Court Opinion

ID: 9688465
Source: CourtListenerOpinion
Date Created: 2023-08-24 17:48:38.829944+00
Date Added: 2024-06-11T18:18:39.155408
License: Public Domain

Garfield, J.
After the trial Elmer Hollinberger, original plaintiff, died and Grace Meyers was substituted as .plaintiff. *695However, for convenience we will refer to Hollinberger as plaintiff.
Ashbel W. and John L. Canutt, brothers, formerly owned two lots in Adel. Ashbel acquired the interest of John L. Upon Ashbel’s death sometime before 1920 the property descended to his widow, Sarah Jane, and five adult children. The family dwelling was located on the north half of the lots. In March 1924, the widow deeded her one-third interest in the property to her son John W. Canutt, a defendant. However, the deed was not filed for record until March 1938. The widow continued to reside on the premises.
In December 1926, plaintiff (seventy-nine at time of tidal) married the widow Sarah Jane (a blind pensioner) and moved into the dwelling with her on the north half of the lots. In the summer of 1930 plaintiff purchased a seven-room house for $250, dug a basement on the south half of the lots, built a foundation, moved and set the house on the foundation, repaired and painted the house, built a chimney, dug a sewer, installed a used furnace and moved a garage onto the premises. Plaintiff, a mechanic, did much of the work himself, the rest he hired and paid for. The total cost to him (including* the $250) was about $700, according to his oral testimony. The exhibits indicate the cost exceeded $700.
Plaintiff and Sarah Jane occupied this house on the south half of the lots from 1930 until Sarah Jane died in March 1943. Plaintiff then continued to live there until April 1945, when he rented it to one McAtee, reserving a bed for himself. Some of plaintiff’s belongings remained in the house and garage, he continued to use the garage and get his mail at the house. In July 1948, defendant John W. Canutt, who apparently acquired the interests of his brothers and sisters in the two lots, sold them to Gottschalk who notified McAtee to pay plaintiff no more rent.
A few days after this sale to Gottschalk plaintiff brought ■this action against John W. Canutt and wife and Gottschalk and wife to quiet title to the south half of the lots on the theory of adverse possession and, in a second count, to recover for the improvements placed thereon by plaintiff under the oecupyingclaimants law (chapter 560, Code, 1946). At the conclusion of plaintiff’s evidence, on defendants’ motion, plaintiff’s petition *696was dismissed and he has appealed. The trial court’s decision seems to be largely based on the conclusion plaintiff did not claim to be the owner of the property or at least there was insufficient basis for plaintiff to believe he was the owner.
I. We are agreed plaintiff has failed to establish title on the theory of adverse possession. To establish ownership by adverse possession-plaintiff was required to prove hostile, actual, open, exclusive and continuous possession, under claim of right or color of title, for at least ten years. While title by adverse possession is a legal title in fee simple, the doctrine is to be taken strictly. The acts of one who claims property of another by adverse possession are to be strictly construed. The law presumes possession of land is under the regular title. Nichols v. Kirchner, 241 Iowa 99, 103, 40 N.W.2d 13, 16, and citations. See also 1 Am. Jur., Adverse Possession, sections 126, 238; 2 C.J.S., Adverse Possession, sections 8, 214a, 215.
“In an action involving a claim of title by adverse possession every presumption * * * is against the claimant * * 2 C.J.S., Adverse Possession, section 215a.
II. Code section 560.1 authorizes recovery by an occupant of real estate who has color of title for valuable improvements made thereon in good faith. The two essentials for recovery are color of title and good faith in making the improvements. Lunquest v. Ten Eyck, 40 Iowa 213, 215; Betz v. Sioux City, 240 Iowa 941, 944, 38 N.W.2d 628, 630.
Defendants do not question the procedure adopted by plaintiff to obtain relief as an occupying claimant and we are not inclined to do so upon our own motion. It is a consideration of some importance, favorable to plaintiff, that the suit is in equity, tried as such and not as an ordinary action like the usual occupying-claimant petition under Code section 560.3.
Betz v. Sioux City, 239 Iowa 95, 99, 30 N.W.2d 778, 780, clearly points out the inequitable character of the early common-law rule that the owner of land was under no liability to pay for improvements made thereon by an occupying claimant and says:
“The nature and purpose of these occupying-claimant statutes are such that courts have uniformly accorded them a broad and liberal construction. As said * * * in Stump v. Hornback, 109 Mo. 272, 280, 18 S.W. 37, 39: ‘The statute growing out *697of the application of equitable principles should, be given a liberal construction so as to do, as far as possible, under its provisions, complete justice between the parties.’
