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.
The question whether payments made on a judgment can be recovered depends in the first instance upon the further question whether such judgment has been reversed, set aside, and the like, or whether it has not. If the judgment is not reversed, set aside, or modified in a proper proceeding for that purpose directly attacking the judgment, it is binding between the parties if rendered by a court having jurisdiction of the parties and the subject-matter. Since matters concluded by such judgment cannot be relitigated it follows that money paid by reason of such judgment cannot be recovered, even if the judgment is erroneous, or should have been rendered for the defeated party on the real merits of the case. The enforcement of such judgment is clearly a resort to the means provided by law for enforcing liabilities, and such payments cannot be said to be made under duress.1 Thus, if money forfeited as bail has been decreed by order of court to the county in which the cause of action was brought, instead of to the county to which the trial was transferred, the latter county, the party who has been prejudiced by such order should appeal from the order: and cannot sue the former county for the money thus paid in, while the order stands unmodified.2 Thus in a condemnation suit, A the owner of an undivided interest in realty was awarded a certain sum of money as damages for his interest in the realty appropriated. A partition suit was then pending between A and the other co-owners. Subsequently the tract out of which the land had been appropriated was awarded to another co-owner, B. It was held that the county which had made the payment in the condemnation proceedings could not recover from A.3 Thus where A, who had at one time been a commissioner of insolvents, assumed to act as such, and required B to give bond with sureties, which B did, and after the bond was forfeited A sued B and such surety, and obtained a judgment which was paid by one of the sureties, such surety cannot recover from A.4 So, after a judgment which includes usurious interest, recovery of such usury can not be had while the judgment is unreversed.5 So where A was sued as surety on a bail bond, and judgment rendered, and after such judgment he filed a remission of the penalty executed by the governor of the state, but such judgment was not set aside or modified, it was held that A could not recover the amount paid in by him on such judgment.6 Equity has allowed recovery of money paid upon a Common Law judgment which was obtained by fraud, though such judgment is not reversed, set aside or modified.7 Thus A held a note signed by the firm B and C, per C. A represented to B that the money for which this note was given was loaned to the firm, and B allowed A to take a judgment on such note. Subsequently B enjoined the collection of such judgment on the ground that it was not a firm debt; but on A's answer that it was a firm debt, and that the judgment was not obtained by fraud, the injunction was dissolved. B paid such judgment. After payment B found evidence that the money was loaned to C, and used by him to discharge an individual debt. It was held that on these facts B could recover from A in equity.8 At law, however, payments on a judgment obtained by fraud cannot be recovered until such judgment is reversed or set aside.9 A judgment is not conclusive as to matters arising after its rendition. Thus, if A is compelled by judicial proceedings to pay assessments for a street improvement and such improvement is thereafter abandoned, A can recover the money thus paid in.10
5 Scottish, etc., Ins. Co. v. Harriott, 109 la. 606; 77 Am. St. Rep. 548; 80 N. W. 665; Douglas v. Kansas City, 147 Mo. 428; 48 S. W. 851; Western Union Telegraph Co. v. Mayer, 28 O. S. 521. Contra, Jackson v. Newman, 59 Miss. 385; 42 Am. Rep. 367; Austin v. Vir-oqua, 67 Wis. 314; 30 N. W. 515.
6 Andrew v. St. Olave's, etc. (1898), 1 Q. B. 775.
7Tatum v. Trenton, 85 Ga. 468; 11 S. E. 705.
8 Curry v. Tawas Township, 81 Mich. 355; 45 N. W. 831.
9 Yates v. Ins. Co., 200 111. 202; 65 N. E. 726.
10Betts v. Reading, 93 Mich. 77; 52 N. W. 940.
1 Carter v. Society. 3 Conn. 455; Warren County v. Polk County, 89 la. 44; 56 N. W. 281: Williams v. Shelbourne, 102 Ky. 579; 44 S. W. 110; Footman v. Stetson, 32 Me. 17; 52 Am. Dec. 634; New Madrid County v. Phillips. 125 Mo. 61; 28 S. W. 321; Gerecke v. Campbell, 24 Neb. 306; 38 N. W. 847; Kirk-
Ian v. Brown. 4 Humph. (Tenn.) 174; 40 Am. Dec. 635.
2 Warren County v. Polk County, 89 la. 44; 56 N. W. 281.
3 New Madrid County v. Phillips. 125 Mo. 61; 28 S. W. 321. In this case A was B's guardian. No fraud, however, was found to exist.
4 Job v. Collier. 11 Ohio 422.