Case Title: Vernon v. McEntire

Citation: 356 S.W.2d 13

Docket Number: 5-2637

State: arkansas

Court: Arkansas Supreme Court

Date: 1962-04-09T00:00:00Z

Document:
356 S.W.2d 13 (1962) Luchers VERNON et al., Appellants, v. J. L. McENTIRE et al., Appellees. No. 5-2637. Supreme Court of Arkansas. April 9, 1962. Wiley A. Branton, Pine Bluff, for appellants. Jay W. Dickey, Pine Bluff, for appellees. WARD, Justice. This is the second appeal involving the same parties and the same 80 acres of land in Jefferson County. In the first opinion (Vernon v. McEntire, Ark., 339 S.W.2d 855) it was held that Luchers Vernon and his wife had the right to redeem the land from the McEntires. The background facts are set forth in that opinion. When the mandate on the first opinion was filed in the trial court no further pleadings were filed by either party. At the beginning *14 of the second hearing the trial court correctly stated the issues in the following language: At this hearing it was agreed that the record on the first appeal would be considered as a part of the record on this appeal, but testimony was also introduced by both sides on the issues as above defined. It is agreed by both parties that the Vernons owe the McEntires the sum of $3100 (as principal) on the purchase price of the land. At the conclusion of the hearing the trial court, after first fully setting out its reasons, found the account between the parties to be as follows: Accordingly the trial court decreed it would be necessary for appellants to pay appellees the sum of $5,677.93 in order to redeem the land, giving appellants 10 days to deposit said amount in the registry of the court, otherwise fee simple title would vest in appellees. Appellants in prosecuting this appeal object to only two items in the decree rendered by the trial court. One is the $2000 allowed appellees for improvements and the other is the date from which interest was allowed on the $3100 balance. One. We agree with appellants' contention that appellees are not entitled to reimbursement for money spent in making improvements on the land. We reach this conclusion because we find no evidence in the record to support a finding that appellees acted in good faith (as defined by this Court) when they made the improvements. It may be conceded, for the purpose of this opinion, that appellees spent $2000 in clearing, draining, ditching, etc. on the 80 acres of land, but we do point out that the amount of recovery for improvements under the Betterment Statute is based on the enhanced value of the land and not on the cost of improvements. See: Wallis v. McGuire, 234 Ark. 484, 352 S.W.2d 940. We find no evidence of enhanced value in this case. There are two ways or theories by which appellees could seek recovery for improvements in this case, providing, of course, they had proven the enhanced value of the property. One, under Ark.Stats. § 34-1423 (commonly known as the Betterment Act) and the other would be to enforce an equitable right, as recognized in Foltz v. Alford, 102 Ark. 191, 143 S.W. 905. However, in either event, there can be no recovery for improvements unless made in good faith. Therefore, it is in order now to find out how this Court has defined "good faith" when used in this connection. A case closely in point on principle is Douglass v. Hunt, 98 Ark. 320, 136 S.W. 170. In that case Hunt testified: There, in denying Hunt's claim for improvements, we said: "`It must be an honest belief and an ignorance that any other person claims a better right to the land.'" In the case of Graves v. Bean, 200 Ark. 863, 141 S.W.2d 50, the Court, in dealing with this same question, made the following statement: In the same connection the Court also said: In Patton v. Taylor, 144 Ark. 254, 222 S.W. 49, the test of good faith was put this way: Likewise, in the case of McDonald v. Rankin, 92 Ark. 173, 122 S.W. 88, the Court, after reviewing at length many cases on the meaning of good faith, said: The meaning of good faith was very clearly restated in Welch v. Burton, 221 Ark. 173, 252 S.W.2d 411, this way: Applying the definition of the words "good faith" as so clearly set forth in the previously cited cases, we cannot escape the conclusion that appellees were not acting in good faith when they made the improvements for which they seek recovery here. As stated in the Burton case, supra, the burden was on appellees to prove good faith. It can hardly be seriously contended that appellees did not know appellants were claiming title to the land at the very time they (appellees) were making the improvements thereon. The pertinent facts on that question are set out below. The earliest date any improvements were made by appellees was in February, 1960 after taking possession of the land in