Opinion
No. 33931.
June 10, 1940.
1. TENANCY IN COMMON.
A wife to whom husband conveyed his undivided one-third interest in cotton gin property, and to whom husband's partner conveyed an undivided one-sixth interest in the property, was a mere "tenant in common" in relation to property, where husband and partner owning the undivided one-half interest conducted as partners a ginning business on the property, and wife was not a member of partnership, and assumed no personal responsibility in conduct of partnership business, and did not devote any time or attention to business, and invested no money of her own therein.
2. TENANCY IN COMMON.
A tenant in common in possession of entire property and not paying for use and occupation thereof must preserve property and make all ordinary repairs for its preservation as respects its condition at time tenant in common went into possession, but extraordinary repairs, or substitution of new structures and modern equipment required by changing conditions or inevitable result of mere lapse of time, are "improvements" and not "repairs."
3. TENANCY IN COMMON.
A cotenant must pay to tenant in common, making, with cotenant's acquiescence, valuable improvements which cannot be allotted solely to tenant in common because made on entire property a sum equal to proportion of amount of the enhancement, by the improvement, less a fair proportionate allowance against tenant in common for use and occupation, and for balance of such sum a lien will be fastened on share of cotenant whenever cotenant calls for division of property.
4. EQUITY.
He who would have the aid of equity must as a condition allow equity to be done to the opposite party.
5. TENANCY IN COMMON.
In a court of equity, tenant in common cannot obtain compensation from cotenant for use and occupation of property in its improved state, except on condition that amount of enhancement of value of share of tenant in common resulting from improvement made by cotenant with acquiescence of tenant in common, be credited against demand of tenant in common.
6. TENANCY IN COMMON.
Any right which cotenant possesses to allowance for improvements to common property may be enforced by a successor in interest of the cotenant, such as a purchaser of the property.
7. TENANCY IN COMMON.
A cotenant, acquiescing in improvements made by tenant in common in possession of cotton gin property, could not recover anything from tenant in common and his successors in interest for use and occupation of cotenant's share of property in its improved condition, where value of improvements chargeable to cotenant's share would equal or exceed amount due for use and occupation, notwithstanding that improvements were replacements of equipment and building that wore out while tenant in common and his successors in interest were in possession of property.
APPEAL from the chancery court of Sunflower county; HON. J.L. WILLIAMS, Chancellor.
Butler Snow, of Jackson, for appellant, Delta Cotton Oil Company.
The court erred in holding that the Delta Cotton Oil Company was not entitled to be subrogated to the indebtedness and lien of the Buckeye Cotton Oil Company, paid off from the proceeds of its loan to Lovelace Hogin.
Alliance Trust Co. v. Armstrong, 186 So. 633; Continental Jewelry Co. v. Joseph, 140 Miss. 582; Gunter v. Henderson Molpus Co., 149 Miss. 603; Fornea v. Goodyear Yellow Pine Co., 181 Miss. 50; Wall v. Wall, 177 Miss. 743; Caulk v. Burt, 112 Miss. 660; Prestridge v. Lazar, 132 Miss. 168; Robinson v. Sullivan, 102 Miss. 581; Fed. Land Bank v. Miles, 169 Miss. 43; Ligon v. Barton, 88 Miss. 135; Union Mort. Co. v. Peters, 72 Miss. 1058; McIntyre v. Agricultural Bank, Freeman's Chy. 105; Ellis Jones Drug Co. v. Coker, 156 Miss. 775; Wilkinson v. Wilson, 154 Miss. 726; Spencer v. Clarke, 152 Miss. 542; Good v. Golden, 73 Miss. 91; Box v. Early (Miss.), 178 So. 790; 25 R.C.L. 1343; Walker v. Williams, 84 Miss. 392; Staton v. Bryant, 55 Miss. 261; Wall v. Harris, 90 Miss. 671; Nash v. Smith, 133 Miss. 1.
The demurrer was improperly sustained.
Lewis v. Simpson, 176 Miss. 123.
Delta Cotton Oil Company was entitled to off-set.
Field v. Coleman, 72 Miss. 545; Jordan v. Holmes, 102 Miss. 487; Note to Huggins v. Smith (Ark.), 16 A.L.R. 331.
Appellee was estopped from claiming interest in the property.
