Worthington v. Hiss

16 A. 534, 70 Md. 172, 1889 Md. LEXIS 21

• Court: Court of Appeals of Maryland
• Decided: January 17, 1889
• Status: Published

Opinion

Miller, J.,

delivered the opinion of the Court.

After the remand of this case on the second appeal (67 Md., 139,) the Circuit Court, being so instructed by this Court, passed a decree, dated the 23rd of May, 1887, for a partition of the common property, and directed that the shares of the Worthingtons and Knapps therein should be allotted to them out of the unimproved part now in possession of the devisees of Philip Hiss. This partition and allotment have been made, and to this extent the litigation seems to be ended. It was decided on the first appeal (62 Md., 33,) that the Worthingtons were entitled as tenants in common to an undivided sixth, and the Knapps to an undivided sixth of one-sixth part of all the common property. This property consists of about seven acres óf land lying within the limits of the City of Baltimore, through which streets have been laid out and opened. About one-balf of this area was and still is vacant and unimproved ground, while the other half has heen improved hy valuable dwelling houses erected thereon hy the several purchasers of huilding lots. The possessors and occupiers of all this property at the time the suit was commenced, were bona fide purchasers, deriving title from a judicial sale made in 1833, under a decree in equity.

This decree of May, 1887, besides providing for the partition, also declares, in conformity with the previous decision of this Court, that the Worthingtons and Knapps are entitled to recover from the other parties, their respective shares of the rents and profits of the common property, and refers the case to the auditor for the purpose of having an account stated. The auditor, however, is expressly directed in stating the account, to ascertain what portion of such rents and profits have been due to the use of the improvements upon the parcels of said property which have been improved since the judicial sale in 1833, as distinguished from the portion thereof which have been due to the use of the land in its present condition, and to exclude the first mentioned portion of such rents and profits from the allowance to be made to the Worthingtons and Knapps. This clause of the decree simply carries into effect the previously declared purpose of this Court to give full protection to these bona fide purchasers in respect to any beneficial permanent improvements they may have placed upon the property. Such improvements are neither allowed to enhance the value of the property for the purpose of partition, nor to increase the responsibility of the improvers in respect to back rents and profits. In taking the account, the auditor is directed to consider the property just as if it had all heen and remained vacant and unimproved ground.

When the accounts came in they were rejected on exceptions being filed to them, and the Court hy an order passed on the 29th of September, 1888, sent the case hack to the auditor, with directions to state the accounts upon the principles laid down in its accompanying opinion, with leave to take additional proof. From this order both sides have appealed.

On the appeal hy the Worthingtons and the Knapps the main question is, what rule ought to govern this accounting for rents and profits, where the entire property out of which it is supposed such rents and profits were derived, consists, or must he treated as consisting, of vacant unimproved city lots ? To determine this we must ascertain the real character of the case, the legal relation of the parties to each other, and upon what ground the right to recover hack-rents and profits is to he placed. It seems to us clear that this is not a case coming within the Statute of 4 Anne, ch. 16, sec. 27. That statute, whatever may he said as to its construction in other respects, applies only to cases where there is no question either as to the existence of a tenancy in common, or as to the title of the party seeking the account which it allows. But here the original bill prayed for a partition, and a sale of the property for the purpose of effecting partition between tenants in common, and the defendants strenuously denied the title asserted hy the complainants. They insisted that their own title, derived under the judicial sale, was an absolute fee simple interest in the entire property, and that all interest of the Worthingtons and Knapps therein was divested hy that sale. This denial of title and resistance to the suit made a clear case of ouster, and'the parties would, ordinarily, have been sent to a Court of law to try the question of title in an action of ejectment. That however was not done in the present case, hut the trial was had in equity under the bill for partition, and it is explained in the opinions of this Court in the preceding appeals why there was this departure from the ordinary practice. So far however as the question now before us is concerned, it matters not in what tribunal the title was determined. The Worthingtons and Knapps have successfully asserted their title against the resistance and denial of the other parties, and are now seeking to recover their share of the rents and profits of the common property during the time they have been thus ousted and deprived of possession. Their right to this recovery, so far as the plea of limitations interposed by the other parties will allow, has already been determined by this Court. We think it plain then, that the parties stand in the same position as if the Worthingtons and Knapps had, after recovering in ejectment, brought actions for mesne profits, and that the rules applicable to such actions must govern this accounting.

