Gordon v. McLemore

• Decision Date: 19 January 1939
• Docket Number: 3 Div. 249.
• Citation: 237 Ala. 270,186 So. 470
• Parties: GORDON v MCLEMORE.
• Court: Alabama Supreme Court

186 So. 470

237 Ala. 270

GORDON v MCLEMORE.

3 Div. 249.

Supreme Court of Alabama

January 19, 1939

Rehearing Denied Feb. 16, 1939.

Appeal from Circuit Court, Montgomery County; Walter B. Jones Judge.

Suit for partition by Lila Cobb Gordon against A. J. McLemore, who filed a cross-bill to quiet title. From a decree of sale for division, subjecting complainant's share to certain charges, complainant appeals.

Affirmed in part, and in part reversed, rendered and remanded.

Hill Hill, Whiting & Rives, of Montgomery, for appellant.

Eugene Ballard and Rushton & Rushton, all of Montgomery, for appellee.

FOSTER Justice.

This is a suit in equity filed July 1936 by appellant for the partition of approximately 250 acres of land in Montgomery County. The bill alleges that complainant owns an undivided one-third interest and that respondent owns an undivided two-thirds interest.

The respondent filed an answer and cross-bill. He set up claim to the entire interest in the land, under a mortgage and its foreclosure executed by complainant to his predecessor, Miss Laura McLemore, embracing a two-thirds interest, and that her brother Dr. Cobb owned the other third: that he acquired said one-third interest under a tax sale; that he and his predecessor have had possession since the mortgage was foreclosed in January 1933, and have paid the taxes on it all; and that he has made permanent improvements on the land that it is not capable of division in kind, and if complainant has any interest it cannot be set off to her; and seeks to have his title established and quieted. There was a general denial of those allegations in answer to the cross-bill.

Complainant claimed to own the one-third interest of Dr. Cobb, her brother, who died, leaving his property to his widow, who in turn conveyed his interest in the land in question to complainant.

The evidence was that for the year 1931, the land was assessed to Mrs. Gordon and Dr. Cobb. They did not pay the taxes. It was sold for taxes so assessed, and in August 1932 bought in for Miss Laura McLemore. A certificate of purchase was issued but it was not reported as sold, and there was no decree ordering it sold, and no tax deed was ever made. For 1932 it was also assessed to Mrs. Gordon and Dr. Cobb, but they did not pay the taxes and it was paid by McLemore. The mortgage was then foreclosed in January 1933. The land was not in condition to rent for much profit. While some of it was rented for 1933, only $30 was collected, and no rents were shown to have been collected thereafter.

After the present suit was begun and in January 1937, respondent built a barn on the land at a cost of $350, and rebuilt a tenant house which was then of no practical value, at a cost of $150.

The court held that the tax sale under which appellee claimed the land was not effective and that complainant owned an undivided one-third and respondent a two-thirds. Respondent is not complaining of this ruling.

The court also found that the land could not be equitably divided without a sale, and ordered its sale for that purpose. He also found and decreed that respondent and his predecessor had paid the taxes on the land for the years 1931, 1932, 1933, 1934, 1935 and 1936, and allowed him fifteen per cent. interest on the amounts so paid and an attorneys' fee, on the authority, as claimed by respondent's counsel, of section 3108, Code. He also found that respondent had in good faith made permanent improvements. He decreed that the value of the permanent improvements of $500 be allowed respondent out of the proceeds of sale, and after payment of the costs and expenses and an attorneys' fee to complainant's counsel, the balance be divided into three parts; two of which were ordered paid to respondent, and from the remaining one-third the amount of taxes paid by respondent with interest at fifteen per cent per annum, aggregating $327.10, and an attorneys' fee of $50, be subtracted and paid to respondent, and the balance of said share be paid to complainant.

Complainant appeals and insists that there was error (1) in holding that the land could not be equitably divided without a sale, (2) in holding that respondent was entitled to the value of his permanent improvements, and (3) in holding that from complainant's share should be deducted the amount of taxes paid by respondent, with fifteen per cent. interest and an attorneys' fee for respondent.

