Forgery.-Money Paid under Ignorance or Mistake.

543 name was forged, but, discovering the mistake, gave notice thereof the same morning to the holder in time to enable him to give notice of non-payment to the indorsers, it was held that the money was recoverable from the holder. Wilkinson v. Johnson, 3 B. & C. 428 and see Gompertz v. Bartlett, and cases cited, ante, p. 540. So, where the plaintiffs discounted for the defendants a bill of exchange, which the latter did not indorse, and the signatures of the drawer and acceptor (the latter of whom kept an account with the plaintiffs) were forged, it was ruled that the defendants were liable to refund the money. Fuller v. Smith, Ry. & M. 49.

But, where the party paying the money ought to have ascertained, or is bound to know, that the handwriting is forged; or where, by his delay in discovering his mistake, he has deprived the holder of the means of resorting to other parties on the bill, he will not be allowed to recover. Thus, where two bills were drawn upon the plaintiff, one of which he accepted and both of which he paid, and it appeared that the handwriting of the drawer was forged, it was held that it was incumbent upon the plaintiff to be satisfied that the bill drawn upon him was in the drawer's hand before he accepted or paid it, and that he could not recover the amount from the payee. Price v. Neale, 3 Burr. 1354; 1 W. Bl. 390. So where a banker paid a bill to a bona fide holder, which purported to be accepted payable at his house by one of his customers, and the forgery of the acceptor's name was not discovered until the end of a week, it was held that the money could not be recovered from the holder; Smith v. Mercer, 6 Taunt. 76; and the banker in such a case cannot recover, though he give notice of the forgery on the day after he has paid it; for the holder is entitled to know whether it is to be dishonoured on the very day it becomes due. Cocks v. Masterman, 9 B. & C. 902. Where, a cheque, drawn by a customer upon his banker, for a sum of money, described in the body of the cheque in words and figures, was afterwards altered by the holder, who substituted a large sum for that mentioned in the cheque, in such a manner that no person in the ordinary course of business could observe it, and the banker paid to the holder this larger sum, it was held that the banker could not charge his customer for anything beyond the original sum. Hall v. Fuller, 5 B. & C. 750. But where the customer drew a cheque for 50l., and left a space on the line before the fifty, and also a space between the £ and the 50, so that the person to whom it was delivered was enabled to insert three hundred and before the fifty, and the figure 3 between the £ and the 50, it was held that the forgery and payment were from the customer's negligence, and he must bear the loss. Young v. Grote, 4 Bing. 253; Halifax Union v. Wheelwright, L. R., 10 Ex. 183. See, however, Baxendale v. Bennett, 3 Q. B. D. 525, 533, 534, per Brett, L. J. The executor of A. recovered from the maker of a note, purporting to be payable to A. and B., of whom A. survived B. It afterwards appeared that A.'s name had been added by forgery, and B.'s executor thereupon sued A.'s executor for money received to plaintiff's use; held, that he could not recover, for it was not money paid on a note to which, if genuine, the plaintiff would have been entitled. Vaughan v. Matthews, 13 Q. B. 187. As to the liability of a banker for the amount paid or received in respect of a cheque payable to order, the indorsement of which has been forged, vide ante, p. 371.

As to the recovery of money obtained under a forged power of attorney, see Stone v. Marsh, 6 B. & C. 551; and Marsh v. Keating, 1 N. C. 198, cited post, p. 549.

Money paid under ignorance or mistake of facts or of law.] Money paid with a knowledge of all the facts, but under a mistake of the law, cannot in general be recovered back, there being nothing against conscience in the

other retaining it. Bilbie v. Lumley, 2 East, 469; Brisbane v. Dacres, 5 Taunt. 143; Barber v. Pott, 4 H. & N. 759; 28 L. J., Ex. 381; Rogers v. Ingham, 3 Ch. D. 351. Thus, where the plaintiff has suffered the defendant to sell some of his property under an impression that it had passed to the defendant by deed of assignment, which was, in fact, inoperative, he cannot recover the price as money received to his use. Platt v. Bromage, 24 L. J., Ex. 63. But money paid under a mistake of facts, and which the party receiving it has no claim in conscience to retain, is recoverable as money paid without consideration. Bize v. Dickason, 1 T. R. 285; Milnes v. Duncan, 6 B. & C. 671. And money so paid in ignorance may be recovered back, although the defendant cannot be put in statu quo. Standish v. Ross, 3 Exch. 527. Where money was paid on account, and a dispute afterwards occurred between the parties, and a balance was struck omitting to notice the sums paid, and the plaintiff paid the whole balance, he was permitted to recover the sum paid on account, as money paid under a mistake in the hurry of business. Lucas v. Worswick, 1 M. & Rob. 293. And a payment, made, in bona fide forgetfulness of a fact, formerly known to the plaintiff, may be recovered back. Kelly v. Solari, 9 M. & W. 54. And, it is not enough to disentitle the plaintiff that he might have learnt the real fact upon inquiry, unless he has voluntarily waived all inquiry into the truth. S. C. Thus, where on the dissolution of a partnership, the plaintiff paid the defendant a sum for a share therein, on the footing of an investigation of the partnership accounts which he had made, and on further investigation he found that the profits were less than he had first estimated, so that a smaller sum than he had paid was payable to the defendant under the agreement for sale; held that the plaintiff could recover from the defendant the sum paid in excess. Townsend v. Crowdy, 8 C. B., N. S. 477; 29 L. J., C. P. 300. The action will lie although the position of the defendant has been altered since the payment was made, unless there is some mutual relation between the parties creating a duty on the plaintiff, breach of which disentitles him to recover. Durrant v. Ecclesiastical Commissioners, 6 Q. B.

