Watson v. Lewis

• Citation: 272 N.W.2d 459
• Decision Date: 20 December 1978
• Docket Number: No. 2-61237,2-61237
• Parties: Tom W. WATSON, Appellant, v. C. Ira LEWIS, Appellee.
• Court: United States State Supreme Court of Iowa

Page 459

272 N.W.2d 459

Tom W. WATSON, Appellant, v. C. Ira LEWIS, Appellee.

No. 2-61237.

Supreme Court of Iowa.

Dec. 20, 1978.

Robert J. Stone and Thomas M. Horan, Marion, for plaintiff-appellant.

Keith D. Mossman and Van D. Zimmer, of Mossman & Mossman, Vinton, for defendant-appellee.

Considered by REYNOLDSON, C. J., and LeGRAND, McCORMICK, McGIVERIN and LARSON, JJ.

LARSON, Justice.

Tenant under alleged farm lease commenced an action under Chapter 646, The Code, demanding possession of the land, or in the alternative, money damages for refusal to deliver possession. A separate count, pled in the alternative, claimed damages under quantum meruit for plowing done in anticipation of the following crop year. Following a jury verdict for plaintiff under Count I, the trial court granted judgment notwithstanding the verdict as to that count and a new trial as to Count II. No appeal has been taken as to Count II. Upon tenant's appeal of the order granting judgment notwithstanding, we affirm the trial court.

The sole issue here is the measure of damages to be applied in a claim for breach of a crop-share lease.

A motion for judgment notwithstanding the verdict under Rule of Civil Procedure 243 must stand on grounds raised in the directed verdict motion. Dutcher v. Lewis, 221 N.W.2d 755, 760 (Iowa 1974); and on appeal from such judgment, review by an appellate court is limited to those grounds raised in the directed verdict motion. Meeker v. City of Clinton, 259 N.W.2d 822, 828 (Iowa 1977). When considering a motion for judgment notwithstanding the verdict, the court must view the evidence in the light most favorable to the party against whom the motion is directed, in this case, the plaintiff. Winter v. Honeggars' & Co., 215 N.W.2d 316, 321 (Iowa 1974).

The evidence, when viewed in this light, showed that in September, 1976, the parties entered into oral negotiations for the lease of two tracts of farm land of 100 and 200 acres respectively.

After lengthy discussions, the parties agreed Watson could farm the land for the next crop year. Several details concerning cost sharing on fertilizer and seed, and site of crop deliveries were discussed. The negotiations and farm tour lasted several hours; the parties thereupon shook hands on the deal. Lewis said his "word was good;" that he would have a written lease drawn up "in about three or four weeks" but wanted Watson to do some fall plowing "to show his good faith."

Following this meeting, Watson did plow approximately 175 acres. After the plowing was completed, Watson found out that Lewis had rented the land to another tenant for the following crop year under a five-year lease. Plaintiff then commenced this statutory action of "ejectment" and, in the alternative a claim under quantum meruit for the value of his plowing.

There was some dispute at the trial as to whether the discussions of the parties outlined above created an oral lease, or were only preliminary, with no binding effect until preparation of a written lease because of the unresolved issue of cost-sharing on crop expenses and other matters.

Negotiations by proposed lease parties may be deemed to have resulted in a completed lease, rather than merely an option or agreement to negotiate further, even though certain customary provisions of such leases are omitted. President Street Corp. v. Bolton Realty Corp., 300 N.Y. 63, 89 N.E.2d 16 (N.Y.Ct.App.1949).

Appellee in this court adopts the appellant's statement of the facts, apparently conceding that a lease did exist. In any event, under our view of the law it is not material whether or not a valid lease existed, because the tenant failed to establish his damages under a lease, even if it was established.

At the trial, tenant Watson sought to prove his damages by introducing evidence of the rental value, based upon the amount he had paid for similar land in the area. Without passing on the question of whether this properly established the fair and reasonable rental value, we hold this is not the proper measure of damages here. He did not introduce evidence of any excess of rental value over that which he had agreed to pay (his "rental bargain") nor of any lost profits, recoverable as incidental damages in certain cases. See e. g., Dopheide v. Schoeppner, 163 N.W.2d 360, 366-67 (Iowa 1968). He testified that he was able to only partially replace this land, and was damaged because of his inability to fully use his farming capabilities. However, he did not attempt to establish how much these incidental damages were.

