Edwards v. Lee's Administrator
265 Ky. 418, 96 S.W.2d 1028, 1936 Ky. LEXIS 493 (1936)
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Rule of Law:
When a willful trespasser profitably uses another's property without causing tangible damage, the measure of recovery for the injured landowner may extend beyond nominal damages to include the net profits received by the trespasser under a theory of unjust enrichment.
Facts:
- About twenty years prior, L. P. Edwards discovered a cave under land belonging to him and his wife, Sally Edwards, with its entrance located on their property.
- Edwards named the cave 'Great Onyx Cave' and embarked on a program of advertising and development, including building a hotel and improving paths, which made it a well-known and profitable tourist attraction.
- In a separate condemnation proceeding, the Great Onyx Cave was valued by a jury at $396,000.
- F. P. Lee, an adjoining landowner, claimed that a portion of the Great Onyx Cave extended under his land.
- Edwards and his associates continued to operate and profit from the entire cave, including the segment underlying Lee's property, which contained significant advertised points of interest.
- Edwards' use of the portion of the cave under Lee's land generated substantial revenue for him and his associates through entrance fees from tourists.
Procedural Posture:
- F. P. Lee filed a suit against L. P. Edwards and the heirs of Sally Edwards in Edmonson circuit court (trial court/court of first instance), claiming a portion of the Great Onyx Cave was under his land, and praying for damages, an accounting of profits, and an injunction.
- The chancellor (trial judge) ordered that a survey of the cave be made to determine the portion under Lee's land.
- Edwards prosecuted an appeal from the survey order to the Kentucky Court of Appeals, which dismissed the appeal because it was not from a final judgment (`Edwards v. Lee, 230 Ky. 375, 19 S. W. (2d) 992`).
- Edwards sought a writ of prohibition in the Kentucky Court of Appeals against the circuit judge to prevent the carrying out of the survey order, but the writ was denied (`Edwards v. Sims, 232 Ky. 791, 24 S. W. (2d) 619`).
- An appeal was taken to the Kentucky Court of Appeals from a judgment fixing the boundaries between the lands of Edwards and Lee, and that judgment was affirmed (`Edwards v. Lee, 250 Ky. 166, 61 S. W. (2d) 1049`).
- An injunction was granted by the chancellor prohibiting Edwards and his associates from further trespassing on the lands of Lee.
- On final hearing, the chancellor found Lee was entitled to recover a proportionate part of the net proceeds Edwards received from exhibiting the cave, based on the footage under Lee's land, for the years 1923 to 1930, plus 6% interest.
- Edwards (appellants) appealed this judgment to the Kentucky Court of Appeals, arguing the trial court applied an improper measure of damages and that the amount was erroneously computed.
- Lee (appellees) filed a cross-appeal, arguing that damages for willful trespass should be measured by gross profits rather than net profits.
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Issue:
Does the measure of damages for willful trespass involving the profitable exhibition of a unique underground cave, where the trespass causes no tangible harm, extend beyond nominal damages to include the net profits received by the trespasser?
Opinions:
Majority - Judge Stites
Yes, the measure of damages for willful trespass involving the profitable exhibition of a unique underground cave, where the trespass causes no tangible harm, extends beyond nominal damages to include the net profits received by the trespasser. The court acknowledged Lee's legal title to a segment of the cave and Edwards' willful and repeated trespasses. It characterized Lee's action as ex contractu (seeking an accounting of profits) rather than a mere tort action for damages, focusing on the unjust enrichment of the wrongdoer. The court distinguished this case from typical trespass actions where recovery is often measured by reasonable rental value, explaining that rental value is merely a convenient yardstick for profit derived from land. Citing precedents like Hambly v. Trott and Phillips v. Homfray, the court established that actions survive against a wrongdoer's estate when the offender acquires gain, emphasizing that "unjust enrichment of the wrongdoer is the gist of the right to bring an action ex contractu." It analogized the situation to actions for 'mesne profits' and the tortious use of trade names or other similar rights, where the law seeks to prevent the wrongdoer from profiting from their misconduct, especially when tangible loss is absent or difficult to prove. Therefore, the court concluded that the appropriate measure of recovery was the "benefits, or net profits," received by Edwards from the use of Lee's property, grounded in the principle that "a wrongdoer shall not be permitted to make a profit from his own wrong." The court affirmed the chancellor's method of calculating one-third of the net profits based on the footage and relative value of exhibited attractions under Lee's land but reversed a portion of the calculation for 1930 profits due to a factual error.
Concurring - Justice Thomas
Yes, the ultimate conclusion that the judgment awarding a share of net profits for the use of the cave should be affirmed is correct, but the reasoning should be different. Justice Thomas concurred in the result but disagreed with the majority's reasoning. He argued that the case is sui generis (unique) and should be determined upon equitable principles aimed at preserving the rights of all owners and the public. He found the majority's analogies to mineral extraction (where corpus is taken) or mere use (rental value) impractical for a cave. Instead, he proposed that the entire cave, throughout its exhibitable length, should be treated as a single unit of property, jointly owned by all surface owners above it, in proportion to their surface ownership. This theory would represent a departure from the ancient maxim, "Cujus est solum, ejus est usque ad ccelum et ad infernos" (ownership to the sky and depths), similar to how it has been modified for aerial navigation rights. Justice Thomas believed this joint ownership approach would prevent the undesirable outcome of segmented ownership where individual owners could block off parts of the cave, rendering it valueless as a profit-producing or public attraction. He suggested that if prior interlocutory rulings prevented the application of this joint ownership theory in the current case, it should at least be declared as the prevailing theory for future cases of a similar nature.
Analysis:
This case is highly significant as it broadens the scope of remedies for trespass, particularly for unique property interests where traditional damages for physical harm or rental value are inadequate. It firmly establishes unjust enrichment as a viable and preferred theory of recovery for willful trespassers who profit from the use of another's land without causing tangible damage. The decision reinforces the equitable principle that wrongdoers should not be permitted to profit from their unlawful acts, influencing how courts may assess damages in cases involving intangible property uses or scenarios where the benefit to the trespasser far outweighs the direct harm to the landowner. It highlights the flexibility of equity in crafting remedies for novel factual situations.
