Northrop's executors v. Graves , 19 Conn. 548 ( 1849 )

Church, Ch. J,

In deciding this case, we have not supposed it necessary to examine very critically the opinions of jurists, which have been advanced upon the general question, how far mistakes of law may be relieved against in equity; nor what is the precise nature of the distinction made by courts between the effect of mistakes of law and mistakes of fact upon the rights and responsibilities of parties. The questions raised on this motion seem to us to be within limits more confined. And yet we shall have occasion to advert to some of the cases on this subject, and to some of the maxims which are supposed to apply to it; such as Vo-lenti non fit injuria — Ignorantia legis non excusat; and to the maxim often in requisition, and generally false in reality, that every man is bound, and therefore upresumed, to know the law.’’’ These, and all other general doctrines and aphorisms, when properly applied to facts and in furtherance of justice, should be carefully regarded ; but the danger is, that they are often pressed into the service of injustice, by a misapplication of their true meaning. It is better to yield to • the force of truth and conscience, than to any reverence for maxims.

In the present case, we establish no new principle, nor depart from any well settled doctrine of the common law. We do not decide, that money paid by a mere mistake in point of law, can be recovered back ;^(a) as if it has been paid by an infant, by a feme covert, or by a person after the statute of limitátions has barred an action, or when any other merely legal defence existed against a claim for the money so paid, and which might be honestly retained. But 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 legal or moral obligation to pay, and which the recipient has no right in good conscience to retain, it may be recovered back, in an action of indebitatus assump-sit, whether such mistake be one of fact or of law ; and this we insist, may be done, both upon the principle of Christian morals and the common law. And such only was the doctrine of the charge to the jury, in the present case. In such a case as we have stated, there can be no reasonable presumption that a gratuity is intended ; nor is the maxim Volenti non fit injuria, at all invaded. The mind no more assents to the payment made under a mistake of the law, than if made under a mistake of the facts ; the delusion is the same in both cases ; in both alike, the mind is influenced by false motives.

Nor are we here deciding a case where the plaintiffs claim to recover under a mere pretence that they were ignorant of the law, so much and so strangely feared by Judge Story; (1 Sto. Eq. 123. § 111.) but a case in which the jury has found, that such mistake existed in truth, not in pretence.

Nor is this a case where the parties have made a compromise of a claim, in view of a legal doubt or uncertainty as to an asserted right, and have taken their chances of the result; but a case in which the plaintiffs verily supposed they were bound to pay, and the defendant, at the same time, knew they were not ; and a case where the money in good conscience as much belongs to the plaintiffs now, as it did when they had it in possession ; as the jury, bv their verdict, have found. One would think, that a reference to adjudged cases could not be necessary to establish a principle of natural justice so obvious as that a right of repetition must exist in such a case, and that what belongs to one man cannot be acquired by another, without the consent or the fault of the owner. But we will briefly recur to the cases, which, as we think, have recognized the common law on this subject, and see if the principle which we have advanced, is not, asserted or recognized, with more or less distinctness, in all of them.

The action of indebitatus assumpsit for the recovery of money had and received, and for money paid, &c. is an action of the common law, but, to a great extent, an equitable action, adopted for the enforcement of many equitable, as well as legal rights. And it is a fundamental principle of this action, that it lies for the recovery of money, which, ex aequo el bono, ought to be paid over to the plaintiff; and that the law, in case of such equity, will imply a promise to pay it. 3 Bla. Com. 163. The principles of the action were very definitely stated, by Lord Mansfield, in the leading case of Moses v. Macferlan, 2 Burr. 1002., and have never since been doubted. He says, “ If the defendant be under an obligation, from the ties of natural justice, to refund, the law implies a debt, and gives this action founded in the equity of the plaintiff’s case, as if it were upon a contract.” He particularizes, and says again : “ This kind of equitable action to recover back money, which ought not injustice to be kept, is very beneficial, and therefore much encouraged.” He goes on to enumerate several cases, in which money paid cannot be recovered back, as if advanced in payment of a debt barred by the statute of limitations, &c.,and as a reason: “ Because in all these cases, the defendant may retain it with a safe conscience, though by positive law he was barred from recovering.” And he refers to money paid by mistake, as an instance of the equity, which will sustain the action : making no allusion to a distinction between a mistake of law, and a mistake of fact — a suggestion, we believe, as applied to this action, of a much more recent date.

The same principle was recognized and applied, by the court of common pleas, in the case of Farmer v. Arundel, 2 Wm. Bla. 824. “Whenever,” says Chief Justice De Grey, “money is paid, by one man to another, on a mistake, either of fact or of law, or by deceit, this action will certainly lie %¿and because the defendant had good right in conscience, in ^that case, to retain the money, the plaintiff failed to recover, "band for that reason alone, although the money was paid "ftinder a mistake of the law.

