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Bates v. N. Y. Ins. Co.
By the articles of association of the defendants, the sum of 10 dollars on each share was payable at five different instalments; on the first of May, 1796, the 20th of July, 1796, the 20th of July, 1796, the 20th of January, 1797, the 20th of January, 1798. It appeared by the articles of association, that no transfer of any share could be permitted or be valid, until all the instalments on such shares were paid. The two first instalments were paid by Butler, and the three last by the plaintiff, who regularly received a notice of such payment being due, from the secretary of the company, directed, however, to Norman Butler. It was also proved by the secretary of the company, that on the 20th day of Januuary, 1797, he knew of the assignment from Butler to the plaintiff; and that, from that day to the 20th of January,
1798, three dividends were made, amounting in the [*239] whole to 525 dollars, on the 50 shares; which sum 'the
defendants had credited on three certain notes given by Norman Butler to thein. The first note was dated 3d of June, 1795, for 1,001 dollars and 25 cents, payable in six months, and the other two amounted to 251 dollars and 25 cents, dated the 21st of September, 1796, payable six months after date; which notes were given for premiums of insurance; and by return of premiums, the sum dne on the three notes was reduced to 990 dollars; and after crediting the 525 dollars, the amount of the three dividends, a balance remained due from Butler to the defendants, of 465 dollars, The defendants refused to transfer the shares which had been assigned to the plaintiff by Butler, until that sum was paid, which the plaintiff accordingly paid, and the transfer was made. Butler, on the 20th of January, 1798, was insolvent; and on that day the last instalment was paid on the 50 shares, and the plaintiff requested a transfer to be made, which the defendants refused to make, until the balance due on the three notes above mentioned was paid. It was also proved by the secretary of the company, that it was common to make assignments of stock, and that it was
Bates v. N. Y. Ins. Co.
their practice to send notices, when the instalments became due, to the persons to whom the stock had been assigned.
The jury found a verdict for the plaintiff for 990 dollars, subject to the opinion of the court, on a case containing the above facts; and the questions raised for the determination of the court were, whether the plaintiff ought to recover any thing; and, if so, whether he should recover the 990 dollars, being the amount of the three dividends made after his assignment, together with the money paid by him in order to procure the transfer; or, whether he should recover only the 465 dollars, the money demanded of him, and paid at the time the transfer of the stock was made.
Pendleton and Wilkins, for the plaintiff.
We are of opinion that judgment ought to be given for the plaintiff; but the question, as to the amount, seems to divide itself into two distinct considerations. In the first place, whether the 465 dollars were paid under such circumstances of compulsion, that the plaintiff ought to recover it back, or whether it must be considered as a voluntary payment, and coming within the rule volenti non fit injuria. And, in the second place, whether the defendants, holding those notes against Butler, were authorized to appropriate the dividends on those shares to the payment of the notes after they had received notice of the assignment of the stock to the plaintiff.
The equitable extension of this kind of action has of late been so liberal, that it will lie to recover money obtained from any one, by extortion, imposition, oppression, or taking an undue advantage of his situation. In the present case, there was, at least, an undue advantage taken of the plaintiff's situation. He had purchased of Norman Butler the fifty shares; a regular assignment was made to him; but the transfer could not be completed without the assent of the defendants. He had given notice to the defendants of the assignment, and had paid them three instalments, amount. ing to 1,500 dollars; and no information appears to have Vol. III.
Bates v. N. Y. Ins. Co.
been given to him by the company, that they had any demand against Butler, who had now become insolvent, and the plaintiff had no mode of indemnifying himself, for the money paid Butler, or for the instalments which he had paid, but by some means or other procuring a transfer of the stock, which he had purchased, which the defendants refused to make, unless he paid them the 465 dollars, which was not then due from Butler to them. The purchase of the stock had been made by the plaintiff, and the business transacted according to the usage and practice before adopted by the defendants, and he had reasonable grounds to
believe, when he made the purchase, that the trans[*241] fer would *be made to him, agreeably to the former
practice of the company, and which they in equity and good conscience were bound to do. The money being inequitably demanded of him, he must be presumed to have paid it, relying on his legal remedy to recover it back. In the case of Astly v. Reynolds, (2 Str. 913,) money paid under circumstances less coercive than in the present case was recovered back in this form of action. In that case the plaintiff had pawned some plate to the defendant, and, when he came to redeem it, the defendant refused to deliver it up, unless he was paid an exorbitant premium, which was paid, and an action brought 10 recover the money back. The court, in giving judgment, said that it was a payment by compulsion ; the plaintiff might have such an immediate want of his goods that an action of trover would not do his business; that where the rule volenti non fit injuria is applied, it must be where the party had his freedom of exerci. sing his will. In the case of Irving v. Wilson, (4 Term Rep. 485,) and also of Hunt, Executor, foc. v. Stokes, (4 Term Rep. 561,) the same principles are fully recognized and adopted.
