Title: ALLMAN v STUART

State: montana

Issuer: Montana Supreme Court

Document:

I N T H E SUPREME C O U R T OF THE STATE OF MONTANA N o . 12074 G L E N N H. A L L M A N , Administrator of the Estate of Pvan B . APErnan, Deceased J. M. STUART, the CPTY O F G L A S G O W and the C O U N T Y OF VALLEY, Defendants and Cross P l a i n t i f f s . O R D E R - - PER CURPAM: The opinion of t h i s Court dated January 1 0 , 1972 is ordered amended as fol1sws : Another paragraph s h a l l be added on page 12, a t t h e end of t h e present opinion and reading: " P l a i n t i f f - a p p e l l a n t to have his costs on e h i s appeal, t o be taxed by t h e d i s t r i c t court." The p e t i t i o n f o r rehearing is denied, D A T E D t h i s %st day of February, 3.972. No. 12074 I N T H E S U P R E M E C O U R T O F THE STATE O F MONTANA 1971 G L E N N H. A L L M A N , Administrator of t h e Estate of IVAN B. A L L M A N , Deceased, P l a i n t i f f and Appellant, J. M. STUART, the CITY O F G T A S G O W , and t h e COUNTY O F VALLEY, Defendants and Cross-Plaintiffs. Appeal from: District Court of the Seventeenth J u d i c i a l D i s t r i c t , Honorable M. James Sorte, Judge presiding. Counsel of Record : For Appellant : Leo J. Kottas, Sr. argued, Helena, Montana. For Defendants : Robert Hurly argued, Glasgow, Montana. Submitted: December 2, 1971 Decided : JAR 1 0 g#g Filed : 3 P t N I 0 I 9 R M r . J u s t i c e Frank I. Haswell delivered the Opinion of t h e Court. I n a s u i t between p l a i n t i f f who owns two l o t s and de- fendant who owns an o f f i c e building s i t u a t e thereon, the d i s t r i c t court of Valley County entered judgment requiring s a l e of t h e l o t s and building a s an e n t i t y , with apportionment of t h e s a l e proceeds between t h e p a r t i e s . P l a i n t i f f appeals from t h i s judg- ment and d e n i a l of h i s motion f o r a new t r i a l . The s a l i e n t f a c t s here a r e unique. The two l o t s i n question a r e located i n t h e City of Glasgow, Montana. An o f f i c e building had been constructed on t h e l o t s by persons other than t h e p a r t i e s i n t h e i n s t a n t case. Financial problems ensued cul- minating i n a mortgage foreclosure a c t i o n f i l e d i n t h e United S t a t e s D i s t r i c t Court i n Glasgow by p l a i n t i f f ' s decedent, who was t h e owner and holder of two $10,000 promissory notes and mortgages. Several lienholders, including defendant here, were named a s p a r t i e s defendant i n t h e foreclosure a c t i o n . O n June 19, 1961, t h e United S t a t e s D i s t r i c t Court entered i t s foreclosure decree requiring a separate s a l e a t public auction of t h e l o t s on the one hand and a s e p a r a t e s a l e of t h e building on t h e other hand. Presumably t h i s was done t o e s t a b l i s h t h e proper l i e n r i g h t s and p r i o r i t i e s among t h e various lienholders, a s t o the land and building respectively. Pursuant t o t h i s foreclosure decree, t h e s a l e was held by the United S t a t e s Marshal on October 10, 1961, i n Glasgow. The o f f i c e building was offered f o r s a l e f i r s t . Plain- t i f f ' s decedent, who was t h e mortgage holder, and defendant, who held a mechanic's l i e n f o r e l e c t r i c a l equipment i n s t a l l e d i n t h e building, each bid on t h e building. Defendant eventually was t h e successful bidder a t a p r i c e of $14,000. The two l o t s were then offered f o r s a l e and purchased by p l a i n t i f f ' s decedent f o r a p r i c e of $20,000. Defendant t e s t i - f i e d t h a t he intended t o b i d on t h e l o t s , but did not do s o because t h e opening bid was too high. Both s a l e s were subsequently confirmed by t h e United S t a t e s D i s t r i c t Court and separate c e r t i f i c a t e s of s a l e were issued t o t h e respective purchasers. No appeal has ever been taken by anyone i n t h e foreclosure proceedings. Following t h e foreclosure s a l e , negotiations were had be- tween t h e respective owners of the l o t s on t h e one hand, and of t h e building on t h e other. Defendant's testimony summarizes'the s i t u a t i o n : "Q. And during the f i r s t year o r two a f t e r t h i s Marshall ( s i c ) s a l e was