Citizens Trust & Savings Bank v. Fletcher American Co.

Appellees are the owners of public improvement bonds issued against certain property by the city of Hammond, under Improvement Resolution No. 1497, pursuant to §§ 10487-10492, Burns 1926. Appellant is the owner of improvement bonds issued against the same property by the city of Hammond, pursuant to §§ 10566-10575, Burns 1926. The lien of appellees' bonds, issued under Improvement Resolution No. 1497, attached September 13, 1926, and the lien of those issued under Improvement Resolution No. 1534, attached November 15, 1926. Appellant's bonds were issued under Improvement Resolution No. 1281, and the lien attached on September 2, 1925. All of the bonds were issued for the improvement of, and are liens upon, the same real estate.

Appellees filed a complaint in two paragraphs; the first seeking foreclosure under the lien resulting from Improvement Resolution No. 1497, and the second seeking foreclosure under the lien resulting from Improvement Resolution No. 1534. Appellant answered this complaint in three paragraphs; the first a general denial, the second asserting that its lien under Improvement Resolution No. 1281 was equal in rank and priority to the liens claimed by appellees, and the third asserting that its lien having first attached is entitled to precedence over appellees' liens. The cause was submitted to the court upon stipulated facts, and the court found for appellees, that their liens were prior to appellant's lien, and judgment was had accordingly.

The error assigned here is the overruling of appellant's motion for a new trial. But a single question is presented. Where two or more public improvements are made at different times, under either or both of the statutes above referred to, and liens arise upon the same property for assessed benefits, are the liens of the assessments equal, or does the first or the last lien have priority?

The statute under which appellees' liens arose provides that the lien "shall have precedence over all liens, except taxes." By provision of the statute under which appellant's lien arose, the character of the lien is controlled by § 10445, Burns 1926, § 48-2711, Burns 1933, § 11662, Baldwin's 1934. It also provides that the lien "shall have precedence over all liens, except taxes." Each side contends that the statute gives its lien priority over the other.

The liens are purely statutory, and their character, extent, and priorities must be determined from the statute. State ex rel. Ely, Drainage Commissioner v. Aetna Life Ins. Co. 1. (1889), 117 Ind. 251, 252, 20 N.E. 144; Wilt v. Bueter, Treas. (1916), 186 Ind. 98, 111 N.E. 926; BrownellImprovement Co. v. Nixon (1910), 48 Ind. App. 195, 92 N.E. 693, 95 N.E. 585.

This same question was before the Appellate Court in the case of Burke v. Lukens (1895), 12 Ind. App. 648, 651, 40 N.E. 641, 50 Am. St. Rep. 539. The court said:

"A strict construction of the wording of the statute fully warrants appellant's assumption that the last lien of this kind acquired must have precedence over all other liens of a like character. The theory of the law is that every improvement of this character to the extent of the improvement enhances the value of the property. So every improvement made increases the security for the payment of assessments previously made. . . . It follows, therefore, that the last assessment for such improvement must take precedence as a lien over those previously made."

But there is no express provision in the statute giving precedence to the latter lien. As was said by Elliott, J., inState ex rel. Ely, Drainage Commissioner v. Aetna Life Ins.Co., supra:

"We do not doubt that it would have been within the power of the Legislature to provide by express words that the lien should have priority over pre-existing mortgages. . . . But there is no such provision in our statute, and the question is whether the courts can put one there."

In Burke v. Lukens, supra, it is argued that every improvement may increase the security for payment of the assessments previously made, but, as said by Judge Elliott in the last case cited:

"We appreciate the force of the appellant's argument, but think it one that should be addressed to the Legislature rather than the courts."

Arguments as to the wisdom, justice, or equity of priorities must be addressed to the legislature for its consideration in framing statutes on the subject, for the shaping of 2. policies in respect to such matter rests with the legislature, and not with the courts.

In the opinion in the case of Brownell Improvement Co. v.Nixon, supra, Myers, J., now of this court, said, (p. 200):

"This court in the case of Burke v. Lukens, supra, on the theory that every improvement of streets, to the extent of the assessments therefor, enhances the value of the property assessed, read into the statute the words ``of a like character.' Upon a careful re-examination of that statute, we conclude that the reason given for the added words will not justify such a material addition."

It is provided by § 247, Burns 1926 that in construing statutes, words shall be taken in their plain or ordinary sense, unless such construction be plainly repugnant to the intent of the legislature, or the context of the same statute. We find nothing in the statutes referred to, or elsewhere, indicating an intention that the words "shall have precedence over all liens, except taxes" should be taken to mean anything different than is implied by the plain or ordinary and usual sense of the words, nor is such a construction plainly repugnant to any manifest intention of the legislature as shown by the context of the same statute.

The meaning of the word "all" is clear and easily understood. The language "shall have precedence over all liens, except taxes," does not mean all prior liens, or all subsequent 3. liens, or all mortgage liens, or all liens, except taxes and subsequent improvement liens, or all liens, except taxes and prior improvement liens. If appellees' liens are to be given priority, the statute must be read as giving appellant's lien "precedence over all liens, except taxes and subsequent improvement liens," and if appellant is to be given preference, the statute must be treated as giving appellees' liens "precedence over all liens, except taxes and prior improvement liens." But we know of no rule of construction that will permit us to add qualifying or limiting words to this provision of the statute. The word "all" must be construed as meaning all, without exception or reservation, and to cover other liens, except taxes only, both prior and subsequent. In other words, when the liens were created, the statute said to both appellant and appellees: "No lien arising prior or subsequent to your lien will take precedence over you, except the lien of taxes." It must follow, therefore, that since the lien of each takes precedence over all, except only the lien of taxes, no other exception can be created, and the court cannot say to either: "Your lien has precedence over all liens, except taxes and one other lien." The liens, therefore, each taking precedence over all, are equal, and neither may have precedence over the other.

The court erred in finding that appellees' liens were prior to appellant's.

Judgment is reversed, with instructions to sustain appellant's motion for a new trial, and to enter judgment consistent with this opinion.