Opinion ID: 1336186
Heading Depth: 2
Heading Rank: 3

Heading: Did the Court err in referring the question of rent back to the referee?

Text: The first two questions are so related that they will be discussed together. The dwelling was constructed under an agreement between the Few brothers that each would pay one-half of the cost. Ben testified that it was agreed that total cost should not exceed $30,000.00. Marion denied this but testified that he told Ben that he thought the dwelling could be built for $50,000.00 to $55,000.00. Ben testified that he paid $28,000.00 on construction cost and supported this in part by documentary evidence. Marion testified that Ben's contribution was only $14,000.00. Neither the referee nor the court resolved these conflicts in the testimony and, for reasons hereafter stated, we need not do so. By his pleading, the defendant, alleging that he had constructed the dwelling with his own funds, except for a small amount contributed by plaintiff, claimed that he is entitled to have it alloted to him because plaintiff is estopped from claiming any interest therein. The court, finding no estoppel, awarded the dwelling to the defendant at an assessed valuation on the ground that equity demanded that this be done under the circumstances. This conclusion is tenable only if not to allot the dwelling to the defendant would result in inequity to him, and if the allowance of his claim results in no inequity to his cotenant. Bank of Swansea v. Rucker , 156 S.C. 29, 152 S.E. 712, from which the following passage was quoted in Shumaker v. Shumaker , 234 S.C. 421, 425, 108 S.E. (2d) 682, 685: The rule appears well settled in this state that the right of a cotenant in possession of the common property to be reimbursed for improvements made by him, or in the partition to have the portion of the land improved by him allotted to him, is exceptional, and to maintain it the improving tenant must establish: (1) That he was in possession under an honest belief of ownership; or (2) that to disallow his claim would be inequitable; and (3) that the allowance would result in no inequity to the interests of his cotenants. Compensation in money or by allotment of the improved portion of the common property to the improving tenant is allowed not as a matter of legal right but purely from the desire of a court of equity to do justice and to prevent one tenant from becoming enriched at the expense of another. Shumaker v. Shumaker , 234 S.C. 421, 426, 108 S.E. (2d) 682, 685. The court made no findings of fact on which the principles of the Shumaker and Rucker cases could have been invoked. Contrary findings are implicit in the provision of the decree that the defendant be charged with one-half of the estimated enhancement in the value of the property attributable to the dwelling. The defendant did not except. Consequently, under the law of this case, the defendant is not in the position of an improving tenant entitled to reimbursement or allocation of the improved portion of the premises under equitable principles. Instead, the dwelling is part of the common property in which the parties possess equal rights. Therefore, it is unnecessary for us to resolve the conflicts in the evidence relating to the contributions of the parties toward the construction of the dwelling or to review that relating to the extensive improvements which were accomplished with funds provided by plaintiff's husband. However, we think it appropriate to state that the clear weight of the evidence establishes that plaintiff will not be unjustly enriched by treating the dwelling as a part of the common property and throwing the contributions of both parties to it into the common pot with all of the other improvements. We recognize the broad authority conferred upon the court to partition in kind or by allotment. Title 10, Chapter 28, Code of Laws. But partition in kind or by allotment may be resorted to only when it can be fairly and impartially made and without injury to any of the parties in interest   . (Sec. 10-2205.) All of the witnesses were enthusiastic about the quality of the dwelling. None questioned that its replacement value was well above $50,000.00. On the other hand, there was great disparity in their estimates as to the amount by which the dwelling enhanced the value of the property. Two of plaintiff's witnesses, one a forester and one a land surveyor, expressed the opinion that the house increased the value of the property by about $25,000.00. Both thought that the property could be divided in kind, especially if the house were excluded. However, both recommended partition by sale because of the possibility that the house would bring more than their estimate. One of the defendant's witnesses, a farmer and bank official, valued the house at $25,000.00-$30,000.00 and testified that the property could be divided in kind. On the other hand, three witnesses sworn by the plaintiff attributed much higher enhancement value to the dwelling. Two of these were unusually well qualified real estate experts with broad experience in handling property of this type. They valued the property as a whole at between $170,000.00 and $180,000.00. One included the dwelling at $40,000.00 and the other at $65,000.00. Both testified convincingly that the value of the property would be seriously impaired by its division. The third of these witnesses was a local banker. He estimated the value of the property as a whole at $161,000.00, of which he attributed $65,000.00 or $70,000.00 to the dwelling. He was also of the definite opinion that to divide this property in kind would impair the value of the whole. It is, of course, quite possible that the parties have overbuilt on this property and that their investment in the dwelling cannot be realized in the market. Assuming that this is so to the extent found by the lower court, we think that equality requires partition by sale, which will afford each party an opportunity to back his judgment of value by bidding for the interest of the other. When the disparate opinions as to the enhancement value of the dwelling are considered, we are convinced that partition by allotment of the dwelling to defendant at a valuation of $25,000.00 and division in kind of the remaining land would involve manifest injury to plaintiff. The court held that to sell this house at a loss of $40,000.00 to the owners would be most inequitable, and certainly under the law of partition would be a manifest injury to M.L. Few. Since the plan of partition adopted by the decree forces Caroline W. Few to surrender her equal interest in the dwelling at a valuation based upon the same testimony from which the court assumes that a sale will result in a loss to the owners of $40,000.00, with no opportunity to protect her interest at a public sale, we think that injury to her is far more manifest. Especially in the light of conflicting, at least evenly balanced, opinion testimony as to value, it would be inequitable to bestow this bargain upon one tenant at the expense of the other. This inequity can be avoided only by public sale, which may be in parcels and as a whole, as the court may direct. We conclude that the court erred in allotting the dwelling to the defendant and in failing to order partition by sale of the property and division of the proceeds. There was no error in referring the question of rent back to the referee, subject, however, to any binding stipulations made by counsel at the trial. Reversed and remanded for further proceedings consistent herewith. TAYLOR, C.J., and MOSS, LEWIS and BUSSEY, JJ., concur.