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
Page 82 U. S. 625
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.
Page 82 U. S. 626
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
Page 82 U. S. 627
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
---------- $157,600.00
And allowed the city:
Expenses of repairs. . . . . . . . . . . $17,166.66
Interest on repairs. . . . . . . . . . . 15,166.55
---------- 32,333.21
-----------
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
Page 82 U. S. 628
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.
Page 82 U. S. 629
MR. JUSTICE HUNT delivered the opinion of the Court.
The appeal before the Court arises upon exceptions to the
master's report only, and not to the original judgment.
1. It is only where the master or the judge, in acting upon his
report, has departed from the order of the judgment or has omitted
to enforce its provisions that a just objection can arise. The
judgment has decided that the plaintiff was the owner of this
property in question in 1834, when the defendant entered into its
possession; that then and at all times since, the defendant has
illegally kept the plaintiff out of its possession and has itself
been in its possession during the same period, and that it obtained
and during all this time held such possession wrongfully and in bad
faith.
This statement furnishes an answer to the suggestion that the
rents and profits were allowed for one year, during
Page 82 U. S. 630
which the city was not in possession. This is not an open
question. It is settled by the judgment, and the allowance is in
accordance with the decision.
It is also decided
"That the City of New Orleans ought to be deemed and held, and
is hereby deemed and held, to have purchased the property in
question with full notice that the said 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 rights
of the person or persons entitled to the succession of the said
Daniel Clark."
This sale to Evariste Blanc was the source from which the city
derived its title to the property in question. During the whole
time of its holding, the city was a possessor in bad faith of the
property of the plaintiff. The Civil Code of Louisiana declares as
follows:
"ARTICLE 3414. The possessor in good faith is he who has just
reason to believe himself the master of the thing which he
possesses, although he may not be in fact, as happens to him who
buys a thing which he supposes to belong to the person selling it
to him but which in fact belongs to another."
"ARTICLE 3415. The possessor in bad faith is he who possesses as
master but who assumes this quality, when he well knows that he has
no title to the thing, or that this title is vicious and
defective."
By the same code, a possessor in good faith may enjoy the fruits
of the property until it is claimed by the owner, and is bound to
account only from the time of a demand for restitution. He is also
entitled, when evicted, to be reimbursed for the expenses he may
have incurred on it. (Article 3416.)
To the same purport are Articles 500 and 501.
"When plantations, constructions, and works have been made by a
third person and with such person's own materials, the owner of the
soil has a right to keep them, or compel this third person to take
away or demolish the same. If the owner requires the demolition of
such works, they shall be demolished at the expense of the person
who erected them without any
Page 82 U. S. 631
compensation; such person may even be sentenced to pay damages,
if the case require it, for the prejudice which the owner of the
soil may have sustained. If the owner keeps the works, he owes to
the owner of the materials nothing but the reimbursement of their
value and of the price of workmanship, without any regard to the
greater or less value which the soil may have acquired
thereby."
"Nevertheless, if the plantations, edifices, or works have been
done by a third person evicted, but not sentenced to make
restitution of the fruits because such person possessed
bona
fide, the owner shall not have a right to demand the
demolition of the works, plantation, or edifices, but he shall have
his choice either to reimburse the value of the materials and the
price of the workmanship or to reimburse a sum equal to the
enhanced value of the soil."
The case of the present defendant is an instance where the works
were done not by one not sentenced to make restitution because such
person possessed
bona fide, but by one who was sentenced
to make restitution, and who was expressly adjudged to possess
mala fide.
Mrs. Gaines, therefore, had the right to keep the improvements
upon reimbursing their value and the price of the workmanship, or
to compel the city to demolish and remove them. She has not been
called upon legally to elect which course she would adopt. On the
hearing, an oral notice was given that she would be called upon to
elect, which the master understood to be in the future, and not a
present notice. The matter was never again presented, and the
master considered the subject as abandoned. She may now properly
rest upon her right to have the works demolished and removed. This
would give the city the value of the materials only as taken down
at its own expense and when separated from their position upon the
land. This allowance has, however, already been made to the city.
In the opinion of the judge at the circuit he uses this
language:
"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
construction and repairs. . . . Whilst the profits
Page 82 U. S. 632
and advantages (he says) of the drainage machine are uncertain
and indefinite 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."
It is evident from this statement that there has been already
allowed to the city a sum not only equal to the value of the
materials of the improvements, if they were demolished, but of
their actual cost. The city has therefore no cause of complaint on
this score, and the point under consideration must be held against
it.
2. The question of the allowance of interest on the items of
rent was not made before the master or before the judge at the
circuit, and is not properly before us. Interest was allowed at the
rate of five percent, the rate fixed by the Code of Louisiana. In
Vandevoort v. Gould, [
Footnote 2] it was adjudged that mesne profits consist of
what the premises are reasonably worth annually, with the interest
to the time of the trial. "Less than this," it is said, "would not
give the plaintiff full and complete indemnity for the injury to
his rights." Such is also the express declaration of Article 1939
of the Civil Code of Louisiana.
