Simpson v. Bostwick

• Decision Date: 15 January 1957
• Docket Number: No. 49076,49076
• Citation: Simpson v. Bostwick, 248 Iowa 238, 80 N.W.2d 339 (Iowa 1957)
• Parties: T. A. SIMPSON and Lola E. Simpson, Appellees, v. L. V. BOSTWICK, Miriam K. Bostwick, W. F. Bostwick and Mrs. W. F. Bostwick, Appellants.
• Court: Iowa Supreme Court

Page 339

80 N.W.2d 339

248 Iowa 238

T. A. SIMPSON and Lola E. Simpson, Appellees, v. L. V. BOSTWICK, Miriam K. Bostwick, W. F. Bostwick and Mrs. W. F. Bostwick, Appellants.

No. 49076.

Supreme Court of Iowa.

Jan. 15, 1957.

Stuart & Stuart, Chariton, for appellants.

Robert Jackson and Jim I. Myerly, Des Moines, for appellees.

LARSON, Justice.

Under a written agreement executed in California January 24, 1950, plaintiffs T. A. Simpson and Lola E. Simpson deeded a farm located in Appanoose County, Iowa, to defendants L. V. Bostwick and Miriam K. Bostwick on January 31, 1950. There are other defendants, but when referred to herein these are the parties so designated. In part, the agreement provided as follows:

'Parties of the first part, Thomas A. Simpson and Lola E. Simpson, agree to exchange 375 acres in the County of Appanoose, State of Iowa, to wit: (farm description) * * * This property free and clear of all other encumbrances except a loan on real estate of $8,800.00, the original amount of which was $10,000.00 payable $300.00 per year on the principal, plus 4 1/2% interest. Next payment due March 1951--this year's taxes paid.

'For the property known as the Woodruff Trailer Park and Apartments at 15717 Woodruff Avenue, Bellflower, California, which is at the present time in litigation between L. V. Bostwick and James R. Carter, who are equal partners at this time. At the close of litigation, L. V. Bostwick and Miriam K. Bostwick are to transfer title to the above mentioned property to Thomas A. Simpson and Lola E. Simpson, subject to an indebtedness of approximately $28,000; * * *

'Simpson will not receive any income from said property or be subject to any payments on said property until title is delivered. All payments are to be up to date, including taxes, at the time title is delivered.

'It is further agreed that Thomas A. Simpson and Lola E. Simpson give immediate title to the farm to L. V. Bostwick and Miriam K. Bostwick; Mr. Bostwick agrees to advance $2500.00 to be returned to him in time to close his litigation on the Trailer Park. In the event Mr. Bostwick cannot deliver title to said property, then this $2500.00 is to be used as rent on the above farm for the year 1950, ending March 1951. If for some cause Bostwick cannot deliver title to the Woodruff Trailer Park and Apts., then he is to deed back the farm to Thomas A. Simpson and Lola E. Simpson. Both parties agree to transfer insurance.'

Plaintiffs' farm at the time was under foreclosure due to some arrearages. While there was some dispute as to whether defendants were aware of the foreclosure and arrearages when entering the agreement, we believe that under the record the trial court's determination that it was known or acquiesced in before accepting the deed was justified. On January 31, 1950, the date the deed was executed, defendants paid plaintiffs only $500 of the agreed $2,500. A few days later they sent the $1,981.14 via their representative to Iowa to cover the arrearages and reinstate the mortgage upon the Iowa farm. Mr. Bostwick's instruction of February 5, 1950, to complete the reinstatement of the mortgage if it could be 'straightened up for not more than $2,500.00' is quite persuasive. The trial court found defendants were aware of the situation and retained the $2,000 on the 31st of January to cover the approximate arrearages. It pointed out, as defendants made no effort toward obtaining reimbursement for the $1,981.14 actually paid for that purpose, the inference was strong that defendants knew of and acquiesced in that transaction. The record discloses plaintiffs themselves had made an effort to comply with the agreement and to reinstate the mortgage for $2,000 prior to defendants' payment, but for personal reasons were unsuccessful. It thus appears that defendants' subsequent attempt to accomplish the same result, as a new owner, was successful.

Plaintiffs contend the $500 plus the $1,981.14 account for the $2,500 advancement under the agreement. Defendants' contention was that $2,000 had already been advanced plaintiffs under several loans and that the $1,981.14 was a necessary and unexpected additional advancement. The trial court held no substantial evidence was introduced to prove these alleged prior loans, rejected that contention, and accepted plaintiffs' explanation of that transaction and their account of the agreed advancement.

