Ramasami Naidu vs Muthusami Pillai

Oldfield, J.—The main facts of this case can be stated shortly. Plaintiff obtained a decree against second, third and fourth Defendants and,

after attaching money alleged to belong to them and to be in first Defendant�s possession, was appointed Receiver in his own execution and in

that capacity is now attempting to recover from first Defendant, the other Defendants being impleaded as persons interested. The defence of first

Defendant, the Appellant before us, is that (1) the money is a sum due to second, third and fourth Defendants and one Rajappa Mudali, the right to

collect which he acquired in a legal manner; (2) if his own title is bad, some at least of the money has vested in persons other than Plaintiff, those

who are administering second and third Defendants� estates in insolvency.

The lower Appellate Court''s judgment is mainly occupied with the second of these contentions. The facts relied on are that second Defendant

on 13th March 1911 and third Defendant on 7th October 1911 became insolvents, the one in Tinnevelly and the other in Madura, and their assets

therefore vested for the benefit of all their creditors, Before Plaintiff attached this portion of them on 15th July 1914. The District Munsif s finding

that this was so in the case of second Defendant has not been attacked. He and the lower Appellate Court found otherwise in the case of third

Defendant, because he was adjudicated insolvent by the Official Receiver, Madura, and no distinct vesting order, such as The Official Receiver of

Trichinopoly Vs. S.A. Somasundaram Chettiar and Others, requires, having been passed, the debtor''s estate is still available to satisfy individual

claims. But this is unsustainable. The authority cited may entail that the estate did not in the absence of a distinct order vest in the Official Receiver.

The fact, which the lower Courts overlooked, remains that in any case it vested u/s 16(1) of the Provincial Insolvency Act in the Court and became

divisible among the creditors from the date of the petition and that u/s 16(2) after the date of the adjudication, which related back to that of the

petition, no creditor had any remedy against it. The cases of second and third Defendants are therefore similar. Plaintiff can execute his decree only

by proving in their insolvencies; and on this ground at least his claim to what is alleged to be in part their money in first Defendant�s hands must

fail.

The lower Appellate Court has next held against first Defendant�s right to that money on the special ground that he obtained it in proceedings,

which could not bind them or fourth Defendant. It consists in a debt, which he has collected in virtue of his purchase at a sale held by the Official

Receiver, Tinnevelly, in the administration of the estate of Rajappa Mudali above referred to and of an assignment to him, Exhibit I, by second

Defendant. That sale is represented by first Defendant as being of the debts due to a firm composed of Rajappa and second, third and fourth

Defendants. But, as Exhibit B, the auction list, shows, what was sold was only, ""the right to arrears due to Rajappa Mudali, insolvent Petitioner, as

due under the day book and ledger of R.M. shop,"" R.M.N. being the firm above referred to. Exhibit K, the sale deed by the Official Receiver to

first Defendant, is no doubt for ""the debts due to the joint shop conducted under the style of R.M. by Rajappa Mudali."" But the insolvency was, it

is not disputed, that of Rajappa, not the firm; and it is sufficiently clear that only his share, not second, third and fourth Defendants�, purported to

be or could have been sold. How the Official Receiver could sell one partner''s share of the debts due to the firm, instead of following the normal

course and selling his share in its assets, as it might he ascertained, is not clear; but this irregularity appears to have gone unnoticed until the hearing

in this Court and on the view I take, would not affect the conclusion. The sale in these circumstances giving no title to any portion of the debts

except Rajappa''s, first Defendant has relied also on Exhibit I, the assignment of second and third Defendants� shares, which he obtained shortly

after. It is, I agree with the lower Court, ineffectual as regards third Defendant�s share, because Exhibit A, his power of attorney in second

Defendant�s favour, authorized the latter only to collect debts due to the shop, not to realize their value or any part of it by selling them. The

result so far is that first Defendant�s right to the debts has been established only in respect of second Defendant�s and Rajappa''s shares, but

that, as already found, Plaintiff cannot be heard to deny it in respect of the former�s. The question is next of the general objection, which has

been made to his claim to the share of fourth Defendant. That objection would, it may be observed, be available against his claim to the other

shares also.

