Vernon v. McEntire

• Citation: 356 S.W.2d 13,234 Ark. 995
• Decision Date: 09 April 1962
• Docket Number: No. 5-2637,5-2637
• Parties: Luchers VERNON et al., Appellants, v. J. L. McENTIRE et al., Appellees.
• Court: Supreme Court of Arkansas

Page 13

356 S.W.2d 13

234 Ark. 995

Luchers VERNON et al., Appellants, v. J. L. McENTIRE et al., Appellees.

No. 5-2637.

Supreme Court of Arkansas.

April 9, 1962.

Wiley A. Branton, Pine Bluff, for appellants.

Jay W. Dickey, Pine Bluff, for appellees.

WARD, Justice.

This is the second appeal involving the same parties and the same 80 acres of land in Jefferson County. In the first opinion (Vernon v. McEntire, Ark., 339 S.W.2d 855) it was held that Luchers Vernon and his wife had the right to redeem the land from the McEntires. The background facts are set forth in that opinion.

When the mandate on the first opinion was filed in the trial court no further pleadings were filed by either party. At the beginning of the second hearing the trial court correctly stated the issues in the following language:

'The sole question before the Court is whether the McEntires, appellees in the case of Vernon vs. McEntire, 339 S.W.2d 855, have made improvements on the land in controversy since the Decree of this Court and if so, whether they are entitled to be compensated for said improvements in addition to being compensated for taxes and insurance premiums they paid. Also, the question of rents due the Vernons is before the Court.'

At this hearing it was agreed that the record on the first appeal would be considered as a part of the record on this appeal, but testimony was also introduced by both sides on the issues as above defined. It is agreed by both parties that the Vernons owe the McEntires the sum of $3100 (as principal) on the purchase price of the land.

At the conclusion of the hearing the trial court, after first fully setting out its reasons, found the account between the parties to be as follows:

                           Appellants owe appellees
                1.  $3100.00  Balance on land
                      592.57  6% interest, 1"1"58 to 3"31"61
                2.   2000.00  For permanent improvements
                3.    531.52  1958"1960 taxes
                       68.37  6% interest to 3"31"61
                    $6292.46  Total
                           Appellees owe appellants
                1.  $ 400.00  Rent on land
                        6.00  6% interest, 1"1"61 to 3"31"61
                2.     65.00  House sold from land
                        3.65  6% interest, 4"17"60 to 3"31"61
                3.    137.50  Costs, first appeal
                        2.38  6% interest, 12"15"60 to 3"31"61
                    $ 614.53  Total
                

Accordingly the trial court decreed it would be necessary for appellants to pay appellees the sum of $5,677.93 in order to redeem the land, giving appellants 10 days to deposit said amount in the registry of the court, otherwise fee simple title would vest in appellees.

Appellants in prosecuting this appeal object to only two items in the decree rendered by the trial court. One is the $2000 allowed appellees for improvements and the other is the date from which interest was allowed on the $3100 balance.

One. We agree with appellants' contention that appellees are not entitled to reimbursement for money spent in making improvements on the land. We reach this conclusion because we find no evidence in the record to support a finding that appellees acted in good faith (as defined by this Court) when they made the improvements. It may be conceded, for the purpose of this opinion, that appellees spent $2000 in clearing, draining, ditching, etc. on the 80 acres of land, but we do point out that the amount of recovery for improvements under the Betterment Statute is based on the enhanced value of the land and not on the cost of improvements. See: Wallis v. McGuire, 234 Ark. 484, 352 S.W.2d 940. We find no evidence of enhanced value in this case.

There are two ways or theories by which appellees could seek recovery for improvements in this case, providing, of course, they had proven the enhanced value of the property. One, under Ark.Stats. § 34-1423 (commonly known as the Betterment Act) and the other would be to enforce an equitable right, as recognized in Foltz v. Alford, 102 Ark. 191, 143 S.W. 905. However, in either event, there can be no recovery for improvements unless made in good faith. Therefore, it is in order now to find out how this Court has defined 'good faith' when used in this connection.

A case closely in point on principle is Douglass v. Hunt, 98 Ark. 320, 136 S.W. 170. In that case Hunt testified:

'* * * he was advised by attorneys of well known learning and integrity that his deed from Lovejoy conveyed the title in fee simple, and that he occupied and improved the land in the honest belief that he had a perfect title. He testified, however, that both before and after he purchased the land from Lovejoy he received information that appellants who were the children of Mrs. Hackney, were going to lay claim to the land at her death.'

There, in denying Hunt's claim for improvements, we said: "It must be an honest belief and an ignorance that any other person claims a better right to the land."

In the case of Graves v. Bean, 200 Ark. 863, 141 S.W.2d 50, the Court, in dealing with this same question, made the following statement:

'Cases as to the good faith required are illustrated by such authorities as Patton v. Taylor, 144 Ark. 254, 222 S.W. 49; McDonald v. Rankin, 92 Ark. 173, 122 S.W. 88; Foltz v. Alford, 102 Ark. 191, 143 S.W. 905, Ann.Cas.1914A, 236.

'One chargeable with notice as to the kind of title he holds certainly may not, under the foregoing authorities make such improvements as will impair the title in fee.'

In the same connection the Court also said:

'It can serve no beneficial purpose or interest to enter upon any extended discussions of these matters as her estate must fail in the event she did not make the improvements under color of title or in event that she did not make them in that good faith within the meaning of that expression as defined.'

In Patton v. Taylor, 144 Ark. 254, 222 S.W. 49, the test of good faith was put this way:

'To entitle an occupant to remuneration for his improvements, the test of good faith is: Did he make them in the honest belief that he was the true proprietor and in ignorance that any other person claimed a better right to the land?'

Likewise, in the case of McDonald v. Rankin, 92 Ark. 173, 122 S.W. 88, the Court, after reviewing at length many cases on the meaning of good faith, said:

'From all these cases it will be seen that the cardinal requisite that the occupant should possess is good faith, and an honest belief in the title under which he occupies the land, and an ignorance of his title being questioned by another who claims a better right, in order for him to be entitled to the benefits of the statute.'

The meaning of good faith was very clearly restated in Welch v. Burton, 221 Ark. 173, 252 S.W.2d 411, this way:

'The statute governing betterments is Ark.Stats. § 34-1423, and runs in favor of anyone believing himself to be the owner. This has been interpreted to refer to anyone who acts in good faith and our cases define good faith, and places the burden of proof on the claimant. Greer v. Fontaine, 71 Ark. 605, 77 S.W. 56. In Beard v. Dansby, 48 Ark. 183, 2 S.W. 701, it was said that good faith consists of 'an honest belief, and an ignorance that any other person claims a better right to the land.''

Applying the definition of the words 'good faith' as so clearly set forth in the previously cited cases, we cannot escape the conclusion that appellees were not acting in good faith when they made the improvements for which they seek recovery here. As stated in the Burton case, supra, the burden was on appellees to prove good faith. It can hardly be seriously contended that appellees did not know appellants were claiming title to the land at the very time they (appellees) were making the improvements thereon. The pertinent facts on that question are set out below.

The earliest date any improvements were made by appellees was in February, 1960 after taking possession of the land in January of that year. Did appellees know in February, 1960 that appellants were claiming title to the 80 acres? Obviously the answer is that they did know. The record on the first appeal, which is a...