Fort Dodge, DM & S. Ry. v. AMERICAN COM. STORES CORP.

131 N.W.2d 515
CourtSupreme Court of Iowa
DecidedNovember 17, 1964
Docket51480
StatusPublished

This text of 131 N.W.2d 515 (Fort Dodge, DM & S. Ry. v. AMERICAN COM. STORES CORP.) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fort Dodge, DM & S. Ry. v. AMERICAN COM. STORES CORP., 131 N.W.2d 515 (iowa 1964).

Opinion

131 N.W.2d 515 (1964)

FORT DODGE, DES MOINES & SOUTHERN RAILWAY, Appellant,
v.
AMERICAN COMMUNITY STORES CORPORATION, Tyler B. Gaines, Trustee, Appellee and Cross-Petitioner,
v.
STATE of Iowa, Third-Party Defendant and Appellee.

No. 51480.

Supreme Court of Iowa.

November 17, 1964.

*517 Whitfield, Musgrave, Selvy & Kelly, Des Moines, for appellant.

*518 Connolly, O'Malley & Conley, Des Moines, for appellee and cross-petitioner.

Evan Hultman, Atty. Gen., C. J. Lyman, Sp. Asst. Atty. Gen., James E. Thomson and Henry M. Keyes, State Counsel, for third-party defendant and appellee.

SNELL, Justice.

Plaintiff, vendor, sought specific performance of a contract for sale of real estate. Defendant, American Community Stores Corporation, Tyler B. Gaines, Trustee, vendee, denied merchantability of the title as tendered, brought in the State of Iowa as a third-party defendant and then cross-petitioned against the State seeking a declaratory judgment adjudicating the rights of all parties.

The trial court found that plaintiff's title was not merchantable and denied relief. Plaintiff has appealed.

The property involved is in the business district of Ames. It consists of several lots or parts of lots in Block 2, College Park Addition to City of Ames.

It is north of Lincoln Way, also known as Highway Number 30, south of Second Street, and west of Grand Avenue also known as Highway Number 69.

Plaintiff's title to the several lots was not acquired from a common source. Only part is subject to the objections raised by defendant, but that fact has not been treated by the parties as of any importance. Under the issues defendant is entitled to merchantable title to the entire tract covered by the contract of purchase or denial of specific performance.

The following tracing from a part of a plat introduced into evidence shows the tract proposed to be sold and its location at the intersection of Lincoln Way and Highway Number 69.

*519 On February 5, 1962 by written contract plaintiff agreed to sell and defendant agreed to buy for the sum of $66,000 the several lots and parts of lots within the heavy outline in the foregoing plat. The lots were specifically described.

The pertinent, part of paragraph 1 of the contract is as follows:

"The party of the first part hereby sells to the party of the second part, and the party of the second part hereby purchases from the party of the first part, free and clear of any and all liens and encumbrances except building restrictions and easements, the following described real estate:"

The legal description of the property sold followed.

Paragraph 3 of the contract provided:

"The Vendor will deliver to the Purchaser an abstract of title to said premises within thirty (30) days after the date of this contract for preliminary examination by the Purchaser, which abstract will show a good and merchantable title to said premises and the Vendor. In the event the Purchaser shall find an imperfection in the title, the Vendor will have a reasonable time to act to correct same."

The pertinent part of paragraph 8 of the contract provided:

"On obtaining possession of premises, the Purchaser will pay the Vendor $60,000, that amount being the balance of the purchase price and the Vendor will, simultaneously with the payment of $60,000 purchase price, deliver to the Purchaser a duly executed warranty deed, with revenue stamps attached, to the above described real estate, which warranty deed shall convey a good and merchantable title in said premises to the purchaser, free and clear of any and all liens and encumbrances."

Plaintiff tendered an abstract of title for examination. Defendant objected to the title as unmerchantable. Being unable to satisfy defendant's objections plaintiff sued for specific performance.

Prior to 1937 plaintiff owned a tract of land in Ames bounded by Highway 69 on the east and Highway 30 (Lincoln Way) on the south. The property then owned by plaintiff appears as Lots 11 and 12 on the plat, supra. The small area numbered 13 between Lots 11 and 12 is an alley. The State needed additional land for highway purposes. By negotiation the State purchased the tract west of plaintiff's then owned property and within the heavy outline on the plat. The State then traded this land to plaintiff for land then owned by plaintiff that did adjoin Highways 30 and 69. The land transferred by plaintiff to the State was for improvement of Highways 30 and 69 and to permit the construction of the underpass on Highway Number 69.

The transfer from the State to plaintiff was by two separate deeds, one dated September 29, 1937 and one dated January 31, 1938. The deeds contained no warranty of title but did incorporate the restrictions of section 4755-f3, Code of 1935 now appearing as section 306.18, Code of 1962, I.C.A.

Section 306.18, Code of Iowa, I.C.A. provides:

"Conditions. Any sale of land as herein authorized shall be upon the conditions that the tract, parcel, or piece of land so sold shall not be used in any manner so as to interfere with the use of the highway by the public, or to endanger public safety in the use of the highway, or to the material damage of the adjacent owner."

Each deed from the State to plaintiff provided:

"Upon condition that neither said premises, nor any part thereof shall be used in any manner as will interfere with the use of the public highways of the State of Iowa by the public, or endanger public safety in the use thereof, or to the material damage of adjacent property."

*520 Because of these provisions in the deeds defendant rejected the tendered title as not merchantable.

By stipulation it appears the property involved had never been used in connection with or for the improvement, maintenance or use of a highway.

Plaintiff tried to obtain from the State through the highway commission the removal of the restriction or an interpretation to allow construction of a supermarket but without success.

Defendant purchased the real estate for the purpose of building and operating a supermarket thereon consisting of between 15,000 and 19,250 square feet of floor space and a car parking area of about 190 stalls with access to Lincoln Way. It was anticipated that there would be a 6,000 customer car count at the store weekly.

The traffic now in the area of plaintiff's property exceeds the design capacity of the highways. The traffic count is the second highest in the state. It had at time of trial increased from an average of 16,730 vehicles per day in 1955 to 17,095 in 1958, to 19,825 in 1960 and to 22,184 in 1962. In 1955 approximately 4,000 to 4,500 vehicles were considered to be through traffic, not originating in Ames. A sizeable increase in traffic was expected. Much of the great traffic generation in the area was attributed by witnesses to Iowa State University, the Iowa Highway Commission offices nearby, and the general layout of the City of Ames.

The evidence indicated that the use contemplated by defendant would create traffic problems, reduce the capacity of the intersection, increase congestion, add to the traffic accident potential and interfere with the use of the highway and the safety of the traveling public.

I. The trial court found plaintiff's title unmerchantable.

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Bluebook (online)
131 N.W.2d 515, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fort-dodge-dm-s-ry-v-american-com-stores-corp-iowa-1964.