Before referring to this objection, I observe that Plaintiff''s decree which has been shown us during the hearing, was obtained against second,

third arid fourth Defendants, Rajappa not being a party. It may be permissible in India, as it is in England (Hawkins v. Ramsbottam (1815) VI

Taunt 179, to sue only the solvent members of a firm, when a decree is sought against it. But there is nothing in the decree, except the use of the

vilasam R.M.N. before each Defendant�s name, and that is insufficient, to indicate that relief was sought or given against the firm''s assets, not

the Defendants individually; and on such a decree Plaintiff''s proper course was after exhausting their separate property to proceed against their

shares in those assets after they had been ascertained in proper dissolution proceedings, if necessary at his instance in Defendants� insolvencies

or otherwise, again however this point has not been taken at any stage; and I therefore turn to the general argument already referred to.

It may for the present purpose be considered only as regards fourth Defendant and it is that the suit will not lie, because Plaintiff cannot recover

from first Defendant money, which he received owing to a mistake from the debtors of fourth Defendant Plaintiff''s debtor. Certainly first Defendant

had no right to receive the money. But there is no finding that in doing so, he acted otherwise than honestly and in bona fide mistake as to his right.

''When or how he became aware of the invalidity of his title, as based on his purchase at the Official Receiver''s sale or his assignment (in the case

of third Defendant), if he did become aware before collecting the money, has not been ascertained; but, the plaint containing no suggestion of fraud

or collusion between him and the Official Receiver or any person concerned, no presumption can be made against him. And then, as Plaintiff''s

position can be no better than that of his debtors, the question simplified is whether fourth Defendant or either of the others could recover from first

Defendant what he has received mistakenly as due to them.

This question in terms of English Law is whether in the circumstances an action would lie against first Defendant for money had and received for

their use; that is for the use of Plaintiff. The scope of this form of action and the considerations, which led to its extension, are discussed fully in

Sinclair v. Brougham (1914) A.C. 398, although it is possible that the former has never been defined exhaustively. Plaintiff''s argument has

accordingly been that it comprehends all claims arising, in the words of Blackstone''s definition (Comm. III 162), ex aequo et bono and ""the justice

of the case."" First Defendant contends, and I shall hold, that one test of its applicability to such facts, as those before us, is afforded by the

existence of privity between the Plaintiff and Defendant, a test which those facts do not satisfy. For it is not suggested that Plaintiff or second, third

and fourth Defendants had any knowledge of or connation with the payment to first Defendant. No doubt there are, as is to be expected in the

circumstances referred to in Sinclair v. Brougham (1914) A.C. 398, decisions, in which this test was not applied dearly. But, so far as they cannot

be distinguished, they must be regarded as discredited by the mass of cases, in which the general rule was enunciated.

To refer to cases, in which the question arose, as it arises here, in connexion with the recovery of payments mistakenly made to the Defendant,

not by the Plaintiff directly, but by a third person alleged to be liable to the Plaintiff, and in which there was no direct or obvious fiduciary relation

between the parties, reliance has been placed first on Litt v. Martindale (1856) 18 C.B. 314, and it is certainly in Plaintiff''s favour. But, although

the objection taken by the Defendant was that money had and received would not lie, the judgments (which are laconic) indicate that the action

was treated as founded on fraud, of which there is no question in the ease before us. In Littlewood v. Williams (1815) 6 Tau 277, the point of

privity was not dealt with distinctly, but would appear to have been decided in the Plaintiff''s favour on the ground of their previous relation with the

Defendant and their servant and his, from whom he received the money, the conclusion being that it was the Plaintiff''s money in his hands. These

English cases therefore, the strongest on Plaintiff''s side, in no way detract from the insistence on the necessity for evidence of privity in others, to

which I turn. In Rogers v. Kelly (1809) 2 Camp 123, the Defendant received money due on Plaintiff''s bill from his bankers owing to a clerk

confusing a bill which had been provided for with one which had not been; and the action was dismissed on the ground that whatever Plaintiff''s

position as against his bankers or theirs against Defendant, there was no privity between the parties before the Court. And so also in Chambers v.

