Freedom Financial Bank v. Estate of Edward J. Boesen

IN THE SUPREME COURT OF IOWA
No. 11:17 / 09–0397
Filed November 18, 2011
FREEDOM FINANCIAL BANK,
Appellee,
vs.
ESTATE OF EDWARD J. BOESEN,
Appellant,
and
MAUREEN A. BOESEN,
Appellant.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Polk County, Douglas F.
Staskal, Judge.
Maureen Boesen and the Estate of Edward J. Boesen appeal the
district court’s grant of summary judgment to Freedom Financial Bank
in this mortgage foreclosure proceeding. DECISION OF COURT OF
APPEALS AFFIRMED; DISTRICT COURT JUDGMENT AFFIRMED IN
PART AND REVERSED IN PART.
James R. Monroe, Des Moines, for appellant Estate of Edward J.
Boesen.
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Adam C. Van Dike of Connolly O’Malley Lillis Hansen Olson LLP,
Des Moines, and Jerrold Wanek of Garten & Wanek, Des Moines, for
appellant Maureen A. Boesen.
Louis R. Hockenberg and Benjamin M. Clark of Sullivan & Ward,
P.C., Des Moines, for appellee Freedom Financial Bank.
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WATERMAN, Justice.
The forgery of a spouse’s signature on a mortgage complicates this
foreclosure dispute between creditors and the widow over her deceased
husband’s commercial real estate. Venerable precedent dating back to
the 1870s guides our resolution of the parties’ competing claims and
helps harmonize seemingly conflicting provisions of the probate code.
Specifically, we must decide whether a surviving spouse’s dower
interest—codified in Iowa Code section 633.211 (2009) as to
nonhomestead real property—is subject to either a lender’s purchase-
money mortgage or the other debts and charges of the estate of the
spouse who died intestate.
Edward J. Boesen obtained a purchase-money mortgage from
Freedom Financial Bank to invest in commercial real estate in Ankeny,
Iowa. The signature of his wife, Maureen, was forged in executing the
purchase-money mortgage. After Edward’s death, Freedom Financial
attempted to foreclose its mortgage, but Maureen and the Boesen Estate
asserted Maureen’s fraudulent signature voided the mortgage.
The district court granted Freedom Financial summary judgment,
concluding its purchase-money mortgage was superior to Maureen’s
statutory dower interest and the estate’s other debts and charges. The
district court ordered any excess sale proceeds to be paid to the estate,
not Maureen. The court of appeals affirmed the district court’s award of
summary judgment to Freedom Financial, but reversed the district
court’s determination that the foreclosure sale surplus be paid to the
estate and instead held Maureen’s statutory dower interest took priority
over the estate’s other debts and charges. On further review, we affirm
the court of appeals decision. This is the result at common law that the
applicable provisions of the probate code embrace.
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I. Factual and Procedural Background.
On May 25, 2007, Edward Boesen purchased commercial real
estate in Ankeny. The deed conveyed the land “to Edward J. Boesen, a
married person” and was recorded in the Polk County Recorder’s Office
the same day. To finance the purchase, Edward obtained a $232,000
loan from Freedom Financial and executed a promissory note for
$232,000 and a mortgage securing $290,000 in loans and advances on
the Ankeny real estate. The mortgage was recorded within a minute of
the deed. The loan documents Edward signed contained a purchase-
money mortgage recital and expressly waived all dower interests.
Edward’s signature and Maureen’s purported signature on the mortgage
were acknowledged by a notary public. Maureen claims her signature
was forged. The record contains no details as to the forgery.
Edward died intestate on July 15, 2008, leaving Maureen as his
surviving spouse. Edward and Maureen had four children together.
After Edward’s death, the mortgage fell into default; Freedom Financial
issued a notice of default and then filed its petition to foreclose the
mortgage on August 7, 2008.
Freedom Financial’s petition asserted its mortgage was superior to
all other claimants’ interests in the Ankeny real estate. The bank sought
judgment for the $228,056.42 remaining on the promissory note and for
attorney fees and costs as provided for in the promissory note and
mortgage. Maureen and the estate filed answers and raised affirmative
defenses, contending the mortgage was void because Maureen did not
execute the mortgage and Edward could not unilaterally convey her
statutory dower interest.
Freedom Financial moved for summary judgment. The bank did
not challenge the allegations Maureen’s signature was forged, but argued
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its purchase-money mortgage nevertheless remained superior to
Maureen’s statutory dower interest. Maureen resisted the motion and
cross-moved for summary judgment on grounds she never executed the
mortgage and Edward could not sign away her statutory dower interest
in the Ankeny property. The estate moved for summary judgment,
alleging Maureen’s fraudulent signature rendered Freedom Financial’s
mortgage invalid as to Maureen’s interest in the property. The estate
also asked the court to subject Maureen’s statutory interest in the real
estate to its debts and charges.
