Hopkins v. Gilman

Cole, J. It could hardly have been anticipated, when this case was here on a former appeal (22 "Wis., 476), that a decade would elapse before the cause would be brought to a hearing on the issues sent down from this court for trial; and, as both parties are more or less responsible for this delay, their obligations and duties in the mean time cannot be ignored’in the final decision of the cause. The only relief which this court thought could be consistently granted on the former appeal, was to send the case back with directions to the circuit court to ascertain the value of the improvements placed upon the property by the plaintiff or his assignor, and to allow the plaintiff to retain possession of the premises until he was paid for such improvements. This was as far as the court was called upon to go at that time. In conformity with this direction, the cause, came on for hearing in June, 1878, and considerable testimony was taken on both sides, bearing upon the question of the value of the improvements placed upon the lot under the lease. At the outset here a question is raised as to the proper basis of estimating the improvements. One of the counsel for the defendant claims that under the covenants of the lease the lessor was bound to pay only for such improvements as, between landlord and tenant, could be removed or were capable of removal. This position is founded upon the clause in the lease which gives the lessor a lien for the rents and taxes on all the improvements which should be made upon the premises, and authorizes the lessor, in case of default on the part of the lessee, to sell the improvements at public auction, and give the purchaser a good and sufficient bill of sale or conveyance of such improvements. This construction of the lease we deem quite too narrow and strict. When the lease was executed, the lot was vacant and unimproved. It was doubtless contemplated by both parties at the time that a dwelling-house and other necessary erections and additions should be placed upon the property, such as would enhance its value — 588 — and render it fit for the occupation of the tenant. Therefore, a cistern, well, barn, and other out-houses, placed upon the lot, would be deemed improvements within the meaning of the lease, though they could not all be detached or removed from the premises. Considering the whole lease, we have no doubt that such erections or additions to the premises, which were calculated to enhance their value and render them desirable as residence property, were improvements within the covenants of the lease. The lease provides, in case the lessee made any improvements on the premises, and the lessor should elect, at the expiration of the term, to pay for them instead of renewing the lease, then that the improvements should be appraised “without regard to the situation or value of the premises leased.” The counsel for the plaintiff argues with considerable force and plausibility, that this covenant imports an undertaking on the part of the lessor to pay what the improvements were worth to the tenant, irrespective of their connection with the land (and not what they were worth to the landlord), and without regard to how much they added to the value of the lot. But we think the proper basis is to ascertain the real value of the improvements, or what they are actually worth in their present condition, treating the property as residence property. Of course, if the premises were to be used for business purposes, some of the improvements might be unnecessary and add nothing to the value of the lot. But whatever was built or placed upon the premises which was a substantial benefit to them — whatever rendered them more fit for use as residence property, or more capable of producing an income or rent, — should be paid for at its present cost or actual value. Now, as we understand the case, the court below proceeded really upon that basis in ascertaining the value of the improvements which the defendant was bound to pay for by the lease. The court assessed such value at the sum of $5,TOO. It is — 589 — claimed that tlie valuation is excessive, and unwarranted by tlie testimony. The evidence in regard to tlie value of the improvements is quite conflicting. While we have carefully considered it, as we find it in the printed case, we are not disposed to disturb the finding of the court below upon that branch of the case. The witnesses differ very widely as to the value of the buildings and structures put upon the premises; but the court below seems to have adopted neither the highest nor tlie lowest estimates. It would serve no useful purpose to discuss at length the testimony relating to this question of value, and we shall therefore dismiss the matter upon stating our conclusion upon it. We think substantial justice is done by the assessment or valuation made by the circuit court. The court below further allowed interest on the value of the improvements as assessed, from the 15th day of April, 1869, to the rendition of the judgment. The remittitur from this court was filed in the court below April 15, 1868. Probably the circuit court considered that a year afforded ample time and opportunity for the defendant to ascertain and pay the value of the improvements. But the counsel for the defendant insists that as the plaintiff’s intestate remained in the possession of the premises, enjoying the use of the improvements, it is inequitable to make the defendant pay interest on their value during such period. Under the circumstances we are disposed to treat the plaintiff like a mortgagee in possession after condition broken, liable for tire rent and the payment of the taxes stipulated for in the lease, but that he is not entitled to interest on the value of his improvements. On the former appeal, as already observed, this court thought the plaintiff had the equitable right to remain in possession until the defendant made payment for the improvements. It was suggested on the argument that this was not a right springing from the lease, but that the plaintiff retained possession solely by virtue of the decree of this court, without refer — 590 — ence to that instrument. Therefore, it is said, the plaintiff was under no obligation, while thus in possession, to pay any rent or taxes, but was