Unjust Enrichment

Author(s): D. P. O'Connell
Source: The American Journal of Comparative Law, Vol. 5, No. 1 (Winter, 1956), pp. 2-17
Published by: American Society of Comparative Law
Stable URL: [Link]
Accessed: 27-02-2016 04:00 UTC

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at [Link]
info/about/policies/[Link]

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content
in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship.
For more information about JSTOR, please contact support@[Link].

American Society of Comparative Law is collaborating with JSTOR to digitize, preserve and extend access to The American
Journal of Comparative Law.

[Link]

This content downloaded from [Link] on Sat, 27 Feb 2016 [Link] UTC
All use subject to JSTOR Terms and Conditions
 D. P. O'CONNELL

Unjust Enrichment

IT IS PERHAPSNOT TOO MUCH to suggest that the doctrine of unjust

enrichmenthas been the area of one of the principalconflicts of modem
English [Link] arguments for and against the existence of
the doctrine in English law are merely expressionsof the far deeper dif-
ferencebetweenthat schoolof thought which seeks to expandthe common
law by referenceto its ultimate ethico-juridicalprinciples,and that which
is content to contain it within certain clearly definedpaths that permit
of only limited deviation. The dichotomyof commonlaw obligationsinto
contract and tort is only relatively recent and largely accidental. There
are many remediesprovided by the law which lie outside the ambit of
consensusor delictum,and which for the purposes of convenience have
been cataloguedwithin the past century or so under the inaccurateand
meaninglessheadingof "quasicontract."This headinghas been attached
as an appendageto the law of contract, because it could not be conveni-
ently fitted into any other category, and for this reason the unitary
principle underlying the various quasi-contractual remedies has been
[Link] AmericanRestatement'has sought to formulate this uni-
tary principle as a generic head of law, of equal status with tort and
contract, and has significantlydesignated it "restitution."
It is usefulat the outset of this discussionto quote the formulaadopted
by the Restaters: "A person who has been unjustly enrichedat the ex-
pense of another is required to make restitution to the other." This
principleis said to depend for its validity "upon certain basic assump-
tions in regard to what is requiredby justice in the various situations."
Thus, the moralbasis of the remediesof quasi contractis franklyacknowl-
edged, and the rules to be deduced from it are described as "general
guides for conduct of the courts." In other words, the principleasserted
in the Restatementconstitutes an invitation to the judge to extend exist-
ing remedies,or even create new rules for new instances when justice in
a very fundamentalsense requiresit. To that extent, the Restatement
representsa reaction against the concept of "legal certainty," and what
D. P. O'CONNELL is Reader in Law in the University of Adelaide, South Australia.
This article is the introduction to a series of lectures on Restitution delivered to the Ade-
laide Law School and the South Australian legal profession.
1 Restatement of the Law of Restitution, American Law Institute (1937).
2

This content downloaded from [Link] on Sat, 27 Feb 2016 [Link] UTC
All use subject to JSTOR Terms and Conditions
 O'CONNELL: UNJUST ENRICHMENT 3

some would define as the "fetters of judicial precedent";whether or not

it accurately reflects the American decisions, it is at least indicative of
the course which the common law might take in the future.2
Why should the Restatement be so significant, and why has it not
been readily accepted as the guide which the commonlaw might follow?
Why is it that English Law, almost alone of European systems, has
proved hesitant in adopting a principleso conformableto common sense
and so obviously a part of the European legal heritage?The answer is
to be found partly in the accidents of the commonlaw development,and
even more in recent times in the mentality of English lawyers.' The ana-
lytical characterof English jurisprudencehas caused undue emphasis to
be placed on accumulationof decisionsand dicta, so that in many aspects
the common law would seem to be an amalgam of factual data rather
than an epitome of values. The technique of the analytical jurist is to
aggregateand expand precedentuntil there is enough of it to warrant a
[Link] approachesunjust enrichment,he tends to gather
on one side all the statements in favor of the doctrine and balance them
against a similaraccumulationin oppositionon the other. If he finds the
scales even he expresses doubt, and so in effect makes his contribution
to the negative balance. The result is quantitative rather than qualita-
tive. With all due respect, the statement of Lord Porter in the House of
Lords in Reading v. A.-G.4 is only too characteristicof this approach.
The question of unjust enrichment did not call for decision, but Lord
Porter permitted himself the observation that "the exact status of the
law of unjust enrichment is not yet assured." He was content for the
purposes of the case, he said, "to accept the view that it forms no part
of the Law of England."Lord Porter has weighedup the opposingdicta,
found them evenly balanced,and so expresseddoubt. Subsequentjudges
will employ the same process, but adding Lord Porter's dictum to the
negative scale. And so it goes on, this erectionof competingedifices,until
one so overtops the other that it wins the day.
Is it not much more satisfactory to examine how sound is the ground
on which the edifices rest? This means going beyond the self-imposed
2LordWrightin 51 HarvardLawReview (1937)369;Friedmannin 1 ModemLaw Review
(1937) 77; Seavey and Scott in 54 Law QuarterlyReview (1938) 32; Arminjon,Nolde and
Wolff,Traite de droit compar6(1952), vol. 3, p. 155.
' [Link], loc. cit., p. 32. DenningL. J. has illustratedhowthe Restatementcan
influenceEnglishLaw in 37 AmericanBar AssociationJournal(1951)329. He himselfin the
first hearingof Readingv. A.-G. acceptedan argumentof counselbased on the Restatement
of Agency.
4 [1951]A.C. 507 617, at p. 514. See also Boissevainv. Weil [1950]A.C. 327 per LordRad-
cliffe,at p. 341; Ministryof Healthv. Simpson[1951]A.C. 251 perLordSimonds,at p. 275.

