Putnam's Handy Law Book for the Layman

by Albert Sidney Bolles

As the illness or death of a contractor does not, like fire or shipwreck, deprive the other party of the fruits of what has been already done, the benefit resulting to him is more obvious, and the element of hardship is wanting that appears in many of the cases. The value of his services or the materials he may have used may therefore be recovered. In one of the cases A agreed that he and his wife should live in B's house and maintain him for life. As A's wife died the contract could not be performed. Nevertheless, A recovered the value of the service he had rendered to B during the lifetime of his wife.

Wagering contracts either by statute or judicial decision are illegal and void in most or all the states. In many of them the statute permits the recovery of the money from the stakeholder or the winner. Payment over to the winner after notice or demand by the loser is not a good defense in an action against the stakeholder. Again, the winner is liable who, when receiving the money, knows that the stakeholder has been notified not to pay it over, or has received notice not to take it.

The legality of contracts made or to be performed on Sunday is determined generally by statute. Generally, when a contract is made on Sunday, or is fully performed on both sides, the money paid or other thing done in execution of it cannot be recovered. Again, one who is induced by fraudulent representations to enter into a contract which is in violation of a Sunday law is not so much in the wrong as the other, and consequently may recover a benefit he has conferred on the other party in performing the contract.

If a member of a firm gives a promissory note signed by the partnership name, for a debt of his own, which his partner is compelled to pay, he may recover the money from the other. So, if a carrier by mistake delivered goods to the wrong person who keeps them, and the carrier is obliged to pay for their value, he can recover the amount of the other person who thus wrongfully keeps them.

Whenever a person makes a payment to another under such a mistake of the material facts as to create a belief in the existence of a liability which does not really exist, the money may be recovered back. Such an obligation arises where money is paid as due on the basis of erroneous accounts, and on a true statement of account is found not to have been due. A voluntary payment with knowledge of all the facts cannot be recovered, even though there may have been no obligation to pay.

A person cannot recover money paid under a mistake of fact who has received the equivalent for which he bargained, because there is no failure of consideration. Nor is the fact immaterial that he need not, and would not have made the payment had he known the true state of things. A bank, for example, that pays the check of a depositor under the erroneous belief that it has sufficient funds, may not recover from the payee the excess to the depositor's credit. But if the purchaser of goods has paid the price, and the seller fails to deliver them, the purchaser may recover his money. And in any case, a person who has paid money under an agreement which he may rescind and does so, because there was a failure of consideration, may recover what he has paid. An action will lie against a person who sells goods as his own, but which do not belong to him, whenever the real owner claims them from the purchaser. In like manner an action will lie against a person who sells bills, notes, bonds, stock or other securities which prove to be worthless, or against a person who agrees to transfer the title to land which, for lack of title or other reason, cannot pass.

As a rule, the consideration of a contract must totally fail to entitle a person to recover back the money he has paid. If the consideration has only partly failed, the remedy, if there is any, is for a breach of the contract, and not to recover back the money he has paid. Thus, if an article is sold with a warranty of its quality, and it is not worthless, his remedy is an action to recover damages for a breach of the warranty, and not an action to recover back the money paid for the thing purchased.

A liability cannot be imposed on a person without his act or consent. One man cannot force a benefit on another without his knowledge or consent, and then compel him to pay for it. "If a person," says Clark, "intentionally and knowingly performs services for another or otherwise confers a benefit on him without his knowledge, so that he has no opportunity to refuse the benefit, the law will not create a liability to pay for it. So, where a person supplies another with goods, the latter supposing that he is being supplied by another person with whom he had contracted for the goods, the law will not even imply a promise to pay for the goods." Where benefits are conferred by one person on another under such circumstances as to raise no promise in fact or in law to pay for them, he may, nevertheless, become liable by retaining them. Thus, if a person were to receive goods from another reasonably but mistakenly believing them to be intended as a gift, and, after learning of his mistake, should retain them, when he might return them, or if he should receive part of the goods purchased from another, and retain them after failure of the latter to supply the rest of the goods, the law would compel him to pay for them. And the same rule applies where benefits are in any other way received under such circumstances as to create no contractual obligation, and are retained when they should in justice be returned. If, however, the benefits thus received are incapable of being returned, as where they consist of services, or of materials which have been used in repairing a house, no liability is created.

Sale.—By a contract to sell goods the seller agrees to transfer the property in them to the buyer for a consideration called the price. There is an important distinction between a contract to sell in the future and a present sale. The first is called an executory, the other an executed, sale. If the goods are to be transferred, there is an executed sale even though the price is not to be paid at the same time. But if the price is paid, and the goods are not then to pass, the transaction is a contract to sell, or an executory sale. Both kinds of sales may be by deed or sealed contract as well as by parol or orally.

Sales and contracts to sell are based on mutual assent, the intent, therefore, of the parties fixes the nature and terms of the bargain. If the offerer understood the transaction to differ from that which his words plainly expressed, it is immaterial, "as his obligation must be measured by his overt acts." Thus, if an offer to buy or sell is sent by telegraph, and is improperly transmitted by the telegraph company, an acceptance by the offeree creates a binding bargain. By using the telegraph as an agency of communication, the offerer makes himself responsible for the offer actually delivered. Of course the telegraph company would be responsible to the offerer for any damage he may have suffered unless relieved by some neglect or fault of the sender of the message.