Opinion ID: 2280225
Heading Depth: 1
Heading Rank: 1

Heading: The Propriety of Reformation

Text: On appeal, Spruce Enterprises does not dispute the existence of a mutual basic mistake of fact by Bernice Dumais and the Gagnons that would ordinarily be ground for reformation of the deed from Bernice Dumais to the Gagnons. See, e. g., Wolff v. Gibney, Me., 386 A.2d 325, 328 (1978). Nor does Spruce Enterprises contest the trial court's ruling that reformation should be granted unless Spruce Enterprises took from Bernice Dumais as a bona fide purchaser for value without notice of the Gagnons' claim. See, e. g., Farley v. Bryant, 32 Me. 474 (1851). Rather, Spruce Enterprises challenges the factual conclusion that the corporation, through its president, purchased the tract from Bernice Dumais with notice of the Gagnons' rights in their lot. Because Spruce's president, Robert Michaud, never wavered in his assertion that he did not know where the Gagnons' lot was located, Spruce Enterprises argues that the evidence showed conclusively that Spruce had not notice of the Gagnons' claim. We disagree. Actual knowledge of an adverse claim of ownership is not the only form of notice that will deny a purchaser the protected status of bona fide purchaser for value without notice. One who has knowledge of such facts as would lead a fair and prudent man, using ordinary caution, to make further inquiries is chargeable with notice of the facts which by ordinary diligence he would have ascertained. Gagner v. Kittery Water Dist., Me., 385 A.2d 206, 207 (1978), quoting from Knapp v. Bailey, 79 Me. 195, 204, 9 A. 122, 124 (1887). See also Hopkins v. McCarthy, 121 Me. 27, 115 A. 513 (1921). In the present case there was competent evidence supporting the justice's conclusion that Robert Michaud had sufficient knowledge of the circumstances surrounding Bernice Dumais' conveyance to the Gagnons to create a duty on him to inquire further into the location of the Gagnons' property. The recorded deeds in Spruce Enterprises' chain of title showed that Bernice Dumais had conveyed to the Gagnons a parcel most of which she did not own. Since Michaud testified that he knew that the Gagnons' lot reduced the amount of the tract's highway frontage, he should have reasonably inferred that the Gagnons' property was located somewhere between the parcels belonging to Joel Bellefleur and Roger Dumais. Certain witnesses testified that before Spruce Enterprises purchased the tract Michaud had been told that the tract contained only about 400 feet of highway frontage  an impossibility if the Gagnons' property lay westerly of Joel Bellefleur's lot. Finally, there was testimony in the record that Michaud entered the tract before his corporation purchased it at a time when the stakes and culvert that Leo Gagnon had installed on the supposed site of his property were plainly visible. The evidence of all these facts in combination is sufficient to support the trial justice's conclusion that the circumstances placed on Spruce Enterprises the duty to investigate the possibility that the Gagnons' lot did not adjoin the northwesterly boundary of Joel Bellefleur's property but, rather, adjoined its southeasterly boundary. No excuse appearing for its failure to pursue that duty of inquiry, Spruce Enterprises did not have the status of bona fide purchaser for value without notice.