This content downloaded from [Link] on Sat, 27 Feb 2016 [Link] UTC
All use subject to JSTOR Terms and Conditions
4 THE AMERICANJOURNAL OF COMPARATIVELAW

bounds of analytical [Link] enrichmentis not to be con-

structed empirically by the adding together of so many judicial pro-
nouncementsand the welding of them into a formula.6Rather is it to be
understood as the enunciation of a precept lying on the borderlandof
law and ethics, and constituting the ultimate basis for diverse rules and
decisions. In approachingthe question of the existence or otherwise of
the doctrine in English law, one must not only appreciatethe character
of the English legal system, but go further and recognize the essential
unity of all European legal structures, a unity founded on the moral
concordof Westernpeoples. This is one of the primaryuses of compara-
tive law.
In this context, a comparison of Blackstone,6 Lord Mansfield, and
Pothier is instructive. All three jurists were typical of their age in their
belief that restitutionaryremedieshave their genesis in the natural law;
all clearly intended to propounda doctrine of unjust enrichmentin the
most basic of terms. Indeed, it would have been surprisingif Lord Mans-
field, with his wide knowledge of continental law and his sympathy for
the natural law tradition, had stated his case on quasi contract in any
other way. As formulated by him, the law not merely gives a remedy
where it implies a debt; it implies a debt where natural justice demands
it. And the reasonwhy a debt had to be implied was proceduraland not
substantive.7English law had no form of action for recovery of money
in the absence of a contractualbond, trespass, or trover. A simple logical
trick was thereforenecessary:the law would assume a contractualbond
where it was "unconscionable"for one to retain a benefit, and so what
was intended to be essentially a restitutionary remedy founded on the
broadestof moral principleswas brought by the fiction of implied under-
taking within the province of contract.
While the old forms of action survived, it was still necessary to frame
restitutionaryproceedingsaccordingto the technicalities of this implied
6 Cf. Winfield in 54 Law Quarterly Review (1938) 529.
6Implied contracts are such as "reason and justice dictate, and which therefore the law
presumes that every man has contracted to perform; and, upon this presumption, makes him
answerable;" and the common courts for work and labor "arise from natural reason, and
the just construction of law." Comm. III, 158, 161.
7 Moses v. Macferlan (1760) 2 Burr. 1005. Mansfield and his immediate successors tended

to approach the question in terms of broad principle: Deering v. Winchelsea (1787), 2 B. &
P. 270 at p. 272; Weston v. Downes (1778), 1 Doug. K. B. 23 at p. 24; Munt v. Stokes (1792)
4 Term. Rep. 561; Greville v. Da Costa (1797) Peake, Add. Cas. 113; Edwards v. Bates
(1844) 7 Man. & C. 590; Kelly v. Solari (1841), 9 M. & W. 54; Foster v. Stewart (1814), 3
M. & S. 191; Marsack v. Webber (1860) 6 H. & N. 1; Freeman v. Jeffries (1869), L. R. 4
Ex. 189. See the 1868 edition of Bullen v. Leake on Pleadings, pp. 36, 44. On Mansfield's
rationalization of quasi contract generally, see Fifoot, Lord Mansfield (1937) 246.

This content downloaded from [Link] on Sat, 27 Feb 2016 [Link] UTC
All use subject to JSTOR Terms and Conditions
 O'CONNELL: UNJUST ENRICHMENT 5

promise to repay. In due course, however, the technicalities came to

obscureand even stifle the [Link] result was that quasi contract,
instead of being an independent branch of the common law, continued
to be annexed as sort of corollaryto the law of contract, and as a conse-
quence was greatly restricted in its scope. That this inhibiting process
was contemporaneouswith the attack on the natural law tradition is not
without [Link] denial of the validity of universalpropositions
in the realm of philosophy involved in jurisprudencea denial of the va-
lidity of any generalprinciplesof justice from which specific rules of law
might be deduced.
It was widely assumed that an obligation of law could arise only in
virtue of an act of will manifested in the form either of an agreementto
be bound or an intention or [Link] such manifestationof the
sovereignwill of the individual there could be no obligation, and so a
judge was assumed to have no mandate, in the absence of consensusor
delictum,to create law. Especially must he avoid any resort to funda-
mental moralprinciples,since these, even if they were valid, were deemed
to be beyond the scope of [Link] followed that in quasi con-
tract one had to be able to imply a real promise to repay money or re-
store a benefit before the law would offerredress.8Lord Sumner'sfamous
and crushingreferenceto Lord Mansfieldin Baylis v. Bishop of London,9
and his assumptionin Sinclair v. Brougham"'that the rationale of quasi
contract is implied undertaking,are merely the most celebrated mani-
festations of this point of view.
Pothier has been accused of a similar narrowingdown of the scope of
restitution as it operatedin Roman law11by adducing only two instances
of it, namely the condictio,which he catalogues under promutuum,and
negotiorumgestio which becomes gestion d'[Link] had no such
intention. Natural law was the ultimate principle, and he was merely
citing certain of the propositions to be deduced from it. He chose his
principal examples from the post-glossators,and they were dearly not
exclusive.'2Having instanced the case of payment of a debt which the
8 Pownalv. Ferrand(1827),6 B. & C. 439, per Bayley J. at p. 444, HolroydJ. at p. 445
and LittledaleJ. at p. 446, referringto Exall v. Partridge(1799) 8 Term Rep. 308. But see
Bonnerv. TottenhamBuildingSociety [189911 Q.B. 161 at p. 166;Toussaintv. Martinnant
(1787), 2 Term Rep. 100 at p. 104.
9 [1913]1 Ch. 127, at p. 140.
10 [19141 A. C. 398.
11Inst. 3, 27; Gaius,3, 91; Dig. 22, 3, 25; Hunter,RomanLaw (1876), 657-66; Sherman,
Roman Law in the Modem World (1917), vol. 2, p. 365; Friedmannin 16 CanadianBar
Review (1938) 247.
12The period that intervenedbetween the post-glossatorsand the Age of Reason was
not productiveof any significantcontributionto a theory of [Link] were more

This content downloaded from [Link] on Sat, 27 Feb 2016 [Link] UTC
All use subject to JSTOR Terms and Conditions
6 THE AMERICAN JOURNAL OF COMPARATIVELAW

