PIONEER MILL COMPANY, LIMITED, AN HAWAIIAN CORPORATION, v. VICTORIA KATHLEEN WARD, EXECUTRIX, ET AL., RESPONDENTS.
No. 2283.
Supreme Court of Hawaii.
Submitted November 1, 1938.
Decided November 25, 1938.
APPEAL FROM CIRCUIT JUDGE SECOND CIRCUIT. HON. D.H. CASE,
JUDGE.
PETERS AND KEMP, JJ., AND CIRCUIT JUDGE BROOKS IN PLACE OF
COKE, C.J., ABSENT.
Page 687
OPINION OF THE COURT BY KEMP, J.
On May 14, 1930, Pioneer Mill Company, Limited, filed its bill
in the circuit court, second circuit, for a partition of the land
situated at Honokowai, Kaanapali, County of Maui, Territory of
Hawaii, known as the ili of Waihele, being more fully described
in royal patent number 7691, land commission award number 327-B
to John Previer. The ili of Waihele contains six apanas, all
situated in the
Page 688
valley of Honokowai. Certain of the apanas are partially bounded
by the Honokowai stream and the remaining apanas are situated a
short distance from the stream. The areas of said lands are as
follows: apana 1, 28 acres; apana 2, 6.80 acres; apana 3, 7.39
acres; apana 4, 4.69 acres; apana 5, 30.50 acres; apana 6, 117.45
acres, or a total for all of the lands of 194.83 acres. In the
bill for partition apana 6 is divided into two lots, designated
lots 6 and 7, lot 6 containing 43.45 acres and lot 7 containing
74.00 acres. In the original bill the petitioner alleged that it
owned an undivided 716/896 interest in all of said lands; that
the appellant Victoria Kathleen Ward owned an undivided 56/896
interest, and that various other persons owned the remaining
undivided interest. Prior to the trial in 1935 the petitioner had
acquired various of the interests which it admitted were owned by
others at the time of the filing of its original bill and its
bill was amended so as to claim for petitioner an undivided
766.8346/896 interest, still admitting that Victoria Kathleen
Ward, the appellant, owned an undivided 56/896 interest and the
remaining respondents owned the remaining interest in varying
fractions.
The ownership of fractional interests set forth in the amended
bill and found to be correct follows:
Pioneer Mill Company, Limited, 766.8346/896
Mrs. Victoria Ward 49.0000/896
Miss Victoria Kathleen Ward 56.0000/896
Mrs. Caroline J. Robinson 21.0000/896
Three Kukeas (jointly) .8000/896
Eight Kaleiwaheas (jointly) .6154/896
Thomas Duncan 1.7500/896
____________
Total 896.0000/896
In the original bill the petitioner alleged that the lands were
not susceptible of partition in kind and prayed that the lands be
sold and the proceeds divided. No claim of sole ownership of
improvements was made in the original
Page 689
bill. In answering the original bill the respondents Victoria
Ward and Caroline J. Robinson and Victoria Kathleen Ward, the
respondent-appellant, prayed that upon a hearing a commissioner
be appointed by the court with power to investigate and report
upon the practicability of partitioning said land in kind. In its
amended bill filed in 1934 the petitioner alleged the acquisition
of additional interests in the lands and alleged that it and its
predecessor in title, Lahaina Agricultural Company, Limited, had
been in possession of said lands for many years and had made
extensive improvements thereon, including the construction of
buildings, railroads, ditches, tunnels and pipelines in good
faith and under the honest belief that petitioner or its
predecessor in title, Lahaina Agricultural Company, Limited, had
acquired title to all of said lands or the right to acquire such
title, and that said lands and said improvements made thereon by
petitioner or its predecessor as aforesaid had for many years
last past been used by petitioner as part of its sugar cane
plantation, prayed for partition in kind and that there be set
apart for petitioner the particular portions of said land which
petitioner has improved. The appellant Victoria Kathleen Ward,
Victoria Ward and Caroline J. Robinson each filed a separate
answer to the amended bill, denied that the petitioner or Lahaina
Agricultural Company, Limited, the predecessor in title of
petitioner, had made any improvements upon the property described
in the complaint under the honest belief that petitioner or its
predecessor in title had acquired any title or right to said
property and at the trial the amended answers of all three were
further amended so as to allege that said lands were not
susceptible of partition in kind and prayed for a sale of the
lands and a partition of the proceeds. A guardian ad litem was
appointed for the minor respondents who filed an answer in their
behalf, neither admitting nor denying the allegations of the
bill, and demanded full proof.