made you [defendant] and myself [defendant 's attorney] and M r . Kottas [plain- t i f f ' s a t t o r n e y ] and M r . Allman [ p l a i n t i f f ] have negotiated together may times t r y i n g t o work out a s o l u t i o n t o t h i s problem of divided ownership haven't we? (Bracketed m a t e r i a 1 supplied) "A. That is c o r r e c t . I ? During t h i s period t h e condition of t h e building d i f f e r e d m a t e r i a l l y from i t s condition a t t h e time of t r i a l . The following excerpt from defendant's testimony portrays t h i s s i t u a t i o n : "Q. And during t h a t f i r s t period a l s o i s n ' t it t r u e t h a t your building was i n not too good shape and it wouldn't have been too hard t o move? "A. The walls were cracked and it was only about a t h i r d rented and t h e paint and everything from s e t t l e - ment and s t u f f . . . t h e walls were cracked and it could have been moved without doing too much damage outside of maybe losing t h e masonry on t h e outside of it which a t t h e time c o s t around $3,100.00 something l i k e t h a t , t o replace t h e masonry. " Q . And a c t u a l l y over the years s i n c e you bought t h e building you've put i n approxima t e l y $12,000.00 worth of improvements have you n o t ? "A. Yes. The building is r e a l good shape and f u l l y rented a t t h e present. "Q. And t h e s e improvements i n these cases were r e - quired by your r e n t e r s i n order t o r e n t space t o them? "A. Well i t couldn't be rented without: doing it, no. "Q. And i s n ' t i t a l s o t r u e t h a t about $1,000.00 of those improvements have been t o grade and gravel t h e land around t h e building? "A. Yes t h e water. . . i t stood around t h e r e l i k e a lake and yo!^. ..besides not being a b l e t o park t h e seepage underneath was what was making i t s e t t l e and cracked a l l t h e walls. " Q . Is it p r a c t i c a l t o move t h e building a t t h e present time? "A. Well it i s n ' t p r a c t i c a l . It would, it could be moved but i t s c o s t s would be p r e t t y prohibitive. It would undo a l l the remodeling and it would be a r e a l expensive proposition. "Q. And t h i s has been attached t o t h e ground with a permanent concrete foundation, has it n o t ? A . That is c o r r e c t . "Q. And t h e r e a r e water and sewer and gas l i n e s t h a t go underground t o t h e building? A . U h huh. "Q. And it has sidewalks and s t e p s t h a t a r e attached t o the groufid? "A. I put i n new sidewalks on t h e south s i d e towards t h e Elks t h i s summer. There was running water s e t t l e d way down and was running water under t h e footing so--- " Q . Approximately how much money do you have invested i n the building a t t h e present time? "A. Around $22,000.00. " The negotiations between p l a i n t i f f and defendant concerning the building problem continued through a t l e a s t 1965, according t o defendant. A s e a r l y a s 1963 defendant was n o t i f i e d by p l a i n t i f f , i n w r i t i n g , t o move t h e building o f f t h e l o t s ; defendant was n o t i f i e d i n writing again i n 1964. Oral n o t i f i c a t i o n was a l s o made i n 1965. p l a i n t i f f ' s testimony concerning t h i s n o t i c e is summarized i n the following excerpt: Q . Do you r e c a l l having a conversation with M r . S t u a r t a t h i s home, you and I, a f t e r talking t o M r . Hurly [defendant's a t t o r n e y ] , and M r . Hurly t o l d us t h a t we could go and t a l k t o M r . S t u a r t ? Do you r e c a l l t h e year t h a t was? (Bracketed m a t e r i a l added) "A. I think it would have been i n 65. 