## Facts

- Vernon F. Howell bought rural land in Beaufort County, North Carolina, from Donald Ray Waters by deed generally describing the tract as “484 AC. in Pantego twnsp.”
- Howell negotiated and inspected the property with Waters’ agent, Herbert Hoell, who orally identified the boundaries by reference to canals and an adjoining owner.
- Howell relied on Hoell’s boundary description in assessing the property, including the timber value, and proceeded to cut timber based on his understanding of the tract.
- The tract’s actual boundaries did not match the oral description; substantial portions lay inside the referenced canals, excluding at least 125 acres that Howell believed were included.
- Hoell later acknowledged giving a “very general” boundary description and denied intending an exact legal description.
- A neighboring owner sued Howell for wrongful cutting and removal of timber from land she claimed to own.
- Howell filed a separate action against Waters seeking rescission based on mutual mistake regarding the tract’s boundaries.

## Issues

1. Whether the case could be treated as a fraud action under Rule 15(b) when the complaint pleaded mutual mistake and the evidence supporting fraud was also relevant to mutual mistake.
2. Whether the evidence, viewed in Howell’s favor, was sufficient for a jury to find a material boundary mistake supporting rescission (as mutual mistake or as unilateral mistake known to or caused by Waters’ agent), making a directed verdict improper.

## Decision

- The Court of Appeals held the case must be decided on the pleaded theory of mutual mistake, not fraud, because any evidence suggestive of fraud was also relevant to mutual mistake and did not show implied consent to try fraud.
- The court reversed the directed verdict for Waters.
- The court remanded for trial because a reasonable jury could find a material mistake as to boundaries and could find either mutual mistake or a unilateral mistake that the seller’s agent had reason to know of or caused.

## Legal Principles

- A directed verdict is proper only when, viewing the evidence in the nonmovant’s favor, the evidence is insufficient as a matter of law to support a verdict for that party.
- Rescission may be available for mutual mistake of a material existing or past fact that goes to the essence of the agreement, such that the parties did what neither intended.
- Unilateral mistake ordinarily does not justify rescission absent oppressive circumstances, but a unilateral mistake can justify avoidance when the other party had reason to know of the mistake or caused it.
- Under Rule 15(b), an unpleaded theory is not tried by implied consent when the evidence introduced is also relevant to issues already raised by the pleadings.
- Whether the buyer assumed the risk of boundary error or acted unreasonably in failing to obtain more precise boundary information is typically a jury question absent explicit contractual risk allocation.

## Conclusion

The court reversed a directed verdict dismissing a rescission claim arising from an alleged boundary mistake in a land sale, holding that the action remained one for mutual mistake and that the evidence allowed a jury to find a material mistake as to the tract’s boundaries, including the possibility of unilateral mistake known to or caused by the seller’s agent.


Howell v. Waters, 347 S.E.2d 65 (N.C. Ct. App. 1986)