■“* * * Maxey v. Patterson, 82 S.W.2d 386, 388, expressed a like thought:
“ ‘The rule which allows one to recover for improvements so placed by him on the property of another has its origin in the principles of equity and is based on a sound policy which requires fair and honest dealing between man and man. [Citing cases.] Therefore, the right thus recognized by the statute ought not to be defeated by the application of unnecessary technical rules.’ ”
Several other authorities to the same general effect are cited in the Betz opinion in 239 Iowa. (Betz v. Sioux City was before us three times.) The rule of liberal statutory construction stated in Code section 4.2 also seems peculiarly applicable to chapter 560. ¥e are therefore justified in looking more favorably upon plaintiff’s claim for compensation under the occupying-elaimants law than upon his claim of ownership under the theory of adverse possession.
 III. There can be little doubt plaintiff had color of title within the meaning of chapter 560. Section 560.2, paragraph 2, provides that one has color of title “who has by himself or together with those under whom he claims, occupied the premises for .a period of five years continuously.” That five years continuous occupancy constitutes color of title under this law see Craton v. Wright, 16 Iowa 133, 137; Lunquest v. Ten Eyck, supra, 40 Iowa 213; Welles v. Newsom, 76 Iowa 81, 83, 40 N.W. 105; Betz v. Sioux City, supra, 240 Iowa 941, 945, 38 N.W.2d 628, 630.
Plaintiff continuously occupied the south half of the lots as his home from the summer of 1930 until his wife died in March 1943. Thereafter he was a continuous occupant at least until defendant John Canutt sold to G-ottschalk in July 1948. Occupancy of plaintiff’s tenant from April 1945 until the sale to Gottschalk was the equivalent of personal occupancy by plaintiff. Parsons v. Moses (Dillon, J.), 16 Iowa 440, 441, 442, cited with approval in Betz v. Sioux City, supra, 239 Iowa 95, 99, 30 N.W.2d 778, 780.
*698It is no- defense that plaintiff placed the improvements upon the premises before he had occupied them at least five years. Benton v. Dumbarton Realty Co., 161 Iowa 600, 611-613, 143 N.W. 586.
IV. ' The only requirement of section 560.1 other than color of title is that the improvements be made “in good faith.” Lunquest v. Ten Eyck, supra, states (page 216 of 40 Iowa) “this implies that the occupancy must be bona fide.”
Lindt v. Uihlein, 116 Iowa 48, 55, 89 N.W. 214, 216, says: “This court has said that the making of improvements in good faith implies that the occupancy must also be bona fide. Lunquest v. Ten Eyck, 40 Iowa 216. In other words, if the occupancy is stamped with any circumstance which conclusively indicates bad faith, then no- improvements placed upon the property under such occupancy can be said to have been made in good faith.” The Lindt opinion also (page 56 of 116 Iowa) takes note of “The many cases * * * where courts have exercised great liberality, if not ingenuity, in extending the presumption of good faith for the relief of persons claiming compensation for improvements on land * * (Italics added.)
Read v. Howe, 49 Iowa 65, 67, 68, cited with approval in Betz v. Sioux City, supra, 239 Iowa 95, 100, 30 N.W.2d 778, 781, states: “* * * we are not disposed to put upon the words good faith, as used in the statute, any technical construction. We think that they are to be taken in their ordinary acceptation.”
Good faith in a like connection has been held to be a question of fact to be determined in each particular case. The term is used in its popular sense, as the actual, existing state of mind, whether so- from ignorance, sophistry or delusion, without regard to what it should be from given legal standards. Good faith has also- been defined as freedom from a design to defraud the person having the better title. Searl v. School District, 133 U. S. 553, 563, 564, 10 S. Ct. 374, 377, 33 L. Ed. 740, 746, and citations; State v. West Branch Lbr. Co., 64 W. Va. 673, 63 S.E. 372, 380, 381.
We think we are justified in not giving the term “good faith” any narrow or technical meaning here. To do so would *699not give to chapter 560 the broad and liberal interpretation we have held it should receive. In the absence of evidence for defendants (as stated, the trial court saw fit to dismiss plaintiff’s action at the conclusion of his testimony) we hold there is sufficient showing of good faith on the part of plaintiff.
