Producers Lumber & Supply Co. v. Olney Building Co.

333 S.W.2d 619, 1960 Tex. App. LEXIS 2079

• Court: Court of Appeals of Texas
• Decided: March 3, 1960
• Docket: 13543
• Status: Published

Opinions

MURRAY, Chief Justice.

This suit was instituted by Producers Lumber & Supply Company, Inc., against Olney Building Company, a corporation, seeking to recover damages resulting from the conduct of H. P. Orts, president of defendant, when he caused his construction superintendent and a large crew of men to go upon Lot 8, Block 9, New City Block 12459, Northeast Park, an addition situated in the corporate limits of the City of San Antonio, Bexar County, Texas, owned by plaintiff, and demolish a dwelling constructed thereon by Olney Building Company.

The trial was to a jury and, based partly upon the verdict of the jury, the trial court rendered judgment in favor of plaintiff against defendant in the sum of $600. Producers Lumber & Supply Company, Inc., has prosecuted this appeal, contending that the judgment should have been in the sum of $5,900.

The issues submitted to the jury and the answers thereto are as follows:

“Question No. 1: Do you find from a preponderance of the evidence that H. P. Orts, as president of Olney Building Company, acted in good faith in erecting the building on the plaintiff’s lot?

“Answer ‘Yes’ ot ‘No.’

“We, the jury, answer: Yes.

“Question No. 2: What do you find from a preponderance of the evidence would be the reasonable and necessary cost of restoring the lot in question to substantially the same condition that it was in immediately before the construction was commenced thereon?

“Answer by stating the cost:

“We, the jury, answer: $600.00.

“Question No. 3: Do you find from a preponderance of the evidence that H. P. Orts, as president of Olney Building Company, acted maliciously in removing the building from the lot in question ?

“Answer ‘Yes’ or ‘No.’

“We, the jury, answer: Yes.

“Question No. 4: What sum of money, if any, do you find from a preponderance of the evidence is the plaintiff, Producers Supply & Lumber Company, entitled to receive as exemplary damages, if any, as that term is •defined hereinbelow?

“Answer by stating the amount, if any:

“We, the jury, answer: $300.00.”

The parties stipulated that the dwelling •on Lot 8 had a value of $5,000, and that the dwelling had enhanced the value of Lot 8 by $5,000.

After the verdict was returned, appellant moved that the jury’s answer to Question No. 1 be disregarded, and for a judgment in its favor in the sum of $5,900, while appellee moved that the jury’s answer to Questions Nos. 3 and 4 be disregarded and judgment for appellant be confined to the sum of $600. This latter motion was granted and judgment rendered accordingly.