'p. And did we contact M r . S t u a r t a t t h a t time? "A. Yes. "Q. And where d i d we contact him? "A. A t h i s house. "Q. W h o was present? A . You and M r . S t u a r t and myself. Q . And what.. . Did you t a l k t o him about anything a t t h a t time? "A. Yes . Q . What was i t ? "A. About removing t h e building. Q And what, what was t h e g i s t of t h e conversa- t i o n t h a t you had i n m y presence t h e r e with M r . S t u a r t ? "A. Well he was going t o g e t around t o it and we talked about i f we shouldn't be g e t t i n g some r e n t o f f f o r t h e time t h a t he had used it, and he agreed t h a t we should and I think, I think he asked how much we wanted and I t o l d him t o submit a f i g u r e and 1 ' d take it up with t h e h e i r s and ... "Q. Did you receive such a f i g u r e from him? llA. No."' S t a t e and l o c a l taxes were separately b i l l e d t o t h e owner of t h e l o t s and t o t h e owner of t h e building respectively, following t h e recording of t h e foreclosure decree. Defendant has paid nothing t o p l a i n t i f f f o r t h e use of t h e land on which t h e building i s s i t u a t e d , nor has he made an accounting of income from t h e building. O n January 11, 1966, p l a i n t i f f f i l e d t h e i n s t a n t s u i t a g a i n s t defendant i n t h e d i s t r i c t court of Valley County seeking a mandatory injunction requiring defendant t o remove h i s building from p l a i n t i f f ' s two l o t s , an accounting of r e n t s and p r o f i t s from t h e building, damages, and attorney fees. Defendant answered and f i l e d a counterclaim, mistakenly designated a cross complaint . H i s answer admitted t h e purchase of t h e t h e land by p l a i n t i f f and t h e purchase of t h e building located thereon by himself; h i s c o l l e c t i o n of a l l r e n t a l s f o r space i n t h e building; generally denied a l l e l s e including any r i g h t i n p l a i n t i f f t o r e l i e f ; and s e t f o r t h two affirmative de- fenses: (1) The r e n t a l s collected a r e f o r space i n t h e building and a r e no concern of p l a i n t i f f ; (2) The e n t i r e s i t u a t i o n was created by p l a i n t i f f ' s decedent i n causing t h e land and building t o be sold separately i n h i s foreclosure a c t i o n . O n September 11, 1967, Judge Loucks sustained p l a i n t i f f ' s motion t o dismiss defendant's answer and counterclaim (erroneously designated a cross claim). Subsequently Judge Loucks died and Judge Sorte, h i s successor, assumed j u r i s d i c t i o n . P l a i n t i f f f i l e d an amended complaint naming t h e c i t y of Glasgow and Valley County a s a d d i t i o n a l p a r t i e s defendant, s o t h a t t a x l i a b i l i t y on t h e l o t s could be determined. Defendant S t u a r t f i l e d an answer and counter- claim t o t h e amended complaint s u b s t a n t i a l l y similar t o h i s o r i g i n a l pleading. T r i a l was held before the court s i t t i n g without a jury. O n March 11, 1971, the d i s t r i c t court entered i t s findings of f a c t , conclusions of law and judgment. Its substance was: "The only equitable s o l u t i o n t o t h i s controversy i s t o s e l l t h e l o t and building together and t h e r e a f t e r apportion t h e proceeds among t h e parties". Judgment was entered accordingly. Following the d i s t r i c t court I s d e n i a l of p l a i n t i f f ' s motion t o amend t h e findings of f a c t , conclusions of law, and judgment o r i n the a l t e r n a t i v e t o g r a n t p l a i n t i f f a new t r i a l , p l a i n t i f f appeals from t h e f i n a l judgment and d e n i a l of h i s motion f o r new t r i a l . P l a i n t i f f lists s i x issues f o r review upon appeal. W e summarize the c o n t r o l l i n g issues i n t h i s fashion: 1. Is p l a i n t i f f e n t i t l e d t o a mandatory injunction requiring removal of t h e building from h i s l o t s ? 2. Is defendant e n t i t l e d t o r e q u i r e t h a t t h e land and building be sold together and t h e proceeds apportioned among t h e p a r t i e s ? 3 . Is p l a i n t i f f e n t i t l e d t o an accounting o r reasonable r e n t a l f o r t h e use of h i s land? The f i r s t i s s u e f o r review requires no extended discus- sion. P l a i n t i f f is the s o l e and exclusive owner of t h e two l o t s by v i r t u e of h i s purchase of the land a t t h e foreclosure s a l e . Defendant acquired no i n t e r e s t i n t h e land by v i r t u e of h i s pur- chase of t h e building thereon, under t h e separate foreclosure s a l e of t h e building. Defendant t e s t i f i e d t h a t a t t h e time of the foreclosure s a l e he knew he was buying j u s t t h e building; t h a t p l a i n t i f f ' s decedent bought t h e land; and t h a t water, sewer, and e l e c t r i c a l connections were i n place. Defendant admitted negotiations