Payment of taxes is evidence of good faith. Benton v. Dumbarton Realty Co., 161 Iowa 600, 608, 143 N.W. 586. So is the mere fact plaintiff improved the land at his own expense. Ibid, at page 613 of 161 Iowa. It is undisputed that plaintiff paid all taxes on lots 1 and 2, and the special assessments for paving and sewer, from 1926 to 1949. A real estate broker valued the paving at $500 and the sewer at $200. Plaintiff testified without dispute nobody objected to his making the improvements and he “thought he was doing all right.”
The receipts for taxes paid by plaintiff listed the property owners as Ashbel W. and John L. (not defendant John W.) Canutt until 1943 when John W.’s name was added as an owner. This was seventeen years after plaintiff started paying the taxes, thirteen years after he erected the improvements. Plaintiff of course knew Ashbel and his brother John L. had long been dead and that Sarah Jane was Ashbel’s widow. Plaintiff testified.he paid the taxes “because I was living there and making it my home. The taxes was due. It was on my property.”
On cross-examination plaintiff admitted he never acquired title to the lots by deed or bought them from anyone. He also said “It was already mine after we were married, partly. I didn’t need to buy it. * * * I did not know how the record title stood. * * * My wife’s name was on the homestead papers.” Plaintiff also frankly and commendably admitted, “I wasn’t trying to defeat the title of anybody when I paid the taxes.”
We have mentioned about all the evidence bearing on the question of good faith. There is no evidence plaintiff had any knowledge of the deed from Sarah Jane to John W. until the sale to Gottschalk a few days before this suit was started.
It seems extremely unjust and inequitable to allow defendant John W. Canutt the full benefit of these improvements without requiring him to compensate plaintiff at least for the cost thereof.
*700V. Code section 560.3 provides that “the value of the real estate and of such improvements” shall be separately ascertained. Section 560.4 states the owner of the land may thereupon pay the appraised value of the improvements and take the property. If the owner fails to do- SO' within such reasonable time as the court may fix, the occupying claimant may pay the value of the property exclusive of the improvements and take the property and improvements.
Betz v. Sioux City, supra, 240 Iowa 941, 945, 38 N.W.2d 628, 630, says, perhaps by way of dictum since it was .there held no “valuable improvements” were made, 'that an occupying claimant cannot be allowed more than the cost to him of the improvements. This is the rule in some but not all jurisdictions. 42 C. J. S., Improvements, section 11. See also 27 Am. Jur., Improvements, section 22. We have held that where, the cost of the improvements exceeds the amount they add to the value of the property only such added value should be allowed: Gleiser v. McGregor, 85 Iowa 489, 491, 52 N.W. 366, and citations.
The undisputed evidence is that the value of the lots when ■ plaintiff came there was $50. A real estate broker who was not cross-examined testified the ground, without paving and sewer, is now worth $300 and the whole property $4000. Plaintiff placed the present value of the property at “$6000 or $5000.” It rented, for $30 per month. It is obvious the improvements erected by plaintiff made the property several times more valuable.
Although it seems inequitable to limit plaintiff’s recovery to the mere cost to him of the improvements we are disposed to adhere to' the statement in Betz v. Sioux City, supra, 240 Iowa 941, 945. We think, however, plaintiff should be allowed reasonable compensation for his own time in making the improvements as well as reimbursement for his expenditures. Such an allowance would be very much less than the amount the improvements enhanced the value of the property.
As indicated, the record is not clear as to the cost to plaintiff of the improvements. We are therefore remanding the case to the district court to determine, if the parties do not agree, the allowance io plaintiff. Plaintiff is entitled to a lien on the property for • such amount, with interest at five per cent from the time this suit' was commenced. On the question of interest in cases of this kind *701see 42 C. J. S., Improvements, Section. 13 b, and 27 Am. Jur., Improvements, section 22.
As having some bearing on the case generally see Rainsbarger v. Rainsbarger, 208 Iowa 764, 224 N.W. 45, cited with approval in Walch v. Beck, 230 Iowa 146, 153, 296 N.W. 780, 783. — Reversed and remanded.
Bliss, Mantz, Hays, and Thompson, JJ., concur.
Oliver, J., and Wennerstrum, C.J., and Smith and Mtjlroney, JJ., dissent.