Muskogee Development Co. v. Green , 22 Okla. 237 ( 1908 )

The only question necessary to determine is whether or not the court erred in ordering that this cause be dismissed, and the receiver discharged, and the property involved in this controversy placed in the possession of the defendants in error. The law, in its wisdom and comprehensiveness, throws around infants and minors every possible protection; but the question is presented here that when such infant or minor receives the benefit of an invalid contract, and such benefit is permanent and substantial and continuing with such minor, whether or not the law permits the party causing such benefit to accrue, parting with his consideration in good faith, believing that he is acting within the pale of the law, to be recompensed therefor, when such minor in a lawful way seeks to avoid the obligations of such contract. There is an unbroken line of authority that where a minor makes contracts, and gets the benefits thereof, he will not be permitted, with such benefits in hand, to disaffirm said contract, without making a proper tender or offer to refund when so within his power. Stull v. Harris, 51 Ark. 294, 11 S.W. 104, 2 L. R. A. 741; American Freehold Land Mortgage Co. v.Dykes, 111 Ala. 178, 18 So. 292, 56 Am. St. Rep. 38; Craigv. Van Bebber, 100 Mo. 584, 13 S.W. 906, 18 Am. St. Rep. 569;Englebert v. Troxell, 40 Neb. 195, 58 N.W. 852, 26 L. R. A. 177, 42 Am. St. Rep. 665.

There is another class of authorities to the effect that where a void contract becomes executed, and a party acquires a possessory right thereunder, the other party thereto cannot retain the consideration for same, and at the same time repudiate and avoid the contract so as to recover such possession, and courts of equity will not cancel such contract without requiring the person that has received the consideration to make proper recompense to the other party.White v. Brown, 1 Ind. T. 98, 38 S.W. 335; Poplin v. Clausen, 1 Ind. T. 157, 38 S.W. 974; Wrought Iron Bridge Co. v. Town ofUtica et al. (C. C.) 17 Fed. 316; Beard v. Dansty, 48 Ark. 183, 2 S.W. 702; Potts v. Cullom, 68 Ill. 217; Brockway v. Thomas,36 Ark. 518.

The case of Shumate v. Harbin, 35 S.C. 521, 15 S.E. 270, is substantially in point. Mr. Justice Pope, speaking for the court said:

"The demurrer presents the very serious question here. It belongs to that class of cases that appeal very directly to the conscience of the court. Shall one be allowed to enjoy the property of another, and he a stranger, without any compensation therefor? Or, to put the matter in a different form, shall property that was useless to one be made to increase in intrinsic value and become the source of constant profit, through the expenditure of the means of another, innocently made, without creating a legal necessity, whereby the owner is made to compensate him through whom the improvements were made? Quite often has this question been presented by one tenant in common, who has added largely to the value of the common stock by the expenditure of his own means, in a contest with other co-tenants. In the case of Buck v. Martin. 21 S.C. 592, 53 Am. Rep. 702, this court announced: 'Our cases have settled the question against the right of the improving tenant in common to the exclusive benefit of his improvements' — citing an array of authorities in support of such conclusions. In the same case this court goes on to say: 'To this rule, however, there are well-established exceptions. * * * When, however, improvements have been erected by a co-tenant which add value to the common stock, and erected under the circumstances which would make it a great and obvious hardship upon the improving tenant to deprive him entirely of the benefit of such improvements, throwing their whole value into the common estate for partition, the disposition of the court of equity has always been to give the improving tenant the benefit thereof, so far as consistent with the equity of his co-tenants. 1 Story, Eq. Jur. § 655.' To the same effect was the decision of this court in the case of Lewis v. Price, 3 Rich. Eq. (S.C.) 173. The result of all the cases bearing upon this relief, peculiar to courts of equity, is that it is not what such improvements may have cost in dollars and cents that is allowed, but what additional value has been imparted to the premises by such improvements. Lewis v. Price, supra. The court said: 'At the same time I am content, in this case, that the tenant shall have credit, not for the cost of improvements, but for thevalue they imparted to the premises.' (Italics ours.)