Miller (1862) 32 L.J. C.P.N.S. 30, and Aikin v. Short (1856) 1 H. & N. 210, in which it was regarded as material that the mistake, owing to

which the Defendant received the money was one, with which he had nothing to do, since it was between the person who paid him, and the

Plaintiff. In these cases Defendant was no doubt entitled to the money, though not from that person. But that was not so in Rogers v. Ingham

(1876) 3 Ch. D. 351, a suit between two persons claiming to be legatees of whom the Defendant had been paid by the executor''s mistake; and,

though the action for money had and received was not in question, the principle now under discussion was applied, james, L.J., observing that

relief against mistake had never been given in the case of a simple money demand between the parties, there being no fiduciary relation between

them and no equity to supervene by reason of the conduct of either. So also in Mackersy v. Ramsays (1843) 9 C & F 818 where it was hold that,

because privity existed between Plaintiff and Defendant, his banker who had undertaken to collect the amount of his bill and had agreed to credit

him with the amount received, the latter was liable to him; and that, because privity did not exist between him and the banker''s agents, whose

insolvency caused loss of the money, those agents were not. And in Prince v. Oriental Bank Corporation (1878) 3 A.C. 398 in which Mackersy v.

Ramsays (1843) 9 C & F 818 was approved, the absence of privity again afforded a ground of decision. It is to be observed that the language in

Sinclair v. Brougham (1914) A.C 398, on which Plaintiff''s claim to a liberal view of the action for money had and received mainly rests, was used

rather of its early development than of its scope as settled at the present time by authority. It is no doubt still to be regarded, as it was originally, as

based on an implied or fictional promise (see the judgments of Lords Haldane and Dunedin). But Sinclair v. Brougham (1914) A.C. 398 is

completely in accordance with the great body of other authority in negativing the possibility of such a promise being deduced, as Plaintiff here

would deduce it, from the aequum et bonum, as it may appeal to the sympathy of the Court in the particular case, or from circumstances, in which

the Defendant, having no privity with the Plaintiff, when the money was received, need not be supposed to have given and had no duty to give any

promise. Here first Defendant was clearly under no such duty. For he collected the debts due to fourth Defendant and others without reference to

them and was not enabled to do so by reason of any fiduciary relation with them or in consequence of any fact independent of the willingness of

their debtors to pay him.

The conditions, on which a Plaintiff, can sue for money received to his use, have been discussed in India more often with reference to the

applicability of Article No. 62, Schedule I, Limitation Act than to the existence of a right of action; and, when the latter has been in question, the

issue of privity has seldom arisen or been raised. The cases therefore are of little assistance. Plaintiff however relies on Syad Lutf Alikhan v.

Mussamat Afzalunissa Begum (1872) 9 Ben. L.R. 348 (P.C.), and Tellis v. Saldanha (1887) ILR 10 Mad. 69, the latter, being explained in

Vaidyanatha, Aiyar v. Aiyasami Aiyar (1909) ILR 32 Mad. 191. But in all these the parties were in the relation of joint tenants or co-owners and

the principle of Section 90, Trusts Act, was applicable, the Defendants having in each case received the money sued for as representing the

Plaintiffs and themselves; and a fiduciary relation was therefore in question. Sankunni v. Govinda (1914) ILR 37 Mad. 381, was no doubt decided

with reference to Black-stone''s definition of the action and a very general statement that the Defendant�s obligation arose ex aequo et bono. But

the suit was to recover money, for which no doubt Defendant, a member of a tarwad, and Plaintiff had given a promissory-note, apparently by

way of acknowledgment, to the karnavan; and, when the money was returned from the Government deposit, for which Defendant originally

received it, his receipt of it was apparently regarded as part of the transaction, into which he had entered with the karnavan''s concurrence for the

