Brief Fact Summary. The Somervilles’ own several lots of land next to each other and mistakenly erected a warehouse on a lot that was not their own. The owners of the lot claim ownership to the warehouse.
Synopsis of Rule of Law. Under principle of unjust enrichment if an improver makes improvements upon land that is not his own by a bona fide mistake, the owner of the land must either compensate the improver for the improvements or sell the land to the improver both being at fair market values.
W.J. and Hazel Somerville owned lots 44, 45 and lot 46 in the Homeland Addition to the City of Parkersburg. Using a surveyor’s report and plat they erected a warehouse on what they thought was lot 46 but it was actually lot 47. Before discovery of the problem the Somervilles’ sold all of their lots to Fred Engle and Jimmy Pappas, who then leased the lot with the warehouse on it to Parkersburg Coca-Cola Bottling Company. Soon after William and Marjorie Jacobs realized the warehouse was on their lot and claimed ownership under the theory of annexation. The Somervilles’ brought an equitable action requesting either 20,500.00 for the value of the improvement or that the defendants be ordered to sell their lot for fair market value,
Issue. Whether a court of equity can either order an owner of land to compensate an improver for work done on the owners land or order the owner to sell the land to the improver when the improver in good faith believed the land was his own and the owner didn’t realize it was his land until after the improvements where completed.
Held. Yes. When an improver in good faith make improvement upon another persons land without knowledge that the land was not his own, equitable theories of unjust enrichment will not allow the actual land owner to just take those improvements and not compensate the improver. There must be a reasonable mistake of fact here the Somervilles’ relied upon the surveyor’s report and plat. Also there is no bad faith upon the owners here they did not know about the construction until it was completed. The theory of annexation states anything built upon a persons land is their property that is not at issue here. The defendants now own the warehouse. The court will first try to see if the improvement can be moved, which in this case would cause to much damage and the defendants are refusing removal. The sale of the lot is worth 2,000.00. It is not uncommon to require parties to either sell the lot of pay for improvements and is so ordered here.
This is a case of first precedent in this jurisdiction and Judge Fred Caplan believes the court is setting a dangerous precedent. The issue here is the defendants had no fault of their own, and their right to property is being violated. What happens to the owner who can not afford the improvements but wishes to keep his land, this is an unfair result. This is property condemnation (eminent domain) which is only a governmental right not private party right. It is clear law that the party who made the mistake should suffer the harm. The defendants should also be allowed to make the choice that plaintiffs simply remove the structure if they want.
Discussion. When there is a bona fide mistake of fact, courts of equity will not approve unjust enrichment, where the defendant takes the benefit of that mistake and is not required compensating the improver.