Page 690
After a lengthy trial a decree was entered on March 9, 1935,
holding that petitioner and its predecessor in title, Lahaina
Agricultural Company, Limited, had for many years been in
occupancy of the several pieces of land sought to be partitioned,
other than possibly lot 7 or a portion thereof, and that during
these years of occupancy had expended large sums of money upon
said property in the construction of a water tunnel across and
several hundred feet beneath the surface of lot 7; railroad
tracks over and across lots 2 and 3; improvements such as
buildings, water pipes, corrals and fences on lot 1 and the
planting of sugar cane and other growing crops on lots 1, 2, 3
and 4; that from time to time petitioner has paid to its
cotenants and the cotenants have accepted rentals for their
respective interests in said lands; that the interests of the
parties in said land were correctly alleged in the amended bill
but that the tunnel under lot 7 and the railroad tracks on lots 2
and 3 are not improvements inuring to the benefit of respondents
or any of them but are of great value to petitioner and that the
moneys so expended were made in good faith and that said tunnel
and railroad tracks and all of the improvements hereinabove
mentioned were made under the honest belief that the petitioner
or its predecessor, the Lahaina Agricultural Company, Limited,
had acquired or was about to acquire full title to all of said
lands. The court further decreed the amount of rentals due and
unpaid to the various respondents, including the appellant, and
ordered petitioner to pay the same. The court further decreed
that all of the structures and improvements, consisting of a
water tunnel running through lot 7, the railroad tracks, rails
and ties on lots 2 and 3 and the buildings, fences, corrals and
water pipes on lot 1, as well as the growing crops on lots 1, 2,
3 and 4, are the sole property of petitioner and that the
respondents have no interest therein.
Page 691
A commissioner was appointed to partition the lands into shares
to which the parties hereto are entitled as above decreed without
taking into account the value of said water tunnel, railroads,
improvements and crops, which are the sole property of petitioner
as above decreed, and directed the commissioner as far as
practicable in partitioning the said land to set off to
petitioner as part of its share to which it is entitled in the
said land the land upon which the said structures and
improvements have been placed, and further decreed that if any
part of the land on which growing crops are situated should be
set off to respondents or any of them that provision be made for
petitioner to bring to maturity and harvest such crops upon
paying a reasonable rental for the land so occupied. It further
provided that the commissioner or any of the parties herein may,
upon notice given to the other parties, apply to the court for
further directions in the premises.
On March 11, 1935, petitioner’s bill of cost was taxed. $318.65
of the cost was taxed against the respondents Victoria Ward,
Victoria Kathleen Ward and Caroline J. Robinson alone and the
remaining $322.55 of said cost, paid by petitioner in the first
instance, was taxed against all parties hereto in proportion to
their interest in the land as decreed by the decree of partition
of March 9, 1935. The costs which were taxed against the three
respondents alone are the costs expended in the taking of
depositions, procuring certified copies of records of the bureau
of conveyances, land court and circuit courts and witness fees
and mileage paid witnesses called to testify at the trial, all
deemed necessary to establish the title of the various parties
and the circumstances under which petitioner claimed sole
ownership of the improvements on the land.
On November 1, 1935, petitioner filed a petition for a writ of
revivor, setting up the death of one of the respondents, the
appointment of an executor of her estate, and
Page 692
praying that this action be revived against the executor. In said
petition it is alleged that at all times hereinafter mentioned
this action has been and still is pending. The writ of revivor
issued as prayed.
The commissioner, in compliance with said decree, procured
apana 1, to be subdivided into lots 1-A to 1-I, inclusive. Lots
1-A, area 1.06 acres; 1-F, area 6.41 acres; 1-I, area 0.18 acres;
and apanas 2, 3, 4, 5 and 6 (lots 6 and 7) were set off to
petitioner. Lot 1-H, area 10 acres, was set off to Victoria
Kathleen Ward; 1-E, area 2.07 acres, to Caroline J. Robinson;
1-G, area 6.83 acres, to Victoria Ward; 1-B, area 0.13 acres, to
the heirs of Kukea; 1-C, area 0.17 acres, to the heirs of
Kaleiwahea, 1-D, area 0.38 acres, to Thomas Duncan, and the
roadway running through lot 1, having been found to be the
property of the Territory of Hawaii, was excluded; also a roadway
was laid out through apana 1 so as to give access to the public
road from all of the various subdivisions. He asked that a
hearing be had upon his report and that if the same met with the
approval of the court he be permitted to execute proper deeds to
the several parties. Petitioner filed exceptions to the report of
the commissioner. No exceptions were filed to said report by any
of the respondents.
