Fundaburk v. Cody

• Decision Date: 13 May 1954
• Docket Number: 4 Div. 643
• Parties: , 48 A.L.R.2d 1295 FUNDABURK et al. v. CODY et al.
• Court: Alabama Supreme Court

Page 710

72 So.2d 710

261 Ala. 25, 48 A.L.R.2d 1295

FUNDABURK et al. v. CODY et al.

4 Div. 643.

Supreme Court of Alabama.

May 13, 1954.

Lightfoot & Bricken, Luverne, for appellants.

Calvin Poole and Arthur E. Gamble, Jr., Greenville, for appellees.

GOODWYN, Justice.

Bill in equity to sell land for division among tenants in common. The principal question relates to the right of those not in possession to require those in possession to account for rents, income and profits, and the right of those in possession to reimbursement out of the proceeds of the sale for sums expended by them in payment of insurance, repairs, and interest and principal on a mortgage debt against the property. The tenants in possession also seek compensation for personal services rendered by them in managing the property.

Essentially, the facts are these:

Emma T. Beard died intestate in 1934 leaving five children surviving her, viz.: Dell Fundaburk, Susie E. Cody, John M. Beard, Renoba Douglass, and Minnie Reynolds. At the time of her death she owned what is known as the Beard Hotel property in Luverne, Alabama, here involved. Since her death, Dell Fundaburk and Minnie Reynolds have been in sole possession of said property operating it as a public hotel. However, the other tenants have never been excluded from occupancy of said property. To the contrary, it clearly appears that they have acquiesced in the sole occupancy by said Dell Fundaburk and Minnie Reynolds. The receipts from the operation of said hotel, for room and board, totaled $83,675 and 'expenses of groceries for board, laundry, three servants, coal and wood, telephone, and state and county licenses' amounted to $72,329.25. An additional expenditure of $3,956.58 was made for lights and water, making the total expenditures in the operation of the hotel $76,285.83. Said parties also claim that they paid out during their occupancy $1,211.08 for repairs, $926.13 for insurance, § 686.40 for state, county and city ad valorem taxes, and $11,528.19 in principal and interest payments on a pre-existing mortgage to Home Owners Loan Corporation. They also claim $100 a month each for personal services rendered in the operation of the hotel, which they insist inured to the benefit of all the cotenants. The hotel consisted of thirteen rooms, two of which were occupied by the said Dell Fundaburk and Minnie Reynolds.

The bill was filed by appellees Frank J. Cody, Esther Cowart, Frances Thames and James Cody, the children and only heirs of Susie E. Cody, deceased. Renoba Douglass having conveyed her interest in the property to Dell Fundaburk and Minnie Reynolds, said last named parties and John M. Beard, being all of the tenants in common other than complainants, were made respondents to the bill. The complainants seek not only a sale for division but an accounting from Dell Fundaburk and Minnie Reynolds of the rents, income and profits received by them during their occupancy of the hotel property. Dell Fundaburk and Minnie Reynolds, by crossbill, seek reimbursement, out of the proceeds of the sale, of the amounts expended by them in payment of taxes, insurance, repairs, and interest and principal on the mortgage, and also for their personal services.

The court ordered the property sold. At the sale, Dell Fundaburk and Minnie Reynolds became the purchasers for $15,000. No question is presented with respect to the sale. The sale was confirmed and the register ordered to hold a reference to ascertain the following: (1) reasonable solicitors' fees; (2) the rents and income received by Dell Fundaburk and Minnie Reynolds; (3) any outstanding liens against the property; (4) expenditures by Dell Fundaburk and Minnie Reynolds for the following purposes: (a) mortgage payments, (b) incidental expenses in operating the hotel, (c) repairs for preservation of the property, (d) state, county and city taxes, (e) fire insurance, and (f) what amount Dell Fundaburk and Minnie Reynolds should be paid for their personal services rendered for the common benefit of the estate.

The parties stipulated as follows:

That the mortgage payments to the Home Owners Loan Corporation totaled $3,965.54 on the principal and $4,760.80 for interest; that expenditures for repairs amounted to $1,211.08; that the total paid for taxes and insurance was $3,945.56; and that the reasonable rental value of the property during the period of time in controversy was $13,885.

The register found and reported as follows: That the rents and income received by Dell Fundaburk and Minnie Reynolds totaled $83,675; that in operating the hotel business they expended $76,285.83; that they also expended the following amounts: $3,965.54 principal and $4,760.80 interest on the mortgage; repairs and preservation of the property, $1,211.08; and taxes and insurance, $3,945.56. The register also found that Dell Fundaburk and Minnie Reynolds should be paid $100 each, per month, for services rendered for the common benefit of the estate in operating the hotel.