Barron v. Fed. Land Bank of N.O. (Miss.), 180 So. 74; Staton v. Bryant, 55 Miss. 261; Barrier v. Kelly, 82 Miss. 233; Davis v. Richardson, 45 Miss. 499; Bank v. Ethridge Hardee, 112 Miss. 215.
Quit claim deed conveyed appellee's entire interest and estopped her from claiming rents and profits.
14 Am. Jur. 107-108; Burns v. Dreyfus, 69 Miss. 211; Walker v. Williams, 84 Miss. 392, 56 So. 450; Courtenay v. Hayden, 127 Miss. 13, 89 So. 777.
Lovelace should not have been permitted to testify that he and his wife did not know the recitals of the deed of trust signed by them.
Jenkins should have been permitted to testify as to the balance due.
The court should have held that appellee had no interest in the gin plant or the land.
The court should not have held that $1750 per season was the reasonable value of the use and occupation of the premises and should not have rendered a judgment on this theory.
Moody Davis, of Indianola, for appellants, J.E. Hogin and Fletcher Barnett.
Though a tenancy in common may be created by an act of the parties, as when the owner of the whole property conveys an undivided interest therein to another, yet the essential elements of such a relationship are characterized by a single unity, "that of possession, or of the right to possession, of the common property. If such unity exists, there is tenancy in common irrespective of other unities; if it does not exist the estate is not a tenancy in common."
14 Am. Jur. 82, sec. 16.
As a consequence of such relationship the applicable law is that, "subject to the rights of his cotenants, a cotenant of real property may use and enjoy the common estate in the same manner as though he were the sole proprietor."
14 Am. Jur. 95, sec. 24.
As a result of such equality of interests, "It is a universal principle that the possession of one cotenant is the possession of all."
14 Am. Jur. 94.
Rents and profits received by a cotenant in possession from a third person is distinct from the profits of possession. The former is the amount received from a third person, whereas the latter is the net amount received by the cotenant from the use of the property itself.
14 Am. Jur. 100-1, sec. 32; Newbeck v. Newbeck, 27 A.L.R. 172; Hamby v. Wall, 3 A.S.R. 218; Brown v. Thurstin, 29 L.R.A. (N.S.) 238.
The very important question is presented as to whether in order for a cotenant to be liable for the value of the use and occupation an ouster is required.
Freeman on Cotenancy and Partition (2 Ed.), Chap. X.
Even if it be conceded that all of the appellants, as cotenants of the appellee, are liable respectively to the appellee for the profits of their possession or for the reasonable rental value of their use and occupation, yet the important question is necessarily presented as to the extent, on an accounting, of such liability.
The right of contribution of one cotenant, which corresponds with the obligation of the other, exists for the amount paid in discharging, in whole or in part, an encumbrance on the common estate, and this includes the amount of principal, interest, and insurance secured by a mortgage or deed of trust; the payment of taxes and special assessments; the amount of necessary repairs and permanent improvements.
14 Am. Jr. 111-16, Secs. 44-49.
On a bill in equity by a tenant in common against his cotenants for an accounting for the profits of possession or for the reasonable rental value of the use and occupation, the court in granting relief on such a bill should keep in view and enforce so far as is possible the equities of all parties.
Griffith's Chan. Practice, Sec. 395.
Surely this is true where the equities of the appellants are set up in their answers and established by proof.
Memphis Gravel Co. v. Archer, 137 Miss. 558, 102 So. 390.
Whether it would have been better for the chancellor to have referred an accounting between the parties to a master, under directions as to the manner of stating the account, or, if not, that the court, in the decree, had stated the basis on which the sums stated were ascertained, as held by this court in Hebron v. Kelly, 77 Miss. 48, we take it error cannot be predicated on the failure to do either. However, the findings in the decree must correspond with, and not be contradictory of, the evidence bearing on the account as it is stated in the decree. If, when so considered, the findings stated in the decree are erroneous, the decree must be reversed. This is true because the amounts decreed to be paid to the complainant by the several defendants are based on the findings as stated in the decree, which findings are in conflict with the evidence.
Staton v. Bryant, 55 Miss. 261.
