Benschoter v. Hakes , 232 Iowa 1354 ( 1943 )

Plaintiffs' petition in a quieting-title action alleged that they were the owners of 154 acres of farm land in which the defendant claimed some interest by virtue of a lease. The lease, attached to the petition, showed that the Lincoln Joint Stock Land Bank of Lincoln, Nebraska, had, on September 26, 1940, leased the land to defendant until February 28, 1942. The plaintiffs alleged that the defendant claimed an interest over and above her right to possession until the expiration date of said lease.

The defendant's answer admitted the allegations of the petition and alleged her right of tenancy until March 1, 1943, by virtue of a failure to give her notice of the termination of the lease on or before November 1, 1941, as provided in section 10161 of the 1939 Code of Iowa.

Plaintiffs moved to dismiss the answer on the ground that section 10161 has no application to the facts as alleged in plaintiffs' petition and, if said section attempts to extend the termination date of the written lease beyond the date fixed therein, then the statute is unconstitutional as violative of sections 1, 9, 21, and 24 of Article I of the Constitution of Iowa and section 1 of the Fourteenth Amendment and the Fifth Amendment to the Constitution of the United States.

The trial court sustained the motion and, upon defendant's election to stand on the pleading, entered judgment in favor of plaintiffs.

[1] I. The first proposition argued by counsel for appellees is that section 10161 of the 1939 Code of Iowa has no application where there is a written lease for a definite period; that, properly construed, this section only applies to tenancies at will and not to tenancies created by a lease for a fixed term.

In support of their argument, counsel for appellees trace the legislative history of section 10161, Code of 1939. This section provides as follows:

"Agreement for termination. Where an agreement is made fixing the time of the termination of the tenancy, whether in writing or not, it shall cease at the time agreed upon, without notice. In the case of farm tenants, except mere croppers, occupying and cultivating an acreage of forty acres or more, the tenancy shall continue for the following crop year upon the same terms and conditions as the original lease unless written notice for termination is given by either party to the other not later than November 1, whereupon the tenancy shall terminate March 1 following; provided further, the tenancy shall not continue because of absence of notice in case there be default in the performance of the existing rental agreement."

The second sentence in the above section is the amendment of chapter 235, Acts of the Forty-eighth General Assembly. The first sentence is the way the section read prior to the amendment. The history of this law prior to the amendment shows that section 1209 of the Code of 1851 provided for the notice necessary for the termination of a tenancy at will. The Seventh General Assembly repealed section 1209, Code of 1851, and substituted therefor an act which took effect July 4, 1858, which provided as follows:

"Section 2218. (1.) [R. 1860] Be it enacted by the General Assembly of the State of Iowa, That section 1209, chapter 78 of the code be so far amended as to read as follows: Thirty days' notice in writing is necessary to be given by either party, before he or she can terminate a tenancy at will; but when in any case rent is reserved, payable at intervals of less than thirty days, the length of notice need not be greater than such interval between the days of payment. In case of tenants occupying and cultivating farms, the notice must fix the termination of the tenancy, to take place on the first day of March: provided, that where an express agreement is made, whether the same has been reduced to writing or not, the tenancy shall cease at the time agreed upon, without notice."

Thereafter, in the Codes of 1873 and 1897 and in the Compiled Code of 1919, the provision for the termination of the tenancy without notice, where there is an agreement for termination, appeared in substantially the same language in the statutes providing generally for notice for termination of tenancies at will. The Fortieth General Assembly passed an act to "amend, revise, and codify" the entire chapter [5, Title XXIII] entitled "Landlord and Tenant" as it appeared in the Compiled Code of 1919. (Acts of the Fortieth General Assembly, chapter 238.) This act took the provision for termination without notice, where there was such an agreement, from the body of the general statute as it appeared in the Compiled Code, and set it forth as a separate provision, or section 6, which reads as follows:

"Sec. 6. Agreement for termination — effect. Where an agreement is made fixing the time of the termination of the tenancy, whether in writing or not, it shall cease at the time agreed upon, without notice."

Thereafter, in the Codes of 1924, 1927, 1931, and 1935, this law, eliminating the necessity for notice to terminate a tenancy where there was an agreement for such termination, appears as a separate law, being section 10161 in all of said Codes.