"The principles announced in the foregoing cases were made to apply, notwithstanding some of the co-tenants were infants. We acknowledge these are cases between co-tenants. They are cited by way of illustration of certain principles of equity. Let it be remembered, also, that the improvements, in these cases referred to, were made without the sanction of the court in the first instance. In the case of Buck v. Martin, supra, this court said: 'We do not regard the rule that the improving co-tenant is not entitled to compensation as applying to all the cases where all the co-tenants concur in the improvements. From the peculiar circumstances of this case we must regard it as belonging to that class of cases. It is true that the children were minors at the time improvements were made, and could not consent for themselves; but they were with their mother, and the family needed a home. Indeed, it was absolutely necessary. If at the time an application had been made to the court for leave to build a little cottage on the common property as a shelter for the family, can there be a doubt that such application would have been granted by the court acting for the children? Exparte Palmer, 2 Hill, Eq. (S.C.) 218; Corbett v. Laurens, 5 Rich. Eq. (S.C.) 316. Then we regard that done which should have been done. It was not the legal duty of the mother or her husband (stepfather) to support the children without the use of their shares.

"Recurring to the case at bar: Here was a destitute family, consisting of mother, stepfather, infant son, not only without money, but homeless. It was not the duty of the mother and stepfather to support the infant son. Buck v. Martin, supra;Lewis v. Price, supra. The son was only 10 years of age, with no general or testamentary guardian; but his mother was his guardian by nature. As such, in the absence of one appointed by law, the mother is naturally expected to fill that office, and thousands of boys and girls, bereft by death of a father's care and protection, rise up and proclaim their mother blessed. By nature and education timid and retiring, when the interests of the fatherless need her protecting care, all obstacles are surmounted, all dangers bravely met. Under these circumstances the plaintiff builds a modest home for their occupancy, believing the title in the mother. What before was useless, because untenantable, by the labor and means of plaintiff expended thereon, becomes not only a home fit for their occupancy, but, when not so used by them afterwards, it becomes a source of revenue. Sixty dollars per year is its rental value. Now, because it was not Mrs. Harbin's land, because the plaintiff made a mistake, because she is not her son's legal guardian, because she is not a tenant in common with him, because she is not administrator or executor of the estate of his father — because of these things, must this plaintiff lose all compensation for this work? We do not think so.

"This court, in the case of Spencer v. Godfrey, Bailey, Eq. (S.C.) 468, held that when the mother, who was the administratrix of the estate of her deceased husband, applied to the court in an ex parte petition, alleging that it was necessary to borrow money to pay debts and support her children, and for that purpose that a mortgage should be placed upon the land belonging to the estate of the intestate, and the court of equity granted such relief, it did not lie in the power of one of the children afterwards to upset such an act of the court. The court of equity has jurisdiction over the persons and estates of infants. The result of the decision seems to be that what the court of equity would have done in the first instance upon application therefor, if the same be done without authority, the court will afterwards, upon the propriety of such course being made manifest, confirm such act. Ryan v.Bull, 3 Strob. Eq. (S.C.) 91; Corbett v. Laurens, 5 Rich. Eq. (S.C.) 316; Ex parte Palmer, supra. That there was a mistake in the character of the person who made the contract will make no difference. It is substance, not form, which the court of equity regards. Cater v. Eveleigh, 4 Desaus. 19, 6 Am. Dec. 596; James v. Mayrant, 4 Desaus. 591, 6 Am. Dec. 630. But, while so holding, we must be clearly understood to decide that not the cost of such improvements, but the value they impart to the premises, is the true rule. The property should be rented by the master of Greenville county, and, after the payment of the master's fees and all taxes the residue of such rent should be paid over to the plaintiff until he shall receive his debt of $149.54, and, when the plaintiff shall have been so satisfied, the property shall be rented for the benefit of its owner, Michael J. Roberts, until he obtain a guardian to manage same, or reaches the age of 21 years. We feel constrained, however, in this instance to instruct that there shall be no costs taxed against the infant defendant. It is the judgment of this court that the judgment of the circuit court be reversed, and the cause remanded to the circuit court, with directions that the principles of this decree be duly enforced in that court."