were had following t h e i r respective purchases a t t h e foreclosure s a l e s i n an attempt t o work out a solution t o t h e problem of divided ownership. The evidence is equally c l e a r t h a t d e s p i t e t h e i r f a i l u r e t o resolve t h i s question, defendant went ahead and made extensive improvements t o the building t o t h e tune of some $12,000, which rendered i t impractical t o remove t h e building from p l a i n t i f f ' s land. There is no evidence p l a i n t i f f misled defendant i n t o taking t h i s course of a c t i o n o r had anything t o do with it; on t h e contrary, a l l t h e evidence indicates repeated demands by p l a i n t i f f t h a t defendant remove the building from p l a i n t i f f ' s l o t s . It is admitted by both p a r t i e s t h a t defendant has paid nothing t o p l a i n t i f f f o r t h e use of h i s land occupied by de- fendant's building f o r s e v e r a l years following t h e foreclosure s a l e s . P l a i n t i f f has repeatedly demanded t h a t defendant remove t h e building; defendant has neglected t o do s o without any r i g h t whatever t o occupy p l a i n t i f f ' s land; and, p l a i n t i f f is e n t i t l e d t o a mandatory injunction requiring defendant t o remove t h e building from p l a i n t i f f ' s land within such reasonable time and under such reasonable procedures a s t h e d i s t r i c t court may require. Directing our a t t e n t i o n t o t h e second i s s u e f o r review, the r i g h t s of the p a r t i e s a r e equally c l e a r . The d i s t r i c t court cannot order t h a t the l o t s and building be sold a s an i n d i v i s i b l e e n t i t y with the proceeds of t h e s a l e apportioned between t h e p a r t i e s i n t h e absence of a primary r i g h t i n defendant t o such r e l i e f . Here, t h e r e is no such primary r i g h t i n defendant e i t h e r under Montana's p a r t i t i o n s t a t u t e s o r by application of any recog- nized equity principle. Defendant has no r i g h t t o such r e l i e f under our p a r t i t i o n s t a t u t e s a s they require an individed co-ownership of t h e property t o be partitioned. Section 93-6301, R.C.M. 1947, provides i n material part: 11 When several cotenants hold and a r e i n possession of r e a l property a s j o i n t tenants or tenants i n common * * * an action may be brought by one or more of such persons for a p a r t i t i o n thereof * * * and f o r a s a l e of such property, or a part thereof, i f it appears t h a t a p a r t i t i o n cannot be made without a great prejudice t o the owners. 11 Section 93-6301.1, R.C.M. 1947, requires the same co- tenancy i n p a r t i t i o n actions of personal property. Here, there is no cotenancy of an undivided i n t e r e s t a s j o i n t tenants, tenants i s i n common, or otherwise; on the contrary, p l a i n t i f f / t h e s o l e and exclusive owner of t h e r e a l e s t a t e , i . e . the land, while defendant is the sole and exclusive owner of t h e personal property, i . e . the building. Accordingly, defendant has no standing t o bring a p a r t i t i o n action on the e n t i r e property, I.@. the land and t h e building, a s he is not a cotenant therein. In e f f e c t , the fore- c losure decree and separate s a l e s partitioned the property i n t o twoseparate parts, each owned exclusively by the respective p a r t i e s t o t h i s action. Nor has defendant, under any recognized equitable principle, established any primary r i g h t i n himself t o have the building and land merged for s a l e , sold a s an e n t i t y , and the s a l e proceeds apportioned between the respective owners. Both p a r t i e s purchased t h e i r respective properties with t h e i r eyes open; under no m i s - representation, mistake, or misunders tanding; and, with f u l l knowledge of the problems inherent i n divided ownership. Defendant u n i l a t e r a l l y proceeded t o expend a s u b s t a n t i a l sum of money in improvements on h i s building, rendering it i m - p r a c t i c a l t o remove it from p l a i n t i f f ' s land. A l l these improve- ments were made without any agreement o r payment t o p l a i n t i f f of a reasonable r e n t a l f o r the use of h i s land, and a t l e a s t some of the improvements