As to his quantum meruit claim, Watson did attempt to establish the value of the plowing, but that claim, under Count II, is not before us.

Chapter 646, The Code, is a codification of the common-law action of ejectment, Jensen v. Nolte, 233 Iowa 636, 10 N.W.2d 47 (1943), and provides, in addition to ejectment, for alternative relief in money damages in the event the tenant may not be put in possession of the land. See § 646.18, The Code. No measure of damages is set out in this chapter. This statutory remedy is available to a lessee of real estate, as well as parties claiming ownership interests. Jensen v. Nolte, 233 Iowa at 639, 10 N.W.2d at 49.

The action is by ordinary proceedings and no other causes of action shall be joined with it. Section 646.1, The Code. Despite the prohibition of joinder, Count II was included in the petition to seek recovery for the value of plowing done and no objection was made by defendant. The jury was instructed that it could return a verdict for Watson under one theory, or the other, but not both.

The defendant, following the plaintiff's evidence, moved for a directed verdict on several grounds, including the ground that no evidence regarding a proper measure of damages had been presented in support of the claim under Count I. This motion was overruled.

Following presentation of the defendant's case, the motions were renewed and again overruled. The jury was thereafter charged in Instruction 6 regarding the measure of damages as follows:

If . . . you find that the plaintiff is entitled to recover damages under count I of his petition, then you shall determine the amount of damages based upon the fair rental value of the real estate for the term of the lease.

The term "fair rental value" was not defined in the instructions.

The jury returned a verdict for the plaintiff under Count I (ejectment) but pursuant to the court's instruction, did not render a verdict as to the alternative Count II (quantum meruit). Following the verdict, Lewis moved for judgment notwithstanding the verdict as to the measure of damages and other matters, and the motion was granted. The trial court stated that no evidence was introduced as to loss of income or profits plaintiff having shown only its reasonable cash rental basis.

The trial court, on its own motion, also entered an order granting a new trial as to Count II. It stated that: "had a directed verdict been granted as to Count I, then the jury would have passed on that count alone. As these two counts were pled and submitted in the alternative . . . no verdict was rendered on count II of the petition."

Defendant does not appeal from the trial court's granting, sua sponte, the new trial under Count II, and we therefore limit our review to the matter of the judgment notwithstanding the verdict.

In determining the propriety of this order, we view the evidence in accordance with the same principles required for review by a trial court on a motion for directed verdict, i. e., when viewed favorably for plaintiff, was there sufficient evidence to generate a jury question? Meeker v. City of Clinton, 259 N.W.2d 822, 828 (Iowa 1978).

In determining the sufficiency of the evidence as to damages, we must first determine the proper measure to be applied. Appellant contends it is based upon the rental value of the premises for the time during which the tenant is deprived of possession. Here, he testified he paid $70 per acre as rental for similar land, and claimed that he should recover that amount under the facts of this case.

Appellant relies upon Larson v. Baker, 235 Iowa 200, 16 N.W.2d 262 (1944) for authority for his contention that rental value is the measure for lessee damages. In that case the defendant refused to deliver possession to the lessee, who had paid $50 advance rent. This was returned to lessee and the premises rented to a third party. The municipal court granted judgment for the lessee for $50, and this was affirmed by the supreme court. Apparently Watson here contends that the advance rental paid constituted the proper measure of damages. Other than the fact that the amount advanced by lessee and damages allowed by the trial court were identical amounts, there is nothing in that opinion to substantiate Watson's claim. To the contrary, the supreme court said, as to this amount:

The damages allowed were almost nominal. The evidence showed plaintiff had been put to the Expense of one move, and the Trouble of preparing for another. (Emphasis added.) 235 Iowa at 204, 16 N.W.2d at 265.

This language is more compatible with a measure of damages based upon lessee's loss of profits and incidental expenses than with plaintiff's theory of damages based upon rental value. In any event, the issue of the measure of damages was not raised in Larson.

Adair v. Bogle, 20 Iowa 238 (1866), is close on its facts with this case. This was an action by a lessee against the owner of farm land to recover damages for his refusal to allow the lessee to enter the premises. He alleged that, relying upon this lease, and at great expense and loss of time, he prepared to take possession of the farm, and failed to make arrangements to get other farm land. It was contended by the tenant that the measure of damages was the difference between the actual value of the leasehold interest and the amount provided by the agreement. The owner contended that this action amounted to one...