of deed and abstract of title. The purchaser became ill prior to March 1 and was unable to complete the purchase. Edward W. Collins, whom we call plaintiff, unless otherwise indicated, was a livestock buyer who had dealt with Donald and knew his son Delaine, the defendant. Collins told defendant 'If you're in any trouble with that farm, I have money.'
In late February, 1964 defendant and his father asked plaintiff if he still had the money available to 'rent' on the farm and he said he did
Pursuant to this agreement Donald and his wife (defendant's parents) executed and delivered to plaintiff on February 24, 1964 a quitclaim deed to the farm and assignment of the real estate contract. Plaintiff completed the purchase of the farm from Bergstrom, the vendor, and took title thereto by warranty deed from him. On February 28 plaintiff made and delivered to defendant a written lease to the farm for three years commencing March 1, 1964 at an annual rent of $1400 evidenced by three promissory notes payable November 1 of each of the three years.
Also on February 28 plaintiff gave defendant a written option to purchase the 80 acres during the term of the lease for $15,300 plus all costs and expense of plaintiff in consummating the sale under the option if exercised. The written option also provides that if it is exercised the rent is to be pro-rated to the time of the purchase. It will be recalled $15,300 is the amount plaintiff paid Bergstrom as the balance of the purchase price.
The lease contains these provisions:
'In the event the second party shall fail to make the payments contemplated in this contract, or perform any of the covenants herein, at the times hereinabove specified, the first party, may, at their option, declare this contract forfeited by serving 30 days notice of forfeiture as provided for by the laws of Iowa, and if the second party shall fail to pay said sum or sums, or perform said conditions, in default within said 30 day period, this contract shall stand forfeited and all payments made hereunder shall become the property of the first party as liquidated damages for the breach of contract.'
The trial court held and plaintiff virtually conceded in argument the quitclaim deed, assignment of the land contract, plaintiff's advancement of the balance of the purchase price and the lease-option agreements were all parts of the same transaction which took place during the last week in February.
In late October 1964 plaintiff accepted a check signed by defendant's father for the agreed rent for the first year of the leasehold. About May 1, 1965 plaintiff was displeased because defendant and his father refused to sell cattle to plaintiff at the price he offered to pay. It is not claimed the Isaacsons were under any obligation to sell to plaintiff. It also appears that in February 1965 plaintiff took offense because defendant and his father attempted to combine the farm in question with one owned by the father in order to secure a more favorable corn base from the county ASC office. The favorable ruling was not obtained because plaintiff, as landlord of the 80 acres, refused to consent thereto. We do not understand defendant or his father acted illegally or improperly in applying for the favorable ruling.
On September 27, 1965 plaintiff mailed to defendant a notice of termination of the lease because of claimed violation by defendant of the condition, quoted supra, that any controversy caused by his father 'on any subject concerning this lease' should cancel and forfeit it. The notice called upon defendant to return the premises to plaintiff on March 1, 1966. On October 18, 1965 defendant paid plaintiff the rent due November 1.
On March 3, 1966 plaintiffs caused to be served upon defendant a second notice, entitled 'Notice of Forfeiture of Real Estate', declaring the lease forfeited for his alleged failure to comply with certain of its terms and conditions and for permitting waste to be committed. This notice does not assert any violation of the condition to which the first notice refers--that defendant's father had caused a controversy with plaintiff on a subject concerning the lease.
The testimony, including that given by plaintiff (Mrs. Collins did not testify), makes it clear, and his counsel admitted in argument, the basis for the attempt to forfeit defendant's rights was the one referred to in the first notice. Some of defendant's acts referred to in the second notice were with plaintiff's consent or he testified they were unimportant.
The trial court found after carefully reviewing the record there was no breach by defendant at any time of any material term or condition of the lease-option undertaking and plaintiffs wholly failed to establish they were entitled to exact a forfeiture thereof.
We conclude it is not at all clear that either of the two principal matters involving defendant's father, plaintiff's unsuccessful attempt to purchase cattle from the Isaacsons and their application to the ASC for an enlarged corn base by combining the 80 acres with another farm, was a controversy caused by the father on a 'subject concerning this lease', as the lease provides. We will say more about this later.
In any event, during the time allowed in the lease (see the provision quoted supra) and the first notice of forfeiture, defendant made a good and sufficient tender to plaintiff (See section 538.6 Codes 1962, 1966) of the purchase price of $15,300, plus the pro rata rental on the land, reasonable legal fees, cost of revenue stamps for the deed, continuance of the abstract of title to date and recording fees incurred by plaintiff in conveying the property, all in accordance with terms of the option agreement. It was stipulated this tender should be deemed a continuing one.
The trial court decreed plaintiffs' title was in the nature of an equitable mortgage, defendant had not breached the lease or option agreement, and that upon payment to plaintiffs of the sums tendered plus $1480 rent due November 1, 1966, between the time of trial and entry of the decree, plaintiffs must convey the land to defendant and deliver to him an abstract of title showing merchantable title in plaintiffs subject only to defendant's interest in the land. Plaintiffs' petition was dismissed.
II. Plaintiffs-appellants assert two propositions relied on for reversal: (1) Claimed error in finding defendant did not breach any material term or condition of the lease-option agreement and plaintiffs have failed to establish their right to exact a forfeiture thereof. (2) The decree is contrary to law in holding the lease-option agreements constitute a single contract in the nature of an equitable mortgage.
In considering these propositions, especially the first, on this review de novo we give weight to the fact findings of the trial court but are not bound by them. Rule 344(f)7, Rules of Civil Procedure.
III. Plaintiff's argument under the first of these propositions refers to three provisions of the lease, other than the one about a controversy with defendant's father, it is claimed defendant violated. As previously indicated, it is clear plaintiff did not regard any of them as important and that what triggered the attempt to forfeit the lease were the incidents regarding the cattle purchase and, previously, the application to the ASC.
Plaintiff testified: 'What I objected to was Donald Isaacson attempting to change my corn base to his land.' Again,
Regarding the Isaacsons' refusal to sell the cattle to plaintiff he testified: 'The next morning I went out and they had sold the cattle to someone else. I said 'Well, if Donald is into it that is the last dealings we will have. I am going to cancel the thing.''
As before indicated, if we give weight to the trial court's fact findings, we are not persuaded defendant violated the...
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