On January 24, 1936, a final decree in partition was entered
which, after reiterating all of the findings contained in the
decree of March 9, 1935, recites that the commissioner appointed
in said decree had filed his report, accompanied by maps of the
proposed plan of division and partition of said lands; that the
petitioner filed exceptions to the report of the commissioner and
said exceptions having come on for hearing and petitioner stating
at said hearing that if this decree should remain final and
should not be set aside on appeal by any of the parties hereto
the petitioner would not insist upon said exceptions being
granted, otherwise the petitioner reserved the right to insist
Page 693
upon said exceptions if this decree should be set aside or
modified. Said final decree approved and confirmed the report of
the commissioner in every respect except as otherwise
specifically modified by this decree and divided among the
several owners the lands according to the allotment made to and
for the benefit of said owners as in this decree set forth. The
exception referred to was as to the allotment to certain of the
respondents which the court had ordered sold. Said decree further
vested in the petitioner and the various respondents the parcels
of land which the commissioner had set off and allotted to them.
On the same day a supplemental decree was entered whereby the
fee and expenses of the commissioner were determined and ordered
paid by the various parties to this proceeding.
On the 29th day of January, 1936, Victoria Kathleen Ward, one
of the respondents, filed her notice of appeal and appeal to this
court from the final decree made and entered in the above
entitled cause on the 24th day of January, 1936, and the
supplemental decree made and entered on the 24th day of January,
1936.
The assignments of error, set forth in appellant’s brief,
challenge the correctness of the rulings that said lands are
fairly susceptible of partition in kind and that the improvements
placed on the land by petitioner are the sole property of
petitioner and that respondents have no interest therein. They
also challenge the circuit judge’s taxation of certain of the
costs against three of the respondents, including the appellant,
by the decree of March 11, 1935. No other rulings are challenged.
Petitioner has moved that the appeal be dismissed on the ground
that the decrees of March 9 and 11, 1935, are, as to all of said
issues, final and appealable and that the appeal, not having been
perfected within the statutory time after the entry of said
decrees, comes too late. It is not
Page 694
contended that the appeal was not perfected within the statutory
time after the entry of the decrees of January 24, 1936. We have,
by order heretofore entered, denied the motion to dismiss the
appeal without indicating whether or not all of the issues argued
by the appellant may be considered on this appeal.
It is well-settled that an appeal from a final decree in equity
brings up for review all interlocutory orders not appealable
directly as of right which deal with issues in the case. (Focke
v. Gay,26 Haw. 290, and cases cited.)
The question of the finality of decrees is not free from
difficulty. This court has entertained an appeal from a decree in
partition ordering the property sold for the purpose of effecting
a partition although the question of the finality of said decree
does not appear to have been raised or considered. (Lee Chu v. Noar,14 Haw. 648.) This court has also entertained an
interlocutory appeal by the respondent in a partition case where
the controversy was as to the interest owned by the petitioner.
She claimed and the court decreed her a one-seventh undivided
interest whereas the respondent claimed that her interest was
only an undivided one-eighth interest. (Makainai v. Lalakea, 29 Haw. 482.) After the above appeal and the case was again
before the circuit judge a new party appeared and was permitted
to intervene. A demurrer to his answer and claim having been
sustained, he appealed to this court where it was held that the
decree involved in the interlocutory appeal was in fact
interlocutory. (Makainai v. Lalakea,30 Haw. 323, 330.)
Counsel has argued that the above holding is dictum. With this we
cannot agree. This court was considering the question of whether
or not the intervenor was precluded by the former decree from
asserting his interest in the lands in question and gave as the
principal reason why he was not that said decree was not final
but interlocutory.
Page 695
A leading case on the finality of decree in partition is Green v. Fisk,103 U.S. 519, 26 L.Ed. 485. In that case Chief
Justice Waite, speaking for the court, said: “In partition
causes, courts of equity first ascertain the rights of the
several persons interested, and then make a division of the
property. After the division has been made, and confirmed by the
court, the partition, if in kind, is completed by mutual
conveyances of the allotments to the several parties. * * * A
decree cannot be said to be final until the court has completed
its adjudication of the cause. Here the several interests of the
parties in the land have been ascertained and determined, but
this is merely preparatory to the final relief which is sought;
that is to say, a setting off to the complainant in severalty her
share of the property in money or in kind. This can only be done
by a further decree of the court.”