The case of Bize v, Dickason, 1 Term R. 284., deserves special attention, because the force of it was attempted to be parried, by Lord Ellenborough, in Stevens v. Lynch, 12 East, 37. The facts show the case to be one of a mistake of law only. The plaintiff was a broker acting under a del credere commission, for foreign correspondents, and the bankrupt had been an underwriter, who was liable for losses, which the correspondents of the plaintiff had sustained, and which he had paid over to them, without having received the amount of the losses from the bankrupt. The plaintiff, being indebted, on other accounts, to the bankrupt, in a still larger sum, paid the whole to the assignees of the bankrupt, under a mistake, and without knowing that he had a legal right to set off against the claims of the bankrupt, the amount of the losses he had paid. When he discovered, from the decision of the court, in the case of Grove v. Dubois, 1 Term R. 112., that he had such right, he brought ids action against the assignees of the bankrupt, to recover back the amount of the money which he had paid to them, which by law he had a right to have set off. No mistake of facts existed, and none was adverted to, by Lord Mansfield, in discussing the plaintiff’s right to recover. He refers only to money paid under mistakes of law, and applies the principle he had before so very distinctly stated, in the case of Moses v. Macferlan, and which had again been recognized, in explicit terms, by Ch. J. I)e Grey ; and without reference to any possible distinction between mistakes of law and of fact, he concludes: “But where money is paid, under a mistake, which there was no ground to claim in conscience, the party may recover it back again, by this kind of action.” And it may be re— marked, that this case was decided, after the case of Lowry v. Bourdieu, Doug. 468., in which, Duller, J. applied the maxim, “Ignorantia legis non excusat” to money paid as the premium on an illegal gaming policy.

The next case we refer to, is Brisbane v. Dacres’ executrix, 5 Taun. 144. This case has been much noticed, and e¡Torts made to press it into the service of those who have attempted to sustain the doctrines of this defence ; but with what propriety, will be seen, by an examination of it. Mansfield, Ch. J., and Chambre, J. expressly admit the principle we advance; and it is neither denied, nor doubted, as we can see, by Gibbs and Heath, Js. The plaintiff was the commander of a king’s ship in the British navy, on the Jamaica station ; and Lord Dacres was the admiral there. The plaintiff, by order of Lord Dacres, the admiral, took on board his vessel a large amount of specie, belonging to the government, and transported it to England, for which service he received from the treasury a considerable sum as freight. It had been a long established usage in the navy, for commanders of vessels, in like cases, to pay over one-third of the freight to the superior officer, under whose orders they acted ; although, at the time this money was paid over, by the plaintiff, he was not bound, by law, to pay it over, and the admiral had no legal right to demand it ; but it was paid upon the demand of the admiral, as his right. The action was brought against the executrix of admiral Dacres, to recover back the money so paid. Chambre, J., in a very conclusive argument, maintained the right of the plaintiff to recover the money. He says : “The plaintiff had a right to it, and the defendant in conscience ought not to retain it. The rule is, that when he cannot, in conscience retain it, he must refund it, if there is nothing illegal in the transaction.” Mansfield, Ch. J. admits the rule, as stated by Chambre, J., saying, “ If it was against his conscience, to retain this money, according to the doctrine of Lord Kenyon, an action may be maintained to recover it back.” But because the money was paid and received under the former usages of the navy, he considered it entirely proper and conscientious for the executrix to retain it; and for this reason alone, he opposed a recovery. Gibbs, J., founded his opinion in the defendant’s ^favour upon the fact that the money was demanded asa matter of right, and was paid upon such a demand ; and this being submitted to, and not resisted, at the time, must be considered asa voluntary payment, and indeed, as a gift! A controuling feature in the case, entirely unlike the present, and if true, proving very clearly, that the money might be very honestly received and retained. Heath, J. takes still a different ground — that there was neither ignorance nor mistake in the case, but that the plaintiff intended, in fact, to make a voluntary payment to his admiral. But what is most materia! to our purpose, is, that neither Gibbs nor Heath refer to the conscience of the case, and therefore, are not at issue with their brethren, nor with us, upon this turning point of the whole matter.

The vice-chancellor, in the case of Naylor v. Winch, 1 Sim. & Stu. 555., remarks, that “If a party, acting in ignorance of a plain and settled principle of law, is induced to give up a portion of his indisputable property, under the name of compromise, a court of equity will relieve.” Here, our doctrine is quite distinctly recognized : the case supposed, treats the retention of the money, as unconscientious and wrong, and therefore the relief will be given.

Approved text-writers recognise the law to be as we have stated. Broome, in his treatise on law-maxims, and under the maxim, “Ignoraniia juris non excusa!,” says, “It is therefore a rule, that money paid with full knowledge of the facts, but through ignorance of the law, is not recoverable, if there be nothing unconscientious in the retainer of it and in support of this rule, the case of Brisbane v. Dacres, is cited; and of that case, it is said, that the plaintiff did not recover, because it was not against conscience for the executrix to retain the money. And so, under the maxim, “ Volenti non fit injuria,” the author states the law thus ; “ But where money is paid under a mistake, which there was no ground to claim in conscience, the party may recover it back again, as money had and received.” And the same views of the law on this subject are expressed, by Stephens, in his Nisi Prius, vol. 1., p. 349., whether the mistake be one of law or fact.