1. Was the order of sale for division, instead of a partition in kind, erroneous as a deduction from the evidence? The evidence was taken orally in open court. The witnesses referred to physical conditions and pointed out details on the map which are not clear to us, but which were doubtless clear to the trial judge. The result is a finding from that evidence. Giving it the presumptions which obtain under such circumstances, we cannot reverse it as being contrary to the great weight of the evidence. We think a discussion of the evidence on that issue would serve no useful purpose.

2. Was there error in that part of the decree which provides for the payment out of the proceeds of sale the sum of $500 for the permanent improvements, which we have described? It is our judgment that in this respect there was error, as we will undertake to show. We have a line of cases in this State which hold that if a tenant in common is in possession of land with a bona fide claim of full ownership, not knowing of the claim of another to be a cotenant, and makes such permanent improvements on the land as to enhance its market value, if it subsequently developes that another owns an undivided interest and the land is sold for division in equity, the court will ascertain the true amount of the market value which such improvements added to the sale price, and out of the proceeds to be refunded to the cotenant who thus enhanced the sale value of the property. Staples v. Pearson, 230 Ala. 62, 159 So. 488, 98 A.L.R. 852; Porter v. Henderson, 203 Ala. 312, 82 So. 668; Winsett v. Winsett, 203 Ala. 373, 83 So. 117; McDaniel v. Louisville & Nashville R. Co., 155 Ala. 553, 46 So. 981. Compare L.R.A.1915B, 962, notes.

And that if the land is divided without a sale that on which the permanent improvement was made ought under those circumstances to be set aside to him who made them. Sanders v. Robertson, 57 Ala. 465; Horton v. Sledge, 29 Ala. 478; Ferris v. Montgomery Land & Improvement Co., 94 Ala. 557, 10 So. 607, 33 Am. St.Rep. 146.

But there is this distinction, that when there is a partition in kind equity may award to the cotenant the part improved by him, though he knew of the other interests, if the improvements were made "without any intention of embarrassing or obstructing a partition, or gaining an advantage therein, and there is no good reason why he should not be allowed to retain the part improved by him, if his improvements in fact do not constitute a hindrance or obstacle in the way of the other co-tenants getting their full shares on the division of the property." Ferris v. Montgomery Land & Improvement Co., supra, page 566, 10 So. page 610.

In the case of McDaniel v. Louisville & Nashville R. Co., supra, the facts were stated to be that the improving tenant had the bona fide belief that it held and owned the land exclusively. That was a sale for division.

And in Porter v. Henderson, supra, which was also a suit for sale for division, it was pointed out that the improving tenant must be without knowledge of the outstanding interests.

We think that the distinction is based on sound reasoning. When valuable permanent improvements are made by a cotenant with knowledge of an outstanding co-share, they probably cast a burden on a sale of the tract which may be made. They will enhance by that amount the purchase price, if it is allowed at all, and thereby decrease the number of prospective purchasers. He may be better able to buy at the enhanced value than the other share owners. It therefore tends to constitute a hindrance or obstacle in the way of the others getting their full share. Whereas this would not be so if that part were simply set off to the improving cotenant.

In this case the improvements were made after this suit was begun, and with knowledge that she had a just claim and without her consent. Moreover, the mortgage under which respondent claims only included a two-thirds interest. He knew that he had no tax title and that there was outstanding a valid claim to a one-third interest. These matters cannot be ignored nor forgotten by respondent upon his assertion of full ownership. And under no circumstances would the value of the improvements made pending suit in equity for partition be allowed without first obtaining the approval of the court or consent of the parties. It could not then be in good faith as we understand what that means in such a situation.

3. Was there error in charging appellant, payable out of her share, with the full amount of the taxes paid by respondent, and with fifteen per cent. interest and with $50 for an attorney's fee? Respondent seems to rely on section 3108, Code, to justify this feature of the decree. But we cannot agree that it justifies a charge against complainant's one-third interest of more than one-third of the amount of the taxes and costs paid, or that it justifies an allowance of fifteen per cent. on the proper charge of one-third of the amount, or that it justifies an attorney's fee in any sum whatever, as applied to the facts of this case. In the first place, it is apparent to us that section 3108, Code, never contemplated that a person would be by that process chargeable with an amount of taxes which he is not in equity due to pay or on which his property right was not subject on an accounting with his cotenants.

We held...