Elder v. McClaskey, 70 Fed. 529, also a partition case,
holds that the decree which determines the interest of the
parties in the property and appoints a commissioner to effect the
partition is interlocutory. By the issues made on the pleadings
it became necessary to determine the interests and descent of the
complainants and cross-complainants from the ancestor in whom the
title was conceded to have been and also the question of whether
the right of entry was barred by the statute of limitations. The
court determined these issues by decree in November, 1891. Final
decree in the case was entered in August, 1894. From the final
decree there was an appeal and matters determined by the 1891
decree were assigned as error. Appellees moved to dismiss or
strike out certain assignments of error made by appellants on the
ground that they were based on issues disposed of in the decree
of 1891 and therefore not cognizable on an appeal from the 1894
decree.
Circuit Judge Taft, speaking for the circuit court of appeals,
in an opinion which shows that the question was
Page 696
given an unusual amount of attention, said in part: “By the
issues made on the pleadings, it became necessary to determine
the interests and descent of the complainants and cross
complainants from the ancestors in whom the original title was
conceded to have been, and also the question whether the right of
entry had not been barred by the statute of limitations. But
these issues were but incidental to the main relief asked, which
was a partition of the land, and a setting apart of their proper
shares to the complainants and cross complainants. But for the
fact that this was the main object of the bill, no possible
ground for the jurisdiction of a court of equity existed. A mere
dispute concerning title and right to possession must inevitably
have been dismissed from the equity side of the court, and
redocketed on the law side. In an equitable action for partition,
the preliminary inquiry of the court is always as to the various
undivided interests; and not until after these are fixed does the
court proceed to its main judicial function in such cases, — of
determining how the partition prayed for can be equitably made,
and of making it. The decree of November, 1891, settled what the
various undivided interests of the parties to the cause were, and
found that the complainants and cross complainants were entitled
to partition. It appointed three commissioners to make partition,
with authority to employ a surveyor and to allot to the parties
their respective shares as declared in the decree, but, if they
found it impossible to partition any tract without manifest
injury, to report this fact. * * * Fortunately, however, we are
not obliged in this case to refer to general rules to settle the
question of the interlocutory character of this decree. In Green
v. Fisk, 103 U.S. 518, the complainant filed a bill for partition
of real estate not susceptible of partition (as the land in this
case was also reported to be), praying a partition by sale. The
court entered a decree finding the exact interest of complainant
Page 697
in the land, and his right to partition, and referred the case to
a master `to proceed to partition according to law, under the
direction of the court.’ It was held that it was not a final
decree. * * * If the decree of November, 1891, was not a final
decree, as the foregoing authoritative language conclusively
shows, then no final decree was entered until August, 1894; and
an appeal properly taken and allowed from that decree brings up
for review all the questions in the cause, both those decided by
the decree of 1891 and those subsequently arising.” (See also 20
R.C.L., T. Partition, § 47, p. 770; Montoya v. Heirs,16 N.M. 349,
120 P. 676; Torrez v. Brady, 292 Pac. [N.M.] 901; Camp Phosphate Co. v. Anderson, 37 So. [Fla.] 722, 111 A.S.R.
77; Webster v. Webster, 154 N.E. [N.Y.] 588.)
A few state courts hold that where title is an issue in
partition the decree which determines that issue is final and
appealable. (Castillo v. Farias, 64 S.W. [2d] [Tex.] 989; Jones v. Jones, 150 N.E. [Ind.] 65; Hardin v. Wolf, 148
N.E. [Ill.] 868; Bates v. Hanks, 90 S.W. [2d] [Ky.] 743; Sinclair v. Purdy, 139 N.E. [N.Y.] 255.) However, in view of
the authorities, we are convinced that the decree of March 9,
1935, is interlocutory and that an appeal from the final decree
brings up the issues argued by the appellant. We therefore
proceed to a consideration of the issues presented.