Appellant assigns as error the trial court’s action in sustaining appellee’s motion to disregard the jury’s answers to Special Issues Nos. 3 and 4. The jury’s answers to these issues were well supported by the evidence, were very material and the court erred in setting them aside. Special Issue No. 3 inquired whether H. P. Orts, as president of appellee acted maliciously in removing the building from Lot No. 8. The jury very properly found that he did. It might be well here to make a rather complete statement of the evidence in the case. H. P, Orts owned several corporations and was the head and general manager of them all, including Olney Building Company. Prior to November 1, 1956, Elliott Construction Co., Inc., hereinafter referred to as Elliott, was the owner of Lot 8, Block 9, New City Block 12,459, involved herein. On that date H. P. Orts, executed a warranty deed, which was properly recorded, from Elliott Construction Co., Inc., as its Assistant Secretary and Agent and Attorney in Fact, to Producers Lumber & Supply Co., appellant herein, conveying Lot 8 for a consideration of $1,428. The lot was purchased by appellant with the intention that later its general manager, George R. Montgomery, and his wife would build a home for themselves thereon. Montgomery and wife had the lot graded and planted some trees and grass on it. On or about February 27, 1958, Orts and Elliott decided to construct nine dwellings, one on Lot 8, and eight on other nearby lots. Orts called A. L. Burden, secretary-treasurer of appellee, and asked him whether Lot 8 had been sold. Burden, after consulting a map on the wall, assured Orts it had not been sold. Orts inspected Lot 8 and noticed the trees planted there, he thought it was nice of someone to plant trees on this lot. Shortly thereafter the construction of the nine houses was begun, on April 1, 1958, appellee ordered Stewart Title Company to issue a Title Binder covering all nine lots to Frost National Bank in connection with appellee’s interim financing. On April 14, 1958, Orts learned from the Title Company that Lot 8 had been sold to appellant. Orts then notified Mr. Montgomery of the circumstances, and this was the first notice to appellant that construction had been commenced on its lot. The dwelling on Lot 8 had been almost completed when the discovery was made. The house had been constructed without the knowledge or consent of appellant and against its wishes, and contrary to the plans that Montgomery and wife had for their- own home. Orts began negotiations with Montgomery, trying to reach an amicable settlement of the matter. Orts told Montgomery that he, Montgomery, had him at his mercy. Various offers and counter-offers were made, but no settlement had been reached, when suddenly on April 22, 1958, Orts broke off negotiations and sent his construction superintendent with a large crew of men and heavy equipment to Lot 8, and demolished the dwelling constructed thereon, leaving nothing but a' heap of crude building material and debris. With1 reference to the destruction of this dwelling, Orts testified as follows:

“Q. Now, you did, on or about April 22, 1958, remove those improvements, did you not? A. That is cor- ' rect, sir.

“Q. Did you notify Mr. Montgomery or anyone from Producers Lumber and Supply Company that you were going to remove them? A. No, sir.

“Q. How many men do you remember employing on the job of removal? A. Does this have to be exact, or will an approximation do?

“Q. Well, if you know, tell me exactly; otherwise, it has to be approximately. A. I will say — I am going to say ten.

“Q. Approximately ten? A. Yes.

“Q. Isn’t it a fact that you started the removal of these improvements, about 2:00 o’clock in the afternoon?" A. That is correct, sir.

“Q. Isn’t it a fact that by 6:00" o’clock in the afternoon, by the use of a bulldozer and a dozen or more men, you had completely removed everything but the slab? A. That’s right.

“Q. Isn’t it a fact that you made no. effort to salvage anything on the removal? A. No, sir.

“Q. You say that is not true? A., No, sir.

“Q. What did you salvage? A.. All of the interior partitions, the exterior partitions, the siding, not • the-siding, but the exterior sheeting, thereof sheeting, electrical and plumbing..

“Q. Well, now, actually what happened was that several of your men. went out1 and tore the roof off, isn’t, that right?. A, That’s right.

“Q. And then you, for lack of a better word I will say ‘unjointed’, the corners and then you hooked on with a dozer and dragged the partitions and framing and roof trusses across, the street, is that right ? A. Partially,, that is correct.

“Q. You say that is not true? A. Not all of it.

“Q. What is not true? A. The side walls were taken down piece by-piece.

“Q. The side walls were taken down piece by piece? A. Yes, sir.. * * *

“Q. You said that you salvaged' the electrical? A. Yes. * * *

“Q. Now, who did you employ to-remove the slab? A. My superintendent.

“Q. How did Crea Brothers get on the job? A. I hired their equipment.

“Q. What equipment did you hire from Crea Brothers? A. A D-12 tractor, and I believe that slab was so good they couldn’t get it up with a D-12 and finally they had to get a crane with a drop hammer, and I told my superintendent if Crea Brothers didn’t have the—well, frankly, I don’t know where I got the crane with the drop hammer.

“Q. Isn’t it a fact that they also used a couple of air hammers? A. Oh, yes.

“Q. Air hammers, and they had to use torches to cut the steel? A. That is correct.”

With reference to the destruction of the •dwelling Orts further testified as follows:

“Q. So the night you tore that house down, $2,768.00 went down the drain; is that right? A. Yes, sir. My money.

