Court Opinion

ID: 6515682
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:26:24.665167+00
Date Added: 2024-06-11T15:55:01.009573
License: Public Domain

HARALSON, J.
1. It is well understood, everywhere, that the action for mony had and received is a liberal and equitable action, and on principles of natural justice and equity will be supported, when the defendant has received money, which in good conscience he ought *191not to retain, and which, exequo et bono, belongs to the plaintiff. The law implies a promise that he will pay it;' and the only privity between the parties that need be shown in such an action, arises from this promise implied by law, that the defendant, having in his hands money which belongs to the plaintiff, will pay it over to him. — Boyett v. Potter, 80 Ala. 479 ; Levinshon v. Edwards, 79 Ala. 294; Harper v. Claxton, 62 Ala. 46; Booker v. Jones, 55 Ala. 275; Branch Bank v. Parrish, 20 Ala. 434; Thompson v. Merriman, 15 Ala. 168; Houston v. Frazier, 8 Ala. 84; 1 Brick. Dig., 140, § 73; Mason v. Waite, 17 Mass. 562.
2. The question often arises, and does in this case, whether money obtained by fraud, and to recover which an action on the case would be an appropriate form of action, may be recovered in an action for money had and received. Mr. Greenleaf, from whose conclusion there seems to be but little, if any, dissent in the authorities, states the doctrine to be, that, “The count for money had and received may also be supported, by evidence, that the defendant obtained the plaintiff’s money by fraud, or false color or pretense. ’ ’ And after giving illustration of the rule he adds : “So, if the money of the plaintiff has, in any other manner, come to the defendant’s hands, for which he would be chargeable in tort, the plaintiff may waive the tort, and bring assumpsit on the common counts. But this rule must be taken with this qualification : that the defendant is not thereby to be deprived of any benefit, which he could have .derived under the appropriate form of action in tort.” — 2 Greenl. on Ev., § 120. Mr. Starkie states the principle to the same effect as follows : “So the plaintiff may recover in any case where the defendant has by fraud or deceit received money belonging to the plaintiff; for he may waive the tort and rely upon the contract which the law implies for him.” — Houston v. Frazier, 8 Ala. 85; Branch Bank v. Parrish, 20 Ala. 434; Russell v. Little, 28 Ala. 160. In Burton v. Driggs, 20 Wall. (U. S.) 125, in speaking of one who has been overreached and deprived of his money by fraud and false pretenses, t]ie court held, that the person thus defrauded, may recover his money in assumpsit , on a declaration containing special counts setting out the instrument as inducement, and averring the utter falsity of its recitations and the fraud of the whole *192transaction — the declaration containing also • the common counts.
3. In the application of the foregoing principle, however, it is not enough to show that the defendant has money he can not conscientiously retain, but the plaintiff must go further and show, that of right he is entitled to it. It will be observed, that in all the authorities referred to, the party defrauded, the one whose money had been obtained and was withheld by the defendant, was the party to maintain the action. In the extract from G-reenleaf, it was "the money of the plaintiff,” and in the one from Starkie, it was the “money belonging to the plaintiff,” that was referred to as being recoverable by him, and so it was, in the cases cited — the obligation, in each instance, being on the defendant to refund to the plaintiff his money, and not another’s. If the false repi’esentationis made to A. to induce him to part with his money, and he does so, A. must sue ; but, if made to him to induce B. to part with his, and B. is induced thereby to do so, he, and not A., is the party injured, who may maintain the action.
In Wells v. Cook, 16 Ohio St. 67, s. c. 88 Am. Dec. 436, it was held, that the one who has been damaged by acting on false and fraudulent representations made to him as agent of another, but not intended to be acted on by him, has no action for deceit against the party making the representations. The court in that case say: ' ‘We are satisfied that one of the prescribed limits is this : that the false and fraudulent representations must have been intended to be acted on, in a manner affecting himself, by the party who seeks redress for the consequential injuries.”
In Hungerford v. Moore, 65 Ala. 232, it was said : “The theory of the suit is, that the defendant received the money, when, ex equo et bono, it belonged to the plaintiffs. In such case, the burden is on the plaintiffs to show that they are legally entitled to the money, and it is not enough to show that defendant has no right to it. If neither party is entitled to the money, neither can recover from the other.” — Mobile & M. R. R. Co. v. Felrath, 67 Ala. 189.
4. An agent, who undertakes to represent another in the performance of a service, is understood to contract for reasonable skill and ordinary diligence — that-degree *193of diligence which, persons of common prudence are accustomed to use about their own business and affairs— and is, consequently, liable to his employer for the want of these. — Story on Agency, § 183; Mechem on Agency, § 494; 1 Amer. & Eng. Encyc. of *Law, 371.
5. In applying what has been above said to this case, it would seem to follow, that if the plaintiffs have any right, growing out of the alleged transaction between them, acting as the agents of M. L. & C. Ernst, and the defendant, to give them cause of action in case against defendant, they might waive the tort and maintain assumpsit as well. There is no objection, therefore, to the mere form of this action ; the party aggrieved could maintain either assumpsit or case. Nor are the counts liable to demurrer for a misjoinder of counts. They are all in assumpsit, and not in case.
