
    Bert Vilas, Appellee, v. Chicago, Milwaukee & St. Paul Railroad Company et al., Appellants.
    MUNICIPAL CORPORATIONS: Streets, Alleys, Etc. — Change of 1 Grade — Damages—Non-reliance on Ordinance. A property owner may not base a claim for damages for change of grade of a street on a grade ordinance which he has never in any way relied on.
    
    PRINCIPLE APPLIED1: A property owner, at a time when the city had established no grade of the street, built his building so as to conform to the natural surface of the ground. Some time later, the city, by ordinance, established the grade at the natural surface of the ground. Still later, the city, by ordinance, changed the grade by materially raising it from the former established grade. Held that plaintiff, not having built in reliance on any ordinance establishing a grade, was not entitled to recover damages by reason of the latter ordinance.
    MUNICIPAL CORPORATIONS: Streets, Alleys, Etc. — Change of 2 Grade — Damages—When Action Accrues. Principle recognized that the mere passing of an ordinance changing the grade of a street after a property owner has built in reliance on a formerly established grade, gives no right of action to the property owner for damages. Such right of action accrues only when the city physically carries out the change.
    
    
      
      Appeal from Boone District Court. — R. M. Wrigi-it, Judge.
    Monday, May 14, 1917.
    "Action for damages consequent on change of grade resulted in judgment against the defendants, from which they appeal.
    
    Reversed.-
    
      Hughes, Sutherland & Taylor, and J. A. Hull, for appellants..
    ' D. F. Baker, for appellee.
   Ladd, J.

The plaintiff owned the south half of Lots 2 and 3 in Block 6 in Madrid. A brick building was erected thereon, fronting on Water Street, and conforming to the natural surface of the ground. Thereafter, and in 1905, the town council enacted an ordinance establishing the grade of this street at the surface. Thereafter, and in 1913, by another ordinance the town established another grade, several feet higher than the first, and the street was brought up to this grade by the Chicago, M. & St. P. R. Co., in pursuance of an ordinance so authorizing, in putting in an overhead crossing, in which that company undertook to keep the town harmless in the matter of damages. This suit is by the above lot owner to recover damages because of raising the grade, and with reference thereto, the court instructed the jury as follows:

“If you find from a preponderance of the evidence that the buildings and improvements on plaintiff’s property, were made in conformity to the natural level and natural grade of Water Street before the same was improved, so as to conserve the convenient use of plaintiff’s said property, and you further find from a preponderance of the evidence that the grade of Water Street, as established by Ordinance No. 38, was practically the same as the natural level and natural grade of said Water Street before the same was improved, then, for the purpose of this case, you would be Avarranted in finding that said improvements were made in conformity to said grade established by Ordinance No. 38, and that the plaintiff had the same vested right in said grade as he would have had if his improvements had been made after the passage of Ordinance No. 38 and before the passage of Ordinance No. 55; and if you so find, and you further find that thereafter, by Ordinance No. 55, there was established another grade to the damage of the plaintiff, then he should recover in this case. If,^ however, you fail to fiud the above and foregoing facts to have been established by a preponderance of the evidence, your verdict should be in favor of the defendants.”

As appellant contends that this and other -instructions of like import are fundamentally wrong, and, under the facts as recited, there can be no recovery, the cause is submitted on the pleadings .and instructions, without the evidence. It is to be kept in mind that no change in the street was made until 1913, and that the only improvement on the lot was made prior" to the establishment of the paper grade, in 1905. This being so, the plaintiff did nothing in reliance on the latter grade. Had the paper grade of 1913 been established in 1905, instead of that then established, there could haim been no recovery, and the very natural inquiry is, How has plaintiff been injured by this change of paper grades? It is well established .that, where the improvements haim been made prior to the establishment of the grade, and these changed to conform thereto, there cannot be recovery. Wilber v. City of Ft. Dodge, 120 Iowa 555. Nor does the mere passage of an ordinance providing for a change in the grade of a street give rise to an-immediate cause of action on the part of an-abutting owner. That accrues only upon the physical bringing of the street to grade. York v. City of Cedar Rapids, 130 Iowa 453.

The establishment of a grade by ordinance or change of one previously established by ordinance is merely preliminary to the improvement of the street, and no claim for damages may be based thereon. These can only result from the consequential physical grading or change of grades. Hempstead v. City of Des Moines, 63 Iowa 36; Buser v. City of Cedar Rapids, 115 Iowa 685; Stritesky v. City of Cedar Rapids, 98 Iowa 373.

