Des Moines Brick Manufacturing Co. v. Smith

"Wateeman, J. [308] — The only issue presented is between plaintiff and intervener, and it relates to the priority of their respective liens. Which is to have precedence of the other is the only question in the case. The certificates held by intervener were issued in payment for curbing East Grand [309] avenue in tbe city of Des Moines. Tbe- contract for tbis work was let about August 19, 1891, and tbe work was completed during that year. Tbe certificates tberefor were issued March 16, 1893. Tbe certificates beld by plaintiff were given, as already said, in payment for paving tbe same street. Tbe contract for this work was let about April 15, 1892; tbe labor was done during tbe year 1893, and tbe certificates were issued May 19tb of that year. It is apparent that tbe lien of tbe intervener was first in point of time. Tbe contention of plaintiff is that its later lien supersedes tbe other. Tbe rule, in tbe absence of statutory provision to the contrary, is that liens take precedence in tbe order of time; tbe first in point of time being superior. Tbe only exception to tbis that we now recall is a bottomry bond, and it is expressly recognized by text writers as differing in tbis respect from all other common law liens. 3 Eent Oommentáries, 437. Tbis order of priority will not be disturbed or altered, unless expressly provided by statute. Smith v. Skow, 97 Iowa, 640; Bibbins v. Clark, 90 Iowa, 230. We come, then, to an investigation of tbe statutory provisions with relation to liens of tbe character of those involved. It is conceded that tbis case is governed by chapter 168, Laws Twenty-first General Assembly. Section 13 of that act is as follows: “Said assessments with interest accruing thereon shall be a lien upon tbe property abutting upon the street or streets on which any such improvement is made from tbe commencement of tbe work, and shall remain a lien until fully paid, and shall have precedence over all other liens, excepting tbe ordinary taxes, and shall not be divested by any judicial sale, provided that such lien shall be limited to tbe lots bounding or abutting on such street or streets, and not exceeding in depth therefrom one hundred and fifty feet.” It is upon tbe construction of tbis section that tbe rights of tbe parties depend. If tbe section stood alone, there would be much warrant for tbe claim made by appellant that [310] tbe last lien so given displaced all other previous liens upon tbe property. But, in order to properly interpret tbis part of tbe chapter, we must look to its context. Tbis act begins with a grant of power to certain cities to levy special assessments for paving, curbing,'or sewering streets. These three distinct kinds of improvement may be made and paid for by levying tbe cost against abutting property. As tbe law proceeds, it treats of these improvements as a class. Nowhere does it distinguish between them, or attempt to set off one as .against tbe others. When section 13 is reached, the lien for such cost is provided for, not of either one of these improvements, but of the whole class, and it is said such lien “shall have precedence over all other liens, excepting ordinary taxes.” Looking at it in this way, it would seem clear that the “other liens” mentioned are liens of some other class or kind. There appears to be good reason, too, for so construing this act. It would be something unusual to say that the municipality might, by its own voluntary act, displace a lien which, under the law, it had given. We are asked now to hold that after the city, through its acts, has given to one party a lien, it can without his consent and against his will, displace, and perhaps destroy, it, by creating another lien in favor of some other person. This right may be conferred by statute, but it should be done in unmistakable language before we would feel justified in so holding. Such a provision, too>, would have a tendency to defeat the whole purpose of the statute. It is safe to say that contractors would hesitate to accept these certificates, if they knew the city had power at any time to destroy the lien by which their payment is secured. It may be thought, as counsel in substance asserts, that the benefit to the property of the later improvement would add to the security of the earlier lien, and make it as safe in second place as it was originally in the first. It is hardly necessary to say that the immediate benefit to property, from improvements of this kind, is in many instances more fanciful than real. [311] In the present case, the cost of the improvement seems to exceed the value of the property after the work is done. The property owner is not without reason, if under such circumstances he regards the improvement as a burden rather than a benefit. It can hardly be said in any case that the real estate at once takes on an additional value equal to the cost of the improvement. But, however this may be, if the paving benefited the real estate in question by increasing its price, there is quito as much justice in compelling plaintiff to rely upon this for his security, as for holding that such fact will support the right to displace the lien of the intervener. After all, the question is one of statutory construction only. The lien of intervener is first and paramount, unless the statute otherwise provides; and this we think is not the case. One argument used by appellant is that, if intervener had foreclosed her lien and become the owner of the property before the paving was done, she would have been obliged to pay for such improvement. This is true. But we might respond by saying that if one who holds a mortgage upon property on which intoxicating liquors are sold forecloses his lien, and becomes the owner of the property before the mulct tax is levied, he will be liable for its payment, and yet we held that the lien of such tax would not take precedence of a prior existing mortgage. Smith v. Show, supra. The only case cited by appellant which we regard as in conflict with our views is Burke v. Lukens, 12 Ind. App. 648 (40 N. E. Rep. 641), and this is by an intermediate court. It is not an authority, and we must say that we are not inclined to accept the line of reasoning pursued as a sufficient argument to sustain the conclusion. 2 II. Another ground of complaint by appellant is that the court allowed interest upon its judgment at the rate of six per cent, only, when the law provides for ten per cent, in case an action is brought for the recovery of such taxes. The adverse parties here make no argument on this matter of interest. To the intervener it is manifestly [312] immaterial, if sbe is successful in mantaining the priority of her claim, and it seems, as already said, that the face of the liens is sufficient to exhaust the property, and the owner is indifferent as to what may be added in the way of interest. Section 12, chapter 168, Acts Twenty-first General Assembly, which provided for interest, was amended by chapter 5, Acts Twenty-second General Assembly, and is as follows: “Said assessment shall be placed on the tax duplicate or list of the county and shall be payable at the office of the county treasurer in seven equal installments with interest at six per centum from the date of the assessment upon the unpaid portion thereof, the first of which, with interest on the whole amount at six per cent, shall be payable at the first semiannual payment of taxes next succeeding the time said assessment is placed on said duplicate and the others annually thereafter. And said assessment shall be collected in the same manner and bear the same penalties when delinquent as now provided by law for the collection of other taxes.7’ The rate of interest is here fixed at six per cent. The closing lines, in which it is stated that such taxes shall hear the same penalties when delinquent as ordinary taxes, relate, a3 we construe them, to cases where the collection is made by the treasurer, and have no application to instances of this kind, where extraordinary means are adopted. Appellant bases its claim on sections 478, 479, Code 1873. In these sections it is provided that there may be a recovery by suit against the owner, and the lien thus enforced. And in section 479 it is said in such action “any municipal corporation may be entitled to demand and recover in addition to the amount assessed and interest thereon at ten per cent, from the time of the assessment, five per cent, to defray the expenses of collection,” etc. This added burden is in the nature of a penalty. It is given to the municipal corporation only in case it seeks to enforce payment of the assessment by civil action; and there is strong reason for saying that no such action will lie on the part of the city until it has paid its contractors. City of Burlington [313] v. Quicks, 47 Iowa, 222. We are not inclined to extend tbs provision beyond the strict letter of its terms. This action is not by the city; therefore this additional interest cannot be claimed under the section last mentioned. The decree of the trial court was in all respects right, and it is aeeiemed.