Lipman, Wolfe & Co. v. Phoenix Assur. Co.

• Decision Date: 26 May 1919
• Docket Number: 3262.
• Citation: 258 F. 544
• Parties: LIPMAN, WOLFE & CO. v. PHOENIX ASSUR. CO., Limited.
• Court: U.S. Court of Appeals — Ninth Circuit

258 F. 544

LIPMAN, WOLFE & CO. v. PHOENIX ASSUR. CO., Limited.

No. 3262.

United States Court of Appeals, Ninth Circuit.

May 26, 1919

William C. Bristol, of Portland, Or. (F. E. Grigsby and Ernest W Hardy, both of Portland, Or., of counsel), for plaintiff in error.

W. F Magill, of Portland, Or., for defendant in error.

Before GILBERT, ROSS, and HUNT, Circuit Judges.

GILBERT Circuit Judge (after stating the facts as above).

The first question which arises is whether the complaint states a cause of action. In Cary v. Curtis, 3 How. 236, 247 (11 L.Ed. 576), the court said:

'The action of assumpsit for money had and received, it is said by Lord Mansfield, Burr, 1012, Moses v. MacFarlen, will lie in general whenever the defendant has received money which is the property of the plaintiff, and which the defendant is obliged by the ties of natural justice and equity to refund. And by Buller, Justice, in Stratton v. Rastall, 2 T.R. 370, 'that this action has been of late years extended on the principle of its being considered like a bill in equity, and therefore, in order to recover money in this form of action, the party must show that he has equity and conscience on his side, and could recover in a court of equity.' These are the general grounds of the action as given from high authority.'

In Bither v. Packard, 115 Me. 306, 312, 98 A. 929, 932, the court said:

'It is elementary law that, when one person has in his possession money which in equity and good conscience belongs to another, the law will create an implied promise upon the part of such person to pay the same to him to whom it belongs, and in such cases an action for money had and received may be maintained. This form of action is comprehensive in its reach and scope, and though the form of proceeding is in law it is equitable in spirit and purpose and the substantial justice which it promotes renders it favored by the courts. It lies for money paid under protest, or obtained through fraud, duress, extortion, imposition, or any other taking of undue advantage of the plaintiff's situation, or otherwise involuntarily and wrongfully paid. Where the defendant is proved to have in his hands the money of the plaintiff which, ex aequo et bono, he ought to refund, the law conclusively presumes that he has promised to do so'-- citing Mayo v. Purington, 113 Me. 452, 455, 94 A. 935.

To the same effect are Gaines v. Miller, 111 U.S. 395, 4 Sup.Ct. 426, 28 L.Ed. 466; Taylor v. Currey, 192 Ill.App. 502; Early v. Atchison, T. & S.F. Ry. Co., 167 Mo.App. 252, 149 S.W. 1170; Cullen v. Sea Board Air Line, 63 Fla. 122, 58 So. 182; Knight v. Forbes, 19 Ga.App. 320, 91 S.E. 445, in which the court said that such an action needs for its support no actual contractual relation, for the law will imply a quasi contractual relation to uphold it whenever the circumstances so require.

One cannot recover money voluntarily paid with a full knowledge of all the facts, although no obligation to pay existed, but money may be recovered where paid under circumstances of fraud, misrepresentation, and threats amounting to a duress which prevents the free exercise of the will, or where it is paid on a wrongful demand, to save the party paying from some great or irreparable mischief or damage from which he could not otherwise be saved, and while money paid under apprehension, or induced by threats of suits or actions, is not in general paid under such duress as to make the payment compulsory, such threats may, in connection with other circumstances, such as the inexperience of the person threatened, or the peril to which his business is exposed, if the threats are carried out, constitute such duress that money paid under the influence thereof may be recovered as for money had and received. Carew v. Rutherford, 106 Mass. 1, 8 Am.Rep. 287; Lehigh Coal & Nav. Co. v. Brown, 100 Pa. 338; ******** Bros. Co. v. Breese, 96 Wis. 591, 72 N.W. 45, 65 Am.St.Rep. 83; Vyne v. Glenn, 41 Mich. 112, 1 N.W. 997; Baldwin v. Hutchison, 8 Ind.App. 454, 35 N.E. 711; Brown v. Worthington, 162 Mo.App. 508, 142 S.W. 1082; Rees v. *******, 164 Ill.App. 251; Sartwell v. Horton, 28 Vt. 370; Parmentier v. Pater, 13 Or. 121, 9 P. 59.

Here the complaint alleges the inexperience of the officers of the plaintiff, their mental disturbance in view of the threats and fraudulent representations, the large pecuniary interest involved in their business, and the powerful combination arrayed against them, represented by the Gallegos Committee, acting for and on behalf of more than 40 insurance companies, practically the whole insurance world, with power to destroy the credit of the plaintiff in error, and to prevent it from obtaining insurance upon its property. The combination against the plaintiff in error which is set forth in the complaint is not unlike that which was condemned in Carew v. Rutherford, supra, and we think the facts alleged are sufficient to constitute a cause of action for money had and received.

The second question here is which of the two following provisions of the statute of limitations of Oregon applies to the cause of action,

'Sec. 6. Within six years: An action upon a contract or liability express or implied * * * '

'Sec. 8. Within two years: An action for assault, battery, false imprisonment, for criminal conversation, or for any injury to the person or rights of another, not arising on contract, and not herein especially enumerated.'

The action for money had and received has always been regarded as an action in assumpsit, based upon a promise to repay which the law implies, where one has possession of money which in equity and good conscience belongs to another. 'Having money that rightfully belongs to another, creates a debt; and whenever a debt exists without any express promise to pay the law implies a promise,...