435; Wheeler v. Hathaway, 58 Mich. 77). The courts regard the investigation as proof of purpose to pay at all events, and will not permit the payer to appeal to them to reverse his own decision. Such a presumption, it is submitted, is quite contrary to the actual fact. The investigation, followed by pay

shipped four cars more of goods than were ordered and the purchaser, with knowledge of the fact, but believing that he was to hold the goods subject to the vendor's order, paid the freight and other charges thereon to the carrier, it was held that he could recover these sums from the vendors “only if paid at their request, express or implied, or if they sub-ment, is proof rather of a conviction that the claim sequently ratified the payment as made in their behalf" (Edwards v. Manufacturing Co., 60 N. W. [Minn.] 1097).

II. There must be actual mistake.

is well founded. At any rate, the only result of such a rule seems to be that the careless man may recover, whereas one who is more prudent and seeks to verify a claim before payment shall be without remedy. The doctrine has never been followed elsewhere. The nearest approach to it is in Windbiel v. Carroll (16 Hun, 101), where it was held that one paying a claim which he was aware, but was unable to prove, had been paid before, may not, on discovering the proof, recover. In this case, however, it is clear that the payment was by way of settlement alone, for where there is knowledge of the mistake there can be no error.

(b.) Mistake must be as to a past or present fact. Similarly, in order to have an actionable mistake at all, the error must be as to a past or present fact. If an expected event in the future fail to occur. there may be a disappointment or a misfortune, but no mistake in the sense that money paid on the faith

(a.) Payment by way of settlement. Where a payment is made, not under a mistaken obligation, but for the purpose of settlement or compromise, there can be no recovery. The value is surrendered, not by mistake, but in spite of mistake. The action is expressly taken without regard to the truth or falsehood of the facts, the payer meaning to waive all inquiry, and that the payee shall have the money at all events. Once such a step is taken the courts cannot permit the plaintiff to blow hot or cold according as he wins or loses by the result (Mowatt v. Wright, 1 Wend. 355). Where, however, the settlement or compromise is itself based on an assumption of fact, made by both parties, payment thereunder may be recovered if the assump-¦ of the happening of the event can be recovered. The tion prove false. Thus, where the parties agree to guess at the price of a certain cargo, under the belief that the crates which compose it are of a certain size, the excess payment may be recovered if the capacity of the crates prove less (Calkins v. Griswold, 11 Hun, 208). So, also, where milk is paid for in the belief that the cans contain eight gallons (Devine v. Edwards, 101 Ill. 138); or wheat is bought, "hit or miss," upon the assumption that the quantity already measured is 500 bushels (Wheadon V. Olds, 20 Wend. 174). In Murphy v. Knickerbocker Ice Co. (49 N. Y. Supp. 279) the facts showed that an ice company were accustomed, from time to time, to weigh the wagons of the retail dealers, who bought from it, and use the results, entered on a weigh card, in estimating tare to be deducted from the gross weight of the loaded wagons. In an action by one of these customers to recover money paid under an alleged mistake, the fact that the weight of the wagons, as thus obtained, on a given date was thirty pounds more than the figures procured three months earlier, was held immaterial, since the parties must be taken to have assumed the first weight as a basis for payment till the wagon was reweighed and the payment was to be viewed as a substantial compliance with plaintiff's part of the transaction.

In Michigan, by a curious presumption of law, the rule as to settlements is greatly widened. In that State, if one, after investigation and without fraud on the part of the recipient, becomes satisfied that a claim is correct and pays it, he cannot recover the money back on the ground that it was paid under a mistake of fact, though he afterwards discover the claim to be baseless (McArthur v. Luce, 43 Mich.

line between fact and foresight has ever been sharply drawn by the law. Thus a mere promise is no ground for an action for deceit, even if fraudulently made, for it is but an expression of opinion. On the other hand, a statement as to one's intention to perform an act in the future, if false, is an actionable fraud, for it refers to a present fact. Similarly, one who advances money to another in consideration of the latter's promise to transfer to him certain specified goods or negotiable securities, not yet in the possession of the promissor, will not acquire, by a subsequent delivery to himself, the rights of a bona fide purchaser (Taft v. Chapman, 50 N. Y. 445; Barnard v. Campbell, 55 N. Y. 456). In both these cases the transferee advances his money, not in reliance upon the apparent ownership of the transferor, but in reliance upon the latter's promises alone.