payer did not owe but thought he owed, he says that there are many
more examples,"quenouspassonssous silence."13 The framersof the Code
are the ones to incur blame if blame is to be imputed for narrowingthe
Roman law [Link] was adopted as the model, and his illus-
trations became rubricsin their own right,14so that in the Code there is
no generalprincipleof unjust enrichmentor restitution, and clearly there
are many circumstancesof enrichment not covered by the stated for-
mulae. Were the French-courtsto be limited in their applicationof resti-
tutionary remediesto matters that could be broughtwithin the Code, or
were they still entitled to invoke the more fundamental principle that
underlay the actio de i-nrem versoas understoodby the civilians? Their
approach to this question is curiously parallel to that of the English
courts to Lord Mansfield'[Link] both countries,the onslaught
of juridicalpositivism during the nineteenth century had the same con-
stricting effect. -In England, analytical jurisprudence,having resolved
against any excursionbeyond the boundariesof precedent, had to rely
on fictions to rationalizethe already existing rules of quasi contract. In
France, the judicial processwas confinedto exegesis of the Code. Unless
a plaintiff could anchorhis case to one of the stated heads of restitution
he was lost,15and doubtful cases could only be resolved by contorting
the languageof the Code."8Any tendency to use a garbledCode to secure
concernedwith the techniquesof customaryand late-feudallaw, and it was necessaryto
wait for the favorableclimate of the 18th century to propoundany doctrinairethesis on
the topic: Dawson, Unjust Enrichment(1951) 64. Domat in the late 17th centuryhad dis-
cussed a concept of unjust enrichmentas conformableto the Natural law (Lois Civiles, I,
bk. II, tit. 7. sec. 1), but Pothierseemsto have chosenhis principalexamplesfrom the post-
glossators,and notably Cujas, (OperaOmnia,III, c. 34, 214 (1758)),who had alreadymade
referenceto naturaljusticeas the basis of the Romanremedies.
13Oeuvres(Bugnet ed., 1890) Vol. 2, sec. 113. "Dans les contrats,c'est le consentement
des parties contractantesqui produit l'obligation;dans les quasi contrats, il n'intervient
aucun consentement,et c'est la loi seule ou l'6quitdnaturellequi produit l'obligation,en
rendantobligatoirele fait d'oAelle r6sulte."114. See also 134 and 140, a restorationof prop-
erty belongingto [Link] Dawson,op. cit., p. 97.
was specificallyelevatedto a head of
14 In Pothier,op. cit., vol. 5, pt. III. Gestiond'affaires
law, with its own technicalassocations. (Ibid., 167 et seq.) It becamea matter of reciprocal
obligationon the Roman law model (Code,Arts. 1372-1380);the negotiorumgestor is re-
quiredto completethe undertakinganduse care,and the personwhoseaffairis managedmust
reimbursehim; the matter thereforewent beyondthe mere moralobligationto compensate.
Recoveryof goodspassedor money paid undermistakewas likewisecovered,and there are
some thirteen other matters scattered throughoutthe Code which have a restitutionary
flavor. The earliest commentatorsdenied a doctrineof unjust enrichment:e.g., Toullier
Droit Civil Franais, vol. XI, No. 55, p. 65, and this was followedin S.37.2330;S.50.1.257.
15Dawson, op. cit., p. 98; David in 5 CambridgeLaw Journal(1935) 205: Challies,The
Doctrineof UnjustifiedEnrichmentin the Law of the Provinceof Quebec(2nd ed., 1952),
[Link]; Arminjonetc., op. cit., vol. 2, p. 78.
16In that year, the Courtof Appealat Rennesemployedthe actio de in remversoto secure
reimbursementfrom a husbandwhere the latter's duty to supporthis wife had been dis-

This content downloaded from [Link] on Sat, 27 Feb 2016 [Link] UTC
All use subject to JSTOR Terms and Conditions
 O'CONNELL: UNJUST ENRICHMENT 7

compensationfor enrichmentthrough a third party's contract was, how-

ever, consistently suppressedby the Court of Cassation, although there
was only one case which was decisively in favor of the rejection of any
generalprincipleof restitution,"7and that case, in 1889, where relief was
denied to a lender of money who paid off a first lien and thereby gave
priority to a second lienor, was probably decided on the basis of the
negligenceof the payor.18
The trend towards the end of the century was away from a positivist
approachand in favor of a return to the broadprinciplesof Pothier. The
decisive case was one which came before the Court of Cassation in 1892.
The plaintiff had sold fertilizerto a farmerwho was lessee of the defend-
ant's land. The lease was cancelled after the fertilizerhad been applied
to the land, and the lessee was insolvent. The ownerof the land was sued.
No provision in the Code governed the situation. It was held that the
action de in rem versocould be employed, and so a generic principle of
restitution was elevated to rank equally with the Code. The Court made
no attempt to disguiseits resort to ethics in orderto justify its decision:
"Attenduque cette action, derivantdu principe d'dquite,qui defend de
s'enrichirau detrimentd'autrui,et n'ayant dtdreglementde par aucun texte
de nos lois, son exercicen'est soumis d aucuneconditiondetermin&e; qu' il
suffit, pour la rendrerecevable,que le demandeurallegue et offre d'etablir
l'existenced'un avantagequ'il aurait; par un sacrificeou un fait personnel,
procure" d celui contrelequelil agit." The decision is the more interesting
in that it circumventedArticle 1165, which provides that contracts do
chargedby a thirdperson,"foundedon the fact that it is in the husband'sintereststhat the
debts were contracted."(Dalloz, R6pertoire,vol. V, Contratde [Link]. 1014) and in
a well-knownarr6tof the Courtof Appealat Pau in 1852,a schoolmasterwas permittedto
recover tuition fees from a pupil whose father was insolvent: ([Link] D.69.2.213
(1869). Article 1376 was stretched to cover the situation.) The words "ennichissement au
d6pensd'autrui"appearin an arrdtof the Courtof Appealat Parisof 1850,whererecoveryof
value of workdonewas allowedagainstan undisclosedprincipal:D. 54.5.483,whererecovery
was permittedagainst shipownersof money borrowedby a ship's officerand expendedon
the needsof the ship. In 1852the motherof an illegitimatechildwas alloweda set-offagainst
the child's estate for the cost of upbringing:D.P.53.2.181.
17S.50.1.257.,S.53.1.209,actionsagainstpartnershipfor value of assetssold to one partner
and transferredby him to the partnership;D.53.1.28, action for recoveryof value of assets
sold to lesseeand left on land. Even at this elevatedlevel, a liberalisingof the requirements
of semanticswas by no meansunknown;e.g., the Courtof Cassationallowedrecoverywhere
a vendorof seed sold to a lesseeand sowedby him on the defendant'slandbeforecancellation
of the [Link] case was broughtunderArt. 2102 whichgives the ownerpreferenceon pay-
ment of sums due for seeds: ((1864) S.64.1.311).After 1870 more and more problemsnot
directlycoveredby the restitutionaryArticlesin the Codecamebeforethe Courtof Cassation
(D.P. (1870) 71.1.240; (1873) D.73.1.451; (1877) D.78.1.204; (1888) D.88.1.310; (1889)
D. 89.1.321;(1890)D. 91.1.49; (1891) S.92.1.92);(1871) S.71.2.76;(1872) S.72.2.222;(1875)
S.75.1.362).
is S.9o.1.97.

