Claim against directors

of company for misrepresentation

by fraudulent prospectus.

2. On the 1st day of May, 1870, Messrs. A. and B., public accountants, acting as agents of the defendants, sent to the plaintiff, and the plaintiff received, a prospectus and letter relating to an issue of debentures in the said company.

3. The said prospectus and letter were issued by the authority or with the sanction or acquiescence of the defendants.

4. The plaintiff, believing that the information contained in the said letter and prospectus was true, and acting entirely upon the faith of the statements therein contained, subscribed for and took twelve of the said debentures, and paid the moneys payable in respect thereof, namely the sum of £. The plaintiff's application was accepted, and the said twelve debentures were issued and allotted to him by the defendants.

5. The plaintiff has since ascertained that the following statements contained in the said letter and prospectus were and are false and calculated to mislead and deceive the plaintiff, and the plaintiff alleges that the defendants falsely and fraudulently made the said statements to him, although they well knew that the same were false, with the intention to induce him to subscribe for and take the said debentures on the faith of them. The following are the false statements above referred to:

[Here follow the false statements.]

6. The said debentures so bought by the defendant, upon the faith of the representations aforesaid, are altogether worthless, and the plaintiff has entirely lost the sums of money which he paid in respect of them.

The plaintiff claims the said sum of £.

Claim for

misrepresentation of the

solvency

of a third

person.

Action for Misrepresentation as to the Solvency of another

Person.

1. The plaintiffs are corn merchants carrying on business at B., and the defendant C. W. is the manager of the S. branch of the G. bank.

2. In the month of, 18, the plaintiffs, through their bankers S. & Co., caused a letter to be written and sent to the

G. bank, which said letter was in the words and figures follow- Claim for ing, or to the following effect :

"[Private.]

misrepresentation of solvency of third

"S. Bank, B., 18—.

"We shall feel obliged by your favouring us with your confidential opinion as to the general character and responsibility in the way of business of J. F., of to the extent of

£1000 to £2000."

3. In answer to the said letter, the defendant, intending thereby to deceive the plaintiffs and to induce them to give credit to the said J. F., wrote and signed and then sent to the said S. & Co. a letter which was in the words and figures following:

"[Confidential.]

"G. Bank, S.

"For your private use, and without responsibility on the part of this bank or the manager.

"S. & Co., B.

"Gentlemen, The person you inquire about is respectable and doing a good business, and we consider his means are sufficient for his requirements in trade. The amount you state (£2000) seems rather large for a single transaction. We are yours obediently. "C. W.,

"Manager."

4. At the time when the said reply was so written and sent by the defendant, the said J. F. was insolvent and totally unable to carry on his trade as a miller, as the defendant well knew, and his debts and liabilities amounted to more than £1000 beyond his assets, which was also well known to the defendant.

5. In consequence of the said reply, the plaintiffs were induced to sell and deliver to the said J. F. goods on credit; and in the month of 18-, the said J. F. was indebted to the plaintiffs in respect of such goods in the sum of £818.

6. In the month of, 18, the said J. F. filed a petition for liquidating his affairs by arrangement or composition, and the plaintiffs have lost £780 of the said sum of £818 so due and owing to them as aforesaid.

The plaintiffs claim £780, with interest thereon from until payment.

person.

Claim for money lent and interest.

Money paid to use of plaintiff.

Request must be proved, except where plaintiff compelled

to pay.

When request

implied.

Money (a).

Claim for Money lent and Interest.

1. At various dates between the 1st of July and the 1st October, 1874, the plaintiff lent to the defendant sums of money amounting in the whole to £150.

(a) The actions coming under the head of money are:

1. For money paid to the use of the plaintiff at his request.
2. For money lent by the plaintiff to the defendant.

3. For money had and received by the defendant for or on behalf of the plaintiff.

Money paid to the use of the plaintiff.]-To maintain this action the following conditions are necessary, viz.-(a) That the money was paid by the plaintiff; (b) That it was paid at the request of the defendant. To support the first of these it is necessary to show that money was paid, unless where stock (Howard v. Danbury, 2 C. B. 803), or a bill or note (Barclay v. Gooch, 2 Esp. 571) is taken as equivalent to money. It must also appear that the money paid was the plaintiff's. Moore v. Pyrke, 11 East, 52; Erall v. Partridge, 8 T. R. 308.)

