Lessenger v. Lessenger

• Decision Date: 05 March 1968
• Docket Number: No. 52845,52845
• Citation: 261 Iowa 1076,156 N.W.2d 845
• Parties: Audrey J. LESSENGER, Appellee, v. Ralph U. LESSENGER, Appellant.
• Court: Iowa Supreme Court

Page 845

156 N.W.2d 845

261 Iowa 1076

Audrey J. LESSENGER, Appellee, v. Ralph U. LESSENGER, Appellant.

No. 52845.

Supreme Court of Iowa.

March 5, 1968.

Morrison, Morrison & Morrison, Washington, for appellant.

Bailey C. Webber, Ottumwa, for appellee.

GARFIELD, Chief Justice.

Defendant Ralph U. Lessenger has appealed from decree granting plaintiff Audrey J. Lessenger a divorce, custody of the daughter (seven at time of trial in May, 1966), with reasonable visitation right to defendant, $80 a month child support until she graduates from high school or sooner marries, awarding each party an automobile subject to the indebtedness thereon and the household goods in the possession of each, also subject to indebtedness.

No complaint is made as to any of the above provisions and the decree, as to them, is affirmed.

The decree also provides that a farm of 397 acres, a dwelling in Wapello, all farm machinery, crops, stored grain and hay be sold under the court's supervision by plaintiff's attorney and defendant's then attorney, appointed commissioners for such purpose. From the sale proceeds the secured obligations are first to be paid, then costs of sale including real estate broker's commissions allowed by the court and expenses and charges of the commissioners for their services, then unsecured obligations, and from the net remaining proceeds pay plaintiff 1/3 as lump sum alimony and the remaining 2/3 to defendant.

The trial court retained jurisdiction over the commissioners and parties for making additional orders or directions to carry out the decree. Partial distribution of lump sum alimony, as it could be determined and available, might be made under the court's supervision and direction. Costs of the trial were divided equally between the parties.

This is the second appeal of this case. From the decree following the first trial plaintiff wife appealed, contending the allowances of lump sum alimony of $6000 and child support of $50 per month were inadequate and not based on sufficient evidence. We held the evidence was inadequate as to the essentials to be considered in determining the amounts of alimony and child support which were 'right,' as the term is used in section 598.14 Codes 1962, 1966. Accordingly we decided 'The decree must be set aside and the cause remanded with directions that the trial court permit a reopening for further evidence on the issues of the amount of child support and a proper property division or lump sum alimony.' Lessenger v. Lessenger, 258 Iowa 170, 176, 138 N.W.2d 58, 61.

Pursuant to our mandate, further evidence was taken before a different trial judge, largely as to the financial condition of the parties. Since, as stated, defendant appellant makes no complaint as to the allowance for child support, we have to consider only the provisions of the second decree for the benefit of the wife. We shall try to avoid needlessly repeating what is said in our former opinion but suggest it be read.

I. Defendant assigns error in several findings of fact by the trial court. Since this is an equity case in which our review of both facts and law is de novo (Rule 334, Rules of Civil Procedure) we need not separately consider these assignments. We do not reverse an equity case upon such complaints as these but draw such conclusions from our review as we deem proper. Arnold v. Arnold, 257 Iowa 429, 433, 133 N.W.2d 53, 56, and citation; Sawyer v. Sawyer, Iowa, 152 N.W.2d 605, 612.

II. The principal questions we have for decision are whether plaintiff wife is entitled to a third interest in the net proceeds of substantially all assets of the parties and whether they should all, especially the 397 acre farm, be sold by the attorney-commissioners appointed by the court, under the latter's supervision and direction.

The equity in the farm is much the most valuable asset of the parties. Defendant contends in effect its net value would be greatly reduced by carrying out the terms of the decree because of broker's commissions, fees and expenses of appraisers and the commissioners and, above all, capital gain tax. Defendant also calls attention to the fact he acquired the farm five years before his marriage to plaintiff and its sale, along with the farm machinery and equipment, would take from him his chosen means of earning a livelihood.

At the hearing after the remand a real estate broker called by plaintiff expressed the opinion the value of the 397 acres was then (May, 1966) $300 per acre. Plaintiff gave her opinion the value was then $120,000 to $125,000. In a deposition taken by plaintiff two months before the hearing defendant said he had no idea of the value of the farm, 'it is not for sale'. A farmerreal estate broker who owned an interest in six farms in the same county, some by vendor's lien or purchase money mortgage, testified for defendant the value of the farm was $75,000. The trial court made no finding as to its value.

As stated in our former opinion (258 Iowa 170, 172, 138 N.W.2d 58, 59), defendant purchased the farm for $30,000; at the time the parties were married it was mortgaged for $18,000. This mortgage was later replaced by one to Prudential Insurance Co. for $30,000. At the time of the second hearing $21,300 was owing Prudential. Also as stated in our former opinion, an additional mortgage was given to Farmers Home Administration (FHA) for $17,000. About $15,000 was owing on this mortgage together with interest from January 6, 1966. Taxes for 1965 of about $1550 plus penalty and interest remained unpaid.

Regrettably it was more than 17 months after the second decree was entered before the appeal was submitted to us. We have no way of knowing to a certainty whether taxes for 1966 have been paid nor the exact amount of secured indebtedness against the farm at any time subsequent to the hearing after the remand. It is probable, however, such indebtedness has substantially increased in amount from accumulated interest before now.

There is little doubt sale of the farm under the decree would result in substantial reductions from the gross sale price before the net balance could be arrived at and distributed to the parties. And we don't think it is best For either party to settle the matter or property division or lump sum alimony in the manner provided by the decree.

The commissioners are both busy lawyers, located some distance from the farm in another county. The then attorney for defendant, named one commissioner, has not represented defendant in taking or prosecuting the appeal. The attorney who succeeded him is located in a different county from both the farm and the home of plaintiff's attorney, the other commissioner. It would be inconvenient and expensive for the farm to be sold in this manner.

It is probable there would be a broker's commission. We may take judicial notice such commissions have increased to as much as five or six percent of the gross sale price, including the amount of incumbrances--not merely the balance of the sale price after paying the secured obligations, or the value of the owner's 'equity.'

On the question of liability for capital gain tax from sale of the farm, it was suggested in oral argument this might be avoided by replacing the farm with other property of similar or related use, thus amounting to an involuntary conversion. A classic example is...