tarwad''s benefit. The decision therefore might, it would seem, have been based on a ground, narrower than the one adopted and consistent with

the conclusion already reached on English authority. In it reference was made to Mohamed Waheb v. Mahomead Ameer (1905) ILR 32 Cal 527,

a case, in which the fiduciary relation between the parties, co-sharers, was clear and in which therefore nothing turned on the reference it contains

to Litt v. Martindale (1856) 18 C.B. 349, already cited, as an action for money had and received. This reference in fact merely reproduced that

made in another case relied on by Plaintiff, Raghumoni Adhikari v. Nilmoni Singh Deo (1877) ILR 2 Cal 393, in which Litt v. Martindale (1856)

18 C.B. 314, Neate v. Harding (1851) 6 Ex. 349 and Holt v. Ely (1853) I. EI.&BI. 795. were referred to. But the claim in the two last mentioned

cases was for money taken wrongfully from the Plaintiff, directly in the one and from his agent in the other; and the question of privity was therefore

not raised in them. It has been pointed out that it was not discussed in the first mentioned; and in Raghumoni Adhikari v. Nilmoni Singh Deo (1877)

ILR 2 Cal 393, the claim being for money obtained fraudulently by the Defendant from the Collector, who received it as Plaintiff''s deposit and

apparently was holding it for him, it would probably have been useless to raise it. On the other hand, in Ramaswami Aiyar v. Kunthayya (1899) 9

M.L.J. 57, also a case of withdrawal of money from a Collectorate, but not one in which it was held as a deposit or withdrawn by fraud, although

the relevancy of the reference to Kendal v. Wood (1871) L.R. 6 Ex. 243, is not clear, the suit was held unsustainable, on the ground that the

payment by the Collector and the receipt by Defendants were bona fide and without notice of Plaintiff''s preferential right and Harihar Misser v.

Syed Mohamed (1910) 20 C.W.N. 983, was a case, in which evidence of privity was insisted on and the suit was held to be governed by Article

62 only because that evidence was sufficient. There is accordingly no reason for holding that the principle accepted in England has been rejected in

this country. We must therefore decide that Plaintiff''s suit does not lie for any of the money claimed.

This conclusion renders it unnecessary to deal with the argument of Mr. A. Krishnaswamy Aiyar for Plaintiff relating to fourth Defendant�s

share of the amount received by the first Defendant and based on Lindley on Partnership, sixth edition, page 692 or with the Memorandum of

Objections. The result is that the appeal is allowed and the suit dismissed, Plaintiff to pay the first Defendant�s costs throughout. The other

Defendants have not been made parties to the appeal. The Memorandum of objections is dismissed with costs.

Sadasiva Ayyar, J.

The material facts may be shortly stated thus : The Official Receiver of the Tinnevelly district sold by public auction the debts due to a

partnership of four persons who carried on business in Tuticorin. The principal partner, Rajappa Mudali, was adjudicated an insolvent with effect

from the 5th December 1908. The partnership business itself had been closed in February 1908 (see Exhibit I). I think it may be taken that the

partnership had become dissolved between February 1908 when the business was closed and December 1908 when Rajappa was declared

insolvent except, of course, that the rights and obligations of the partners continued in all things necessary for winding up the business of the

partnership (Section 263 of the Contract Act). When Rajappa Mudali was adjudicated an insolvent, he was entitled only to one-fourth share in the

assets of the partnership which assets principally consisted of the outstanding due to the partnership by its debtors. The Official Receiver seems to

have put up for auction sale the whole of the out standings due to the partnership and the first Defendant became the purchaser thereof in October

1910 (see Exhibit K) for Rs. 250. I think it is clear that the first Defendant (the Appellant before us) never intended to purchase only Rajappa

Mudali''s one-fourth share in the out standings and it follows that he never considered himself as a co-sharer with the other three partners of

Rajappa Mudali (namely the Defendants Nos. 2, 3 and 4) of the right to recover those out standings. He never recognized the fourth Defendant as

having been a partner at all, and the fourth Defendant himself always repudiated that he was a partner, though the finding of the lower Courts

(which is binding on us in Second Appeal) is that he was a partner.

