land." It further said that, to entitle one claiming for improvements to recover: "It is not enough, that the possessor shows himself to have meliorated the land, but his money and labor must be bestowed under an honest conviction of his being the rightful owner of the land. For if he takes possession without title, and knowing the land belongs to another, he is himself guilty of a wrong, and although he may have expended his money and bestowed his labor, his claim for compensation ought not to be sanctioned by a court of equity." In Harrison v. Fleming, 7 T. B. Mon. 537, and again in Harrison v. Baker, 5 Litt. 250, it was held that where persons make improvements with actual knowledge of the assertion of an adverse claim to the land, they cannot recover for the improvement. the same effect are Singleton v. Jackson, 2 Litt. 208, and Wade v. Keown, 79 S. W. 222, 25 Ky. Law Rep. 1787. producing wells were necessary to its devel-1 in his favor, for improvements made upon the opment, Conley should not be permitted to receive the benefit of their labor and money without compensating them at least to the extent that he has been benefited by the boring of the wells. The question of the good faith of the Loebs in boring these wells, or, in other words, whether they honestly believed and had reasonable grounds to believe that they had the right, by virtue of their lease, to develop the property by boring these wells, is the controlling issue upon which their right to compensation must stand or fall, and this is a question of fact. Whether a person acts in good faith, which involves an honest belief in the correctness of his position, depends on the circumstances surrounding the transaction. The mere personal belief of the person affected that he acted in good faith and honestly believed that he was right in the position assumed is not conclusive of the question, and will not of itself entitle him to the advantage of a person occupying a position of good faith. The court, in determining this question, will look into all the facts and circumstances surrounding the party, and decide from them whether he was acting in good faith and un-provements, it would put it in their power to der an honest conviction that he was right in his assumption. In 20 Cyc. page 1260, and in the note to Jackson v. Loomis, 4 Cow. (N. Y.) 168, 15 Am. Dec. 347, there will be found numerous cases on this subject. To In Upton v. Handley, 123 S. W. 1188, in denying a recovery for improvements, the court said: "At that time they knew that their title to holding property under such circumstances If parties the property had been attacked. should be credited with the value of the im improve the property in such way as practically to defeat a recovery. We are of opinion that the only relief to which appellees are entitled, so far as the additional improvements are concerned, is the right to remove them from the lot in question." In Leavison v. Harris, 14 S. W. 343, 12 Ky. Law Rep. 488, the court again denied a recovery for improvements and said: pellee's claim to the land, they thereafter built "The appellants having had notice of the apthe wall upon it at their peril. And, the court having found the appellee's contention to be true, the appellants will not be heard to say tention to be true, they are entitled to recover that, as they did not believe the appellee's conunder the occupying claimant's law." [8] We also regard it as well settled by the authorities that a person who enters upon land in the good-faith belief that he is the owner of it, is entitled, if dispossessed, to be compensated for improvements made by him, while believing in good faith that he was the owner, to at least the amount that the improvements have increased the vendible value of the land. Chiles v. Patterson, 1 A. K. Marsh. 444; Parker v. Stephens, 3 A. K. In Bennett Jellico Coal Co. v. East Jellico Marsh. 197; Bell v. Barnet, 2 J. J. Marsh. Coal Co., 152 Ky. 838, 154 S. W. 922, in re516; Thomas v. Thomas, 16 B. Mon. 420;jecting the claim of the appellee for the valProctor v. Smith, 8 Bush, 81; Hawkins v. Brown, 80 Ky. 186; Floyd v. Mackey, 112 Ky. 646, 66 S. W. 518, 23 Ky. Law Rep. 2030; Darnall v. Jones, 72 S. W. 1108, 24 Ky. Law Rep. 2090. If, however, the improvements are not made by a person while acting in the goodfaith belief that he is the owner of the land, or if they are made with actual notice of an adverse superior claim, and especially after this adverse claim has been asserted in a suit, the person making the improvements will not be entitled to compensation. For example, in Barlow v. Bell, 1 A. K. Marsh. 