42
FEDERAL REPORTER.
dehtor thereto having passed to. William- Crawford before the judgments were given or docketed. There was no interest of Foster's left in the property for the judgments to. operate on. The conveyance was valid between the parties thereto. The right of the creditors to have it set :aside forfraud as to them was all that was left. The plaintiff being the first ,creditor to assert this right, by the filing of his bill, then acquired a prior right to whatever may be made out of the property of the suit. Burt v. Keyes, 1 Flip. 72; Wait, Fraud. Conv. § 392; In re Estes, 6 Sawy. 459, 3 Fed. Rep. 134, and cases there cited. In the latter case, after a careful examination of the subject, I held that under the law of this state the lien of a judgment only attached to property belonging to the judgment debtor at the date of its docketing, and that a conveyance, though void as to creditors who might assert their right against it, was valid between the parties, and passed all the estate of the grantor in the premises to the grantee; and therefore the ,lien of a subsequent judgment does not attach to the property.
DAVIS 11. CHAPMAN.
,(Circuit Court, D. Indiana. August 18, 1888.;
1.
TENANC¥ IN COMMON-RIGHTS OF CHASER ON. FORECLOSURE.
PuR·
The co-tenancy of a purchaser at a sale on foreclosure of the interest of a ten:ant in common in real estate oommences, for the purpose of an accounting be. tween the ,tenants. from the date of the deed, and does not relate back to the date of the mortgage. and the accounting should embrace no charge for reo pairs or improvements made !>r taxes paid by tenant prior to the date of the deed.' . , : ', ; .
2. SAME"':'USE AND OCCUPATION-REPAIRS-SET-OFF.
, While one tenant in common cannot recover of another for mere occupa· . tiono! the premises, yet such occupation may be .considered and made an equitable set-olf against theoccupying tenant's claim fOf repairs, which, in the absence of an agreement, is likewise not the subject of an, actioD between cotenants.
Equity., Action for partition and accounting. The action isfor partition of real estate, and f9r an accounting in respect to rents and profits. The defendant claims a set-off for repairs and improvements and for taxes paid. The title. of the complainant has been .established in an action at law in this court, and for the history of that ,title, and the disputes and litigation of the parties over it, reference is 'made tQthe decision in 24 Fed; Rep. 674. Upon the matters now in .question the master says: . "This suit is the last chapter ip thtllitigation that has been in progress between the parties in different courts and in various forms for ten or eleven years; complainant making claitn to the ownership of the und'ivided half of certain real estate (hotel and livery stable property) in the city of Warsaw, Kosciusko county, this state. Chl\Pman, the defendant, until the May term
DAVIS
v;
CHAPMAN·.'
43
ofthis court, 1885, denied .the'title of the complainant; but tbis' Mrtrt at time, in an ejectment suit on tbe law side of the court, gave jUdgment against him, and confirmed plaintiff's title as ownerof the undivided half of the property. In its present form, this is a suit, for partition and, sale" with a prayer that defendant account to complainant for the half·of the rents arid ]lrofitsof the real estate during the period of herowner3hip. The bill as originally filed in this case was of much wider scope, and contains a history of the efforts of the defendant, Chapman, to secure titlp. to the plaintiff's undivided half of the real estate by means of tax deeds, the foreclosure of mortgages, and various other legal proceedings, which have enabled the defendant to retain the possession of the prt>mises, and which litigation has subjected the complainant to great expense in defending her title and enforcing her rights. The evidence shows, in the master's opinion. that the efforts of the defendant to defeat the title of Mrs. Davis do not exhibit him in the light of a man who was sepking ill good faith to assert and maintain his legal rights, but rather as a litigant who was doing everything in his powllr to vex and harass her by futile but expensive lawsuits. It was said at the argnment, for the defendant, that' in the present proceeding these considerations could hllve no proper weight in the matter of that, the judgment of this court in the ejectment suit having settled and confirmed Mrs. Davis' there remained nothing to be done but an examination of the accounts of the defendant, with a view of ascertaining the amount of rents .with which he should be chargMble, and the deductions or credits to be made in his favor on account of necessary 'and proper repairs and taxes. While this may be true, the master thinks that, in view of the fact that the defendant has been in the wrongful possession of the complainant's property for so many years, he should be clJargedwiih the full value of the rentals corning to his co-tenant. rather than the amount hechatges himself with as haVing been actually received therefor. It appears in' the evidence that the dllfendant was the owner of some furniture and other personal property whit-h is used in the hotel. In making his contracts with tenants he would,apportion the amount, allowing so much for the real estate, in which the plaintiff had half in terest, and 80 rn nch for the use of the furni· ture, of which he was the sole owner. In the master's judgment, these :apportionments were inequitable. The property is a three-story brick hotel and basement. sixty-six feet