Martin v. A. W. Moeller & Son

• Decision Date: 17 October 1950
• Docket Number: No. 47714,47714
• Parties: MARTIN v. A. W. MOELLER & SON et al.
• Court: Iowa Supreme Court

Page 345

44 N.W.2d 345

241 Iowa 1033

MARTIN v. A. W. MOELLER & SON et al.

No. 47714.

Supreme Court of Iowa.

Oct. 17, 1950.

Gray & Gray, of Rockwell City, for appellants.

F. Wendell Miller, of Rockwell City, for appellee.

SMITH, Justice.

This case involves interpretation of a contract under which plaintiff raised and sold 3910.6 bushels of hybrid seed corn under a contract that provided: 'The Purchaser agrees to pay to the Grower (plaintiff) on all accepted corn the full amount per bushel plus premium of 25cents per bu. above the local price of Yellow shelled corn. Choice of the market to be selected by the Grower between November 15th, 1948, and May 15, 1949; if no selection is made by May 15th, the market on that day shall be accepted.'

Plaintiff contends the words 'local price' and 'market' permit him to select the amount per bushed offered by the U. S. Department of Agriculture Commodity Credit Corporation for sealing corn or entering into a purchase agreement for future delivery. Defendants argue those words 'refer to a price or value in an open market created as between one who desires but is not compelled to buy and one who is willing but not compelled to sell.' Reducing their own formula to practical terms, defendants argue the contract means 'elevator price.'

That is the lawsuit. The facts are mostly stipulated, subject to appropriate objections. The 'sealing price' was $1.35 and the 'elevator price' $1.15 per bushel on May 5, 1949, the date chosen by plaintiff. Under the contract therefore plaintiff was entitled to $1.60 per bushel according to his construction, or to only $1.40, under defendants'. The trial court adopted plaintiff's interpretation and rendered judgment accordingly. Defendants have appealed.

Plaintiff offered in evidence the form of 'Purchasing Agreement' used by the Commodity Credit Corporation under which the Corporation would loan the grower (land owner or tenant) on corn sealed in crib on the farm the fixed 'sealing' price. Under it the borrower could either sell (if he could find a buyer to pay more than the 'sealing' price) and pay off the loan in cash; or he could on the day his loan fell due, tender the corn to the Corporation in payment of the loan.

I. It is shown the parties had dealt in previous years (in 1946 at least under a written contract similar to the one in question here) and plaintiff on those occasions chose and was paid the elevator price. But it also is shown that in those years the elevator price was higher than the sealing price.

Defendants argue that the practical interpretation thus placed on the contract by the parties themselves in the past is the best indication of their intent in entering into it, citing Dalton v. Treinen, 191 Iowa 1185, 181 N.W. 437; Tooey v. C. L. Percival Co., 192 Iowa 267, 182 N.W. 403; and Winfield State Bank v. Snell, 208 Iowa 1086, 226 N.W. 774; that such construction is entitled to great, if not controlling, weight, citing Frank Cram & Sons v. Central Trust Co., 205 Iowa 408, 216 N.W. 71; and that the courts will follow such practical construction, citing Bowman v. Swanwood Coal Co., 201 Iowa 1236, 207 N.W. 591.

These propositions are sound but they do not solve the present controversy. Plaintiff claims the terms of this contract permit him to choose either sealing price or elevator price. Naturally he would choose the higher which in former years was the elevator price. His choice would not be an interpretation that he was compelled to resort to the price chosen.

The language of the contract certainly gives the purchaser a choice of markets and that recognizes the possibility of more than one to choose from. Defendants would interpret it as a choice between 'elevator' prices varying from time to time--a choice of the day whose 'elevator' price he would receive. Plaintiff's argument implies, on the contrary, the possibility of more than one kind of price from which to choose as well as the day on which the selection would be made.

II. Examination of the briefs, as well as our own research convinces us we are dealing with a problem without precedent in the books. As well said by the trial judge in his opinion (which we are tempted to set out verbatim as our own), 'It is obvious the problem * * * is not only new but one created by governmental policies not anticipated when the contract form used by the parties was originally prepared. It may be that changing governmental policies and artificial price supports do violence to former customs and preconceived notions. That fact alone, however, * * * certainly cannot support a denial of their existence and their import.

'New statutes, new programs and changed marketing conditions create new elements which must be considered in construing contractual obligations. The law recognizes these changes and attempts to integrate them into our legalistic thinking.'

Again the trial judge says: 'When, pursuant to its authorization...