## Facts

- Darrill and Verla Mund (plaintiffs) and Ethel English (defendant) owned adjoining one-acre parcels purchased in 1977.
- A single water well was drilled on English’s parcel, and equipment and piping were installed to supply water to both households.
- The parties shared the costs of drilling and installing the well and water system and shared operating expenses.
- The Munds built a residence on their parcel relying on continued access to the well as their only water source.
- Within about a year, the parties began disputing plaintiffs’ rights to use the well and system.
- Plaintiffs contended their right to use the well was intended to be permanent; defendant contended any use was conditional and revocable.

## Issues

1. Whether plaintiffs proved an enforceable agreement requiring defendant to convey a one-half ownership interest in the well and grant a permanent easement for the water system.
2. Whether, even absent an enforceable conveyance agreement, plaintiffs obtained an irrevocable license to use the well and water system based on reliance and improvements.
3. Whether the trial court erred under ORCP 23 B by denying plaintiffs’ post-trial motion to amend pleadings to add an irrevocable-license theory when the issue was tried by express or implied consent.

## Decision

- The court agreed plaintiffs did not prove an enforceable agreement to deed a one-half interest in the well or to grant a permanent easement because there was no meeting of the minds.
- The court held the facts established that defendant granted plaintiffs an irrevocable license to use the well and water system.
- The court held the trial court erred by refusing to allow amendment under ORCP 23 B because the irrevocable-license issue was tried by at least implied consent.
- The court reversed and remanded with directions to enter a decree granting plaintiffs a one-half interest in the well and water system, granting an easement over defendant’s land for the system, and allocating shared maintenance and operating costs.

## Legal Principles

- A claimed agreement to convey an interest in real property fails where the parties did not reach a meeting of the minds on essential terms.
- A license to use land that would otherwise be revocable may become irrevocable in equity when the licensor’s conduct induces substantial reliance, including valuable improvements or significant change of position, such that revocation would be unjust.
- Under ORCP 23 B, issues not pleaded but tried by express or implied consent must be treated as if pleaded, and amendments to conform pleadings to the evidence may be allowed even after trial; denial is improper where the opposing party effectively litigated the issue.

## Conclusion

The Oregon Court of Appeals rejected plaintiffs’ contract-based claim for a deeded interest and permanent easement due to lack of mutual assent, but held that plaintiffs’ reliance and improvements created an irrevocable license to use the shared well; because that theory was tried by consent, the pleadings should have been amended, and the case was remanded for a decree protecting plaintiffs’ continuing rights and allocating ongoing costs.


Mund v. English, 69 Or. App. 289, 684 P.2d 1248 (Or. Ct. App. 1984)