The following pertinent facts are either uncontroverted or are
well-established by the evidence: Upon lots 1-A and 1-F, which
were awarded to the petitioner, there are a number of houses
built by petitioner to house its employees. Most of these houses
were built in 1917, some in 1919 and one in 1924, at a cost of
$3107.55. The uncontroverted evidence is that these houses,
together with fences and pipelines, had at the time of the trial
a book value of $2623.25 after adding the cost of repairs and
deducting a normal depreciation. On lot 2 there is a railroad the
book value
Page 698
of which at the time of the trial was, according to the
uncontroverted evidence, $684.84; and on lot 3 there is a
railroad which at the same time had a book value of $385.78. It
does not appear from the evidence just when these railroads were
built. On or under lot 7 there is a water tunnel. The length of
the portion of the tunnel which is under said lot is 1076.6 feet
and penetrates said lot 7 several hundred feet under the surface.
The records produced by the petitioner show that this water
tunnel cost for its entire length $119,416.74 and that by
prorating the cost of said tunnel according to length the portion
of the tunnel which is under the land here involved cost
$16,019.81, which petitioner has depreciated at the rate of 2%
per annum, leaving a value at the time of the trial of
$11,213.87. This tunnel taps Honokowai stream above the lands
here involved and diverts all of the water of said stream which
formerly flowed through its bed to certain apanas of the land
subject to partition and on to the sea to other lands owned by
petitioner and to some of the lands involved in this partition.
The construction of this tunnel was commenced in October, 1916,
and was finished in August, 1918. More specifically the work done
toward the construction of said water tunnel in 1916 consisted of
the clearing of the land; the actual work of boring the tunnel
began February 13, 1917, and was completed in March, 1918, and
the lining of the tunnel with concrete was completed in August,
1918. All of said improvements, buildings, railroads and tunnel
were built and paid for by the petitioner, Pioneer Mill Company,
Limited.
The circuit judge made no findings as to the value of the
various improvements. He no doubt considered such a finding
unnecessary since he held that the same belonged solely to the
petitioner. He ordered the commissioner appointed to effect the
partition to set off as far as possible to
Page 699
the petitioner the lands upon which said improvements are
situated.
There is a marked difference in the opinion of various
witnesses as to the value of the separate parcels of land without
taking into consideration the value of the improvements. One
witness called by the respondent, who testified to values, placed
a total value of $21,160.25 upon the lands without considering
any value for improvements. He did attempt to place a value upon
the buildings situated upon lot 1-A, although he did not pose as
an expert on building values. The highest value placed by any
witness upon the lands, without considering improvements, was
approximately $27,000 and the value fixed by the commissioner who
appraised the same was $19,247.90. It cannot be ascertained what
value the commissioner placed on the lots set off to the
respondents. During the course of the trial when the court was
considering evidence as to value and as to whether or not the
land was susceptible of partition in kind without prejudice to
the parties the respondent Victoria Kathleen Ward, who was
contending that the court should order the lands sold for the
purpose of partition instead of attempting to partition it in
kind, or appoint a commissioner to report the feasibility of
partition in kind, offered an upset price of $30,000 for the land
if the court would order the lands sold for the purpose of
partition. Her offer was for the land without the improvements.
It is undisputed that she paid $3000 for her 56/896 interest in
the land which would place a valuation of $48,000 upon the whole
of the land. She bought her interest in said land approximately
one year before this suit was instituted and about six years
prior to the trial.
It is undisputed that since the boring of said tunnel all of
the water of Honokowai stream is diverted at the intake of said
tunnel and no longer flows through the stream to the lands
situated below the intake. Apana 1, which lies
Page 700
upon the seashore, is described in the award as a house lot and
is bounded upon one side by the Honokowai stream; apana 2 is
bounded on two sides by the Honokowai stream; apana 5, which is
described as kula and kalo land, is described as running to a
large rock in the middle of the river and thence along down the
river to the end of Mr. Previer’s kalo land; apana 6 (now lots 6
and 7) is described as mountain land; apanas 3 and 4 are
described as kula land and do not touch the stream. Petitioner’s
evidence clearly establishes the fact that the water tunnel
carries water principally to lands owned by the petitioner but
does carry some water situated upon the lands involved in this
partition which are planted to sugar cane.
