Opinion ID: 2103351
Heading Depth: 1
Heading Rank: 1

Heading: The Automatic Forfeiture Issue.

Text: Ordinarily, nothing is required to complete a forfeiture except the passage of the thirty days after notice. See Iowa Code §§ 656.2, .4. Section 656.5 provides that after thirty days, if the buyer does not cure the default, the party serving said notice or causing the same to be served, may file for record in the office of the county recorder a copy of the notice aforesaid with proofs of service attached... and when so filed and recorded, the said record shall be constructive notice to all parties of the due forfeiture and cancellation of said contract. (Emphasis added.) It is clear from this statute, and the case law interpreting it, that the recording of the forfeiture notice and proof of service is required only for constructive notice purposes; it is not a condition precedent to the completion of the forfeiture. See, e.g., Abodeely v. Cavras, 221 N.W.2d 494, 499-500 (Iowa 1974). Simpson relies on Abodeely in arguing that upon passage of the thirty days in this case the forfeiture was automatic. In Abodeely, the seller served a notice of forfeiture on the buyer but did nothing further for about a year. In the meantime, he decided to sue on the contract. We held that the forfeiture was complete, even without the recording of the notice under section 656.5, and the seller could not thereafter sue on the contract for specific performance or damages. Id. at 504. In Abodeely, however, there was no claim, such as there is in the present case, that the seller had waived his right to forfeit the contract. The record in the present case clearly shows a waiver of forfeiture rights by the seller. Almost from the beginning of the thirty-day period, Gottschalks vacillated on the question of whether to proceed with the forfeiture, because they wanted the payment of the contract balance, not the land. The reason was a sharply reduced value of farmland in the area. During the thirty days, Gottschalks were involved in a continuing attempt to obtain payment from the Preglers, who were expected to receive vendor's payments under other subcontracts due after the thirty days. That Gottschalks had waived their rights, within the thirty days, to proceed with the forfeiture through these acts is clear from the fact that they eventually accepted the quitclaim deed which provided it was in lieu of forfeiture. It is clear that a forfeiture right under a contract may be waived by the seller. See, e.g., Bettis v. Bettis, 228 N.W.2d 193, 195 (Iowa 1975); Wemer v. Long, 185 N.W.2d 243, 247 (Iowa 1971); Babb's, Inc. v. Babb, 169 N.W.2d 211, 213 (Iowa 1969). The problem Simpson has with the waiver argument, apparently, is that the waiver came too late; by the time the deed was given, the thirty-day period had passed. The thirty-day period provided by chapter 656 for curing of defaults, however, was not intended to automatically drop a curtain on any negotiations or settlement attempts undertaken by the parties during the thirty-day period, or to preclude a waiver of forfeiture by the seller. Nothing in the statute, or our cases, would suggest that. The thirty-day forfeiture procedure is said to be a statutory embodiment of the rule in equity that a reasonable time must be allowed for a defaulting party to perform. See, e.g., Bettis, 228 N.W.2d at 195-96; Mintle v. Sylvester, 202 Iowa 1128, 1136, 211 N.W. 367, 372 (1926). We do not suggest that the circumstances of the present case require extension of the thirty-day period to cure the default, only that there is nothing in the statute that would prevent such extensions if the contract parties elect to do so, or if the vendor's forfeiture rights are waived within the thirty days. The general principles that the law does not favor forfeitures, see, e.g., Babb's, Inc., 169 N.W.2d at 213, and that the law favors settlements, would support that interpretation. Here, it should be pointed out that Simpson has shown no prejudice resulting from the waiver; he will only be required to perform under the contract he made with Preglers. We hold that the time for performance in this case had been waived by the sellers within the thirty days and that the deed given in lieu of forfeiture, even though it was after the expiration of the thirty days was effective to pass to the Gottschalks all of the interest that Preglers had in the subcontract with Simpson. We therefore affirm the district court.