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was made of it in the book, and the plaintiff became aware of the fact; but at the time of effecting the policy he did not know that the defendant had received such a letter from the captain; for the defendant having been induced to believe that the statements in the letter were exaggerated, and knowing that the ship would be repaired under the previous insurance, did not think it necessary to communicate them to the underwriters. The ship was totally lost in October 1857, and in December of that year the amount for which the plaintiff had underwritten the policy was paid by him to the defendant. Thornton, however, who had also underwritten the policy, refused to pay his share of the loss, and an action was brought against him by the present defendant; in the course of which the circumstance of the receipt of the captain's letter having come to light, the defendant in that action succeeded, on the ground that the policy was void, a material fact having been concealed from the insurers by the assured. See Russell v. Thornton, 4 H. & N. 788, affirmed in the Exchequer Chamber, 6 Id. 140. The proceedings in Russell v. Thornton having given publicity to the fact that that letter had been received by the defendant before the policy was executed, the present plaintiff made application to him to have the amount which he had paid on the policy returned. With this the defendant refused to comply, and this action was accordingly brought. Before it was commenced, and before he had received any notice from the plaintiff of his claim to be repaid, the defendant had transmitted to his principals the whole of the money, amounting in all to 80007., which he had received from the various underwriters on this policy, with the excep

tion of two sums of 6071. 3s. 10d. and 6087. 10s. 1ld. The first of these he accounted for with his principals thus: he had a claim against them for disbursements and commission, and in his account delivered at the end of the year he entered that sum of 6077. 3s. 10d. to their credit, and struck the balance, which proved in their favour, and credited them with that balance in the next year's account, both of which accounts were accepted and ratified by the principals. The latter sum he had, by the authority of his principals, applied towards the payment of the expences of the action of Russell v. Thornton, which amounted to nearly 10007.

The Lord Chief Justice left to the jury to say whether the omission by the defendant to communicate the contents of the captain's letter to the underwriters was done with a fraudulent intention to deceive. The jury having found in the negative, a verdict was entered for the defendant; with leave to the plaintiff to move to enter the verdict for himself for 2007., or such other sum as the Court should direct, if the Court should be of opinion that, upon the facts proved, he was entitled to recover back the sum paid by him to the defendant in ignorance of the letter; the Court having power to draw inferences of fact.

Bovill, in Easter Term 1861, obtained a rule accordingly.

This rule was argued during the Term, on the 30th May: before Cockburn C. J., and Wightman and Blackburn JJ.

Lush and Watkin Williams shewed cause.-If this





2 G

B. & S.





action had been brought against the owners of the ship, the plaintiff would have been entitled to recover back this money as paid under a mistake of fact; for Russell v. Thornton (a) has decided that the non-communication of the captain's letter to the underwriters was an act vitiating the policy. But the defendant was only an agent acting for the owners of the ship: and the rule of law deducible from the cases is that, where an agent who has received money for his principal pays it over to the principal, bonâ fide and without notice to the contrary from the party paying, the agent is not liable to refund if it turns out to have been paid through mistake of fact, but the party seeking to recover it back must sue the principal; Buller v. Harrison (b), Cox v. Prentice (c), Murray v. Mann (d), Bone v. Ekless (e). And the same rule holds although the agent has not actually paid the money to the principal,—it is enough if the agent has altered his position, on the faith of being allowed credit for the money; Skyring v. Greenwood (f). Here the agent has actually transmitted to the principal part of the money; some more has been allowed in account between them; and the residue has, with the consent of the principal, been appropriated by the agent in part liquidation of a debt incurred by the agent in bringing an action for the principal. It makes no difference whether the plaintiff knew that the defendant was an agent or not; but, if that point is material, the evidence shews that he

(a) 4 H. & N. 788; affirmed on error, 6 Id. 140.

(b) Cowp. 565.
(d) 2 Exch. 538.

(c) 3 Mau. & S. 344.

(e) 5 H. & N. 925.

(f) 4 B. & C. 281.

did know it. All this is in accordance with the principle laid down by Lord Mansfield in Moses v. Macferlan (a), that the action for money had and received "lies only for money which, ex æquo et bono, the defendant ought to refund."

Bovill and Honyman, in support of the rule.-The first answer to the general argument of the other side is, that the defendant cannot be looked upon as a mere agent. He was a principal, or at least may be treated as such: for he employed brokers to effect this policy, it was effected in his name, the moneys due on the policy were paid to him, and he brought an action in his own name against one of the underwriters who refused to pay. The second answer is that the rule of law respecting the liability of agents, as stated by the other side, does not apply where the agent was the person who knew the fact the suppression of which vitiated the policy; Snowdon v. Davis (b), Oates v. Hudson (c) Parker v. The Bristol Railway Company (d): and it makes no difference that the suppression was not with fraudulent intent on his part. In Carter v. Boehm (e) Lord Mansfield says, p. 1909, "The special facts, upon which the contingent chance is to be computed, lie most commonly in the knowledge of the insured only: the underwriter trusts to his representation, and proceeds upon confidence that he does not keep back any circumstance in his knowledge, to mislead the underwriter into a belief that the circumstance does not exist, and to induce him to estimate the risk, as if it did not exist. The keeping

(a) 2 Burr. 1005. 1012.

* 1861.




(b) 1 Taunt. 359.

(c) 6 Exch. 346.

(d) 6 Exch. 702.

(e) 3 Burr. 1905.





back such circumstance is a fraud, and therefore the policy is void." Every man must be supposed to know the law; Bilbie v. Lumley (a). Where an auctioneer pays over to his principal the deposit money received from a purchaser, the purchaser may sue the auctioneer to recover it back, if a good title cannot be made; Edwards v. Hodding (b), Gray v. Gutteridge (c). [Blackburn J. There the auctioneer paid over money which he had no right to pay over. He was a stakeholder, and should have held the money until his agency was determined, whereas he took upon himself, to determine it prematurely. Wightman J. Those cases do not apply.]

At least the plaintiff is entitled to recover the sums not actually paid over by the defendant to the principal. Buller v. Harrison (d), and Cox v. Prentice (e), which are relied on by the other side, shew this; and Sweeting v. Pearce (ƒ) is to the same effect. Skyring v. Greenwood (g) is inconsistent with the subsequent case of Dails v. Lloyd (h). [Blackburn J. referred to Livingstone v. Whiting (i).] In Story on

Agency, § 300, the law is thus laid down.

"The liability

of agents to third persons, on contracts, may also arise from acts done, or refused to be done, by such agents. Thus, for example, if a party, who has paid money to an agent for the use of his principal, becomes entitled to recall it, he may, upon notice to the agent, recall it, provided the agent has not paid it over to his principal, and also provided no change has taken place in the

(a) 2 East, 469.
(c) 3 Car. & P. 40.
(e) 3 Mau. & S. 344.
(g) 4 B. & C. 281.

(i) 15 Q. B. 722.

(b) 5 Taunt. 815.
(d) Coup. 565.
(ƒ) 7 C. B. N. S. 449.
(h) 12 Q. B. 531.

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