Rent, even in the most comprehensive sense of the term, arises from, or grows out of, a contract, express or implied, between the parties and hence creates, expressly or impliedly, the relationship of landlord and tenant. By virtue of this relationship rent is the return or compensation by the tenant to the landlord for possession of the land. The word "rent" is derived from the Latin word "reditus" and signifies a compensation or return given for the possession of land and has been defined as a certain profit issuing periodically out of lands or tenements corporeal. It must issue out of the thing granted, which of course implies a contract for the use of the thing by virtue of which the relationship of landlord and tenant is created.
Riley v. Handy et al (Miss.), 189 So. 514; 16 R.C.L. p. 541, Sec. 13 and p. 909, Sec. 416.
By virtue of this relationship of landlord and tenant, the tenant is the absolute owner of the premises for all practical purposes for the term granted, the landlord's rights being confined to his reversionary interest.
16 R.C.L. 619, Sec. 100.
Hence a conveyance of the thing granted vests in the vendee the reversionary interest of the grantor therein but not the cause of action against the tenant for accrued rent unless specifically assigned.
Bloodworth v. Stevens, 31 Miss. 475, 480-1; 66 C.J. 1040, Sec. 792.
The quitclaim deed in controversy, as applicable to the case made by the record, is much stronger than the cases cited as authority for the reason that it is a deed executed by a tenant in common to his cotenants and, as between them, the cause of action grows out of and is dependent on the joint title to or ownership of the common property and does not merely grow out of the title to or ownership of the property by the grantor.
Fink v. Henderson, 74 Miss. 8; Houston v. Nat. Mut. B. L. Assn., 80 Miss. 31, 31 So. 540.
The deed in question is from a tenant in common to his cotenants and conveys the common property and not merely an interest in it.
Secs. 2124, 2125, Code of 1930.
Inasmuch as the mutuality of rights of action between tenants in common grow out of the joint title to or ownership of the common property, a conveyance of the common property by a tenant in common to and accepted by his cotenants operates not merely as an assignment of such rights of action but as well as a mutual release of all rights of action inter sese which includes a right of action in favor of the grantor as well as a right of action in favor of the grantee. This result follows because the rights of action are mutual and, as stated, grow out of the joint title to and ownership of the common property. In short, as the rights of action are mutual, the release is mutual.
Whether a conveyance of the title operates as an assignment of a cause of action for rent, accrued or to accrue, which is based on a contract whereby the relation of landlord and tenant is created is well stated and applied by this court in Bloodworth v. Stevens, 51 Miss. 475, 480, 481.
On the other hand, whether a conveyance of the title operates as an assignment of a cause of action which grows out of and is dependent upon the title, and not on a contract, is well stated and applied by this court in Fink v. Henderson, 74 Miss. 8, 19 So. 982; Houston v. Nat. Mut. B. Loan Assn., 80 Miss. 31, 31 So. 540.
The chancellor fell into error by failing to note the distinction between the two causes of action, one of which is based on a contract whereby the relation of landlord and tenant is created, and the other is based on and grows out of the joint title to or ownership of the common property, the title of which is conveyed.
We submit, therefore, that because of the execution of the quitclaim deed by the appellee and her husband, no cause of action was outstanding in her when the bill of complaint was filed. If so, the decree of the lower court must be reversed and the bill of complaint dismissed.
Pinkerton v. Fenelon, 44 A.L.R. 1272, 131 Wis. 440, 111 N.W. 220, 11 Ann. Cas. 729; 44 A.L.R. 1266 (Annotations and notes); Chapman v. Sims, 53 Miss. 154.
Butler Snow and Moody Davis, for appellants.
Let it be noted that we are dealing with equitable subrogation. We are not dealing with conventional subrogation. We are dealing with a doctrine which rests upon the principle of natural equity, "one of equity and benevolence," one whose basis is the doing of complete, essential, and perfect justice between the parties without regard to form.
Robinson v. Sullivan, 102 Miss. 581; Prestridge v. Lazar, 132 Miss. 168; Box v. Early, 181 Miss. 847.
For the purposes of this case, Delta Cotton Oil Company is to be considered as the purchaser of the notes and deeds of trust in favor of the Buckeye Cotton Oil Company. The situation is the same from a legal standpoint as if the Buckeye Cotton Oil Company had assigned the notes and deeds of trust to the Delta Cotton Oil Company. In equity, the Delta Cotton Oil Company became the absolute holder of these notes and the deeds of trust securing the same. In legal contemplation, the notes were not paid. In legal contemplation, the deeds of trust in favor of the Buckeye Cotton Oil Company have not been cancelled. The very definition of subrogation shows this to be true.