The second Defendant in November 1910 (within three weeks of the first Defendant�s purchase) admitted in Exhibit I that the whole of the

out standings belonged to the first Defendant by his purchase at the Receiver''s sale, and on receipt of a consideration released all his (second

Defendant''s) right in, or in connexion with, the out standings in favour of the first Defendant. Thus the first Defendant became legally entitled at

least to half share in those out standings whether his claim to the whole of the out standings was well founded or not.

The Plaintiff got a decree for money against the Defendants Nos. 2 to 4 in a Small Cause Suit of 1910. The first Defendant persuaded a debtor

of the firm to agree to pay about Rs. 1,650 to him in compromise of a suit brought by him against that debtor and afterwards received Rs. 450

more than three years before this suit and again Rs. 1,200 in 1912 within three years before this suit from that debtor. The Plaintiff, in execution of

his small cause decree against the Defendants Nos. 2 to 4, attached three-fourths of this amount of Rs. 1,650 in July 1914, though meanwhile the

second Defendant had relinquished his rights to the first Defendant in November 1910 and had even been declared insolvent in the Madura District

Court with effect from March 1911 The third Defendant also had been adjudicated insolvent in the same Court with effect from October 1911.

Thus it is clear that the Plaintiff''s attachment in 1914 (assuming that the second and third Defendants continued to have each one-fourth share in

the out standings of the firm, notwithstanding the Tinnevelly Receiver''s auction sale of the whole to the first defend-ant in October 1910) was

wholly ineffectual so far as the second and the third Defendants� safaris were concerned as the said snares had become vested in the first

Defendant and the Official Receiver, respectively, or in the Official Receiver of Madura alone before the attachment of July 1914.

The Plaintiff brought the present suit in April 1915 for recovery of three-fourths of Rs. 1,650 (Rs. 1,237-8-0) recovered by the first Defendant

in 1911-12 from the partnership-debtor. The Plaintiff had been appointed Receiver in the suit in which the shares of the Defendants Nos. 2 to 4

were attached in 1914. The suit was brought on the allegation that three-fourths share of the money so recovered by the first Defendant was

money had and received by the first Defendant for the use of the Defendants Nos. 2 to 4.

The lower Courts have given a decree in favour of the Plaintiff for half of Rs. 1,200 (that is, Rs. 600) which the first Defendant collected from

the partnership-debtor in 1912 within three years of the suit, treating that Rs. 600 as the half share of the Defendants Nos. 3 and 4 received by the

first Defendant for the use of the Defendants Nos. 3 and 4. I shall at once dispose of one of the points that arise in the case by stating that the

Plaintiff''s attachment of the third Defendant�s alleged one-fourth share in the Rs. 1,200 is legally ineffective as that share, assuming it to have

existed in 1911, had become vested in the Official Receiver of Madura who was not a party to the Plaintiffs execution proceedings of 1914. The

Second Appeal has, therefore, to be allowed in any event to the extent of half the amount decreed in Plaintiff''s (Respondent''s) favour by the lower

Court.

The only question, therefore, remaining is whether the first Defendant received Rs. 300 being the one-fourth share (of the Rs. 1,200) due to the

fourth Defendant for the use of the fourth Defendant and whether the first Defendant is, therefore, liable to pay over that Rs. 300 with interest from

23rd April 1915 to the Plaintiff. The question of law involved must be admitted to be one of very great difficulty. Suppose A and B are joint

creditors of G who owe them Rs. 100. D, a stranger, purchases the whole debt from A believing that A was entitled to transfer the whole debt of

Rs. 100 to D.D then is paid by C the debtor the whole of the Rs. 100. Can the co-creditor treat Rs. 50 of the Rs. 100 as having been received by

D for B''s use and sue to recover it from D (It will be seen that I have tried in the above illustration to eliminate as far as possible unnecessary

incidents appearing in the facts of the present case but not bearing on the question of law.)