The case of Bilbie v. Lumley, 2 East, 469., has been sometimes cited in opposition to the rule as laid down in _ the preceding authorities. That case was not argued ; was decided instanter ; and whether the insured could, or could not, in foro conscientice, retain the money, does not appear, and was not a circumstance alluded to, by the court. And we say, in reply, to Lord Ellenborough’s reference to the maxim, “Ignorantia legis non excusat,” that although the plaintiff’s ignorance of the law may not furnish a good excuse for his paying the money, it does not follow, that it furnishes a good excuse to the defendants to retain it, against i the suggestions of equity and conscience.

The case of Elliott v. Swartwout, 10 Peters, 138., does not conflict with our views. The money there, was paid over, by the importer, to the collector, as duties, upon a demand and claim of right, and without protest. The defendant received it in good faith, and in the same good faith, had paid , it over to the treasury of the United States.

The case of Stevens v. Lynch, 12 East, 37., to which allusion has been made, was not an action to recover back money paid, but upon a promise to pay, made under a mistake of the law. The defendant was the drawer of a bill of exchange, and, as such, had been legally, and was still equitably, bound to pay the money named in it; but being ignorant that his legal liability was discharged, by reason that the holder had given time to the acceptor, yet he had promised to pay it, and was holden liable. This was the case of a mere mistake of law, with the equity and conscience of the case all against him, who acted under the mistake, and not in his favour, as in the case before us. It was like the case of money, paid in ignorance of the legal defence of the statute of limitations, infancy, usury, &c.

We have seen but one case, in which, the doctrine we adopt, has been directly denied, by any court: it is Clarke v. Butcher, 9 Cowen, 674. We need not review it, because we believe every authority referred to in that case, in support of the opinion of the court, has been now noticed by us ; and we are led by them to a very different conclusion. The reasons advanced by the court there, are not satisfactory to us, if we understand them. They are, that, if the equities of the case — the,,moral rights and duties of the parties — are to have influence in the decision, it will spoil or 1 . . , , the maxim, that, “every man is bound and presumed to jinow ]aW)” as we]} as the maxim, 44 Volenti non fit in-juria.” And also, that thereby the practical distinction between a mistake of fact, and a mistake of law, will be destroyed ; both of which assumptions we respectfully deny. rThat a party may not urge his ignorance of the law as an excuse or palliation of a crime, or even of it fault, we may admit; that he may not, by reason of such ignorance, or mistake, obtain any right or advantage over another, we may admit; but we do not admit, that such other may obtain or secure an unjust advantage over him, by reason of his ignorance or mistake, even of the law. We agree, that men should not complain of the consequences of their deliberate and voluntary acts ; but we do not agree, that acts performed under the influence of essential and controuling mistakes, are voluntary, within the meaning of the maxim referred to. And we say, that neither maxims of law, nor fictions of law, " should be so applied, as to work manifest injustice.

We conclude, therefore, with entire unanimity, that the charge of the court, in this respect, ought to be sanctioned.

Another question is suggested, by this motion, and was mentioned in argument — that if this money was paid, by the plaintiffs, in their capacity of executors of Northrop’s estate, from the funds of his estate, under a mistaken construction of the will, and thus, under a mistake of law ; whether it could not be recovered back, for the benefit of the estate, whatever the law might be, if the plaintiffs had acted merely on their own individual account, as we have here treated it ? This is, certainly, a question worthy of consideration ; but the opinion already expressed by us, renders a decision of it unnecessary.

The defendant also claimed, in his defence, that as the legacy was, by the will of the testator, payable to Mrs. Graves, the defendant’s wife, and was intended, as he supposed, for her sole benefit, and was actually paid to her, he was not liable. But we think, that in legal effect, the money was received by the defendant: although delivered into the hands of the wife, it was done in his presence, with his consent, and with his subsequent approval, and became subject to his disposal.

The jury were instructed, to allow interest on the sum paid, from the time it was received, by the defendant, on the ground, that it was received by him, in his own wrong, and should have been immediately restored. But a majority of the court think differently ; ^(a) and that no interest could accrue, under the circumstances, until demand of repayment was made. This excess of interest, therefore, allowed by the jury, must be remitted ; and the court will not direct a new trial.

In considering the legal questions in this case, we are necessarily confined to the facts apparent on the record, and may not indulge in any speculations into circumstances connected with the settlement of David Northrop’s estate, and from which, the defendant might have considered himself, as he probably did, fairly entitled to retain the money thus received by him.

In this opinion the other Judges concurred.

Part of interest to be remitted.

New trial not to be granted.

(a) In the revised edition of Swifts Digeslt voh 1. p. 398. the learned editor refers to the case in the text, as having decided, without qualification, the general position here denied. The opinion of the court as, now expressed, had not then been published; which at once accounts for, and excuses, this mistake of law.

(a) The Chief Justice, by whom the jury had been instructed, probably had not changed his opinion on this point.