7 Words Phrases, p. 6722; Robinson v. Sullivan, 102 Miss. 581 at pp. 596, 597; 27 Am. Eng. Encyc. of Law 202; Magee v. Legett, 48 Miss. 139; 60 C.J. 694, 723, 754-757, 832; 25 R.C.L. 1311, 1377; Pomeroy's Equity, Secs. 1211, 1214.
We think the record discloses that the balance due on the Buckeye Cotton Oil Company's notes and deeds of trust exceeds the amount of appellee's claim against the Delta Cotton Oil Company.
Fletcher Barnett have the right of subrogation and setoff. The deed to Fletcher Barnett operated as an assignment to them in part, at least, of the Delta Cotton Oil Company's right of subrogation and setoff, even though the deed was executed by W. Russel Barrow and not by the Delta Cotton Oil Company.
Restatement of Agency, Secs. 141, 144, 146, 147, 149, 150, 153, 163, 186, 190, 193; Code of 1930, Secs. 2118, 2122, 2131; 18 C.J. 293, 317.
In our opinion, a co-tenant may be estopped to claim the value of the use and occupation of the common property and not precluded from claiming title to the property itself.
Hixon v. Bridges, 18 Ky. Law 1068, 38 S.W. 1046.
It will be recalled that, at common law, in the absence of agreement, or technical ouster, one cotenant could not recover against another for use and occupation.
Note, 27 A.L.R. 185; 14 Am. Jur. 99; 62 C.J. 446.
This rule was changed in England by the Statute of Anne, but that statute, as such, never had any effect in this state.
Jordan v. Roach, 32 Miss. 481; Lbr. Co. v. Harrison County, 89 Miss. 448 at 505-6.
The whole matter of accounting between co-tenants in the absence of a statute, or an agreement, is a matter of equity.
Bennett v. Bennett, 84 Miss. 493; Wilie v. Brooks, 45 Miss. 542; Hicks v. Blakeman, 74 Miss. 459; Freemen on Co-tenancy, Secs. 269-279; Note 52 Am. St. Rep. 924 et seq; Note 27 A.L.R. 185 et seq.
There is a conflict in the authorties as to whether a cotenant who occupies the whole, or more than his just portion of the common property, is liable to his co-tenant for use and occupancy, as pointed out in the notes and authorities, supra. But even in those states which allow a recovery in such cases, "the circumstances of the particular case may require a denial of the application of the rule as inequitable, as where the occupancy has been with the acquiescence of the co-tenants or the other co-tenants have abandoned the occupancy of the property and declined to occupy it."
62 C.J. 448; Freeman on Co-tenancy, Secs. 274-276, p. 561; Henderson v. Eason, 17 Ad. El. (N.S.) 701; Hixon v. Bridges, 18 Ky. Law 1068, 38 S.W. 1046; Hamby v. Wall, 48 Ark. 135, 3 Am. St. Rep. 218; Currey v. Smith, 105 Or. 82, 209 P. 232; Crane v. Wagoner, 27 Ind. 52, 89 Am. Dec. 493; Akin v. Jefferson, 65 Tex. 137; Porter v. Henderson, 204 Ala. 564, 86 So. 531; Wilkinson v. Stuart, 74 Ala. 198; Broom v. Pearson, 200 S.W. 191; Izard v. Bodine, 69 Am. Dec. 595; Nelson's Heirs v. Clay's Heirs, 23 Am. Dec. 386; Note 52 Am. St. Rep. 930-932.
Appellee did not repudiate the arrangement under which co-tenants used and occupied the property until just before she began this suit. She acquiesced in the occupancy by appellants under that arrangement. It would shock the equitable conscience of the court if, under the facts of this case, appellee should be permitted to recover $8750 for the use and occupation of the property, which she consented might be used and occupied without charge, and for the use and occupation of the improvements, for which she did not contribute one cent, improvements for which she has received full value and which cost her nothing.
14 Am. Jur. 78, 166.
Cooper Thomas, of Indianola, for appellee.
There is no evidence in this record that Delta at the time it made the loan was expecting or requiring a first lien or lien on the entire plant. They did not ask for it. It was not promised to them.
