178 Iowa 1 | Iowa | 1915
The request of the motion in the district court was that a verdict be directed against the Wolfes, on the grounds here indicated.- The defendant did not, in the district court, ask a dismissal of its own. appeal. The plaintiffs were all in court by virtue of defendant’s appeal, and by virtue of the initial proceedings which the defendant instituted against them. On such appeal, the question of damages was triable de novo. Except in one respect, hereinafter indicated, the
“This agreement, made this 19th day of September, A. D. 1913, between Lewis Maybauer of the county of Linn and state of Iowa, party of the first part, and John Wolfe and Tom Wolfe of the county of Linn and state of Iowa, party of the second part, as follows:
“The party of the first part hereby agrees to sell to the party of the second part, on the performance of the agreements of the party of the second part, as hereinafter mentioned, all his right, title and interest in and to the real estate situated in the county of Linn and state of Iowa, to wit:
“On'March 1, 1914, the 80-acre farm owned by first party, directly between Mt. Vernon, Iowa, and Lisbon, Iowa, directly opposite West Wood horse farm. In case of loss by fire or otherwise, first party collects insurance and credits same to second party on purchase price of farm for the sum of $23,200, payable as hereinafter mentioned. And the said party of the second part, in consideration of the premises, hereby agrees to and with the party of the first part, to purchase all his right, title and interest in and to the real estate above described, for the sum of $23,200, and to pay said sum therefor to the party of the first part, his heirs or assigns, as follows: $5,200 on March 1, 1914, as shown by note dated Sept. 19, 1913, and due March 1, 1914, and $18,000, March 1, 1915, as shown by one note to be given March 1, 1914, for $18,000, due March 1, 1915, given by second party to first party, at which time (March 1, 1914), deed and abstract tO' be given second parties. The $18,000 note secured by first mortgage on land sold herein, with interest from this date at the rate of 5 per cent, per annum on all such sums as shall remain unpaid, payable annually until all is paid. It is expressly agreed that the party of the second part shall keep all buildings on said premises constantly insured for two*5 thirds their value in good and satisfactory insurance companies for the benefit of the party of the first part . . . But if said sums of money, interest, and taxes are paid as aforesaid, promptly at the time aforesaid, the party of the first part will, on receiving said money and interest, execute and deliver at his own cost and expense a warranty deed of said premises as above agreed, accompanied by an abstract showing good and sufficient title to said property in the vendor, free and clear of all liens and incumbrance. If any of the land is condemned by Interurban R. R., all such money must be applied on payment of above note.”
It is manifest from the foregoing that the legal title of the farm in question rested in Maybauer until March 1, 1914. It is also manifest that the contract in question was obligatory upon, and enforceable against, both parties thereto. Neither party could escape the provisions of this contract except by the subsequent, consent of the other. Such subsequent consent would amount only to a subsequent contract. Under this contract, the full beneficial interest of Maybauer in the land was the agreed purchase price to be paid. Under the same contract, the Wolfes became subject to every future unfavorable contingency, and entitled to the benefit of every favorable one. Future depreciation of value would fall upon them. Future appreciation would inure to them. Future appreciation or depreciation could affect Maybauer only as affecting his security for'the purchase price. The contract was entered into before the appropriation of the right of way. It was known to the parties that a location of a right of way was in prospect as a possibility, but no rights had been asserted by or accrued to the railway company. In the absence of a contrary provision in the contract, it would seem too clear for dispute that if, after the execution of such binding contract, the' premises should be depreciated by the appropriation of a right of way, the damages accruing by reason of such appropriation should accrue to the purchasers, to the extent at least of having the same applied in reduction of the
“If any of'the land is condemned and taken by Interurban Railway, all such money must be applied to the payment of the above note.”
In the case before us, it is not very material whether we call the Wolfes the equitable owners of the land or whether we characterize their interests by some other term. They did have a fixed and vested interest in the real estate as such. Their interest was clearly affected by the appropriation of the right of way across such farm. The mutual rights of the plaintiff Maybauer and. the Wolfes were entirely consistent ; one was not adverse to the other. ' Both purchaser and seller understood their relative rights alike. In order
“With regard to any previous taking of the land, the respondents deny the petitioner’s right to recover damages, on the ground that the legal title had not vested in him at the time. But before the filing of the location of 1866, he had made a contract for the purchase of the land, and had thereby become equitably entitled to a conveyance upon the performance of the conditions of the purchase. The price which he had agreed to pay was made upon the assumption that he was to become the owner of the entire lot, unincumbered by the action of the respondents in appropriating a portion of it to their own use. Under the decree of this court, he has been compelled to fulfill his contract, and to pay the price of the entire lot. The effect of this decree is that he gets from his grantors less than he contracted for, and that all the damage resulting from the construction of the respondents’ railroad falls upon him, and not upon the parties from whom he derived his title. So far as it is a question between him and his grantors, there can be no doubt that the compensation for the taking equitably belongs to him, and not to them. If it should be paid to them, the result would be that they would be paid a second time for what they have already sold and been paid for. They have already been paid for the entire lot, and if, in addition to the price paid them, they were to proceed and recover damages for land taken after they had ceased to have the equitable title, on the ground that they had not parted with the legal title, they would be liable for any amount so recovered to the petitioner, as*9 liis trustees. It is a mere question whether he can claim the damages in his own name, or is bound to sue for them in the name of the grantors, in whom the legal title stood. We do not think that, in proceedings of this nature, there is any inflexible rule of law that requires the court to shut its eyes to the real interests of the parties, or to refuse to take into consideration their substantial rights and equities in relation to each other. All that the respondents are entitled to is that they shall not, after paying the damages to one party, continue liable to pay them to another.”
Also, in Clarke v. Ramuz, Law Reports (1891), 2 Queen’s Bench 456, Lord Coleridge discussed the same as follows:
“It appears to be well established in equity that, in the case of a contract for the sale and purchase of land, although the legal property does not pass until the execution of the conveyance, during the interval prior to completion the vendor in possession is a trustee for the purchaser, and as such has .duties to perform towards him, not exactly the same as in the case of other trustees, but certain duties, one of which is to use reasonable care to preserve the property in a reasonable state of preservation, and, so far as may be, as it was when the contract was made. ’ ’
In Stevenson v. Loehr, 57 Ill. 509, 511, it is said:
“'In such cases, then, if the railway company, condemning a portion of the land, pays damages, they would belong, in equity, to the purchaser. It is true, if the security of the vendor would be impaired by the receipt of the damages by the purchaser, he might insist they should not be paid to him until his security had been increased to that extent, and the purchaser would have a corresponding right to security, if about to be placed in jeopardy by their payment to the vendor. But the damages belong, in fact, to the purchaser, and if the vendor receives them he must hold them as trustee for the purchaser, to be accounted for when the purchase money is paid.”
IT. Upon the record before us herein, the defendant has
Upon the whole record, therefore, we hold that the Wolfes had such an interest in the real estate, both under their contract and under the subsequent warranty deed, as to make thém appropriate parties to the proceeding; and, being parties thereto, they were entitled to be heard upon the one issue in the case, viz.: What was the depreciation in the value of the farm in question by reason of the appropriation of the right of way? The order of the district court is, therefore,— Affirmed.