On January 26, 2009, the district court granted Freedom Financial
summary judgment and entered judgment against the estate in the
amount of $228,056.42 plus interest, court costs, attorney fees, and
other advances made by the bank. The district court ruled that, under
Iowa Code section 654.12B, the bank held a purchase-money mortgage
superior to “any other right, title, [or] interest . . . arising through, or
under Edward.” The district court concluded that Maureen’s statutory
dower right was a real property interest arising through Edward. The
district court also ordered any foreclosure sale surplus to be paid to the
estate—implicitly concluding Maureen’s statutory dower interest under
section 633.211 was subject to the estate’s debts and charges. On
February 25, 2009, the district court entered a decree of foreclosure.
Later that day, the district court filed a supplemental order
rejecting Freedom Financial’s contention that its mortgage entitled its
nonpurchase-money advances to Boesen to receive purchase-money
priority. After the bank sought clarification, the district court filed a
March 16, 2009 order reiterating that the estate is entitled to any
foreclosure sale surplus, but that Freedom Financial’s secured
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nonpurchase-money advances retain their priority vis-à-vis other estate
creditors.
The estate appealed the district court’s summary judgment order,
its foreclosure decree, and its supplemental order. Maureen filed a
“cross-appeal” appealing all rulings. The case was transferred to the
court of appeals. The court of appeals affirmed the district court’s
foreclosure decree in favor of Freedom Financial, but reversed the district
court’s order awarding the sale surplus to the estate. The court of
appeals held Maureen’s statutory dower interest in the real property was
free and clear of the estate’s other debts and charges. We granted the
estate’s application for further review.
II. Standard of Review.
Foreclosure proceedings are typically tried in equity. Iowa Code
§ 654.1; First Fed. Sav. & Loan Ass’n of Storm Lake v. Blass, 316 N.W.2d
411, 415 (Iowa 1982). This appeal, however, is from an order granting
summary judgment and related supplemental orders. Our review,
therefore, is for correction of errors of law. Baratta v. Polk Cnty. Health
Servs., Inc., 588 N.W.2d 107, 109 (Iowa 1999).
III. Purchase-Money Mortgage Priority.
Maureen and the estate contend her statutory dower share
provides her an interest in the Ankeny real estate superior to Freedom
Financial’s purchase-money mortgage. The dower statute, Iowa Code
section 633.211(1), provides in pertinent part:
If the decedent dies intestate leaving a surviving
spouse and leaving no issue or leaving issue all of whom are
the issue of the surviving spouse, the surviving spouse shall
receive the following share:
1. All the value of all the legal or equitable estates in
real property possessed by the decedent at any time during
the marriage, which have not been sold on execution or by
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other judicial sale, and to which the surviving spouse has
made no relinquishment of right.
(Emphasis added.) Maureen and the estate argue her statutory dower
interest attached to the Ankeny property when Edward purchased the
land, and he could not unilaterally convey away her dower interest in
real property. Maureen and the estate also assert Freedom Financial’s
mortgage was improperly recorded and is therefore invalid.
A. The Purchase-Money Mortgage is Superior to the Statutory
Dower Interest. On appeal, the parties agree Freedom Financial’s
mortgage was a purchase-money mortgage. Iowa Code section
654.12B(2) defines a purchase-money mortgage as:
Taken by a lender who, by making an advance or incurring
an obligation, provides funds to enable the purchaser to
acquire rights in the real estate, including all costs in
connection with the purchase, if the funds are in fact so
used.
Freedom Financial loaned Edward $232,000 to purchase the real estate
for investment purposes. By statutory definition, the instrument he
signed was a purchase-money mortgage. The mortgage contained a
recital clause stating, “This is a purchase-money mortgage as defined by
Iowa law.” Section 654.12B states a recorded purchase-money mortgage
has “priority over and is senior to preexisting judgments against the
purchaser and any other right, title, interest, or lien arising either
directly or indirectly by, through, or under the purchaser.” This
provision codifies the common law rule that a purchase-money mortgage
had “preference over previous judgments against the purchaser-
mortgagor.” Keefe v. Cropper, 196 Iowa 1179, 1181, 194 N.W. 305, 306
(1923).
Undaunted, Maureen and the estate argue her statutory dower
interest is superior to the bank’s purchase-money mortgage because
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Maureen did not sign the mortgage, and Edward cannot unilaterally
convey her statutory dower interest they claim attached when Edward
purchased the land. Maureen and the estate rely on a line of cases that
hold a decedent cannot unilaterally divest the surviving spouse’s
statutory dower interest. In Warner v. Trustees of Norwegian Cemetery
Ass’n, a husband conveyed real property to a third party without his
wife’s knowledge. 139 Iowa 115, 117, 117 N.W. 39, 42 (1908). Upon the
husband’s death, the wife sought to claim her dower interest in the real
property. We found for the wife by holding:
The dower right, given by statute to a wife in the property of
her husband, though inchoate pending the life of the
husband, is in the nature of a property right, and she cannot
be divested of it by any act of her husband, whether done in
good faith, or in fraud . . . .