246, 10 Am. Dec. 731, Barlow sought to recover for improvements, and the court, in denying him relief, said: "As the appellant [Barlow] is shown to have had a perfect knowledge of the appellee's [Bell] title, and was advised of the consequences of a purchase from the agent of William Bell, before he made the purchase, he cannot be viewed in the favorable attitude of a bona fide possessor, so as to warrant the decree of a court of equity ue of improvements, it is said: "Whether valuable or not, if appellee, at the time the tracks were being so laid and the mine so propped, had actual notice of appellant's ownership, it is in no position to complain, for it is well settled, by a long line of decisions, that where one, without the consent of the owner, makes improvements upon another's property, he does so at his peril, and, except under extraordinary circumstances, will be allowed neither to remove the improvements so made nor to receive compensation therefor." To the same effect are Taylor v. Whiting, 9 Dana, 399; Patrick v. Marshall, 2 Bibb, 40, 4 Am. Dec. 670; Henderson v. Pickett, 4 T. B. Mon. 54, 16 Am. Dec. 130. In Deffeback v. Hawke, 115 U. S. 392, 6 Sup. Ct. 95, 29 L. Ed. 423, the Supreme Court said: "There can be no color of title in an occupant who does not hold under any instrument, proceeding, or law, purporting to transfer to him the title or to give to him the right of possession. And there can be no such thing as good faith in an adverse holding, where the party knows that he has no title, and that, under the law, which he is presumed to know, he can ac- | notice of the prior and superior claim and quire none by his occupation." There are some cases holding that there may be a recovery for improvements made in the good faith belief of ownership, although they were made after the party making them had actual notice of the adverse and subsequently successful title of another to the property. Among these is Searl v. School District, 133 U. S. 553, 10 Sup. Ct. 374, 33 L. Ed. 740, in which the Supreme Court held, under very exceptional circumstances, that the improver should be compensated. Other cases are Whitledge v. Wait, Ky. Dec. 335, 2 Am. Dec. 721; Bell v. Barnet, 2 J. J. Marsh. 516; Bell v. Barnet, 7 J. J. Marsh. 379, in which the improver was allowed compensation for improvements made subsequent to actual notice of adverse title, and even after the institution of proceedings in which the improver was evicted. But in these cases the improvements were set off against the rents. [9] With this understanding of the law applicable to the case we will now look to the facts for the purpose of determining whether these wells were bored by the Loebs in the good-faith belief that they were the rightful occupants of this land under their lease from Sebastian. In disposing of this question we will leave entirely out of view the constructive notice furnished to the Loebs by the recorded lease of Conley, and further assume that when they took their lease from Sebastian they, in good faith, believed that Sebastian had the right to make the lease, thus narrowing the question down to the effect of the actual notice of Conley's superior title before the expenditure of money in making the improvements. Fortunately there is little material dispute about the facts as to actual notice. After the Loebs had secured the lease from Sebastian, but before they had expended any money in improvements or in boring these wells, they not only had actual notice of the assertion of Conley's claim, but actual notice of the existence of Conley's lease, and there had been tendered back to them by Sebastian the money they paid to him for the lease. After receiving this actual notice and rejecting this tender, they proceeded to commence operations, but had only expended a few dollars before Conley brought this suit against them, in which he prayed that their lease be canceled, and that they be enjoined from entering upon the land or operating thereon for oil or gas or from interfering with him in any way in the development of the land. Therefore we may safely say from the record that all of the improvements for which the Loebs now seek compensation were made, not only after they had actual notice, by the service of process of this suit, but actual notice of the existence of Conley's lease, and this lease, as we have said, furnished to them title of Conley to this land. Under these circumstances we think that the Loebs did not make these improvements in the goodfaith belief that they had the right to make them, and so are not entitled to compensation. We do not of course