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 money has been advanced, or property delivered for a consideration which has failed, the injured party may recover what he had paid under the contract.1 Payment made in advance for support,2 for irrigation,3 for corporate stock to be delivered,4 for the release of a lien,5 or for a saloon license,8 may be recovered if the consideration for which such payments were made fails totally. So a man who has paid money to a woman to enable her to prepare for her marriage with him under her contract, may recover such payments if she refuses to marry him.7 If A pays premiums on B's policy of life insurance under a contract whereby B has assigned such policy to A, and it is subsequently held that such assignment is invalid, A may recover such premiums from B's estate.8 If an entire contract is made to transport freight,9 or passengers,10 and through some accident the carrier after having effected transportation for part of the distance is unable to complete the contract, payments made in advance under such contract may be recovered. Failure to execute and deliver a mortgage which a builder had agreed to take in payment for his work does not entitle him to take possession of the building, of which the owner has already gone into peaceable possession, and to exclude the owner therefrom.11 The assignee of a worthless instrument,12 as of an instrument purporting to be a state bond which is not in fact a valid obligation,13 or of an instrument purporting to be a valid town order, which is thereafter held void,14 may in each case recover what he has paid therefor.
7 White v. White, 68 Vt. 161; 34 Atl. 425.
8 Clark v. Russell, 3 Watts (Pa.) 213; 27 Am. Dec. 348.
9 Sheldon Axle Co. v. Scofield, 85 Mich. 177; 48 N. W. 511.
10 Tyler v. Cote, 29 Or. 515; 45 Pac. 800.
1 Warnoek v. Davis, 104 U. S. 775; Richter v. Stock Co., 129 Cal. 367; 62 Pac. 39; Herwig v. Richardson, 44 La. Ann. 703; 11 So. 135; Pugh v. Moore, 44 La. Ann. 209; 10 So. 710; Furgerson v. Staples, 82 Me. 159; 17 Am. St. Rep. 470; 19 Atl. 158; Slater v. Olson, 83 Minn. 35; 85 N. W. 825; Dennis v. Brewing Co.. 80 Minn. 15; 82 N. W. 978; Anthony v. Sewing Machine Co., 16 R. I. 571; 5 L. R. A. 575; 18 Atl. 176; Williamson v. Johnson, 62 Vt. 378; 22 Am. St.
Rep. 117; 9 L. R. A. 277; 20 Atl. 279; Hughes v. Frum, 41 W. Va. 445; 23 S. E. 604. "When money is paid or a promise made by one party in contemplation of some act to be done by the other which is the sole consideration of the payment or promise, and the thing stipulated to be done is not performed, the money may be recovered back, or the promise founded on such consideration may be avoided between the parties to the contract." Griggs v. Austin, 3 Pick. (Mass.) 20, 22; 15 Am. Dec. 175; quoted, Hudson v. Archer, 9 S. D. 240, 245; 68 N. W. 541.
2 Lathrop v. Mayer, 86 Mo. App. 355.
3 Richter v. Stock Co., 129 Cal. 367; 62 Pac. 39.