Court Opinion

ID: 7115056
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:30:55.103186+00
Date Added: 2024-06-11T16:13:52.496932
License: Public Domain

Evans, J.
(dissenting). I. I am of the opinion that the majority holding is in conflict with the former holding *323of the court in the case In re Shields Bros., 134 Iowa, 559. An examination of the opinion in the Shields Bros, case will not, in my opinion, justify the distinction which purports to he made in the majority opinion.
It so happens that, in the written contract in the case before us, the same blank printed form was used as was used in the Shields Bros, case, so that the two written contracts are identical in their general nature and in the form of their undertakings. Both parties to the contract involved in the present case testified as witnesses as to the real understanding between the parties to the contract. It is said in the majority opinion that this testimony is a mere interpretation of the written contract by the parties. If this bo so, it is precisely what was contended for by the appellants in the Shields Bros, case, as will appear from the following statement of the issue as made in the opinion in such ease: “Shields Bros, appeared before the treasurer pursuant to notice, and, in writing, objected to an assessment on the grounds: First, that the contract between the parties, as evidenced by the writing and by the facts and circumstances attending the making thereof, was not intended or understood to be a contract of sale, or one creating an absolute indebtedness; that, on the contrary, it was a mere option, giving Flynn the right to purchase in the future on the terms and conditions specified, and that it was so intended and understood by the parties thereto. Second, that an assessment based on said contract as an item of credit would result in double taxation. And it was upon the issues as thus outlined that the case was tried below and is now presented in this court.” 134 Iowa, page 561.
It will be seen from the foregoing that the appellants in that case based their appeal upon the contract between the parties “as evidenced by the writing” and by the “facts and circumstances attending the making thereof.” There was no claim made of a mistake in the writing. The parties to the contract were agreed in their construction of *324it and acted npon such construction. And all this must be said also in the case at bar. The following comprises all the rest of the discussion and holding of this court in the Shields Bros, case:
The hearing was had in the district court as in equity, and on such hearing the appellants brought into the record proof of the circumstances attending the making of the contract. Each of the respective parties to such contract were called to the stand, and over objections as to competency, etc., testified that it was their understanding that a mere option to purchase was all that was in contemplation and being granted; that they informed the scrivener that such was their contract, and supposed he had so written. A contract rests in the intention of the parties thereto. It is true by general rule that, where the contract has been committed to writing, the nature and extent of the undertakings must be ascertained by an inspection of such writing. Oral evidence is not allowable to work a change or variance in the terms, conditions, etc., as fairly expressed by the writing. But this rule is enforced only where a controvery arises between the parties to the contract or their privies. As against a stranger to the contract, a party thereto may assert that the agreement was other or different -in any respect and to any extent — than that which the writing imports. Livingstone v. Stevens, 122 Iowa, 63; Logan v. Miller, 106 Iowa, 511; Roberts v. Bank, 8 N. D. 474 (79 N. W. 1049); 11 Am. & Eng. Ency. 548, note; Page on Contracts, section 1196 et seq. Now, it may be doubted if the writing here in question imports a sale. In terms the agreement is for a sale, not an agreement of sale. There was to be no change in possession in virtue of the contract, and the appellants were to pay the taxes on the lands for the current year. Moreover, if Elynn failed to present himself on March 1st, following, and make payment etc., the money paid as of the date of the contract was to be regarded as forfeited, and all his rights should at once and without action on the part of appellants cease and-determine. But however this may be, we must treat the contract as one granting only the right to exercise an option. The parties to it so intended and understood; and, as we have seen, all other parties are concluded from asserting *325that it was other or different. And as against a stranger, it is not necessary that the writing be reformed in an action brought for that purpose before the real contract can be asserted and made the basis of a recovery or defense. Logan v. Miller, supra. Now, an option is not a contract to pay. It creates no enforceable indebtedness on the part of the person to whom it is granted. Hopwood v. McCausland, 120 Iowa, 218; Warvelle on Vendors, section 125. And, this being true, there can not arise out of such a contract a taxable credit within the meaning of the tax laws of the state. 134 Iowa, 561-563.
It will be noted from the foregoing that grave doubts were expressed by this court as to whether the form of written contract, adopted, amounted to anything more than an option. This only emphasizes the reasonableness of the attitude of the parties herein in putting an agreed construction upon the contract. There is no claim of fraud or collusion. The evidence on behalf of the appellee is undisputed and unimpeached either in its facts or its motive. The conduct of the parties with reference to the contract, after it was entered into, was consistent with their present, claim, and that, too, in a very substantial and significant sense. The contract in question was entered into in October Under the statute the taxes for the ensuing year became a lien upon the property on the last day of December. ’ The appellant, as owner of the land, paid these taxes for which he was in no manner liable if the October contract amounted to a sale.
II. I disagree, also with some emphasis, with the last paragraph of the majority opinion. It is there held that the testimony in such a case as this “should be clear, satisfactory, ánd conclusive, and of such import as to justify a reformation.” Such is the kind of testimony which must be produced in order to justify a reformation as between the parties to the contract. If-.the same rule is to be applied as between a party to the contract arid a third party, then the distinction pointed out in the Shields Bros, case *326is wholly ignored. It is there held especially that the existence of a written contract between two parties does not preclude oral evidence to contradict it as between one of the parties and a third party. Such oral evidence is admissible for the all-sufficient reason that the parties to the suit are not the parties or privies to the contract. It is not essential, in such a case, that it be shown that the written contract is reformable as between the parties thereto.
Of course, if any question of fraud or collusion were involved or if the evidence were conflicting, the court, as a trier of fact, might properly give greater weight to the written contract and find the facts in accord therewith. But no question of that kind is involved here. The appellee introduced no evidence in the court below and has submitted no argument here. I think, therefore, the case is ruled squarely by the former case.
I should have less objection to the majority opinion if the Shields case were frankly overruled therein. As between the two, however, I think the Shields case reached a more equitable result. The contrary holding is not wholesome in its practical operation. We can hardly fail to take judicial notice of -the universal custom which obtains in the sale of farm lands, viz., that the contracts are always made with a view to consummation on the 1st of March following. December 31st usually intervenes between the date of contract and the date of consummation, and the practical effect of the present holding will usually result in double taxation.
For the reasons indicated, I respectfully dissent from the majority.