Delta as soon as the seed from the Indianola plant was promised asked no further questions. It thereupon relied upon its resources, upon its own officials and upon its own attorneys.
There was no misleading statement or misleading silence on the part of anyone. There was no fraud perpetrated and none charged in this record.
There was no understanding, express or implied, that Lovelace Hogin would give to Delta a lien of equal rank with the lien of Buckeye. This was neither asked nor promised.
There was no understanding, express or implied, that the old lien of Buckeye would be kept alive. On the contrary Delta promised to "clear" the Indianola gin of the Buckeye lien. This it had to do to get the desirable seed contract.
It is evident that Delta's claim to subrogation is bottomed solely and alone on the single fact that the money they loaned was used to apply on the payment of the Buckeye lien. We have found no case in Mississippi, and opposing counsel have cited none, that any person is entitled to subrogation because they made a loan which was used in the payment of a lien on land.
60 C.J. 807 Sec. 113; Good v. Golden, 73 Miss. 91, 19 So. 100, 55 A.S.R. 486; Carter v. Witherspoon, 156 Miss. 597, 126 So. 388; Bank of Philadelphia v. Posey, 92 So. 840, 130 Miss. 530; Howell v. Bush, 54 Miss. 437; Welch v. Thigpen, 159 So. 101; Jarvis v. Armstrong, 94 Miss. 145; Berry v. Bullock, 81 Miss. 463, 33 So. 410.
If a third party lends money to a borrower for the purpose of paying off and discharging an incumbrance on his land and the money is so applied and such lien is cancelled, such money lender is not entitled to subrogation unless there has been a promise to him that he would be given security of equal value and position to that of the lien so paid off. If such money lender asks no questions, is made no promises, relies upon himself alone for the security he desires and there is no fraud or misrepresentation, he is certainly not entitled to subrogation, and he has carved out his own security.
After the foreclosure, the net proceeds were applied on the four notes and the suit was for deficiency judgment on the four notes so secured by the said deed of trust to Delta.
The statute effectively bars any holder of such notes from suing on them after foreclosing the lien which secures them after the expiration of one year from the date of foreclosure. Delta waited several years before suing on the notes and, of course, was barred and the demurrer to the cross bill which raised this question was properly sustained by the lower court.
Permissive possession, even if long continued, does not confer title on the person in possession of the property.
Barron v. Fed. Land Bk., 180 So. 74; Bullock v. Greer (Miss.), 179 So. 264; Neal v. Newburger Co., 154 Miss. 691, 123 So. 861; Leavenworth v. Reeves, 106 Miss. 722, 64 So. 660; Rothschild v. Hatch, 54 Miss. 554; Adams v. Guice, 30 Miss. 397; Morgan v. Collins School House, 160 Miss. 321, 133 So. 675; Miss. Digest, Adverse Possession, Key 60 (2) and Key 60 (4).
The existence of a relationship of a tenancy in common was terminated on December 21, 1937, when D.S. Lovelace and wife, Mrs. Erma H. Lovelace, executed their certain quitclaim deed to W.B. Fletcher and Elma Barnett, which was duly acknowledged December 27, 1937, and filed for record January 8, 1938.
Bennett v. Bennett, 84 Miss. 439, 36 So. 452.
Where an accounting is had in partition proceedings between co-tenants, and one purchasing from another co-tenant, who purchased the common property at a foreclosure sale, the last purchaser should be charged with his proportion of a reasonable rent for the property for the time he has been in possession thereof, and credited with his proportion of the amount expended in the purchase of the property by the co-tenant, with six percent interest annually thereon and also with amount expended for taxes, with interest and permanent and not ornamental improvements made by him.
Dickerson v. Weeks, 106 Miss. 804, 64 So. 731.
There certainly existed a cause of action in Mrs. Lovelace at and prior to the execution of the quitclaim deed against the various appellants, even though tenants in common, because of and based on the rule of law enunciated by our supreme court in the case of Bennett v. Bennett, supra, and Dickerson v. Weeks, supra.
A transfer of the reversion does not carry with it any right to the accrued rents; and after such a transfer the landlord may still recover all rents theretofore accrued.
16 R.C.L. 915, Sec. 422; 36 C.J. 366, Sec. 1208; 66 C.J. 1042, Sec. 792; 18 C.J. 296, Sec. 276; Bloodworth v. Stevens, 51 Miss. 475.