absolutely discharged therefrom. This view, we think, is not warranted by the former decision. The court did not then attempt or assume to keep the plaintiff in possession independent of and without any reference to the terms of the lease. But this court then thought, and still thinks, that the plaintiff had the right, by virtue of the conditions in the lease, to remain in possession until the improvements were ascertained and paid for, inasmuch as the defendant refused to renew. But this was a right founded upon the stipulations in the lease, which a court of equity would enforce for the protection of the plaintiff. It appears to ns it would be a most extraordinary claim for a court of equity to sanction, to allow the plaintiff to remain in possession, enjoy the use of the improvements, have interest upon their value as ascertained by the court, but still pay no rent or taxes. A claim so inequitable and unjust cannot receive our assent. It was said that a party is not liable for use and occupation except where the relation of landlord and tenant actually exists, and that this relation arises only upon contract express or implied. But, without refining upon the matter, we reply that a court of equity, having acquired jurisdiction of a cause, will, if possible, do complete justice between the parties. That it is just and equitable, in adjusting the rights of the parties in this case, to charge the plaintiff with rent, as though holding over after the expiration of the term, and also to require him to pay taxes, according to the lease, is to our minds a proposition too plain for argument. In July, 1876, the defendant Oilman made application to the circuit court for leave to file a supplemental answer, and for an order bringing in Bedford B. and Edward G. Hopkins as parties defendant. Leave was granted, and these persons were brought in, and the supplemental answer was served upoii them. The supplemental answer is in the nature of a — 591 — cross complaint, as .respects these defendants, and seems to have been so treated by them in their respective answers. It states, in brief, that the plaintiff, Otis B. Hopkins, has remained in possession of the premises, but has paid no rent since May, I860; that he has failed and neglected to pay the taxes and assessments levied upon the lot for the year 1869, and for several subsequent years; that, as a Consequence, the lot, or an undivided portion thereof, has been sold for the delinquent taxes; that there are a number of tax certificates now outstanding and unredeemed; that the defendants Bed-ford B. and Edward O. Hopkins, for the purpose of creating a cloud upon the title, and to hinder and embarrass him in the enforcement of his rights against the plaintiff, and thereby injure him, have pi'ocured and placed upon record two tax deeds, issued upon tax certificates, which tax deeds, he alleges, they hold merely in trust and for the benefit of the plaintiff. He asks that the plaintiff account for the rent from the first day of May, 1865, with interest; that he be required to redeem the lot from the tax sales, or to account to him for the amount of such sales, with the statutory interest; that the plaintiff procure from Bedford B. and Edward O. Hopkins good and valid deeds of release of their interest in the property by virtue of the tax deeds; and that such deeds be adjudged fraudulent and void as against him. How the question is, Was not the defendant Gilman entitled to that relief upon the pleadings and testimony? We are of the opinion that he was, except that he should have no interest on the rent due and payable by the lease. A question was made as to the regularity of the practice in thus bringing in new parties defendant at that stage in the cause. We can see no substantial objection to the course pursued. Furthermore, both Bedford B. and Edward G. Hopldns appeared and answered the supplemental answer, and submitted proofs on the issues made therein without objection. These parties claimed adverse interests in the property; and it manifestly — 592 — would be unjust to require the defendant Gilman to pay the plaintiff for improvements put upon the lot, when both such improvements and the lot itself had-been lost in consequence of the neglect of the latter to pay the taxes which he was under obligation to pay. Indeed, we do not see how it was possible, under the circumstances, to settle the equities existing between the original parties without bringing in Bedford B. and E. C. Hopkins, repi’esenting conflicting claims. See The Northwestern Mut. Life Ins. Co. v. Park Hotel Co., 37 Wis., 125; Hunter v. Bosworth, 43 Wis., 583. No time will be spent in attempting to show that it was the plain duty of the plaintiff’s intestate to pay all taxes and assessments levied upon the lot while he was in possession. This he was bound to do, as. well on account of his relation to the property as by covenants in the lease; and it is quite apparent that if he could not himself take a tax deed upon the property and hold it as against his landlord, he could not procure it to be done by others for his benefit. We are quite well satisfied by the evidence that the tax deeds taken by his brothers were really for his use and benefit. All the facts of the case relating to the tax titles point irresistibly to that conclusion ; but we shall not discuss the evidence upon that point. We attach no importance to the pretended adjudication in respect to one of these tax deeds in the case of B. B. Hopkins v. Otis B. Hopkins. Instead of dismissing the suit as to the defendants Bedford B. and Edward G. Hopkins, the judgment should have been as to them that the two tax deeds mentioned in the case were cancelled of record, as having been taken by them for the purpose of aiding their brother Otis B. to obtain some undue advantage in this litigation. We have said all that we deem it necessary to say as to the liability of the plaintiff for rent from May 1, 1865, and his duty to discharge all tax liens against the property. By the Court. — The judgment of the circuit court is reversed, and the cause remanded for a restatement of the account — 593 — between tbe plaintiff and tbe defendant Gilman, according to this opinion, and for an order adjudging tbe tax deeds to be cancelled. ByAN, C. J., took no part in this cause.