Case Name: William Parsons Junior versus The President, &c. of Gloucester Bank
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1830-11
Citations: 10 Pick. 533
Docket Number: 
Parties: William Parsons Junior versus The President, &c. of Gloucester Bank.
Judges: 
Reporter: Massachusetts Reports
Volume: 27
Pages: 544–546

Head Matter:
William Parsons Junior versus The President, &c. of Gloucester Bank.
An insolvent debtor made a general assignment of his property, by indenture, to trustees, for the payment of his debts, which was executed by the holder and by the indorser of a note made by the debtor. The indenture contained a general release to the debtor, but with a proviso that it should not impair any collateral security taken by a creditor. It was held, that the indorser, having signed the indenture, was estopped to say he did not know it contained a release of the maker by the holder ; that he was not discharged from his liability, having, by executing the indenture, assented to the release ; and that whether he executed the indenture before or after the holder, the effect was the same.
Assumpsit for money had and received. The case was tried before Putnam J.
The plaintiff was the indorser of a note for $661 made to him by Winthrop Sargent, which became due to the defendants on January 5th, 1829, on which day Sargent stopped payment. The bank sued the plaintiff on the morning of the 6th. Afterwards, on that day, the plaintiff made a transfer of personal property to the bank, of the value of $ 4546, as collateral security for what he then owed or should owe to the bank, and the bank agreed to lend him $ 2600; and it was understood that the plaintiff was to pay the note for $ 661, when he should receive the money so agreed to be lent to him On the 13th of January he received the money upon the new loan, and paid the note for $661, by his check on the bank. On the 5th of January, Sargent executed an indenture of assignment of his property to trustees, for the benefit of his creditors, the material parts of which are stated in the preceding case of Gloucester Bank v. Worcester. The plaintiff executed it likewise, but at what time, did not appear. It was proved that he knew, before he paid the note, that the bank had executed an indenture of assignment between the bank and Sargent, but that he did not know it contained a release of their demands against Sargent. The plaintiff held a note against Sargent for $ 2703, and the sum of $ 3300 against the name of the plaintiff on a schedule annexed to the indenture, was understood to refer to that note and the note for $661.
The parol evidence which was given in the case of Gloucester Bank v. Worcester, was admitted in this case, though objected to by the plaintiff.
The jury found a verdict for the plaintiff for $715 ; which was to be retained, if, in the opinion of the whole Court, the plaintiff could recover on the ground of money paid by mistake.
Nov. 161*.
Fletcher and Choate, for the defendants,
argued that the money could not be recovered back, because it was paid with the knowledge, or the means of knowledge, of all the facts, and the bank might conscientiously retain it, it being manifest that they had no intention to discharge the plaintiff from his liability as indorser. Brisbane v. Dacres, 5 Taunt. 143 ; 1 Selw. N. P. 66 ; Marsh. on Ins. (Condy’s ed.) 732 a ; Milnes v. Duncan, 6 Barn. & Cressw. 671 ; Price v. Neal, 3 Burr. 1354 ; Smith v. Mercer, 6 Taunt. 76 ; Wilkinson v. Johnston, 3 Barn. & Cressw. 428 ; Moses v. M'Ferlan, 2 Burr. 1005 ; Farmer v. Arundel, 2 W. Bl. 824 ; Johnson v Bloodgood, 1 Johns. Cas. 53 ; Smith v. Low, 1 Atk. 490.
Saltonstall and B. Merrill, for the plaintiff,
said the jury had not found that the plaintiff had the means of knowing that the defendants had executed a release to Sargent, whereby the plaintiff was discharged ; and the fact was to be proved, not presumed. As to the right to recover back money paid by mistake, they cited Garland v. Salem Bank, 9 Mass. R. 408.

Opinion:
Putnam J.
afterward drew up the opinion of the Court. The plaintiff claims to recover back the money, upon the Sround that he paid it under a mistake, supposing that he was liable, when in fact he was not liable to pay it. But the decision in the case of Gloucester Bank v. Worcester, at this term, is conclusive against the plaintiff as to his liability to pay, notwithstanding {he defendants, who were holders, released the maker by the release in the assignment in the case. We do not think that the fact, that the plaintiff on or before the 13th of January and on or before his payment of the §661 did not know that the indenture contained a release of the bank to Sargent, is material ; for the plaintiff executed the instrument himself, and he must be presumed to know and assent to its contents at the time when he executed it. It did not appear certainly at what time the plaintiff became a party to it ; nor is it material that it should ; for whenever it was, he assented to all the terms of the instrument ; and upon a true construction of the same, independently of the parol evidence objected to, the release of the maker was with the consent and approbation of the plaintiff, who was, according to the proviso, to continue liable upon his pledge or undertaking as an indorser. We refer to the opinion given in the case of the Gloucester Bank v. Worcester, for the reasons of the plaintiff's continued liability.
We are all of opinion, that the ground of the action has failed, and that the plaintiff should become nonsuit.
Money paid under a mistake or ignorance of the law, but with a knowl edge of the facts, or with the means of such knowledge, cannot be reeoveree back. Elliott v. Swartwout, 10 Peters, 137; Mowat v. Wright, 1 Wendell, 355; Hubbard v. Martin, 8 Yerger, 498: Jones v. Watkins, 1 Stewart, 81 ; Dickens v. Jones, 6 Yerger, 483; Lee v. Stuart, 2 Leigh, 76; Haven v. Foster, 9 Pick (2d ed.) 112 and notes ; Chitty on Contr. (4th Am. ed ) 491 and notes; Amer. Jurist, No. XLV. 146, and No. XLVI. 371.