Vrba v. Mason City Production Credit Ass'n

• Decision Date: 15 January 1957
• Docket Number: No. 49025,49025
• Citation: 80 N.W.2d 495,248 Iowa 264
• Parties: Duane VRBA, by Evelyn Vrba, his next friend, Appellant, v. MASON CITY PRODUCTION CREDIT ASSOCIATION, R. F. Dunkelberg, Dan McArthur and J. R. Hanson, Appellees. Edward H. Vrba, Appellee.
• Court: Iowa Supreme Court

Page 495

80 N.W.2d 495

248 Iowa 264

Duane VRBA, by Evelyn Vrba, his next friend, Appellant, v. MASON CITY PRODUCTION CREDIT ASSOCIATION, R. F. Dunkelberg, Dan McArthur and J. R. Hanson, Appellees.

Edward H. Vrba, Appellee.

No. 49025.

Supreme Court of Iowa.

Jan. 15, 1957.

William D. Lyons, Cresco, for appellant.

Breese & Cornwell, Mason City, and Elwood, Anderson & Elwood, Cresco, for appellees.

GARFIELD, Justice.

A 14-year-old boy by his mother as next friend brought this equity suit for specific performance of an alleged oral contract to convey a 200-acre farm to someone designated by plaintiff or in lieu thereof for money damages. Following trial plaintiff was denied relief and title to the farm was quieted in defendant Mason City Production Credit Association. (For convenience we disregard the fact three officers of the corporation are also defendants.) The trial court held proof of the claimed contract was insufficient and any evidence thereof was within the statute of frauds, section 622.32, Code 1954, I.C.A. We affirm the decree.

Prior to March, 1955, the farm in question was owned by Edward H. Vrba or his wife. Defendant association held a second mortgage on it which was foreclosed. The association obtained sheriff's certificate for the farm at the sale on March 6, 1954. No redemption was made and defendant received sheriff's deed March 15, 1955. Mr. Vrba and his attorney, Mr. Laub, attended a meeting of defendant's board of directors on February 25, 1955 (about ten days before the time for redemption expired) in an effort to save the farm for the Vrbas. Plaintiff claims an oral contract was entered into at this meeting for defendant to convey the farm to someone designated by plaintiff upon payment of the amount defendant had invested in it.

There was an equity in the farm of several thousand dollars above the amount of the first mortgage (about $13,000) and the sum necessary to redeem from foreclosure of the second mortgage (about $13,500). However, Mr. Vrba was involved financially and did not want to redeem in his own name. He and his attorney decided it would be better to have the title in the Vrbas' 14-year-old son or someone for him.

At the February 25th board meeting Attorney Laub orally proposed that defendant sell the farm on contract to someone who would be appointed guardian for the boy, with a down payment of $4000, the rest of the purchase price to be paid within five years. It clearly appears the board did not accept this offer. As a witness Mr. Laub testifies he then asked one of the directors, 'What do you want, so Duane (plaintiff) can acquire this farm?' Laub says the director replied 'all we want is our money out of it. We don't want one cent profit,' and the other directors nodded approvingly.

Mr. Laub further testifies defendant's secretary-treasurer and a director informed him after the meeting the board went on record that the Vrba family should have the first opportunity to acquire the farm, he should have a chance to attend the next board meeting and would be advised of the time. Laub says he asked at the meeting how much was owing defendant and the secretary-treasurer replied it was about $12,500 'plus additional charges that were rather vague.' Mr. Vrba testifies two board members and the secretary-treasurer (not a member) said defendant would acquire the farm when the time for redemption expired, 'we would acquire it from them by paying what they had against us and were given until the next board meeting to complete the transaction.'

The next board meeting was on March 29. Mr. Laub, with the three Vrbas, attended. Laub says he had a 'C.D.' for $3,300 and had arranged with a banker named Farnsworth that his bank would honor a check for the rest of what defendant had against the farm. This total amount was then $13,499.28 plus some little added charges. Mr. Laub orally proposed to the board the farm be deeded to him and said he had agreed with Duane's parents to hold it in trust for Duane and was prepared to pay all defendant had in the property. The board informed Laub it had an offer of $33,000 for the farm and if he wanted to pay that amount he could have it. Mr. Laub was unwilling to offer more than the sum defendant had against the farm. Later, on April 12, defendant sold the farm on contract to one Madsen for $33,000.

It afterwards developed Laub had prepared a written contract before the second board meeting wherein he and the banker Farnsworth granted plaintiff an option for five years to purchase the farm from them for the amount they had invested in it plus $2000, together with interest at six per cent, the grantors to receive ten per cent of the rentals as a fee for managing the farm. The contract had the approval of plaintiff's parents but was never executed by anyone. It is apparent the contract evidences the arrangement Laub and Farnsworth would have made with the Vrbas if the former had acquired title to the farm.

Members of defendant's board and the secretary-treasurer admit Laub and Vrba were told at the first (February 25) board meeting that all defendant wanted out of the farm was what it had invested in it. Their version, however, is this was on the assumption it would be paid before the period for redemption expired and it made no commitment to convey the farm to anyone for any amount if it should acquire the title. Some of these witnesses testify they urged the Vrbas to redeem on several occasions during the redemption period, saying 'we don't want the farm, all we want is our money.'

Defendant's board members also say there never was any talk of deeding the farm to Mr. Laub until he made such proposal at the March 29th meeting.

The minutes of the February 25th board meeting contain this recital: 'The board of directors discussed the possibility of reselling the Edward H. Vrba farm in the event a sheriff's deed is obtained by the association. Mr. Laub and Mr. Vrba proposed that the association should sell the property back to the Vrba family--more specifically to the son under § guardianship arrangement. The board took no action and made no commitments pertaining to this matter.'

We will later mention some other evidence.

I. The trial court found in substance it was not shown there way any meeting of the minds of the parties upon any definite oral contract which should be specifically enforced. While our review is de novo we are justified in giving weight to these findings, especially since the case involves fact questions the trial court was in better position than we to decide. Bell v. Pierschbacher, 245 Iowa 436, 439, 62 N.W.2d 784, 786, and citations; Blum v. Keene, 245 Iowa 867, 899, 63 N.W.2d 197, 214.

II. Vanston v. Rupe, 244 Iowa 609, 618, 57 N.W.2d 546, 551, states: 'While the thought has been expressed in language that varies somewhat, it is well settled that specific performance of an oral contract to convey realty will not be decreed unless proof of the contract is clear, satisfactory and convincing. The various expressions of this thought found in our decisions are set out in Williams v. Harrison, 228 Iowa 715, 723, 293 N.W. 41, and citations. This does not mean that proof of the contract must be undisputed or to an absolute certainty--reasonable certainty is sufficient. Williams v. Chapman, 242 Iowa 294, 307-309, 46 N.W.2d 56, 63, 64, and citations.'

See also Bell v. Pierschbacher, supra, 245 Iowa 436, 439-440, 62 N.W.2d 784, 786, and citations; Rorem v. Rorem, 244 Iowa 980, 988, 59 N.W.2d 210, 214-215, and citations; 81 C.J.S., Specific Performance, § 143b; 49 Am.Jur., Specific Performance, section 21, page 32.

If we give the trial court's findings the weight to which they are entitled the conclusion is not warranted that plaintiff's claim has been established by the required degree of proof. No definite and complete contract has been proven. Oral assurances by individual members of defendant's board, assuming they were made, that...