Id. at 123, 117 N.W. at 42. We similarly concluded a wife’s statutory
dower interest takes priority over leasehold interests conveyed by her
husband without her approval. Westergard v. Klepper, 229 N.W.2d 236,
239 (Iowa 1975).
While it is generally true a decedent cannot unilaterally divest a
surviving spouse of their vested statutory dower interest, none of the
cases cited by Maureen or the estate for this proposition involve a
purchase-money mortgage. As with so many things in life, timing
matters. A spouse’s statutory dower interest attaches to real property
“the instant there is a concurrence of seisin in the husband and marriage
relation between the parties.” Lucas v. White, 120 Iowa 735, 741, 95
N.W. 209, 211 (1903). In Warner and Westergard, the husband had title
to the properties before unilaterally conveying real estate interests; the
surviving spouse’s statutory dower share had already attached to real
estate before the conveyances. A purchase-money mortgage, however, is
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a unique real estate instrument with a priority timing rule that dictates a
different result.
A purchase-money mortgage “is predicated on the theory that upon
the simultaneous execution of the deed and mortgage the title to the land
does not for a single moment rest in the purchaser.” Keefe, 196 Iowa at
1181, 194 N.W. at 306. Through a legal fiction, the title “merely passes
through [the purchaser’s] hands and, without stopping, vests in the
mortgagee.” Id. Accordingly, “no lien of any character” can attach prior
to the purchase-money mortgage, and the mortgage “has preference over
previous judgments against the purchaser-mortgagor.” Id. Based upon
these principles, in 1876, we held a spouse’s dower interest was subject
to a purchase-money mortgage because “no time, in contemplation of
law, intervened between the execution of the deed from plaintiff and the
mortgage[; therefore, the surviving spouse’s] inchoate right of dower
attached subject to the mortgage.” Thomas v. Hanson, 44 Iowa 651, 653
(1876); see also Haynes v. Rolstin, 164 Iowa 180, 182, 145 N.W. 336, 336
(1914) (“By many previous decisions of this court it has been held that
the dower interest in real estate attaches subject to the superior right of
a purchase-money mortgage, and that the widow is not entitled to assert
it as against the prior claim based upon a purchase-money lien.”).
This long-standing priority rule is well accepted:
As a general rule, where a husband purchases land and at
the same time executes to the grantor a mortgage for the
unpaid purchase-money, such mortgage is superior to the
wife’s right of dower . . . and this is so even though the wife
did not join in the execution of the mortgage.
28 C.J.S. Dower & Curtesy § 48, at 139 (2008); see also 25 Am. Jur. 2d
Dower & Curtesy § 30, at 85 (2004) (“[D]ower is generally subordinate to
a mortgage subject to which the husband takes title, to a mortgage given
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before marriage, to a mortgage in which the wife released her right of
dower, and to a purchase-money mortgage.”).
Thomas resolved the very dispute at issue in this appeal by holding
a purchase-money mortgage’s “pass-through” characteristics rendered a
surviving spouse’s dower interest subject to the mortgage. 44 Iowa at
653. Iowa Code section 654.12B codifies the definition and priority of a
purchase-money mortgage by expressly stating it “shall have priority over
and is senior to preexisting judgments against the purchaser and any
other right, title interest, or lien arising either directly or indirectly by,
through, or under the purchaser.” The provision also expressly
preserves the common law: “The rights in this section are in addition to,
and the obligations are not in derogation of, all rights provided by
common law.” Iowa Code § 654.12B. Neither Maureen nor the estate
argues the statute’s text demands a result different from Thomas; the
statute’s plain language makes such an argument untenable.
This result is not unfair to Maureen. Without the bank’s six-figure
loan, Edward never would have acquired the Ankeny land. His
acquisition gave Maureen her dower interest in the sale surplus.
Edward’s interest in the real property was always subject to the bank’s
purchase-money mortgage. Section 633.211 states a surviving spouse is
entitled to the “value of all legal or equitable estates in real property . . .
at any time during the marriage.” (Emphasis added.) At no time did
Edward have a real estate interest in the Ankeny property superior to
Freedom Financial’s mortgage interest. Maureen’s statutory dower
cannot bestow upon her a property interest greater than Edward ever
possessed.
Maureen and the estate’s reliance on Warner and Westergard is
misplaced. In those cases, the surviving spouse’s dower interest
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attached before the husband’s unilateral conveyance. Here, Maureen’s
statutory interest attached after Freedom Financial’s purchase-money
mortgage in the Ankeny property. We follow Thomas and the plain
meaning of section 654.12B to hold Maureen’s statutory dower interest
under Iowa Code section 633.211 is subject to Freedom Financial’s
purchase-money mortgage.