In the case of Athey et al. v. Knotts et al., 45 Ky. 29, Judge Breck, speaking for the court, said:

"The allegation in the complainant's bill is that the improvements made are lasting and valuable, and the fair presumption is that the property of the son is thereby rendered more productive. They have not been made by a trespasser, but by the natural guardian of the infant, who has a right, in the absence of a statutory guardian, to control and manage his estate, and to the extent that it has been rendered more productive by the improvements, to enjoy the benefit thereof, at least during the son's minority, and which it is alleged he is now enjoying. Assuming, then, that Elisha Athey, by reason of the improvements which he has made, is entitled to a portion of the rent, it seems to us that the chancellor has power to reach such interest and apply it to the discharge of the complainant's judgments. We have a right to presume that the improvements have been made with a view, and that they will permanently enhance the value of the son's estate, independent of the immediate enjoyment and benefit therefrom contemplated by the father. When the son arrives at age it may be proper to rule him to an election to pay such sum as the improvements may, at that time, add to the value of the estate, or surrender such portion of the annual rent as may be equitable, taking into consideration the increased value thereof by reason of the improvements, or that they (the improvements) should be removed. How far he should be tolerated in a capricious election for the removal of the improvements, when obviously for his interest, as well as the creditor's, that they should remain upon equitable terms, need not now be decided. We are not satisfied that the chancellor should not exercise a controlling discretion in that respect. In Graham Butler v.Chatoque Bank, 5 B. Mon. (Ky.) 45, this court decided that if a ward, upon arriving at age, should elect to enter upon a lot before the expiration of a lease thereon, made by the guardian, and beneficially to the ward, he should be held responsible for a fair remuneration for improvements which had been made by the lessee under and as part of the contract with the guardian. So in this case, should the son elect to enter upon arriving at age, the chancellor, under all the circumstances, may require him to do what may be equitable in regard to the improvements. Until that period we are of the opinion the complainant is entitled to an equitable portion of the rent, to be applied in discharge of his claim. The chancellor should direct such facts to be ascertained and reported as will enable him to determine to what extent the rent should be so applied. We think the chancellor has power to direct the premises to be rented out, and to retain the case, if necessary, until Lee Athey arrives at age, and longer, if the equity of the case should require."

In the case of Bent et al. v. Barnett, 90 Ky. 600, 14 S.W. 597, the court held that where a guardian of minor children in good faith, but without authority from the chancellor or proper court, reconstructed an old building on the children's land, which enhanced the value of the property and enabled them to realize an income therefrom, the materialmen, whose property had been in good faith used in making the improvements, were equitably entitled to be paid the actual cost of their material out of the enhanced rental value of the property by reason of the improvements, after deducting therefrom the insurance, taxes, and costs of keeping the premises in repair.

The statutes in force in the Indian Territory prior to November 16, 1907, and uniformly throughout the American states, require a guardian, seeking to make expenditure in behalf of his ward, to obtain the authority of the probate court therefor; but in many instances, for want of proper advice, or because the court was not in session, or from ignorance on the part of such guardian, expenditures have been made without any previous authority having been obtained from the court. When such matters came before the court, if it was satisfactorily shown that they were for the benefit of the infant and that said infant had derived a benefit therefrom, the courts, looking to the substance, rather than the form, allow the guardian credit on his account for the amounts actually expended for the benefit of the infant. Calhoun v.Calhoun, 41 Ala. 370; Waldrip v. Tulley, 48 Ark. 297, 3 S.W. 192; Martin v. Campbell, 35 Ark. 137; 21 Cyc. pp. 65, 66. In the Indian Territory, prior to its admission as a part of the state of Oklahoma, the father was the natural guardian of his minor child, and entitled to his custody, and also that of his property, when there was no legal guardian. Mansf. Dig. § 3465 (Ind. T. Ann. St. 1899, § 2361).

The land, that was without an income, because neither fenced, nor in a state of cultivation, nor improved with houses, barns, and the like, became, no doubt, in this instance a profitable, productive farm, fit for the husbandman and yielding revenue; certainly becoming a source of revenue — the rental value thereof being found by the referee to be $2 per acre per annum. Because of the fact that plaintiff in error, as well as the natural guardian, erroneously believed that under the Creek Supplemental Agreement the defendant in error, as the natural guardian of his children, had a right to enter into said lease for the benefit of said children, must the expenditures and improvements made by said plaintiff in error under the terms of such lease, at the instance of the natural guardian, who thereafter as legal guardian seeks to repudiate such agreement, for the breaking of land, building of fences, and furnishing material and erecting houses thereon for the permanent benefit of such children, be a loss to him? What was unproductive prairie became a crop-yielding farm. Allotments that had no place of habitation thereon were made an abode for the industrious, affording shelter from the rains and storms and protection from the winter's rigors and the summer's heat. Had the defendant in error, as the legal guardian of his children, applied to the proper court for permission to make an improvement lease upon their raw allotments, the same under proper and legal regulations would have been permitted, allowed, and approved.

