CHAPTER XL.

OF COMPENSATION FOR IMPROVEMENTS MADE BY PERSONS IN POSSESSION UNDER TAX TITLES.

ACCORDING to the strict rule of the common law, the owner recovers his land in ejectment, without being subjected to the condition or obligation of paying for the improvements which may have been made upon the land by an adverse possessor. The improvements are regarded as annexed to and forming a part of the freehold, and pass by the recovery, to the owner of the latter. Every adverse possessor makes all improvements upon the land at his peril, and, upon eviction, is entitled to no remuneration whatever. It is even held, that they do not constitute such a consideration as will support an express promise by the owner to pay for them. The only instance in which the common-law courts grant any relief to the person who made them, is, where, after a recovery in ejectment, the plaintiff brings an action of trespass for the mesne profits; in which case, it is said that all improvements of a permanent character, which have increased the value of the land, may be treated as an equitable set-off, and the value thereof recouped.2 The rule of the civil law was more equitable in its character. It was, that the bona fide possessor was entitled to be reimbursed, by way of indemnity, the expenses of beneficial improvements, so far as they augmented the property in value.3 The

common law proceeds upon the assumption, that it *588 is the duty of government to assist the rightful owner of property in recovering the possession of it, when he has

1 3 Kent, Com. 334; 5 Johns. 272; 1 A. K. Marsh. 444.

2 2 Johns. Cas. 441; 1 Johns. Cas. 281; 1 Johns. Ch. 387; 8 Wheat. 81, 82. 3 2 Kent, 336.

been unjustly deprived of it; and that he ought not to be clogged with onerous conditions in the prosecution of his remedy; that the improvements may be of such a costly character as to be beyond the ability of the claimant to refund; that he may have a just affection for the property on account of home associations connected with it; that it may have answered all of his necessities and desires in its original state, without the improvements; that the adverse possessor, by the use of reasonable diligence, and cautious inquiry, might have discovered whether the title which he purchased, and upon the faith of which he made his improvements, was clear or clouded; that the maxim caveat emptor applies to the possessor, who neglects to examine into the title before purchasing, and is exceedingly conducive to the security of the rights of the real owner; that the possession was taken and improvements made without the consent of the owner; that they originated in wrong, and that consequently there is no moral or legal obligation resting upon the owner to pay for them. As a general rule, this reasoning is entitled to great weight, but a distinction ought to be made between ignorance and want of good faith. The reasoning of Chief Justice Taney, in Moore v. Brown, is conclusive upon this point.1

A case of great hardship, and which appeals most strongly to the sense of justice of every man, may be thus stated: The Supreme Court of Illinois held, that where a deed - commonly called a quitclaim - purporting only to convey the present interest of the grantor, was executed and delivered at a time when he had no title, in law or equity, to the land, and he afterwards acquired the legal title, the subsequently acquired title enured to the benefit of his grantee. Upon the faith of that decision, a title is acquired to, possession taken of, and improvements made upon land similarly situated. Afterwards the Supreme Court overrule their former opinion, an * 589 innocent purchaser is deprived of his land, and the fruits of his labor. Who will say, under such circumstances, that he is entitled to no compensation for lasting improvements, upon eviction?

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Whatever may be the rule of the common law, equity follows, to a great extent, the principle of the civil law. Thus, where one, believing that he has title to a parcel of land, enters and erects a building upon it, and the owner stands by and permits him to go on with his improvements, without giving him any notice of the adverse title, equity will decree to the occupant compensation.1 So where the true owner of an estate, after a recovery thereof at law, from a bona fide purchaser, without notice, and for a valuable consideration, seeks an account in equity, against such possessor, for the rents and profits, the defendant is allowed to deduct therefrom the full amount of improvements made to the benefit of the estate by him, and thus to recoup them from the rents and profits.2 And where the true owner of an estate holds only an equitable title thereto, and seeks the aid of a court of chancery to enforce it, this aid will only be given on the terms of making compensation for the beneficial improvements made by the defendant.3

And it is very strongly intimated by Judge Story, that the courts will go one step further, and sustain a bill brought by the possessor to recover against the owner, after a suit at law, the plaintiff's expenditures for improvements. Upon a review of all the cases which have been decided in this country, in whatever form they may have been presented to the court, it may be safely affirmed that equity will grant relief to the bona fide possessor who has made lasting and valuable improvements upon the land. The right of a bona fide possessor to

