United Bank v. Gardos

722 P.2d 1261, 80 Or. App. 342
CourtCourt of Appeals of Oregon
DecidedJuly 23, 1986
Docket82-455-E; CA A34225
StatusPublished
Cited by1 cases

This text of 722 P.2d 1261 (United Bank v. Gardos) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Bank v. Gardos, 722 P.2d 1261, 80 Or. App. 342 (Or. Ct. App. 1986).

Opinion

WARDEN, J.

In February, 1980, defendant Karin Gardos and Robert Kerivan, husband of intervenor Lotte Kerivan, purchased unimproved real property in Josephine County. The Kerivans were residents of California. In November, 1980, plaintiff was awarded a judgment against Robert in Colorado. In July, 1981, Robert conveyed his interest in the Josephine County property to intervenor. In September, plaintiffs judgment was registered in Josephine County, a writ of execution issued to enforce the judgment and the sheriff levied on Robert’s interest in the property. Plaintiff purchased Robert’s interest at the sheriffs sale for $51,250 in January, 1982. When the time for redemption had passed, plaintiff received a sheriffs deed to Robert’s interest. After plaintiff had purchased Robert’s interest and before the redemption period had run, plaintiff filed an action to set aside the deed from Robert to intervenor as a fraudulent conveyance. In March, 1983, a decree was entered setting the deed aside.

Plaintiff then brought this action to partition the real property or, alternatively, to sell it and for an accounting. Intervenor claimed an ownership interest in the property on the basis that California community property in which she had an interest had been used to purchase the real property. A partition judgment was entered dismissing all of intervenor’s affirmative defenses and counterclaims and ordering a public sale of the property. Gardos and intervenor appeal.

Gardos first argues that the trial court erred in ordering repayment to plaintiff and Gardos of their respective investments in the property from the proceeds of the partition sale. The court found that Gardos’ investment was $21,372 and plaintiffs was $51,250. Gardos also argues that, because plaintiff acquired its interest nearly two years after Gardos, Gardos will not receive the full increase in value of her investment in the property.

Plaintiff argues that “equity balances the positions of the parties before it and that plaintiff has been unable to realize on its judgment against Robert,” that Gardos’ “application for affirmative equitable relief casts upon her a duty to ‘do equity’” and that the duty “may be read in terms of according plaintiff equitable treatment for the amounts it spent to acquire its interest in the property and preserve it.”

[345]*345Plaintiff did not allege or prove that, in its relationship with Gardos, she was guilty of misconduct which would require balancing the equities in favor of plaintiff. Asserting a legal position in order to preserve her interest in the property should not require Gardos to pay for the dispute between plaintiff and Robert. Furthermore, the Supreme Court, in Palmer v. Protrka, 257 Or 23, 476 P2d 185 (1970), rejected the argument that equitable principles should be applied in adjusting the interests of the parties in a partition suit.

In Palmer, Robert and Elsie Palmer were husband and wife, holding property as tenants by the entirety. They separated, and in a decree of limited separation the trial court purported to award the property to Elsie, who obtained a decree of divorce from Robert in Mexico 10 months later. Three years later, Robert conveyed his interest in the property to Beverly Savage four days before they married. He died a few days after the wedding. There was no consideration for the transfer to Beverly. Beverly sought a partition. The trial court concluded that, as a matter of equity, if Robert were alive and before the court, he would not be entitled to any interest. The trial court then divided the proceeds of the sale of the property by taking into consideration the property division in the earlier action between Elsie and Robert.

The Supreme Court held that equities arising from the marital relationship of Robert and Elsie were not relevant in making an allocation of the interests in the property between Beverly and Elsie. It further held that, in a partition action, a trial court should allocate the interests of the parties upon the basis of the respective contributions made by the parties in acquiring and maintaining the property. The court remanded the case to take of further evidence of the contributions of the parties, but in its discussion of the evidence that was before it the court addressed the acquisition and interests of Elsie and Robert and not those of Beverly.

We agree with Gardos that the trial court should have determined the interest of Robert at the time of the purchase by plaintiff at the execution sale. Robert owned the property as co-tenant with Gardos. Plaintiff could acquire no more than Robert’s share, which is presumed to be an equal half, unless the evidence shows a larger contribution by one party [346]*346in acquiring the property. See Palmer v. Protrka, supra. Plaintiffs counsel acknowledged that the interest acquired by plaintiff here was an undivided one-half:

“The present suit is to partition * * * between Miss Gar-dos, the undivided one-half interest owner, and the bank, who now stands in the shoes of Kerivan, having obtained Kerivan’s undivided one-half interest when the suit to set aside from [the intervenor] was made.”

There was no evidence that Robert contributed more than Gardos in acquiring the property. Without such evidence the trial court erred in awarding plaintiff more than Gardos for sums paid toward acquiring the property.1

Gardos next claims that the court erred in requiring a public instead of a private sale of the property. There was no error. A trial court does not have the authority to order a private sale when there is no evidence of great prejudice. ORS 105.205; ORS 105.210; Fike v. Sharer, 280 Or 577, 583, 571 P2d 1252 (1977). Plaintiffs evidence does not show that a public sale will result in such prejudice. In Doan v. Doan, 208 Or 508, 302 P2d 565 (1956), the Supreme Court ordered a private sale when the defendant lived on the property and used the residence as a boarding house to produce income. Here, the residence is not Gardos’ permanent home, nor has the vineyard on the property produced income. Gardos’ future plans to move to the property and her hopes that the vineyard will prove profitable within two years do not establish the need for a private sale.

Gardos next assigns as error the finding by the trial court that plaintiff was entitled to payment of one-half of the reasonable rental value of the property from April, 1982, out of the proceeds of the sale. Plaintiff does not dispute the general rule that

“At common law and under the great majority of modern cases, one or more of several tenants in common may occupy realty without incurring liability for payment of rent for use and occupation so long as they do not exclude other cotenants from the exercise of similar rights.” Hanns v. Hanns, 246 Or [347]*347282, 310, 423 P2d 499 (1967); see also 4 Thompson, Real Property, § 1829 (1979).

The policy behind the rule is stated by 4A Powell, Law of Real Property, § 603 (1982):

“ ‘[U]nity of possession’ is the characteristic attribute of a tenancy in common. In the absence of special facts the possession by one cotenant is deemed a possession by all cotenants.

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722 P.2d 1261, 80 Or. App. 342, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-bank-v-gardos-orctapp-1986.