Case ID: tenn_53/html/0450-01.html
Source: Caselaw Access Project
Author: {"author": "NicholsoN, Ch. J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Paul Masson v. H. W. Swan, Adm’x, et als.
    
    1. Chancery Practice. Process. Guardian and Ward. A regular guardian may defend for his wards and may waive the service of process upon them.
    Case cited: Cowan v. Anderson, 7 Col., 284.
    2. Same. Answer not signed. It is no ground of exception in the Supreme Court to the answer of the guardian that it was not subscribed by him, ■ the certificate of the clerk showing that the answer was “ sworn to by the defendants,” and no exception having been taken in the court below.
    
      3. Parol CONTRACT NOR Sale oe Land. Compensation to vendee for improvements. A parol contract for the sale of land is not void, but is voidable at the election of either party, and upon the rescission thereof the vendee is entitled to compensation for permanent improvements, upon the ground of the subsistence of a valid contract when they were made.
    Cases cited: Shea v. Allison, 3 Head, 176; Roberts v. Francis, 2 Heis., 128.
    4. Same. Same. Compensation, how computed. The measure of compensation is the enhanced value of the land in the market, resulting from the permanent improvements, estimated as of the time the election to avoid the contract was made. The vendee is also entitled to be reimbursed the taxes paid by him, but not the insurance, and is chargeable with reasonable rents.
    5. Same. Same. Administrator of vendor not chargeable with balance. The vendor having died before the parol contract was rescinded, his administrator is not chargeable with the balance due the vendee as compensation for improvements — such balance is merely a charge on the land.
    PROM KNOX.
    Appeal from the decree of the Chancery Court, July Term, 1861. Seth J. W. Luckey, Ch.
    Jas. R. Cocke for complainant, insisted:
    1. Complainant has a lien upon the house and lot to the full extent that the ’ improvements made by him have enhanced the permanent value of the land: citing Rhea v. Allison, 3 Head, 177; Ridley v. MeNairy, 2 Hum., 174; Herring v. Pollard, 4 Hum., 362; Matthews v. Davis, 6 Hum., 324; 6 Paige, 390.
    2. The regular guardian may waive process: citing Britain v. Gowan, 5 Hum., 315; C'owcm v. Anderson, 7 Col., 284, et seq.
    
    3. The caption of the answer shows that it is the answer of both the minors and their guardian, .and the certificate of the clerk shows that it was “ sworn to by the defendants.”.
    
      W. P. Washburn for the administratrix, insisted:
    that the personal representative is not liable for any balance that may be due the vendee for permanent improvements, and argued:
    1. That although it is well settled in Tennessee that the vendee, upon the rescission ^ of a parol contract for the sale of land, may, in equity, recover compensation for permanent improvements, yet such was not the case at common law, and the rule is not recognized in most of the States of the Union: citing 2 Sto. Eq. Ju., s. 799, a. b.
    
    2. In case of a mortgage the heir may call upon the personal representative to redeem, because the personal estate has had the benefit of the money borrowed: 1 Wash. Real., 566. And the same principle might apply here if the purchase money had been paid by the vendee, and this suit was for its recovery. But the purchase money, it is admitted, was never paid.
    3. None of our cases have gone further than to make such balance a lien on the land: citing 2 Hum., 174; 4 Hum., 362; 6 Hum., 324. And the lien is given, not for what the improvements cost, but for the amount by which the value of the property has been enhanced: citing Matthews v. Mavis, 6 Hum., 324.
    George Andrews for the heirs, insisted:
    1. If the vendor had chosen to rescind the parol contract, equity would have aided the vendee, and to prevent the perpetration of a fraud, would have given him tlie value of his improvements; but the vendee himself having,, in bad faith, elected to rescind, equity ' will leave him' to his legal rights: citing Hilton v. Duncan, 1 Col., 313.
    2. The complainant, at all events, can not recover for insurance paid. A mortgagee could not, except by special contract: citing 1 Hill, on Mortg., 469, s. 32.
    3. He is entitled to the amount that the value of the land has been enhanced by the permanent improvements, if to anything, and not to the cost of such improvements.
    4. The administratrix, and not the heirs, should bear the charge.
    5. And if a sale of the lot is ordered, the decree should direct that the original purchase money should be first paid out of the proceeds, then the compensation to, complainant, and any surplus’ to the heirs. For if this should not be done, and the property should bring less than the estimated value of the improvements (and this is not improbable at a forced sale), the heirs would lose all their interest.
    Deaderick, J., being incompetent, did not sit.
   NicholsoN, Ch. J.,

delivered the opinion of the court.

