Madrid v. Spears

Facts

In this case the Plaintiff brought a diversity action to cancel a deed and quiet her title to an undivided one-half interest in 320 acres of land in New Mexico, on the grounds that her name to the deed granting an interest to the Defendants. The Defendants denied the forgery, but alternatively pleaded they had made valuable improvements in good faith under color of title and the Plaintiff was estopped by the doctrine of laches to assert her title. The Plaintiff, in her responsive pleading, admitted the valuable improvements for which Defendants were entitled to credit, but alleged that Defendants had realized large profits from the land during the years 1952, 1953, 1954 and 1955 and that the Defendants should be made to account for such profits. The lower court found that the deed was in fact a forgery and that the Plaintiff was entitled to a one-half interest in the land. The lower court also found that the Defendants had, prior to notice of forgery, made valuable improvement s in the good faith belief that they were the fee owners. The Defendants were entitled to restitution for one-half of the cost of such improvements, which were agreed to be $14,214.42. The lower court found no evidence of rental value of the land absent the improvements and concluded that the Plaintiff was not entitled to share in the profits realized in the amount of $17,453. The lower court ordered partition and the Defendants made an election, which resulted in a court-ordered lien against the Plaintiff’s one-half interest and the rents and profits therefrom for the amount of the agreed one-half cost of the improvements until discharged. The Defendants appealed from that part of the lower court’s judgment limiting their recovery for the improvements to the actual cost thereof, contending that the amount of their recovery in equity is not measured by the cost of the improvements, but by the amount they have enhanced the value of the land, less the net profits derived therefrom since the filing of the Plaintiff’s complaint. It is agreed that one-half of the difference between the value of the land at the time the Defendants occupied it under a forged deed and the time they were dispossessed was $39,150. The Plaintiff cross-appealed from the portion of the lower court judgment which denied her any credit or set-off for the rents and profits received by the Defendants after notice of the Plaintiff’s claim in 1953.