This is the legislative history down to the amendment of chapter 235, Acts of the Forty-eighth General Assembly. Counsel argues that this history shows conclusively that section 10161 as it appeared in the Code of 1935 and prior Codes applied only to termination of tenancies at will. From this conclusion counsel argues that the amendment only provides for the notice where the law before amendment eliminated the necessity of notices, namely, tenancies at will with an agreement for the termination date. Counsel cites the case of Jones v. Mills County, 224 Iowa 1375, 279 N.W. 96; Dennis v. Independent Sch. Dist., 166 Iowa 744, 750, 148 N.W. 1007, 1009, and several other cases announcing the rule which is stated in the last-cited case to be as follows:

"It is a rule of construction that changes made by a revision of the statutes will not be construed as altering the law, unless it is clear that such was the intention, and, if the revised statute is ambiguous or susceptible of two constructions, reference may be had to prior statutes for the purpose of ascertaining the intent of the Legislature."

We agree with this rule. It is significant here, however, that the division into a separate section was done by a specific act of the Fortieth General Assembly. The cases cited by counsel, where the separation was made by Code commissioners or Code editors, therefore do not apply. Is this statute, section 10161 of the 1935 Code, which stems from the specific act of the Fortieth General Assembly (section 6, chapter 238, Acts of the Fortieth General Assembly), ambiguous or susceptible of two constructions? We think not. It is clear and definite.

[2] The argument that this section only applied to tenancies at will is weakened by an analysis of the effect of such a limited application. The law deals with agreements for termination of tenancies. A tenancy at will negatives any such agreement for termination. A tenancy at will with an agreement for a termination date is a paradox. If there is an agreement for a termination of the tenancy, then it is a tenancy for a term and not a tenancy at will.

But whatever doubts exist as to the scope of the application of section 10161, as it appeared before the amendment in the 1935 Code, they are all cleared up by the passage of chapter 235, Acts of the Forty-eighth General Assembly. This amendment was Senate File 203 in the Forty-eighth General Assembly and it was entitled an act to amend section 10161, Code of 1935 "relating to the termination of agricultural leases." (Italics ours.) Here is a legislative interpretation of section 10161 as it stood in the Code of 1935. The legislature is now providing for notices that must be given to terminate "agricultural leases" and it directs its amendment to the very statute that provides for no notice where there is an agreement for the termination date. It seems clear that, by this amendment, the legislature intended to include term leases. The effect is to leave the law allowing termination without notice applicable to urban leases and all leases other than farm leases, but in the case of farm leases, except those conveying cropper rights and those conveying less than 40 acres, the notice by November 1st must be given.

[3] Additional proof of the legislature's intent not to confine the operation of this statute to tenancies at will is furnished by the record of the introduction of an amendment to that effect. This amendment, as shown by the senate journal of the Forty-eighth General Assembly, provided only for notice to terminate tenancies at will. The amendment was not adopted. The construction placed upon section 10161 as it stood in the 1935 Code at the time of the amendment is controlling. It is the amendment of chapter 235, Acts of the Forty-eighth General Assembly, that provides for the notice that appellees did not give. If the Forty-eighth General Assembly gave section 10161, as it appeared in the 1935 Code, its apparent interpretation, without reference to its legislative history, and proceeded to amend it, then it is the duty of this court to interpret the statute as a whole and we are concerned with the legislative intent of the Forty-eighth General Assembly. The applicable rule is stated by the Supreme Court of the United States in the case of the United States v. Freeman, 3 How. (U.S.) 556, 564, 11 L. Ed. 724, 728:

"If a thing contained in a subsequent statute be within the reason of a former statute, it shall be taken to be within the meaning of that statute; Ld. Raym., 1028; and if it can be gathered from a subsequent statute in pari materia, what meaning the legislature attached to the words of a former statute, they will amount to a legislative declaration of its meaning, and will govern the construction of the first statute."

The rule is stated in 59 C.J. 1096, section 647, as follows:

"An amended act is ordinarily to be construed as if the original statute had been repealed, and a new and independent act in the amended form had been adopted in its stead; * * *."