mean to say that the mere fact of notice of an adverse claim, or indeed the pendency of a suit asserting an adverse claim, would be conclusive of the question that the improver had not acted in good faith, for the improver might be honestly of the opinion, based on reasonable ground, that his contention was right, notwithstanding notice of an adverse claim and the pendency of a suit to enforce it. Searl v. School District, supra. But when there is, taken in connection with the actual notice of an adverse claim and the pendency of a su't asserting it, actual notice of a recorded instrument that shows on its face the superior ownership of the adverse claimant, there is no ground left on which to rest the plea of good faith. The Loebs spent a large sum of money in these improvements, but they took the chance of losing it, with their eyes open to every fact needed to put a reasonable person on notice of the risk he was taking, and we know of no equitable principle that would allow compensation under the circumstances shown in this record. Wherefore, the whole court sitting, the judgment of the lower court is affirmed. Ex parte SMITH. (Court of Appeals of Kentucky. Oct. 6, 1914.) 1. BANKS AND BANKING (§ 77*)—LIQUIDATION OF INSOLVENT BANKS-SALE OF REALTY. Under Acts 1912, c. 4, establishing a banking department in charge of a banking commissioner, who is given authority to liquidate insolvent banks, and providing, in section 18, that the posting of a notice by the directors of a bank, stating that it is in the hands of the banking commissioner, or the taking charge of the bank by the commissioner, shall be sufficient to place all its assets and property in his possession, the commissioner is by implication authorized to dispose of the real estate, as well as the personal property, of such a bank without obtaining the consent or direction of the vately, and upon such terms as he believes to court, and may make such sales publicly or pribe to the best interests of all concerned. [Ed. Note.-For other cases, see Banks and Banking, Cent. Dig. §§ 165-1762; Dec. Dig. § 77.*] 2. BANKS AND BANKING (§ 77*)-LIQUIDATION OF INSOLVENT BANKS-PROCEDURE. Under Banking Act (Acts 1912, c. 4), which requires the banking commissioner to report his acts and doings, in the administration of the affairs of banks of which he takes possession, at stated intervals to the circuit court, and which provides that any person may, by petition to the circuit court, have any act of the commissioner reviewed by the court in the same though the commissioner were manner and with the same rights and powers as a receiver anpointed by the court, the only distinction in this *For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes acts by the court. [Ed. Note.-For other cases, see Banks and Banking, Cent. Dig. §§ 165-1762; Dec. Dig. § 77.*] respect between a receiver and the commissioner | sioner. On June 13, 1914, the banking comis that the commissioner may act without an missioner instituted this ex parte proceedorder of the court, subject only to review of his ing in the Bourbon circuit court, and prayed that he be authorized and empowered to sell the real estate and personal property owned by said bank at either public or private sale, as he might deem for the best interests of the creditors of the bank, and prayed that he be authorized and empowered to convey to Sallie B. Bramblett the property which the bank had contracted to convey to her. 3. BANKS AND BANKING (§ 77*)—LIQUIDATION [Ed. Note.-For other cases. see Banks and Banking, Cent. Dig. §§ 165-1762; Dec. Dig. § 77.*] 4. BANKS AND BANKING ($ 77*)-LIQUIDATION OF INSOLVENT BANKS-PROCEDURE. Where real estate is sold by a bank, of which the banking commissioner takes charge, before he takes charge he should file a report showing the fact of the sale and the terms thereof, and, if no exceptions are filed to the report. the court should order him to collect the unpaid purchase money, if any, and execute a convey ance. [Ed. Note.-For other cases, see Banks and The court adjudged that the petitioner be authorized to sell the bank's personal property; but that he was not authorized or empowered under the Banking Act to sell or convey the bank's real estate at either public or private sale, or to convey to Sallie B. Bramblett the property contracted to be conveyed by the bank to her; and, from so much of the judgment as denies the authority of the banking commissioner to dispose of the bank's real estate, this appeal was prosecuted. [1] 1. The appeal involves the interpretaof chapter 4, Acts of 1912, being an act entitled “An act to establish a department of banking," etc., and known as the Banking Act of 1912. Section 18 of that act provides Banking, Cent. Dig. §8 165-1762; Dec. Dig. that the posting of a notice like that above $ 77.