forgery before payment is held to preclude him from recovery.16 On the other hand money paid to the holder of a check or draft drawn without funds may be recovered back, if paid by the drawee under a mistake of fact. And though the rule was originally subject to the limitation that it must be shown that the party seeking to recover back had been guilty of no negligence, it is now held that the plaintiff in such case is not precluded from recovery by laches in not availing himself of the means of knowledge in his power. It is otherwise if the money is intentionally paid without reference to the truth or falsehood of the fact, and with the intention that the payee shall have the money at all events.17 Still there is authority for the rule that payment of a check by a bank is regarded as a finality, in the absence of fraud on the part of the holder; and the fact that the drawer had no funds on deposit will not give the bank any remedy against the holder.18

197. Mistake Induced by Forgetfulness.-The knowledge of the facts which precludes the recovery of money paid means a knowledge existing in the mind at the time of payment.19 Therefore a payment made through forgetfulness of the fact that the amount has already been paid is a payment under a mistake of fact, and may be recovered,20 for a person so paying has done an act he did not intend to do, and did not know or believe he was doing, and the error, no matter whether arising from forgetfulness or otherwise, destroys the whole basis of the agreement and the parties are restored to their original condition and right. Thus it has been held that where one pays a note under the mistaken belief that he had executed it, he may recover the money so paid, on discovering the mistake.

198. Means of Knowledge.-The rule which formerly prevailed that if a person might, by the exercise of reasonable diligence, have ascertained the facts, he would not on the ground of ignorance or mistake be permitted to recover money paid has of late been much

16. Ellis v. Ohio L. Ins., etc., Co., 4 Ohio St. 628, 64 Am. Dec. 610: Cocks v. Masterman, 9 B. & C. 902, 17 E. C. L. 517, 33 Rev. Rep. 365, 21 Eng. Rul. Cas. 68; London, etc., Plate Bank v. Liverpool Bank [1896] 1 Q. B. 7, 65 L. J. Q. B. 80, 73 L. T. N. S. 473, 21 Eng. Rul. Cas. 73. See supra, par. 192.

17. Merchants' Nat. Bank v. National Eagle Bank, 101 Mass. 281, 100 Am. Dec. 120.

18. Manufacturers' Nat. Bank v. Swift, 70 Md. 515, 17 Atl. 336, 14 A. S. R. 381.

19. Lewellen v. Garrett, 58 Ind. 442, 26 Am. Rep. 74.

20. Simms v. Vick, 151 N. C. 78, 65 S. E. 621, 18 Ann. Cas. 669 and note, 24 L.R.A. (N.S.) 517 and note; Scott v. Ford, 45 Ore. 531, 78 Pac. 742, 80 Pac. 899, 68 L.R.A. 469.

1., Baltimore, etc., R. Co. v. Faunce, 6 Gill (Md.) 68, 46 Am. Dec. 655. 2. Lewellen v. Garrett, 58 Ind. 442, 26 Am. Rep. 74.

3. Bend v. Hoyt, 13 Pet. 263, 10 U. S. (L. ed.) 154; Norton v. Marden, 15 Me. 45, 32 Am. Dec. 132; Adams v. Reeves, 68 N. C. 134, 12 Am. Rep. 627; Scott v. Ford, 45 Ore. 531, 78 Pac. 742; 80 Pac. 899, 68 L.R.A. 469 (stating rule); Gould v. McFall, 118 Pa. St. 455, 12 Atl. 336, 4 A. S. R.

relaxed. The later cases establish the doctrine that it is not sufficient to preclude a person from recovering money paid by him under a mistake of fact that he had the means of knowledge of the fact.* Of course if the money is intentionally paid without reference to the truth or falsehood of the fact, the plaintiff meaning to waive all inquiry into it, and intending that the person receiving shall have the money at all events, whether the fact be true or false, there can be no recovery. This rule seems best to accord with the plainest principle of justice. The position that a person making a payment is precluded from recovery on the ground of mistake if he has the means of knowledge in his power is founded on a dictum in an early English case, and being a part of a rule stated, it has, like so many other misstatements of legal principle, been copied by courts without a careful consideration of its import. As to what amounts to means of knowledge within the rule, it has been held that it is such as the party may avail himself of without calling to his aid other assistance.8

7

199. Mistake on Disputed Question of Fact.-In the settlement of disputed questions where both parties have equal opportunity and facilities for ascertaining the facts, it becomes incumbent on each then to make his investigation and not carelessly settle, trusting to future investigation to show a mistake of fact and enable him to recover back the amount paid. Therefore where the existence or nonexistence of a particular fact is brought to their attention and the means of knowledge as to the fact in controversy is equally available to each, then a payment made is binding and cannot be recovered, where the party either fails to investigate the fact, or does investigate and draws an erroneous conclusion.10 Thus it has been held that an adminis

606; Stevens v. Head, 9 Vt. 174, 31 Simms v. Vick, 151 N. C. 78, 65 S. E. Am. Dec. 617.