The divestiture of interest of estate has reference only to land and not to rights of action pertaining to the land, unless involved as necessary incidents thereof, and we respectfully maintain that certainly rents or reasonable rental value for use and occupation already accrued prior to execution of the quitclaim were not rights of action as necessary incidents to the title to the land. Redundancy in the use of words is often done not only by laymen but by skilled draftsmen in the preparation of written instruments and the verb "quitclaim" so used in the present deed cannot add anything more than the law ascribes to its effect, and this effect we contend was not such as to involve and convey either the right of action for rents, reasonable rental value, or a liability on an accounting for the rents or a reasonable rental value.
If a landlord conveys by a quitclaim to a tenant the real estate the tenant has been occupying and if at the time of such conveyance rent accrued remains unpaid, then certainly the liability for this unpaid rent would not be satisfied merely by the execution of a quitclaim deed.
Johnson v. Muzzy, 42 Vt. 708.
Assuming, but not admitting, that the right to have a court of equity establish subrogation once existed, it still does not follow that the effort in this suit to have Delta subrogated to the liens of Buckeye exist at the time of this suit.
There is distinction between subrogation and the right to have a court give the relief of subrogation. At no time was Delta subrogated to the rights and liens of Buckeye. The most that can be said is that at one time they had the right to go into a court of competent jurisdiction and to ask that court to give the relief of subrogation and, if granted, the subrogation began when that relief was granted.
60 C.J. 823, Sec. 124.
Subrogation cannot be granted in a court of equity without the necessary parties before it. Buckeye Cotton Oil Company was a necessary party in any proceeding seeking to be subrogated to the lien of Buckeye.
Doty v. Enterprise Timber Co., 75 So. 602, 114 Miss. 872.
A subrogee steps into the shoes of the creditor whose lien is paid.
If Buckeye could not have enforced the Buckeye liens in 1939, then no transferee of such liens could have enforced the same in 1939. If Buckeye is barred from enforcing them, then Delta Cotton Oil Company is barred from enforcing such liens. Certainly subrogation does not give higher rights and remedies than an absolute assignment of the lien.
Partee v. Matthews, 53 Miss. 140; 25 R.C.L. 1394; 17 R.C.L. 833, Sec. 194; 24 R.C.L. 837, Sec. 43; 57 C.J. 390, Sec. 41; 37 C.J. 805, Sec. 150; 60 C.J. p. 623, Sec. 35, p. 722, Secs. 30, 33, 34, p. 827, Secs. 131, 132.
A set-off may be used defensively, but it cannot be the basis of a judgment against the plaintiff for any excess.
Feld v. Coleman, 72 Miss. 545, 17 So. 378.
Our position is that the Delta Cotton Oil Company is not entitled to any deficiency judgment, either by way of set-off or otherwise, and that the judgment against them for the sum of $1750 should be affirmed.
We insist that every act of the Delta Cotton Oil Company shows that they were a volunteer; that they intended to and did procure the proper and valid cancellation of the Buckeye deeds of trust; that they intended to and did accept security they asked for and a lien they desired in securing the loan they made; that they carved out their own security and were completely satisfied with it year after year, until the depression had knocked the values out of everything; that if the depression had not come these people would not have raised any question about subrogation, because their security was ample and their loan was conservative; that they waited eight years and more before raising the first suggestion that they ought to be subrogated to the liens of Buckeye Cotton Oil Company, and did not raise such question until after the Buckeye liens had been barred by the statute of limitations; that they waited more than six years after the right of subrogation, if it ever existed, had accrued; that the mere payment, even under compulsion, by one creditor of the debt of another does not give subrogation, but only the right to ask a court to give subrogation, and the privileges arising from subrogation begin at the time the court grants such relief and not at the time when such payment was made; that even though at one time Delta Cotton Oil Company had the right to bring an action for deficiency judgment, such right had been extinguished long prior to the filing of this suit, not by virtue of the general chapter on the limitation of actions, but by virtue of the special act passed in 1934, and, therefore, the right to ask for set-off was lost.