January of that year. Did appellees know in February, 1960 that appellants were claiming title to the 80 acres? Obviously the answer is that they did know. The *16 record on the first appeal, which is a part of the record on this appeal, shows that on January 30, 1959 appellants filed a complaint against appellees in which they asked the court to require appellees to convey title to them. It also shows that on November 10, 1959 the trial court refused the relief asked for by appellants. It further shows that on November 30, 1959 appellant filed a notice of appeal to this Court. Appellees do not disclaim knowledge of appellants' intention to appeal nor are they in any position to do so, because Section 3 of Act 555 of 1953 required the clerk to give them written notice. Therefore when appellees began making improvements on the land some two months later (February, 1960) they did know appellants were still claiming title to the land, and also that appellants were prosecuting that claim in court. That being true, appellees proceeded to make improvements at their own risk, and it cannot be said they did so in "good faith" as those words have been defined by this Court. Two. The trial court also erred in requiring appellants to pay interest on the balance of $3,100 from January 1, 1958. The trial court fell into this error because it found appellants had never made a tender of payment to appellees. In our opinion on the first appeal we made the specific finding that appellants did make such tender, and that finding is not subject to change after the opinion became final. Appellants cannot be charged with interest on the $3,100 after the tender was made. Although appellants necessarily made the tender before they filed the original complaint on January 30, 1959 yet, in the absence of proof of the exact time, we will give appellees the benefit of the uncertainty and fix the date of tender as of January 30, 1959. This means that appellants are charged with interest from January 1, 1958 to January 30, 1959 but not thereafter. Except for the two items above discussed the decree of the trial court is affirmed. For the errors above indicated and to that extent the decree is reversed, and the cause is remanded with instructions to enter a decree not inconsistent with this opinion. Reversed and remanded. HARRIS, C. J., and McFADDIN, J., dissent. McFADDIN, Justice (dissenting). I respectfully dissent from the reversal because I would affirm in all respects the Decree of the Chancery Court; and here are my reasons. I. The $2,000.00 For Improvements. This amount should be allowed the appellees under the doctrine of unjust enrichment; i. e., under the facts here, the appellants would be unjustly enriched to receive the benefit of the appellees' labors and expenditures without paying therefor. In 46 American Jurisprudence 99, under the topic "Restitution and Unjust Enrichment" the rule is stated: *17 The McEntires expended the $2,000.00 improving the property, not of their own volition but because they were required to do so in order to keep the property in workable condition. The testimony showed that the Cousart Drainage Ditch ran through the property, and the Cousart Drainage District had a dragline clean out its ditch and push the dirt back on the land here involved; and the McEntires were obliged to have a bulldozer spread this spoil bank over the land in order that it could be farmed. The $2,000.00 was expended in spreading out the spoil bank over the land and opening up the laterals and ditches so that the land could be farmed. The McEntires didn't deliberately undertake these improvements. They were merely trying to save the usable character of the farm, and if this $2,000.00 item doesn't come within the "betterment" decisions cited by the Majority, it certainly comes within the rule of "unjust enrichment". I think the Chancellor was correct in allowing the McEntires the $2,000.00. II. Interest On The $3,100.00. I think the Trial Court was correct in allowing the McEntires interest on the $3,100.00. It is true that prior to the first trial the Vernons tendered $3,100.00 to the McEntires, but there is no evidence in the record, in either the first trial or this one, that the Vernons kept such tender alive. To offer the money is a tender; but the law requires that the tender be kept alive in order to stop the running of interest; I cannot find any evidence in the record in either trial that the Vernons ever kept the tender alive. In Abbott v. Herron, 90 Ark. 206, 118 S.W. 708, Judge Battle said, with regard to keeping tender alive: Since the Vernons did not keep the tender alive by paying it into the Registry of the Court or otherwise, then the McEntires were entitled to interest as fixed by the Chancery Court.