D. 234.

It has been said that before commencing the action on the ground of mistake, it is necessary to give the defendant notice of the mistake, and to demand the money. Freeman v. Jeffries, L. R., 4 Ex. 189, per Martin and Bramwell, BB. Where a bill was given by one partner for the balance of an account, alleged to be due from the partnership to the defendant, and he afterwards found that this account included a separate debt due from his co-partner, and then paid the amount of the bill to the holder, under protest, to save the drawer's credit: it was held this was not a voluntary payment, and that the plaintiff might recover from the defendant the amount of the private debt. Kendal v. Wood, L. R., 6 Ex. 243, Ex. Ch.

Money paid with full knowledge of facts by a person who might have resisted payment cannot be recovered back. Thus where a discharged insolvent, being lawfully arrested by one of his creditors, pays the debt, he cannot get it back in this action; and semble, if he had given a security for it (which would itself be void as against the statute), and paid the amount when due, he could not have recovered it back. Viner v. Hawkins, 9 Exch. 266; 23 L. J., Ex. 38. Where a mortgagee gave notice of the mortgage to a tenant and demanded the rent, and the tenant chose to pay it to his landlord, the mortgagor, on an indemnity which proved to be bad, it was held that he could not recover the rent back from his lessor after he had been obliged by distress to pay it over again to the mortgagee. Higgs v. Scott, 7 C. B. 63. The rule in equity is in general the same as at law. Rogers v. Ingham, supra; and see Id. 356, 357. But in the case of a common mistake of both the payer and the payee relief may sometimes be given;

Money Paid under Ignorance, &c.

545

see Daniell v. Sinclair, 6 Ap. Ca. 181, P. C. cited post, p. 555. Not every mistake of fact will enable the party to recover money paid in ignorance. Thus where A. conveyed to his bankers, by way of security, all his interest in a supposed devise to him, subject to a charge on it of a debt due from A. to B., and the bankers afterwards voluntarily paid to B. the debt at A.'s request, it was held that they could not recover back the money from B. upon discovering that the will had been revoked and the security was worthless. In this case the debt paid was really due to B., and the only mistake of the bankers was in supposing that they held a good security against A. for the advance. Aiken v. Short, 1 H. & N. 210; 25 L. J., Ex. 321. So, where bankers cash a customer's cheque, and afterwards discover that they have no assets of his, they cannot recover the money back from the person to whom they paid it. Chambers v. Miller, 13 C. B., N. S. 125; 32 L. J., C. P. 30; see also Pollard v. Bank of England, L. R., 6 Q. B. 623. See further the notes to Marriott v. Hampton, 2 Smith's Lead. Cas. 8th ed. 437, et seq.

Where money had been paid to the defendant, by the plaintiffs, on an insurance on a ship, effected by the defendant, as the agent of a foreign principal, and the defendant, when effecting the insurance, had suppressed a material fact, which, if known to the plaintiffs, would have enabled them to resist the payment, and on discovering the fact, the plaintiffs brought an action against the defendant to recover the money; it was held that the defendant, having suppressed the fact with no intention to defraud, and having paid the money over to his principals, or settled it in account with them, before demand by the plaintiffs, was not liable to refund it; Holland v. Russell, 1 B. & S. 424; 30 L. J., Q. B. 308; 4 B. & S. 14; 32 L. J., Q. B. 297, Ex. Ch.; accord. Shand v. Grant, 15 C. B., N. S. 324. Where, however, the defendant has, as principal, so received the money to which he is not entitled, it is no answer that he has paid it over to another person for whom he was acting. Newall v. Tomlinson, L. R., 6 C. P. 405.