It is well settled, that in an action to recover mesne profits, the plaintiff must show in the best way he can, what these profits are, and there are two modes of doing so, to either of which he may resort. He may either prove the profits actually received, or the annual rental value of the land. West vs. Hughes, 1 H. & J., 576; Mitchell vs. Mitchell, 10 Md., 234. The latter is the mode usually adopted. Where there is occupation of a farm or land used only for agricultural purposes, and the income and profits are, of necesty, the produce of the soil, the owner may have an account of the proceeds of the crops or other products sold or raised thereon, deducting the expense of cultivation. These are necessarily rents and profits in such cases, hut even there it is more usual to arrive at the same result by charging the occupier as tenant with a fair annual money rent. McLaughlin vs. Barnum, 31 Md., 452. But the proprietor of city lots with improvements upon them, can only derive therefrom, as owner, a fair occupation rent for the purposes for which the premises are adapted. This constitutes the rents and profits, in the legal sense of the terms, of such property, and is all the owner can justly claim in this shape from the occupier. Ibid.

The Worthingtons and the Knapps refuse to recognize this rule as applicable- to unimproved city building lots. They are not willing to accept their share of what would have been the fair annual rental value of this property in its unimproved condition during the period they were deprived of its possession. Their counsel have formulated another rule of responsibility which may he explained thus: There was a front foot valuation placed upon the whole area as vacant ground, for the purpose of partition. This was its leasing value under leases for ninety-nine years renewable forever, and it is insisted that annual rents and profits must be ascertained according to this valuation. In other words, and to illustrate the effect of this rule, let us suppose that one of these parties was the purchaser and occupier of an actually vacant lot, fronting say twenty feet on McOulloh street, which had been thus valued at $10 per front foot. This means that in the opinion of the valuers the lot could he leased under a perpetual lease at an annual and perpetual rent of $200, and the position taken is that this annual sum of $200 during the period for which recovery is allowed, must he charged against the purchaser in this accounting, notwithstanding it is conceded that no lease was ever made, that no building was ever erected upon the lot, and that no such rent was ever in fact received by him. We regard such á rule not only as novel and unreasonable, hut one which if adopted will work great injustice to the holders of actually vacant lots. Those who purchased and are in possession of such lots were under no obligation to lease them or to improve them sooner than it might suit their own convenience or interest. They had the perfect right to hold them in their unimproved condition as long as they chose. In point of fact they could not, after this litigation was commenced, haAre leased them under perpetual leases even if they had desired to do so. The filing of the original hill on the first of June, 1880, must have stopped that kind of leasing, for it is quite certain that no one would have taken a lease of that character on property the title to ^hich was thus put in controversy, nor until the litigation was ended and the title settled. The controversy has been a protracted one, hut we do not find that the delay is attributable to any fault on the part of the defendants. In short we find nothing in the circumstances of the case which should induce a Court of equity to impose any unusual or harsh rule of compensation against the bona fide purchasers of this property. In our opinion, the Court below has gone as far as reason or justice will permit in holding that the true rental value to be considered as the basis of compensation in this respect,, is such rental value or occupation rent as might fairly have been made by the defendants during the time of the ouster, by a valid lease of the property in its unimproved condition from year to year or for a term equal to the period of ouster. This' in our opinion, is a liberal application of the general rule governing actions for mesne profits, and gives the Worthingtons and the Knapps all they are justly entitled to claim. And this rule, as we have seen, must apply to all the property, whether improved or unimproved. It has been suggested, and it may he true, that it will he impossible to prove that the yearly rent of vacant unimproved city lots will suffice to pay taxes on them, and that the Worthingtons and Knapps will get nothing in the shape of haclr-rents and profits. If such is the result .of the proof all that we can say is that, in that event, they will be entitled to nothing. It is not in the •power of the Court to create rents and profits for their benefit, nor would it be just, in order to benefit them, to make these innocent bona fide purchasers responsible on account of rents and profits which they have never in fact received, and never could have realized.

