McDonald v. Rankin

122 S.W. 88, 92 Ark. 173, 1909 Ark. LEXIS 280
Supreme Court of Arkansas·Decided June 28, 1909·Published·Cited by 38 cases

Opinions

Frauenthal, J.,

(after stating the facts). The matters that are now involved in this case, and which are presented to us on this appeal for our determination, relate to the respective rights of the parties to a recovery for improvements and taxes upon the one side, and the rents and profits of the land on the other. The determination of these matters depend principally, if not entirely, upon whether or not the betterment act applies to this case. It has been decided that the appellee is, and has been ever since the death of her father, the true owner of all said lands.

According to the common law, the true owner of the land had a right to the land, and that included the right to enter on it when the possession was withheld, and to have and own the improvements placed thereon 'by any one, which were considered to be but a part of the land itself; and the true owner had also a right to all the rents and profits issuing from the land. No distinction was made between a bona Me and mala Me possessor. As to the true owner, the possession of the occupying claimant was wrongful, and he could acquire no rights in another’s property by his wrongful acts. But it soon became apparent that this rule was harsh and unjust when lasting and permanent improvements, which actually increased tlie value of the lands, were placed thereon by an innocent and bona Me holder and offset the value of the rents and profits. To cure this harsh rule, the courts of equity adopted the doctrine of requiring the value of the permanent improvements in such cases to be offset against the rents and profits whenever the owner of the lands applied to such court of equity for an accounting by the possessor of the rents and profits. This doctrine was applied in pursuance of the great equitable principle that “he who seeks equity must do equity.”

The rights thus recognized by the courts of equity were founded upon the principle that the occupant who thus went into possession of the land in ignorance of the invalidity of his title, although technically a possessor in bad faith because he might have discovered such defect, yet was not to be placed in the position of one who fraudulently takes possession without any title and keeps the true and known owner out of possession. But these rights accorded to such an occupant were only of an equitable nature, and his remedies could only be enforced in a court of equity. The reason and justice of recognizing such rights re-suited in the enactment of statutes which granted them as substantive rights, which could be enforced in the very courts that determined the title to the land, and also gave to the occupant a recovery for the amount of the value of the improvements in excess of the value of the mesne profits. Green v. Biddle, 8 Wheat. 1; 3 Pomeroy, Eq. Jur. (3d Ed.) § 1241; 2 Story, Eq. Jur. § 799a, 799b; Warvelle on Ejectment, § § 546, 557; Jones v. Great Southern Fire Proof Hotel Co., 30 C. C. A. 108; New Orleans v. Gaines, 131 U. S. 191; Byers v. Fowler, 12 Ark. 292; Cunningham v. Ashley, 16 Ark. 182; McCloy v. Arnett, 47 Ark. 458.

The Legislature of the State of Arkansas in 1883 enacted the statute commonly known as the “Betterment Act,” which is embraced in sections 2754-2757, Kirby’s Dig. That statute defines (1) the qualifications of the occupant who is entitled to its benefits; (2) it fixes the value of the improvements and taxes which it grants to such occupant; (3) and the amount of the mesne profits which are recoverable by the owner.

1. It is contended by the counsel for appellee that L. B. McDonald, and the appellants claiming under him, are not such occupants as are described in the betterment act; and they base their contention upon the ground that said McDonald purchased the land during the pendency of this suit under a decree which was declared to be void by this court. The question which is thus presented for determination is, What is the character of the occupancy which the possessor must have in order to fall within the provisions of this statute?

The statute describes such occupant to be “any person, believing himself to be the owner, either in law or equity, under color of title, (who) has peaceably improved, or shall peaceably improve, any land which upon judicial investigation shall be decided to belong to another.” It thus appears that the person must occupy the land under color of title and with the honest belief that he has title to the land.

In the case of Fee v. Cowdry, 45 Ark. 410, the court described such occupant as being “one who not only supposes himself to be the true proprietor of the land, but who is ignorant that his title is questioned by some one claiming better right to it.” In Beard v. Dansby, 48 Ark. 183, in describing the requirements which such occupant should possess, this court said: “Good faith, in its moral sense, as contradistinguished from bad faith, and not in the technical sense in which it is applied to conveyances of title, as when we speak of a bona fide purchaser, meaning thereby a purchaser without notice, actual or constructive, is implied in the requirement that he must believe himself to be the true proprietor. It must be an honest belief and an ignorance that any other person claims a better right to the land.”

It was held in Shepherd v. Jernigan, 51 Ark. 275, that where a party improved lands in good faith, and under the belief that he was the true owner, he is entitled to the benefits of this betterment act, and that such notice as might be gained from the registry of the deed is not sufficient to preclude him from those benefits.

This court, in the case of Bloom v. Strauss, 70 Ark. 483, held that a bona ñde occupant who held under a last will which was defective upon its face could claim the benefit of this statute.

In the case of Brown v. Nelms, 86 Ark. 368, this court held that one who had purchased under a probate sale which was declared void was such an occupant as could claim the benefits of this statute. In that case the purchaser at the judicial sale had been the appraiser of the land that was sold, and upon that account it was held that such sale was fraudulent in law, and on account of such fraud it was void. But the court found that the purchaser acted in good faith and in the honest belief that he would obtain a good title to the land, although he knew the facts which constituted the legal fraud and made the sale invalid. That was a judicial sale, under which a purchase was made, and the parties in interest had a right to'appeal therefrom or to institute proceedings to avoid said sale, which they did; so that in that case the occupant was a purchaser during the pendency of the proceedings, under a sale which was afterwards declared void; and this court held that the provisions of the betterment act applied in that case. Cowling v. Nelson, 76 Ark. 146.

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. He may know the facts which prove the invalidity of his title, yet if, through mistake of-the law, he still believes that title good, he can hold in good faith, within the meaning of the betterment act.

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McDonald v. Rankin, 122 S.W. 88, 92 Ark. 173, 1909 Ark. LEXIS 280 (Ark. 1909).

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