B. The Allegedly Defective Acknowledgement. The estate and
Maureen alternatively argue that her statutory interest takes precedence
over Freedom Financial’s mortgage because the forgery of her signature
precludes the bank’s compliance with the statutory recording
requirements. Their argument invokes a web of interconnected statutes.
Section 654.12B states a “recorded” purchase-money mortgage has
priority. Next, the recording act provision, section 558.42, states for an
instrument to be properly recorded, its acknowledgement must comply
with Iowa Code chapter 9E. Section 9E.9(1), in turn, requires “the
notarial officer [to] determine, either from personal knowledge or from
satisfactory evidence, that the person appearing before the notary and
making the acknowledgement is the person whose true signature is on
the instrument.” The estate and Maureen argue that, because her
signature was a forgery, the public notary failed to properly acknowledge
her signature, making the recording defective under section 558.42 and,
thereby, voiding the mortgage as to Maureen under section 654.12B.
In district court, Maureen first raised a simplified version of this
argument, relying primarily on caselaw, in a reply memorandum to
Freedom Financial’s resistance to her cross-motion for summary
judgment. The district court granted Freedom Financial summary
judgment without reaching Maureen’s “defective acknowledgment”
argument. On appeal, the estate and Maureen developed the argument
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by citing to the foregoing statutory recording provisions. They are too
late. Neither Maureen nor the estate filed a motion under Iowa Rule of
Civil Procedure 1.904(2) to enlarge the district court’s findings or
otherwise requested the district court to rule on this issue. “ ‘When a
district court fails to rule on an issue properly raised by a party, the
party who raised the issue must file a motion requesting a ruling in order
to preserve error for appeal.’ ” Stammeyer v. Div. of Narcotics
Enforcement, 721 N.W.2d 541, 548 (Iowa 2006) (quoting Meier v.
Senecaut, 641 N.W.2d 532, 537 (Iowa 2002)). “If the court does not rule
on an issue and neither party files a motion requesting the district court
to do so, there is nothing before us to review.” Id. Accordingly, the
estate and Maureen have failed to preserve error on this argument.
Even if the issue had been preserved, Maureen and the estate still
would not prevail. They essentially allege the public notary’s defective
acknowledgement creates a recording act violation. “The purpose of the
recording act is [only] ‘to notify subsequent purchasers and
incumbrancers of the rights [the recorded] instruments are intended to
secure.’ ” Shill v. Careage Corp., 353 N.W.2d 416, 419 (Iowa 1984)
(quoting Connolly v. Des Moines & Cent. Iowa Ry., 246 Iowa 874, 890, 68
N.W.2d 320, 330 (1955)). Section 558.41 states the only effect of an
improperly recorded instrument is the “instrument affecting real estate is
of no validity against subsequent purchasers for a valuable
consideration, without notice.” Maureen, however, is not a subsequent
purchaser for value. “ ‘The rule is well established that to be a good faith
purchaser for value, one must show that he made the purchase before he
had notice of the claim of another, express or implied.’ ” Moser v. Thorp
Sales Corp., 312 N.W.2d 881, 886 (Iowa 1981) (quoting Janssen v.
N. Iowa Conference Pensions, Inc. of Methodist Church, 166 N.W.2d 901,
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908 (Iowa 1969)). Maureen never paid anything for the Ankeny property.
The recording act protects the unsuspecting purchaser who acquires title
through valuable consideration in reliance on recorded legal title. The
recording act does so by granting the purchaser priority over an
otherwise superior interest holder who failed to record its interest.
Maureen did not acquire her statutory dower interest in reliance on the
Ankeny property’s legal title or pay valuable consideration to acquire the
title. The recording act provides her no relief.
IV. The Statutory Dower Interest in Real Property is Free and
Clear of the Estate’s Other Debts and Charges.
After presenting a united front against Freedom Financial’s
purchase-money-mortgage priority claim, Maureen and the estate part
company as to whether her statutory dower interest in the sale surplus is
subject to the estate’s other debts and charges. Maureen contends her
interest is free and clear of the estate’s other debts and charges; the
estate argues debts and charges must be paid first. Each party relies on
different statutory language.
A. Framing the Issue. Maureen argues her statutory dower
interest entitles her to the Ankeny real estate free and clear of the
estate’s debts and charges. Section 633.211 provides a surviving spouse:
1. All the value of all the legal or equitable estates in
real property possessed by the decedent at any time during
the marriage, which have not been sold on execution or by
other judicial sale, and to which the surviving spouse has
made no relinquishment of right.
2. All personal property that, at the time of death,
was, in the hands of the decedent as the head of a family,
exempt from execution.
3. All other personal property of the decedent which is
not necessary for the payment of debts and charges.
