Monona County v. Waples
| Decision Date | 20 June 1939 |
| Docket Number | 44786. |
| Citation | 286 N.W. 461,226 Iowa 1281 |
| Parties | MONONA COUNTY v. WAPLES et al. |
| Court | Iowa Supreme Court |
Appeal from District Court, Monona County; Miles W. Newby, Judge.
Plaintiff appeals from decree in foreclosure suit in favor of defendant J. Ray Hubbard.
Reversed and remanded.
Geo E. Allen, of Onawa, for appellant.
Prichard & Prichard, of Onawa, for appellee.
In 1920, Monona County made a loan of $2,500 from the permanent school fund of the State of Iowa to defendants, P. T. Waples and Josephine Waples. They executed a note for $2,500 payable to Monona County in trust for the school fund due in 5 years and to secure the note they executed a mortgage on their 40 acres in Monona County to the County of Monona and the State of Iowa. This school fund mortgage contained the following paragraph: " And it is expressly agreed that this mortgage is made in accordance with and subject to all the provisions of an act of the Eighth General Assembly of the State of Iowa, entitled, ‘ An Act Providing for the Management of the School Fund, and of the sale of School Lands,’ being Title 12, Chapter 12, of the Code of 1873, and acts amendatory thereto."
On March 5, 1936, the defendant, J. Ray Hubbard, purchased the mortgaged premises at tax sale.
In December 1937, Monona County, as trustee for the use and benefit of the school fund of the State of Iowa, commenced this suit to foreclose the school fund mortgage. The petition alleged that Mr. Hubbard's tax sale certificate was junior and inferior to plaintiff's mortgage. Hubbard, who will be referred to as the defendant, filed an answer stating that the land involved in the suit was not school agricultural college, or university land sold on credit, but was land that was entered and patented in the usual manner; that plaintiff was not the holder of a lien for the unpaid purchase price of the real estate and therefore the lien of plaintiff's mortgage was junior and inferior to the tax lien of the defendant.
The case was submitted to the trial court on an agreed statement of facts. In addition to the above facts it was stipulated that the note and mortgage were the property of the State of Iowa; that the real estate had never been school or university land sold on credit; that defendant paid subsequent taxes on the real estate after his purchase of the tax sale certificate and that the amount necessary to redeem from the tax sale was the sum of $101.64.
The decree entered in the case did not determine the priority of said liens which was the only issue formed by the pleadings or referred to in the statement of facts. The trial court found that it was unnecessary to determine this issue because the equities were with the defendant. The decree granted plaintiff a judgment in foreclosure against all the defaulting defendants but as to the defendant Hubbard it adjudged as follows: " It is the further order, judgment and decree of the court that the plaintiff, Monona County, as trustee, and the said defendant, J. Ray Hubbard, be, and are, hereby placed in statu quo-that is-in the same position they were in before the purchase of the said tax certificate by the said J. Ray Hubbard, without costs, interest and penalty as to him."
The effect of this order was to require the plaintiff, as trustee of the school fund, to refund to defendant the amount of taxes he had paid Monona County in the sum of $101.64. The County was not a party to the suit.
In finding that the equities of the case appealed to the conscience of the court and were with the defendant, the court stated in the decree that the plaintiff did not demand or attempt to collect the loan until eleven years after it became due; that the State and its trustee, Monona County, were in fact guilty of laches and negligence; that equity would not permit the State to take advantage of its lack of diligence and attempt to collect its debt from a citizen and taxpayer of the county who purchased the land at tax sale on which the school fund mortgage existed.
Section 3 of the second division of Article 9 of the Constitution of the State of Iowa states that the school fund " shall be inviolably appropriated to the support of Common schools throughout the State."
Section 3, Article 7 of the Constitution reads:
Section 7202, 1935 Code, reads:
Section 4495, found in Chapter 232, 1935 Code, on school funds, reads:
A school fund mortgage is State property and, as stated in the early case of Des Moines County v. Harker, 34 Iowa 84:
" The State has recognized its right to the fund, and has solemnly pledged itself to maintain it intact and inviolate for the purpose to which it has been dedicated."
Beginning with the Code Revision of 1860, the legislature has enacted legislation in harmony with the provision contained in all of our codes that taxes upon real estate shall not be a lien against the State and for the purpose of aiding the State in preserving the school fund from loss.
This legislation is found in Sections 810 and 811, Revision of 1860; Section 900 of the Code of 1873; Section 1435, Code of 1897 and Section 7268 of the 1924, 1927, 1931 and 1935 Codes.
Sections 810 and 811, Revision of 1860, read:
In the Code of 1873, the above two sections are found in Section 900.
The headnote to Section 1435 of the 1897 Code is " School, agricultural college or university land." The first sentence of Section 1435 is substantially the same as Section 900, Code of 1873 down to the first semicolon. Beginning with the second sentence, Section 1435, 1897 Code, reads: (Italics supplied.)
Subsequent Codes contain substantially the same provisions as Section 1435, 1897 Code.
Prior to the adoption of the 1897 Code, this court, in construing Section 900 of the Code of 1873 and Sections 810 and 811 of [286 N.W. 465] the Revision of 1860, held without exception that the lien of a mortgage given the State for the purchase price of school land bought on credit and the lien of a real estate mortgage to the school fund were paramount to a tax lien. See La Rue v. King, 74 Iowa 288, 37 N.W. 374; Winnebago County v. Brones, Adm'r, 68 Iowa 682, 28 N.W. 15; Ayres v. Adair County, 61 Iowa 728, 17 N.W. 161; Lovelace v. Berryhill, 36 Iowa 379; Miller v. Gregg, 26 Iowa 75; Helphrey v. Ross, 19 Iowa 40; State v. Shaw, 28 Iowa 67; Jasper County v. Rogers, 17 Iowa 254; Crum v. Cotting, 22 Iowa 411.
In the case of State v. Shaw, supra, the court, in referring to Section 811 of the Revision of 1860, states: " This provision exempts lands so mortgaged from tax sales that will divest the lien of such mortgage, and the purchasers at the sales only acquire the right to redeem from the mortgage."
This is the first time this court has been called on to construe Section 1435, 1897 Code, and the corresponding sections in our subsequent codes.
We are of the opinion that we should construe Section 1435 of the 1897 Code and the corresponding sections of the subsequent codes in precisely the same manner as the court construed Section 900 of the 1873 Code and Sections 810 and 811 of the Revision of 1860.
It will be observed that the second clause of said Section 900 reads " And in all ca...
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