(Decided 17th January, 1889.)

A point has been made as to the sufficiency of the pleas of limitation interposed to the recovery on account of rents and profits, but these pleas were held to be good and valid by this Court on the first appeal. 62 Md., 74.

As to the appeal taken by the other parties, little need be said. We are clearly of opinion it was competent for the Court by its order of September, 1888, to allow additional’ proof to be taken, notwithstanding any restriction as to time contained in the decree of May, 1887. In fact we think it .the plain duty of a Court of equity to allow further proof to come in at any time during the progress of a cause when, in its judgment, the taking of such proof will subserve the ends of justice.

It follows from what we have thus said, that the order appealed from, in so far as it rejects the accounts and refers the case back to the auditor, with leave to the parties to take further proof, .will be affirmed, and the cause remanded for further proceedings in accordance with the views expressed in this opinion.

Order affirmed, and

cause remanded.

Application was made on the 14th of March, 1889, on behalf of Worthington and others, for a re-argument of the foregoing case. The Court denied the application but filed no opinion. Subsequently, for the reason therein stated, the Court through Judge Milleb, delivered the following opinion:

When the motion for a re-argument in this case was overruled, no opinion was filed. This is our usual practice where all the Judges who heard the case argued, are clearly satisfied with the original opinion, and such was the case here. It has, however, been suggested that it wou-ld be well, in order to save the parties further delay, litigation, and costs, to express briefly our opinion on a point in regard to which it is supposed there remains some doubt, and that is, whether the Worthingtons and Knapps are entitled to recover, in this accounting for rents and profits, a share of the ground rents that may have been received by some of the defendants under perpetual- leases. That question was fully considered when the case was decided; and though it may not be so prominently noticed in the opinion as it might have been, is yet clearly covered by the views therein expressed. At first we were inclined to agree with Judge Deknis, that if any of the defendants had undertaken to make such leases the plaintiffs were entitled to'their proportionate share of the rents actually received thereunder, but a careful consideration of the decree of the 23rd of May, 1881, and the antecedent opinions of this Court, stating the principles upon which the accounting for rents and profits should be had, brought our minds to a different conclusion. We found that the decree expressly directed the auditor in stating the account to ascertain what portion of such rents and profits have been due to the use of the improvements upon the parcels of said property which have been improved since the sale under the decree of 1833, as distinguished from the portion thereof which have heen due to the use of the land in its present condition, and exclude the first mentioned portion of such rents and profits from the allowance to he made to the complainants. We said that this part of the decree simply carried into effect the previously declared purpose of this Court, to give full protection to these bona fide purchasers in respect to any beneficial improvements they may have placed upon the property. Such improvements are neither allowed to enhance the value of the property for the purpose of partition, nor to increase the responsibility of the improvers in respect to hack rents and profits. In taking the account, the auditor is directed to consider the property just as if it had all heen and remained vacant and unimproved ground. And in another part of the opinion, we said the main question is what rule ought to govern this accounting for rents and profits, where the entire property out of which it is supposed such rents and profits were derived consists, or must be treated as consisting, of vacant and unimproved city lots; and we then went on to consider and lay down what, in our judgment, was the proper rule to he applied in such a case, and with reference to such property.

We thought then, and still think, that the purchasers under the decree of 1833 were bona fide purchasers, that it was the purpose of this Court in its previous decisions in the case to give these purchasers, or those claiming under them, complete protection with respect to all improvements put on the property, and that in doing this the. Court was simply doing them justice. We could not then and cannot now see any distinction in principle, between the case of a purchaser who built improvements himself and then rented them from year to year, and that of a purchaser who had the improvements put up, or contracted that they should he put up by his lessee, under a perpettial lease. In either case the rents are paid, because of the buildings or improvements put on the property. Erom the best consideration we were able to give the case that was our opinion when we decided it, and it remains out-opinion now.

(Filed 12th June, 1889.)

Motion overruled.