16 Johns. Ch. 68, 69; 1 Schoales & Lefroy, 73; 1 Story's Eq. sec. 388; Bradley v. Snyder, 14 Ill. 263.

2 Bright v. Boyd, 1 Story, 478.

3 Ibid.

4 Ibid.

5 Parkhurst v. Van Cortlandt, 1 Johns. Ch. 274; Botsford v. Burr, 2 Johns. Ch. 405; Benedict v. Gilman, 4 Paige, 58; Stuke's case, 1 Bland, 57; Southall v. McKeand, 1 Wash. Va. 336; Dellet v. Whitner, 1 Cheves, 213, part 2; Gillis v. Martin, 2 Dev. Ch. 470; Withers v. Yeedon, 1 Rich. Ch. 324; Kennedy v. Kennedy, 2 Ala. 571; Goodwin v. Lyon, 4 Porter (Alabama), 297; Herring v. Pollard, 4 Humph. 362; Pulliam v. Robinson, 1 Monr. 228; Stevenson v. Dunlap, 7 Monr. 134; Ballard v. Stevenson, 7 Monr. 364; Hamilton v. Hamilton, 5 Litt. 28; McCampbell v. McCampbell, 5 Litt. 92; Richardson v. McKinson, 6 Litt. 320; Thompson v. Mason, 4 Bibb, 195; Hewitt v. Berryman, 5 Dana, 162; Taylor v. Whiting, 9 Dana, 399; Barlow v. Bell, 1 A. K. Marsh. 246; Griffith v. Depew, 3 A. K. Marsh. 177; Bell v. Barnet, 2 J. J. Marsh. 516; Hawkins v. Lowry, 6 J. J. Marsh. 55.

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*590 sustain a bill for compensation, after an eviction at law, is denied in Winthrop v. Huntington.1 Where the occupier has been guilty of fraud, or had notice of the defect in his own title, or of a superior outstanding title, he is not entitled to compensation.2 Such is believed to be the equity rule in regard to compensation for improvements made by a possessor who has acted in good faith.3

For the purpose of remedying the injustice of the commonlaw rule, and assimilating as nearly as possible to the more just and equitable principles of the civil law in this respect, many of the States have from time to time enacted laws for the protection of the bona fide occupant, and securing to him full compensation for any losses which he might otherwise sustain by reason of an eviction under a paramount title. These laws are variously denominated, "betterment," "improvement," and "occupying claimant" laws. They are undoubtedly constitutional, standing upon equitable principles and public policy for their support. They are sustainable upon the same principle that statutes of limitation and acts curing

or confirming void and defective titles, are held valid, * 591 where they do not affect vested rights. The owner is bound to take notice of the general law, which prescribes the time within which he must make his entry upon, or bring his action for, land in the adverse possession of another; so he is bound to take notice of those general laws which promulgate the rule, that if he lies by and suffers another to enter upon his land and make improvements, without giving the adverse possessor notice of the claim, he shall be estopped from denying the duty of compensation. Such laws are pro

1 3 Ohio, 335.

2 Van Horne v. Fonda, 5 Johns. Ch. 388; Putnam v. Ritchie, 6 Paige, Ch. 390; McKim v. Moody, 1 Rand. 58; Morris v. Terrell, 2 Rand. 6; Pomeroy v. Lambeth, 1 Ired. Ch. 65; De Brahm v. Fenwick, 1 Dessaus. 114; Belton v. Briggs, 4 Dessaus. 465; Dellet v. Whitner, 1 Cheves, 213, part 2; Harrison v. Fleming, 7 Monr. 537; Harrison v. Baker, 5 Litt. 250; Scroggs v. Taylor, 1 A. K. Marsh. 247; Patrick v. Marshall, 2 Bibb, 40.

3 Ross v. Irving, 14 Ill. 176-178.

4 Ross v. Irving, 14 Ill. 171, and cases there cited. maintain the opposing doctrine are Nelson v. Allen, 1 Biddle, 8 Wheat. 1.

The only cases which Yerg. 360, and Green v.

spective in their character, and are no more unjust to the owner, than the common-law rule was to the possessor.

Whether these laws are applicable to improvements made under tax titles, and what kind of a tax title will constitute a proper basis for a claim of compensation, will depend upon the peculiar phraseology of each particular statute. The only case reported where a claim for improvements was set up by one in possession under a tax title, after eviction, is that of Ross v. Irving.1 The statute of Illinois exempted the adverse possessor of land held under "a plain, clear, and connected title in law or equity, deducible of record, without any actual notice of a paramount title," &c., from an action for the mesne profits, and gave him compensation for lasting and valuable improvements made prior to the receipt of such notice. In the case cited, where the defendant was in possession, and made improvements under a tax deed which was not evidence per se of title, and who failed to prove a compliance by the officer, with the requirements of law, in the making of the sale and conveyance, and where the Supreme Court had held, that his deed was not even "a claim and color of title " under the limitation law of 1839, it was held, that he was entitled to the benefit of this law. It would therefore seem to be the settled rule in Illinois, that every possessor under a tax title, of whatever grade, is protected in his improvements, and exempted from a suit for the back rents and profits.

The Pennsylvania statute of April 3, 1804, declared: "That

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no action for the recovery of land sold for taxes 592 shall lie unless the same be brought within five years after the sale thereof for taxes, as aforesaid; Provided, always, that where the owner or owners of such lands sold as aforesaid, shall, at the time of such sale, be minor or minors, or insane, and residing within the United States, five years after such disability is removed, shall be allowed such person, or persons, their heirs or legal representatives, to bring their suit or action for recovery of the lands so sold; but where the recovery is effected in such case, the value of the improvements made on the land so sold, after the sale thereof, shall be ascertained by

1 14 Ill. 171.