Moser v. Thorp Sales Corp.

• Decision Date: 25 November 1981
• Docket Number: No. 61995,61995
• Citation: 312 N.W.2d 881
• Parties: Clifton G. MOSER and Carlys C. Moser, Appellees, v. THORP SALES CORPORATION, Thorp Credit, Inc., Hoth and Willman Real Estate and Auctions, Col. Chuck Hoth, Col. Gay Oelke, Marguerite Schmitt, Richard Schmitt, Thorp Finance Corp. of Wisconsin, and ITT Thorp Corp., Defendants, Lola Jean Woods and Donald J. Woods, Appellants, The Federal Land Bank of Omaha, Appellee, and Gary Woods, Intervenor.
• Court: Iowa Supreme Court

Page 881

312 N.W.2d 881

Clifton G. MOSER and Carlys C. Moser, Appellees, v. THORP SALES CORPORATION, Thorp Credit, Inc., Hoth and Willman Real Estate and Auctions, Col. Chuck Hoth, Col. Gay Oelke, Marguerite Schmitt, Richard Schmitt, Thorp Finance Corp. of Wisconsin, and ITT Thorp Corp., Defendants Lola Jean Woods and Donald J. Woods, Appellants The Federal Land Bank of Omaha, Appellee and Gary Woods, Intervenor.

No. 61995.

Supreme Court of Iowa.

Nov. 25, 1981.

Frederick G. White, Waterloo, and Larry F. Woods, Oelwein, for appellants and intervenor.

Kathleen Neylan and Kevin C. Neylan, Elkader, for appellees Moser.

John Gnagy of Erhardt and Gnagy, Elkader, for appellee Federal Land Bank.

Considered en banc.

McGIVERIN, Justice.

This is another chapter in a saga of litigation and clouded title to a 285-acre Clayton County farm that began in 1971. The facts of the first appeal appear in Moser v. Thorp Sales Corp., 256 N.W.2d 900 (Iowa 1977) (Moser I ) and are detailed below only as necessary to understand subsequent developments. In the issues now before us, the district court granted summary judgment quieting title to the land in plaintiffs Clifton G. Moser and Carlys C. Moser. After trial, the court awarded them damages against defendants Marguerite and Richard Schmitt and Lola Jean and Donald J. Woods and dismissed Woods' counterclaim for reimbursement for improvements to the land and buildings. Woods appeal. Mosers and defendant The Federal Land Bank of Omaha cross-appeal. We modify, affirm as modified, and remand.

Mosers purchased the land from Schmitts for $42,180 at an auction on December 1, 1971, and the parties then signed a contract of sale. Mosers paid $8430 down and the transaction was to be closed on January 15, 1972. Schmitts refused to perform and defendant Thorp Finance Corp. of Wisconsin foreclosed a mortgage it held on the land. In 1973 Mosers brought an action for specific performance, quiet title and damages, which resulted in the appeal in Moser I. However, Woods were not parties to that litigation. Other evidence before the court in Moser I indicated Woods may have later purchased the land from Schmitts or else had become the assignees of defendant ITT Thorp Corp., purchaser of the farm at the foreclosure sale.

In Moser I we remanded to the district court for further proceedings. 256 N.W.2d at 912-13. Thereafter, Mosers amended their petition to add Donald J. Woods and his wife, Lola Jean Woods, (Woods), as defendants to the quiet title division. Mosers also amended their petition to add The Federal Land Bank of Omaha (FLB), a mortgagee of Woods, as a defendant in the quiet title division. Woods' son, Gary D. Woods, who had farmed the land with his father in 1977, intervened. Appropriate responsive pleadings were filed.

Mosers moved for partial summary judgment on March 10, 1978, asking that the court quiet title in them as against all defendants.

Woods counterclaimed for improvements made on the land in the event the court quieted title in Mosers.

The court entered its judgment and decree on the motion for partial summary judgment on April 10. The court concluded that neither Woods nor FLB were good faith purchasers for value without notice, since the parties had received actual notice of Mosers' prior claims to the real property. Title to the property was quieted in Mosers against all named defendants in the action.

On April 14 depositions, taken on behalf of Woods on April 5, were filed but not considered by the court in ruling on summary judgment. Woods moved to vacate and set aside the judgment and decree. The court overruled the motion. Woods and Schmitts filed notices of appeal. We stayed those appeals until all remaining issues had been ruled on by the trial court.

A second judgment was entered by the trial court on September 20, 1978. This judgment was based on a hearing limited to an adjustment of rents, profits and damages between Mosers and Schmitts, and a consideration of the final report of a receiver, who had been appointed to administer the land.

The court ordered the clerk to return $8430 to Mosers, which sum represented the down payment on the 1971 sales contract that was the basis of Mosers' claim to the land. The court also entered judgment for Mosers against Schmitts for $22,199.69 plus interest for: interest on Mosers' down payment; the difference between the equitable redemption amount of $45,479.14 paid into court by Mosers to fulfill a condition allowed by our remand in Moser I, 256 N.W.2d at 912, and the original purchase price plus interest from April 10, 1978, until date of judgment; and net rents plus interest for the years 1972, 1973, and 1974 when Schmitts were in possession of the land.