*] mentioned, and the notification of the banking commissioner, and his taking charge of the bank, "shall be sufficient to place all its assets and property, of whatever nature, in the possession of the banking commissioner." So the question is: What may he do with the bank's real estate, and how shall he do it? The Banking Act is silent upon these matters, except that, as it authorizes and directs the banking commissioner to liqui John J. Williams, of Paris, and John M. date insolvent banks, by implication it auLassing, of Newport, for appellant. On thorizes him to dispose of the real estate belonging thereto. In Cartmell v. Commercial Bank, 153 Ky. 798, 156 S. W. 1048, the court, in speaking of liquidation of banks by a receiver, as contrasted with liquidation under the Banking Act of 1912 by the banking commissioner, said that, if any difference is to be found, it is in favor of the liquidation of banks through and under the direction of the banking commissioner, for the reason that liquidation by the banking commissioner is not only more expeditious and less cumbersome but also less expensive. And it is quite evident that this was one of the factors which induced this legislation. HANNAH, J. The bank of George Alexander & Co. State Bank was a corporation created under the laws of this commonwealth, with power to do a general banking business. On May 14, 1914, Thomas J. Smith, banking commissioner, caused an examination to be made of the affairs of said bank, which examination disclosed the fact that the bank was insolvent. On May 19, 1914, the following notice, signed by a majority of the directors, was placed upon the doors of the bank: "This bank is in the hands of the banking commissioner." May 19, 1914, the date on which the commissioner took charge of the assets of the bank, When a bank is closed because it has beit was the owner of several pieces of real es- come insolvent, and enters upon a process of tate at Paris, Bourbon county, where the liquidation, more or less hardship is inevibank was doing business; and prior to that table. To those persons of slender means, date the bank had contracted with one Sal- who have their little all deposited in such lie B. Bramblett to convey to her a piece of a bank, as well as to the large commercial real estate, and she had paid to the bank a enterprises which carry. therein on deposit part of the purchase money, but, before any their working capital, the suspension of a conveyance had been made by the bank, it bank is alike a matter of serious import; passed into the hands of the banking commis- and the efforts of the liquidating agent should *For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes first of all be directed to the conversion of the sale had been made by himself; and, its "quick assets" into cash, in order that if no exceptions are filed to such report, the the same may be rendered available to the court should order the commissioner to colcreditors. The Banking Act confers upon lect the unpaid purchase money, if any, acthe commissioner extraordinary powers; and cording to the terms of sale, and to execute it should be given a broad and liberal inter- a conveyance to the purchaser. pretation. The commissioner is a state officer, and it is his duty to serve the public. And it is the spirit of the act that liquidation should proceed without delay and with as little expense as possible. The court is of the opinion that the commissioner is vested with power to sell and convey the real estate of the bank, as well as its personal property, without first obtaining the consent or direction of the court; and that he may make such sales either publicly or privately, and upon such terms as he believes to be to the best interests of all concerned. [2, 3] Under the Banking Act, the banking commissioner is required to report all his acts and doings in the administration of the bank's affairs, at stated intervals, to the circuit court of the county in which the bank is located; and it is further provided that any person, firm, or corporation may, by petition addressed to and filed in the circuit court, have any act of such commissioner reviewed by the court, in the same manner and with the same rights and powers as would have attached had such commissioner been a receiver appointed by the court. As the court gathers the legislative intent from the language of the Banking Act, the only distinction in this