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(Emphasis added.) According to Maureen, it is plain the legislature
intended her statutory share in real property to have priority over the
estate’s debts and charges when subpart 3, which expressly states
nonexempt personal property is subject to the estate’s debts and
charges, is compared to subpart 1, which states she is entitled to “all the
value” in real property “possessed by the decedent at any time during the
marriage” without any limitation. To buttress her statutory argument,
Maureen points to a line of nineteenth century cases that hold a wife’s
statutory dower share takes free and clear of the estate’s debts and
charges. Maureen is correct.
The estate contends modern statutory codification has overturned
these cases, and that the current probate code, when read as a whole,
subjects the surviving spouse’s statutory dower interest in
nonhomestead real property to the estate’s debts and charges. The
estate points to Iowa Code sections 633.218 and 633.350 to support its
position. Iowa Code section 633.218 states:
After such [appraisal] proceedings, and after payment
of debts and charges, the surviving spouse shall have the
right to select from the property so appraised, at its
appraised value thus fixed, property equal in value to the
amount to which the spouse is entitled under section
633.211 or 633.212 . . . .
(Emphasis added.) Iowa Code section 633.350 provides:
Except as otherwise provided in this probate code,
when a person dies, the title to the person’s property, real
and personal, passes to the person to whom it is devised by
the person’s last will, or, in the absence of such disposition,
to the persons who succeed to the estate as provided in this
probate code, but all of the property shall be subject to the
possession of the personal representative as provided in
section 633.351 and to the control of the court for the
purposes of administration, sale, or other disposition under
the provisions of law, and such property, except homestead
and other exempt property, shall be chargeable with the
payment of debts and charges against the estate.
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(Emphasis added.) The estate contends “homestead and other exempt
property” is limited to property defined as homestead in section 561.1
and property exempt from execution under section 627.6.
To advance its argument that section 633.211 does not exclude
real property from the decedent’s estate, the estate proposes an
alternative construction of the language in section 633.211(1) and (3).
The estate correctly observes section 633.211(1) is actually silent as to
whether real property is subject to the decedent’s debts, making no
mention of the decedent’s debts. According to the estate, section
633.211(3)’s declaration that the surviving spouse receives personal
property “which is not necessary for the payment of debts and charges”
and section 633.211(1)’s unqualified real property language does not
imply section 633.211(1) real property is free from the estate’s debts and
charges, but only that the legislature intended the estate to first satisfy
its debts and charges from nonexempt personal property before turning
to nonhomestead real property. We must interpret this complex,
interconnected set of probate provisions.
Our goal in interpreting statutes is to determine legislative intent.
In re Conservatorship of Alessio, 803 N.W.2d 656, 661 (Iowa 2011).
“When construing a statute, we ‘must be mindful of the state of the law
when it was enacted and seek to harmonize the statute, if possible, with
other statutes on the same subject matter.’ ” Judicial Branch v. Iowa
Dist. Ct., 800 N.W.2d 569, 576 (Iowa 2011) (quoting State v. Dann, 591
N.W.2d 635, 638 (Iowa 1999)).
“[S]tatute[s] should be construed as to give meaning to all of
them, if this can be done, and each statute should be
afforded a field of operation. So, where the enactment of a
series of statutes results in confusion and consequences
which the legislature may not have contemplated, the courts
must construe the statutes to reflect the obvious intent of
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the legislature and permit the practical application of the
statutes.”
Id. at 576–77 (quoting Nw. Bell Tel. Co. v. Hawkeye State Tel. Co., 165
N.W.2d 771, 774–75 (Iowa 1969)); see also Thoms v. IPERS, 715 N.W.2d
7, 13 (Iowa 2006) (“We interpret statutes by considering them as a whole,
not by looking at isolated parts of the statute.”).
Based on the statutory language, precedent, and legislative history,
we hold the legislature intended the surviving spouse’s statutory dower
interest in real property to be free and clear of the estate’s debts and
charges.
B. Interpreting the Applicable Statutes. Section 633.350
states, “property, except homestead and other exempt property, shall be
chargeable with the payments of debts and charges against the estate.”
This language does not define what property is deemed to be exempt. We
must look to other provisions to determine what is exempt. One such
provision is section 633.211(1). Section 633.218 addresses the
procedure by which a surviving spouse selects property for her statutory
share. Its introductory clause, “[a]fter such [appraisal] proceedings, and
after payment of debts and charges,” is merely a timing mechanism
stating when the selection should occur and does not substantively
define what statutory dower property is exempt from payment of the
debts and charges of the decedent’s estate.
Section 633.211, which defines the dower interest, is controlling.
