On this principle it has been held[1] that a party could not pay a claim which he knew he did not owe, and afterwards recover the money, alleging that he paid because of the loss of his evidence, and that he notified the defendant at the time of payment he should bring an action to recover the money on finding his evidence.
It has been already said that the plaintiff’s claim rests on the fact of the defendant being unjustly enriched at the plaintiff’s expense.
To make out that the enrichment has been at his expense the plaintiff must show a failure of consideration. It can be properly said that the equity in plaintiff’s favor is a failure of consideration rather than mistake, and that in this particular class of cases he establishes his equity, namely, failure of consideration, by showing that he parted with the money without receiving a certain equivalent because of a mistake.
The decision in Taylor v. Hare[2] is an extreme illustration of this position.
In that case the plaintiff sought to recover certain royalties paid to the defendant under a contract by which the defendant agreed to permit the plaintiff to use a certain apparatus, of which they both thought the defendant was the inventor, and for the invention of which the defendant held letters-patent. It was afterwards discovered that the invention was not patentable; but the Court held that the plaintiff could not recover, notwithstanding the fact that the plaintiff laboring under this mistake paid during its user by him a royalty on an apparatus to which he had the same right as defendant, and that the contract was made by him solely in consequence of this mutual mistake. The Court said, although there had been a mutual mistake as to a material point, there was not a failure of consideration. Perhaps the following statement from the opinion delivered by Chambré fairly states the position of the Court: “The plaintiff has had the enjoyment of what he stipulated for, and in this action the Court ought not to interfere unless there be something ex æquo et bono which shows that the defendant ought to refund.”
As the plaintiff’s claim is founded on a profit at his expense, and as it is a purely equitable claim, the expense must be not simply technically a fact, but also be a fact judged from an equitable standpoint.