respect between a receiver and the banking commissioner is that the latter may act without an order of court, whereas a receiver acts only in obedience to the orders of the court; but, after the commissioner has acted, then his acts are subject to review as a receiver's acts. The report filed by the banking commissioner should be permitted to lay over for a reasonable time before confirmation, in order that any one desiring so to do may file his petition; and the filing of a petition, as provided for by the Banking Act, would have the same effect and be treated in the same manner, as respects procedure, as exceptions filed to a report of sale of the commissioner or receiver of the court. If no such petition be filed within a reasonable time, by way of exception to the report of the banking commissioner, it should then be approved and confirmed by the circuit court, and, where real estate has been sold, the banking commissioner should be directed to execute conveyance thereof in conformity to his report, in the same manner as is required by law when real estate is sold pursuant to a judgment of the circuit court. There was no necessity for the institution of this action; but plaintiff having asked the advice and consent of the court to make the sale of the property of the bank, and his authority to sell the real estate having been denied by the judgment of the circuit court, the judgment is reversed, with direc tions to enter a judgment in conformity to this opinion. Reversed. RUTLAND v. COMMONWEALTH. (Court of Appeals of Kentucky. Oct. 6, 1914.) 1. CONSPIRACY (§ 43*)-INDICTMENT-KNOWLEDGE OF CO-CONSPIRATOR. An indictment for conspiring to cause a person to be falsely accused of a crime for the purpose of extorting money against one only of the conspirators was not defective because it failed to allege that the other conspirator had knowledge that the charge was false, where the indictment alleged such falsity, as, nothing to the contrary appearing, it would be assumed that he had knowledge of its falsity. [Ed. Note. For other cases, see Conspiracy, Cent. Dig. §§ 79, 80, 84-99; Dec. Dig. 43.*] 2. INDICTMENT AND INFORMATION (§ 71*)— REQUISITES AND SUFFICIENCY OF ACCUSA TION. Hypercritical objections to indictments are not favored, and no error in form of expression will make an indictment bad if when considered as a whole, the charge is stated with sufficient clearness and certainty to enable accused to know what he is charged with, and to enable the court to pronounce judgment. [Ed. Note.-For other cases, see Indictment and Information, Cent. Dig. §§ 144, 174, 193, 194; Dec. Dig. § 71.*] 3. INDICTMENT AND INFORMATION (§ 124*)— JOINDER OF PARTIES INDICTMENTS FOR CONSPIRACY. A separate indictment would lie against one of two conspirators for conspiracy to cause a person to be falsely accused of a crime for the purpose of extorting money, and it was not necessary that the conspirators should be jointly indicted. and Information, Cent. Dig. §§ 327-333; Dec. [Ed. Note.-For other cases, see Indictment Dig. § 124.*] 4. CRIMINAL LAW (§ 696*)—APPEAL-HARMLESS ERROR-DELAY IN EXCLUDING EVIDENCE. On a trial for conspiring with F. to cause a person to be falsely accused of making insulting proposals to F.'s wife, it appeared that F., as next friend for his wife, brought a civil action, and a witness testified on Saturday that F. stated that accused had promised in writ ing to pay the costs of such action if unsuccessful. On Monday the witness was recalled, and, being unable to state the date of this conversa tion, the testimony was excluded. Held, that the delay in excluding this evidence was not prejudicial error, there being nothing in the testimony so damaging that its remaining with the jury from Saturday till Monday would induce [4] 2. Where real estate has been sold by the bank before the commissioner takes charge of the bank, the commissioner should file a report showing the fact of the sale and the terms thereof in the same manner as if *For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes a verdict of guilty, in the absence of evidence | part of the building which was used as an of guilt. [Ed. Note. For other cases, see Criminal Law, Cent. Dig. 88 1639-1644; Dec. Dig. 8 696.