“Q. Yes, sir. $2,768.00 went up just like that (slapping hands together) ? A. That is right.

“Q. As if you had set a match to it, didn’t it? A. That is right.”

It cost more than $1,300 to put the -concrete foundation in, and, of course, it -was worthless after the crane and drop hammer, cutting torches, etc., had been used upon it. This and other evidence clearly supports the finding of the jury that H. P. •Orts, as president of appellee, acted mali•ciously in removing the building from Lot 8.

The finding of the jury that appellant was entitled to recover exemplary •damages in the sum of $300 was also fully ■supported by the evidence.

The jury found in answer to Special Is■sue No. 1, that Orts had built the dwelling •on Lot 8 in good faith. The evidence shows that at the time he began the construction of the dwelling there was a deed on record signed by Orts, conveying this lot to appellant. Orts simply forgot about signing this deed some eighteen months before. Hall v. Wilson, Tex.Civ.App., 215 S.W.2d 204; Warwick v. Harvey, 158 Md. 457, 148 A. 592, 68 A.L.R. 288.

In 23 Tex.Jur. 393, § 17, it is stated:

“A person contemplating the improvement of land is under a duty to investigate the records before he commences work, because there may be information available therein which would prevent him from being regarded as a possessor in good faith. Thus a duly recorded deed containing a sufficient description of the land in question and vesting title in another wofild be sufficient to impart notice of the existence of an outstanding claim, * * ⅜»

However, if the evidence may be regarded as sufficient to support the jury’s answer to Issue No. 1, appellee cannot prevail upon his plea of improvement in good faith, because of his malicious destruction of the dwelling he had constructed on Lot 8.

The law at one time was quite clear that where a person erects a building upon the land of another without his knowledge and consent the building became a fixture and belonged to the owner of the land and the builder was without remedy. Foxworth-Galbraith Lumber Co. v. Thorp, Tex.Civ.App., 86 S.W.2d 644; Rotan Grocery Co. v. Dowlin, Tex.Civ.App., 77 S.W. 430; 23 Tex.Jur. 94, § 71, et seq.; 23 Tex.Jur. 375, § 3; 42 C.J.S. Improvements § 3, pp. 423-424; 42 C.J.S. Improvements § 6a, pp. 428-429 ; 27 Am.Jur., 261, § 3. This rule was regarded as harsh, but was thought necessary to make people careful with reference to their examination of the title to the land upon which they place buildings and other permanent improvements. 14 R.C.L. 17-19, § 5.

It is only where a person places permanent improvements upon land belong-. ing- to another in a good faith belief that he is the owner of the land, that he has-any remedy at all. Luker v. Luker, Tex.Civ.App., 226 S.W.2d 482; 42 C.J.S. Improvements § 6a, pp. 428-429; Schleicher v. Schleicher, 120 Conn. 528, 182 A. 162, 104 A.L.R. 577; Consolidated Freight Lines v. Groenen, 10 Wash.2d 672, 117 P.2d 966, 137 A.L.R. 1078. Where he has built such improvements in good faith, he has a somewhat limited right to go into court, and upon proof of such good faith ask the court to grant him equitable relief. Bonner v. Wiggins, 52 Tex. 125; 27 Am.Jur. 261, § 3. Under such circumstances, a court of equity may grant relief in several ways. If the building can be removed without great injury to the building or to the land, the court may permit the improver to move the building. Salazar v. Garcia, Tex.Civ.App., 232 S.W.2d 685. Where the building cannot well be removed the court or jury can find the market value of the land before and after the making of the improvement, and allow the improver to recover for the amount of this enhanced value, if any. The landowner will first be permitted to pay the enhanced value and keep the land, but if he is unable or unwilling to do so, then the improver may be permitted to pay the value of the land before the improvements were placed thereon, and thus become the owner of the land and the improvements. Rzeppa v. Seymour, 230 Mich. 439, 203 N.W. 62. If the landowner is unable to pay for the improvements and the improver is unable to pay for the land, then the court may order the land and the improvements sold to the highest bidder and the money divided between the owner and the improver as their respective interests appear. Or the court may give the improver judgment for the amount the lot has been inhanced in value, together with a lien against the lot to secure the payment of the judgment. 27 Am.Jur. 282, §§ 29 and 30.