Note: 94 A. S. R. 415.

4. Wolf v. Beaird, 123 Ill. 585, 15 N. E. 161, 5 A. S. R. 565; Baltimore, etc., R. Co. v. Faunce, 6 Gill (Md.) 68, 46 Am. Dec. 655; Waite v. Leggett, 8 Cow. (N. Y.) 195, 18 Am. Dec. 441; Kingston Bank v. Eltinge, 40 N. Y. 391, 100 Am. Dec. 516; Simms v. Vick, 151 N. C. 78, 65 S. E. 621, 18 Ann. Cas. 669 and note, 24 L.R.A. (N.S.) 517 and note; Scott v. Ford, 45 Ore. 531, 78 Pac. 742, 80 Pac. 899, 68 L.R.A. 469; McKibben v. Doyle, 173 Pa. St. 579, 34 Atl. 455, 51 A. S. R. 785.

Note: 94 A. S. R. 415.

621, 18 Ann. Cas. 669 and note, 24 L.R.A.(N.S.) 517 and note; Scott v. Ford, 45 Ore. 531, 78 Pac. 742, 80 Pac. 899, 68 L.R.A. 469; McKibben v. Doyle, 173 Pa. St. 579, 34 Atl. 455, 51 A. S. R. 785. See supra, par. 23. 6. Baltimore, etc., R. Co. v. Faunce, Gill (Md.) 68, 46 Am. Dec. 655. 7. Kingston Bank v. Eltinge, 40 N. Y. 391, 100 Am. Dec. 516.

6

8. Norton v. Marden, 15 Me. 45, 32 Am. Dec. 132.

9. McArthur v. Luce, 43 Mich. 435, 5 N. W. 451, 38 Am. Rep. 204.

10. Alton V. Webster First Nat. Bank, 157 Mass. 341, 32 N. E. 228, 34 A. S. R. 285, 18 L.R.A. 144; New York 5. Merchants' Nat. Bank v. National L. Ins. Co. v. Crittenden, 134 Ia. 613. Eagle Bank, 101 Mass. 281, 100 Am. 112 N. W. 96, 120 A. S. R. 444, 13 Dec. 120; Kingston Bank v. Eltinge, Ann. Cas. 408, 11 L.R.A. (N.S.) 233 40 N. Y. 391, 100 Am. Dec. 516: and note.

tration, by virtue of statute, upon the estate of a person presumed to be dead by seven years' absence, establishes a right of action by the administrator on life insurance policies held by the absentee, and the payment of the insurance money to the administrator to avoid suit on the policies is conclusive on the insurer, and the money cannot be recovered by the insurer after it appears that the insured is in fact alive.11

200. Mistake as to Title, Authority or Quantity.—Whenever money is paid on the representation of the receiver that he has either a certain title in property transferred in consideration of the payment, or a certain authority to receive the money paid, when in fact he has no such title or authority, then, although there is no fraud or intentional misrepresentation on his part, yet there is no consideration for the payment; and the money remains, in equity and good conscience, the property of the payer, and may be recovered back by him.12 Thus where the price of a piece of land depends on the number of square feet it contains, if there is a mistake in computing such area and the purchaser paid a greater sum than was due, he may recover such excess. And his right to recover is not waived by accepting a conveyance thereof, or by paying, after the discovery of the mistake, a note given in part payment of the purchase price.13 As a general rule a grantee who takes a quitclaim deed cannot recover back the consideration paid, in case of failure of title. But this rule does not apply, if the title fails for want of authority in the person who makes the deed to act in the capacity in which he professes to act. In such case, assumpsit will lie to recover back the consideration.14 Where there is no representation as to the title of the vendor but it is intended that the purchaser shall run the risk of title then the purchaser cannot recover the purchase money because of failure of title.15/

201. Circumstances Making Recovery Inequitable.-The rule that money paid under a mistake of fact may be recovered back does not apply where the payment has caused such a change in the position of the other party that it would be unjust to require him to refund.16 If circumstances exist which make such recovery inequitable, the

11. New York L. Ins. Co. v. Crittenden, 134 Ia. 613, 112 N. W. 96, 120 A. S. R. 444, 13 Ann. Cas. 408 and note, 11 L.R.A. (N.S.) 233 and note.

12. Leather Manufacturers' Nat. Bank v. Merchants' Nat. Bank, 128 U. S. 26, 9 S. Ct. 3, 32 U. S. (L. ed.) 342; Feemster v. Markham, 2 J. J. Marsh. (Ky.) 303, 19 Am. Dec. 131; Wright v. Dickinson, 67 Mich. 580, 35 N. W. 164, 11 A. S. R. 602; McKibben v. Doyle, 173 Pa. St. 579, 34 Atl. 455, 51 A. S. R. 785.