See Iowa Code § 4.7 (special provision controls as exception to general
provision). Section 633.211 specifically provides the surviving spouse
“shall receive . . . [a]ll the value of all the legal or equitable estates in real
property,” “[a]ll personal property . . . exempt from execution,” and “[a]ll
other personal property of the decedent which is not necessary for the
17
payment of debts and charges.” The legislature expressly subjected
nonexempt personal property to the payment of debts and charges of the
decedent’s estate, while making no such qualification for real estate or
exempt personal property. Reading the provisions together demonstrates
the legislature’s intent that the surviving spouse takes her statutory
dower interest in real estate free and clear of the decedent’s debts. See
State v. Beach, 630 N.W.2d 598, 600 (Iowa 2001) (noting legislative intent
is expressed by omission as well as by inclusion of statutory terms). If
the legislature intended to subordinate the surviving spouse’s real
property interest to the decedent’s debts, it would have expressly said so,
as it did in subpart 3 with nonexempt personal property. Our conclusion
is buttressed by caselaw and the legislature’s lengthy silence in the face
of the court decisions supporting Maureen’s position.
1. Statutory dower precedent. While the interplay between these
specific statutory provisions is an issue of first impression, this court has
previously resolved priority disputes between a spouse’s statutory dower
interest and an estate’s debts. In Mock v. Watson, “[t]he sole question
presented [was whether] the interest of a widow in the lands of her
deceased husband [were] subject to debts against the estate, or [were] to
be set apart before payment of debts.” 41 Iowa 241, 243 (1875). We
reasoned that at common law the wife’s dower interest attaches at seisin
and marriage, and once the husband dies, the dower interest vests and is
removed from the husband’s estate. Id. at 245. The court noted the
legislature repealed the common law dower estate, but found the
applicable statutory provisions required the same result. Id.; see also
Thomas v. Thomas, 73 Iowa 657, 659, 35 N.W. 693, 694 (1887) (“The
dower of the widow is not subject to the debts of her deceased husband,
and is to be set apart without reference thereto.”); Kendall v. Kendall, 42
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Iowa 464, 466 (1876) (finding “that under present law the widow is
entitled to [her statutory dower share] regardless of the claims of
creditors”). This precedent follows the “general rule” that, absent
contrary statutory provisions, decedent’s “creditors are . . . subordinate
to [the surviving spouse’s] claim for dower.” 28 C.J.S. Dower & Curtesy
§ 42, at 135 (2008).
In Mock, the applicable statutory dower provision was Iowa Code
section 2440 (1873), which is remarkably similar to today’s section
633.211. 41 Iowa at 244. The 1873 provision read:
One-third in value of all the legal or equitable estates in real
property, possessed by the husband at any time during the
marriage, which have not been sold on execution, or any
other judicial sale, and to which the wife has made no
relinquishment of her right, shall be set apart as her
property in fee simple.
Iowa Code § 2440 (1873). Section 633.211 provides the surviving spouse
a dower interest in all real estate rather than one-third of the real estate,
but otherwise its language closely tracks the 1873 provision.
For over a century the law has deemed the surviving spouse’s
statutory dower interest to be free from the decedent’s debts. “ ‘[W]e
often infer legislative assent to our precedents from prolonged legislative
silence.’ ” In re Estate of Vajgrt, 801 N.W.2d 570, 574 (Iowa 2011)
(quoting McElroy v. State, 703 N.W.2d 385, 395 (Iowa 2005)). Stare
decisis also has greater importance when “ ‘the construction placed on a
statute by previous decisions has been long acquiesced in by the
legislature.’ ” Id. (quoting Iowa Dep’t of Transp. v. Soward, 650 N.W.2d
569, 574 (Iowa 2002)). The plain language of section 633.211 continues
to embrace this principle by awarding all real property to the surviving
spouse while expressly providing the surviving spouse’s right to
nonexempt property is subject to the decedent’s debts. Nonetheless, the
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estate contends the legislature overturned this venerable case law when
it recodified the probate code in 1964. See 1963 Iowa Acts ch. 326.
The 1964 Iowa Probate Code sought to create a comprehensive
code that filled “previous voids in the Iowa law and . . . facilitate[d] the
planning and administration of modern estates.” Willard L. Boyd,
Symposium on the New Iowa Probate Code: Foreword, 49 Iowa L. Rev.
633, 633 (1964). A contemporaneous commentator noted “section
[633.]211 retains the statutory or ‘dower’ share as provided by the prior
statute” and that the surviving spouse is still entitled to “one third in
value of the real estate free of debts and charges.” Shirley A. Webster,
Decedents’ Estates: Succession and Administration, 49 Iowa L. Rev. 638,
647–48 (1964). More recently, a respected commentator wrote that
“debts which are not secured by intestate’s real property and general
charges of the estate are ignored” when determining the intestate
surviving spouse’s real property share. I Sheldon F. Kurtz, Kurtz on Iowa
Estates § 3.4, at 98 (3d ed. 1995).