front, on one or the principal business streets of the city of Warsaw. In addition. to the hotel. there is a stable adjoining, which is a part of the premises in which the plailltiff has an. undivided hlllfinterest. The defendant admits that from the stable he received in rents from .!:anu<try' 22,1877, to March 1,1888, some $1,250; that for the houseand furniture, and for the good-will of the hOUSd, ete'., he received from August I, 11:177. to January 29, 1885, the SUIll of $8,665; making a total of$9.915,aceording to bi& own showing. The defendant occupied the hotel himself from January 22, ' 1877, to August l,1877,-seven f\lonths. He was also, in the posse8sioriof' the property from January 30, 11585', to June 15, 1885. the date at which the judgment in ejectment was rendered in this court. From. that time. he .I!as, be..n in the exclusive occupancy of the premises.. The the'ftl!;'-, niture. as it appears in the depositions of ,Mr. George W. Green, Mrs: Jenni'e Reed, and Mr. and Mrs. Newberger, indicates that it was inferior in quality;' and of no great value. The record showEi that the defendant himself b()ught it at a chattel mortgage foreclosure sale in 1876 for $900, which was probably all it was worth. Mr. Urel'll. who rented the hotel. and fll,rniture from AUgllst of tbe;eharacter, 1;1877, to Octobei'l,1881, for$90permonth,aftel' and condition of the furnitUl'e, s<\ys it waS pot worth OVer $500, ,and :that the, faIr rental value of it. was from $30 to $35 a month, Which certainly iSll'fair "nd liberal estimate. '. Mrs .·Jennie Reed rented the.hotplfrom October 3. 18blk 3; 1882. She was to l'ay $1,000 for year,fol':tbe fur-;
44
niture. At that time she says that Chapman only wanted to sell the entire fur· niture for $600 or $700. He finally asked her if she would give $500 for it. She says she told him she would give $300 a year for it,.but she does not think it worth over $50 a year rental. Mr. and Mrs. Newberger rented the house from' May 3, 1882, to January 30, 1885. They were to pay $1,000 per year and $500 for the furniture. Mr. Newberger says that Chapman would not rent the hotel unless he agreed to take the furniture. He also says that the fair cash value of the furniture at that time would not exceed $250. and that $50 a year would be full rental value for it. Mrs. Newberger says the furniture was not worth over $300. The effect of this evidence is to show that in deal· ing with this property Mr. Chapman was taking much better care of his inter' ests in what belonged to him exclusively than he was of the joint property which was owned by himself and the plaintiff. In view of all the faets, I find and report that the defendant should be charged with the rental value of the hotel proper from January 27, 1877, to April 1, 1888, a period of eleven years, , two months, and eight days. At the rateof$75 per month, this wouldarnount to $10,070. I report and find that he should be disallowed for his claim for repairs put upon the property prior to 1877, which repairs amounted to the sum of $2,595. Taking this from the total repairs proved by him, which is $5,223.67, would leave a balance of repairs, for which he is entitled to a,credit, of $2,628.67. In addition to this, the defendant Chapman pa;id taxes from time to time amounting to $1,175.37. This, added to the repairs for which he shOUld be allowed, makes the total of credits in his favor, $3,804.04. Subtracting this amount from the $10,070 rentals,lea\"es a balance of rent for the hotel property, $6,265.96. He should account to the complainant for one-half of this, which is $3,132.98. In addition to the rentals from the hotel, Col. _Chapman received $1,250 rent for the stable. Half of this amount, $625, should be added to the half of the hotel rentals, which makes the amollnt due Mrs. Davis on an accounting, allowing Col. Chapman for repairs and taxes as indicated above, the slim of $3,757.98. III this computation no account has been taken of interest either way. The master has preferred to take the short method of allowing the interest on repairs to offset interest on rents, without attempting to arrive at the exact figures by making monthly or annual rests. I report and find that out of the defendant's share of the proceeds of the sale -ef. .the real estate the complainant be allowed the sum of $3,757.98." Both parties have excepted to the amount of this allowance, and to the calculations by which it was reached. The plaintiff demands rents from January 22, 1877, the date of her deed; and insists that the demands of the defendant for improvements and repairs. and for taxes paid before that date, are merged and extinguished in his title as sale owner of the entire property, acquired November 15; 1876, (or, if the doctrine of relation to the date of purchase be applied, November 15, 1875;) and that for the time since that date he should be allowed nothing, because wrongfully and in bad faith he had denied her rights in the property, had excluded her from possession, and had subjected her to the expense of vexatious litigation.
J. M. Van F'leet and Hill «Lamb, for complainant. ,No case in the books, either at law or in equity, holds that a willful and· perverse wrong-doflr can recover or be allowed anything for improvements or any apportionment whatever for rents incurred by way of improvements. The eounsel will cite none. Many cases can be found holding that where one tenant in common,'supposing that he owned the whole, without notice of adverse claims, has been allowed in eqUity a deduction for the rents occasioned
DAVIS V. CHAPMAN.
