Opinion ID: 2220719
Heading Depth: 1
Heading Rank: 4

Heading: taking western's property

Text: Because we have concluded that Western should have received the entire estate as described in the mortgage documents, we must determine whether, in the absence of that occurring, Western's property has been taken. The district court held that [t]he fact that the defendant's assessment and lien are void against the priority of the plaintiff's lien does not mean they have `taken' private property of the plaintiff without just compensation, because any failure to secure Western's consent to the dedications was paid for by the City's loss of its claimed lien in the foreclosure action. The court also found that Western had purchased the property in question with actual notice of the defendant's interest in the land, and thus, Western's interest could be no greater than that of BRG, which had authorized the City's claims to the property. The court held that Western's claimed ownership was servient to the City's easements and appropriations. However, Kimco Addition v. Lower Platte South N.R.D., 232 Neb. 289, 440 N.W.2d 456 (1989), which the court cited in support of its conclusion, is inapposite, because in Kimco Addition, the party claiming its property had been taken had no interest in the property whatsoever at the time the alleged taking occurred. Relying in large part on Peterborough Savings Bank v. Pierce, 54 Neb. 712, 75 N.W. 20 (1898), the Court of Appeals affirmed the district court's decision and concluded that because Western, as purchaser, had notice of the improvements on the property, [it acquired] no rights greater than BRG or Western, as mortgagee, against the City concerning these improvements when it purchased the property at the foreclosure sale. Western Fertilizer v. City of Alliance, 1 NCA 1517, 1520, 1992 WL 221779 (1992). The Court of Appeals clearly erred in concluding that no taking could have occurred when Western was mortgagee because Western did not have title or possession of the property at the time the improvements were consented to and made. 1 NCA at 1520. In Dodge v. O. & S.W.R.R. Co., 20 Neb. 276, 282, 29 N.W. 936, 939-40 (1886), this court noted that [i]f mortgaged property can be literally destroyed ... without notice to the mortgagee, or any compensation to him, then the [takings clause] of the constitution ... would be without practical force, and would remain only in theory. Although no Nebraska cases discuss this precise issue, several other jurisdictions have held that a mortgagee's lien on real estate is an interest that may be subjected to a taking for a public purpose and, therefore, may be the subject of an eminent domain proceeding. See, for example, Matter of the Petition of Dillman, 276 Mich. 252, 258, 267 N.W. 623, 625 (1936) ([u]nder any circumstances, a mortgagee has sufficient right to the [condemnation] award to preserve his security against evident or established impairment); Board of Directors v. Whiteside, 87 F.Supp. 69, 71 (W.D.Ark. 1949) ([i]n condemnation cases the mortgagee cannot be deprived of its lien by such proceedings without notice and, in order for the plaintiff to acquire title to the property sought to be condemned, it was necessary that the mortgagee be made a party); Bourjaily v. Johnson County, 167 N.W.2d 630, 634 (Iowa 1969) ([i]t is clear the contract vendors and the mortgagee have interests in the property which will be directly and materially affected by the condemnation of the land in question); Maxey v. Redevelopment Authority of Racine, 94 Wis.2d 375, 400-01, 288 N.W.2d 794, 806 (1980) (a mortgagee's lien extends to any compensation made for the condemnation of mortgaged property). Thus, it does not matter that Western had neither title nor possession of the property at the time the alleged taking occurred if its interest in the property was adversely affected by the City's actions. Whether Western's interest in the property was affected depends upon whether the property described by the sheriff's deed received by Western at the foreclosure sale differs from the property described in the mortgage which Western obtained from BRG. If the property as described by the sheriff's deed differs from the property described in the mortgage, then the property was taken prior to Western's purchase of the land at the foreclosure sale, and the City must pay compensation, unless, as the City asserts, the statute of limitations bars this action.