Brief Fact Summary. A builder accidentally constructed an entire structure on neighboring land, which increased the value of the property on which it was built.
Synopsis of Rule of Law. When a person in good faith mistakenly improves the property of another, that person is entitled to the value of the improvements.
Consistent with the policy that he who seeks equity must do equity, the rule has been established that when the true owner seeks relief in equity, as in the instant case, and where improvements upon real estate, of a permanent character, are made in good faith by one in possession, believing himself to be a bona fide purchaser or owner for value, and under circumstances justifying such belief, and the expenditure is reasonable in amount and of benefit to the estate, allowance may be made for the increased or enhanced value caused by the improvements, but the persons claiming such allowance are charged with the value of the use and occupation of the premises.View Full Point of Law
Issue. Can a court of equity award compensation to an improver who makes a good faith mistake of building on land that he does not own?
Held. Yes. Judgment remanded for further proceedings.
The improver reasonably believed that he owned the land and acted in good faith when he erected the building that increased the value of the other’s land. The owner of the land is deemed to be the owner of the building, but the improver is entitled to recover the value of the improvements from the landowner. Otherwise, the landowner would be unjustly enriched by the builder’s work.
To enforce the improver’s claim, the building may be sold to make the payment.
Dissent. The improver had a duty to determine that he was building on the correct lot and he made a mistake. Equity should not protect a person at fault. When a property owner is not at fault for having a building mistakenly constructed on his property, he should not be forced into purchasing the building.
Discussion. In order to prevent unjust enrichment, a landowner will have to compensate an improver who, in good faith mistake, constructs a building on the landowner’s prop