Section 3500, Mansf. Dig. (Ind. T. Ann. St. 1899, § 2396), is as follows:

"If any ward be the owner of wild or unimproved lands, not connected with any cultivated or improved tract belonging to such ward, the guardian may, under the advice and instruction of the court, let out such unimproved land under improvement lease, not to extend more than two years beyond the majority of such ward."

Section 17 of "An act to ratify and confirm a supplemental agreement with the Creek tribe of Indians, and for other purposes" (Kapler, Indian Affairs, Laws, and Treaties [2d Ed.] vol. 1, p. 762; Act. June 30, 1902, c. 1323, 32 Stat. 504), provides:

"Creek citizens may rent their allotments for strictly non-mineral purposes, for a term not exceeding one year for grazing purposes only, and for a term not to exceed five years for agricultural purposes, but without any stipulation or obligation to renew the same. Such lease for a period of longer than one year for grazing purposes and for a period longer than five years for agricultural purposes, and leases for mineral purposes, may also be made with the approval of the Secretary of the Interior, and not otherwise. Any agreement or lease of any kind or character violative of this paragraph shall be absolutely void and not susceptible of ratification in any manner and no rule of estoppel shall prevent the assertion of its validity. * * *"

The rental for grazing purposes, where no improvements, such as breaking sod, or grubbing stumps, or building houses or barns, are required, is limited to one year; but for agricultural purposes, where the land necessarily, except in exceptional cases, must be broken and sodded, cleared and grubbed, and houses and barns built, is limited to five years; but, recognizing in some events that the improvements must require a lease in excess of five years, it is provided that in such event the same shall be valid only upon the approval of the Secretary of the Interior. These treaties were made with a view of consummating the allotment of the lands in severalty among the members of the Creek tribe. It was recognized that a great many of them would not have lands improved from which to select their allotments, and for this purpose it was contemplated that improvement leases might be made, not only for the benefit of the Indian, by causing him to have an allotment in cultivation and yielding an income, but also to give his noncitizen neighbor an opportunity to engage in agriculture and aid in the development of the country. What were the limitations thereon? Where the provisions of this treaty conflict with said section 3500 of Mansfield's Digest,supra, the treaty prevails. Consequently, under the law an allottee of the Creek tribe had a right, if he was an adult, to enter into an agricultural lease for a period of five years, and if the allottee was a minor the probate court had jurisdiction and authority to permit the guardian to enter into an improvement lease for the benefit of such minor, not to exceed the period of five years; but with the approval of the Secretary of the Interior it might exceed the five-year period, provided that it did not extend two years beyond the majority of the minor.

A court of equity, seeking to do substantial justice, will do what the court ought to have done. In doing so, however, the plaintiff in error is not entitled to recover the cost of such improvements, unless the same imparted an additional value to such allotments equal to such cost, and caused a commensurate increase in the income from such allotments as would make the investment profitable and beneficial to such minors and permanent. Such contracts should be critically scrutinized by the courts, so as to vouchsafe that they are reasonable and necessary, and for the best interest of the minor, at the same time adding to the value of his allotment; and whilst seeing that substantial justice is done to the party that makes the outlay for the minor, it should also be careful that such compensation is merely a matter of recompense. Looking to the substance, rather than to the form, doing justice between all parties where a benefit has been done and is permanent, and causes an increment in the value of the estate of the infant, increasing his income and thereby providing for his maintenance, a court will see that the income from such estate should be made to render recompense for the outlay that has been made to bring about that result.

This cause is reversed and remanded, with instructions to the lower court to refer this cause back to the referee for additional findings, and to proceed in accordance with this opinion.

Dunn, Hayes, and Turner, JJ., concur. Kane, J., dissents