Appellee sued appellants in the chancery court for the recovery of compensation for use and occupation of her half interest in a cotton gin property, located in Indianola, for the ginning seasons of 1933-4, 1934-5, 1935-6, 1936-7, and 1937-8. The appellant, Delta Cotton Oil Company, had acquired what it supposed to be the entire interest in the property at the foreclosure sale under a deed of trust to it, executed by Lovelace and Hogin, a partnership, hereinafter more particularly to be mentioned. This foreclosure was on June 23, 1933, and the Delta Company operated the plant until March 1, 1934, when the company sold it to appellant Hogin on credit, secured by deed of trust. Hogin operated the plant until May 3, 1935, when his deed of trust was foreclosed to the Delta Company, and the latter conveyed it to appellants, Fletcher and Barnett, on May 10, 1935, who thereupon operated it as grantees of the Delta Company until December 21, 1937, at which time they acquired, for a large consideration, the outstanding interest of appellee by quitclaim deed from her of that date. All these grantees, except perhaps Hogin, had thought until shortly before the time of the quitclaim aforesaid, that they had purchased the entire interest in the property.
Appellee's interest came about in this way: For four or five years prior to May 19, 1920, the Buckeye Cotton Oil Company had owned the property and operated a gin thereon under the management of appellee's husband as an employe. On the date last aforesaid the Buckeye Company conveyed the entire property to appellee's husband and her brother-in-law, Hogin, and one Voorhies. On January 14, 1921, appellee's husband conveyed to her his undivided one-third interest. On June 2, 1922, Voorhies conveyed his one-third interest to Hogin, and on January 30, 1923, Hogin conveyed to appellee a one-sixth undivided interest, in consequence of which appellee became the owner of an undivided one-half interest, the other half being in her brother-in-law, Hogin.
What was the value of the property at the time of the foregoing deeds to appellee is not shown, except that the consideration in the deed from the Buckeye Company to Lovelace, Hogin, and Voorhies was $8000, three-fourths of which was on credit. Appellee, as a witness, admitted that she paid nothing for any of the deeds to her. It is shown, however, that, from the date of appellee's acquisition of the half-interest, Hogin, appellee's tenant in common, together with her husband, conducted as partners a ginning business on the property for a period of more than ten years, and until the date of the foreclosure of the deed of trust, which the partners had given as sole owners of the entire property to the Delta Company, which foreclosure, as already stated, was on June 23, 1933.
Appellee was not a member of the firm; she assumed no personal responsibility in the conduct of its business; she did not devote an hour's time or attention to it, and she placed not a dollar of her own in it. And, so far as the property was concerned, her sole relation to it was as a mere tenant in common.
The record shows that, during the ten years aforesaid, Hogin, appellee's cotenant, and the partnership, composed of Hogin and appellee's husband, in order to enable them to compete with other gins, replaced all or substantially all the old machinery theretofore on the property with new and modern machinery at their own expense and brought thereto additional units of machinery and equipment; and in 1929 they replaced the old with a new gin building, to all of which appellee contributed not an hour's time nor a dollar of her own. Appellee's husband testified that at the time he conveyed his interest to his wife, at which time she first became a tenant in common, the original gin equipment was still on the property. He testified on cross-examnation that the partnership, Lovelace and Hogin, thereafter bought new equipment, engine, gin stands, conveyors, press and power plant, and all the like, and completely re-equipped this gin, and, as already mentioned, they built a new gin house.
As an illustration of what they did, we may refer to the old steam power equipment. This had become outmoded and too expensive to operate in competition, and it was sold as scrap iron as being worth only a nominal sum, and was replaced by a modern 100-horse power Diesel oil engine and fixtures belonging thereto, at a cost of around $6,000. Appellee's husband testified that the average life of gin equipment, such as that here in question, is ten years, at the end of which time, without replacements, the property would be worthless from the standpoint of any use or income therefrom. On all these features in respect to the improvements, the testimony of appellee's husband is without substantial dispute; and that testimony shows the facts as we have above stated them.
Three estimates or appraisals of the value of the property as enhanced by the aforesaid improvements are given in the record. It is shown by appellee's husband that at the time it was mortgaged by the partnership to the Delta Company in 1930, it was appraised at $40,000. Another witness for appellee placed its value during the years for which this suit is brought at $35,000, of which he ascribed $10,000 in value to the lot itself. There was another appraisal made at about the close of this period at $31,000. If we take the lowest of these three estimates as to the value of the entire property as improved and deduct therefrom the only estimate we have of the value at the same time of the lot, there is left a balance of $21,000 as representing the enhancement by improvements, which, for appellee's half, would be $10,500. The court allowed her $8,750 for the five seasons' use and occupation sued for, which, when taken from the $10,500, would leave $1,750 — ample to cover any of the old improvements which had remained in a usable condition on the property.
