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.
Payments made by one who is not on terms of practical equality with the person to whom such payments are made are looked upon, not as voluntary payments but as payments made under compulsion. Where A demands from B payment of tolls which are not legally due under threat of drawing off water from a dam used by B, a step which would interefere with B's business seriously, and to avoid such action B pays such tolls he may recover such payment.1 A, a section foreman of a railroad, extorted money from B, one of the section hands, by showing B a written order from A's superior, X, directing A to discharge every man who would not pay over ten dollars. In order to keep from being discharged, B paid such amount. It was held that B could recover from A.2 The fact that A had transmitted such money to X, did not relieve him from the liability to account to B therefor. A pension attorney who charges and collects a fee in excess of that fixed by Federal Statute for obtaining a pension is liable for such excess to the person by whom such payment is made.3 Where insurance was effected in the names of lessor and lessee jointly and on loss, proof of loss must be made by both, and the lessor takes advantage of the financial necessities of the lessee to exact a payment out of the lessee's share of the insurance of an amount which is not due to the lessee, such payment may be recovered as made under duress.4 A refusal of a vendee to accept a deed unless revenue stamps are affixed thereto is not duress; and the vendor who buys such stamps from the revenue collector without protest and without notifying him of their intended use cannot recover from him.5 In some jurisdictions, it is held that payments of usurious interest are necessarily made under compulsion, and hence may be recovered, even though the contract has been fully performed, and there is no statute specifically providing for recovery.6 A common carrier and a shipper do not stand upon terms of equality. The shipper is usually under a practical compulsion to have his property transported at once. He does not know, and he has no means of communicating with the officers of the road whose business it is to fix the charges for transportation. Accordingly, payment by a shipper of an unreasonable charge, or one in excess of the amount fixed by law is not looked upon as one of voluntary payment, and the shipper may recover,7 even if no protest is made at the time of the over-payment.8 Thus where by law charges must be uniform, a shipper who has been obliged to pay regular rates while other shippers have received rebates may recover the difference between the rates paid by him and what he would have been obliged to pay had he received the same rebate.9 So if the carrier has paid to one shipper a proportion of the freight charges paid by another shipper, a competitor of the former, the latter may recover such amount from the former.10 But it has been held that under a statute permitting the refunding of excessive charges for freight an action cannot be brought to compel such refunding.11 A private individual and a public officer do not ordinarily stand upon an equal footing.12 Accordingly, a payment demanded and received of a public officer, under color of office, may be recovered by the private person making such payment, even if he makes it under a mistake of law. Thus where A lived in a county attached for certain purposes to another at the time that certain taxes were levied, but subsequently reorganized as a separate county before such taxes were paid, and A pays his taxes to the treasurer of such other county, A may recover such taxes from such county.13 So a postmaster who exacts an unauthorized fee for delivering letters may be made to refund such payment in an action for money had and received.14 If the public officer receives fees to which he is not entitled, and he knows that the person paying them is ignorant of the law and makes such payments because he thinks he is bound by law to pay them, his act in receiving such payment without informing the other person of his rights, is looked upon as a fraud, and the party making such payments may recover them.15 Whenever a payment made in ignorance of the law is induced by the fraud or imposition of the other party and especially if the parties are not on an equal footing, an action to recover it back is maintainable.16 Payment made to a public officer by a private citizen, for services which the officer was not required to render as a part of his public duty, cannot be recovered. Thus, if an auditor makes a special charge for services in preparing a bond which he is not required by his office to do, a payment therefor cannot be recovered.17 The legislature has power to change the Common Law rule that money paid under mistake of law cannot be recovered, and may give a right of action against a public officer who collects, from a private person, fees to which he is not entitled by law.18 If legal and illegal charges are so blended by the officer making them, that the legal cannot be separated from the illegal, he may be liable to pay all fees thus received.19 A borrowed money from a school fund. The county auditor made an illegal demand for a payment as a penalty as delinquent interest. A paid such amount into the county treasury. The county attorney was paid for his services in obtaining such payment out of the county revenue funds. It was held that A could not recover from any of these officers; since the auditor, who had demanded the payment, did not receive it, the treasurer who received it did not exact it; and the county attorney was not paid out of such funds.20
1 Lehigh, etc., Co. v. Brown, 100 Pa. St. 338.
2 Bocchino v. Cook, 67 N. J. L. 467; 51 Atl. 487.
3 Hall v. Kimmer, 61 Mich. 269; 1 Am. St. Rep. 575; 28 N. W. 96.
4 Gnetzkow Bros. Co. v. Breese, 96 Wis. 591; 65 Am. St. Rep. 83; 72 X. W. 45.
5 Chesebrough v. United States, 192 U. S. 253.
6 Bexar, etc., Co. v. Robinson, 78 Tex. 163; 22 Am. St. Rep. 36; 9 L. R. A. 292; 14 S. W. 227. See Sec. 521.
7 Mobile, etc., Ry. v. Steiner, 61 Ala. 559; Chicago, etc.. R. R. v. Coal Co., 79 111. 121; Chicago, etc., Ry. v. Wolcott, 141 Ind. 267; 50 Am. St. Rep. 320; 39 N. E. 451; Lafayette, etc., R. R. v. Pattison, 41 Ind. 312; Peters v. R. R.. 42 0. S. 275; 51 Am. Rep. 814; Beckwith v.
Frisbie, 32 Vt. 559; West Virginia, etc., Co. v. Sweetzer, 25 W. Va. 434.
8 Louisville, etc., Ry. v. Wilson, 132 Ind. 517; 18 L. R. A. 105; 32 N. E. 311.
9 Cook v. Ry., 81 la. 551; 25 Am. St. Rep. 512; 9 L. R. A. 764; 46 N. W. 1080.
10Brundred v. Rice, 49 O. S. 640; 34 Am. St. Rep. 589; 32 N. E. 169.
11 Randle v. Abeel, 88 Fed. 719.
12 American Steamship Co. v. Young, 89 Pa. St. 186; 33 Am. Rep. 748; Marcotte v. Allen, 91 Me.
74; 40 L. R. A. 185; 39 Atl. 346.
13 Fremont, etc., Ry. v. Holt County, 28 Neb. 742; 45 N. W. 163.
14 Barnes v. Foley. 5 Burr. 2711.
15Marcotte v. Allen, 91 Me. 74; 40 L. R. A. 185; 39 Atl. 346.
16Marcotte v. Allen, 91 Me. 74;
40 L. R. A. 185; 39 Atl. 346; Bank v. Daniel, 12 Pet. (U. S.) 32.
17 Eley v. Miller, 7 Ind. App. 529; 34 N. E. 836.
18 Benson v. Christian, 129 Ind. 535; 29 N. E. 26.