The same line is drawn in the money counts. Thus in Tyler v. Mayor, etc. (7 State Rep. [N. Y.], 265), where the plaintiff had paid the city in advance for the use of water in his distillery, he was not allowed to recover it as paid by mistake, on proof that, owing to a seizure by the internal revenue officer, his establishment was never in operation. Again, in Holt v. Thomas (105 Cal. 273), one who paid an assessment on the stock of an insolvent bank, was not allowed to recover on proof that more funds were collected than were required to pay the creditors, and in Wunsch v. Boldt (15 S. W. [Tex.] 193), the payment of the contract-price for a supply of water, which shortly ran dry, was held not to be a payment by mistake. In Southwick v. Bank of Memphis (84 N. Y. 420) the same principle was announced and applied to a case where the plaintiff paid the defendant a draft under the erroneous

has seen fit to suspend. As technical defenses merely they form no basis for affirmative action and must be pleaded in due season. Any other result would entail the greatest mischief to society, for it would multiply litigation and would present the strange spectacle of a mere suspension of the arm of the law being used to recall a payment made upon a sound legal basis.

coverture. The doctrine, however, was too glaring are in their natural state a portion of the general an anomaly, and the courts soon began to retrace | law, a rule of the national jurisprudence, whose bindtheir steps. In Mills v. Wyman (3 Pick. 207 ing force under the case stated the social wisdom [1826]), the Supreme Court of Massachusetts refused to apply the principle, save where there had been a pre-existing enforceable obligation, which had become inoperative by positive law. Even in England Lee v. Muggeridge lived but twenty years, and was overruled by Littlefield v. Shee (2 B. & A. 811). and, with the exception of the doubtful case in New York of Goulding v. Davidson (26 N. Y. 604), the rule is now universal that a moral obligation will support a subsequent promise only when there was a past legal obligation, which became unenforceable through some rule of positive law. In the result, therefore, the role of conscience has been usurped by the simple rule that a promise in the terms of a debt barred by the statute of limitations, bankruptcy or the plea of infancy, revives the past consideration. In the belief of the writer some such idea as this is behind the statement that there can be no recovery of money paid by mistake "when contrary to conscience." The four illustrations given by Lord Mansfield in the quotation from Moses v. Macferlan go no further than this: that where, under the principles of the common law there is an actual subsisting obligation, which, however, is or can be suspended by the interposition of a rule of positive law, or some exception born of expediency, then money paid in ignorance of the technical defense cannot be recovered. This, it is submitted, is the sum and substance of the so-called ex aequo et bono rule. The recovery is denied, not because it would be against conscience-a reason which, as a rule of law, would mean just nothing at all—but because what error there is, is purely extrinsic and collateral. If in ignorance of some technical defense, of the immunity of some personal status, one pays a debt, which, under ordinary circumstances, the common law would compel him to pay, his mistake goes, not to the goodness of the claim, but rather to its coercion. As was said by the Supreme Court in National Bank v. Burkhardt (100 U. S. 686): “The case is simply one of an executed contract. There are the requisite parties, the requisite consideration and the requisite

concurrence and assent of the minds of those concerned." And there are, might have been added, the actual obligation, and the true knowledge of all the facts which constitute it. But this obligation, the legislature or public convenience, speaking through the mouth of custom, has said shall not be pressed home. Payments, therefore, upon this obligation have a sound legal basis. They are not pay ments of something when nothing is due. Rather are they the recognition of an obligation already existing, but whose binding force the community has dispensed with, not for the benefit of the party solely, but principally for the public convenience. The obligation on which they are made resemble demands upon the conscience alone, in that under the given set of facts they are left wholly to the interior forum; they differ from such demands in that they

Turning now to the cases, we find a long line of illustrations. In Munt v. Stokes (4 T. R. 561), the plaintiff's testator, an English subject, and master of a ship under Danish colors, gave a respondent a bond in exchange for a loan of money. By the laws of Denmark such an act by a foreign master was void; but the plaintiff in ignorance of this defense, which as a foreign law might be regarded as a matter of fact, paid on the bond the sum loaned. On the principles above stated the court found rightly for the defendant. That money loaned must be returned is a rule fundamental in every system of laws; but by the statutes of Denmark the State refused to coerce restitution when the loan was made to an alien captain of a Danish ship. When, therefore, the debtor paid, his belief in the existence of a claim and the facts on which it rested were in no wise mistaken. His error lay in supposing a right in the creditor to coerce payment. For like reasons a recovery has been denied where by mistake future acquired property has been sold under an assignment to satisfy a debt (Platt v. Bromage, 24 L. J. 63); or where one parish under a belief of right had received reimbursement for the support of a pauper of an adjoining parish (Farmer v. Arundell, 2 W. Black. 824); or where in paying a note which by mistake read for a less amount than that loaned, the debtor by a second mistake paid the full amount of the loan (Foster v. Kirby, 31 Mo. 496).

In New York the leading case is that of The Franklin Bank v. Raymond (3 Wend. 69). Here the fact unknown was that at the time of payment the payer possessed a set-off to the full amount of the claim. The reasoning followed is that already out

lined:

"The general principle of law is indisputable, that if a party pays money under a mistake of the real facts, he may recover back such money. What sort of facts are meant? Such facts as show that the demand on which the money was paid did not actually exist against the person paying at the time the money was paid. * * * The debt paid by the defendants was one that subsisted against them at the time of payment. The fact of which they were ignorant did not show that there was no debt existing at the time; it only showed that they were in a situation which enabled them to set-off against the demand they had paid, a demand due to them."

