This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
If A receives money which belongs to B, under circumstances which give A no right thereto, but which bind A on principles of justice and fairness to repay such money to B, the Common Law allowed B to sue as on contract, although there was no express contract, and no real implied contract.1 This principle has survived in our law, and an action as upon contract will lie for money had and received wherever one person has received money which belongs to another, and which in justice and right should be returned.2 Since the contract alleged in the plaintiff's com-
11 Wood-Dryer Grocery Co. v. Bank, 110 Ala. 311; 20 So. 311.
12 Peirce v. Closterhouse, 96 Mich. 124; 55 N. W. 663.
13 Alabama, etc., Ry. v. Moore, 109 Ala. 393; 19 So. 804. So with work and labor. Woodruff v. Rochester, etc., R. R. Co., 108 N. Y. 39; 14 N. E. 832.
14Limer v. Traders' Co., 44 W. Va. 175; 28 S. E. 730.
1 "If the defendant be under an obligation from the ties of natural justice to refund, the law implies a debt and gives this action, founded in the equity of the plaintiff's case as it were upon a contract." Moses v. Macferlan, 2 Burr. 1005, 1008; quoted in Bates-Farley Savings Bank v. Dismukes, 107 Ga. 212, 217; 33 S. E. 175.
2 Gaines v. Miller, 111 U. S. 395? Pauly v. Pauly, 107 Cal. 8; 48 Am. St. Rep. 98: 40 Pac. 29; Brown v. Woodward, 75 Conn. 254; 53 Atl. 112; Bates-Farley Savings Bank v. Dismukes. 107 Ga. 212; 33 S. E. 175; Wilson v. Turner, 164 111. 398; plaint is often purely fictitious, the plaintiff's right to recover in a contract does not depend upon any principles of privity of contract between the plaintiff and the defendant, and no privity is necessary.3 The plaintiff's right to recover is governed by principles of equity, although the action is one at law.4 The plaintiff may, in most cases, recover at law in assumpsit where he could have compelled an accounting for the money received by the defendant, had the action been in equity.5 If A has in his possession a fund the equitable title to which is in B, and A's only duty in connection therewith is to pay it over to B, B may sue at law for money had and received.6 Two general classes of questions are presented under the topic of money had and received. The first concerns the rights of the parties. It is, whether, under the facts the plaintiff has a right of recovery from the defendant. The second concerns the form of the action. It is, whether an action in contract can be brought if upon the facts the plaintiff has a right to recover in some form of action. The answer to the latter question, however, decides whether the right in question can be classed with contract rights or not. Recovery cannot ordinarily be had in this form of action if there is a special contract between the parties. Thus if a note is given for the loan the right of the lender to recover is on the note alone.7 However if X obtains a loan from A through X's agent B, and B's note is given therefor, X may ignore the note and sue A on the contract of loan.
45 X. E. 820; Long v. Straus, 107 Ind. 94; 57 Am. Rep. 87; 6 N. E. 123; 7 N. E. 763; Comer v. Hay-worth, 30 Ind. App. 144; 96 Am. St. Rep. 335; 65 X. E. 595; Garrott v. Jaffrey, 10 Bush. (Ky.) 418; Pease v. Bamford, 96 Me. 23; 51 Atl. 234; Spencer v. Towles, 18 Mich. 9; School District v. Thompson, 51 Neb. 857; 71 N. W. 728; Gangwer v. Fry. 17 Pa. St. 491; 55 Am. Dec. 578; Matthies v. Herth, 31 Wash. 665; 72 Pac. 480.
3 Moses v. Macferlan, 2 Burr 1005; Rapalje v. Emory, 2 Dall. (U. S.) 51; Bank of the Metropolis v. Bank, 19 Fed. 301; Levinshon v. Edwards, 79 Ala. 293; Kreutz v. Livingston, 15 Cal. 344; Brown v. Woodward, 75 Conn. 254; 53 Atl. 112; Eagle Bank v. Smith, 5 Conn. 71; 13 Am. Dec. 37; Bates-Farley Savings Bank v. Dismukes, 107 Ga. 212; 33 S. E. 175; Allen v. Stenger, 74 111. 119; Glascock v. Lyons, 20 Ind. 1; 83 Am. Dec. 299; Calais v. Whidden. 64 Me. 249; Howe v. Clancey. 53 Me. 130: Lewis v. Sawyer. 44 Me. 332; Mills v. Bailey, 88 Md. 320; 41 Atl. 780; Mason v. Waite. 17 Mass. 560; Walker v. Conant, 65 Mich. 194; 31 X. W. 786. (Decided on demurrer to pe-tion. On hearing on the merits no liability to make compensation was found to exist. Walker v. Conant. 69 Mich. 321; 13 Am. St. Rep. 391;
37 N. W. 292; Richardson v. Drug Co., 92 Mo. App. 515; 69 S. W. 398; Fogg v. Worster, 49 N. H. 503; Rob. erts v.. Ely, 113 X. Y. 128; 20 X. E. 606; Salem v. Marion County, 25 Or. 449; 36 Pac. 163; Madden v. Watts, 59 S. C 81; 37 S. E. 209; Finch v. Park, 12 S. D. 63; 76 Am. St. Rep. 588; 80 X. W. 155; Siems v. Bank, 7 S. D. 338; 64 X. W. 167; Colgrove v. Fillmore, 1 Alk. (Vt.) 347; Soder-berg v. King County, 15 Wash. 194; 55 Am. St. Rep. 878; 33 L. R. A. 670; 45 Pac. 785; Ela v. Express Co., 29 Wis. 611: 9 Am. Rep. 619.
4Rushton v. Davis, 127 Ala. 279; 28 So. 476; Brainard v. Colchester, 31 Conn. 407; Jackson v. Hough,
38 W. Va. 236; 18 S. E. 575. "An action of assumpsit for money had and received is a remedy equitable in its nature existing in favor of one person against another when that other person has received money either from the plaintiff or a third person under such circumstances that in equity and good conscience he ought not to retain the same and which ex aequo et bono belongs to plaintiff." Merchants", etc., Bank v. Barnes, 18 Mont. 335, 337; 56 Am. St. Rep. 586; 47 L. R. A. 737: 45 Pac. 218.
5 Jackson v. Hough, 38 W. Va. 236; 18 S. E. 575.