Schnabel v. Vaughn
| Decision Date | 08 February 1966 |
| Docket Number | No. 51911,51911 |
| Citation | 140 N.W.2d 168,258 Iowa 839 |
| Parties | R. J. SCHNABEL, Appellant, v. Ben VAUGHN and Richard Garrison, d/b/a Ben and Dick's Auto Service, Appellees. |
| Court | Iowa Supreme Court |
Butterfield, Ball, Beekman & Peterson, Waterloo, for appellant.
Kildee, Keith, Gallagher, Lybbert & Martin, Waterloo, for appellees.
This is an action at law tried to the municipal court for rent due under a written lease. The trial court's findings of fact are binding on us if supported by substantial evidence. Here there is no substantial factual dispute.
The matter is one of those simple situations that become complex in recitation. Perhaps it will be better to refer to the facts in chronological order before considering the contentions of the parties.
While we are not favored with a description of the demised premises except by street and number, it is apparently large enough to house both an automobile repair shop and an automobile sales agency. Plaintiff had leased the premises from Leila A. Young, trustee, for term ending February 28, 1964. This lease is not in controversy and Leila A. Young, trustee, is not a party to this action.
Plaintiff subleased the premises to defendants for $313.07 per month from December 1, 1962, to February 28, 1964. This sublease was in writing, executed November 19, 1962.
On January 5, 1963, one and one-half months after the foregoing sublease was executed, plaintiff entered into another written sublease covering the same premises. This sublease was identical in form to the first one with the following significant exceptions. The sublessee was one David Sutherland, d/b/a West Side Auto Sales. The term was identical in the first portion of the two subleases in that they both expired March 28, 1964, but the second sublease contained this additional paragraph: 'It is hereby understood that the term of expiration as 30th day of May, 1963, shall be extended to the 31st day of December, 1963, with option to renew to the 28th day of February, 1964.' The rent remained the same.
On the same date, January 5, 1963, plaintiff, defendants and Mr. Sutherland all executed an additional document called a Rental Agreement, under which defendants rented the rear of the building from Sutherland on a month to month basis. No rental amount was listed. This instrument closed with the following paragraph, 'Rentee (defendant here) stipulates that he has knowledge of and agrees to all covenants made in rentor's (Sutherland's) Sublease Agreement with R. J. Schnabel.'
Plaintiff's petition is based on the first sublease. It ignores the second sublease and the rental agreement. Defendants' answer pleads the second sublease and the rental agreement, alleging that the second sublease canceled and superseded the prior sublease. By way or reply, plaintiff admits execution of the second sublease but denies that it in any manner canceled or superseded the first sublease.
Battle having been thus joined, plaintiff proved execution of the first sublease and that defendant not only took possession under it but continued to pay the $313.07 monthly rent to December 31, 1963.
Without objection David Sutherland testified for plaintiff that in the fall of 1962, he wanted to take over the West Side Auto Sales from one Charlie Kurtt, its then owner. He further testified a licensed auto dealer in Iowa would have to show he possessed a lease to the premises on which he conducted business. Mr. Sutherland also testified that he paid $125.00 per month rent on the premises to defendants Ben Vaughn and Richard Garrison from the time he took over the operation of the West Side Auto Sales on approximately January 1, 1963, through December 31, 1963, he did not pay any of the utilities on the premises, the utilities were paid by defendants Vaughn and Garrison, he never paid any money whatsoever to plaintiff R. J. Schnabel and defendants were operating the business on the premises for approximately one month before Mr. Sutherland had commenced to operate the West Side Auto Sales there.
I. Plaintiff's position is that the first sublease is valid and has been breached by the defendants. He admits the existence of the second sublease. By reason of the rule of law stated in Division II, infra, plaintiff must destory the effectiveness of the second sublease and subsequent rental agreement in order to sustain his position. This, of course, would necessitate admission of parol evidence. 'The parol evidence rule is one of substantive law, in the absence of fraud, accident, mistake or ambiguity parol evidence is not admissible to contradict, vary or enlarge the terms of a written contract.' Gordon v. Witthauer, 138 N.W.2d 918, decided by this court December 14, 1965. We there noted this rule is subject to exceptions. Plaintiff earnestly contends the parol evidence offered here falls within one of those exceptions.
The evidence offered by plaintiff would tend to prove that the sole purpose of the second sublease was to provide evidence Sutherland could use to obtain his automobile dealer's license. The implication being that the second sublease was never intended to be effective as between the parties. This evidence was rejected by the trial court when it specifically held the parol evidence rule in connection with such evidence was applicable.
The rule urged by plaintiff is: 20 Am.Jur., Evidence, section 1097, page 957. However, this exception is itself subject to a gloss that where the sham aims at an evasion of the law or a deception of other persons it will not be recognized as an exception to the parol evidence rule. The entire matter is well put and soundly decided by the Oregon court in the following language:
'Thus, the principal question is: Will the law permit...
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...from facts found others may fairly be inferred which will support the adjudication, such inference will be drawn. Schnabel v. Vaughn, 258 Iowa 839, 845--846, 140 N.W.2d 168; Rose v. John Deere Ottumwa Works, 247 Iowa 900, 907, 76 N.W.2d 756, and Van Riper v. Baker, 44 Iowa 450, It is also g......
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...technically. In case of doubt or ambiguity, findings will be construed to uphold, rather than defeat, the judgment. Schnabel v. Vaughn, 258 Iowa 839, 845, 140 N.W.2d 168, 172; Grall v. Meyer, 173 N.W.2d 61, 63 (Iowa IV. In considering whether notice of loss made a condition precedent to lia......
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