Complainants filed exceptions to the register's report with respect to the finding of expenses in operating the hotel, on the ground that 'the expense of operating a hotel business by the respondents is not a proper charge against the joint property.' Exception was also taken to that part of the report finding that Dell Fundaburk and Minnie Reynolds should be paid $100 per month each for personal services rendered in operating the hotel.

The trial court, in effect, held as follows:

'1. That the expenses of operating the hotel were not proper charges against the joint property for which the other joint owners should be held accountable.

'2. That the operation of the hotel by Dell Fundaburk and Minnie Reynolds was for their own benefit and not for the common benefit of the joint owners of the property; that there was no agreement, express or implied, that said parties were to be paid for such services; and that said parties are not entitled to compensation from the proceeds of the sale of the property for such services.

'3. That since the reasonable value of the use and occupation of the jointly owned property, which was in the sole possession of the respondents, Dell Fundaburk and Minnie Reynolds, was in excess of all payments made by them for the protection and preservation of the property, the value of the use and occupation should be [and] the same is hereby set off against the amounts paid out by the respondents, Dell Fundaburk and Minnie Reynolds, for the protection and preservation of the property while the same was in the sole possession and used by them for operating a public hotel.'

It is apparent that the 'rents and profits' from the hotel operations came to $7,389.17, being the difference between receipts of $86,675.00 and expenses of $76,285.83; and that the expenditures by Dell Fundaburk and Minnie Reynolds for repairs, taxes, insurance and mortgage payments totaled $13,882.98. The position which they take is that they should be reimbursed out of the proceeds of the sale, before distribution, the sum of $6,493.81, which represents the balance of said $13,882.98 after crediting against it the 'rents and profits' of $7,389.17. We note that no insistence is here made that they are entitled to compensation for personal services.

On the other hand, appellees take the position that the trial court very properly set off the reasonable value of the use and occupation of the property ($13,885.00, as stipulated) against the payments for protection and preservation of the property ($13,882.98). Our problem, then, is to determine whether this was error.

This is not a case of one cotenant seeking a pro-rata part of 'rents' collected by another cotenant from third parties, but involves instead the adjusting of equities between cotenants in a partition proceeding where some have been in sole possession of the property. It is provided by statute that, in partition proceedings, the court 'shall proceed according to its own practices in equity cases', Code 1940, Tit. 47, § 186, and 'may adjust the equities between and determine all claims of the several co-tenants', Code 1940, Tit. 47, § 189. And, as we see it, that is what the trial court did in this case.

We have consistently approved the general principle that 'a friendly occupancy of the common estate by one tenant does not render him liable to account for rents and profits'. Rehfuss v. McAndrew, 250 Ala. 55, 57, 33 So.2d 16; Warner v. Warner, 248 Ala. 556, 566, 28 So.2d 701; Burk v. Burk, 247 Ala. 91, 92, 22 So.2d 609; Turner v. Johnson, 246 Ala. 114, 115, 19 So.2d 397; Cochran v. Leonard, 204 Ala. 163, 164, 85 So. 693; McCaw v. Barker, 115 Ala. 543, 548, 22 So. 131; Gayle v. Johnston, 80 Ala. 395, 400; Wilkinson v. Stuart, 74 Ala. 198, 204, 205; Fielder v. Childs, 73 Ala. 567, 572, 573; Newbold v. Smart, 67 Ala. 326, 331, 332.

The principle is thus stated in Rehfuss v. McAndrew, supra [250 Ala. 55, 33 So.2d 17]:

'It is also well understood that a tenant in common in possession by virtue of his own title is not liable to his cotenants for use and occupation unless he actually excludes his cotenants from the premises. * * *

'The possession here referred to is of the entire premises. If such tenant in common occupies and uses the entire premises, without a contract to pay the other tenants and without an ouster, the entire income from such use belongs to the occupaying tenant with no duty to account to the others. This includes crops thus grown.'

In Warner v. Warner, supra, this court stated as follows [248 Ala. 556, 28 So.2d 710]:

'The only essential to a cotenancy or tenancy in common is a unity of possession or right of possession of the property and a cotenancy may exist in every species of property, real, personal and mixed, corporeal or incorporeal. 7 R.C.L. 815-817, paragraphs 8-10. Though a cotenant may occupy the entire property, no liability for rent or use and occupation exists in the absence of express agreement...