(See

A request must be proved, even where the plaintiff has paid a debt due by the defendant. (Stokes v. Lewis, 1 T. R. 20.) But a legal obligation to pay another's debt, as in the case of a surety, dispenses with an express request. (See Johnson v. R. Mail Packet Co., L. R. 3 C. P. 38.) On this principle an accommodation acceptor who is sued in default of payment by the drawer may recover from the latter the amount of the bill paid by him (Driver v. Burton, 21 L. J. Q. B. 157); aliter if he paid it voluntarily. (Sleigh v. Sleigh, 5 Ex. 514.) If he defends the action at the request of the drawer, he may recover the costs. (Garrard v. Cottrell, 10 Q. B. 679.) And such request is implied. (Stratton v. Mathers, 3 Ex. 48.)

Where the plaintiff paid the funeral expenses of the defendant's wife, who was living apart from him at her death, which took place in the plaintiff's house, he was held entitled to recover, though he knew where

2. Such loans were made on the terms that the defendant Claim for should repay the same by the 1st of October, 1875, and should pay interest thereon after the rate of 15 per cent. per

to find the defendant, and did not apply to him. (Bradshaw v. Beard, 31 L. J. C. P. 273.)

If the plaintiff allows goods to remain on the defendant's premises with his knowledge but without his express request until rent has become due, and the landlord has distrained, the plaintiff cannot recover from the defendant money paid by him to pay out the distress.

money lent.

paid for breaches of cove

An original lessee may recover in this action money paid by him for Lessee may breaches of covenant by the assignee, on the implied or express promise recover or covenant to indemnify (Moule v. Garrett, L. R. 5 Ex. 132; aff. Ex. money Ch. L. R. 7 Ex. 101. See also Roberts v. Crowe, L. R. 7 C. P. 636, per Willes, J.; and Couch v. Tregonning, L. R. 7 Ex. 88.) As to costs paid in action on such breaches, see Howard v. Lovegrove, L. R. 6 Ex. 43. If a person is compelled to pay money in consequence of his own neglect or breach of duty, though it may be for the benefit of another, it cannot be recovered from the latter. (Pitcher v. Bailey, 8 East, 171.)

If there has been an express request to pay, the plaintiff may recover, though the debt was one which could not have been enforced, such as a wager (Knight v. Chambers, 24 L. J. C. P. 121), or a time bargain. (Rosewarne v. Billing, 33 L. J. C. P. 55.) A subsequent assent to the payment will be evidence of a previous request. (1 Wms. Saund. 264, b (2).)

nant by assignee of the term.

Mere payment of

Money lent.]-The plaintiff must show that the money was lent and not repaid. The mere payment of money to the defendant is not evidence of a loan, as the presumption is that it was in payment of a debt. (Welch v. Seaborn, 1 Stark. 474.) But if the plaintiff can show money not any transactions from which the loan may be inferred, or an application evidence for a loan at the time, this, coupled with payment, will be evidence of a of a loan. loan. (Cary v. Gerrish, 4 Esp. 9.) Where money is advanced by A. to B. as a gift, B.'s assent will be assumed, but if B. declines to accept it except as a loan, the advance is then a loan. (Hill v. Wilson, L. R. 8 Ch. 888.) Where A., at the request of B., agreed to lend C. money on D.'s What is guarantee, and did so, receiving the following memorandum, signed by evidence C. and D., "We jointly and severally owe you £60," it was held that of a loan. there was evidence of a loan. (Buck v. Hurst, L. R. 1 C. P. 297.)

Money had and received for plaintiff.]—The plaintiff must show that money was received by the defendant, and that it was received by him on account of the plaintiff. The action will not lie to recover a bank note against the finder thereof, it not having been received (Chitty on Bills, 9th ed., 524); aliter if cashed. (Ib.)

An auctioneer is the agent of both parties, and a deposit on a sale that goes off may be recovered from him as money received to the plaintiff's Where a deposit is paid to the vendor's solicitor, the vendor may recover it before the question of title is settled. (Edgell v. Day, L. R. 1 C. P. 80.)

use.

Profits made by an agent in the course of his employment belong absolutely to the principal, who may recover them as money received to the use of the plaintiff. (Morison v. Thompson, L. R. 9 Q. B. 480.)

