Fencl v. City of Harpers Ferry

• Decision Date: 20 December 2000
• Docket Number: No. 98-2284.,98-2284.
• Citation: 620 N.W.2d 808
• Parties: Robert J. FENCL, Appellant, v. CITY OF HARPERS FERRY, Iowa, Appellee.
• Court: Iowa Supreme Court

620 N.W.2d 808

Robert J. FENCL, Appellant, v. CITY OF HARPERS FERRY, Iowa, Appellee.

No. 98-2284.

Supreme Court of Iowa.

December 20, 2000.

Rehearing Denied January 29, 2001.

Eric W. Johnson of Beecher, Field, Walker, Morris, Hoffman & Johnson, P.C., Waterloo, for appellant.

James A. Garrett, Waukon, for appellee.

Considered en banc.

TERNUS, Justice.

The appellant, Robert Fencl, brought this action to quiet title to a twenty-foot strip of land that was originally platted as an alley in the City of Harpers Ferry, but never used as such. The trial court held that the alley was public trust property and, therefore, Iowa's Marketable Record Title Act, Iowa Code sections 614.29-.38 (1997), did not apply to cut off the appellee city's interest. On appeal, we hold that the unused alley is not public trust property. Notwithstanding this holding, we conclude that the act does not apply to extinguish the city's interest because a statutory exception for interests appearing in the record titleholder's muniments of title applies. In considering the appellant's alternative argument, rejected by the trial court, that the city is equitably estopped from claiming any interest in the land, we find that Fencl has established the elements of equitable estoppel and, therefore, the city is estopped from claiming ownership of the disputed property. Accordingly, we reverse and remand for entry of an order quieting title in Fencl.

I. Background Facts and Proceedings.

Harpers Ferry is a resort community on the shore of the Mississippi River. Its origin can be traced to an 1854 recorded plat of the town of Winfield, later renamed as Harpers Ferry. This plat, identified as "the Original Plat of Harpers Ferry," defined the boundaries of lots and designated streets and alleys. The property in dispute in this case appears on the original plat as an alley, although it has never been utilized as such.

Robert Fencl currently owns the property designated as lot 63 on the 1854 plat. The unused alley lies south of lot 63, between lot 63 and lot 64. For many years prior to 1950, both lots, as well as additional adjacent property, were under the common ownership of F.W. Goebel and his wife, Martha, and were part of a large farm. Then in 1950, the Goebels conveyed lot 63 to W.A. Ottilie. The complete description used in the warranty deed conveying the property to Ottilie is as follows:

Lot 63 of Original Plat of the Town of Harpers Ferry, Iowa, and the part lying immediately South of that Lot which was originally platted as an alley and 15 feet immediately East of said Lot which constitutes a vacated portion of Second Street.¹

When Ottilie died in 1951 his heirs deeded the property back to Martha Goebel, and she owned the property until 1962.

In 1962, Raymond and Betty Fencl, the parents of Robert Fencl, approached the Goebels about purchasing a lot. The Goebels offered the Fencls a choice of several lots; lot 63 was priced higher than other lots because it was twenty feet wider due to the addition of the property platted as an alley. The Fencls agreed to purchase lot 63, and received a warranty deed from the Goebels. The description of the property was identical to the description appearing in the 1950 warranty deed to Ottilie.

The Fencls made various improvements to the property, including the tract originally designated as an alley. They spent considerable effort cleaning up the property and eventually moved a trailer onto that portion of the property known as lot 63. They planted grass, flowers, and trees, and, in 1969, built a tool shed on the contested property at the cost of a few hundred dollars. At one time, a septic tank system was located on the disputed tract, but in the late 1980s the Fencls stopped using it when they connected to a citywide sewer system.

In 1993 the Fencls deeded the property to their son. The property description remained as it had in prior deeds.

Around 1996, the city began a process of identifying and eliminating unneeded public rights-of-way, including platted, but never developed, streets and alleys. Property designated by the city was offered to adjoining property owners at a standard price of $.96 per square foot. One of the properties so designated was the twenty-foot strip of property between lots 63 and 64, originally platted as an alley and included in Fencl's deed. The city contacted Fencl and his neighbor to the south and offered to sell each of them one-half of the alley at the established price. Fencl objected to purchasing the property, as he believed that he already owned it. When the parties were unable to resolve the issue, Fencl filed this quiet title action.