Prior to March 1, 1950, defendants took possession of the Iowa farm by placing thereon as tenants a relative, W. F. Bostwick and his wife, also listed as defendants herein, and by them continued in possession until removed therefrom by the decree of the trial court March 1, 1956. Although defendants failed to obtain title to the trailer park before or at the referee's sale as contemplated in the agreement, and retained possession of their part of the proceeds of that sale, they refused plaintiffs' demand on April 6, 1951, that the farm be deeded back to them as per the agreement. The trial court held such failure breached the agreement, and that possession and title from that time on was wrongfully withheld from the plaintiffs.

There were charges and countercharges of fraud and misrepresentation, lack of good faith, etc. made by each party, but a careful examination of the record, we think, sustains the trial court's rejection of those allegations. True, we try this matter de novo, but the trial court was in the best position to determine the credibility of the witnesses, and we are satisfied there was insufficient proof to justify a finding of false representation, fraud, or even mistake. Considerable importance is given the testimony of Marvin Wood, Mr. Bostwick's brother-in-law, by the court. He testified he visited the farm the latter part of January, 1950, at defendant Bostwick's request, and gave him a report by phone. Wood said: 'Well, I tried to tell him like I saw it.' Defendants' actions thereafter, including the money advanced to clear the arrearages, do not sustain their claim of fraud and misrepresentation. They did not then complain or make demand on plaintiffs due to the revealed facts. The element of reliance is also totally lacking. It further appears, if there was any misrepresentation or misunderstanding, the deal was ratified by defendants' subsequent affirmative acts. Armstrong v. Breen, 101 Iowa 9, 69 N.W. 1125; Steckel v. Million, 210 Iowa 1139, 231 N.W. 387; Gipp v. Lynch, 226 Iowa 1020, 285 N.W. 659; 37 C.J.S., Fraud, § 37, p. 284.

Predicated upon a determination that title to the farm should be restored to plaintiffs, the trial court determined that an accounting was necessary to settle the various claims and counterclaims arising out of the relations of the parties during that period. It was undisputed that defendants had loaned plaintiffs $500 on a note on May 5, 1950, which had not been paid; that defendants had paid off the entire mortgage on the farm and had paid the taxes each year when due. Defendants further introduced evidence that many costly improvements were made upon the farm during the period they were claiming title and were in possession of the farm. On the other hand, plaintiffs introduced evidence as to the rental value of the farm from March 1, 1951 to March 1, 1956. Judgment was entered setting aside the deed of January 31, 1950, and quieting title to the farm in plaintiffs. Under the accounting defendants were granted a judgment of $616.16 against plaintiffs and possession of the farm was given plaintiffs as of March 1, 1956, with a lien established against the farm for defendants' judgment. Costs were taxed to defendants under other appropriate orders of the court.

Defendants enumerate seven propositions as a basis of their appeal to this court. We shall consider each of them herein.

I. Defendants contend that although this case was brought and tried as an action in equity, it is in fact an action at law to recover damages for the breach of a written contract to exchange real property; that the plaintiffs are therefore not entitled to have the deed set aside for the reason that no fraud, mistake or accident was charged or proven, and that therefore plaintiffs' recovery, if any, should be the difference in the value of the equities in the properties at the time of the breach, which amount would fully compensate the plaintiffs for their loss by not having the contract fully performed.

Plaintiffs point out, and we think correctly, that this contention comes too late. There were no objections by the parties to the forum below and the case was fully tried in equity. Whether the cause stated in the petition discloses a case properly triable in equity we need not consider, when the action so brought upon that theory is tried without objection. It will then be treated as one of equitable jurisdiction on appeal to this court. Wait v. Mystic Workers of the World, 140 Iowa 648, 119 N.W. 72; Reiger v. Turley, 151 Iowa 491, 131 N.W. 866; Steltzer v. Chicago, Milwaukee & St. Paul R. Co., 167 Iowa 464, 149 N.W. 501. There is, however, an aspect of specific performance in this action, for plaintiffs are demanding the return of their farm as provided in the agreement plus, of course, the prayer to quiet title in them. In addition, as heretofore indicated, we believe the facts related justify a court of equity in setting aside this deed.

The remedy of specific performance, of course, is an equitable remedy governed by equitable principles, but one coming into a court of equity for specific performance must be prepared to show that there is equity and good conscience in support of his claim to relief. Reiger v. Turley, supra; 49 Am.Jur., Specific Performance, § 6, pages 10-11. We therefore examine plaintiffs' claims with such in mind, and reexamine the accounting feature to determine for ourselves the parties' just compensation, if any. According to the record, which incidentally is much too large and detailed, every fact necessary to...