In Ressegieu v. City of Sioux City, 94 Iowa 543, the plaintiff had built in conformity to the paper grade. Thereafter, this was loAvered by ordinance, and the street improved accordingly. It was held that plaintiff, in erecting his building, had the right to assume “that, Avhen the street was permanently improved, it Avould be on line with the grade the city had thus established,” and that Eessegieu Avas entitled to damages. In Farmer v. City of Cedar Rapids, 116 Iowa 322, the first paper grade was established in 1875, and subsequently, another was established instead, in 1886. The street Avas brought to the latter grade in 1896. Prior thereto, but after the establishment of the last paper grade, plaintiff, in 1893, improved her lot according to the physical surface of the street, and was held not entitled to damages, the court saying:

“If the lot owner may build in reliance on the street’s being brought to grade, he cannot at the time rely on its remaining as it is, notAvithstanding the establishment of a grade. Indeed, the fixing of the grade by ordinance is preliminary to the improvement of the street, and is an assertion on the part of the city to lot OAvners that such improvement will be made according to the line described. The statute simply - awards damages sustained by any who have acted in reliance on this assurance, and, because of the city’s subsequently changed plans, been injured. The plaintiff, in what she did, disregarded the grade fixed by the ordinance, but the city improved the street precisely as proposed.”

Recovery of damages was denied. Such has been the interpretation of this statute since Dalzell v. City of Davenport, 12 Iowa 437, where the court, speaking through Wright, J., said:

“As we construe the law, it was the intention of the legislature to distinguish between those cases where the owner had built or made improvements according to the established grade, and where he had not. If the owner had done no act upon the faith of the continuance of the grade as established, there would seem .to be no great impropriety in denying him any possible damages consequent upon the change. When, however, he builds or makes improvements according to the grade, having acted, as he had a right to do, upon the supposition that the grade would remain unchanged, his property is brought within the mean-ing and terms of the statute.”

Indeed, this is the only fair interpretation of which the statute, Section 785 of the Code, is susceptible:

. “When any city or town shall have established the grade ■ of any street or alley, and any person shall have made improvements on the same, or lots abutting thereon, according to the established grade thereof, and such grade shall thereafter be altered in such a manner as to damage, injure or diminish the value of such property /so improved, said city or town shall pay to the owner of such property the amount of such damage or injury.”

To entitle an abutting lot owner to recover under this statute, five elements are essential: (1) A grade must have been established by ordinance; (2) the lot owner must have improved his lot with reference to the grade so established; (3) a new and different grade must have been subsequently established by ordinance; (4) the municipality must have changed the physical grade to conform to the new paper grade; and (5), in consequence thereof, the owner’s property must have been damaged, injured or diminished in value. Appellee argues that what is intended by the statute is that the improvement made be in conformity with the grade when established by ordinance, whether constructed before or afterwards, and that, to construe it otherwise, it would be necessary to read into the statute the word “thereafter” before “made.” This involves a misconception of the design in its enactment. Neither the letter nor the spirit of the statute permits of the construction as contended. Prior to its enactment, grades of streets might be changed ad libitum by a municipality, without incurring liability for damages to abutting owners. Creal v. City of Keokuk, 4 G. Greene 47; Russell v. City of Burlington, 30 Iowa 262; Kepple v. City of Keokuk, 61 Iowa 653.

Recovery must be had, if at all, by virtue of the statute quoted. Its manifest design is to enable those who have improved their property abutting on a street in reliance on the grade established by city or town to recover, when thereafter such grade is changed, to the injury of such property, so that the city or town which has been at fault, rather than the innocent owner, shall bear the loss. Surely the owner could not well “have made improvements * * * according to the established grade” if none had been established. Nor can the establishment of the grade according to improvements previously made be regarded as equivalent to erecting the improvement “according, to the grade,” which is the substance of appellee’s contention. Nor, in such a case as that before us, can it be said that any damage, injury or diminution of value has resulted from the alteration in the grade by the ordinance of 1913. Neither the town nor the property' owner had made any physical change subsequent to the enactment of the ordinance in 1905. All done was the making of a change in tbe paper grades. As said, bad tbe ordinance of 1913 been enacted instead of that of 1905, and bad tbe town, at that time, brought tbe street to grade, it would have been without liability for damages, and, if so, tbe enactment of the same ordinance in 1913, and bringing tbe street to grade for tbe first time, would not create a liability that would not have existed at tbe earlier date. We are of opinion that tbe improvement must have been in reliance on tbe established grade, in existence at tbe time, in order to render the municipality liable for damages in event of the subsequent alteration of such grade. — Reversed.

Gaynor, C. J., Evans and Salinger, JJ., concur.  