Bearing upon the question of whether or not petitioner is
entitled to claim sole ownership of the improvements which it
placed upon said lands, the following facts are either
uncontroverted or well-established by the evidence: In July,
1896, petitioner leased from the then owners, for a term of
twenty years, all of the lands involved in this suit except apana
1, which was expressly excluded from the lease. The lease
contained a covenant by the lessee as follows: “and that at the
end or earlier determination of this term to peaceably quit and
surrender the demised premises with the improvements to the said
Lessors or their representatives.” With the possible exception of
the railroads, which are situated upon two of the lots, no
improvements were placed upon the land by petitioner during the
twenty-year term of said lease. However, at the expiration of the
term of said lease petitioner continued to occupy said lands and
to pay rent from time to time to the owners of said land. This
holding over after the expiration of the lease, contrary to the
contention of counsel for petitioner, constituted petitioner a
tenant from year to year subject to the tenancy being determined
by proper notice. (Charles
Page 701
L. Hopkins v. Chung Wa,4 Haw. 650; Parke v. Robinson, 6 Haw. 666; 35 C.J. 1101.)
The tenancy from year to year, which resulted from the holding
over by petitioner after the expiration of the 1896 lease, was
subject to the same covenants and agreements contained in that
lease. (Jones, Landlord and Tenant, § 201; 2 Taylor’s Landlord
and Tenant [8th ed.], § 525, p. 121; Brewer v. Knapp, 1 Pick.
332; Schuyler v. Smith,51 N.Y. 309; Prickett v. Ritter, 16 Ill. 96; Bacon v. Brown,9 Conn. 334; Newberger v. Fletcher Land Co.,46 R.I. 390; Hobbs Son v. Grand Trunk Ry. Co.,93 Vt. 392.) One of the covenants was, as we have seen,
to surrender the demised premises with improvements to the
lessors or their representatives.
As to apana 1 it does not definitely appear just when or by
what claim of right petitioner went into possession or claimed
when the improvements were erected thereon. The evidence
discloses that in the year 1917 petitioner erected improvements
upon apana 1 and continued to occupy said apana to the time of
the trial. The water tunnel running under apana 6 (lot 7) was
constructed about the same time as the houses upon apana 1. It
does not appear just when the railroads were erected upon two of
the lots, whether before or after the expiration of the
twenty-year term of the lease. But as to said railroads it
appears that they were placed upon the land by the petitioner
either during the term of its lease or between the time of the
expiration of the lease and the date upon which it first
purchased an interest in the land. They were, therefore, placed
upon the land by petitioner at a time when its only interest in
the land was either as a lessee or as a holdover tenant of the
then owners. The water tunnel was constructed while petitioner
was a holdover tenant. As to the improvements upon apana 1 it
appears that they were placed
Page 702
thereon by petitioner at a time when it was a mere trespasser. To
be more specific, the houses upon apana 1, with the exception of
one erected in 1919 and one in 1924, were all erected in 1917.
The water tunnel was commenced in February, 1917, and completed
in August, 1918. The Lahaina Agricultural Company, Limited, the
principal predecessor in title to petitioner, purchased its first
interest in said land on November 21, 1919, and the first
purchase by petitioner of an undivided interest in said land was
on April 2, 1924, when it purchased the interest of Lahaina
Agricultural Company, Limited. Petitioner acquired other
interests ranging from that date to November 16, 1934.
It is, however, uncontroverted that petitioner owned 965 of the
1000 shares of the capital stock of Lahaina Agricultural Company,
Limited, and that Lahaina Agricultural Company, Limited, was
organized and incorporated by petitioner as a land-holding
company because of the then existing thousand-acre clause of the
Hawaii Organic Act. Counsel admit this. Said corporation, in
1916, prior to the termination of the 1896 lease to petitioner,
opened negotiations with J. Lawrence P. Robinson, one of the
owners of said land, for the purchase thereof. It appears that
Lahaina Agricultural Company, Limited, assumed that Mr. Robinson
was agent for the other owners for Mr. F.E. Thompson, attorney
for Lahaana Agricultural Company, Limited, addressed him as
“agent, Previer heirs.” Mr. Robinson was, however, only one of
many Previer heirs who were the owners of said land at the time
and it does not appear that he represented himself as agent for
all of said heirs or that he had authority to bind any of the
other owners of interests in said land. At that time Henry P.
Robinson, the predecessor in title to Victoria Kathleen Ward, was
one of the owners. It appears from the evidence that Henry P.
Robinson was not consulted and when a deed was sent to him for
his signature he returned it without
Page 703
signing it and without comment. He later sold his interest to the
appellant in 1929 for $3000.
