Brief Fact Summary. Plaintiffs mistakenly built a house upon the land of Defendants, who subsequently took possession of the house.
Synopsis of Rule of Law. Plaintiffs may sue for the value of the house built in good faith and mistakenly placed on Defendant’s land, and do not have to prove misconduct by Defendants in ejecting Plaintiffs from the land. If Plaintiffs were deprived of the house without compensation, an injustice would result.
Issue. Are Plaintiffs, as builders of the house, required to prove fraud or other misconduct on the part of Defendants (such as acquiescence after knowledge of the construction) in order to recover compensation?
Held. No. Judgment affirmed.
The Court found that the case was not based on fraud or estoppel, as it would be in a situation where Defendants stood by and permitted Plaintiffs to build the house on the wrong lot. The Court cited Isle Royal Mining Co. v. Hertin, infra, as standing for the proposition that there could be no recovery at law. However, the Court was required to determine if Plaintiffs could recover in equity.
The Court found that there were some authorities holding that where an occupant has made improvements to property and has been evicted by the true owner, the person evicted may sue at equity for value of the improvements without any reference to fraud or misconduct on the part of the rightful owner of the land.
The Court held that Plaintiffs may maintain this action because allowing otherwise would permit Defendants to profit from Plaintiffs’ innocent mistake. The Court also found that the fact that Defendants need no relief and did not sue for relief should not bar the Plaintiffs from seeking compensation for the value of the house of which the Defendants were in possession.
The Court quoted Justice Story in Bright v. Boyd, Boyd, Fed. Cas. No. 1875: “[t]he argument, I am aware is, that the moment the house is built, it belongs to the owner of the land by mere operation of law; and that he may certainly possess and enjoy his own. But this is merely stating the technical rule of law, by which the true owner seeks to hold, what, in a just sense, he never had the slightest title to, that is, the house.” This Court will reach outside the technical statement of the law to the equities involved and allow Plaintiffs to maintain this action for compensation. Plaintiffs, should they make a case for equitable relief, should offer Defendants the opportunity to take the improvements to real property at the fair market value found by the court, or to allow Plaintiffs the right to purchase the lot at fair market value.
Discussion. This Court again sought to make the conclusion just according to the facts presented. These cases illustrate the difficulty of rules requiring rigid interpretat