45
by his improvements. as well as the present value of the improvements at the time of the trial. That doctrine of equity has been codifled by the fourth subdivision of section 1076, Rev. St. 1881. This necessarily implies that one not within the statute shall be allowed no reductions whatever. Carver v. Coffman, (Ind.) 10 N. E. !{ep. 567: Mining Co. v. Sydnor, 39 Wis. 600: .Vannoy v. Blessing, 36 Ind. 349: Woodhull, v. Rosenthal, 61 N. Y. 382; Patterv. Brown, 32 iQ". Y. 81; Hilgenberg v. Rhodes, 12 N E. Rep. 149; Osborn v. Storms, 65 Ind. 325: Ethel v. Batchelder. 90 Ind. 525; Walker v. Quigg, 6 Watts, 87; Shand v. Hanley, 71 N. Y 319; Haslett v. Crain, 85 III. 129; Davidson v. Thompson, 22 N. J. Eq. 8::1; WUltinson v. Pearson, 23 Pat St. 117: Austin v. Barrett, 44 Iowa, 488, and cases cited. Harrison, Miller & Elam, for defendant. We insist that the only penalty the law inflicts upon the defendant for the denial of complainant's title is the costs of the litigation: that this question of an accounting can only arise between tenants in common, where one has excluded the other and taken sole possession: aud that the fact that he denied his co-tenant's title, as well as his right to possession, does not in any degree influence the equitable principles upon which the accounting is to be made. We state these propositions, with some cases in support of them: First. For the time since the defendant invited the complainant to share the possession and occupancy with him, or to unite with him in leasing the property, she can recover no rent;i: the defendant having received none. Second. For the time when the property was occupied by defendant Ihmself, undel' a claim of an exclusive right, the complainant might recover the one-half of the reasonable rental value of the property, if she had offered any evidence of the rental value: but she did not. The evidence is that it could not be rented, and was kept going by defendant at a loss. Third. At common law one tenant in common cannot recover of another for mere occupation at all; and by statute, when there has not been an actual exclusion, there can be a recovery only for actual receipts of money, etc. Our statute, section 228, simply takes place of statute of 16 Anne, c. 4. 'rhe language is the same. The wurd "received" is the same in both, and is adopted with a well-settled construction in England and America. Fourth. In the absence of evidence of rental value, the accounting must pl'oceed by charging the defendant only with the money actually recei ved by him for rents. Fifth. Against thIS he is entitled to be credited with the cost of such repairs and improvements as were necessary to the beneficial use of the property, and with any taxes paid by him. The complainant cannot receive the increased rental produced by the improvements, and refuse to share p. their cost. Pickering v. Pickering, (1'\ H.) 3 Atl. R 744, and cases cited: 1 Washb. Real Prop. 661,662; Pico v. Oulumbet. 12 Cal. 414: Fordv. Knapp, (N. Y.),6 N. E. Rep. 283: Alexander v. Ellison. 79 Ky. 148: 'l'yner v.Fenner, 4 Lea, 469: Osborn v. Osborn, 62 Tex. 495. WOODS. J., (a.ftcr mating the facts all above.) In respect to the title of the parties it is enough to restate briefly here, what is shown more at large in the report of the case at law; that in 1873 Chapman and Charles Ford were equal co-tenants of the property, and continued so until November 15,1876, (erroneously stated "1875'1 at page 75 of the report,) when by force of certain judicial sales, the title of Ford was transferred to Chapman, terminating the previous co-tenancy and making Chapman the sole owner of the property, subject to the mortgage of July 2, 1875, made by Ford upon his half interest to Nelson Davis,upon fQreclosure of which Mrs. Davis purchased, January 22, 1876, and on January 22,
I
46
F;EDERAJf REPORTER.