were made i n the face of repeated demands by p l a i n t i f f t h a t defendant remove h i s building from p l a i n t i f f ' s land. Defendant is nothing more than a naked trespasser on p l a i n t i f f ' s land who proceeded a t h i s p e r i l with s u b s t a n t i a l improvements t o h i s building i n the hope t h a t some agreement could be reached whereby he could purchase the land, p l a i n t i f f would purchase h i s building, or a r e n t a l agreement or some other arrangement could be consummated so t h a t t h e building would not have t o be removed from Lhe land. N o agreement has been reached and now defendant seeks t o compel p l a i n t i f f t o s e l l h i s land a t public auction. Defendant has no primary r i g h t t o compel p l a i n t i f f t o do t h i s . The land belongs t o p l a i n t i f f who has the r i g h t t o s e l l it on such terms and conditions a s he sees f i t ; or plain- t i f f can refuse t o s e l l it a t a l l . These r i g h t s a r e unquesttoned incidents of legal ownership of private property. lai in tiff's motives or reasons for s a l e or refusal t o s e l l , or h i s terms and conditions of s a l e , a r e immaterial. Unquestionably defendant now finds himself i n a d i f f i c u l t position with a likelihood of sustaining a s u b s t a n t i a l l o s s , but it is a s i t u a t i o n of h i s own making f o r which p l a i n t i f f is i n no m y chargeable nor responsible. Although defendant argues t h a t t h i s s i t u a t i o n was created by p l a i n t i f f ' s decedent i n bringing about the divided ownership a s a r e s u l t of h i s foreclosure s u i t , there i s neither evidence t h a t the separate s a l e s under the fore- closure decree were h i s doing, nor t h a t defendant misunderstood or was misled i n any way about what he was purchasing o r of h i s rights thereunder. Under such circumstances , what equitable principle compels the owner of land t o s e l l it a t public auction against h i s wishes t o prevent a loss t o a continuing trespasser with notice? The question provides its own answer and demonstrates the fallacy of defendant's position on t h i s issue. Proceeding t o the f i n a l issue, we hold t h a t although p l a i n t i f f is not e n t i t l e d t o an accounting of defendant's r e n t a l s on h i s o f f i c e building, p l a i n t i f f is nevertheless e n t i t l e d t o a reasonable r e n t a l f o r t h e use of h i s land occupied by defendant's building. P l a i n t i f f i s not e n t i t l e d t o an accounting simply because defendant is the s o l e and exclusive owner and landlord of the building and p l a i n t i f f has no i n t e r e s t i n t h e building o r r e n t a l s derived from its tenants. O n the other hand, p l a i n t i f f a s s o l e and exclusive owner of the land on which the building is s i t u a t e is e n t i t l e d t o the reasonable r e n t a l value of h i s land for the period of time it was and i s occupied by defendant's building. The record of the t r i a l is devoid of any s u b s t a n t i a l credible evidence concerning the reasonable r e n t a l value of p l a i n t i f f ' s land. The only evidence offered on t h i s point is the bald assertion by p l a i n t i f f t h a t "we figured it could e a s i l y bring in $75.00 t o $80.00 a month'' j u s t f o r parking. P l a i n t i f f gave no basis f o r t h i s opinion and admitted t h a t he did not look i n t o the a c t u a l expense of creating a parking l o t on h i s land. P l a i n t i f f a l s o t e s t i f i e d there were two vacant l o t s immediately west of his land which were used a s parking space f o r patrons of the Elks Club and defendant's building and that he did not know of anyone who was paying any s o r t of rent for t h i s parking. Accordingly, t h i s cause is remanded t o the d i s t r i c t court with directions t o vacate the findings of f a c t , conclusions of law, and judgment heretofore entered; t o hold a further hearing t o determine the reasonable r e n t a l value t o be paid p l a i n t i f f f o r the use of h i s land by defendant; and, f o r the entry of appropriate findings o t t a c t , conclusions of law, and f i n a l judgment i n conformity with t h i s opinion. Associate J u s t i c e ef J u s t i c e