June 1, 2012 COA Minutes — Nos. 481-498 (18 decisions; 3 To Be Published)

The Kentucky Supreme Court explained the doctrine of champerty as follows:

[A] conveyance of lands held adversely by a third person is champertous, it is void as to the person in possession and his privies, even though the conveyance is made in good faith and for a valuable consideration. As against the person in adverse possession, no right or title is passed or transmitted from the grantor to the grantee by the deed; title remains in the grantor, and may be subsequently purchased from him by the adverse possessor during the pendency of a suit against such possessor by the grantor for the benefit of the champertous grantee.  Id. at 830-31. Because the Little Church of Jesus Christ adversely possessed the property at the time of the transfer, the Court voided the sale of the property to Zion Tabernacle with the finding that the attempted conveyance was champertous. But, the Court explicitly stated, “However, it has not been shown that the adverse possession by appellees has run for the statutory period and thus the title does not vest in the adverse possessors.” Id. (Emphasis added).

ADVERSE POSSESSION:

“In order to establish title through adverse possession, a claimant must show possession of disputed property under a claim of right that is hostile to the title owners interest. Further, the possession must be shown to be actual, open and notorious, exclusive, and continuous for a period of fifteen years.” Phillips v. Akers, 103 S.W.3d 705, 708 (Ky. App. 2002) (citing Tartar v. Tucker, 280 S.W.2d 150, 152 (Ky. 1955)).

The Baileys argue that their possession of the six-foot strip of land was hostile, actual, and under a claim of right because they believed the property belonged to them and put a fence up enclosing the property. Further, they landscaped the property and installed an arbor and deck for a hot tub on the disputed property. The Baileys argue that “hostility” does not mean the McAlpins had to have known they were taking the property and that hostility can instead happen by mistake. See Tarter, supra. The Baileys argue that the fence and improvements rendered their possession open and notorious, and exclusive because the McAlplins and the Tatums had notice of their possession and could not get to the property without removing the fence, etc.

The permissible ways to stop the accrual of a claim to ownership by adverse possession are to retake possession of the property or file suit before the statute of limitations runs. Petty v. Petty, 265 Ky. 15, 95 S.W.2d 1122, 1124 (1936). The McAlpins and the Tatums argue that the only way for them to retake possession was to tear down the Baileys’ fence, which they argue was an “encroachment” on their property.

In Reed v. Mercer County Fiscal Court, 220 Ky. 646, 295 S.W. 995 (1927), the Court was asked to review an award of damages for the destruction of a fence that was not an encroachment. The Court held that the property owner was entitled to the value of his fence at the time of the injury, citing the principle that one who has negligently destroyed the property of another is required to compensate the injured person for the fair value of the property.