Phar-Crest Land Corp. v. Therber, PHAR-CREST

• Decision Date: 27 February 1969
• Docket Number: No. 1268S214,PHAR-CREST,1268S214
• Parties: LAND CORPORATION, Appellant, v. Marvin E. THERBER, Anne Therber, Appellees.
• Court: Indiana Supreme Court

Page 644

244 N.E.2d 644

251 Ind. 674

PHAR-CREST LAND CORPORATION, Appellant, v. Marvin E. THERBER, Anne Therber, Appellees.

No. 1268S214.

Supreme Court of Indiana.

Feb. 27, 1969.

Bamberger, Foreman, Oswald & Hahn, Evansville, for appellant.

Edwin W. Johnson, John L. Carroll, Charles C. Griffith, Evansville, for appellees, Johnson & Carroll, Evansville, of counsel.

ARTERBURN, Judge.

This case comes to this Court on transfer from the Appellate Court by an order made by that court which questions the soundness of the decision in Ross, Inc. v. Legler (1964), 245 Ind. 655, 199 N.E.2d 346. See 242 N.E.2d 641 for opinion of Appellate Court.

Plaintiff-appellant brought an action of ejectment and to quiet title to a strip of land which the appellant's predecessors in title by deed had granted to the railroad back in 1908, and which land the railroad had ceased to use as a right-of-way. The deed was similar in character and concerned land owned by the same railroad in the same area as that involved in Ross, Inc. v. Legler, supra.

The appellees (defendants below) claimed possession by grant from the railroad and filed four paragraphs of answer, to which we need give no particular concern except the third paragraph, which was based upon laches. The appellees filed a cross-complaint to quiet title, claiming they were the owners of the fee-simple title thereto. The appellees requested a jury trial. Appellant asked that the equitable issue as to laches be severed from the legal issues and tried by the court. The request was granted. The cause was then submitted to the jury for trial on the legal issues as to the title. The jury was directed to and did render a verdict for the appellants on appellee's cross-complaint. The court by instruction withdrew from the jury's consideration the appellees' answers based upon adverse possession and recorded title as defenses. The court gave to the jury at the appellant's request at the close of the evidence, an instruction to the effect that the appellant-plaintiff was the owner of the real estate in question, as shown by the recorded title. The jury, however, rendered a verdict for appellees on appellant's complaint. The court, by special finding, found for the appellees on the third paragraph of answer and that appellant was guilty of laches and should not recover from the appellees.

It is argued that the jury should not have disregarded the court's instruction in favor of the appellant when it rendered judgment against the appellant for the appellees on plaintiff's complaint. In our opinion, that question becomes moot as a result of the trial court's finding that laches existed which nullified the right of the appellant to assert its legal record title. If the jury had found for the plaintiff and that the plaintiff had legal title, the trial court, in determining the equitable issue of whether or not laches existed and finding that it did exist, would thereupon have had to set aside the jury's verdict as a result of the court's finding.

There are many questions raised by the appellant with reference to the jury trial and alleged error committed therein. In our opinion, however, they all become moot upon the trial court's finding that the defendant had an equitable defense of laches and that the plaintiff-appellant could not have recovered, even if the jury returned a verdict in favor of the appellant upon the legal issues of the title.

What we have to say with reference to those contentions of appellant also is true of the question of whether or not the principles enunciated in Ross, Inc. v. Legler, supra should be reconsidered by this Court. The question is moot. For that reason we need not consider whether or not the plaintiff-appellant here had any reserved legal interest such as that remaining over and above the granting of an easement for a right-of-way. The defense of laches was found by the trial court to be valid against such legal interest or claim, if any existed.

The only real question here before us is whether or not the evidence was sufficient to sustain the trial court upon the issue of laches, and in that respect we can not weigh the evidence before the trial court. We may examine it only to determine if there is any evidence to support such a finding.

'Where the sufficiency of the evidence is questioned on appeal, the Supreme or Appellate Courts do not weigh the evidence, but will merely examine the record most favorable to the appellee to determine if there is any evidence, or any legal inference which may be drawn therefrom which, if believed by the trier of facts, would sustain the verdict or decision.' 2 I.L.E., Appeals, § 572, p. 489; Southport Board of Zoning Appeals et al. v. Southside Ready Mix Concrete, Inc. et al. (1961), 242 Ind. 133, 176 N.E.2d 112; Anderson et al. v. Kinser et al. (1961), 241 Ind. 555, 173 N.E.2d 914.

