Martin v. McCabe

• Citation: 213 S.W.2d 497,358 Mo. 118
• Decision Date: 12 July 1948
• Docket Number: 40756
• Parties: Katherine Martin, Appellant, v. Marie McCabe, Respondent
• Court: Missouri Supreme Court

213 S.W.2d 497

358 Mo. 118

Katherine Martin, Appellant, v. Marie McCabe, Respondent

No. 40756

Supreme Court of Missouri

July 12, 1948

Motion for Rehearing or to Transfer to Banc Overruled September 13 1948.

Appeal from Greene Circuit Court; Hon. Warren L. White Judge.

Affirmed.

W. D Tatlow and Arch A. Johnson for appellant.

(1) This is a suit in equity in which the plaintiff seeks to recover for improvements made in good faith under Sections 1548 to 1554 R.S. 1939, inclusive, prior to her having notice of an adverse title. Rains v. Moulder, 338 Mo. 275, 90 S.W.2d 81. (2) The Missouri opinions are numerous and directly to the point that the trial court in the instant case was in error in announcing and following the rule that "the occupant is bound to know the defects apparent in his own title papers," announced in the early case of (Shaffner v. Schilling, 6 Mo.App. 42). This erroneous rule is the primary basis for the court's opinion in the instant case and is in direct conflict with the court's repeated rulings of the Missouri Court as follows: Richmond v. Ashcraft, 137 Mo. 191, 117 S.W. 689; Rains v. Moulder, 338 Mo. 275, 90 S.W.2d 81; Brown v. Baldwin, 121 Mo. 106, 25 S.W. 858; Michalski v. Grace, 151 Mo.App. 631, 132 S.W. 333; Pierce v. Rollings, 60 Mo.App. 497; Seibel v. Highman, 216 Mo. 121, 115 S.W. 987; Siers v. Clark, 132 Mo.App. 537, 112 S.W. 526; Lee v. Bowman, 55 Mo. 400. (3) Knowledge of such facts as should induce inquiry, and as would lead to inquiry in the case of an ordinary prudent man, and which can not be neglected without a voluntary closing of the eyes, and conduct inconsistent with good faith, is actual notice. Direct and positive knowledge and knowledge of facts to which one chooses to be blind, lest following the inquiry up should lead to disclosure, are, both of them, actual notice; and do not differ in kind, but only in character of the proof. Hill v. Tissier, 15 Mo.App. 299; Richmond v. Ashcraft, 137 Mo.App. 191; Lee v. Bowman, 55 Mo. 400 Brown v. Baldwin, 121 Mo. 106, 25 S.W. 858; Olten v. Olten, 348 Mo. 674, 156 S.W.2d 587. (4) Where the action is in equity and not at law, the rule has been further modified. Seibel v. Highman, 216 Mo. 121, 115 S.W. 987; Keisling v. Yoder, 236 S.W. 860. (5) The entire basis for the statute is failure of claimant's title. Richmond v. Ashcraft, 137 Mo.App. 191. (6) The Missouri statute permitting a recovery for improvements made in good faith when the title fails is an early recognition to a limited extent of the now well recognized doctrine against unjust enrichment. Faulk v. Moxhay, 1 Ames, Equity Cases 143; Lucas v. Central Missouri Trust Co., 166 S.W.2d 1053; American Law Institute, sec. 1, p. 12; Mehl v. Norton, 201 Minn. 203, 275 N.W. 843, 113 A.L.R. 1055; 3105 Grand Corp. v. New York, 288, N.Y. 178, 42 N.E.2d 475, 145 A.L.R. 1211; United Rubber Products v. Batesburg, 183 S.C. 49, 190 S.E. 120, 110 A.L.R. 144; Duffy v. Scott, 235 Wis. 142, 292 N.W. 273, 129 A.L.R. 487; Rankin v. Emigh, 218 U.S. 27, 54 L.Ed. 915, 30 S.Ct. 672; Walker v. Richmond, 173 Ky. 26, 189 S.W. 1122, Ann. Cas. 1918E, 1084; Tucker v. Hibernia Bank U.T. Co., 212 Mo.App. 88, 251 S.W. 406; Dame v. Woods, 73 N.H. 222, 60 A. 744, 70 L.R.A. 133; Manchester & L.R. Co. v. Concord R. Corp. 66 N.H. 100, 20 A. 383, 9 L.R.A. 689, 49 Am. Rep. 582; Gladowski v. Felezak, 346 Penn. 660, 31 A. 718, 151 A.L.R. 418; National Shawmut Bank v. Fidelity, etc., Ins. Co., 318 Mass. 152, 61 N.E.2d 18, 159 A.L.R. 478, 154 A.L.R. 357; Moritz v. Horsman, 305 Mich. 627, 9 N.W.2d 868, 147 A.L.R. 117; Ford-Davis Mfg. Co. v. Magee, 233 S.W. 267. (7) The rule in other jurisdictions which the trial court followed in the instant case, that the occupant is bound to know the defects apparent in his own title papers -- in other words constructive notice, is based on the ancient and now largely discarded rule that equity will not relieve against a mistake of law. 19 Am. Jur., sec. 64, p. 82; Peter v. Peter, 343 Ill. 493, 175 N.E. 846, 75 A.L.R. 890; State ex inf. McKittrick v. Springfield City Water Co., 345 Mo. 6, 131 S.W.2d 525; Eisenbeis v. Shillington, 349 Mo. 108, 159 S.W.2d 641. (8) The dominant and controlling question in the case is whether there is any collateral fact or circumstance from which the trial court could have found that the plaintiff had actual notice of an adverse title from proof that Crutcher knew of other facts, that is, outside of constructive notice of the defect in his title which he failed to investigate and is to be charged with knowledge of whatever would have been learned by proper inquiry. Richmond v. Ashcraft, 137 Mo.App. 191.

