Appeal from Circuit Court, Multnomah County. Alan F. Davis, Judge.
R. W. Kitson, Portland, argued the cause for appellants. With him on the briefs were Rader & Kitson, Portland.
Carlton D. Warren, Portland, argued the cause for respondents and cross-appellants. With him on the brief were Solomon, Warren & Killeen, Portland.
This is a suit to reform a land sale contract. Defendants appeal from a decree in favor of plaintiffs.
The decree reformed the contract by adding to the legal description a strip of land four feet three inches wide lying adjacent to the east property line of the lot described in the contract.
Prior to the execution of the contract, defendant Stanley Culver had constructed a four-unit apartment on the lot. The lot was located on the westerly end of a one hundred and twenty-five foot frontage owned by Culver. When Culver constructed the fourplex he installed a substantial fence around it. The fence was installed four feet three inches to the east of the eastern boundary of the land described in the contract.
At the time plaintiffs purchased the property a lawn area extended to the fence along the east side of the building. A parking lot and driveway apron serving the apartment also ran to the fence. From the photographs introduced in evidence it is clear that these and other physical features on the east side of the apartment building would make it appear that the fence constituted the eastern boundary of the lot upon which the building was situated.
Plaintiffs' complaint sought reformation on the ground that defendant Culver represented that the property included all of the land encompassed by the fence. Defendants contend that the evidence is not
sufficient to establish such a representation by Culver, because there was no contract or communication by him with plaintiffs or their agents.
A contract or deed may be reformed where there has been a mistake by one party accompanied by fraud or other inequitable conduct of the other party.*fn1 In the present case the evidence clearly establishes that plaintiffs mistakenly believed the fence in question marked the eastern boundary of their land. They were not made aware of the boundary as described in the contract until almost five years after the contract was executed, when Culver called upon them to remove the fence.
Plaintiffs were misled by Culver's conduct in constructing the fence, and in developing other parts of the property in such a way as to make it appear that the fence marked the true line. This conduct can be looked upon as an implied representation by Culver that he was selling all of the land encompassed by the fence. It would be inequitable ...