These improvements, this building of a new gin house, the replacements of the original machinery with new and modern equipment was all done with the knowledge and acquiescence of appellee, and not only so, but by an arrangement with her that until the property was worked out of debt by her husband and brother-in-law, she would receive no compensation for their use and occupation of it, in which connection there is to be added for what it is worth that they never succeeded in working it out of debt, but their entire interest supposed to be then the whole property was foreclosed on June 23, 1933, the property bringing less than the debt.
Appellee contends, however, that she should not be charged with improvements made on the property, although solely by her cotenant and his partner, because, as we understand her argument, the improvements were replacements merely of what they wore out in the use. This argument, when examined, leads to this: That however small in value or inadequate in equipment a common property may have been originally and however much with the acquiescence of the non-improving cotenant its value may have been enhanced, even if in the thousands of dollars, by new and modern equipment and building, the improving cotenant is entitled to nothing for the enhancement in value as a result of subsequent improvements made by him. The statement of the argument is enough to cause its rejection.
It may be conceded that when a tenant in common is in possession of the entire property, and so long as he is not called on to pay for its use and occupation, he is under the duty to preserve the property and to make all ordinary repairs which will go to its preservation as respects its condition at the time he went into possession; but when changing conditions or the inevitable result of the mere elapse of time requires the making of extraordinary repairs or the substitution of new structures and modern fixed equipment for the old, as was the case here, these are not repairs to be dealt with as such, but are improvements.
We have set forth the attitude of the parties and the physical situation under which the improvements were made, and there remains only to apply thereto the established rules, which we shall now state.
The rule is that where a tenant in common has, with the acquiescence of his cotenant, made valuable improvements on the entire property so that the improvements made by him cannot be allotted solely to him, the other tenant who has made no improvements must pay to the improving tenant a sum equal to the proportionate amount of the enhancement, by the improvement, less a fair proportionate allowance against the improving tenant for use and occupation; and for the balance of the amount aforesaid a lien will be fastened upon the share of the non-improving tenant whenever he calls for a division of the property by which his undivided share shall be allotted to him. This is the rule of equity enforced everywhere in partition proceedings, and is founded upon the principle that he who would have the aid of equity must as a condition allow equity to be done to the opposite party. It is illustrated by such cases as Bennett v. Bennett, 84 Miss. 493, 36 So. 452, and see the cases therein cited, and 47 C.J. 473.
The same principle applies when, in a court of equity, as is the case here, a tenant in common is demanding of his cotenant compensation for use and occupation. If he has made none of the improvements, or if substantially all the improvements presently on the property were, with his acquiescence, made by his cotenants, he cannot call for compensation for the use and occupation of the property in its improved state except upon the condition that there be credited against his demand the amount of the enhancement of the value of his share resulting from the improvement made by his improving cotenant who has been in the use and occupation of the property. 14 Am. Jur., p. 118, cases and annotations under note 11; and see also Bennett v. Bennett, supra, 83 Miss. at page 501, 36 So. at page 453, numeral 2.
And the general rule applicable to the facts in this case is also that any right which a cotenant possesses to an allowance for improvements to the common property may be enforced by a successor in interest of the cotenant, such as purchasers of the property. 14 Am. Jur., p. 119 and notes 2 and 3.
The case may, therefore, be summed up to a conclusion as follows: The court allowed the complaining cotenant a sum for the use and occupation of her share of the property in its improved condition for the five ginning seasons involved in the total amount of $8,750, but failed to credit against this amount the enhancement in value of appellee's share as a result of the improvements made solely by the other cotenants. The undisputed proof, some of which we have mentioned, is ample to show that had this been done, the value of the improvements chargeable to complainants' share would equal or exceed the amount due for the use and occupation thereof for the five seasons aforesaid; hence the decree should have been for the defendants.
Other points are within the record and have been presented and argued at length by the parties. One among the other contentions urged by appellants would perhaps upon a further statement of the facts pertinent to that contention lead to the same result that we have reached on the question of the allowance for improvements; but since one ground for decree is enough, we do not enter into any discussion of the others.
Reversed, and decree here for appellants.