Where an agent receives money to pay over to a third person, though he assents to hold it for that purpose, it cannot be recovered from him by such third person until he has entered into a binding agreement to hold it to his use or communicates the fact to the third person. (Baron v. Husband, 4 B. & Ad. 611; Lilly v. Hays, 5 Ad. & E. 548.) The holder of a bill cannot sue the acceptor's banker for the amount of the bill put into the banker's hands to pay the bill. (Hill v. Royds, L. R. 8 Eq. 290.)

G G

Person to whom money is paid for another not liable to that other

Claim for

money lent.

till he has agreed with him

to hold the money to his use. Money recoverable on a total failure of consideration.

Money paid under mis. take of law

not recoverable.

Aliter, where mistake is as to facts.

Money ob.

tained by fraud recoverable.

But the

fraud, &c, must be at once repu diated.

Money extorted may be recovered.

annum.

Particulars have been delivered to the defendant showing the sums lent, and when, and how much is due in respect of interest on each of the said loans.

In cases of a total failure of consideration this action lies to recover money paid on such consideration. But where A. conveyed land to B., and A. covenants for title, and B. is evicted owing to A.'s want of title, A. cannot sue B. for money had and received, but can sue him on his covenant. (Clare v. Lamb, L. R. 10 C. P. 334.) If the consideration has only partially failed, the money cannot be recovered. As where a premium is paid for instructing an apprentice for seven years, and the master dies at the end of the first year, no part of the premium is recoverable from the personal representative of the master. (Whincup v. Hughes, L. R. 6 C. P. 78.)

Money paid under mistake of law cannot be recovered back. (Platt v. Bromage, 24 L. J. Ex. 63; Barber v. Pott, 28 L. J. Ex. 381.) But money paid under a mistake of facts, which the party receiving has no claim in conscience to retain, can be recovered, though the plaintiff might have learned the real facts on inquiry. (Milnes v. Duncan, 6 B. & C. 671; Lucas v. Worswick, 1 M. & Rob. 293; Kelly v. Solari, 9 M. & W. 54.) Semble, before commencing an action a notice of the mistake should be given to, and demand of the money made of, the defendant. Freeman v. Jeffries, L. R. 4 Ex. 189.) If a person voluntarily waives all inquiry into the truth, or pays the money with a full knowledge of the facts, he cannot recover it. (Kelly v. Solari, supra; Viner v. Hawkins, 23 L. J. Ex. 38.)

Where bankers cash a customer's cheque, and afterwards discover that they have no assets of his, they cannot recover the money back from the person to whom they paid it. (Chambers v. Miller, 32 L. J. C. P. 30 ; and see Pollard v. Bank of England, L. R. 6 Q. B. 623.)

Money obtained by fraud may be recovered as money had and received. but it cannot be recovered after it passes into the hands of a person who takes it bonâ fide and for value. (Watson v. Russell, 34 L. J. Q. B. 93, Ex. Ch.)

A person who seeks to recover the amount paid on shares which he has been fraudulently induced to accept, must do so while he is in a position to put both parties in statu quo. He cannot do so if he has received dividends, and has permitted the company to be incorporated. (Addie v. Western Bank of Scotland, L. R. 1 H. L. Sc. 145, 165); but he may sue for damages for the fraud. (lb.) If the allottee of shares has repudiated them on the ground of fraud, and his name has been removed from the registry, the sums paid on the shares may be recovered by him. Ship v. Crosskill, L. R. 10 Eq. 73; Askew's Case, L. R. 9 Ch. 664.

Where a cheque was stolen during its transmission, and the thief forged an indorsement of the name of the payee to C., a person ignorant of the theft, to whom, on presenting it, the amount of it was paid, held that the payee might waive the tort and recover the amount of it from C. as money had and received.

A person who involuntarily pays money, which he is not liable to pay, in order to recover possession of his property or prevent some injury being done to the plaintiff or his firm, may recover it back. (See Kendal v. Wood, L. R. 6 Ex. 243.) So where a party to a reference has been obliged to pay an exorbitant fee to take up the award (Roberts v. Eberhardt, 28 L. J. C. P. 74, Ex.), or where a public officer demands an excessive fee. (Steele v. Williams, 22 L. J. Ex. 225; Dew v. Parsons, 2 B. & A. 562.) So where a railway company refuses to deliver goods until payment of an unauthorized charge for carriage. (Sutton v. G. W. Ry. Co.,