Beacon Homes, Inc. v. Holt - 266 N.C. 467, 146 S.E.2d 434 (1966)

Rule:

Where through a reasonable mistake of fact one builds a house upon the land of another, the landowner, electing to retain the house upon his property, must pay therefor the amount by which the value of his property has been so increased.

Facts:

The builder constructed a home on property belonging to the landowner. The home was built at the request of the landowner's mother and upon her representation that she was the owner of the land, which the builder believed her to be. The builder brought an action to recover the cost of the home and the trial court found in favor of the landowner. The builder made a motion to set aside the verdict and for a new trial. The trial court denied the motion and the builder appealed.

Issue:

Can the builder maintain the present action solely on the ground of unjust enrichment of the landowner through a bona fide mistake of fact by the builder? 

Answer:

Yes.

Conclusion:

The court noted that the builder's allegations stated a cause of action for unjust enrichment, which was the only ground of his complaint that could be sustained. The court found that the builder’s mistake of fact as to the ownership of the land was a mistake as to the risk involved in contracting with the landowner's mother and it could have been assumed that, but for that mistake, the house would not have been built. The court held that where, through a reasonable mistake of fact, one builds a house upon the land of another, the landowner, electing to retain the house upon his property, must pay therefor the amount by which the value of his property has been so increased. Accordingly, the court ordered that a new trial be held on the matter.