Houser v. . McGinnas

Avery, J. after stating the facts: By demurring the defendant Beam admits that the plaintiff paid over to him the sum of five hundred dollars.in money, consigned by express, and failed to take his receipt, and that subsequently, under a mistake as to the fact of having previously made said payment,¡the plaintiff, through the defendant McGinnas, paid to the defendant Humphreys five hundred dollars, which Humphreys allowed as a credit on a debt due him from Beam, in order to satisfy and pay a second time the claim of Beam as assignee. The money has thus been twice paid to the consignee with no new consideration, and yet he resists the plaintiff’s demand for restitution, on the ground that the action could be maintained by Humphreys only, in whom the right to bring it still subsists, the company failing to show any privity between the plaintiff and Humphreys. Where money is paid and received in discharge of a debt then believed by the payer to be due, but in fact previously paid in full by or for the debtor, the creditor is not allowed to keep double the sum due him against the demand of the debtor preferred in an action in the nature of assumpsit for the recovery of the second payment made by mistake. Pool v. Allen, 7 Ired., 120; Mitchell v. Walker, 8 Ired.; 243; Newell v. March, 8 Ired., 441; Hare on Contracts, p. 104. The defendant seems to .admit this principle, but insists that Humphreys paid the debt the last time, and he alone can *636 maintain the aetion for the restitution of the amount wrongfully paid by him. The plaintiff has brought all of the parties who actually have claimed, or who, according to the. contention of either party, can rightfully claim, an interest in the controversy. McGinnas admits the truth of plaintiff's allegations by answer and Beam by demurrer, while liumphreys confesses by failing to answer. When the money was placed bjr McGinnas in the hands of liumphreys, as agent, to pay the claim of the defendant Beam a second time, Humphreys retained the money, but allowed Beam credit on a debt due him from the latter. This was equivalent to paying the debt in money a second time, and the arrangement was fnade for plaintiff, and in consideration of funds furnished by or for him. It was, in effect, a second payment by Houser. Quod facit per alium,, facit.per so. If the facts stated in'the complaint be true, we see no reason why the plaintiff might not have maintained his action against Beam alone, treating both McGinnas and Hum-phreys as his agents. Houser paid $245 in money — all that he could raise — to McGinnas to be handed over to Hum-phreys, who was to effect the settlement with the defendant, and induced McGinnas to paj^ for his benefit $255, the residue of the $500. The law implies a promise by Beam to repay Houser. Mason v. Waite, 17 Mass., 563. AVhere an agent, by mistake of fact, pays money for his principal, the latter may recover it back from the party who has received it. Story on Ag., §435; Wharton’s Com. on Agents, § 413; Sheffer v. Montgomery, 65 Penn. St., 329; Farmers &c. Bank v. King, 98 Am. Dec., 215, and note 221. It is a general rule, that w'here the money of the principal has been wrongfully paid by his agent to a stranger, either the principal or the agent may maintain an action for its recovery. 1 Lawson’s Rights and Rem., §121. But the principal cannot recover where the agent loans to one of his own creditors, who has no notice that it is the principal’s money. *637 Ibid. McGinnas being entrusted by ITouser, as agent, with a part of the money, and having advanced the residue for the plaintiff, might substitute Humphreys, who would be, in contemplation of law, says Mr. Wharton, “ but the extension of the principal himself, introducing no new party into the contract.” Wharton’s Com. on Agency, §§ 33, 34. As Houser might have made Humphreys directly his agent, or might, in terms, have authorized McGinnas to constitute him a sub-agent to settle with Beam, he had the right to ratify the substitution of Humphreys by McGinnas, and thus establish a privity between Humphreys and himself, and of this Beam could not complain. But if this were not so, all of the parties being before the Court, and the mistake being admitted, it would be unconsciousable to allow the defendant to retain double the amount due him. As it may possibly be insisted that, though the privity between the plaintiff and Humphreys be admitted, still the complaint does not state facts sufficient to constitute a cause of action, it is proper that vTe should consider this case in another aspect. We think that if the plaintiff, under the circumstances, actually knew he had paid the debt, and could not, at the time, prove the payment, or if his mistake of fact was negligently made, and he might, by the exercise of ordinary care have avoided falling into it, still, as between him and the defendant, who admits that the money was paid to him in full a second time, not as a gratuity, but nominally in discharge of the same debt, the plaintiff is entitled to restitution, when it can be made without loss or sacrifice on the part of the latter. *His negligence in failing to find out the facts before paying the money does not prevent his recovery from one who does not deny the allegation that he received and retained double the sum justly Hue to him. Hare on Con., p. 233; Bank v. Bank, 43 N. Y., 445; Line v. Shinnerburger, 17 Mo. Appl., 66; North v. Blow, 30 N. Y., 374; Frontier Bank v. Morse, 38 Am. Dec., § 284, and notes, p. 290. *638 It would have been otherwise if the plaintiff, by his negligence in failing to give timely notice of his demand, had prevented the defendant from recovering the sum claimed of a third party, or, generally, where the defendant had sustained damage which the plaintiff by ordinary care might have prevented. Bank v. McGilwry, 64 Am. Dec., 92; United States v. Bank, 6 Fed. Rep., 854. Where the parties cannot be placed in statu quo the loss must fall upon the person who caused it by his negligence, though he may have made the payment under a mistake as to the facts, but without exercising due diligence in ascertaining them. Boas v. Updegrof, 47 Am. Dec., 404. If a second payment had been made with a full knowledge of the facts, but not by compulsion of, or mistake as to, the law, the Courts would not allow Beam, who acknowledges that he has been twice paid, to go out of a court of conscience, when all of the parties are- before the Court, without accounting for what is justly due to the plaintiff, when he has advanced out of his own funds a part arid owes McGin-nas the balance of the amount used by ITumphreys in making the second payment. No wrong is imputed to any other party, and, in any view of the facts, the Courts could not lend their sanction to fraud by allowing one who, by falsely denying a first payment, secures a second, to retain it simply because the debtor may have been guilty of even gross negligence. A payment is not necessarily voluntary, nor is it to be treated as a gift, because the debtor did not act under compulsion in paying it a second time. Pool v. Allen, supra. We conclude, therefore, that there was error in sustaining the demurrer, and the judgment of the Court below is reversed. Reversed.