Where an article is sold, which turns out to be of less value than the price given for it, the extra price, if there be no fraud, cannot be recovered back; per Le Blanc, J., Coe v. Prentice, 3 M. & S. 349. But if parties agree to abide by the weighing of any article at any particular scales, and, in the weighing, an error, not perceived at the time, takes place from an accidental mis-reckoning of some weight, and the thing is reported of more weight than it really is, and the price is paid thereupon, money had and received is sustainable; per Le Blanc, J., and Ld. Ellenborough, C. J., Ibid. In that case a bar of silver, having been assayed by a third person, was bought of the defendant by the plaintiff, and paid for according to the assay, but it turned out that the assay was wrong, and the bar contained less silver; it was held that the plaintiff could recover what he had overpaid.

Though this action will not lie for the purpose of determining a right to an interest in land, Lindon v. Hooper, Cowp. 414, yet where the title is not in issue, it will often lie to recover back payments made under misapprehension of title. Thus, a tenant who paid rent to his landlord, and was afterwards ejected by a third person, who recovered mesne profits from him, for the period during which the tenant has paid his rent, may recover the rent so paid from his landlord, in an action for money had and received, the landlord not having set up any title at the trial of the ejectment. Newsome v. Graham, 10 B. & C. 234; see Freem. 2nd ed., 479 (d). So, where a tenant continues to pay rent to the defendant, in ignorance of the failure of a life on which his lease depends, he may recover back the payments, there being no dispute about title. Barber v. Brown, 1 C. B., N. S. 121; 26 L. J.,

C. P. 41.

VOL. I.

KN

As to money had and received on rescinding a contract, or on breach of warranty, see ante, pp. 301, 438.

Money obtained by fraud, duress, &c.] Where money has been obtained by fraud, this action lies to recover it back; and money, fraudulently obtained, may be recovered, although the defendant may be entitled to it as legatee. Crockford v. Winter, 1 Camp. 124. After the death of a bankrupt, tenant for life, his assignees were allowed to recover, as money had and received, the bygone rents from a person who had received them under the colour of a fraudulent assignment. Pearce v. Day, cited 2 Russ. & Myl. 124. If A., by means of a false pretence, or a promise, or condition which he does not fulfil, induces B. to give him a cheque, and hands it over to C., in fraud of B., but C. takes it bona fide for value, and obtains cash for it at B.'s bankers, B. cannot recover the money from C. Watson v. Russell, 3 B. & S. 34 ; 31 L. J., Q. B. 304; Ex. Ch., 5 B. & S. 968; 34 L. J., Q. B. 93. Where the defendant, being secretly married already, married the plaintiff, and received the rents of her lands, they were held recoverable in this form of action. Hasser v. Wallis, 1 Salk. 28. Where A. is agent of B. to pay certain acceptances of B., and the defendant obtains payment from A. by falsely representing himself to be the holder of one of the securities, the action for money had and received will lie at the suit of A., or semble of B. also. Holt v. Ely, 1 E. & B. 795. In Govett v. Hopgood, Exeter Sp. Assizes, 1852, cor. Erle, J., the plaintiff, a lady, imbecile from age and infirmity, recovered in this form of action a large sum which was alleged to have been a gift by her to the defendant's wife. The plaintiff, being herself called as a witness, showed her incapacity on her examination, and the judge left it to the jury, to say whether she knew what she was about when she gave the money. Where the defendant fraudulently colluded with J. S., who was insolvent, to obtain wines from the plaintiff, the proceeds on the re-sale of which eventually came into the defendant's hands in satisfaction of a debt due to him from J. S.; the plaintiff was held entitled to recover in this action. Abbotts v. Barry, 2 B. & B. 369; 5 B. Moore, 98. The plaintiff can only rescind a contract on the ground of fraud when he can disaffirm the contract and remit the defendant to his former state. Urquhart v. Macpherson, 3 Ap. Ca. 831, P. C., and see also cases cited infra.

He

The promoters of a company advertised a large capital in 120,000 shares: the plaintiff took an allotment of 60 shares; notice was then published by the promoters that all the shares were allotted; whereupon the plaintiff paid a deposit on the shares and signed the subscription contract. afterwards discovered that less than half the shares had been, in fact, allotted, and that the company had no funds. Held, that on this evidence of fraud he might recover back his deposit from one of the active promoters. Wontner v. Sharp, 4 C. B. 404. See also Jarrett v. Kennedy, 6 C. B. 319, cited ante, p. 541. If a fraudulent statement, likely to influence the plaintiff, is shown, it need not be shown positively that it did, in fact, influence; and if the statement in a public advertisement can be traced to the secretary of a company, and purports to be by order of the directors, semb. an express authority to publish it may be presumed. Wontner v. Shairp, supra; and see Watson v. Charlemont, El. of, 12 Q. B. 856. But, a party who seeks to repudiate shares on the ground of fraud must do so while he is in a condition to put both parties in statu quo. He cannot do so after the company has gone into liquidation; Stone v. City & County Bank, 3 C. P. D. 282, Č. A.; nor after he has received dividends and has permitted the company to become incorporated under 19 & 20 Vict. c. 47. Clarke v. Dickson, E. B. & E. 148; 27 L. J., Q. B. 223; Cole v. Bishop, E. B. & E. 150, n.; Addie v. W. Bank of Scotland, L. R., 1 H. L. Sc. 145, 165. But he may sue for the

Money obtained by Fraud, Duress, &c.

