New Orleans v. Gaines - 82 U.S. 624 (1872)
U.S. Supreme Court
New Orleans v. Gaines, 82 U.S. 15 Wall. 624 624 (1872)
New Orleans v. Gaines
82 U.S. (15 Wall.) 624
1. Where a master, on reference, has followed the order of the judgment and enforced its directions, no objection can be taken on appeal to what he has done when the appeal arises upon exceptions to his report, and not on objection to the original judgment under which the reference to him was made.
2. Though by the law of Louisiana, a defendant, ordered by judicial decree to restore possession of real estate which it has been adjudged that he has held mala fide during his whole term of possession, have a right, if the party recovering as true owner desire to retain improvements which the possessor mala fide has put on them, to demand the value of the materials and price of workmanship of such improvements, yet where, in a peculiar and complicated case in which specific amounts and estimates were not possible to be made and the case had to be adjusted largely on a system of equitable compensations, if the party finally dispossessed have by the decree received in fact and good conscience the value of his improvements, the court will not allow him to call for another and more specific payment.
3. The possessor in continuous bad faith of real estate which the true owner at last recovers is chargeable, under the claim of mesne profits, with what the premises are reasonably worth annually, and interest thereon
to the time of the trial. An allowance of five percent interest in a Louisiana case held to have been proper.
4. On a claim for mesne profits by a true owner against a possessor in continuous bad faith, there is nothing in the Civil Code of Louisiana which limits the claim to profits for three years. On the contrary, the rule of
English equity there prevails, and a decree is properly made of profits from the time that the complainant's title accrued. In the present case, the profits of fifteen years were given, with interest on them at five percent.
In the year 1856, Mrs. Myra Clark Gaines filed a bill in the court below against the City of New Orleans in which she sought to recover valuable real estate in New Orleans owned by one Daniel Clark, including a certain block or square described, on which a draining house and outbuildings, with a draining machine for draining the city, was now and had been for many years situated.
The bill alleged that she was the only and legitimate child of Clark; that Clark had left a valid will, made in 1813, by which he devised all his estate to her; that this will having been lost or destroyed, and she a minor till 1827 and ignorant of her parentage and rights, a provisional will, dated in 1811, of which Richard Relf and Beverly Chew were executors, and Clark's mother, Mary Clark, was universal legatee, was admitted to probate and ordered to be executed; that the will of 1813, which revoked the will of 1811, was subsequently found, and, in 1856, established; that Relf and Chew, under pretended authority as executors of Clark and as attorneys in fact of his mother, had, in 1821, without right or authority, and in bad faith, sold this lot and others at public auction to one Evariste Blanc; that Blanc, equally without right or authority and in bad faith, had sold it and others by act of sale on the 26th of September, 1834, to the City of New Orleans; that the city had notice of the fraudulent character of the proceedings of Relf and Chew &c., and of the worthlessness of the title &c., which they acquired. The bill prayed a delivery of the property and an account of the rents and profits.
After a long and expensive litigation, including an appeal to this Court, Mrs. Gaines succeeded in her case, [Footnote 1] and in pursuance of a mandate from this Court, the court below, in June, 1870, entered a decree in her favor decreeing that she was Clark's only legitimate child and as his universal legatee was entitled to the lots in question; that the sale by Relf and Chew and that also by Evariste Blanc was wholly unauthorized and illegal, and utterly null and void; and that the City of New Orleans, at the time it purchased the property, was bound to take notice of the circumstances which rendered the actings and doings of Chew and Relf in the premises utterly null and void, and
"ought to be deemed and held, and was thereby deemed and held, to have purchased the property in question with full notice that the sale at auction, under the pretended authority of the said Richard Relf and Beverly Chew, and the said act of sale to the said Evariste Blanc were unauthorized, illegal, null, and void and in derogation and fraud of the persons entitled to the succession of Daniel Clark."
The court further decreed that Mrs. Gaines, as Clark's only and legitimate child and universal legatee, was entitled to the property with all the yearly rents and profits accruing from it since it came into possession of the city on the 26 of September, 1834, and decreeing an account accordingly, referred it to the master to take the same.
The master reported that the city had never rented the lot on which the draining house and machinery was built, nor received from it any rents or profits except by an increase of the city revenue, brought about by the fact that the draining machine had drained a large part of the city, and by making it of use had largely augmented the property in the city that was taxed. While, therefore, he "found it difficult to fix the amount of rents and profits for which the city was liable on this lot," he presented certain facts and figures from which the court could reach an equitable result. These were thus: the city, it was estimated, had received
from increased taxation of other property, during the term embraced by the order (including interest), $208,825.
Now this particular lot of land, it was testified, was originally worth $200. The buildings erected by the city, independent of the machinery, cost $18,000. The putting up of the machinery was finished July 1, 1835 or 1836 (some witnesses testifying to the one year and some to the other), and it was testified that a fair rental of the land and building was $2,400 a year. The expense of repairs was $500.
The master accordingly -- disallowing to the city the benefit of the "prescription of three years," which it set up against the claim for rents -- charged the city on this basis:
Rental value from July 1st, 1835, to
November 1st, 1870 . . . . . . . . . . . $84,800.00
Interest on the rents, at five percent . . 72,800.00
And allowed the city:
Expenses of repairs. . . . . . . . . . . $17,166.66
Interest on repairs. . . . . . . . . . . 15,166.55
And thus made the city chargeable with
the difference. . . . . . . . . . . . . . . . . . . $125,266.79
On exceptions to his report, one of them was that as the draining machine and buildings necessary therefor were made and erected by the city with materials belonging to it, the only right of Mrs. Gaines as to them was either to keep the same and reimburse to the city their value and the price of workmanship or to require the city to take away or demolish them; that the obligation, under the law of Louisiana, rested upon Mrs. Gaines to elect which she would do; and that the city had demanded of her, through the master, that she should make such election and that the master refused to direct or require her so to do, and thus denied the city its rights under the law.
The master to this reported that the city, by its counsel, had cited Article 500 of the Civil Code of Louisiana before him and stated that it would call upon the complainant (then present) to elect whether she would keep said works and improvements placed upon the land by the city or pay
the city for the same, and the master added that he had
"regarded this as a mere notice of what the defendant intended to do at some future time, but as the point was not presented in writing nor subsequently alluded to, he had assumed that it had been abandoned."
In this state of things, and after the disallowance of some other exceptions, the report came before the circuit court (Bradley, J.). After examining those exceptions, the learned justice came to the main matter, the allowance of the $125,266.79. On that subject he said:
"The case of the city is a peculiar one. The estimation of the rents and profits in that case is so uncertain and speculative that I do not feel entirely satisfied as to the decision that should be made. The master evidently felt the same embarrassment."
And after referring to the different estimates made by the master, and specially to the one above given on p. 82 U. S. 627, the learned justice said:
"As the master has not signified his adoption of either of these estimates, but has stated the facts to the court for its equitable determination, I have come to the conclusion that it would be equitable and just to set off the profits derived by the city from the drainage machine for the past thirty-five years against the cost of constructions and repairs, and to charge the city with the rents of the building and land, less the ordinary repairs of the buildings, amounting, as shown by the report, to the sum of $125,266.79. Whilst the profits and advantages of the drainage machine were indefinite and uncertain in amount, there is no doubt of their reality, nor, if we can place any reliance upon the estimates, is there any doubt of their being amply sufficient to reimburse the city for all its expenditures, including even the rent with which it is charged."
The learned justice of the circuit court accordingly ordered a confirmation of the report. From that decree this appeal came.