Now it is clear that if A himself received the whole of the Rs. 100 from the debtor C, B, his co-creditor, could treat Rs. 50 as money had and

received by A for B and sue A for it. The question is whether, when D got the transfer of the debt from A believing that D got the title to it free

from any claim to any portion of it on the part of anybody else and when D recovered the whole of the money from the debtor G on that footing, D

could be treated as having received half of it on behalf of B. In Sinclair v. Brougham (1914) A.C. 398, Lord Chancellor Haldane, Lord Dunedin

and Lord Sumnee have considered the nature of the action for money had and received. The Lord Chancellor says (see pages 415 to 417):

Broadly speaking, so far as proceedings in personam are concerned, the common law of England recognized only actions of two classes, those

founded on contract and those founded on tort. When it speaks of actions quasi ex contractu it refers merely to a class of action in theory based on

a contract which is imputed to the Defendant by a fiction of law...The action for money had and received was in principle one which rested on a

promise to ''pay, either actual or imputed by law.

Lord Mansfield explained: ""If the Defendant be under an obligation, from the ties of natural justice, to refund, the law implies a debt, and gives

this action founded on the equity of the Plaintiff''s case, as it were upon a contract.... The form of the common inebriates assumpsit�s count was

a form of a claim which had been very gradually evolved. The researches of recent writers appear to me to have placed its origin in its true light.

The basis of actions of this kind was originally tort, a writ having been framed in consimilli casu under the provisions of Chapter 24 of the Statute of

Westminster (13 Edw. I). By degrees, out of this action on the case and as one of its forms, a new form which was soon to diverge wholly from

tort, the action of assumpsit�s arose.... Holt, C.J., is reported to have said: ""That the notion of promises in law was a metaphysical notion for the

law makes no promise, but where there is a promise of the party."" Yet the observation of Holt, C.J., notwithstanding, a little later on this

metaphysical notion"" became firmly established. For it was just the fiction of attributing a promise in a multitude of cases where in reality there was

none which finally gave the action its comprehensive range and made it available even where no fact importing or implying privity of contract could

be proved. The history of the action of the assumpsit has been described by a writer to whom lawyers and historians alike owe much, the late

Professor Ames of Harward University, in language which shows how easily the fiction of a promise grew into part of the law. Speaking of the

action of assumpsit generally he says:

In its origin an action of tort, it was soon transformed into an action of contract, becoming afterwards a remedy where there was neither tort nor

contract. Based at first only upon an express promise, it was afterwards supported upon an implied promise, and even upon a fictitious promise.

Introduced as a special manifestation of the action on the case, it soon acquired the dignity of a distinct form of action, which superseded debt,

became concurrent with account, with case upon a bailment, a warranty, and bills fit exchange, and competed with equity in the case of the

essentially equitable quasi contract growing out of the principle of unjust enrichment.

Lord Dunedin says at pages 431 to 433:

The familiar case is the paying of money by A to B under the mistaken impression in fact that a debt was due, when in truth there was no debt due.

It was to fit cases of this sort that the common law evolved the action for money had and received. I think one cannot help feeling that this action

was truly the putting of an equitable doctrine under a legal form. I am using the word equitable in a non-technical sense, for I am not suggesting for

a moment that the action was borrowed from technical equity. My noble and learned friend Lord Sumner, in his opinion, which I have had the

advantage of seeing, has conclusively shown that it was not. Being a legal form, it does not admit, in spite of Lord Mansfield''s dictum, that such an

action was very beneficial and to be encouraged, of being stretched beyond its capacity.... My Lords, I confess that for a person not bred to the

common law to express an opinion as to the true meaning and extent of common law actions is to handle periculosae plenum opas aleae.

Lord Sumner says at pages 453 to 456:

The action for money had and received cannot now be extended beyond the principles illustrated in decided cases, and although it is hard to

reduce to one common formula the conditions under which the law will imply a promise to repay money received to the Plaintiff''s use, I think it is

clear that no authority extends them far enough to help the Appellants now.

