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.
In some jurisdictions recovery of money paid under a mis-take of law may be recovered where the party to whom it is paid is in no way entitled thereto.1 Thus an executor who pays a and dishonesty."11 This right of recovery of payment made under mistake of law is limited to cases where such payment should not have been made in morals and in good conscience. The mere non-existence of legal liability is not enough to justify recovery. Thus a husband conveyed land to his wife, B, and she agreed as part of the consideration to assume a debt of his. By reason of her coverture such agreement had no validity. Subsequently she paid such debt. It was held that she could not thereafter recover it, even though such payment could not have been compelled.12
7 Phillips v. McConica, 59 O. S. 1; 69 Am. St. Rep. 753; 51 N. E. 445.
8Neal v. Coburn, 92 Me. 139; 69 Am. St. Rep. 495; 42 Atl. 348.
9 Coburn v. Neal, 94 Me. 541; 48 Atl. 178.
10 Hughes v. Pealer, 80 Mich. 540; 45 N. W. 589. In this ease the court found as a fact that the husband knew his rights.
11 Camden v. Green, 54 N. J. L. 591; 33 Am. St. Rep. 686; 25 Atl. 357.
12 Louisville, etc., Ry. v. Marion County, 89 Ky. 531; 12 S. W. 1064;
Yates v. Ins. Co., 200 111. 202; 65 N. E. 726; Manistee Lumber Co. v. Springfield Township, 92 Mich. 277; 52 N. W. 468.
13 Wesson v. Collins, 72 Miss. 844, 850; 18 So. 360, 917.
1 Mansfield v. Lynch, 59 Conn. 320; 12 L. R. A. 285; 22 Atl. 313; Lyon v. Mason & Foard Co., 102 Ky. 594; 44 S. W. 135; Bruner v. Stanton, 102 Ky. 459; 43 S. W. 411. " We mean distinctly to assert that when money is paid by one under a mistake of his rights and his duty, and which he was under no moral or legal obligation to pay, and which legacy under an erroneous construction of the will,2 or who pays debts in full under a mistaken belief that certain other debts of whose existence he knows are not legally enforceable because not proved by writing signed by decedent,3 may recover such payments, or the amount thereof in excess of what should have been paid. So where one pays a license fee under the mistaken belief that the ordinance imposing it is valid may recover such payment.4 Where a public officer permits one in ignorance of the law to pay license fees for burial permits, which fees were not authorized by law it has been held that such payments may be recovered as made by fraud.5 If A attempts to effect insurance, and without any fraud on A's part the insurance never takes effect,6 as where a mortgagee by mistake of law takes out insurance on the mortgaged property believing that it protects his interest,7 or without fraud the insured makes a warranty broken when made, such as one concerning his occupation,8 or the location of the property insured,9 A may recover the premiums paid. If the agent of the insurance company has misled both the insurance company and the insured, the right of the insured to recover the premiums paid in is clear.10 To keep them "would be an act of bad faith and of the grossest injustice the recipient has no right in good conscience to retain, it may be recovered back in an action of indebitatus assumpsit, whether the mistake be one of law or fact; and this we insist may be done both upon the principles of Christian morals and the Common Law." Northrop v. Graves, 19 Conn. 548, 554; 50 Am. Dec. 264; quoted in Mansfield v. Lynch, 59 Conn. 320, 327; 12 L. R. A. 285; 22 Atl. 313.
2 Northrop v. Graves, 19 Conn. 548; 50 Am. Dec. 264.
3 Mansfield v. Lynch, 59 Conn. 320; 12 L. R. A. 285; 22 Atl. 313.
4 Bruner v. Stanton, 102 Ky. 459; 43 S. W. 411. "He is not presumed to know more than those who constitute the legislative and executive departments of the government under which he lives." Louisville v. Anderson, 79 Ky. 334, 340; 42 Am. Rep. 220; quoted in Bruner v. Stanton, 102 Ky. 459, 461; 43 S. W. 411.
5Marcotte v. Allen, 91 Me. 74; 40 L. R. A. 185; 39 Atl. 346.
6 Metropolitan Life Ins. Co. v. Bowser, 20 Ind. App. 557; 50 N. E. 86.
7 Waller v. Assurance Co., 64 la. 101; 19 N. W. 865.
8 McDonald v. Ins. Co., 68 N. H. 4; 73 Am. St. Rep. 548; 38 Atl. 500.
9 Jones v. Ins. Co., 90 Tenn. 604; 25 Am. St. Rep. 706; 18 S. W. 260.
10 New York Life Ins. Co. v. Fletcher, 117 U. S. 519.