Right to Growing Crop Upon Death At Issue

An emblement is a crop growing on the leased premises, and the “doctrine of emblements” gives the tenant (or the tenant’s estate) rights to the growing crop if the land is sold or the tenant dies before the crop is harvested.  The doctrine of emblements may also be involved when the landlord dies during the term of the lease and a growing crop exists.  Entitlement to the crop is fairly clear when the landlord owns a fee simple interest in the leased land – the landlord’s heirs succeed to the landlord’s share of the crop.  However, if the landlord owns less than a fee simple interest in the leased land the outcome may be different.  Under the common law, a life tenant cannot make a lease for a longer period than for the tenant’s life unless the remaindermen agree. Thus, when a lease is involved, upon the life tenant’s death the tenancy becomes a tenancy at will and can be terminated by a demand for possession (i.e. in accordance with state law).

 With respect to the doctrine of emblements, the question is whether the deceased landlord’s estate or the holder of the remainder interest is entitled to the landlord’s share.  The courts across the country are split on the issue with some courts holding that the landlord’s estate is entitled to the landlord’s share of the crop on the basis that the crop was a personal asset of the landlord at the time of death.  Other courts have held, however, that the holder of the remainder interest is entitled to the landlord’s crop share on the theory that the title to the growing crop is in the tenant and rent isn’t due until harvest (under a crop-share lease) and on harvest the remainder holder has a present interest in the land. 

The doctrine of emblements was involved in this case from Linn County, Iowa.  Under the facts of the case, the decedent died in August of 2008.  He was divorced and estranged from most of his children, but did stay in contact with a daughter.  After he divorced his wife in 1978, he “sold” 60 acres to the daughter in an attempt defraud his ex-spouse out of alimony payments.  The contract called for a certain amount down and annual payments until $30,000 had been paid, but the decedent told his daughter that he was gifting the payments to her.  In 2006, the decedent was diagnosed with dementia and the daughter and one of her brothers began a conservatorship proceeding.  Another brother, in late 2006, took the decedent out of the veteran’s home and took him to a lawyer to have a new will executed which removed the daughter as a residual beneficiary and included a provision requesting the executor to look into the payments made under the 1978 contract. 

A different brother was appointed as the guardian and conservator and, while serving in that capacity, planted corn on the 60 acres.  He was later replaced as conservator and presented a bill for crop production expenses to the new conservator and was paid from the farm account that had been set up.  The decedent died in August before the corn had been harvested.  The brother that planted the corn harvested it in the fall with the proceeds of the crop sale deposited in the farm account and an invoice for crop harvesting services submitted.  The executor of the decedent’s estate sought declaratory relief claiming that the 1978 contract was a sham and should be declared null and void, and that the estate was entitled to the crop under the doctrine of emblements.  The trial court upheld the 1978 contract because there was insufficient evidence to hold that the contract was fraudulent and refused to establish a constructive trust.  The court also determined that the estate was not entitled to the proceeds from the harvested crop.  The estate appealed.

On appeal, the court noted that the 1978 transfer would be presumed fraudulent because related parties were involved, but that the daughter could rebut the presumption by showing that her father remained solvent after the transfer.  On that point, the court held that the daughter successfully rebutted the presumption by showing that her father remained solvent after the transfer (which the court construed as a reserved life estate in the father).

Note:  How the court reached the conclusion that a contract sale of land calling for a $3,000 down payment and annual payments of $3,000 until the sum of $30,000 was paid constitutes conveyance of title with a reserved life estate is not explained.  The daughter’s possession of the land, according to the contract terms, was not necessarily delayed until her father’s death.

Because fraud wasn’t involved with respect to the contract, bad faith, duress or some other form of unconscionable conduct had to be established for a constructive trust to be imposed.  In addition, that conduct had to be established by clear and convincing evidence.  Here, the court determined that the daughter simply did not act in bad faith or forced a conveyance of the property to her in any improper manner.

On the issue of entitlement to the crop, the trial court had determined that the fact that the crop was not mature at the time of the father’s death meant that the estate couldn’t profit from the crop.  But, the estate claimed that the doctrine of emblements meant that the crop belonged to the estate.  Prior Iowa court cases have held that a growing crop is part of the real estate and passes with title to the real estate.  But, that doesn’t apply in Iowa if the transfer is from a fee simple title holder to a life tenant.  So, the court determined that the estate was entitled to the profits from the growing crop.  That meant that the proceeds would be distributed in accordance with the decedent’s will.  So, the crop was estate property and the daughter properly paid the expenses of raising the crop on the estate’s behalf.  Carson v. Rothfolk, et al., No. 3-504/12-201, 2013 Iowa App. LEXIS 853 (Iowa Ct. App. Aug. 7, 2013).