This content downloaded from [Link] on Sat, 27 Feb 2016 [Link] UTC
All use subject to JSTOR Terms and Conditions
8 THE AMERICAN JOURNAL OF COMPARATIVELAW

not affect or benefit third parties, and in effect created a right and cor-
respondingobligationbetween one party to a contract and a third party,
on the presuppositionthat the latter had been benefited.'9
Stated as it was, the proposition of the Court of Cassation was too
wide, and it invited a flood of actions in which attempts were made to
expand the terms "enrichment"and the concept of "justice" to quite
absurd limits. Accordinglyin 1914, the Court of Cassation revised the
formula in the following terms: "Attenduque l'action de in rem verso,
fond6esur le principed'tquitM qui dgfendde s'enrichirau dgtrimentd'autrui
doitetre admisedans btusles cas o*, le patrimoined'une personnese trou-
vant sans cause ldgitimeenrichi aux ddpensde celui d'une autrepersonne,
cettedernidrene jouirait, pour obtenirce qui lui est d4, d'aucuneaction
naissant d'un contrat,d'un quasi-contract, d'unddlitou d'unquasi-ddlit."20
Since then, the Frenchcourts, far from reversingthe processinstituted in
1892, have been concerned to refine the notion of enrichissementsans
cause by defining,either by referenceto positive provisionsin the Code
or to morality, the precise conditions of "enrickissement" and the con-
cept of "cause."2'
There is no occasionto enter into a discussionof this processof refine-
ment, which belongs exclusively to a study of French law; it sufficesto
note the intellectual atmospherein which it is conducted. Every general
principlehas to be applied to contingent circumstances,and each appli-
cation tends to generate rules which circumscribethe operation of the
[Link] does not derogatefrom the validity of the principleor the
recognition accorded to it. What is significant is that Lord Mansfield
and Pothier both at the same time enunciatedthe identical proposition;
and when it is noted that in the nineteenth century the Code in France
played the same role in the judicial processas precedentin England, and
when, in addition, one may perceivea parallelreturnto the 18th century
formulation,22the analogy between the English and French approaches
is very instructivein assessingthe presentposition and function of unjust
[Link] Quebeccases, see Challies,op. cit., Chap. 1.
20 S.1918-19.1.41;
D.P. 1920.1.102;An exampleof exaggeratedclaimsis that of the financier
who lent moneyfor the constructionof a railwayto Arlesand soughtunsuccessfullyto recover
fromthe townon the groundthat it was benefitedby the railway'sexistence.D.95.1.391.
21 In 1944,for examplethe Courtof Cassationdecidedthat the vendorof bookscouldnot
recoveragainstthe ultimatepossessorof the booksbecausethe pricewas excessive;the claim
beingimmoral,the enrichmentwasnot withoutcause.([Link]. 1944.2.71)AlsoS.1941.1.121.
22The returnto Lord Mansfield'sformulain the CommonLaw began at the end of last
century when Keener,under Dean Ames' inspiration,at Harvard,producedhis work on
QuasiContract(1893) (See 2 HarvardLaw Review (1888) 1). Woodwardin 1913carriedthe
matter a good deal further:The Law of Quasi Contract(1913). For Francesee Ripert, La
RbgleMorale,No. 138, p. 257; Planioland Ripert, Trait6Pratiquede Droit Civil Frangais
(1931 ed.), vol. VII, No. 752, p. 47.

This content downloaded from [Link] on Sat, 27 Feb 2016 [Link] UTC
All use subject to JSTOR Terms and Conditions
 O'CONNELL:
UNJUSTENRICHMENT 9

enrichmentin English law. The French courts perhaps consideredthem-

selves until 1892 capable of extending a restitutionary remedy to cases
not contemplated in the Code only by importing fictions analogous to
the fictitious contract of Lord Sumner. The subterfuge was abandoned
when the items in the Code were seen to be only so many instances of a
generalprincipleto which resort might be had when the instances failed
to cover the situation.
The argumentsagainst such a processof generalizationin English law
are threefold:First, the conservative approachthat prefersprecise rules
and limitations within the traditional categoriesof quasi contract to the
vaguenessof universalmajorpropositions-Holdsworth in particular,has
been disturbed at the resurrectedspectre of natural law; secondly, the
contention that the fiction of implied contract became a rule of substan-
tive law before the abolition of the common-lawforms of action in 1852;
and thirdly, that even if it is controversialthat before 1852 implied con-
tract was the substance of quasi contract, it was made such as a matter
of stare decisis in Sinclair v. Brougham.23 The first two arguments may
be disposed of shortly. Lord Mansfield himself stated that as a "great
friend" to the doctrine of unjust enrichmenthe would be carefulto keep
it within properlimits,24and the good sense of the judiciaryin this respect
may be supported by reference to the refining process of the French
courts over the past forty years. One may disagree that the straining of
logic to feign a contract is a "more specific and thereforeless vague in-
quiry than to ask is it fair that the defendant should make a payment
to the plaintiff," as Holdsworth puts it,2" and may well consider that the
disadvantagesattendant on the law being influencedby rival philosophies
of justice are slight, compared to the disadvantages of a common law
inhibited by antiquated fictions in its capacity to expand. One may also
disagreewith Holdsworth'sargumentthat implied contract was the basis
of quasi contract. It is true that fictions have become substantive law,26
but one cannot say that all fictions have, and in the case of the implied
contract there is no evidence of this having occurred.27It is true that
u [1914]A.C. 398.
" Weston v. Downes, (1778) 1 Doug. 23, at p. 24.
26 In 55 Law Quarterly Review (1939) 49. Cf. Challies, op. cit., p. 44. Hanbury in 40 Law
QuarterlyReview (1924) 34.
26 E.g., in the action of commonrecovery,the fictionthat an estate tail cannot be barred
completelywithout the consent of the protectorof the settlement became a substantive
law rule.
27Holdsworth(loc. cit.) p. 48 cites as authoritiesSinclairv. Broughamand Re Simms,but
as this paper strives to show neithercase decidedthe point. To the contrary,we may cite
Cockburn - C. J. in Moule v. Garrett(1872) L.R. 7 Ex. 101, at p. 104; Lord TenterdenC.J.
in Powr- Ferrand(1827)6 B. & C. 439.