Apparently at about the same time that Lahaina Agricultural
Company, Limited, opened negotiations with Mr. Robinson for the
purchase of said land petitioner opened negotiations with him for
a new lease of said lands. It does not appear just how these
negotiations were opened but on May 24, 1916, Mr. Robinson, in a
letter addressed to Mr. Frank E. Thompson in reply to a letter of
May 6, 1916, acknowledged receipt of a lease executed by Pioneer
Mill Company, Limited, and stated that he would proceed with the
matter of obtaining the signature of the lessors unless otherwise
instructed. It does not appear what instructions, if any, were
given him with reference to said lease, neither does it appear
whether or not the lease was ever executed by Mr. Robinson or any
of the other owners.
As a result of the negotiations between Mr. F.E. Thompson,
attorney for Lahaina Agricultural Company, Limited, and Mr. J.
Lawrence P. Robinson, various of the owners of undivided
interests in the Previer lands on November 21, 1919, conveyed
their undivided interests to said Lahaina Agricultural Company,
Limited. Some of the owners of interests declined to execute the
deed tendered to them for signature and some (it does not appear
why) did not join in the deed.
While we have gone into some detail as to the negotiations for
and the purchase of interests in this land by Lahaina
Agricultural Company, Limited, we are of the opinion that neither
the negotiations of the Lahaina Agricultural Company, Limited,
nor the purchase by said company of an undivided interest in said
lands conferred any rights whatever upon the petitioner in said
land or in the improvements thereon. It was a legal entity
entirely separate from petitioner, its principal stockholder.
Petitioner acquired no rights in said lands which changed its
status as a tenant
Page 704
until the Lahaina Agricultural Company, Limited, conveyed the
interest which it had purchased in said lands to the petitioner,
which was not until April 2, 1924. In other words, petitioner’s
claim of sole ownership of said improvements must be adjudged
without reference to the relationship of Lahaina Agricultural
Company, Limited, to said title at the time petitioner erected
said improvements. We need not consider what the situation would
be had Lahaina Agricultural Company, Limited, erected said
improvements.
The facts disclosed by the evidence are that at the time the
petitioner was constructing the improvements upon said land
Lahaina Agricultural Company, Limited, a separate corporation,
was negotiating for the purchase of said lands and did, about
fifteen months after the completion of the water tunnel, acquire
by purchase an undivided interest in said lands, but there is not
a scintilla of evidence tending to establish that the petitioner
at said time had any interest in said land other than as a
holdover tenant of a portion thereof and had not even negotiated
for a purchase of said lands or for any other interests therein
except as a lessee. Under these circumstances we are of the
opinion that in examining the ruling of the circuit judge that
the petitioner is the sole owner of said tunnel and railroads
upon the land, we are governed by the terms of the lease, said
improvements having been placed on that portion of the land
demised by the 1896 lease at a time when petitioner was in
possession as a holdover tenant subject to the covenants and
agreements in said lease.
Likewise, we are of the opinion that the right of petitioner to
the improvements placed upon lot 1 is to be tested by the law
applicable to a trespasser who improves land and afterwards
becomes a cotenant.
Petitioner’s assertion of sole ownership of said improvements
is based on the claim that it and its predecessor in
Page 705
title, Lahaina Agricultural Company, Limited, had been in
possession of said land for many years and had made said
improvements in good faith and under the honest belief that it or
its predecessor in title, Lahaina Agricultural Company, Limited,
had acquired title to all of said land or the right to acquire
such title. We have already analyzed the facts upon which this
claim is based and we now have only to apply the law to those
facts.
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. By good
faith is meant an honest belief on the part of the occupant that
he has acquired 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. The honest belief on the part of the
occupant must be induced by ignorance of fact and not ignorance
of law. (Bodkin v. Arnold, 35 S.E. [W. Va.] 980; Williamson
v. Jones,43 W. Va. 562, 27 S.E. 411; Bryan v. Councilman, 106 Md. 380, 14 Ann. Cas. 1175; Clark v. Levitt, 166 N.E.
[Ill.] 538; Holstein v. Adams, 10 S.W. [Tex.] 560; 31 C.J.
319 et seq.)