6. In neither count we have before .us is it pretended that plaintiffs did more in the transaction, than to act as ■ the agents of said Ernsts. In the 3d and 5th counts, the allegations as to agency are the same, that "On the 19th day of February, 1889, the plaintiffs were the agents of M. L. and O. Ernst, and defendant offered said note and mortgage for sale to the plaintiffs as agents as aforesaid, and in order to induce them [as agents] to purchase the same, falsely and fraudently” made to them the representations that induced them to do so. In the 6th count which was offered by way of amendment and re-' jected, it is expressly stated, that the defendant made the proposition to sell said note and mortgage to the plaintiffs, or to any one from whom they had or could obtain authority to purchase them, and that plaintiffs, ' induced thereto by defendant’s false representations, "purchased said note and mortgage of defendant for and on behalf of the said M. L. andC. Ernst, at and for the sum of $5,000,, which amount was then and there paid to him by plaintiffs as agents as aforesaid.” These allegations show with certainty, that the plaintiffs were not representing themselves in that transaction, but the said Ernsts, as the agents of the latter, and defendant knew that fact, and made whatever representations ho did to them, to induce them as agents to buy. What right, therefore, has plaintiffs to maintain this action? The 3d count puts this right upon the ground, that the Ernsts — when said note fell due and was not paid — "be*194came greatly dissatisfied and insisted that plaintiffs, who had acted as their agents in making said transaction should refund said $5,000 to them and take said note and mortgage off their hands, and plaintiffs accordingly did, on, to-wit, the 4th day of September, 1889, repay to said M. L. and C. Ernst with interest thereon from the date of the purchase of said note, and the said note and mortgage were thereupon delivered and assigned by said M. L. & C. Ernst to plaintiffs.”
In the 5th it is stated as follows: “In consequence whereof [the non-payment of said note] the said M. L. & C. Ernst insisted that plaintiffs were legally responsible to them for any injury which they might sustain in the purchase of said note and mortgage, and plaintiffs, in compromise and settlement of said claim and demand, refunded to them the $5,000 they had given for said note and mortgage, * * * and the said note and mortgage were thereupon assigned and delivered by the said M. L. and C. Ernst to plaintiffs. ” In the 6th it is stated in this manner : that said Ernsts had authorized plaintiffs to purchase said note, if the parties making it were the right sort of people to have dealings with, and provided the property was clear and unencumbered and worth more than the amount of the note ; and when they were informed of the fraud which had been committed upon them and plaintiffs, they repudiated said transaction, insisting that plaintiffs had exceeded their authority, and that plaintiffs were legally responsible to them for the loss sustained by them in said transaction ; and plaintiffs having been induced by said fraudulent representations to exceed their authority as agents aforesaid, and having thereby become responsible to said Ernsts on account of said transaction, paid to them in settlement of their said claim the said sum of $5,000 and interest thereon, and thereupon said note and mortgage were assigned and delivered by the Ernsts to plaintiffs, by means whereof the defendant became and is liable to the plaintiffs.
7. The legal effect of these averments is, that the plaintiffs, — because of dissatisfaction on the part of their principals, and because they insisted that plaintiffs had exceeded their authority as agents, — purchased the note and mortgage in question from them. Their liability to their principals is assumed, and averred as a legal con*195elusion. But, from the facts stated, it does not’appear that the plaintiffs did transcend their authority. They were authorized, certainly, to make the investment for their principals. If they failed to act with ordinary, rea-' sonable skill and diligence in their representation of their friends, it is not averred. To test the liability of the plaintiffs to the parties they represented, on the allegations as we find them in this complaint, we have but to suppose that their principals had instituted suit against them, to recover this money, setting up the facts of this complaint, without more, and to ask, if they could recover? Clearly, on these averments alone, and in the absence of others showing fraud on their part, or negligence in the discharge of their duties as agents, the plaintiffs, in such a case, would Have no standing. There is not only an absence of such essential averments of liability on the part of plaintiffs, but such a thing as fraud or collusion on their part is expressly negatived, and according to-the allegations of this complaim, they were simply overreached and defrauded in a way that did not make them liable to their principals. Authorities supra.
8. If the plaintiffs were under no legal obligations to pay this demand of the Ernsts, and the defendant made no request for them to pay it, they could not make him their debtor merely by paying it. — 1 Brick. Dig., 143, § 120. But, if defendant owed the amount to the Ernsts, and it were true that plaintiffs were under legal obligations to pay it to them and did so, they became the equitable owners of the debt and entitled to enforce its payment to them. — Rather v. Young, 56 Ala. 96, and authorities there cited. They have shown no such liability on their part, from any thing averred in this complaint, and they occupy, in paying it, the position of volunteers.
9. The only other ground upon which the plaintiffs can rest their right to maintain this suit is upon the averment that the note and mortgage were assigned to them by said Ernsts, in consideration of their having paid them the amount owing to them by defendant, or in other words, that they became the purchasers of said note and mortgage, which were assigned to them. But, there is a vast difference between said note and mortgage, and the cause of action on which this suit is founded. The two are separate and distinct, — the obligations implied in each being from different individuals. The plain*196tiffs, by virtue of their- purchase and ownership of the former, may have the right to enforce them, and they did sue on and obtain a judgment on the note, against L. Clisby, its maker; but the ownership of the note and mortgage and their right to enforce the same, gave them no ownership of and right to enforce the cause of action on,which this suit is instituted. There is no averment in any of the counts, that plaintiffs purchased and became the owners of Ernsts’ cause of action against defendant5 for- the money he is said to have in hand belonging to them.
10. Enough has been said, without noticing other of the many grounds covered in the argument of counsel; to make it appear, that the plaintiffs ha,ve not presented in the complaint, and in the amendment which was proposed and not allowed, a cause of action which they can maintain against the defendant. The city court did not err in sustaining the demurrers to the 3d and 5th counts, and in not-allowing the 6th to be filed.
Affirmed.