Moses v. Macferlan

Facts

• Moses endorsed promissory notes to Macferlan on the express understanding that Macferlan would not hold Moses liable on the endorsement
• Despite this agreement, Macferlan sued Moses on the endorsement and recovered the money
• Moses then brought an action for money had and received, seeking to recover the amount Macferlan obtained in breach of their understanding
• The question was whether an action lay in the absence of a formal contract between the parties

Issues

1. Whether the law can impose an obligation to return money in the absence of a contract?
2. Does an action for money had and received lie where one party is unjustly enriched at the expense of another?

Held

• Lord Mansfield held that the action for money had and received is an equitable action founded on the principle that no person should unjustly enrich himself at another's expense
• The obligation to return is not contractual but is imposed by law; the law implies a promise to repay
• This obligation arises from natural justice and equity, not from the will of the parties
• Moses was entitled to recover

Ratio Decidendi

Where a person receives money which in justice and equity he ought not to retain, the law, independent of any agreement between the parties, implies an obligation to return it. This quasi-contractual duty arises from the equitable principle against unjust enrichment and constitutes a source of obligation distinct from contract and tort.