Mosers filed notice of appeal from portions of the September 20 judgment. We also stayed that appeal pending resolution of other issues.

On February 22, 1979, Mosers filed an application for authority to file supplemental pleadings. Over Woods' resistance, the trial court granted Mosers leave to file such pleadings. The court also ordered the case to be tried as a nonjury matter and classified all pending matters as equitable issues.

The supplemental pleadings filed by Mosers asked for an accounting from Woods for lost rents and profits, for damages to the buildings and land while Woods were in possession during 1975-77, and for general equitable relief. Woods answered and made demand for jury trial of the issues raised by the supplemental pleadings and their own counterclaim.

After trial to the court on the remaining issues, judgment and decree were entered on August 2, 1979. The decree reiterated the judgment for Mosers against Schmitts and the quieted title in Mosers as against all defendants. The decree also approved the receiver's report. The court awarded the 1977 corn crop to Woods and the intervenor and dismissed Woods' counterclaim. It entered judgment in favor of Mosers against Woods for $51,065.51 with interest, less credit for real estate taxes paid by Woods. This sum comprised the rental value, plus interest, for the crop years 1975 1976, and 1977 and the value of straw removed from the farm by Woods. Due to the pending appeals, no ruling was made as to ownership of the $45,479.14 paid into court by Mosers in response to our opinion in Moser I. See 256 N.W.2d at 912. Mosers, Woods, and FLB each claimed this fund.

Woods appealed and Mosers and FLB cross-appealed. Gary Woods joins with Lola Jean and Donald J. Woods as to the 1977 corn crop issue. The other parties are not participating in this appeal.

The judgment of August 2, 1979, was not final as it did not dispose of all issues in the case. However, to expedite this prolonged litigation, we will grant an interlocutory appeal as to the issues properly preserved and raised before us. Iowa R.App.P. 1(c), 2(a). State ex rel. Parcel v. St. John, 308 N.W.2d 8, 9-10 (Iowa 1981).

We will consider the following issues:

1. Were Woods good faith purchasers of the land for value without notice?

2. Was the summary judgment quieting title in Mosers appropriate?

3. Were Woods entitled to recover damages for improvements as occupying claimants?

4. Was it proper to allow Mosers to file supplemental pleadings?

5. Were Woods entitled to a jury trial?

6. Who has priority to the $45,479.14 fund Mosers deposited with the Clayton County Clerk of Court pursuant to our directions in Moser I ?

7. Were Mosers entitled to recover for damages to the land and buildings for the time while Schmitts and Woods were in possession?

8. Who is entitled to possess the crops raised by Woods?

9. Were the rent awards to Mosers properly calculated?

10. Are Woods entitled to a setoff for real estate taxes paid while in possession?

Actions for quiet title lie in equity. § 649.6, The Code 1981. As such, our review is de novo. Iowa R.App.P. 4, 14(f)(7). In addition, when an action is tried to the district court in equity, we review the record de novo. Strong v. Wood, 306 N.W.2d 737, 738 (Iowa 1981). The present appeal was tried in equity and generally we would review the record de novo. However, even in an equity case we cannot find facts de novo in an appeal from summary judgment. Lyon v. Willie, 288 N.W.2d 884, 894 (Iowa 1980). Therefore, on the issues adjudicated by the trial court in its partial summary judgment of April 10, 1978, we review for correction of errors at law. Iowa R.App.P. 4. The only issue finally adjudicated by the partial summary judgment was the quiet title issue, with title quieted in Mosers because Woods were found not to be good faith purchasers for value without notice.

I. Status of Woods as bona fide purchasers. Woods assign as error the trial court's summary judgment that they were not good faith purchasers for value without notice. We find no error. "The rule is well established that to be a good faith purchaser for value, one must show that he made the purchase before he had notice of the claim of another, express or implied." Janssen v. North Iowa Conference Pensions Inc. of Methodist Church, 166 N.W.2d 901, 908 (Iowa 1969). Because of the actual, imputed and constructive notice Woods received before their purchase from Schmitts on March 24, 1975, we agree with the court that, as a matter of law, a genuine issue of material fact does not exist on the issue of Woods' lack of notice of Mosers' claims and therefore Woods are not bona fide purchasers.

A. Notice from real estate agent. Donald Woods was informed by Max Jennings, a real estate agent who attempted to sell the property for Schmitts in December 1974, that Mosers had a claim to ownership of the farm when the agent showed the farm to Woods on December 8, 1974. We believe that this actual knowledge of Mosers' claim was sufficient to undermine Woods' claim of lack of notice. "A person who has sufficient information to lead him to a fact is deemed conversant with it, and a person who has notice of facts which would cause a reasonably...