These would seem the last words on the subject, were it not for the criticism of Prof. Keener (QuasiContracts, p. 50). His ground is that:

"As between the debtor and the original creditor, been condemned by the city, the commissioners had the difference in amount between the two debts awarded him a certain sum. By a mistake he was represents what in conscience should be paid by one paid a sum larger than that awarded, but not larger to the other. And the fact that in our system of law than the actual value of the land. By the payment one claim does not extinguish the other and must be the defendant was lulled into quiet, and allowed the pleaded, not as payment but by way of set-off or time to expire in which he could lawfully file excepcounterclaim, does not prove that a creditor receiving tions to the report of the commissioners. In an in such circumstances, not the amount of his debt action to recover the excess paid, it was held that the less the set-off, but the entire amount of his claim, plaintiffs had not proved their averment of “the payhas not in conscience received more than he should ment of a certain sum of money not of right due and keep. Accordingly it was held in Bize v. Dickason, payable." The same reason prevailed in Royal Ins. assignee, etc., that money so paid could be recovered." Co. v. Beyers (9 Ont. R. 120). This reasoning, it is plain, is a literal application of the saying that conscience must decide between the parties. In the opinion of the writer it is subject to exception. As is pointed out in our system of law mutual claims do not extinguish each other. On the contrary, before the statute both claims had to be pursued in separate actions. In a jurisdiction, therefore, where the statute does not obtain, such a payment as that in the Franklin Bank case, far from being by mistake would be compulsory. Even with knowledge of its own claim, the debtor would have been compelled to pay the creditor in full; and hence what was compulsory with knowledge, could not be recovered if paid in ignorance. The fact that conscience might fight against this side or that would be immaterial, nor would it be made material by a statute which merely permits the debtor as defendant to set up in a suit by the creditor the claim which but for the statute, he could only assert as plaintiff. The opposing case cited (1 T. R. 285) was one before Lord Mansfield whose extreme theory as to the force of moral obligations has, as we have seen, never been followed.

It does not follow that, when the set-off is adjusted by parties not bound by legal theories, the two claims may not extinguish each other. In Belden v. The State (103 N. Y. 1), the Board of Claims allowed an overpayment on one of three contracts between the plaintiff and the State to extinguish balances due on the two others, and this notwithstanding that an action on the part of the State would be barred by the Statute of Limitations. The affirmance on appeal went upon the ground that the claims had come before a board empowered by statute to take an account and strike a just balance between the parties," and, therefore, there was no authority in a higher court to set aside such settlements as were "equitable and just."

In Jackson v. McKnight (17 Hun, 2), the plaintiff made a payment to the defendant on a bond on which the principal was due. The payment was made and received by way of payment of interest; and the ground of the action was that, contrary to the belief of both parties, this interest had been paid before. The decision was that the payment was made on the very obligation on which the principal was due, and hence really made on the debt. The case, therefore, reduced itself to one of part payment on a debt, and, while entitled to credit pro tanto, the plaintiff could not recover on proof of his abstract intention. The case is criticised (Keener, Quasi-Contracts, 54), on the ground that, if sued, the plaintiff could not use the plea of payment. The case cited as opposed is McGinnis v. The Mayor, etc. (6 Daly, 416). Here the plaintiff's assignor received his salary in installments from the city, each payment being in full for the given interval. By mistake several installments were overpaid; and in an action for arrears the defendant pleaded the excess, not as a counterclaim, but as part payment. In disapproving the plea, the court said:

"The counsel for the defendants mistook the practice in attempting to avail himself of the defense of the overpayment under the plea of payment. The payment to an officer of his salary at regular stated times does not open a running account between him and the city, so that the city may withdraw a payment for one month, and, years afterwards, perhaps, apply it to another month in a subsequent part of the officer's term. Where both parties have, at the time of payment, applied the money to a certain debt, then due or believed to be due, one of them cannot afterwards appropriate the payment to a claim not in existence, and not in the contemplation of the parties, when the money is paid. Although the overpayments are not available under the plea of payment, they might have been pleaded as a setoff or counterclaim."

On the same principle as the Franklin Bank case was decided (Buel v. Boughton, 2 Denio, 91), where the maker of a promissory note by mistake paid to All that is here decided is that overpayments or an indorsee the interest which by a prior mistake mistaken payments on one obligation cannot be aphad not been mentioned in the paper, but which the plied by way of payment on a different obligation. indorsee had taken the paper as carrying. The court A creditor may or may not be entitled in conscience denied recovery on the ground that the plaintiff had to retain whatever funds come into his hands, but it merely paid what in a court of equity the defendant is certain that where the supposed claim on which would have been entitled to receive, and his only the money is paid does not exist at all, then the miserror was that he could not have been sued at law take is intrinsic, and the money recoverable, whatever in the defendant's name. Again in The Mayor, etc., the state of other accounts between the parties.

v. Erben (10 Bosw. 189), the defendant's lots having As a matter of pleading, therefore, the rule seems