Whitehead v. Barker , 288 Mich. 19 ( 1939 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] Plaintiff, a man 84 years of age, was married in 1923 to Augusta D. Murdock, a widow, who at that time was living on premises in the village of Northville, Wayne county, Michigan. Plaintiff and his wife resided upon the premises from the time of their marriage until the death of Mrs. Whitehead on July 10, 1934.

At the time of the marriage the property in question appeared, according to the records of the register of deeds of Wayne county, to be the sole property of his wife. The wife had no children who could inherit in case she died intestate. She left no will.

When plaintiff went to live on the premises with his wife, the property was in great need of repair. Plaintiff was a plumber by trade and commenced the making of improvements and repairs to the premises on the belief that they belonged to his wife. Considerable money was expended by him for sewer services, plumbing fixtures, electric fixtures and wiring, and carpenter labor. After the death of Mrs. Whitehead, defendant, who was the adopted daughter of Mrs. Whitehead's sister, came to the premises and claimed to be the owner thereof, by virtue of a warranty deed which had been recorded in the office of the register of deeds November 26, 1924, about a year and a half after the marriage of plaintiff and his wife. The deed purported to have been executed October 3, 1911. The grantees therein were Mrs. Whitehead's brother and defendant. Subsequent to the above date, defendant had received certain quitclaim deeds in which she secured complete ownership of the property. Mrs. Whitehead, however, had no title after the execution of the first warranty deed above-mentioned. When defendant announced her ownership, some discussion with plaintiff followed, which resulted in the execution of a lease dated August 1, 1934, of the premises from defendant to plaintiff for a period of a year without rent.

It appears that defendant had frequently visited plaintiff and his wife during the course of the repairs and improvements and had complimented plaintiff upon the work being done, stating that her aunt's house would be a much better place to live in when it was fixed up the way they wanted it. Plaintiff resided in the premises until May 18, 1936, when ouster proceedings were commenced before the circuit court commissioner by defendant against plaintiff. On May 21, 1936, plaintiff filed a bill of complaint setting forth the circumstances above related, alleging that he had no knowledge that his wife was not the owner of the promises; that defendant knew of the repairs which were being made and approved them, and asking the court to decree an equitable lien for the expenditures made by plaintiff upon the premises. Up to the time of trial, plaintiff had occupied the premises, paying no rent for a period of approximately 12 years, — 11 years during the lifetime of his wife and a year subsequently. The circuit court, after hearing, entered a decree finding that the value of the improvements made by plaintiff on the premises amounted to $1,300; that the defendant was entitled to a fair rental from August 4, 1934 to the date of decree in the sum of $736, less certain taxes paid by plaintiff, leaving an amount of $668 to be deducted from the amount of the value of the improvements made by plaintiff, and that plaintiff was, therefore, entitled to an equitable lien in the amount of $631.28. The court further decreed that such lien could be satisfied by defendant either by cash or by a lease of the premises, dated as of April 20, 1937, for such period at a rental of $22.50 per month as would amount to $631.28. From such decree both parties appeal.

It is claimed by plaintiff that the "expectancy of title" to property is sufficient color of title to give an occupant a right to compensation for improvements where the owner is estopped by reason of his expressed or implied consent to the making of the improvements. 31 C. J. p. 330. But plaintiff had no expectancy of title. He could only have such from his wife, in this case; and his wife was not the owner, and had no title to give by deed or will. If plaintiff had an expectancy of title, it would not have been sufficient as color of title to give him a right of compensation for improvements unless the owner was estopped to deny it. Improvements by the husband upon the lands of the wife will in general be presumed to be intended by him for her benefit, and he is consequently not entitled to compensation for the same, nor does he acquire thereby any lien on, or interest in, his wife's separate estate. 30 C. J. p. 859. See Murphy v. Stever,47 Mich. 522.

In Bryan v. Councilman, 106 Md. 380 (67 A. 279, 14 Ann. Cas. 1175), it was held that where a wife expended her money in making improvements on lands to which she did not claim title, but which she believed to be the property of her husband, she had no right of lien on the land for the value of such improvements. The court said:

"The appellants have pressed upon us the well-recognized principle of compensation for improvements made upon another's property. Now to entitle the party claiming to a standing even in a court of equity there must be three concurrent essentials.

"1. He must have held possession under color of title.

"2. His possession must have been adverse to the title of the true owner.

"3. He must have acted in good faith. 16 Am. Eng. Encyc. of Law (2d Ed.), 79-83.

"Again — As a general rule in order that one may recover compensation for improvements made on another's land, it is necessary that he should have made such improvements in good faith, while in bona fide adverse possession of the land under color of title. 22 Cyc., pp. 15, 16. By good faith is meant an honest belief on the part of the occupant that he has secured a good title to the property in question and is the rightful owner thereof. And for this belief there must be some reasonable grounds such as would lead a man of ordinary prudence to entertain it. 16 Am. Eng. Encyc. Law (2d Ed.), pp. 85, 86.

