Gatzemeyer v. Vogel, 76-1136

• Citation: 544 F.2d 988
• Decision Date: 24 November 1976
• Docket Number: No. 76-1136,76-1136
• Parties: Marvin GATZEMEYER et al., Appellants, v. Elmer VOGEL et al., Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

Page 988

544 F.2d 988

Marvin GATZEMEYER et al., Appellants, v. Elmer VOGEL et al., Appellees.

No. 76-1136.

United States Court of Appeals,

Eighth Circuit.

Submitted Nov. 9, 1976.

Decided Nov. 24, 1976.

Victor V. Sprengelmeyer, Dubuque, Iowa, for appellant; Peter W. Klauer, Dubuque, Iowa, on brief.

Glenn L. Norris, Des Moines, Iowa, for appellee; Lex Hawkins, Des Moines, Iowa, Charles L. Elson, Leon, Iowa, on brief.

Before HEANEY, WEBSTER and HENLEY, Circuit Judges.

HENLEY, Circuit Judge.

Marvin Gatzemeyer, Marlene Gatzemeyer, his wife, and Henry Neuhaus appeal from a judgment of the United States District Court for the Southern District of Iowa ¹ dismissing a complaint filed by Mr. and Mrs. Gatzemeyer and by Taylor & Martin, Inc. ² against Elmer Vogel, Lillian A. Vogel, his wife, and Arlan Vogel, the son of Elmer and Lillian Vogel.

Mr. and Mrs. Gatzemeyer sought specific performance of an alleged contract for the conveyance to them by the Vogels of three contiguous farms in Iowa which contained in the aggregate about 1500 acres of land. More than half of this acreage was included in what is called the Rockhold Farm, which was owned by Arlan Vogel. The other lands were included in the McFarland Farm and the Williams Farm which were owned by the elder Vogels; alternatively, the Gatzemeyers sought damages for breach of contract. Taylor & Martin sought to recover $30,000.00 by way of a real estate commission on the transaction.

The case was tried to the court without a jury. At the conclusion of the evidence plaintiffs tendered a proposed amendment to the complaint seeking, as alternative relief, specific performance of the alleged contract as it applied to the McFarland and Williams Farms.

The district court's jurisdiction of the case was based on diversity of citizenship and the requisite amount in controversy, 28 U.S.C. § 1332(a), and the rights of the parties were governed by Iowa law.

The district court filed a full memorandum opinion incorporating its findings of fact and conclusions of law. The district court found ultimately that a written instrument executed on February 16, 1973 by Mr. and Mrs. Gatzemeyer, Elmer and Lillian Vogel and Delbert Peterson, an agent of the real estate company, was not a final and binding contract, that in any event it was not binding upon Arlan Vogel, and that neither total nor partial specific performance nor damages should be awarded to the plaintiffs. ³ A judgment dismissing the complaint in its entirety was entered, and this appeal followed.

There is no dispute about the background facts of the case. Arlan Vogel and his wife, Martha, who is not a party to this litigation, purchased the Rockhold Farm in 1966. In 1968 the elder Vogels purchased the adjoining McFarland and Williams Farms. Thereafter, Arlan and Martha conveyed to Elmer and Lillian eleven acres of the Rockhold Farm as a homesite.

The three farms were adapted for operation as a unit, and they were so operated by Arlan Vogel and his father until 1972 when Elmer Vogel was injured in an accident involving a farm tractor and was forced to retire from active farming. His equipment was sold at auction with the sale being conducted by Mr. Peterson, who has been mentioned.

Thereafter, Peterson indicated to the Vogels that Taylor & Martin had a prospective purchaser for a large block of Iowa land, and Peterson suggested that all three farms be offered for sale as a unit. On July 12, 1972 Elmer and Lillian Vogel signed listing contracts covering the McFarland and Williams Farms, and Arlan Vogel signed a similar contract covering the Rockhold Farm. Martha Vogel, Arlan's wife, did not sign the listing contract executed by her husband. Those contracts gave Taylor & Martin the exclusive right to sell the farms, and it was stipulated that Taylor & Martin would receive for its services a commission of 6% of the sales price or prices.

The prospective purchaser whom Peterson had in mind in 1972 seems not to have been interested in buying the Vogel farms. However, in early 1973 Peterson showed the lands to Mr. Gatzemeyer who at the time was representing a farming corporation which was a prospective purchaser of the properties. That corporation turned out not to be interested in buying the lands, but Mr. and Mrs. Gatzemeyer conceived the idea of buying the farms for themselves.

Such a purchase would obviously require a large down payment, which turned out to be $50,000.00. The Gatzemeyers did not have such a large sum in cash, but Mr. Gatzemeyer owned a farm in Nebraska which was subject to a mortgage securing an indebtedness of $46,000.00. In order to enable the Gatzemeyers to make a $50,000.00 down payment on the Iowa lands, Taylor & Martin agreed to purchase the Nebraska farm for $96,000.00; such a purchase would have paid off the $46,000.00 mortgage and would have left the Gatzemeyers with $50,000.00 to pay to the Vogels as a down payment on the Iowa properties.

It was agreed that the Gatzemeyers, Peterson and the Vogels would meet at Elmer Vogel's home on February 16, 1973 and complete negotiations. Arlan Vogel was supposed to be present at the meeting, but he did not appear. Both Peterson and the Gatzemeyers were aware that Arlan owned some of the land involved, and that Elmer and Lillian were not in a position to convey good title to all three farms.

At the meeting held on February 16 negotiations took place between the Gatzemeyers, on one hand, and Elmer and Lillian Vogel, on the other hand. Peterson took part in the negotiations. It was agreed among the parties present that the Gatzemeyers would buy the three farms for a total price of $500,000.00. There was never any discussion of the possibility that the Gatzemeyers might buy the McFarland and Williams Farms without the Rockhold Farm or about the price that the Gatzemeyers might have been willing to pay and the price that Elmer and Lillian Vogel would have been willing to accept for the McFarland and Williams Farms standing alone.

In the course of the negotiations Elmer Vogel represented that he had the authority to speak for his absent son, Arlan, and indeed represented that the Rockhold Farm really belonged to him, although title to it was in the name of Arlan.

The $50,000.00 down payment would have left a principal balance of $450,000.00 to be paid on the over-all contract price of $500,000.00. That balance was to be discharged by fifteen annual payments of $13,334.00 each, and the final remaining balance was to be discharged in a lump sum at the end of fifteen years. The balance of the obligation remaining from time to time unpaid was to bear interest at the rate of 5.5% per annum. Taylor & Martin was to receive a commission of $30,000.00 to be paid by the sellers.

At one time during the negotiations, Lillian Vogel suggested that Arlan Vogel be consulted, and Mr. Gatzemeyer stated that there was no point in proceeding further in the absence of Arlan. Had Mr. Gatzemeyer adhered to that sound position, this lawsuit would never have arisen. However, as the district court found, both sides and the real estate agent were in...