This content downloaded from [Link] on Sat, 27 Feb 2016 [Link] UTC
All use subject to JSTOR Terms and Conditions
10 THE AMERICAN LAW
JOURNALOF COMlPARATIVE

before 1852, the law "raised a promise," but the question is why did it?
The analytical mind is singularlyindisposedto embarkon the excursion
outside the languageof precedentwhich the question invites.
It is clearfrom the academicdebate on unjustenrichmentthat Sinclair
v. Broughamis the crux of the matter. A buildingsociety acted ultravires
in carrying on a banking business and accepting deposits. It went into
liquidation,and, in effect, the shareholderssought to divide up the money
of the depositors. The latter's action for money had and received was
refused, but the equitable remedy of tracing the money was granted. It
can be argued28that the discussion in that case on implied contract as
the basis of quasi contract was in fact obiter,since the decision turned
on the propositionthat at commonlaw the doctrineof ultra vireswas not
to be circumventedby the action for money had and received.29On this
view of the case, it is immaterial that Lord Haldane accepted the di-
chotomy of common-law obligations into contract and tort and con-
tended that the fiction of implied contract could only be set up if a real
contract would have been valid if it existed. But the doctrine of ultra
vireswas in fact circumventedby the equitable remedy of tracing; does
it not follow that the quasi-contractualremedy alone failed because the
theory of implied contract was essential in the decision?The answer is
that the equitableproperty remainedin the depositors,and whereasthe
commonlaw looked to the question whetherpropertyhad passed, equity
would follow the money if it could be earmarkedor traced into assets.
Ultravireswas thereforenot in question in the equity suit.30The signifi-
cant feature of the case is the Lords' clear striving for a remedy for in-
justice to the depositors;31 a rule of positive law as to ultra viresexcluded
the commonlaw remedybut not the equitable, and at least partial relief
could be granted.
If this view of the case is sound, then Sinclair v. Broughamis not a
bar to the constructionof a generic doctrine of restitution.32This, how-
28Cf. LordWrightin 6 Cambridge LawJournal(1938)317; Fifoot, [Link]., p. 246;Jackson,
The Historyof QuasiContract.(1936)123.
29 Lord Haldaneat p. 415.
30 The difficultywith this argumentis that Lord Haldanedescribedthe doctrineof ultra
vires as bindingboth at law and in equity: at p. 414.
81Lord Dunedin,e.g., at p. 431 said "all ideas of naturaljustice are againstallowingA.
to keep the propertyof B., whichhas somehowgot into A.'s possessionwithoutany intention
on the part of B. to makea gift to A." Quasicontract,he went on "is a contrivancewhichis
introducedto meet an equitableidea."See also LordParkerat p. 444.
32The contraryview underliesmany subsequentdicta. E.g., ScruttonL.J. in Holt v.
Markham[1923]1. K.B. 605,at p. 513;as Fifootputs it, he "rushedwith eloquententhusiasm
to the supportof the victors":op. cit., p. 248; AtkinsonJ. in TransvaalInvestmentCo. v.
Atkinson[194411 All E.R. 579; GreeneM.R. in Morganv. Ashcroft[193811 K.B. 49; but

This content downloaded from [Link] on Sat, 27 Feb 2016 [Link] UTC
All use subject to JSTOR Terms and Conditions
 O'CONNELL: UNJUST ENRICMENT 1

ever, does not of itself establish the general principle. The arguments
seekingto do so are ultimately reducedto two: that there are cases where
quasi-contractualremedies have been granted where no contract could
be implied, and that the doctrine is basic in European law. The one is
an analytical argument,the other a [Link] is true that there
are cases in which to import a contract would be to multiply fiction upon
fiction. In Craven-Ellis.v. Canons,33the plaintiff and others purportedto
act as directors but without holding the requisite qualification shares.
The plaintiff entered into an agreement of service between himself and
the company, and pursuant to it renderedservices, later taking action
for his [Link] agreementwas held to be void because it was
made by directorslacking authority. The plaintiff neverthelessrecovered
on quantum meruit. How could a contract be implied when ex hypothesi
there could be no contract?If implied contract is the basis of the action,
it is necessary to assume that the law will so impute even when a real
contract has been rejected. Such an assumption involves the further
question: why will the law so impute?34And with that question unjust
enrichmentis invited back into the [Link] maintain the "fanciful
relationship"of contract in this situation is to adopt that position of
legal antiquarianismwhich Lord Atkin so vigorously and picturesquely
castigated in UnitedAustraliaLtd. v. BarclaysBank.35
It might well be added that the implied contract thesis was finally
disposed of in the FibrosaCase.Y6It is unnecessaryto repeat the famous
see the judgmentsof Scott L.J. and Wynn ParryJ. in Re Diplock'sEstate [1947]1 All E.R.
522 at p. 535, and on appeal[1948]2 All E.R. 318. Also Halsbury(Hailsham)vol. 7, p. 276;
Radcliffein 54 Law QuarterlyReview (1938) 24; Gutteridgein S CambridgeLaw Journal
(1935) 211; Hanburyin 40 Law QuarterlyReview (1924)36; Landonin 53 ibid. (1937)303.
3 [193612 K.B. 403. See the commentof Friedmannin 53 Law
QuarterlyReview (1937)
449.
'4 Holdsworthhas arguedthat the originalcontractbeing void a new one couldbe implied
by the giving and acceptanceof services.(55 Law QuarterlyReview (1939) 49). GreerL.J.,
however,was carefulto explainthat the obligationto pay reasonableremunerationfor the
workdone when thereis no bindingcontractbetweenthe partiesis imposedby a rule of law,
and not by an inferenceof fact arisingfrom the performanceand acceptanceof services:
p. 411.
a5 [19411A.C. 1. See the commentof Lord Wright in 57 Law QuarterlyReview (1941)
184. Generallyon the effectof abolitionof the formsof actionon quasicontractand the effect
of fictionson the developmentof substantivelaw, see Maitland,Formsof Actionat Common
Law (1936ed.) 79; Winfieldin 53 Law QuarterlyReview (1937)449; 54 ibid.,p. 530; 55 ibid.,
p. [Link] Functionof Tort (1930)119;The Lawof QuasiContract(1952)Chap.1;
Friedmannin 53 Law QuarterlyReview (1937) 441; 1 Modem Law Review (1937) 77; 16
CanadianBar Review (1938) 247; Lord Wright in 6 CambridgeLaw Journal (1938) 305;
Cheshireand Fifoot, The Law of Contract(3rded. 1952)537; Jenks,Digest of EnglishCivil
Law (2nd ed., 1921) sect. 707.
86 [1943]A.C. 32 at p. 61. But cf. LordMacmillanat p. 59.

