FARM LAND VALUES IN IOWA. 19 



to carry out his part of the contract, the fulfillment of all subsequent 

 contracts would necessarily be defeated. For instance, if the first 

 buyer of a farm failed to obtain title because of his inability either 

 to make the necessary cash payments or to get valid title, he would 

 be unable to fulfill his contract of sale with the second buyer, who, 

 in turn, would find it impossible to carry out his contract of sale 

 with the third buyer; and so on throughout the series. Unless the 

 matter could be settled by mutual agreement, the recourse of the 

 several parties who have purchased the right to receive title to the 

 land would be a suit to enforce performance and action for damages 

 in case of nonfumllment. Consequently such a situation involves 

 the possibility of considerable litigation as well as a large degree of 

 financial uncertainty for the parties concerned. 



In some instances contracts call for the specific forfeiture of the 

 purchaser's initial payment in case of his failure to perform his part 

 of the contract. Generally, however, the seller retained the alterna- 

 tive right of compelling the purchaser to complete the cash payments 

 agreed upon. Usually the contracts did not include a clause involv- 

 ing a waiver of performance on forfeiture of initial payment. 



In some cases legal methods of dubious character from an ethical 

 point of view were employed for the purpose of reducing the liability 

 and risk of the speculator. Two principal methods appear to have 

 been used for these purposes. The first consisted of the formation 

 of a corporation with limited liability for the purpose of buying and 

 selling farm lands. The members of these corporations bought land 

 under ordinary contracts of sale, using the greater part of the capital 

 for the purpose of making initial payments with the intention of 

 reselling the land at a profit. However, in case the land failed to 

 advance in value and the buyers found themselves overloaded, the 

 liability would be limited to the assets of the corporation and the 

 individual assets of the stockholders would be immune. A second 

 method was the employment of a "dummy" buyer. The real buyer 

 bought the land in the name of another person who possessed no 

 valuable assets. The "dummy" then assigned his rights of pur- 

 chase for a nominal consideration to the real buyer, while still retain- 

 ing the obligations contained in the contract. The assignment was 

 commonly expressed as follows: "For and in consideration of the 

 value received I hereby sell, assign, transfer, and convey to John 

 Doe my rights of purchase in and under the attached contract." 

 Apparently such a clause attached to a contract of sale conferred 

 upon the person mentioned in the clause the right to complete the 

 original contract without obligating him to pay or be held account- 

 able to the first seller for the terms of the contract. 



In some cases, real estate men, not satisfied with regular commis- 

 sions, introduced a dummy buyer as a means of sharing the incre- 