"In McLaughlin v. Barnum, 31 Md. 425, 454, Judge Miller delivering the opinion of the court, uses this language: 'All that is required to entitle a defendant to claim this equity is that he be a bona fide occupant or possessor, and not a mere tortfeasor or mala fide intruder, holding with full knowledge of his own position and of the adverse claim.' The supreme court, in Green v. Biddle, 8 Wheat. (21 U.S.) 1, 79, have defined a bona fide possessor, according to the doctrine of the civil law, to be one 'who not only supposes himself to be the true proprietor of the land, but who is ignorant that his title is contested by some other person claiming a better right to it.' 2 Story's Equity Jurisprudence (6th Ed.), p. 142, § 799, 'if a plaintiff in equity seeks the aid of the court to enforce his title against an innocent person who has made improvements on lands,supposing himself to be the absolute owner, the aid will be given to him only upon the terms that he shall make duecompensation to such innocent person to the extent of the benefits which will be received from these improvements.' "

In this case, the improvements were not upon the wife's property, but upon the property of a third person, plaintiff's wife appearing to have only a right of occupancy under what may have been an understanding that she was to have a life lease. Plaintiff could not rely on expectancy of title as the title was in Mrs. Barker. Is she estopped, then, from asserting that plaintiff is not entitled to compensation for improvements? The answer must be found in her conduct. There was no inducement on her part to plaintiff to make such improvements. She made no representations to him and the extent of her acquiescence consisted only in commenting "that it was a nice place," while the improvements were being made. She did not mislead plaintiff into thinking that she had no title. Her silence on this point is not inconsistent with honest conduct. The house previously had been in poor repair. Mrs. Whitehead had the benefit of the improvements during the last 11 years of her life. Defendant was receiving no immediate advantage therefrom. It was inuring to the benefit of the plaintiff and his wife in the way of comfort and living conditions. Under the circumstances it would be rather unseemly for defendant to warn plaintiff against making the improvements for the benefit of his wife, defendant's benefactor, on the ground that at an uncertain time in the remote or distant future, defendant would be entitled to take over the property. It is not proved nor claimed that she was guilty of fraud in inducing plaintiff by her attitude and silence to believe that she was not the owner of the property, and that, therefore, he had an expectancy of title.

It has been said that the right to compensation for improvements may arise by estoppel, even though the occupant is not one entirely in good faith, where the owner has by his conduct encouraged such occupant to make such improvements, or has so conducted himself while they were being made as to make it a fraud for him to take them without paying therefor.Grider v. Driver, 46 Ark. 109.

But there is no proof of a manifest intention to deceive on the part of defendant which would amount to constructive fraud, or a showing that by her conduct she encouraged plaintiff to make improvements or conducted herself while they were being made as to result in a fraud in taking the improvements without paying for them. Defendant might be estopped under certain circumstances if her conduct showed such a manifest intention to deceive as to amount to a constructive fraud and a resultant advantage to herself.

In Steel v. Smelting Co., 106 U.S. 447 (1 Sup. Ct. 389), it was said:

"The principle invoked is that one should be estopped from asserting a right to property upon which he has, by his conduct, misled another, who supposed himself to be the owner, to make expenditures. It is often applied where one owning an estate stands by and sees another erect improvements on it in the belief that he has the title or an interest in it and does not interfere to prevent the work or inform the party of his own title. There is in such conduct a manifest intention to deceive, or such gross negligence as to amount to constructive fraud. The owner, therefore, in such a case will not be permitted afterwards to assert his title and recover the property, at least without making compensation for the improvements. But this salutary principle cannot be invoked by one who, at the time the improvements were made, was acquainted with the true character of his own title, or with the fact that he had none."

On the claim of plaintiff's belief and reliance on his wife's ownership, we are impressed by the fact that Mrs. Leadbetter, plaintiff's daughter, who appears to maintain friendly relations with her father, testified that she had urged him, for his own protection, not to make expenditures in improvements of the property, for the reason, as she told him, that it was generally understood that Mrs. Barker "was to have the place * * * it was just an understood fact that she was to have the property; that her aunt intended to give her the property, or she was eventually going to have it." This testimony is not contradicted or disputed.

A court of equity cannot create a lien. Liens can only be created by agreement, express or implied, or by some fixed rule of law. Dehn v. Dehn, 170 Mich. 407. There was no agreement, express or implied, between the parties. Plaintiff claims, however, that he is entitled to compensation for improvements under 3 Comp. Laws 1929, § 14946 (Stat. Ann. § 27.1957), which provides:

"Whenever in any action of ejectment the plaintiff, or any one or more of the plaintiffs, if there be more than one, shall recover, or recover any undivided interest in the premises, the defendant or defendants shall be allowed compensation in proportion to such recovery for buildings and improvements on the premises recovered, erected, or made by him or them, by any person through whom he or they claim title to the extent that such buildings and improvements shall increase the present value of said premises: Provided, The defendant or defendants, or the person through whom he or they claim title, shall have been in the actual peaceable occupation of the premises recovered, for six years before the commencement of the action: Or Provided, The same shall have been so occupied for a less time than six years under a color of title and in good faith."

Plaintiff, however, could not recover under the statute as the term "occupancy," as used therein, means "such an occupancy as, under the rules of common law, would entitle one to acquire a title by adverse possession." Jones v. Merrill, 113 Mich. 433 (67 Am. St. Rep. 475); Sleight v. Roe, 125 Mich. 585. InBoucher v. Trembley, 140 Mich. 352, it was held that under the statute a claimant was entitled to no compensation for improvements where he had not occupied the premises under color of title.

In the instant case, plaintiff's only claim to possession was through his wife. He never made any claim of title and occupied the premises under no color of title. Accordingly, plaintiff made no case by his proofs which calls for equitable interposition.

The decree awarding plaintiff an equitable lien is set aside and the bill of complaint dismissed, with costs to defendant.

BUTZEL, C.J., and WIEST, BUSHNELL, SHARPE, POTTER, and CHANDLER, JJ., concurred. NORTH, J., took no part in this decision.