A mistake is an unintentional act or omission arising from ignorance, surprise, or misplaced confidence. The mistake must be material or, in other words, so substantial and fundamental as to defeat the object of the parties. A unilateral mistake is not normally grounds for relief for the mistaken party, whereas a mutual mistake is. A mutual mistake occurs when both parties, at the time of contracting, share a misconception about a basic assumption or vital fact upon which they based their bargain. Some courts require the parties to have the same misconception about the same basic assumption or vital fact. However, mutual mistake also has been defined to include situations in which the parties labor under differing misconceptions as to the same basic assumption or vital fact. The assumption or fact must be the same; otherwise two unilateral mistakes, instead of one mutual mistake, would result.
Appellant land purchaser challenged the decision of the District Court of the Third Judicial District of the State of Idaho, which entered judgment for appellees, other purchaser and seller, in the other purchaser's action to quiet title and the land purchaser's third-party complaint against the seller. Erhardt, representing decedent Mary Ellen Erhardt, conducted an auction sale of decedent’s real and personal property, which consisted of two city lots, numbered “five” and “six”, plus an additional twenty-foot strip of land adjoining the east side of lot six. Lot five would be sold as one parcel and lot six, to the east, and the twenty-foot strip would be sold as the second parcel. When the bidding was conducted Ewing purchased lot five, but because no satisfactory bid was received for the second parcel, it was not sold on the day of the auction. Erhardt was not sure where the boundary line of lot five was when it was sold to Ewing and lot six to Bailey. Bailey facilitated a survey and learned where the true property lines were on his lot – he asserted his claim to the strip of property between the bushes and the line, demanding that Ewing’s newly erected fence be removed as it interfered with his property. Ewing alleged mutual mistake, as well as fraud or misrepresentation on the part of the personal representative.
Did the trial court err in ruling that any mistake concerning the location of the boundary line was a unilateral mistake by the land purchaser?
The court held that a mutual mistake occurred when both parties, at the time of contracting, shared a misconception about a basic assumption or vital fact upon which they based their bargain. The court held that in this case it was clear that, at the time of the purchase, neither the land purchaser nor the seller knew where the boundary line was. The court held that both parties assumed a risk of uncertainty as to the line. The court reasoned that the land purchaser had no right to rely upon the uncertain belief of the seller that the lilac bushes represented the boundary line. Nevertheless, the court held that it was equally clear that neither party consciously assumed a risk that the line would run beneath the eaves of the house. The court reversed the judgment and remanded the action, holding that the mutual mistake which occurred was beyond the scope of the assumed risk. Therefore, the court held that the doctrine of "conscious ignorance" was not a bar to relief for the land purchaser.