It is contended, on the part of the defendants, that this was a voluntary payment, and, therefore, not recoverable back; and to establish this, two cases have been cited, Brown v. M. Kinnaly, (1 Esp. Cases, 279,) and Bizev. Dickason, (1 Term
Bates v. N. Y. Ins. Co.
Rep. 285.) But on examination, those cases do not compare with the present. The fornier case appears to have been decided on the ground that the money for which the action was brought had been paid pending a former suit, and that the plaintiff, Brown, might have interposed, as a defence in that action, the same matter on which he then relied to recover; and that to allow him to sustain his action would be to try every such matter twice. In the latter case, the money for which the action was brought, in equity and conscience, belonged to the defendant; and although the plaintiff could not in law have been compelled to pay it; yet *after he had voluntarily paid it, the court on [*242] that ground refused to sustain an action to recover it back. On the whole, we are of opinion that the 465 dollars could not, under all circumstances, be considered a voluntary payment, but as made, in some measure, by compulsion, an undue advantage having been taken of the plaintiff's situation, and that he ought to recover it back.
The second question with respect to the dividends appropriated by the defendants, involves points of greater doubt and difficulty. From the case it appears, that the assignment from Butler to the plaintiff was made on the 22d of July, 1796, but it does not appear that notice of it was given to the defendants, until the 20th of January, 1797; and the three dividends were made after that period. Had the money been actually paid over to Norman Butler aster the defendants received notice of the assignment, we should be inclined to protect the rights of the assignee, and consider it a payment wrongfully made, and that the plaintiff ought to recover the amount. But in the present case, the defendants had, at the time of receiving the notice, an equitable lien on this money; all the three notes given by Butler to the defendants were dated prior to the notice, and the one for 1,001 dollars and 25 cents, was actually due at the time they received notice of the assignment; and, after deducting the amount of the return premiums, there was a balance due on that note of 738 dollars and 75 cents, which was more than
Bates v. N. Y. Ins. Co.
sufficient to absorb the three dividends amounting only to 525 dollars. By the terms of the association, the defendants could not be called upon to transfer the stock, until the 20th of January, 1798, being the day on which the last instalment for the shares was paid ; and they were then bound to make the transfer, and would not have been justifiable in denying it, until another dividend was made, so as to satisfy the residue of their demand against Butler. We wish to be
understood that our opinion of the defendants' right [*243] to apply the three dividends of 525 *dollars to the
payment of their demand against Butler, is founded on the circumstance that the first note was actually due when they received notice of the assignment. The money in their hands, they had a right to consider it as appropriated to the payment of that demand ; and it is unnecessary to say what would have been our decision had the note not been due. We are, therefore, of opinion, that the plaintiff is entitled to recover the 465 dollars only, with the interest from the 20th of January, 1798.
(a) The books are full of cases which confirm the principle of Bates v. The New York Ins. Co. (See Comyn's Dig., Action upon the case upon Assump. A. 1; Harrison's Dig. ed. 1846, vol. 1, p. 392, ut sup. ; vol. 5, p. 95, et seq. 1 Steph. N. P. 335, Assumpsit, IV., 1; Wheaton's Selwyn, ed. 1848, p. 81, et seq.; United States Digest, Assumpsit, VI. a. d.; Id. supp. VI. a. d.; Gilchrist's Dig. Assimpsit, E. p. 29, 30; Halsted's Dig. tit. Money had and received, p. 625; Maryland Dig. tit. Assumpsit, II. b. vol. 1, 69; Minot's Dig. tit. Assumpsit, II. p. 52; Rice's Dig. tit. Assumpsit, II. p. 69 ; Chitty on Cont. ed. 1848, p. 601, et seq.)