This content downloaded from [Link] on Sat, 27 Feb 2016 [Link] UTC
All use subject to JSTOR Terms and Conditions
12 THE AMERICAN JOURNAL OF COMPARATIVELAW

words of Lord Wright. He stated that to rely on Sinclair v. Brougham

as having shut the door against unjust enrichmentwould be to reduce
ad absurdumthe doctrine of judicial precedent.A "notional or imputed
promiseto pay" is only a way of describinga debt or obligation arising
by constructionof law. In the FibrosaCase, an English company agreed
to sell and deliverwithin fourmonths machineryto a companyin Poland.
A deposit was payable in advance, and its return was successfully sued
for when the contractwas frustratedby the Germaninvasion of Poland.
The money had been paid when due under an existing contract that was
later [Link] then could it be recoveredon any impliedpromise
to repay?The constructionof a hypotheticalcontractby supposingwhat
terms the parties would have arrivedat if they contemplated the future
impossibilitywas not, in Lord Wright's opinion, the proper way of en-
visaging the matter. The action for money had and receivedrested on a
debt imposed by the law, not constructedfrom the wills of the parties.
And this involved the propositionthat restitution is a "third category
of the common law."37
This decision should be sufficientin itself to establish restitution as a
generic doctrine and to indicate that the categoriesof quasi-contractual
remediesare not closed. The use of the action in frustrationwas itself a
novelty. The precedenthas not, however,terminatedthe debate, nor has
it been the starting point for any significant development. It is still
argued that, even if an element of aequumet bonumis present whenever
a quasi-contractualremedy is available, it does not follow that in every
case of unjust enrichment an action in quasi contract lies.Y This is a
valid point, but it does not warrant the further conclusion that only
n [Link] propositionin Brook'sWharfv. Goodman[1937]1 K.B. 534, at p. 543 citing pas-
sagesfromDawsonv. Linton (1822)5 B. & Ald. 521 and Pownalv. Ferrand(1827)6 B. & C.
439. In this case the impliedcontractwouldhave been totally artificial,wherebondedware-
housemenwerecompelledunderstatute to pay customsduties on cargoof otherswhichhad
been stolen without fault of either party.
31Allen in 54 Law QuarterlyReview (1938) 206. Also, Scott L.J. in Morganv. Ashcroft
[1938]1 K.B.49,agreedthat the impliedcontractin moneyhad and receivedhas no element
of agreementabout it, but he was equallyfree of doubt that "the moralprincipleof 'unjust
enrichment'has now been rejectedby EnglishCourtsas a universalor completelegal touch-
stone wherebyto test this cause of action."But it is still important"to find some common
positiveprinciplesupon whichthese causesof actioncalled 'impliedcontracts'can be said to
rest, and which will not altogetherexcludethat of unjust enrichment":at pp. 75-6. This,
however,does not advancethe discussionas to when a contractwill be implied,which is the
realquestion.A like criticismmay be madeof the judgmentof RomerL.J. in Re Simms[1934]
Ch. 1, at p. 31. where,after citing Sinclairv. Brougham,he stated that a promiseto repay
cannot be impliedunless it is inequitablethat the moneybe retained,but that the promise
to be impliedmust be one which, having regardto the principlesof the law of contractis
legally possible.

This content downloaded from [Link] on Sat, 27 Feb 2016 [Link] UTC
All use subject to JSTOR Terms and Conditions
 O'CONNELL: UNJUST ENRICHMENT 13

where a contract can be implied will restitution be effected, nor does the
existenceof historicallyinstancedexceptionsderogatefrom the generality
of the [Link] is, for example, the anomaly of infants' contracts.
This category had emerged, on considerationsof public policy, before
the concept of unjust enrichment;it stands on its own special ground.39
Even here, however, "naturaljustice" has been resorted to in order to
"9 In Cowern v. Nield [191212 K.B. 419, it was held that an infant was able to keep both
the goods he had contracted to sell and the money he had been paid for them. Two years
later in Leslie v. Sheill [1914] 3 K.B. 607, an infant was able to keep money which he had
obtained by entering into a contract upon misrepresenting his age. In both cases, the latter
a Court of Appeal decision, the action for money had and received was rejected, and this
would seem on its face, and indeed it was so argued by Professor Gutteridge, to be a repudia-
tion of the concept of unjust enrichment. A moment's investigation of the history of the
matter will dispose of this objection. The rule in Leslie v. Sheill appears in 1690 in Darby v.
Boucher 1 Salk. 279, where Holt C.J. thought of the situation exclusively in terms of as-
sumpsit, pointing out that "it is upon the lending that the contract must arise, and after that
time there could be no contract raised to bind the infant, because after that he might waste
the money." The matter would seem to have been disposed of in terms of general policy. That
the situation is apposite for an unjust enrichment doctrine was, however, recognized in
Marlow v. Pitfeild, (1719) 1 P. Wms. 558, and Harris v. Lee (1718) 1 P. Wms. 482, where
equity was employed to make in the one case an infant, and in the other a husband, liable
for necessaries. There is nothing in either case to limit the operation of the equitable re-
lief to necessaries. (Bacon's Abridgement, IV, 356.) When, however, Lord Kenyon dealt
in 1792 with the case of an infant who had, as an apprentice, overcharged his employers'
customers and pocketed the balance, he held that an action for money had and received
lay because the claim arose cx delicto, but that no action would lie if the claim had been
ex contractu, clearly making reference to Lord Holt's decision: Bristow v. Eastman (1794)
1 Esp. 172. Out of this unhappy beginning, the text writers (Dicey on Parties, 284; Bullen
& Leake, p. 605) and Victorian judges (e.g., In re Jones 18 Ch. D. 109) produced a rule
of substantive law. Phillimore J. in Cowern v. Nield merely quoted Bristow v. Eastman
and on the strength of it refused the claim. In Leslie v. Sheill, Lord Sumner found the rule
already crystallized that the courts will not enforce in a roundabout way an unenforceable
contract, but he fortified it with the argument (only, of course, to be expected in the light
of what he had just previously had to say in Sinclair v. Brougham) that the law forbids a
court to allow "under the name of an implied contract or in the form of an action quasi ex
contractu, a proceeding to enforce part of a contract, which the statute (Infants Relief Act)
declares to be wholly void." The equitable remedy he discussed at length. In Stocks v. Wilson
the previous year ([1913] 2 K.B. 235), Lush J. applied an equitable principle of restitution on
the basis that the infant could not both keep goods and not pay for them. The situation in
Leslie v. Sheill Lord Sumner conceived to be different. There was no question of tracing the
money paid over. The contract was a special type, a contract of loan, and the other judges
argued that equity would not give effect indirectly to a void contract. The overriding principle
in cases of infants' contracts is, therefore, that the contract shall not be enforced by resort to
quasi-contractual remedies, so preventing infants from running into debt. It would have been
sufficient for the infant's protection to have admitted as a limited defence a plea that the
money had been used, and the rule as it has developed has thus been expanded further than
principle required. Be that as it may, the rule clearly has no bearing on the existence of unjust
enrichment in English law, but one may be pardoned for suggesting that the judicial thinking
on the subject, being contained within the tight limits of contract, has produced a deplorable
rule of law.