547

fraud, and so get damages; S. C., Clarke v. Dickson, 6 C. B., N. S. 453; 28 L. J., C. P. 225; see post, Action for deceit; and where an allottee of shares has repudiated them on the ground of fraud by the company, and his name has been removed from the register, it seems that the sum paid on the shares is recoverable in this form of action. See Ship v. Crosskill, L. R., 10 Eq. 73; Askew's Case, L. R., 9 Ch. 664, 666.

There is an important difference between cases where a contract may be rescinded on account of fraud and those in which it may be rescinded on the ground that there is a difference in substance between the thing bargained for and that obtained; for "it is enough to show that there was a fraudulent representation as to any part of that which induced the party to enter into the contract which he seeks to rescind; but where there has been an innocent misrepresentation or misapprehension, it does not authorize a rescission, unless it is such as to show that there is a complete difference in substance between what was supposed to be and what was taken, so as to constitute a failure of consideration." Kennedy v. Panama, &c. R. Mail Co., L. R., 2 Q. B. 580, 587, per cur.

Where a man has been obliged involuntarily, and by wrongful duress, to pay money, it may be recovered in this action; as, where he has paid an exorbitant sum to redeem his goods from pawn; Astley v. Reynolds, 2 Str. 915 or, wrongful detention; Ashmole v. Wainwright, 2 Q. B. 837; Green v. Duckett, 11 Q. B. D. 275. See Kendal v. Wood, L. R., 6 Ex. 243, ante, p. 544. Plaintiff being indebted to the defendant and others, offered a composition of 5s. in the pound, which some of the creditors accepted, but the defendant refused until the plaintiff had privately given him 50l., when he executed the deed. Some of the other creditors had refused to sign unless the defendant signed, and this he knew; held that the plaintiff could recover the 50l. Atkinson v. Denby, 7 H. & N. 934; 31 L. J., Ex. 362, Ex. Ch. ; In re Lenzberg's Policy, 7 Ch. D. 650, and see post, p. 551. So, where a party to a reference has been obliged to pay an unreasonable charge of the arbitrator in order to take up the award; per curiam in Re Coombs, 4 Exch. 839. See Roberts v. Eberhardt, 3 C. B., Ñ. S. 482; 28 L. J., C. P. 74, Ex. Ch. So, the action lies, where goods, not liable to seizure, are seized by a revenue officer, who extorts money to release them; Irving v. Wilson, 4 T. R. 485; or a public officer demands and exacts an excessive fee; as a parish clerk for a search in a register; Steele v. Williams, 8 Exch. 625; 22 L. J., Ex. 225; or, a corporation officer extorts a fee for granting a licence; Morgan v. Palmer, 2 B. & C. 729; or, a sheriff claims and receives a larger fee than he is entitled to; Dew v. Parsons, 2 B. & A. 562; or, a toll-keeper exacts an illegal toll; Parsons v. Blandy, Wightw. 22; or, a railway company, bound by their special act to charge rates equally to all, detains or refuses to carry the parcels of a particular person until he pays an unreasonable charge. Parker v. Gt. W. Ry. Co., 7 M. & Gr. 253 ; Edwards v. Id., 11 C. B. 588; 21 L. J., C. P. 72; Baxendale v. Id., 16 C. B., N. S. 137; 33 L. J., C. P. 197, Ex. Ch. ; Sutton v. Gt. W. Ry. Co., 3 H. & C. 800; 35 L. J., Ex. 18; L. R., 4 H. L. 226; Baxendale v. L. & S. W. Ry. Co., L. R., 1 Ex. 137; Gidlow v. Lancashire & Yorkshire Ry. Co., L. R., 7 H. L. 517. And this, although part of the money was received by the defendants as agents of another company and for their use. Parker v. Bristol & Exeter Ry. Co., 6 Exch. 702. See further post, pp. 563, 564. So, (if a mortgagee with power of sale refuse to stop a sale, unless the mortgagor pays expenses not duly chargeable upon him, which the mortgagor accordingly pays under protest. Close v. Phipps, 7 M. & Gr. 586. So, where a mortgagee having agreed to assign his security on payment of principal, interest, and costs, made a claim for costs to which he was not entitled, and on his refusal to execute the assignment on any other terms, the assignee, by