Many young farmers attempt to enter into leasing arrangements with established farmers in the area to start their own farming operations. That can be beneficial not only to the young farmer, but, if certain conditions are met, can qualify the landlord for the Iowa Beginning Farmer Tax Credit. In this case, the owner of an established farming operation agreed to help a younger farmer get started in the business by entering into a farming relationship whereby the younger farmer would get 25% of the farm income and pay 25% of the farm expenses. The younger farmer also bought a 25% interest in the farming operation’s livestock business. The parties also entered into a cash rent lease whereby the younger farmer would rent 25% of the farm ground. The young farmer did not own any equipment when he entered into the business relationship. However, the older farmer indicated that in exchange for “hard work and labor,” he would help him acquire some machinery of his own. On occasion, the older farmer would help the young farmer by allowing him to use the trade-in value of older equipment towards the young farmer’s purchase of new equipment.
The relationship turned bad when the landlord got divorced and finances became an issue. The landlord terminated the lease agreements and farming relationship and the young farmer kept the equipment that he believed was his and continued farming on his own. The landlord sued, claiming that the young farmer stole from him. He sought the immediate return of equipment, tools and machinery.
At trial, the landlord could not prove that he actually owned any of the equipment, tools, and machinery he listed in the suit. Even the landlord’s daughter testified that she believed the equipment belonged to the young farmer. The landlord claimed that his daughter’s testimony was merely “vindictive” because of the divorce from her mother, but the trial court did not believe the landlord’s testimony.
The landlord appealed, but the Iowa Court of Appeals found “no reason” to disagree with the findings of the trial court.Jackson and Jax N Farms v. Wesselink, No. 1-022/10-0504, 2011 Iowa App. LEXIS 174 (Iowa Ct. App. Feb. 23, 2011).