#### MOSES ROGERS v. J. P. TIMBERLAKE, JR., W. F. POWERS, Trustee, and SMITH-DOUGLAS CO., INC.

(Filed 14 April, 1943.)

1. Betterments § 1—

One, who in good faith under colorable title, enters into possession of land under a mistaken belief that his title is good, and who is subsequently ejected by the true owner, is entitled to compensation for the enhanced value of the land due to improvements placed on the land by him. C. S., 699.

*602. Betterments §§ 3, 4—

Where defendant acquired the legal title to certain lands (originally belonging to plaintiff) at a foreclosure sale and subject to an agreement to hold the land in trust for the plaintiff and to reconvey to plaintiff upon the payment of a sum certain on or before a given date, he (defendant) is not entitled to the value of improvements placed upon the land by him while holding same upon such trust.

Appeal by defendants from *Bone, J.,*at January Term, 1943, of Franklin.

No error.

This was an action to enforce the provisions of a judgment rendered in a previous suit between the same parties, wherein it was adjudged tbat defendant Timberlake beld title to certain land in trust for the plaintiff, to be conveyed to plaintiff upon tbe payment of $1,500.

Plaintiff pleaded tbis judgment, alleged tender and readiness to pay tbe $1,500, and demanded conveyance in accord witb tbe terms of tbe judgment. Defendants admitted tbe provisions and effect of tbe judgment alleged, and expressed willingness to convey tbe land upon payment of tbe amount fixed by tbe judgment. However, there was disagreement as to tbe manner of payment and cancellation of a deed of trust on tbe land which bad been given by defendant Timberlake to bis codefendants, subsequent to bis acquisition of tbe title in trust. It is admitted tbat tbe money has been paid into court by tbe plaintiff, and tbat deed has been executed by tbe defendant and deposited witb plaintiff’s counsel.

Tbe defendant Timberlake also claimed tbe value of improvements which be alleged be bad placed on tbe land. Tbe court sustained objection to testimony as to tbe value of such improvements, and declined to submit an issue thereon.

Upon tbe issues submitted there was verdict for plaintiff, and it was thereupon adjudged tbat tbe deed executed by defendant be accepted, and tbat out of tbe money paid into court tbe deed of trust should be satisfied and canceled, and taxes paid, so tbat plaintiff should receive a fee simple unencumbered title to tbe land.

Defendants appealed.

*Yarborough ■& Yarborough for plaintiff.*

*G. M. Beam for defendants.*

DeviN, J.

It was not controverted tbat tbe plaintiff was entitled to *the*conveyance of the land upon tbe payment of tbe amount fixed by tbe former judgment. Tbe question as to tbe satisfaction and cancellation of tbe deed of trust, put upon tbe land by defendant Timberlake subsequent to bis acquisition of tbe title in trust for tbe plaintiff, about which tbe parties disagreed, was properly settled by tbe provision in *61tbe judgment below that out of the money already paid into court by the plaintiff the deed of trust and the lien of unpaid taxes should be discharged. Thus, an appropriate end has been put to the cross-firing between the parties as to this part of the controversy.

The defendants, however, assign error in the refusal of the court below to admit testimony and submit an issue as to the value of the improvements alleged to have been put upon the land by defendant subsequent to his acquisition of the title and before the adjudication that he held it subject to a parol trust in favor of the plaintiff. The principle that one who in good faith enters into the possession of land under a mistaken belief that his title is good, and who is subsequently ejected by the true owner, is entitled to compensation for the enhanced value of the land due to permanent improvements placed on the land by him, has long been recognized, both by statute (C. S., 699), and by the decisions of this Court. *Barrett v. Williams,*220 N. C., 32, 16 S. E. (2d), 398, and cases cited. But this principle is applicable only to one who holds the land in good faith under a colorable title believed by him to he good. It must appear that he entertained a *bona fide*belief in the validity of his title, and that he had reasonable grounds for such belief. *Pritchard v. Williams,*116 N. C., 108, 96 S. E., 733; 27 Am. Jur., 269. Here it had been judicially determined, in the former suit between the plaintiff. and defendant Timberlake, that in 1937 Timberlake acquired the legal title to the land (which had originally belonged to the plaintiff) at a foreclosure sale under and subject' to an agreement to hold the land in trust for the plaintiff to reconvey the land to him upon the payment of $1,500 on or before 2 October, 1942. While Timberlake, in the former suit, denied making such an agreement, it was therein determined that he had done so at the time he acquired the title to the land. That fact having been established, it must necessarily follow that he entered into occupancy of the land with knowledge, at that time, that his title was subject to the trust subsequently established — a trust based upon his own agreement. Hence, improvements made by him were put on the land with knowledge that he was obligated to reconvey the land to the plaintiff upon the payment of the amount fixed by the terms of the agreement he had made. *Southerland v. Merritt,*120 N. O., 318, 26 S. E., 814; *Hallyburton v. Slagle,*132 N. C., 957, 44 S. E., 659. The other exceptions noted by defendants and. brought forward in their assignments of error cannot be sustained.

In the trial we find

No error.