The Articles of the Code, 1939 and 1905, are not, as it is
urged, in hostility to this principle. The latter, by its terms,
relates to contracts. By the former, liens which are due for the
restitution of profits bear interest from the day the debtor was in
default. By the judgment, it is found that the city held this
property wrongfully from the outset, and thus (which is the only
sense in which the word can here be used) was in default
continually.
The remaining question to be considered is upon the allowance of
the plea of prescription. It is alleged as error that the plea of
prescription was not allowed in bar of the claim
Page 82 U. S. 633
for all the rents and profits which had accrued more than three
years prior to the commencement of the action. The Civil Code
enumerates as causes of action which are the subject of the
prescription of three years -- "the action for arrearages of rent
charge, annuities, and alimony, or of the hire of movables or
immovables." (Article 3503.) "In general, all personal actions
except those above enumerated are prescribed by ten years, if the
creditor be present, and by twenty years if he be absent." (Article
3508.)
These articles do not govern the present case. They prescribe
actions which the party had the legal right to bring. They do not
apply to rights like the present, which result from the
determination of another action. Until the decree in the main suit,
there was here no existing cause of action to recover the mesne
profits. No special action could be maintained for them until the
title to the property should be judicially determined. It is
controlled rather by the title "Of the Right of Accession to what
is produced by the thing." [
Footnote 3]
"Fruits of the earth, whether spontaneous or cultivated, belong
to the proprietor by right of accession. [
Footnote 4]"
"The fruits of the thing belong to its owner, although they may
have been produced by the work and labor of a third person or from
seeds sown by him, on the owner's reimbursing such person for his
expenses. [
Footnote 5]"
"The produce of the thing does not belong to the simple
possessor, and must be returned with the thing to the owner who
claims the same, unless the possessor held it
bona fide.
[
Footnote 6]"
Speaking strictly, there was not only no cause of action, but no
right to the mesne profits until the judgment in the original
suit.
There is no article of the Code to which our attention is called
which limits this claim to the profits for three years. On the
contrary, the rules of the civil law and the general principles of
equity jurisprudence hold that there is no such limit. It will be
observed that this question does not involve
Page 82 U. S. 634
the allowance for improvements or to its extent. That point has
been already disposed of, and the defendant has been allowed for
the improvements and beneficial structures made by it during the
term. We are now endeavoring to ascertain whether the recovery for
the rents and profits which have been adjudged to be paid shall be
limited as required by the defendant.
The rule is thus laid down in Justinian:
"If any man shall have purchased or by any other means honestly
acquired lands from another whom he believed to be the true owner
when in fact he was not, it is agreeable to natural reason that the
fruits which he shall have gathered shall become his own on account
of his care in the culture, and therefore if the true owner
afterwards appear and claim his lands, he can have no action
against the
bona fide possessor for produce consumed. But
this exemption is not granted to him who knowingly keeps possession
of another's estate, and therefore he is compellable to account for
all the mesne profits, together with the land. [
Footnote 7]"
The chancery rule is thus laid down in
Peere Williams:
[
Footnote 8]
"Where one is in possession of lands belonging to an infant, if
the infant when of age makes out his title, he shall recover the
profits in equity from the first accruing of his title, and not
from the filing of the bill only. So the defendant shall account
for the profits from the time the plaintiff's title accrued, and
not from the filing of the bill only, if the defendant has
concealed the deeds and writings making out the plaintiff's
title."
In
Dormer v. Fortescue, [
Footnote 9] Lord Hardwicke says:
"There are several cases where the court does decree an account
of rents and profits, and that from the time the title accrued, as
where there is a trust and an equitable title merely or where a
widow claims dower merely, but needs the aid of chancery to find
out the lands, the court will give her the profits from the time of
the demand not only, but from the time of her title accrued. "
Page 82 U. S. 635
In the case before him, he decreed an account upon these
principles for a period of fifteen years.
The present action was commenced by Mrs. Gaines nearly seventeen
years ago. It was a bill in equity praying for a discovery, for an
accounting for rents and profits, and for general relief. After
much tribulation, she has reached the point of an account, which
the defendant has brought before us on appeal. We think there is no
prescription of the rents and profits, but that the allowance in
this respect was properly made.
Upon the whole case, we are of the opinion that
The decree or order upon the master's report must be
affirmed, and the exceptions thereto disallowed.
[
Footnote 1]
See Gaines v. New
Orleans, 6 Wall. 642.
[
Footnote 2]
36 N.Y. 639, 647.
[
Footnote 3]
Civil Code 490-494.
[
Footnote 4]
Article 490.
[
Footnote 5]
Ib., 493.
[
Footnote 6]
Ib., 494.
[
Footnote 7]
Justinian Inst., lib. 2, tit. 1, ยง 35.
[
Footnote 8]
Bennet v. Whitehead, 2 Peere Williams 645.
[
Footnote 9]
Atkyns 128.
