Scott v. Ford ( 1904 )

Mr. Justice Wolverton

delivered the opinion.

Plaintiffs base their action upon the principle that when one pays money which he is neither morally nor legally bound to pay, under a mistake as to his legal obligations and duty, and which the recipient has no right in good conscience to retain, the former may recover it back in an action of indebitatus assumpsit, whether his mistake be one of law or of fact. The trial court must have sustained this principle as sound, else its conclusion of law could not follow from the facts found. The defendant contends that the true principle is that money paid with knowledge ■of the facts, without fraud or deceit, under a mistake of law, cannot be recovered back, which principle she insists is.alone applicable in determining the controversy.

1. The question involved is an ancient one, and has provoked much disputation, but the trend of modern authority is strongly in one direction, favorable to the theory that a mistake of law, within proper limitations, does not excuse, and that money paid under such mistake cannot be recovered back. There are two legal maxims involved in the inquiry, namely, Ignorantia facti excusat, ignorantia juris non excusat (Ignorance of fact excuses, ignorance of the law does not excuse); and Volenti non fit injuria (that to which a person assents is not esteemed in law an injury): Broom, Legal Maxims (8 ed.), *253,268. As to the latter Mr. Broom says (*272): “ There is also a large class of cases in which it has been held that money paid voluntarily cannot he.recovered, although the original payment was not required by any equitable consideration ; and these cases are very nearly allied in principle to those which have been considered in treating of a payment made in ignorance of the law.” We will therefore turn our attention more directly to the common understanding in legal thought of the former maxim.

It is axiomatic, also, that “every man is presumed to know the law,” and of this “ignorance of the law does not excuse” is but a sequence. From these, coupled with that as to ignorance of fact, Mr. Broom derives the two following propositions : “First, that money paid with full knowledge of the facts, but through ignorance of the law, is not recoverable, if there be nothing unconseientious- in the retaining of it; and, secondly, that money paid in ignorance of the facts is recoverable, provided there have been no laches in the party paying it, and there was no ground to claim it in conscience.” The qualification of the principle involved by the first deduction, namely, “if there be nothing unconseientious in retaining it,” is traceable to dicta of Lord Chief Justice De Grey in Farmer v. Arundel, 2 W. Bl. *824, and Lord Mansfield in Bize v. Dickason, 1 D. & E. 285. This has been shown by elaborate and well-considered cases, both in England and this country. The observation of Lord Chief Justice De Gr-ey was that, “When money is paid by one man to another as a mistake either of fact or of law, or by deceit, an action will certainly lie to recover it back.” This is a positive affirmation, stripped of any qualification as to conscience, that money, though paid under mistake of law, may be recovered back. But it is said that in the case wherein the announcement was made the action was not sustained, although the money had been paid by the plaintiffs under a clear mistake of law. Lord Mansfield’s proposition was I hat, “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” (assumpsit.) We are left in doubt as to whether the great jurist meant mistake of law or of fact. Mr. Justice Gibbs, who wrote the prevailing opinion in Brisbane v. Dacres, 5 Taunt. 144, infers with convincing force, from circumstances attending the utterance and others occurring later, that he meant the latter. See Clarke v. Dutcher, 9 Cow. 674, where this view was subsequently, maintained.

Brisbane v. Dacres, 5 Taunt. 144, is one among the first cases bearing upon the question, and is most elaborately and learnedly considered. The case was this : The captain of a king’s ship brought public treasure home in her, upon the public service, and treasure of individuals, for his own emolument. He received freight for both, and paid over one third of it, according to established usage in the navy, to the admiral under whose command he had sailed. Discovering, however, that the law did not compel captains to pay to admirals one third of the freight, he brought an action as for money had and received to recover it back from the admiral’s executrix, and it was held that as to the public freight he could not recover the money back. Mr. Justice Gibbs, after stating the facts, makes use of this significant and unmistakable language: “We must take this payment to have been made under a demand of right, and I think that where a man demands money of another as a matter of right, and that other, with a full knowledge of the facts upon which the demand is founded, has paid a sum, he never can recover back the sum he has so voluntarily paid. It may be that upon a further review he may form a different opinion of the law, and it may he his subsequent opinion may be the correctone. If wb were to hold otherwise, I think many inconveniences may arise. There are many doubtful questions of law. When they arise the defendant has an option either to litigate the question, or to submit to the demand, and pay the money. I think that by submitting to the demand he that pays the money gives it to the person to whom he pays it, and makes it his, and closes the transaction between them, tie who receives it has a right to consider it as his without dispute, tie spends it in confidence that it is his; and it would be most mischievous and unjust if he who has acquiesced in the right • by such voluntary payment should be at liberty, at any time within the statute of limitations, to rip up the matter, and recover back the money. He who received it is not in the same condition. He has spent it in the confidence it was his, and perhaps has no means of repayment.” Here are brought to the service of the jurist both of" the legal maxims first above alluded to, which seem to suggest a sound conclusion. Then he discusses the dicta of Lord Chief Justice De Grey and Lord Mansfield, and, as if not to have his meaning misunderstood, reiterates : “lam therefore, of the opinion this money cannot be recovered back. I think, on principle, that money which is paid to a man who claims it as his right, with a knowledge of all the facts, cannot be recovered back. I think it oh principle, and I think the weight of the authorities is so, and I think the dicta that go beyond it are not supported or called for by the facts of the cases.”