Opinion ID: 2210826
Heading Depth: 1
Heading Rank: 3

Heading: Iowa Code Section 524.910(2): Right of First Refusal.

Text: Iowa Code section 524.910(2), as amended in 1985, reads in part: Real property purchased by a state bank at sales upon foreclosure of mortgages or deeds of trust owned by it, or acquired upon judgments or decrees obtained or rendered for debts due it, or real property conveyed to it in satisfaction of debts previously contracted in the course of its business, or real property obtained by it through redemption as a junior mortgagee or judgment creditor, shall be sold or otherwise disposed of by the state bank within five years after title is vested in the state bank.... Before the state bank sells or otherwise disposes of agricultural land held pursuant to this subsection, the state bank shall first offer the prior owner the opportunity to repurchase the agricultural land on the terms the state bank proposes to sell or dispose of the agricultural land. (Emphasis added.) The Coles contend this statute applies to the uncontroverted facts in this case. As the Coles interpret the statute, the bank first had to offer the property to them on the same terms and conditions they proposed selling it to the Steeres. In reaching this conclusion, the Coles focus on the first and last sentence of the statute. The first sentence refers to real property purchased by a state bank. The last sentence refers to the disposal of agricultural land held pursuant to this subsection. The Coles argue that a state bank acquires rights in or purchases the real property when it receives a sheriff's certificate of sale. According to the Coles, no purchase takes place when the sheriff's certificate is delivered to the sheriff in return for the sheriff's deed following the one-year redemption period. The Coles view this last act as simply a ministerial duty on the part of the sheriff to complete the process that took place at the time of the sheriff's sale. So, according to the Coles, the state bank is holding the agricultural land pursuant to this subsection. Like the bank, we see a major flaw in the Coles' interpretation. We think it is legally inaccurate to say that a holder of a sheriff's certificate before redemption acquires rights in or purchases real property at the sheriff's sale. With respect to real property, the holder of a sheriff's certificate is only a lienholder whose lien does not constitute an interest in the real estate. In re Estate of Jensen, 225 Iowa 1249, 1252-54, 282 N.W. 712, 714-15 (1938). The interest of the certificate holder is simply personal property. Id. (sheriff's certificate under foreclosure proceedings, in which period of redemption had not yet expired, was personal property and on death of the certificate holder passed as personal property under will). The legislature has itself defined personal and real property. Personal property includes, among other things, evidences of debt and things in action. Iowa Code § 4.1(9). The legislature has defined real property, land, and real estate synonymously to include, among other things, all rights [in the land], and interests [in the land], equitable as well as legal. Iowa Code § 4.1(8). These legislative definitions are consistent with our holding in Jensen. A section 4.1(9) definition of personal property is broad enough to include such an interest. And a section 4.1(8) definition of land, real estate, and real property clearly excludes it. Because the assignment here is not a sale or disposition of land, the assignment does not trigger the right of first refusal in section 524.910(2). Other language in the statute militates against the Coles' position. More specifically, this language provides that the property shall be sold or otherwise disposed of by the state bank within five years after title is vested in the state bank. Iowa Code § 524.910(2) (emphasis added). Title vests in the holder of a sheriff's certificate of sale when the redemption period expires and not before. Cf. Farmers Prod. Credit Ass'n v. McFarland, 374 N.W.2d 654, 658 (Iowa 1985) (mortgagor's title is not divested until statutory redemption period expires). So when a state bank assigns a sheriff's certificate of sale covering agricultural land before redemption, the right of first refusal does not apply. This is so because at the time of the assignment, title has not vested in the bank. It may be that the legislature inadvertently excluded an assignment transaction like the one here from the ambit of section 524.910(2). We are inclined to think that is what happened because the statute is designed to give relief to financially beleaguered farmers who have lost their farms. The statute represents one last chance for them to reclaim property that might have been in the family for generations. But we are powerless to rewrite the statute to correct this omission. In interpreting statutes we avoid legislating. We consider ourselves bound by what the legislature said rather than what it should or might have said. Hope Evangelical Lutheran Church v. Iowa Dep't of Revenue & Fin., 463 N.W.2d 76 (Iowa 1990). In sum, we hold that the right of first refusal in section 524.910(2) does not apply to a transaction in which a state bank assigns its sheriff's certificate of sale before the period of redemption expires. We conclude that the district court correctly granted the motion to adjudicate law points and the motion for judgment on the pleadings regarding this issue.