This content downloaded from [Link] on Sat, 27 Feb 2016 [Link] UTC
All use subject to JSTOR Terms and Conditions
14 THE AMERICAN JOURNAL OF COMPARATIVELAW

avoid some of the more startling consequencesof the rule,40and unjust

enrichmentmight well be the major premise in further development of
this line of [Link] Wright has argued for an expansion of the
category of necessariesto read down the implications of the law on in-
fants' contracts as stated in Leslie v. Sheill.4'He is probably unsound in
his main propositionthat contracts for necessariesare really quasi-con-
tractual in character,since they were regardedas proper contracts long
before the 18th century,42but his conclusions indicate the intellectual
atmospherewhich might favor a rationalizationof the law on infants'
contracts in the future.
Another instance of gap in the uniformlaw of restitution is the nego-
tiorumgestiosituation, but this is also to be explainedon special grounds.
In Faickev. ScottishImperialInsuranceCo.,43 the rule was fortifiedby the
notion that obligationcan arise only out of a concessionof the will. Such
a dogma seems to lurk behind Bowen L. J's propositionthat "work and
labour done or money expended by one man to preserve or benefit the
propertyof another do not accordingto English law create any lien upon
the property saved or benefited, nor, even if standing alone, create any
obligation to repay the [Link] are not to be forced upon
people behind their backs any more than you can confer a benefit upon
a man against his will." There is no logical distinctionbetween the benefit
created to real estate by the action of a volunteer, and that created by
salvage at sea, yet the law denies compensationin the formercase" and
admits it under civilian influencesin the latter.46Where a railway com-
pany failed to fulfil its duty to repaira bridge and the local corporation
40 In Valentini v. Canali where an infant was not allowed to avoid liability for the benefit

which he had derived from the tenancy of a house, on the ground that "where an infant has
paid for something and has consumed or used it, it is contrary to natural justice that he should
recover the money which he has paid": (1889) 24 Q.B.D.166.
416 Cambridge Law Journal (1938) 319.
4' In re Rhodes (1890) 44 Ch. 94, at p. 107, Lindley L.J. stated that the obligation to pay
for necessaries does not arise from a real contract, but is one which "can be enforced as if it
had a contractual origin." Also Fletcher Moulton L.J. in Nash v. Inman [19081 2 K.B. 1.
Holdsworth argues to the contrary that an infant's contract for necessaries is a valid contract
(loc. cit.), and since the Infants' Relief Act, 1874, it would seem to be so. What its basis was
at common law seems to be immaterial to the discussion of restitutionary remedies. It was
inevitable that the courts and the writers from Manby v. Scott (1659) 1 Mod. 124 should speak
of "contracts for necessaries" (Brooke v. Gally (1740) Barn. C.1; Peters v. Fleming (1840)
6 M. & W. 42; Ryder v. Wombwell (1868) L.R. 4 Ex. 32), since the matter was thought of in
terms of procedure, and Winfield seems to be correct when he says it was uncertain if the
basis of the action was contractual or quasi-contractual: in 58 Law Quarterly Review (1942)
82. The views held by Greer L. J. in Elkington v. Amery [193612 All E.R. 86 at p. 88, and by
Scrutton L.J. in Pontypridd Union v. Drew [1927] 1 K.B. 214, at p. 220 are irrelevant.
4 (1886) 34 Ch. D. 234, at p. 248.

'"Leigh v. Dickeson (1885) 15 Q.B.D. 60.

4
Five Steel Barges (1890) 15 P.D. 142, at p. 146.

This content downloaded from [Link] on Sat, 27 Feb 2016 [Link] UTC
All use subject to JSTOR Terms and Conditions
 UNJUSTENRICHMENT
O'CONNELL: 15

did so without instructionsfrom the company, the corporationwas held

unable to recover the cost.4"This unsatisfactorydecision was arrived at
by an approach from the point of view of contract and not from that of
restitution. Woodwardhad no hesitation in rejecting it as unsound, and
asserted that it was contrary to the common law as it had developed in
the United States.47The distinction adopted by the Restaters between
"officious"and "unofficious"conferringof benefits could well develop a
restitutionary doctrine in this field based on the notions underlying
Brook'sWharfv. Goodman.48 A further point of comment on unjust en-
richmentin Englishlaw is the test of [Link] Phillips v. Homfray,49
the plaintiff claimedcompensationfor the use of mine passages from the
estate of a man who had wrongfullytaken mineralsfrom his farm. It was
held that the assets of the deceased had not necessarilybeen swollen by
what he had done. In effect, the proposition is that enrichment may be
retained if it does not take the fonn either of an accretion of assets or a
depletion of those of the plaintiff.
To argue, however, as some have done, that there is no principle of
unjust enrichmentin English law because there are only certainremedies
and a numberof gaps is to take a stand on the same groundas the early
interpretatorsof the French Code.50If English law were really founded
on the thesis that universalpropositionshave no validity, we would have
to eliminate from it all referencesto "justice," "fairness,"and "reason-
ableness,"for no matter how disguisedand subjective these may be they
have a highly natural law content. The test, or one of the tests of unjust
enrichment is the recognition, more or less constant, in judicial pro-
nouncements involving restitutionary situations, of the fairness and
justice of the case.6'Quasi-contractualand some equitable remedies are
the realizationin law of the moral principleof restitution in the sphere
46 MacclesfieldCorporation
v. Gt. Cen. Ry. [1911]2 K.B. 528.
47The Law of Quasi Contract (1913), p. 334. See also the review in 30 Law Quarterly
Review (1914) 244.
48 [19371 1 K.B. 534.
49 (1883) 24 Ch. D. 439.
60 Since 1892 the de in remversoprinciplehas been read down by Article 1165whichpro-
vides that contractsdo not affector benefitthirdparties,so that a ruleof positivelaw excludes
the moralclaimin somecases. E.g., it has been held that a contractorwho has workedfor a
tenantcannotsue the landlordto recoverthe benefit(D.P. 1923 1.64;D.P. 1920. 1. 102; D.P.
1912. 1. 217.) Nor can a laborerworkingfor an insolventcontractorrecoverhis wages from
the latter'semployer(D.P. 1899. 1. 105). But a usufructuarymay sue for repairsdone to the
owner'sproperty (S.30, 2.73) and where a woman who was joint ownerwith her children
contractedfor improvementsit was held after she becameinsolvent that the childrenwere
liableon the groundthat theestate hadbeenenriched(D.P. [Link] D.P. 1906,2. 132).
61It is to be noted that in Re Diplock [19481Ch. 465, at p. 480, substantialjustice was
achievedby the machineryof tracingmoneypaidby trusteesto "beneficiaries" on a mistaken
interpretationof a will, and this despitethe doubtsexpressedaboutunjustenrichment.