We think it is proper for us to examine the legislative course of this amendment of chapter 235, or Senate File 203, as it proceeded through the Forty-eighth General Assembly. The senate journal of this general assembly sets forth the governor's message to the legislature. In this message the governor told the legislature that the report and recommendations of the Farm Tenancy Committee of the Iowa State Planning Board would be submitted to the legislature. Among the specific recommendations of the Farm Tenancy Committee we find the following:

"1. It is recommended that a special sub-committee on Farm Tenure be appointed from the Agricultural Committee of each House of the 48th General Assembly for a careful study of this most important problem. * * *

"6. Legislation should be enacted to provide for:

"(a) the automatic continuation from year to year of all agricultural leases until notice for termination is served by either party not later than six months before the expiration date of the lease, * * *."

Pursuant to the first recommendation noted above, a special committee on farm tenancy was created by the Forty-eighth General Assembly. This special committee introduced Senate File 203 as a committee bill. It is obvious that Senate File 203 was introduced pursuant to the recommendation noted above. The Farm Tenancy Committee of the Iowa State Planning Board, in this same report, supported its recommendations by a statement of the results of a survey which showed the seriousness of the Iowa farm-tenancy problem. This survey showed a steady increase of tenant-operated farms from twenty-four per cent in 1880 to fifty per cent in 1935. It showed that in 1900 there was only one Iowa county where half the farms were tenant-operated, while in 1935, 57 counties had half or more farms rented. It showed that in 1937, fifty-eight per cent of the farm area of Iowa was under lease. This survey also revealed that thirty-four per cent of all tenants had been on their farms for less than two years; that such unstable conditions necessarily lead to severe soil exploitation, to neglect of farm improvements, to tremendous losses involved in frequent moving, and to reduced farm incomes. This survey was conducted by questionnaire method and the report also showed that public hearings had been held in every county in Iowa.

In view of the above, we are thoroughly convinced that the legislative intent of the Forty-eighth General Assembly at the time of the enactment of chapter 235 was that farm leases for a definite term could be terminated only by the November 1st notice, and failure to give the notice worked a renewal of the lease for one year commencing the next March 1st.

[4] II. This brings us to a consideration of the constitutional issues. The most serious assault launched against the law by counsel for appellees is that it violates rights guaranteed to appellees by sections 1 and 9 of Article I of the Constitution of Iowa, and it deprives appellees of their property without due process of law within the prohibition contained in the due-process clause of the Fourteenth Amendment to the Constitution of the United States.

This legislation is not vulnerable to the constitutional attack here made if it can be said to be a reasonable exercise of the police power of the State of Iowa. See Burlington Summit Apartments v. Manolato, 233 Iowa ___, 7 N.W.2d 26, and authorities therein cited. This court has frequently passed upon the question of whether certain legislation is a lawful exercise of police power. But no precise definition of what constitutes the police power of the state has been or can be given. In each case it is a question whether or not the collective benefit outweighs the specific restraint. Contract rights and property rights are not absolute. As Chief Justice Hughes said in Chicago, B. Q.R. Co. v. McGuire, 219 U.S. 549, 567, 31 S. Ct. 259, 262, 55 L. Ed. 328, 338:

"Liberty implies the absence of arbitrary restraint, not immunity from reasonable regulations and prohibitions imposed in the interests of the community."

It is true that under our form of government the use of property and the making of contracts are normally matters of private and not of public concern, but it is also true that when the use of property or the making of contracts is tinged with public concern, then the owners of the property and the contracting parties can be subjected to reasonable regulations and prohibitions by a lawful exercise of the police power. The parties who are subjected to the regulation receive their benefit by virtue of being part of the public in whose interest the regulations are imposed. For an excellent discussion of this subject of police power, we recommend a reading of Justice Weaver's opinion in the case of the City of Des Moines v. Manhattan Oil Co., 193 Iowa 1096, 1104, 184 N.W. 823, 827, 188 N.W. 921, 23 A.L.R. 1322. In this case Justice Weaver stated:

"* * * while the police power is familiarly exercised in regulations to promote the public health and morals, it extends as well to the promotion of ``public convenience and general prosperity.' Chicago, B. Q.R. Co. v. People of Illinois,200 U.S. 561, 592."

Again, at page 1107 of 193 Iowa, page 828 of 184 N.W., Justice Weaver quotes with approval from the case of Barbier v. Connolly,113 U.S. 27, 5 S. Ct. 357, 28 L. Ed. 923, where the Supreme Court of the United States stated that it was within the orbit of police power "to prescribe regulations to promote the health, peace, morals, education, and good order of the people, and to legislate so as to add to its wealth and prosperity."