Warren M. Turner and Louren G. Davidson for respondent.

(1) Although this court may review a case when tried in the court below without jury, as in a suit of an equitable nature, yet: The judgment of the trial court shall not be set aside unless clearly erroneous. Code of Civil Procedure, Sec. 114, Laws 1943, pp. 353 ff; I Carr Civil Procedure 877, Sec. 813 A.J. Meyer & Co. v. Schulte, 189 S.W.2d 183; Johnson v. Frank, 354 Mo. 767, 191 S.W.2d 618; (2) Due regard shall be given to the ability of the trial court to judge of the credibility of the witnesses. Code of Civil Procedure, Sec. 114, Laws 1943, pp. 353 ff; I Carr Civil Procedure, 877, Sec. 813; Wagner v. Mederacke, 195 S.W.2d 108; Dye v. School District, 355 Mo. 231, 195 S.W.2d 874. (3) Issues not presented by the record made below may not be considered. Code of Civil Procedure, Sec. 140, Laws 1943, pp. 353 ff; II Carr on Civil Procedure 269, Sec. 1213; 4 C.J.S. 434, sec. 229; Wilhoit v. City of Springfield, 237 Mo.App. 775, 171 S.W.2d 95. (4) Although at common law one who erected improvements on another's land could not recover the value thereof: 31 C.J. 309, sec. 3; 42 C.J.S. 428, sec. 6; Schaffner v. Schilling, 6 Mo.App. 42. (5) Both the statute and the courts of equity have modified the rule by an exception that one who erects improvements on another's land, in "Good Faith", believing himself to be the owner and without notice of an adverse title, may recover the value of his improvements. Secs. 1548-1554, R.S. 1939; 42 C.J.S. 428, sec. 6; Gray v. Clement, 296 Mo. 497, 246 S.W. 910; Richmond v. Ashcraft, 137 Mo.App. 191, 117 S.W. 689; Lee v. Bowman, 55 Mo. 400. (6) The essential pre-requisite to the right to recover for the improvements is the "Good Faith" of the improver. Lee v. Bowman, 55 Mo. 400; Richmond v. Ashcraft, 137 Mo.App. 191, 117 S.W. 689; Gray v. Clement, 296 Mo. 497, 246 S.W. 940; Seibel v. Higham, 132 Mo.App. 537, 115 S.W. 987. (7) An improver cannot claim to have believed in "Good Faith" that he owned the land if: He had notice or actual knowledge of another's title. Richmond v. Ashcraft, 137 Mo.App. 191, 117 S.W. 689; Gray v. Clement, 296 Mo. 497, 246 S.W. 940; Brown v. Baldwin, 121 Mo. 106, 132 S.W. 333. (8) Or if he had a clue to information which, if followed, would have led to notice of the true owner's title. Lee v. Bowman, 55 Mo. 400; Richmond v. Ashcraft, 137 Mo.App. 191, 117 S.W. 689; Gray v. Clement, 296 Mo. 497, 246 S.W. 940; Brandon v. Stone, 237 Mo.App. 671, 162 S.W.2d 83; Otten v. Otten, 348 Mo. 674, 156 S.W.2d 587.

Ellison, J. Leedy, J., concurs, Tipton, P.J., not sitting.

OPINION

ELLISON

This action by appellant was started under Sec. 1684 ^[1] as a suit to determine title to the land described in the margin, ^[2] which for brevity we hereafter refer to as a "tract". It wound up with the concession that the defendant-respondent owned an undivided half interest therein; a prayer for partition; and the assertion by appellant of an equitable claim and lien against respondent's said half interest in the sum of $ 12,000, this being one-half the amount expended by appellant in placing improvements on the land and discharging tax liens thereon, in alleged good faith and ignorance of the true state of the title. Appellant says it is essentially an action in equity for unjust enrichment, as to the improvements. The chancellor found and decreed for respondent as to the improvements; for appellant as to the tax liens; and ordered partition by a sale of the land and apportionment of the proceeds.

Appellant is the niece of Byron Crutcher, a man of considerable experience in real estate developments in the City of Springfield. He promoted the opening, paving and curbing by special assessment of a street crosswise of a tier of lots in Country Club Place, dividing them into half lots, including the one here involved. He then bought, among others, two of the tax bills against the tract in controversy for about $ 300, and gave them to appellant as a gift. Thereafter he furnished all the money and did all the acts in her name and behalf which figure in this case. And so, while he is not a party to the record, he was appellant's agent and alter ego. He caused the tax bills to be foreclosed by suit, and bid in the tract at the execution sale, taking the sheriff's deed in appellant's name. Thereafter he paid the taxes against the tract, graded it, and built two dwelling houses thereon, under the innocent and mistaken belief -- he testified -- that appellant was the owner thereof. His total outlay was $ 24,000, of which appellant now seeks to recover one-half from the respondent, on the concession that she is a tenant in common owning an undivided half interest in the land. That is the principal issue on this appeal, and it depends on whether Crutcher acted in good faith in making the foregoing expenditures.

Stating the facts more fully and in order of date. The record title to the tract was in the name of "Miss Bessie McCabe of Los Angeles, California," as devisee under the will of Lawrence Sansone, deceased, a brother of Charles Sansone of Springfield, who was executor of the will and a friend...