Professor Keener contends that where money is borrowed by an agent having no authority to borrow, and is made a part of the funds of the principal, and then misused by the agent, the lender is not entitled to restitution:
Keener on "Quasi-Contracts," p. 334, in discussing Billings v. Monmouth:1 "For while the town [defendant], because of receiving the plaintiff's money, should be put under an obligation to make restitution, that obligation resting on the fact of an unjust enrichment on the part of the town, a loss arising from the misuse of the money without any fault on the part of the town, should, it is submitted, fall on the plaintiff. ... It would be unjust, therefore, to hold the town responsible for money put into its treasury without its authority and without its knowledge, and from which it had derived no benefit."
The learned author has the support of the Supreme Court of Illinois:
Fay v. Slaughter, 1902,194 11I. 157; 62 N. E. 592; 56 L. R. A. 564; 88 Am. St. Rep. 148: Action for money had and received. The defendant's agent, who had a power of attorney to draw checks on the Northern Trust Co. and to indorse checks for deposit with said company, forged the defendant's name upon an assignment of stock certificates belonging to defendant and transferred them to plaintiffs who were innocent purchasers. In payment the agent received checks to the defendant's order, which he indorsed with defendant's name and deposited with the Northern Trust Co., where they were credited to defendant's account. The agent subsequently drew checks upon the defendant's account in the Trust Company, and appropriated the proceeds. Ricks, J. (p. 170): "We are unable to concur in the view that the mere passing of this money through the bank account of plaintiff in error without authority given by him, and in the absence of evidence showing it went to his benefit or was used by or for him, can be held to be such receiving of the money of the defendants in error by him as in equity and good conscience renders him liable for money had and received for the use of the defendants in error. In this record there is no evidence showing or tending to show, that plaintiff in error got the real benefit of any of this money, either by checking it out for his own use or by its being checked and applied to his business."
1 1881, 72 Me. 174. 122
This view, it is submitted, is not tenable. It is the receipt of a benefit and not the use or enjoyment of it which is essential to quasi contractual obligation. The loss of money, after it has become a part of the funds of the principal, through fire or robbery, would deprive the defendant of its use and enjoyment, but would hardly enable him to deny that a benefit had been received by him.1 That it is lost through the misconduct of the same agent who added it to his funds is immaterial.