This content downloaded from [Link] on Sat, 27 Feb 2016 [Link] UTC
All use subject to JSTOR Terms and Conditions
16 THE AMERICAN JOURNAL OF COMPARATIVE LAW

of commutative justice. The techniques by which restitution may be

achieved may be defective and they may differ; they may have to be
channelled along traditional lines;62and they may be subordinatedto
other remedies."In Germanlaw, the generalprincipleof unjust enrich-
ment is used to go behind transactionsformally completedbut the pur-
pose of which is unrealized.64 It covers some of the situations covered
by the doctrine of constructive trust and some classifiedunder the doc-
trine of frustration,56and its function is to mitigate the hardshipswhich
would result in certain cases from an application of strict law by apply-
ing principlesof justice and equity. The fairly constant pattern of opera-
tion of unjust enrichmentthrough these various techniquesmay be seen
as a manifestationof the substantial unity of Europeanlegal structures,
whichis in itself sufficientto promptcomparablejuridicaldevelopments."6
Given the appropriate attitude of mind, one is enabled to penetrate
through the complexof disparaterules and exceptions in English law to
a perception of their genesis, and so comprehendby referenceto conti-
nental experiencetheir true universality and their equally true limita-
tions. The lawyer'ssphereof competenceis not therebytranscended,and
he is perhapsjustified in arrivingat Denning L.J's position in Nelson v.
Larholt,67when he referred to the inappropriatenessof the distinction
between law and equity and proposed that principles be stated in the
light of their combinedeffect.
2 For example,there is no restitutionunder a contract unenforceableby virtue of the
operationof the Statutes of Fraudsor Limitations.
5' E.g., Article2042 of the Italian Civil Code: "The action of enrichmentis not available
wherethe personwho has sufferedthe loss can bringanotheraction to makegood the loss he
has suffered."Cf. S. 1941. 1. 121.
" Section 812(1) of the Civil Code: "Whosoeveracquiresanything throughthe acts of
another, or in any other way at that person's expense, without legal justification
(ohnereahkichen Grund)is boundto restoreit to him. Suchobligationshallalso arisewhenthe
legaljustificationceasesto exist, or wherethe intendedpurposeof a legal transactionhas not
been achieved."Theremust be a detrimentto the claimant,and this, when there is no legal
justification,gives rise to a right to a restorationof the status quo ante, if this is possible.
See Manualof GermanLaw (H.M.S.O.),vol. 1 (1950)97. See also Italian Civil Code,Art.
2041.
56E.g., wheregoods deliveredunder a contractfor sale of future goods (Werklieferungs-
vertrag) have perishedwithout fault of the buyer or seller the latter is obliged to refunda
deposit. This has been appliedalso to confiscation.(Betriebsberater,1952, 733); and cases
whereland is erroneouslyrecorded(112 R.G.Z.260). Achilles-Greifcontendsthat thereis no
generalactionfor unjustenrichment,only a numberof actionswhichneverthelesscovermost
situations:BurgerlichesGesetzbuch(19th ed., 1949),s. 385. See generallyGerota,La th6orie
de l'enrichissement sans causedans le droit civil allemand(1925).
"6Even Soviet Code, sections399-400. See Gsovski,Soviet Civil Law (1949), vol. 2, p.
202. The Soviet test of enrichmentdiffersfrom the Germanin requiringa restorationof the
status quoante (ibid,p. 206). Germanlaw requiresrestorationonly of whathas not beenbona
fide consumed.
67[194811 K.B. 339.

This content downloaded from [Link] on Sat, 27 Feb 2016 [Link] UTC
All use subject to JSTOR Terms and Conditions
 O'CONNELL:
UNJUSTENRICHMENT 17
A coherent system of unjust enrichmentthen will strive to assimilate
under one genericprinciplea diversity of juridical situations. Whenever
money has been paid or work done under a contract which has failed or
was void ab initio, the factual situation has ethical implications. The
party placedat an economicdisadvantagehas what LordMansfieldwould
have described as an "equitable" interest in the benefit of the other
party. Any civilized system, as Lord Wright has insisted,"8must recog-
nize the equities of the case and impute to the party enriched an obliga-
tion to restore the benefit or its economicequivalent. To this there will,
of course, be exceptions, as in the case of a contract unenforceableby
virtue of the Statutes of Frauds or Limitations, but it is still possible to
perceivethe commonelement in cases wherethe enrichmentis occasioned
by overpaymentof a debt, by payment induced by fraud or by mistake
of fact leading to performanceof a supposedbut nonexistent contract,59
or by wrongful distribution by a trustee. It matters not whether the
court regards the one enriched as personally liable to repay or as con-
structively a trustee of the acquired assets.60The net result is restitu-
tionary in character, and the action for money had and received and
that for a dedaration of trust are merely alternative proceduresappro-
priate to differingcircumstances,the one personal,the other proprietary,
but both generated by the same principle. The traditional divisions of
English law were satisfactoryso long as society was relatively static, but
enormouseconomic and social changes invite a liberalizingof precedent
and a striving for new [Link] indicates that the chapterheadings
of contracts and trusts may have to be broken down into more general
precepts that will recognizethe intrinsic affinity of the problemsarising
in a diversity of situations and be acknowledgedas the foundation of
differingactions.61
u Fibrosacase (supra).
9 But not mistakeof law. The existenceof this distinctionhighlightsthe nature of the
[Link] line betweenmistakeof law and mistakeof fact is a very unstable
one, and the courtshave been quite casuisticalin their effortsto characterizea mistakeas
one of fact in orderto give a remedy:Bilbie v. Lumley (1802)2 East 469; Holt v. Markham
[192311 K.B. 504; NorwichFire InsuranceSoc. Ltd. v. Price [1934]A.C.455.
*0See the judgmentof CardozoJ. in Beaty v. GuggenheimExplorationCo. (1919) 225
N.Y. 380 at p. 386 wherehe said: "Whenpropertyhas been acquiredin such circumstances
that the holderof the legal title may not in good conscienceretain the beneficialinterest,
equity convertshim into a trustee."See Pound in 33 HarvardLaw Review (1920), p. 420.
Cf. Atkin L.J. in BanqueBelge v. Hambrouck[1921]1 K.B. 321, at p. 335. See Winfieldin
53 Law QuarterlyReview (1937) 448.
1 Winfieldin 54 Law QuarterlyReview (1938) 530.

This content downloaded from [Link] on Sat, 27 Feb 2016 [Link] UTC
All use subject to JSTOR Terms and Conditions