Then the noble Lord referred to the argument invoking Lord. Mansfield''s authority that:

Whenever it is ex aequo at bono for A to repay money which he has received from B and would be against conscience for A to keep it, then B has

an equity to have A decreed to repay it.

and proceeded:

My Lords, I cannot but think that Lord Mansfield''s language has been completely misunderstood.... Even the decision in Moses v. Macferlan 2

Burr 1005, which has since been dissented from, for sometime unsettled the law (see Smith''s Leading cases, Notes to Marriot v. Hampton (1797)

7 T.R. 269 (2) Sm.L.C 421, 11th Edition, and this last-mentioned case is one which illustrates the proposition that money is not thus recoverable

in all cases where it is unconscientiously for the Defendant to retain it, for no one could doubt that Hampton''s retention of the money in that case

was very likely sharp practice. With whatever complacency the Court of King''s Bench might regard the views expressed in Moses v. Macfarlane

2 Burr. 1005 protests were very early made against it in the Common Pleas (Johnson v. Johnson (1802) 3 Nos. 162 at 169) and in Miller v. Atlee

(1849) 3 Ex. 799, Pollock, C.B. bluntly declared the notion that the action for money had and received was an equitable action to be ''exploded''

and Parke, J., sitting by him, did not say him nay. This episode is reported only in 13 Jurist, but it smacks of truth...There is now no ground for

suggesting as a re-cognizable equity the right to recover money in personam merely because it would be tie right and fair thing that it should be

refunded to the payer.

I have quoted thus at a length which may be called wearisome to show how dangerous it would be for an Indian Judge like any self to deal in my

own language with the nature, scope and extent of the action for money had and received or to classify accurately and exhaustively the

circumstances which would entitle a person to bring an action for money had and received against another, especially when Latin phrases like ex

aequo et bono have to be freely used by Judges and Counsel to explain themselves fully. Lord Sumner at page 458 says:

Of equitable principles I hesitate to speak confidently.

Lord Dunedin has, in a passage which I have already quoted, expressed himself even still more diffidently as ""a person not bred to the common

law"" about his ability to express an opinion as to the true meaning and extent of common law actions. In Sankunni v. Govinda (1914) ILR 37 Mad.

381, Benson, J., and myself did quote Blackstone to indicate the wide nature of the common law action for money had and received in the olden

days. But the scope of that action ought not to be extended beyond what would be covered by the principles governing the numerous decisions

which have laid down what kinds of actions do come within it and what kinds of actions do not. In the case in Sankunni v. Govinda (1914) ILR 37

Mad. 381 the Defendant who received the money knew from the beginning that the money belonged to his tarwad and not to himself and the

person who paid it did not know it. While privity of contract between the parties is of course not necessary to sustain such an action, I think there

must be what might be called some privity of a legally recognizable nature such as some knowledge of particular facts in the man who received the

money and some mistake or ignorance of fact on the part of the man who paid the money or some relation of trust and confidence between the

person who received the money and the person claiming the money or a portion thereof on which the Court could fasten as creating the relation of

principal and agent (though by fiction) between the Plaintiff and the Defendant. I shall try to illustrate what I mean by a simple example. B owes

money to A. A dies. There is a dispute between C and D, each claiming to be the sole heir of A. B pays the money to G. Can D sustain an action

for money had and received against C even if he establishes against C that he is the rightful heir and not C? I am clearly of opinion that he cannot

do so, his only remedy being against the debtor B. In the present case, it is not shown that when the partnership-debtor paid money to the first

Defendant, the first Defendant knew that he had not a right to the whole of the money paid to him and it is also not shown that he was ever in a

position of trust or confidence towards the fourth Defendant and it is also not shown that the debtor had any fraudulent motive in paying the whole

money to first Defendant. A co-sharer may, by a stretch of language, be treated as standing in a position of confidence towards his co-sharers, but

a person who ignorantly purchases from a co-sharer the whole of the claim of all the co-sharers cannot be said to be in such a position. I therefore

agree that the Plaintiff has no cause of action against the first Defendant and I concur in the order proposed by my learned brother.