*] 5. WITNESSES (§ 52*) COMPETENCY OF WIFE OF CO-CONSPIRATOR. The dismissal of an indictment against one of two conspirators does not prevent a conviction of the other conspirator under the rule that two guilty persons are necessary to a conspiracy, as the dismissal of an indictment is not equivalent to a verdict of not guilty. PEACHING OWN WITNESS. office, and there tried to induce her to accuse Dr. S. H. Williams of making improper proposals to her, promising her a suit and a hat if she would do so, and also saying that if she would make this accusation, he would make some "easy money" for her and her husband. She testified that she declined to be a party to such a proceeding, and inform ed Rutland that Dr. Williams had not been guilty of any misconduct toward her. She further testified that some time thereafter her husband took her to Madisonville to the office of an attorney, and that arrangements were there made to file a suit against Dr. Williams; but the witness denies that she fully understood the exact nature of the proposed action. A Mrs. Butler testified that she was in appellant's store and saw Callie Fields when [Ed. Note. For other cases, see Conspiracy, Cent. Dig. §§ 73, 75-78; Dec. Dig. & 40.*] 7. WITNESSES (§ 380*)-IMPEACHMENT-IM- appellant called her into his office; that she heard appellant ask Callie Fields to swear something, and heard him promise her if she would swear it, he would make her and her husband some money; and that she heard Callie Fields reply, "I cannot, for he did not." Dr. Williams lived at Crofton near Em Under Civ. Code Prac. § 596, providing that the party producing a witness may not impeach his credibility by evidence of bad character, but may contradict him by other evidence and by showing that he has made statements different from his present testimony, where a witness gave testimony before the grand jury favorable to the commonwealth, but on the trial changed his testimony and supported accused in every particular, the commonwealth was properly permitted to prove contradictory statements by the witness just before he went before the grand jury, though he was called as a witness by the commonwealth, as prior state-ton. ments contradicting the testimony of a party's own witness are admissible when the witness has given affirmative testimony prejudicial to the party by whom he was called. [Ed. Note.-For other cases, see Witnesses, Cent. Dig. §§ 1210-1219; Dec. Dig. § 380.*] Appeal from Circuit Court, Christian County. pire, as did also the mother of Callie Fields, and the latter had visited her mother from time to time and received medical treatment from Dr. Lovan, another physician at Crof She had also on one occasion gotten some medicine from Dr. Williams. Dr. Williams testified that after dark on November 10, 1913, appellant called him over the telephone and urged his immediate presence at Empire upon a matter of importance; that he went to Empire that night, taking Dr. Lovan with him. The latter lived just A. V. Rutland was convicted of an offense, across the street from Dr. Williams, and and he appeals. Affirmed. HANNAH, J. A. V. Rutland was convicted in the Christian circuit court of the common law of offense of conspiring to cause another to be falsely accused of a crime for the purpose of extorting money. The jury found him guilty and fixed his punishment at a fine of $358, and from the judgment entered upon the verdict he appeals. It appears from the evidence that appellant, Rutland, lives at Empire in Christian county, where he is engaged in the business of operating a coal mine. One Robert Fields was employed by appellant in his store. Callie Fields, wife of Robert Fields, was about 16 years of age at the time of the incidents herein mentioned. Callie Fields testified that some time before Christmas, 1913, she was in appellant's store, and that appellant called her into that they were close friends. When Williams and Lovan arrived at appellant's house, Lovan remained in the buggy while Williams went in. Appellant took Williams to his bed room and informed him that Robert Fields was asserting that he, Williams, had made improper proposals to his wife, and that he was going to bring suit against Williams for damages. After some talk, Williams suggested that appellant send for Fields and his wife, who lived about 100 yards distant, so that he might talk with them, but appellant declined to do this. He suggested indirectly, however, that the matter might be compromised, saying that he himself had once had a case in which the parties wanted $1,200 and he had settled it for $375. Williams declined to accept the proffered suggestion of compromise, and returned home. Dr. Lovan testified that he had been at Empire that same afternoon, and appellant had told him that Fields was going to sue Williams for the alienation of his wife's affection, but that he believed it could be settled for $500. He also testified that he went For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes |