## Facts

- Plaintiffs, acting in good faith, mistakenly built a dwelling house on lot 234 in Carton Park, Flint, Michigan.
- Defendants Burroughs were record owners of the lot, subject to an outstanding land contract held by other defendants who were in possession.
- The land-contract vendees took possession of and occupied the house after it was built.
- Plaintiffs alleged the house was worth $1,250 and that defendants refused to make an adjustment or compensate plaintiffs.
- Plaintiffs alleged no fraud, no misconduct, and no basis for estoppel (including no knowing acquiescence by defendants while construction occurred).
- Under the common-law fixture rule, the improvement would belong to the landowner, and plaintiffs conceded they had no legal remedy for recovery of the house or its value.

## Issues

1. Whether a good-faith builder who mistakenly improves another’s land may bring an affirmative action in equity for compensation for the value of the improvement when the owner did not commit fraud and is not estopped.
2. Whether the unavailability of a legal or statutory remedy permits equity to award restitution to prevent defendants from retaining the improvement without payment.

## Decision

- The Michigan Supreme Court affirmed the trial court’s denial of defendants’ motion to dismiss.
- The court held that plaintiffs stated a maintainable equitable claim for compensation for the value of the house built by mistake.
- The court recognized that neither a legal action nor the statutory improvement remedy tied to ejectment applied, leaving equity as the sole basis for relief.
- The court rejected the view that compensation for mistaken improvements is available only defensively (as a condition when the owner seeks equitable relief), and allowed an affirmative bill by the improver.
- The case was permitted to proceed; the decision resolved only the sufficiency of the pleaded equitable claim, not the amount or form of recovery.

## Legal Principles

- A good-faith improver who mistakenly erects improvements on another’s land and is excluded from the improvement may seek equitable compensation for the value of the improvement to prevent unjust enrichment.
- The absence of fraud, knowing acquiescence, or conduct creating estoppel does not, by itself, bar equitable relief where retention of the improvement without payment would be inequitable.
- The common-law rule that fixtures become part of the realty may control legal title, but equity may require compensation when strict application would produce unjust enrichment.
- The improver’s right to seek equitable compensation is not limited to situations where the landowner initiates an equitable action; equity may entertain an affirmative claim by the improver.

## Conclusion

The court permitted a good-faith mistaken builder to pursue an affirmative equitable action for the value of a house built on another’s land, holding that equity may require compensation to avoid unjust enrichment even when the landowner engaged in no fraud and is not estopped.


Hardy v. Burroughs, 251 Mich. 578, 232 N.W. 200 (Mich. 1930)