The P’s mistakenly believed the warehouse structure they were constructing was being built on their own property. In reality, it was being built on their neighbor’s property. After construction and upon learning that it was built on the neighbors’ land, the P’s sued, claiming ownership in the structure. The land was showed to have improved the value of D’s property. Plaintiffs sued for equitable relief based on the value of the improvement to D’s land.
Whether a P can sue for equitable relief and be awarded, where he makes a reasonable mistake of fact as to the location of property built on another’s land.
Yes, reversed and remanded. Where the improver of another’s land reasonably believes he owns the land and acts in good faith to construct a building that increased the value of the other’s land, he may sue for equitable relief. This does not change the fact that D owned the entirety of the land; however, it is inequitable for P to not receive the value of improvement upon D’s land. This ruling coincides with the theory of unjust enrichment, to D.
P’s mistake of fact was a reasonable once, as he reasonably relied on the results of an erroneous survey in constructing the property. No evidence of bad faith exists. Under a common law doctrine of annexation, the improvements pass to D. However, “it is not equitable that defendants profit by plaintiffs’ innocent mistake, that defendants take all and plaintiffs nothing.”
The builder of the warehouse had a duty to ensure that he was building on the correct land. The application of reasonable mistake doctrine is not well-founded and the resulting order that forces D into purchasing the improvement is inequitable in and of itself.