Under no circumstances is an improver authorized to go upon the land of another, without his knowledge and consent, and demolish the improvements that he has through mistake placed thereon, and if he does so he commits waste and can be required to pay the landowner for such waste. 1 Thompson on Real Property 262, § 174; 42 C.J.S., Improvements §§ 4a and 4c, pp. 425-427 ; 27 Am.Jur. 261, § 3.

When Orts went upon Lot 8 without the knowledge or consent of appellant and demolished the dwelling he had placed thereon, he committed waste and must pay appellant for the value of the dwelling he destroyed, which as stipulated by the parties is the sum of $5,000. And Orts will not be heard to claim, in equity, reimbursement for the amount he had enhanced the value of the lot by the erection of the dwelling thereon. He resorted to self-help and took the law into his own hands, and before a court of equity could determine the rights of the parties he went upon Lot 8, which at the time he well knew belonged to appellant, and demolished the dwelling stipulated to be worth $5,000, thereby causing great destruction of property. He cannot now come into court, with unclean hands, and seek the equitable remedy of reimbursement for the amount he had enhanced the value of Lot 8 by the erection of the dwelling thereon. Bush v. Gaffney, Tex.Civ.App., 84 S.W.2d 759, 764; Sanders v. Cauley, 52 Tex.Civ.App. 261, 113 S.W. 560; Bollinger v. McMinn, 47 Tex.Civ.App. 89, 104 S.W. 1079; Primm v. White, 162 Mo.App. 594, 142 S.W. 802; Little v. Cunningham, 116 Mo.App. 545, 92 S.W. 734; Dean v. Elyton Land Co., 113 Ala. 276, 21 So. 213; Hall v. Wright, 9 Cir., 240 F.2d 787; Pomeroy’s Equity Jurisprudence, 3rd Ed. § 404; 30 C.J.S. Equity § 95, p. 480; 10 R.C.L. 389, Equity, § 139; 19 Am.Jur. 323-325, Equity, §§ 469, 470.

Appellee seems to contend that appellant has unclean hands because it did not offer to pay appellee what it contended the dwelling was worth. In this appellee is mistaken. Appellant was not required to pay appellee anything until appellee had secured a finding in a court of equity that Orts had constructed the dwelling in good faith and not as a result of his own negligence. Appellant had good reason to believe that such an issue might be decided in its favor, in which event it would owe ap-pellee nothing, and, further, if it lost on this issue, appellant would have to pay only such sum as a jury, or other trier of the facts, might find appellee had enhanced the value of Lot 8 by the construction of the dwelling thereon. None of these matters had been decided or stipulated at the time Orts, as president of appellee, entered upon appellant’s lot and demolished the dwelling he had built thereon, but which under the law belonged to appellant. Appellant is not here asserting an equitable remedy, it is suing in law for the damage that was wilfully done to its property by Orts, acting for appellee, but, even if appellant were seeking equitable relief, its failure to settle its claim upon Orts’ terms, or any other terms, would not render its hands unclean. Commonwealth v. Filiatreau, 161 Ky. 434, 170 S.W. 1182; Plenderleith v. Glos, 329 Ill. 382, 160 N.E. 745.

The judgment of the trial court will be amended so as to permit appellant, Producers Lumber & Supply Company, Inc., to recover the sum of $5,000, the stipulated value of the dwelling demolished by Orts, and $300, found by the jury as exemplary damages, in addition to the sum of $600 awarded by the trial court, thus making the total amount of the judgment the sum of $5,900, and as thus amended the judgment will be affirmed. The cost of this appeal is adjudged against appellee.