By contrast, the Uniform Probate Code of 1969 (UPC), adopted by
sixteen states, 1 differs dramatically by limiting the amount of the dower
protected from the estate’s creditors. Under the UPC, the intestate
surviving spouse may only exempt $32,500—$22,500 in homestead
value and $10,000 in exempt personal property—from the estate’s
unsecured creditors. See Unif. Probate Code §§ 2–102, 2–402, 2–403
(amended 2008), 8 U.L.A. 36–37, 96–97 (Supp. 2011). The UPC was
promulgated over forty years ago. The Iowa legislature has selectively
incorporated several provisions from the UPC into our state’s probate
code. See, e.g., Iowa Code §§ 633.238 (including assets in revocable
1See 8 U.L.A. 1 for list of states adopting the UPC and the corresponding state
statutes.
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trusts as part of the surviving spouse elective share as provided in UPC
section 2–205, 2005 Iowa Acts ch. 38, § 14), 633.276 (tracking language
in UPC section 2–513 allowing wills to incorporate written lists detailing
bequests for tangible personal property, 1981 Iowa Acts ch. 195, § 2).
Significantly, however, our legislature never adopted the UPC’s dower
provision. To the contrary, in 1985, it expanded the dower share from
one-third of real estate to all real estate. 1985 Iowa Acts ch. 19, § 1.
We can determine legislative intent from selective enactment or
divergence from uniform acts. See State v. One Certain 1982 Honda
Auto., 353 N.W.2d 90, 92 (Iowa 1984) (holding the legislature’s
divergence from a specific provision in the Uniform Controlled Substance
Act demonstrates it intended a different result); Ipalco Emps. Credit Union
v. Culver, 309 N.W.2d 484, 487 (Iowa 1981) (holding legislative deviation
from the Uniform Consumer Credit Code shows intent to reach a
different result). We presume the Iowa legislature was aware of, but
declined to follow, the UPC’s dower provision because it chose to shield
the dower interest in all real estate from the estate’s creditors.
2. Section 633.350. The estate’s reliance on section 633.350 is
misplaced. The provision’s primary purpose is to articulate the rule of
law that title to the decedent’s real and personal property passes
immediately to the devisee or intestate heir, subject to defeasance by the
personal representative for purposes of administration, sale, or other
disposition under applicable provisions of law. DeLong v. Scott, 217
N.W.2d 635, 637 (Iowa 1974). Notably, this rule of law is not new, but
“has long been established” in this state. Id.; see also In re Smith’s
Estate, 240 Iowa 499, 511, 36 N.W.2d 815, 822 (1949) (“Title to the real
estate passed instantly on the death of the intestate to the statutory
distributees . . . subject to defeasance or diminution in the payment of
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valid and subsisting obligations of the estate, or other proper
administration needs. We have repeatedly so held.”).
The legislature in enacting the provision in 1964 expressly
explained the provision only sought to “codif[y] the present Iowa rule with
respect to title upon death in the case of real estate and adopts the same
rule with respect to personalty.” S.F. 165, 58th G.A., Reg. Sess. (Iowa
1963). The legislature did not intend section 633.350 to create new legal
principles that disrupt our state’s traditional probate scheme; it only
sought to codify existing law.
As discussed above, at the time section 633.350 was enacted, our
caselaw had long established that the spouse’s statutory dower interest
in real estate takes free of the debts of the decedent’s estate. It would be
counterintuitive to construe section 633.350’s codification of our “long
. . . established” title law to disrupt our long-settled precedent on dower.
DeLong, 217 N.W.2d at 637. The provision should not be construed as
defining all property exempt from the personal administrator’s
defeasance. The exemptions are spelled out in other provisions,
including section 633.211(1), for the dower interest in real estate.
Further, the estate’s position hinges upon its unsupported
assertion that “homestead and other exempt property” in section 633.350
encompasses only homestead land under section 561.1 and personal
properly exempt from execution under section 627.6. The problem with
the estate’s position is that the phrase “other exempt property” is broader
than property “exempt from execution.” If the legislature intended a
narrow definition limited to property exempt from execution, presumably
it would have used those words or referenced section 627.6. Instead, the
legislature stated “other exempt property” is free and clear of the estate’s
22
debts and charges. We do not believe the legislature intended section
633.350 to define what property is exempt.
Section 633.351 also shows section 633.350’s “other exempt
property” includes property in addition to homestead and personal
property exempt from execution. Section 633.351’s first sentence applies
only to real property and refers to “the homestead and other property
exempt to the surviving spouse.” 2 This language recognizes the probate
code exempts to the surviving spouse nonhomestead real property, such
as the dower interest codified in section 633.211. See Iowa Code
§ 633.351 (2009).
Finally, section 633.350 is a more general provision, applicable to
both testate and intestate estates concerning title transfer and the
personal representative’s ability to control property; by contrast, section
633.211 specifically identifies the property an intestate surviving spouse
“shall receive.” To the extent “there is a conflict or ambiguity between
specific and general statutes, the provisions of specific statutes control.”