1877, on default of redemption by Chapman or any other, received the' sheriff's deed Of that date, whereby she became and has continued to be cotenant with the defendant, but without recognition by him of her rights, until since the date of the judgment in the case at law. The important question arises here, whether, for the purpose of tlle accounting between the parties, this co-tenancy shall be regarded as beginning with the execution of the deed to the plaintiff, or by relation shall be carried back to the date of the mortgage, or at least to the date of the sale made upon foreclosure of the mortgage, from which the plaintitrs title is derived. The plaintiff claimed and has been allowed nothing for rent before the date of her deed; but the defendant insists upon bringing into the account his expenditures for repairs and taxes before that time, including the taxes of 1873-74, for which the defendant purchased thl:" property at' the tax sale ofFebruary , 1875. Rejecting the charges for repairs, the master allowed those for taxes paid, but by mistake treated the amounts allowed as having been paid upon the entire property, instead of the half, as was the fact. In support of the defendant's claim in this respect, his counsel contend that by force of the doctrine of relation the co-tenancy of the parties should be deemed to have commenced, if not with the execution of the mortgage, at latest on the day of the sale to the plaintiff on the decree of foreclosure of the mortgage. This proposition seems to me inadmissible. Without doubt the title of a purchaser at judicial sale relates to the date, of sale, and, if the sale be upon foreclosure of a mortgage, to the date of the mortgage; but does it follow, upon the sale of an undivided interest, that the co-tenancy consummated by the conveyance must also be deemed, like the title, to conimencewith "the original" of the "divers acts concurrent to make the conveyance?" If so, t4en Mrs. Davis and Chapman must beheld to have been co-tenants since July 2, 1875, (for the relation goes as certa.inly to the date of the mortgage as of the sale,) notwithstanding both in law and fact she actually had. neither nor right ofpossessibn until she received her deed, and until Novem ber, 1 5, Fprd,in common with Chapman, had the title and the right of possession, to her exclusion. To apply the doctrine of,relation to these facts in the manner proposed, might be characterized as an attempt to "make that not to have been whh:h was,"as well as tolllake that to have been' which never was, and which, by the will of either party, without the consent of the other at the time, or even by the will of both parties without 'the cdnsentof Ford, could not have been. But if theca-tenancy during this time or any part of the time were conceded, still, in order to' hold Chapman accountable to l\1rs. Davis for the use or occupation of the prpperty during such tifne, (as a substantive and direct cause of action,) it would be necessary to,add t<> the fiction ofco-tenan,cy thefti'rther as. sumption of an ouster i or wrongful denial of the right of the plaintiff in the premises by the defendant. But it is a recognized limitation upon the ,doctrine ohelation that it shall Dot. be applied in snch way as' to makethattortiolls'which,.when done, was lawful. :;3Waslib. Real Prop. 277. ]Jto8tv. Beekman, 1 Johns. Ch. 297. The, only precedent claimed
DAVIS 'IJ. CHAPMAN.
47
no
or
48
tion to recover anything for such mere use or occupation by the defendant; that is to say, for the time after August, 1885, when, the action at law having been decided, the defendant acknowledged the plaintiff's title and invited her to share in the· possession and management of the property. But while such use and occupation may not be made the direct ground of recovery, it does not follow that it may not be considered in connection with, and made an equitable set-off against, the defendant's claim forrepairs,which, at common law, in the absence of agreement, are likewise not the subject of an action between co-tenants. The same principle which admits one of these claims into the computation opens the door to the other as a set-off against the first. The case of Hyatt v. Cochran, 85 Ind. 231, affords a close analogy. That was an action for rents and profits of real estate under a statute which permitted a recovery for six years only The defendant claimed an allowance for repairs, and the plaintiff was permitted to bring forward in set-off a demand for rents accrued more thatJ. six years before the commencement of the tion. The attitude and conduct of the defendant in the case have shown him throughollt 1Ii determined and persistent litigant, and thEl resulthae shown him to have been in the wrong; but in the judgment of the court, if the subject of bona jidesbewithin the scope of the- present inquiry, there is not such proof of bad faith· on the part of the deftmdant as to exclude his claims from all equitable cognizance. Upon a careful consideration of the case in all its aspects, as presented by counsel, the court is 'not able tO'discover a basis of adjustment different from that adopted by the master, which it could regard as more consonant with equity and good conscience; and the amount reported, reduced by $212.43, that is to say, $3,545.55, to be paid by defendant to complainant, is confirmed, and all exceptions to the report inconsistent with this conclusion are overruled. Decree and judgment accordingly.
INVESTMENT
Co.
OF PHIT,ADELPHIA
'I).
OHIO
&. N. W. R. Co.
et al.
(Oz"rouit Oourt, S. D. Ohio, 'Iv. D. August 17.1888.) RAILROAD 'TIFICATES. AND . TO ISSUE CER.
'The petition of a receiver of an insolvent railroad company for authority to horrow $347.5.77,18, ,and issue his certificates therefor. specified that $111.904 of the amount was to be used in completing a portion of the road aud widening its gauge, $35,000 for purch,asing and laying track over another portion already graded and. bridged at an expense of $49,000; $47.248.18, to pay claims for material furnished. etc., which were not 8 lien on the road; $20,000 .to reimblirse bondholders for advances to meet arrearages of wages and avert a strike; $100,000 to purchase leased rolling stock, for which the coln,panypaid an annual rental of $28,800. the lessors also canceling a claim for $7,000 unpaid rent, if the purchase was made; $4,000 to relay a line of track op. a connecting road, and thus cancel a debt of $8,000 due that road, ll.J;ld secure enough additional business to. pay the cost in three months; and $29,-