In May, 1857, Vm. Swan agreed to sell to Paul Masson a vacant lot in Knoxville for $600. The agreement was in parol, no note given for the purchase money, and no time fixed for its payment, and no written ■ memorandum of the terms of sale. Mas-son took possession of the lot, and proceeded to make permanent improvements upon it by erecting buildings thereon for a residence. From the 25th of December, 1857, to the 25th of December, 1860, he occupied the premises as a residence. No payment on the purchase money was made, and no application to Swan for a title. Swan died in March, 1859.

The bill was filed May 2, ' 1860, making no tender of purchase money, and asking for no execution of the contract by title from the heirs of Swan, but assuming that the contract was void because not reduced to writing, and claiming compensation for the permanent improvements to the amount of the enhanced value of the property, setting off against such the rents, after deducting the amounts paid for taxes and insurance.

The widow of Wm. Swan, as his administratrix, and his heirs, were made defendants.. The heirs answered — those who were adults answering for themselves, and those who were minors by their regular guardian, the service of process on them being waived by him.

By reference to the Clerk and Master the amount of the enhanced value of the lot was ascertained, to which was added the amount of taxes and insurance paid, and from the aggregate sum the amount of the rents was deducted. For the balance a decree was rendered, and an order of sale of the lot for its satisfaction.

Both sides have appealed.

1. It is objected to the decree below that the record shows that the minor defendants were not served with process, and that it does not appear that the answer put in for them by their regular guardian was subscribed and sworn to. . The certificate of the clerk shows that the defendants made oath to the answer; this was sufficient without the signature of the party, as no exception was taken to it. The case of Cowan v. Anderson, 7 Col., 284, determines that a regular guardian may defend for minors and waive process.

2. It is said that there is no equity in the bill, and that complainant has no right to the aid of a court of equity to enable him to rescind the contract.

By the recent decisions in this State, the contract of sale was not absolutely void, but voidable upon the election of either party: Roberts v. Francis, 2 Heis., 128. Swan, the vendor, did not elect to avoid the contract, nor did his heirs after his death. Complainant made no tender of the purchase money, and could not claim a title until he had done so. He rested upon the parol contract, made the improvements, and occupied the property as his own ' under the parol contract until May 2nd, 1860, when he elected to avoid the contract and claim compensation for his improvements. He had the right to make his election, and as the improvements were made under a subsisting parol contract, he had the right to come into a court of equity to have his claim for compensation enforced. The' equity springs from the fact that the contract is not void but voidable, and that either party has the right to avoid it: Rhea v. Allison, fs Head, 176.

3. The equity of complainant is the amount of the enhancement of the "valué of the lot in market, resulting from the permanent improvements made upon it; this value to be estimated at the. time he made his election to avoid the contract. The amounts actually expended in making or superintending the improvements do not furnish the criteria for ascertaining the enhanced value, though they may be looked to as legitimate evidence in the investigation.

But as complainant seeks the enforcement of an equity, he is bound to do equity; hence, he is required to account for the benefits derived from the use and occupation of the property. As he elects to repudiate the contract, and along with it the payment of the purchase money, equity requires him to account for reasonable rents.

During the occupation, of the lot the law imposed taxes on the property. These were encumbrances, for the removal of which he ought to have credit upon the amount of the rents. But the insurance paid upon the property stands on a different footing. He insured the property voluntarily and for his own protection, and while he was holding and treating the property as his own. We see no equity in allowing him a credit for this expenditure. The balance due to complainant will bear interest from the filing' of the bill.

The only remaining question is as to whether the enhanced value should be paid by the administrator or the heirs? It can not be regarded as a debt against the administrator. The liability arose upon tbe election of complainant to avoid the contract, and it is a liability arising out of no default on tbe part of tbe intestate or his administratrix. For all we can see, the intestate was ready at any time to make title if complainant bad entitled- himself to it by tendering or paying the purchase money. Not electing to do this during the lifetime of the intestate, and only making his election to avoid the contract after the legal title had descended to the heirs of the intestate, at which time his equitable claim for compensation came into existence, we think it clear that the liability attaches to the property itself out of which it sprung, and that it can not be viewed as a debt of the estate to be paid by the administratrix. The real estate and not the personal is benefitted by the improvement, and equity necessarily fixes the liability for the benefit on the real estate.

With the modifications indicated, the decree of the Chancellor is affirmed. The heirs will have four months with which to pay the amount ascertained to be due. The clerk of this court will make report of the amount due to the. present term. The costs will be paid by complainant.