Goergen v. State Tax Comm’n, 165 N.W.2d 782, 787 (Iowa 1969); see also
Iowa Code § 4.7; Griffin Pipe Prods. Co. v. Bd. of Review, 789 N.W.2d 769,
775 (Iowa 2010). As Maureen points out, section 633.350 also begins
with the caveat that it applies “[e]xcept as otherwise provided in this
probate code.” The legislature realized other, more specific probate
provisions qualified the language of section 633.350 and clarified that
section 633.350 deferred to these provisions. Section 633.211
2Iowa Code § 633.351 states in part:
If there is no distributee of the real estate present and competent
to take possession, or if there is a lease of such real estate outstanding,
or if the distributees present and competent consent thereto, the
personal representative shall take possession of such real estate, except
the homestead and other property exempt to the surviving spouse.
(Emphasis added.)
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specifically governs an intestate surviving spouse’s statutory dower
share. This further demonstrates the legislature intended section
633.211, not section 633.350, to define the surviving spouse’s statutory
dower share. It makes sense the legislature would prescribe statutory
dower interest priority rules in its statutory dower provision, rather than
concealing those important rules in a general provision relating to the
administration of estate property.
3. Section 633.218. The estate also relies upon Iowa Code section
633.218, which governs the surviving spouse’s right to select property for
her statutory dower share. The provision states:
After such [appraisal] proceedings, and after payment
of debts and charges, the surviving spouse shall have the
right to select from the property so appraised, at its
appraised value thus fixed, property equal in value to the
amount to which the spouse is entitled under section
633.211 or 633.212 which selection shall be in writing filed
with the clerk of court.
Iowa Code § 633.218 (emphasis added). The estate argues the phrase
“and after payment of debts and charges” requires the surviving spouse’s
statutory dower interest in real property to be subject to the estate’s
debts and charges. We find the estate overstates the clause’s effect and
the provision can be harmonized with section 633.211.
The operative language of section 633.218 is not its introductory
clause, but its command that “the surviving spouse shall have the right
to select from the property so appraised” and its procedure for selecting
the property. Section 633.218 is a procedural provision prescribing how
a surviving spouse selects among property when the applicable statutory
dower interest in sections 633.211 and 633.212 do not entitle the
surviving spouse to all of the decedent’s property. See id. § 633.212
(providing “[o]ne-half in value of all the legal or equitable estates in real
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property,” and “[o]ne-half [in value] of all other personal property of
decedent” to a surviving spouse who does not share the same children
with the decedent). The introductory clause, “[a]fter such proceedings,
and after payment of debts and charges,” is merely qualifying language
indicating the selection process occurs after these events. Id. § 633.218.
The clause does not substantively define what debts and charges are to
be paid, nor does it modify the substantive property rights the dower
provisions in sections 633.211 and 633.212 provide the surviving
spouse.
The estate’s argument proves too much. The clause in section
633.218, “after payment of debts and charges,” does not contain any
substantive limitation. If the clause is construed to trump section
633.211(1) and subordinate the surviving spouse’s statutory dower right
in real property to the estate’s debts and charges, then the clause must
also subject the spouse’s remaining property interests in sections
633.211 and 633.212 to the estate’s debts and charges. Sections
633.211(2) and 633.212(2) provide a surviving spouse with “[a]ll personal
property . . . exempt from execution.” It would be illogical to construe
section 633.218 as subordinating personalty exempt from execution to
the estate’s debts and charges.
In 1875, we construed a statutory dower provision, remarkably
similar to section 633.211, as providing the surviving spouse with a real
property interest free and clear of the estate’s debts and charges. Mock,
41 Iowa at 243. The legislature has long acquiesced in that priority.
Section 633.211(1) expressly grants the surviving spouse “[a]ll . . . real
property possessed by the decedent.” By contrast, the dower interest in
personal property is subject to “the payments of debts and charges”—
limiting language inapplicable to real estate. We reject the estate’s
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interpretation of the probate code as it creates conflict among sections
633.211, 633.218, and 633.350. Our interpretation harmonizes and
gives effect to each of these provisions. We hold section 633.211(1)
provides a surviving spouse an interest in real estate free and clear of the
debts and charges of the decedent’s estate. Accordingly, Maureen is
entitled to any surplus from the foreclosure sale.
V. Conclusion.
The district court correctly concluded Freedom Financial’s
purchase-money mortgage had priority over Maureen’s statutory dower
interest and all other claims, but erred in awarding the sale surplus to
the estate. Maureen is entitled to the surplus from the sale of the
Ankeny real estate free and clear of the estate’s other debts and
obligations. We remand for further proceedings consistent with this
opinion.
DECISION OF COURT OF APPEALS AFFIRMED; DISTRICT
COURT JUDGMENT AFFIRMED IN PART AND REVERSED IN PART.
All justices concur except Mansfield, J., who takes no part.