Thursday, November 21, 2013

First Securities Company v. Dahl case brief

First Securities Company v. Dahl case brief summary
560 N.W.2d 327 (1997)

Plaintiff securities company sought review of a decision from the Iowa District Court for Scott County, which found in favor of defendant property owners in the company's declaratory judgment action that requested the removal of a real estate restriction.

The company platted a subdivision in which the owners purchased lots. The company maintained ownership of a lot that was referred to as "Outlot A." There was a platted 52-foot easement for access to Outlot A. After the subdivision homeowner's association filed an action against the company and the shareholder for the payment of a road assessment, the shareholder, in her capacity as secretary, signed an affidavit that restricted the use of the easement to a particular Lot 20 in order to settle the litigation. The company subsequently desired to utilize the easement.


  • The court affirmed the district court's decision after reviewing the action de novo pursuant to Iowa R. App. P. 4. 
  • Either actual or apparent authority by the shareholder was all that was needed to bind the corporation to the assertions in the affidavit. 
  • The affidavit's intent was clear that the use of Outlot A was restricted for road purposes. 
  • In construing a restrictive covenant, due regard was given for the purposes that were contemplated by the parties, but the words were given their ordinary meaning as was commonly understood at the time that the affidavit was executed.

The court affirmed the district court's decision.

Recommended Supplements for Corporations and Business Associations Law

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