No house is big enough for two couples, my mother told me long ago. Especially when one couple pays for nearly everything.
When the non-paying couple asked the court to divide the house, a Missouri court left them out in the cold. They appealed, and the court’s decision in Hoit v. Rankin indicates the application of the equitable action of partition, according to Missouri’s partition statute.
How it happened
The Hoits decided to leave their farm in Kansas after 40 years there and find a residence in Kearney, on the northeast side of Kansas City, Missouri, to be near their daughters. Mrs. Holt’s son Rankin and his wife were living in Texas and also wanted to move to Kearney to be close to relatives. The Hoits agreed to look for a house that would be suitable for the Rankins while the Hoits looked for a house for themselves.
The Hoits found a house they wanted and eventually the Rankins agreed to live in it, taking the lower level and sharing a kitchen. The Rankins had qualified for a loan, and with a down payment from the Hoits, the couples closed on the house in August 2007, and in September the Rankins moved in.
In November, the Hoits sold their farm and paid off the new house and moved in with the Rankins, only to find that the Rankins were occupying part of the upstairs and all the downstairs. By July, the situation had deteriorated to the point that Mrs. Hoit asked the Rankins to move out. They refused. The Rankins claimed they were owners of the house.
The partition suit
In September, the Hoits purchased another house and moved there. They also filed a lawsuit for partition.Partition is the action by which co-owners of property ask a court to divide it. The deed to the shared house showed the Hoits and the Rankins as owners. The Rankins claimed in the suit that the Hoits has promised to give the house to them.
The trial court, following Missouri’s partition statutes, found that the Hoits had paid the entire purchase price of the house and 2008 taxes, while the Rankins had paid only 2007 taxes. The court determined that the Hoits owned 98.61% of the house, with the Rankins owning only 1.39%. The court awarded the house to the Hoits, with an “owelty” judgment in favor of the Rankins for their 1.39%, secured by a lien for $2,757.48. “Owelty” is an ancient word to describe what one co-owner owes to another.
The appeal
The Rankins appealed, claiming:
- they were entitled to a presumption that as co-owners they were equal owners.
- the court should have ordered the house sold, with the proceeds to be divided equally.
The presumption of equal ownership is rebuttable
The appellate court agreed that the law presumes that co-owners are equal owners if the deed doesn’t specify the proportions. But this presumption applies only if there is no evidence to the contrary. Here the court looked at contrary evidence, such as the source of the purchase price, the lack of proof that Hoits intended to make a gift of equal ownership at the time of purchase, and the Hoits’ payoff of the mortgage.
“Owelty” is within the power of the court
Missouri’s partition statutes require a court in a partition action to “declare the interests of the parties” and either divide the property in kind (two acres for you and two acres for you) or order the property sold with the proceeds to be divided. But that’s not all.
The appellate court stated that the trial court divided the house in kind, with 98.61% for the Hoits, but also had the power to reimburse the Rankins for their payment of 2007 taxes, by imposing a owelty lien against the property. However, the court did not have the power to order a personal judgment against the Hoits for the Rankins’ contribution.
Ozarks Law & Economy 