For other authorities to the same effect, see Fevold v. Board of Supvrs., 202 Iowa 1019, 210 N.W. 139, and Sanford Mfg. Co. v. Western Mut. F. Ins. Co., 229 Iowa 283, 294 N.W. 406.

Bearing in mind these principles, we turn to the question of the validity of section 10161 of the 1939 Code under the police powers of this state. Again we refer to the report and recommendations of the Farm Tenancy Committee of the Iowa State Planning Board. This report stated, on pages 13 and 14:

"Iowa is the leading agricultural state in the Union. Forty per cent of her population lives on farms, deriving its income directly from farming. In addition, 20 per cent of the population lives in rural towns and villages and depends upon the income the farmers receive. The welfare of the population in Iowa, as well as of the country as a whole, is closely connected with the welfare of the farmer. There is not a business, trade or profession in Iowa which does not suffer if the farmer suffers, or prosper if the farmer prospers. In 1929 the total income from Iowa agriculture was estimated at 451 million dollars, as compared to only 194 million dollars derived from manufacturing and 37 million dollars from banking, finance and insurance. * * *

"This committee is fully aware that not all tenure problems can be solved by legislation. Mutual cooperation, education and the development of a sense of responsibility on the part of both landlord and tenant are essential. What legislation can do, however, is to provide a framework of certain minimum standards in tenure relationships which will facilitate a clearer understanding of the rights and responsibilities of the parties concerned, and will prevent certain practices distinctly detrimental to land and community. It is the duty of the people of Iowa to accomplish the development of such standards."

Certainly such legislation as chapter 235, Acts of the Forty-eighth General Assembly, was designed to correct the evils of an ever-increasing farm-tenancy situation, to the end that the public welfare and prosperity would be promoted. Clearly it was within the power of the legislature to designate farm tenancy as a subject of police regulation. The Federal Government has recognized farm tenancy as a proper subject of federal legislation. See "Bankhead-Jones Farm Tenant Act" of 1937, chapter 517, 50 Stat. at L. 522, 7 U.S.C. § 1000 et seq. The Iowa legislature was faced with a farm-tenancy problem which, according to the survey of the State Planning Board, affected every citizen of this agricultural state. The legislation, enacted to help cure the problem, does not automatically extend the termination date of a farm lease. It provides for a four-months' notice before the tenure can be interrupted. Certainly such legislation bears a reasonable relationship to the problem.

It is quite apparent that during recent years the old concept of duties and responsibilities of the owners and operators of farm land has undergone a change. Such persons, by controlling the food source of the nation, bear a certain responsibility to the general public. They possess a vital part of the national wealth, and legislation designed to stop waste and exploitation in the interest of the general public is within the sphere of the state's police power. Whether this legislation has accomplished, or will in the future accomplish, the desired result is not for this court to determine. The legislature evidently felt that unstable tenure leads to soil exploitation and waste. The amendment aims at security of tenure and it is therefore within the police power of the state.

[5] III. Section 10161 of the 1939 Code of Iowa does not impair the obligation of appellees' contract, for the law was in force for more than a year before the execution of the lease involved in this case. There is, therefore, no merit in appellees' contention that the law violates section 21, Article I of the Constitution of Iowa. If the law is a reasonable exercise of the state's police power, and we hold that it is, then the law is a part of farm leases executed after the effective date of the law. Midwest Mut. Ins. Assn. v. De Hoet, 208 Iowa 49, 222 N.W. 548; Davis v. Bronson, 6 (Clarke) Iowa 410.

[6] IV. The provisions of section 10161 of the 1939 Code of Iowa cannot operate to extend the lease beyond a term of 20 years within the prohibition of section 24, Article I of the Constitution of Iowa. This law extends the lease no longer than the time it would take one of the parties to terminate it. German State Bank v. Herron, 111 Iowa 25, 82 N.W. 430.

The judgment appealed from is therefore reversed. — Reversed.

GARFIELD, C.J., and HALE, MILLER, OLIVER, and MANTZ, JJ., concur.

BLISS, WENNERSTRUM, and SMITH, JJ., dissent.