Cheever v. Smith

Per Curiam. We are of opinion that evidence of a mistake in the accounts of Smith and Pardee with Allen was properly rejected. The alleged mistake took place in October, 1814, and in July, 1815, the plaintiff settled with Allen, when there appeared to be due to the latter 4156 dollars and 6 cents, allowing him the 5,000 dollars, in respect of which the mistake is alleged to have been committed. On that settlement the sum of 4,156 dollars and 6 cents, which appeared to be due to Allen, was paid to him. Now, had the defendants given notice of that mistake to the plaintiff, he would have made the settlement on very different principles; at all events, he would not have paid Allen, until the fact, whether there had been a mistake or not, was ascertained. If a man deals with another’s agent, and gives the agent a receipt for a sum of money which he had a right to pay, and on the faith of that receipt the principal settles with his agent, and pays him money, the party giving the receipt cannot lie by, until after the settlement between the principal and the agent, and then charge the principal with the payment of the same sum again. Good faith requires that the mistake should be communicated to the principal as soon as it is known ; and, indeed, if a loss is to be borne, it must fall on him who occasioned it. In the present instance, it is not stated that Allen is irresponsible. That fact makes no difference, for he is answerable to the defendants as for money had and received, if it can be shown that he has been allowed 10,000 dollars, as paid to the defendants, when only 5,000 dollars were received by them. The case of Wyatt v. The Marquis of Hertford, (3 East’s Rep. 147.) supports the principle of this decision. Motion for a new trial denied.