If petitioner in the case at bar had an honest but mistaken
belief as to its relationship to the title to the land in
question when it placed the improvements on said land it was not
a mistake of fact but a mistake as to the legal effect of the
facts with which it was thoroughly familiar. If petitioner did
not know that Lahaina Agricultural Company, Limited, was at said
time negotiating for the purchase of said land it could have had
no belief based on the existence of that fact. Petitioner has, by
the evidence, established the fact that shortly before it began
the improvements Lahaina Agricultural Company, Limited,
Page 706
opened negotiations for the purchase of said land and that after
the completion of said improvements said Lahaina Agricultural
Company, Limited, purchased an undivided interest in said land
which was several years later conveyed to petitioner. It is also
established by the evidence that at all of said times petitioner
was the owner of 965 of the 1000 shares of the capital stock of
said Lahaina Agricultural Company, Limited. Petitioner knew that
at all of said times said Lahaina Agricultural Company, Limited,
was a corporate entity of which it, the petitioner, was a mere
stockholder. What honest but mistaken belief then could
petitioner have had with reference to its relationship to said
title? Certainly none except as to the legal effect of the facts
established by the evidence, a synopsis of which we have set out
above.
This was clearly a mistake of law and not of fact and therefore
no matter how honest petitioner’s belief was, ownership of said
improvements cannot be based thereon.
A case upon which petitioner relies is that of Guignard v. Corley,147 S.C. 12, 144 S.E. 586, 62 A.L.R. 533. The facts of
that case, however, differ in at least one essential particular
from the facts in this case. The principal honest but mistaken
belief which Guignard had was that the parcel of land over which
he had a valid license to build the spur tracks there involved
adjoined his land upon which his brick manufacturing plant was
situate whereas it was in fact separated therefrom by a 30-foot
strip. This was clearly a mistake of fact and not of law. And
even in that case Guignard was denied sole ownership of the
improvements which he placed upon said 30-foot strip when he,
like petitioner in this case, afterwards acquired an undivided
interest in said strip and sued for partition. Guignard was,
however, allotted the portion of said 30-foot strip improved by
him and required to pay his opponents for their fractional
interest in said improvements.
The determination by the circuit judge that the petitioner
Page 707
was the sole owner of the structures and improvements upon the
lands subject to partition was no doubt an important, if not the
controlling, consideration in his conclusion that the lands were
susceptible of partition in kind and was the cause of the
direction to the commissioner thereto appointed to set off to the
petitioner, as part of its share to which it was entitled, the
land upon which the said structures and improvements had been
placed. Holding as we do that the structures and improvements
placed upon the land are not the sole property of the petitioner
but, on the contrary, are the property of the parties hereto as
tenants in common to the extent of their respective interests in
the lands subject to partition, the decree must be reversed not
alone as to its findings upon the issue of ownership but also as
to its findings upon the issue of whether the lands are
susceptible to partition in kind and the cause remanded for
further hearing upon the latter issue.
Under the circumstances none of the collateral questions raised
by the parties upon the main issue of whether the land and
improvements are susceptible to partition in kind will be
considered by us. We do not desire to even intimate in any way
our impressions upon that issue. We cannot, however, due to the
state of the record, refrain from concluding with the comment
that evidence of value is of the greatest importance in
determining whether property is susceptible of partition in kind
and should be no less detailed, complete and comprehensive than
the scope of the inquiry involved. Evidence of value is not alone
material to the issues raised by the pleadings but to the issues
raised by any suggested method of partition other than sale. This
is especially so where, as here, the land subject to partition
consists of more than one parcel differing in class, type and
location; easements, appurtenances and rights of way, structures
and improvements are involved, and the claim is made that certain
of the lands have been
Page 708
deprived of water rights to which they were anciently entitled.
This leaves one additional issue to be disposed of, namely, the
taxation of costs by the trial judge against certain of the
respondents, including the appellant.
Section 4756, R.L. 1935, is in part as follows: “All costs of
the proceedings in partition shall be paid by the petitioner in
the first instance, but eventually by all of the parties in
proportion to their interests, except such costs which may be
occasioned by contests as to particular shares or interests,
which shall be charged against the particular shares or interests
involved and be paid as determined by the result of the trial of
such particular issue.”
In view of the fact that the guardian ad litem for the minors
demanded proof of all petitioner’s allegations, it was necessary
to require petitioner to establish its case on all of the issues
by the evidence. So far as we are able to see from the record
before us none of the evidence, the costs of which were taxed
against the three respondents alone, could have been omitted even
though said three respondents had stipulated the facts, the proof
of which caused the expense. If, therefore, we assume that the
contest was such a contest as is contemplated by the statute, we
believe the circuit judge erred in taxing the cost against said
respondents, especially in view of the conclusion we have reached
as to the correctness of the circuit judge’s decision on the
controverted issue.
The decrees appealed from are reversed with instructions to the
circuit court to take further proceedings consistent with the
views herein expressed.
E. Vincent and M.K. Ashford for Victoria Kathleen Ward.
