A contract possessing all the internal elements of validity may be invalidated by the fact that one of the parties thereto is regarded by the law as incompetent to contract. If either party, however, in the honest belief that the contract is binding, performs it in whole or in part, a benefit resulting to the other party therefrom is a benefit conferred in misreliance upon a non-existent contract right. Assuming that the other elements of quasi contractual obligation are present, such a benefit should be restored.
Chiefly as a result of the notion that the wife's personality was merged in that of her husband, a married woman under the common law was in general without contractual capacity.1 In equity, however, she was permitted to make a contract binding upon her separate equitable estate,2 and in recent times her contractual disability has been almost entirely removed by legislation.3 Out of attempts to enter into contracts which, in a particular jurisdiction, she is not permitted to make, the quasi contractual obligation to make restitution may arise.4
Co., 1880, 129 Mass. 185; Heaton v. Eldridge, 1897, 56 Ohio St. 87; 46 N. E. 638; 36 L. R. A. 817; 60 Am. St. Rep. 737. For additional cases, see 29 Am. & Eng. Ency. of Law (2d ed.) 814 n.
As to what law determines the effect of the statute there is a decided conflict among the American cases. See note to Wolf v. Burke, 19 L. R. A. 792, and note to Third Nat. Bank p. Steel, 64 L. R. A. 119.
1 Loyd v. Lee, 1718, 1 Str. 94; Marshall v. Rutton, 1800, 8 Term R. 545; Foster v. Wilcox, 1873, 10 R. I. 443; 14 Am. Rep. 698.
2 In re Leeds Banking Co., 1866, L. R. 3 Eq. 781; Pike v. Fitzgibbon, 1881, 17 Ch. Div. 454; Jacques v. Methodist Episcopal Church, 1820, 17 Johns. (N. Y.) 548.
3 See 15 Am. & Eng. Ency. of Law (2d ed.) 792.
4 Shearer v. Fowler, 1810, 7 Mass. 31, (deed void). And see Wilson v. Mullins, 1909, Ky. ; 119 S. W. 1180, 1184; Nat. Granite Bank v. Tyndale, 1900, 176 Mass. 547; 57 N. E. 1022; 51 L. R. A. 447, (note to husband void). But see Muller v. Witte, 1906, 78 Conn. 495; 62 Atl. 756.
In a Massachusetts case it was held that ah action for money had and received would not lie against the estate of a deceased husband for the recovery of money received by him from his wife upon his promise to return it, or a like sum, to her:
Kneil v. Egleston, 1885, 140 Mass. 202; 4 N. E. 573: Devens, J. (p. 204): "It has, indeed, been held that, where on renders service or conveys property as the stipulated considerac tion of a contract within the statute of frauds, if the other party refuses to perform and sets up the statute, the value of such service or property may be recovered. The obligation which would arise from the receipt or retention of value to return or pay for the same is not overridden, because the words of a form of a contract which did not bind the party repudiating it were uttered at the time. Between parties competent to contract, it is reasonable to infer that the party failing to perform that which he had agreed to do, and yet which he might lawfully do, promised that, if he availed himself of his right of rescission, he would return that which he received, and that the value received or retained by him was so received only on these terms. In Bacon v. Parker [137 Mass. 309], the parties were competent to contract with each other; but the inference that, if one contract was repudiated, another must be inferred, could not arise where parties were not competent to make any contract."
The conclusion of the learned court in this case appears to rest upon a misapprehension of the nature of quasi contractual obligation. It admits that one who renders services or conveys land under a contract unenforceable because of the Statute of Frauds may recover the value of such services or property, but distinguishes that case from the one at bar by pointing out that in the former the obligation results from an implied promise by the defendant "that if he availed himself of his right of rescission, he would return that which he received," while in the latter no such contract can be implied because the parties are incompetent. As a matter of fact, the obligation in both cases rests not upon a genuine implied promise but upon the rule of law that benefits conferred in mistaken reliance upon an unavailable contract right are under certain circumstances recoverable. The so-called promise is a fictional one, for procedural purposes only, and the question of the contractual competency of the defendant is irrelevant.
If an action to recover a benefit conferred under a contract between husband and wife were brought by and against the original parties, it might be contended that, regardless of their substantive rights, they cannot sue each other. Such was the rule at common law, and in some jurisdictions it has not been abrogated. But it is noticeable that in Kneil v. Egleston both husband and wife were dead, and the issue arose between their representatives, so that even the procedural objection was unavailable.1