Laura v. Christian

Brief Fact Summary.

Laura, owner as tenant in common of three-fourths of a property called Fireside Lodge, paid money to prevent foreclosure on the property by the mortgagee, and Christian, owner as tenant in common of one-fourth of the Fireside Lodge, contributed nothing to the payment.

Synopsis of Rule of Law.

As a general rule a cotenant who pays more than his share of an indebtedness secured by mortgage or other lien is entitled to reimbursement or contribution from the other cotenants to the extent to which he paid their share of the debt.

Facts.

Christian claims an one-fourth interest in Fireside Lodge. Laura claims a three-fourth interest. The two are tenants in common. When Laura and Christian obtained their interests the property was subject to a mortgage lien. One payment was made in which the cotenants contributed their pro-rata share of the debt. Thereafter, the payments were not made and the mortgagee instituted foreclosure proceedings on August 31, 1971. A judgment of foreclosure was obtained and the sale was ordered for April 11, 1972. On April 10, 1972, Laura paid the sum of $17,288.40, which was the amount of the judgment, interests and expenses owing to the mortgagee. Christian paid nothing at that time, but it was shown that he had knowledge of the threat of foreclosure as early as July 1971. Then the property value of the Fireside Lodge was greatly enhanced by the execution of an option in March of 1972 which was exercised in July 1972. That was when Christian began to show an interest in paying Laura hi
s share of the indebtedness she paid on April 10, 1972. On January 9, 1973, when this suit was instituted, Christian agreed to pay his pro-rata share of the indebtedness previously paid by Laura and to have a lien imposed on his one-fourth share of the property to secure payment of the amount. Laura instituted this suit to quiet title to the entirety of Fireside Lodge in herself. The lower court found for Laura and quieted title in her, and Christian appealed.

Issue.

Did Christian offer to pay his share of the indebtedness paid by Laura within a reasonable time under the rules of contribution by cotenants?

Held.

Yes. Judgment reversed with instructions to enter a judgment quieting title to three-fourths of the Fireside Lodge in Laura and establishing a one-fourth interest in Christian, subject to a lien securing repayment of his pro-rata share of the indebtedness paid by Laura to the mortgagee, together with interest.
The general rule is stated as follows, “As a general proposition, a cotenant who pays more than his share of a debt secured by mortgage or other lien on the common property, or of interest falling due on such debt, is entitled to reimbursement (contribution) from his cotenants to the extent to which he paid their shares of the indebtedness.” Annot., 48 A.L.R.2nd 1295, 1308 (1956). In this case the Court was faced with a simple matter of requiring contribution from Christian in an amount equal to one-fourth of the monies expended by Laura to his benefit.
The Court noted that the general rule was also that the payment of debt on a property by a cotenant in a tenancy in common inures to the benefit of the non-paying cotenant, who may then exercise an option to contribute their share of the payment so made. The option to pay one’s share must be exercised within a reasonable time. In this case the time was reasonable even though Christian showed no interest in paying his share until it became clear that it was to his benefit to do so.
The Court noted that its prior decisions precluded the imposition of a constructive trust in a suit to quiet title. Thus, the payment of Laura made in behalf of Christian does not create a constructive trust in favor of Laura such that Christian’s one-fourth interest may be quieted in Laura.

Discussion.

This case is easily understood and the Court provides clear rules for the contribution required by cotenants when one shoulders the burden of debt. A constructive trust is a concept of equity which is also sometimes called a “purchase money resulting trust,” and is operable to vest title to property in a payor where one pays money for another’s benefit and is not timely repaid.