The evidence on the issue of laches is as follows:

The railroad used the land obtained through the 1908 conveyance as a right-of-way until 1942. Shortly thereafter the railroad took up the tracks. In 1946 the land was offered for sale by the railroad to Richard Legler, the father of the present stockholders of Phar-Crest Land Corporation. He refused to buy the land. The appellees (the Therbers) then purchased the land. Therber testified in the trial court that shortly after he purchased the land in 1946 he visited Legler and informed him that he had purchased the property and tried to buy some adjoining land. One Cooksey testified for appellees and stated that appellees started working on the property in 1946 by cutting weeds and hauling in bricks to fill the swamp and ditch which ran through the land. Cooksey testified that the Therbers worked on the land once per week in 1946. In 1947, 1948 and 1949 these acts were done every two weeks. In 1959 the appellees started construction of a building on the land, which was soon completed and used as an office building with a value of $14,500.00. These acts were done with the knowledge of the elder Mr. Legler and after his death with the knowledge of his son, Theodore Legler.

The defendants-appellees paid all the real estate taxes which were assessed on the property during the years in which they occupied it. The plaintiff-appellant points out to the court that the auditor's tax receipt given to the defendants-appellees shows that the taxes were only for a right-of-way and not a fee-simple. However, during the time in question the plaintiff-appellant paid no taxes on the property. If its contention is correct that the defendants-appellees paid only the taxes on a right-of-way, the plaintiff-appellant should have been assessed taxes on the remainder interest. The auditor's description on the tax duplicate and receipts were out of the control of the defendants-appellees, and therefore is not in itself determinative. Therefore we do not think this contention is deserving of such merit as to in any way reduce the appellee-defendant's position.

It is further to be noted that upon the death of Richard Legler the property in question was excluded from his estate for estate tax purposes. While this in itself is not enough to render title in the defendants-appellees, when viewed with the other evidence of the case it supports the trial court's finding of laches on the part of the plaintiff-appellant.

It has been said that to establish laches or equitable estoppel against one asserting legal title to real property, the burden is on the party attempting to raise such issue to show actual fraudulent representation, concealment or such negligence as will amount to fraud in law and that such party was actually misled, to his injury. 19 Am.Jur., Estoppel, § 87, p. 743.

The evidence in this case shows that the appellees have been injured by reason of the improvements made on the property if appellant's claimed legal title prevailed. Silence when there is a duty to speak can constitute fraud, and a failure to assert one's right to real estate when his interest is challenged, to the extent that the other party assumes no claim is made thereto, can constitute fraud. Fraud in many instances is 'constructive' in that there may not be any active intentional purpose to deceive or defraud, yet the non-action or action is so prominent and misleading as to cause a party to rely thereon. In our opinion, the trial court found in this case such a situation existed.

'As stated infra § 69 a, fraud is an element of estoppel only in the sense that a fraudulent result would follow a denial of the truth of the representation, and not in the sense that the representation must have been made with an intent to deceive.'

31 C.J.S. Estoppel § 59, p. 376.

It may be that the appellant at one time felt this property was of no value, but as the years went by and the improvements were made thereon, it acquired a value in the appellant's estimation such that it found it desirable to assert its alleged right or title thereto. In the meantime, it permitted appellees to take the risk of depreciation in value of the property and pay the taxes thereon. Equity does not countenance such a position when it damages or injures another party relying thereon.

The case of Hutter et al. v. Weiss et al. (1961), 132 Ind.App. 244, 177 N.E.2d 339 quite comprehensively discusses the principles of laches with respect to its effect in quiet title actions and supports the conclusions we have reached above. Laches generally is referred to in the negative as a defense. It may develop to a point where it becomes the basis for a quiet title action based upon equitable principles. 74 C.J.S. Quieting Title § 17 a, p. 40.

'The rule is well settled in modern law that the title to land or real estate may pass by equitable estoppel, which is effectual to take the title of land from one person and vest it in another where justice requires that such action be done.'

19 Am.Jur., Estoppel, § 87, p. 743.

Very early in the legal history of this ...