Case ID: iowa_127/html/0214-01.html
Source: Caselaw Access Project
Author: {"author": "Bishop, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Andrew Ferguson, Appellee, v. W. S. Epperly, et al., Appellants.
    1 Rents and profits: recovery by vendee of lands : election of remedies. Where the vendee of real property refuses to perform his contract by paying a balance due on the purchase price, recovery of judgment therefor, with interest, by an assignee of the vendor was an election to affirm the sale, and entitled the vendee to the rents and profits of the land from the date at which such payment should have been made under the contract.
    3 Action for rent: parties. In an action by- a vendee of real property to recover rents and profits from one in possession and holding the legal title, the evidence is reviewed and held sufficient to support a finding that the real ownership of the property was in another who was properly made a party to the action.
    3 Counterclaim. Failure óf a vendee to plead a cause of action for rents and profits as a counterclaim in an action for the balance of the contract price of real property, will not preclude him from' maintaining an independent action therefor after payment of the judgment for the contract price.
    
      Appeal from Davis District Gourt.— IíoN. C. W. Vermillion, Judge.
    Thursday, April 6, 1905.
    ActioN in equity for an accounting as for the rents and profits of certain real estate. The opinion states the case. There was judgment in favor of plaintiff against the defendant W. J. Steckel, and the latter appeals.
    
    Affirmed.
    
      H, 0. Taylor, for appellant.
    
      Payne & Sowers, Broolchart & Broohhart, and H. M. Eicher, for appellee.
   Bishop, J.

In the year 1899 one Bobb was the owner of the real estate in question; the same being a farm of about 200 acres situated in Davis county, this State. In the fall of that year Bobb contracted, in writing, to sell and convey said farm to the plaintiff, Ferguson, for the agreed price of $5,600. Ferguson then paid in cash the sum of $400, and the balance of the purchase price was to be paid March 1, 1900, when possession of the property was to be given. In February, 1900, Ferguson gave notice to B,obb that, for certain reasons having relation to title conditions, he would not •take the property. Thereupon Bobb assigned the sale contract to the defendant Epperly, and the latter on March 1, 1900, tendered to Ferguson a deed"of the land, and possession thereof, and demanded payment of the balance of the purchase price. Ferguson refusing to comply, Epperly commenced an action to recover such balance, with interest. Such action resulted in a judgment in favor of Epperly in the district court for the amount claimed, with interest from March 1, 1900, and on appeal to this court the judgment was affirmed. See Epperly v. Ferguson, 118 Iowa, 47. Following the affirmance, and on December 23, 1902, Ferguson complied with the judgment, and paid the amount thereof, with interest and costs, in full, to the clerk of the district court. It appears that with the assignment of the sale contract to him in February, 1900, Epperly went into actual possession of the farm, and that he continued in such possession until the payment of the judgment by Ferguson in December, 1902. This action was commenced to recover the rents and profits of the farm while in the possession of Epperly.

W. J. Steckel was made a party defendant —■ it being alleged, as against him, that he was the real party in interest in the transaction, Epperly being but a mere figurehead for him; and this fact question we may first de- ' # ° termine. Without attempting to set forth the evidence in detail, we may say that it appears with sufficient clearness that the assignment from Nobb to Epperly was. procured to be made by Steckel, and that the latter paid Nobb the purchase price. Upon the judgment being entered against Ferguson, it was at once assigned by Epperly to Steckel, and the latter received the amount of such judgment and interest paid by Ferguson. A memorandum of agreement between Steckel and Epperly was introduced in evidence, and therefrom it appears that, as between them, Ep-perly was to hold title pending the litigation, and, in the event of a failure to recover against Ferguson, he was to have the privilege of purchasing the farm from Steckel. In addition to all this, Epperly turned over to Steckel the proceeds of the farm during the period the same was occupied by him. We conclude that the finding of the district court to the effect that Steckel was the real party in interest was fully justified, and we shall so consider him in our disposition of the case.

Without doubt, appellant had the right on March 1, 1900, to make choice of the remedy he would pursue, and tbis be did by bringing action for tbe balance of tbe purchase price and interest. On bis part, tbe effect thereof was to confirm tbe sale to Ferguson, and this amounted to a recognition of tbe rights of the latter in tbe property as of tbe date when by tbe contract tbe sale was to have been carried into effect. Tbis must be so, for an action for tbe purchase price could not be maintained except upon bis assumption that Ferguson was tbe owner of the property, subject, of course, to a lien for tbe purchase price in favor of tbe vendor. True enough, Ferguson was seeking to avoid payment of tbe purchase price, but tbis could not have tbe effect to give Steckel tbe 'right to insist in one breath upon ownership in Ferguson, and a consequent liability to make payment, with interest, and in tbe next breath make claim in bis own favor, as against Ferguson, of tbe right to possess himself of tbe incidents of ownership; that is, tbe rents and profits. Having made bis election, tbe rights of Steckel were limited to a recovery of tbe purchase price and interest, and tbe attitude assumed by Ferguson could not operate to enlarge those rights. We are npt to be understood as bolding that Steckel, being in possession through Epperly, bad no right to thus remain and to care for tbe property. On tbe contrary, be might properly do so,-but only on tbe theory and to the extent of protecting tbe same as tbe security for tbe payment of bis debt. When, therefore, Ferguson made payment of tbe balance of tbe purchase price, and paid tbe penalty for bis delay by adding interest to principal, be became entitled to tbe undisputed possession of tbe property. Not only tbis, but tbe effect of bis payment of interest was to wipe out every, effect incident to tbe delay, and to vest in him all tbe rights of ownership as of tbe date when the interest payment began. Included in such rights were tbe rents and profits. In short, tbe occupancy of Steckel was, in legal contemplation, that of a mortgagee in possession. He was not chargeable with rent in tbe sense of compensation for bis possession, but be could not use tbe property for bis profit without accounting for so much as be actually received. It is clear that tbe amount actually realized by him was equal to tbe judgment entered by tbe district court. Authorities for tbe general propositions we have thus advanced ought not to be required, but see tbe case of Rea v. Ferguson, 126 Iowa, 704; also Zebley v. Sears, 38 Iowa, 511; Ashurst v. Peck, 101 Ala. 499 (14 South. Rep. 544); Siems v. Bank, 7 S. D. 338 (64 N. W. Rep. 167).

Tbe point is made in argument by appellant that plaintiff should not be permitted to recover in this case because, as it is said, be should have pleaded tbe right here asserted as au offset in the purchase-price action. Tbe contention is without merit. In tbe first place, it does not appear that the right had fully accrued when tbe purchase-price action was tried. But if it bad, there is no rule of law with which we are familiar that, bolds to the doctrine that a failure to plead an existing cause of action as a counterclaim when presented with an opportunity to do so operates ipso fado to cancel dr satisfy such cause of action.

We conclude that the judgment was right in all respects, and it is affirmed.