13. Cardinal v. Hadley, 158 Mass. 352, 33 N. E. 575, 35 A. S. R. 492. 14. Earle V. Bickford, 6 Allen (Mass.) 549, 83 Am. Dec. 651. 15. Dorsey v. Jackman, 1 Serg. & R. (Pa.) 42, 7 Am. Dec. 611.

16. Appleton Bank v. McGilvray, 4 Gray (Mass.) 518, 64 Am. Dec. 92; National Bank of Commerce v. National Mechanics' Banking Ass'n, 55 N. Y. 211, 14 Am. Rep. 232; Hathaway v. Delaware County, 185 N. Y. 368, 78 N. E. 153, 113 A. S. R. 909, 13 L.R.A.

burden of proving that fact rests on the person resisting the payment.17 Thus where a person by mistake declares that an entire shipment consists of a specified article which is dutiable, he cannot recover duties paid where it turns out that only a portion of the shipment consisted of such articles, and as to the remainder it consisted of nondutiable merchandise, for the property having been delivered by the United States without an examination and in reliance on the declaration of the owner its position is so changed as to make it inequitable to allow a recovery.18 Likewise where a mortgagor pays to an assignee of the mortgage the amount due to such assignee on the mortgage and both parties are ignorant of the fact that the mortgage had been previously assigned to another, and the assignment recorded, the money thus paid cannot be recovered, as the mortgage having been delivered up to the mortgagor to be canceled, the assignee could not be restored to his former position.19 However, as between the immediate parties to an obligation or contract the doctrine as to an irrevocable change of position involving loss to the defendant, where the parties are equally innocent, constitutes no defense to an action brought to recover money paid under mistake,20 for it is an ordinary result of payment of money by mistake that the payee has incurred liabilities or paid money which he would not have done, except for the receipt of the money, and if the rule were applied in all cases there could seldom be a recovery.1

Mistake of Law

202. In General.-The question whether money paid under a mistake of law may be recovered is an ancient one and, has provoked much dispute, but the trend of modern authority is strongly in favor of the rule that, as between individuals, money voluntarily paid on a claim of right, with full knowledge of all the facts, in the absence of fraud, duress, or compulsion, cannot be recovered back merely because the party, at the time of payment, was ignorant of or mistook the law as to his liability. The illegality of the demand paid constitutes, of itself, no ground for relief. The rule applies to private

(N.S.) 273; Boas v. Updegrove, 5 Pa. St. 516, 47 Am. Dec. 425; London, etc., Plate Bank v. Liverpool Bank, 1 Q. B. 7, 65 L. J. Q. B. 80, 73 L. T. N. S. 473, 21 Eng. Rul. Cas. 73.

Note: 33 U. S. (L. ed.) 347. 17. Hathaway v. Delaware County, 185 N. Y. 368, 78 N. E. 153, 113 A. S. R. 909, 13 L.R.A. (N.S.) 273.

19. Behring v. Somerville, 63 N. J. L. 568, 44 Atl. 641, 49 L.R.A. 578. 20. Kingston Bank v. Eltinge, 40 N. Y. 391, 100 Am. Dec. 516.

Note: 21 Eng. Rul. Cas. 79. 1. Kingston Bank v. Eltinge, 40 N. Y. 391, 100 Am. Dec. 516.

2. Elliott v. Swartwout, 10 Pet. 137, 9 U. S. (L. ed.) 373; Waples v.

18. Bend v. Hoyt, 13 Pet. 263, 10 United States, 110 U. S. 630, 4 S. Ct. U. S. (L. ed.) 154. 225, 28 U. S. (L. ed.) 272; United

corporations as well as to natural persons. There are a few decisions which lay down a principle distinct and antagonistic to the general rule. According to the view in those courts money paid by mistake. of the law may be recovered back in an action for money had and received where there is a full knowledge of all the facts, provided that the mistake is clearly proven, and the defendant cannot, in good conscience, retain the money. And since it is contended by the author

Atl. 336, 4 A. S. R. 606; Robinson v. Charleston, 2 Rich. L. (S. C.)_317, 45 Am. Dec. 739; Dickins v. Jones, 6 Yerg. (Tenn.) 483, 27 Am. Dec. 488 and note; Boyd v. Anderson, 1 Overt. (Tenn.) 438, 3 Am. Dec. 702; Marshall v. Snediker, 25 Tex. 460, 78 Am. Dec. 534; Flack v. National Bank of Commerce, 8 Utah 193, 30 Pac. 746, 17 L.R.A. 583; Beard v. Beard, 25 W. Va. 486, 52 Am. Rep. 219; Birkhauser v. Schmitt, 45 Wis. 316, 30 Am. Rep. 740.

