Howard v. Edgren ( 1963 )

Per Curiam.

This opinion but states the obvious. Persons who take possession of real property (the property in question happened to be a store building) without the consent of the owner are to be deemed tenants by sufferance, and will be required to pay reasonable rent for the actual time they occupy the premises. RCW 59.04.050.¹

A mortgagor does not lose his right to the possession of mortgaged real property by failing to make payments on the mortgage, or by moving out of the community; Norlin v. Montgomery (1961), 59 Wn. (2d) 268, 367 P. (2d) 621. The right to possession is not lost by abandonment. Northern Pac. R. Co. v. Tacoma Junk Co. (1926), 138 Wash. 1, 5, 244 Pac. 117, 119; Cameron v. Bustard (1922), 119 Wash. 266, 205 Pac. 385.

Nor does the mortgagee have any right to possession of mortgaged real property without a “foreclosure and sale according to law.” RCW 7.28.230.² See also Norlin v. Montgomery, supra.

The defendants in this case, a mortgagee and his contract purchasers (contract price $2,500), admittedly took possession of the mortgaged property without the consent of the absentee owner; and the contract purchasers, at the time this action was commenced, had conducted their business therein (Sprague Implement Company) for 19 months.

Thé plaintiff, the owner of the property, was entitled under the statute (RCW 59.04.050¹) to “reasonable rent” for that 19-month period.

The trial court erred in concluding that a nominal rental of one dollar a month satisfied the requirements of the statute. The trial court was misled by the defendants’ arguments into a consideration of whether the plaintiff could have procured a tenant and how much she would have received from the property if the defendants had not occupied it. From the time the defendants took possession of her property, she did have a tenant who conducted a business on her property. Under such circumstances she was entitled to a reasonable rental for the use of her property. The contentions of the defendants here are completely answered by a California court in a recent opinion, Don v. Trojan Constr. Co. (1960), 178 Cal. App. (2d) 135, 138, 2 Cal. Rptr. 626:

“The argument made by respondents throughout the trial was that the owners had lost nothing because they did not intend to rent the land out anyway. If this subject were open to be debated upon, it could be pointed out that if only nominal damages are awarded, the appropriators of the use of land could gain a virtually expense free use of property for profitable purposes on the single condition that the owner did not presently intend to lease the land or to use it himself. However, the Civil Code in section 3334 has fixed the measure of damages, and has made no exception in cases where the plaintiff did not intend to use the land or to rent it out so that the court can do no other than apply that measure, namely, the ‘value of the use.’ That the owners did not intend to make any use of the land themselves does not deprive them of their proper award. (United States v. Bernard, 202 F. 728 [121 C.C.A. 190]; Whitwham v. Westminster Brymbo Coal & Coke Co. (1896), 2 Ch. 538; Bourdieu v. Seaboard Oil Corp., 48 Cal. App. 2d 429, 438 [119 P. 2d 973].)”

There was evidence that after the contract purchasers went into possession of the property in November, 1959, they expended about $5,000 in repairs and improvements; and it is conceded that this added to the rental value of the property. It is argued that liability for rent is fixed by the reasonable rent at the beginning of the tenancy.

The statute does not so provide; the liability is for “reasonable rent for the actual time he occupied the premises.” See generally 1 American Law of Property, Sec. 3.36 (1952); 32 A.L.R. (2d) 582. This would include any increase in the value of the use and occupancy attributable to improvements and repairs made to the building, irrespective of who made them, if they became an integral part of the building.

Nor do we see any equitable basis for disregarding the increased rental valuation attributable to the improvements. It is apparent, from the language of the purchase contract,³ that the contract purchasers were fully cognizant of the status of the title, and there can be no pretense that they were ignorant of the fact that the mortgagee, from whom they were purchasing, did not have title or the right of possession. The repairs and improvements were incidental to their own use and enjoyment of the property and, obviously, were made in the expectancy that they would eventually become owners of the property. If for reasons of their own the mortgagee and his contract purchasers do not want to take the necessary steps to acquire a right of possession to the property by foreclosure and sale, they are going to have to pay the fair market value for the use and occupancy to the owner during the time they are tenants of that owner. As we pointed out in Norlin v. Montgomery, supra, equitable principles cannot be asserted to establish equitable relief in derogation of statutory mandates.

The judgment for nominal damages in the sum of $19 appealed from is reversed and the cause is remanded to the trial court for a determination of the rent due the plaintiff consistent with the applicable statute and the views expressed herein.

1 “Whenever any person obtains possession of premises without the consent of the owner or other person having the right to give said possession, he shall be deemed a tenant by sufferance merely, and shall be liable to pay reasonable rent for the actual time he occupied the premisés, and shall forthwith on demand surrender his said possession to the owner or person who had the right of possession before said entry,..and all. his. right to possession of said premises shall terminate immediately upon said demand.” RCW 59.04.050.

2 “A mortgage of real property shall not be deemed a conveyance so as to enable the owner of the mortgage to recover possession of the real property, without a foreclosure and sale according to law.”

3 $1,250 was paid in cash; $1,250 to be paid “upon delivery to the Purchasers of a title insurance policy showing title vested in the Vendors free and clear of all liens and encumbrances ...”