Citizens' State Bank v. Jess

127 Iowa 450 | Iowa | 1905

Deemer, J.

The original petition asked for the foreclosure" of a mortgage upon certain property owned by the defendants Jess. The city was made a party to the action because it claimed a lien upon the property in virtue of some special assessments levied against it. The petition charged that these assessments were junior and inferior to plaintiff’s mortgage, because of defects in the proceedings relating thereto, which rendered them void. In a supplemental petition plaintiffs averred that since the commencement of the action they had recovered judgment and a decree of foreclosure against defendants Jess, and that as to the city the action had been continued. They further averred that the property had been sold under the foreclosure decree, and that, the period of redemption having expired, plaintiffs had taken a deed to .the property, and that they thereafter sold the property by warranty deed to a third person; and they asked that their grantee be substituted as party plaintiff, and that the special assessments be annulled, canceled, and set aside. The demurrer filed to these pleadings was upon the grounds: (1) That plaintiff’s cause of action was barred by the statute of limitations; (2) misjoinder of causes of action; (3) because the only question which can be adjudicated in this proceeding is whether the city’s lien was junior and inferior to that claimed by the plaintiffs, and, as plaintiffs’ lien has been merged into a deed, this action cannot be maintained; (4) because plaintiffs’ title is subject to special assessments levied by the city; and (5) because plaintiffs are in no position to question the validity of the special assessments. The original petition simply charged that the defendant city claimed to have some lien upon or interest in the mortgaged premises, but that whatever lien or interest it had was junior and inferior to that created by plaintiffs’ mortgage. To this petition the defendant city appeared, and filed a motion to require the plaintiffs to state more particularly the nature of the lien upon or interest in the property which the defendant city claimed, and the facts showing its inferiority to plaintiffs’ mortgage. Thereafter, the parties all appearing, judgment and decree of foreclosure was entered against the defendants Jess, and the cause was continued as to the defendant city. It seems that other suits were then pending against the city, involving the validity of the special assessments made by it, and it was agreed that this action, in so far as the defendant citfy was concerned, should stand continued until these other suits were determined. This entry of continuance was made October 6, 1900. Thereafter, and on November 23, 1903, plaintiffs filed an amendment to their original petition, and a supplement thereto, in which they set forth the acquisition of title to the mortgaged premises through the foreclosure proceedings, and the deeding of the same by warranty deed to the Dubuque Brewing & Malting Company. They also pleaded many other matters relating to the special assessments, rendering them void and of no effect. In law the sufficiency of these averments is not questioned, as we understand it, by the city. Indeed, counsel concede in argument that this question is not before us. They plant themselves now upon the propositions (1) that plaintiffs have no interest in the property and no right to attack the assessments, (2) that the cause of action is barred by the statute of limitations, and (3) that there was a misjoinder of causes of action. They also say that special assessments upon real estate are superior to mortgage liens.

With this last proposition we shall not concern ourselves; for it assumes, of course, that the special assessments were valid and were properly levied. Nor present purposes, it must be conceded — the demurrer confessing the point — that these special assessments are invalid, and the only inquiry now is, may this invalidity be set forth and taken advantage of in this form of procedure ?

We shall now consider the controlling points relied upon by the defendant city in support of the ruling of the triál court.

1. Mortgage foreclosure: action abatement of. The transfer by the plaintiffs of the title acquired by them through the foreclosure proceedings did not cause the action to abate. Code, section 3476; Kreuger v. Sylvester, 100 Iowa, 647.

3. Merger. That the plaintiffs received a deed to the property through the foreclosure proceedings did not, so far as the defendant city is concerned, amount to a cancellation of the mortgage by and through a merger thereof into ° ° . . ° ° the title held in virtue of the sheriff’s deed. This is fundamental, but see Lindsey v. Delano, 78 Iowa, 350.

3. Assessment liens: statutes. The assessments which plaintiffs challenge were made in the year 1892, and a reassessment was made in the year 1899. The original petition in this case was filed September 19, 1900, and the supplement and amendment thereto on November 23, 1903. Tbe petition as amended charges that defendant city issued its bonds to pay for tbe improvement, for which the special assessments were levied, in the year 1892, and that in 1899 the city, without notice, etc., made a reassessment of the cost of the improvement • against the property covered by the mortgage. We shall, for the purposes of the case, assume, that both the original assessment and the reassessment were and are void. Now section 989 of the Code, relating to special charter cities - the defendant being of that class - provides that no action shall be brought questioning the of any improvement certificates or bonds from and after three months after the time the issuance of the certificates or bonds is ordered by proper authority. This statute found its way into the Code long after the original bonds and certificates in this case were issued, and hence it does not apply. Waples v. Dubuque, 116 Iowa, 167.

4. Reassessments: statutes. As the reassessment was made either to establish a liability of the owner to the city or to the contractor, and no certificates or bonds were issued thereon; or for the purpose of enabling the city to pay bonds which were invalid when issued, Code, section 989, manifestly does not apply. This reassessment was made under section 980 of the Code, authorizing a relevy under certain conditions - that is to say, whenever the original assessment is invalid or has been adjudged irregular- and section 989 does not, in terms or by necessary implication, apply to such cases.

5. Limination of Actions. The general statute of limitations does not apply, for the reason that one owning title to land, or seeking to foreclose a mortgage as against other lienholders, is not barred of his action until the statute has barred his original cause of action. Plaintiffs’ cause of action, in so far as the general statute of limitations is concerned, is not barred. Their original action of foreclosure was timely. They made the city a party thereto, and by agreement tbe canse as to it was continued until tbe amendment and supplement to tbe petition were filed.

6. Supplemental petition: new cause of action. In so far as tbe questions of priority of lien and right to redeem are concerned, no new cause of action was introduced by tbe supplement to tbe petition. Tbe special assessments were an apparent lien upon tbe mort-x Sage<^ Property, and tbe bolder of tbe mortgage could well make the city a party to bis foreclosure proceedings in order that tbe validity and priority of its lien might be established. Baker v. Kelley, 11 Minn. 480 (Gil. 370); Bunce v. West, 62 Iowa, 80; Stanbrough v. Daniels, 77 Iowa, 561; Ayres v. Adair Co., 61 Iowa, 728. In any event, 'it must be conceded that tbe amendment to the petition shows tbe invalidity of both tbe original assessment and tbe reassessment. In other words, plaintiffs bad and have a cause of action against tbe city for tbe cancellation of these assessments. Plaintiffs also bad a cause of action for -tbe foreclosure of their mortgage, and tbe decree of foreclosure, with the order of continuance as to tbe city, did not cut off or affect plaintiffs’ original rights as against tbe city.

7. Misjoinder.’ This being true, it is apparent, tbe statute of limitations being out of tbe way, that tbe only question defendant city may make is tbe claimed misjoinder of parties and causes of action. Ordinarily these questions cannot be raised by demurrer. The remedjy therefor is by motion. Dolan v. Hubinger, 109 Iowa, 408; Lull v. Anamosa Bank, 110 Iowa, 537; Miller v. R. R., 63 Iowa, 680; Turner v. Bank, 26 Iowa, 562; Code, sections 3547, 3548, and 3561.

None of the grounds for the demurrer were good, and it should have been overruled. Thp order and judgment are therefore reversed.