In his petition to quiet title, Fencl asserted that he owned the contested property in fee simple and that the provisions of the Marketable Record Title Act barred any interest that the city may ever have had in the real estate. The city responded that the act did not apply for four reasons: (1) the alley constitutes public trust property and, therefore, the city's interest could not be extinguished by the act; (2) the city's interest was inherent in the muniments of which Fencl's chain of record title was formed, thereby falling within an exception to the act; (3) the city had been in continuous possession of the property for a period of more than forty years, thereby qualifying under another exception to the act; and (4) Fencl's chain of record title failed to adequately identify the property he claimed. The city filed a counterclaim to quiet title in the city.

The case was tried to the court, which denied Fencl's petition to quiet title and granted the city's counterclaim to quiet title. The court ruled that the disputed property was public trust property and, therefore, the act did not apply. The court also rejected an equitable estoppel argument advanced by Fencl. Fencl brought this appeal.

II. Scope of Review.

An action to quiet title in land is in equity and, thus, this court's review is de novo. See Rouse v. Union Township, 530 N.W.2d 714, 716 (Iowa 1995)

; Iowa R.App.P. 4. We have the responsibility to examine the facts as well as the law and to decide anew the issues properly presented. See In re Marriage of Full, 255 N.W.2d 153, 156 (Iowa 1977). "[T]he court gives weight to the fact findings of the trial court, but is not bound by them." Iowa R.App.P. 14(f)(7). Nor are we bound by the trial court's conclusions of law. See Rouse, 530 N.W.2d at 716.

We first examine the basis upon which the trial court rendered its decision, affirming on that ground if possible. See Israel v. Farmers Mut. Ins. Ass'n, 339 N.W.2d 143, 146 (Iowa 1983)

. If we disagree with the basis for the court's ruling, we may still affirm if there is an alternative ground, raised in the district court and urged on appeal, that can support the court's decision. See id.

III. Applicability of the Marketable Record Title Act.

A. General legal principles. We begin our consideration of this issue with a brief review of the Iowa Marketable Record Title Act, commonly known as the forty-year act. Marketable title statutes are

statutes designed to shorten the period of search required to establish title in real estate and give effect and stability to record titles by rendering them marketable and alienable—in substance to improve and render less complicated the land transfer system.

Chicago & N.W. Ry. v. City of Osage, 176 N.W.2d 788, 793 (Iowa 1970). The act itself states that it "shall be liberally construed to effect the legislative purpose of simplifying and facilitating land title transactions by allowing persons to rely on a record chain of title." Iowa Code § 614.30.

In furtherance of this goal, the Iowa legislature established a forty-year marketable record title:

Any person who has an unbroken chain of title of record to any interest in land for forty years or more, shall be deemed to have a marketable record title to such interest . . . subject only to the matters stated in section 614.32. A person shall be deemed to have such an unbroken chain of title when the official public records disclose a conveyance or other title transaction, of record not less than forty years at the time the marketability is to be determined, which said conveyance or other title transaction purports to create such interest, either in:

1. The person claiming such interest, or

2. Some other person from whom, by one or more conveyances or other title transactions of record, such purported interest has become vested in the person claiming such interest; with nothing appearing of record, in either case, purporting to divest such claimant of such purported interest.

Iowa Code § 614.31 (emphasis added). The city concedes that Fencl has a forty-year unbroken chain of record title to the disputed property. Therefore, Fencl has a marketable record title. See id. § 614.29(1) (defining "marketable record title").

Under the statute, a marketable record title operates to extinguish any interest, "the existence of which depends upon any act, transaction, event or omission that occurred prior to the effective date of the root of title ... whether legal or equitable, present or future ... whether such person is natural or corporate, or is private or governmental," subject, however, to the matters stated in section 614.32. Id. § 614.33. Fencl's root of title is the 1950 deed from the Goebels to Ottilie. See id. § 614.29(5) (defining "root of title"). Clearly, the city's interest "depends upon [an] act ... that occurred prior to the effective date of the root of title," that act being the adoption of the original 1854 plat.²Id. § 614.33. Therefore, Fencl's marketable record title serves to extinguish the city's interest unless Fencl's title is subject to any of the matters stated in section 614.32.

Section 614.32 sets forth the interests and rights to which a marketable title is subject. The city relies on two of these matters: (1) interests that are inherent in the record...