Notes: 64 Am. Dec. 95; 15 Am. Rep. 171; 51 Am. Rep. 821; 4 A. S. R. 608; 94 A. S. R. 411; 33 U. S. (L. ed.) 348.

States v. Edmonston, 181 U. S. 500, 412; Phillips v. McConica, 59 Ohio St. 21 S. Ct. 718, 45 U. S. (L. ed.) 971; 1, 51 N. E. 445, 69 A. S. R. 753; Scott Rector v. Collins, 46 Ark. 167, 55 Am. v. Ford, 45 Ore. 531, 78 Pac. 742, 80 Rep. 571; Boggs v. Fowler, 16 Cal. Pac. 899, 68 L.R.A. 469 (discussing 559, 76 Am. Dec. 561; Brumagim v. the origin and history of the rule); Tillinghast, 18 Cal. 265, 79 Am. Dec. Morris v. Tarin, 1 Dall. (Pa.) 147, 1 176; Bucknall v. Story, 46 Cal. 589, U. S. (L. ed.) 76, 1 Am. Dec. 233; 13 Am. Rep. 220; Christy v. Sullivan, Gould v. McFall, 118 Pa. St. 455, 12 50 Cal. 337, 19 Am. Rep. 655; Elston v. Chicago, 40 Ill. 514, 89 Am. Dec. 361; Ligonier v. Ackerman, 46 Ind. 552, 15 Am. Rep. 323, overruled on another point by Jennings v. Fisher, 103 Ind. 112, 2 N. E. 285; Chase v. Dwinal, 7 Greenl. (Me.) 134, 20 Am. Dec. 352; Norton v. Marden, 15 Me. 45, 32 Am. Dec. 132; Freeman v. Curtis, 51 Me. 140, 81 Am. Dec. 564; Houlehan v. Kennebec County, 108 Me. 397, 81 Atl. 449, Ann. Cas. 1913B 435 and note; Baltimore v. Lefferman, 4 Gill (Md.) 425, 45 Am. Dec. 145 and note; Lester v. Baltimore, 29 Md. 415, 96 Am. Dec. 542; Benson v. Monroe, 7 Cush. (Mass.) 125, 54 Am. Dec. 716 and note; Haven v. Foster, 9 Pick. (Mass.) 112, 19 Am. Dec. 353; Alton v. Web- 3. Badeau v. United States, 130 U. ster First Nat. Bank, 157 Mass. 341, 32 S. 439, 9 S. Ct. 579, 32 U. S. (L. ed.) N. E. 228, 34 A. S. R. 285, 18 L.R.A. 997; Norfolk County v. Cook, 211 144; People's Sav. Bank v. Heath, 175 Mass. 390, 97 N. E. 778, Ann. Cas. Mass. 131, 55 N. E. 807, 78 A. S. R. 1913B 650 and note; American Brew481; Norfolk County v. Cook, 211 ing Co. v. St. Louis, 187 Mo. 367, 86 Mass. 390, 97 N. E. 778, Ann. Cas. S. W. 129, 2 Ann. Cas. 821; Lamar v. 1913B 650; Teasdale v. Stroller, 133 Lamar, 261 Mo. 171, 169 S. W. 12, Mo. 645, 34 S. W. 873, 54 A. S. R. Ann. Cas. 1916D 740; Valley R. Co. 703; Wood v. School Dist., 80 Neb. v. Lake Erie Iron Co., 46 Ohio St. 44, 722, 115 N. W. 308, 15 L.R.A. (N.S.) 18 N. E. 486, 1 L.R.A. 412. 478; Evans v. Gale, 17 N. H. 573, 43 4. Northrop v. Graves, 19 Conn. Am. Dec. 614; Camden v. Green, 54 548, 50 Am. Dec. 264; Culbreath v. N. J. L. 591, 25 Atl. 357, 33 A. S. R. Culbreath, 7 Ga. 64, 50 Am. Dec. 375; 686 and note; Mowatt v. Wright, 1 Ray v. Kentucky Bank, 3 B. Mon. Wend. (N. Y.) 355, 19 Am. Dec. 508 (Ky.) 510, 39 Am. Dec. 479; Spaldand note; Champlin v. Laytin, 18 ing v. Lebanon, 156 Ky. 37, 160 S. W. Wend. (N. Y.) 407, 31 Am. Dec. 382; Valley R. Co. v. Lake Erie Iron Co., 46 Ohio St. 44, 18 N. E. 486, 1 L.R.A.

See also EQUITY, vol. 10, p. 313.

751, 49 L.R.A. (N.S.) 387 and note; Scott v. Ford, 45 Ore. 531, 78 Pac. 742, 80 Pac. 899, 68 L.R.A. 469 (stat