is held that the cause of action arises immediately upon the payment. If, however, a party receives the money knowing of the mistake, then there is immediately an unjustifiable enrichment, and no demand is necessary.
“When the mistake is mutual, both parties are innocent, and neither is in the wrong. The party honestly receiving the money through a common mistake owes no duty to return it until at least informed of the error. It is just that he should have an opportunity to correct the mistake, innocently committed on both sides, before being subjected to the risks and expenses of a litigation. . . . The necessity of a demand does not, therefore, exist in a case where the party receiving the money, instead of acting innocently, and under an honest mistake, knows the whole truth, and consciously receives what does not belong to him, taking advantage of the mistake or oversight of the other party, and claiming to hold the money thus obtained as his own.”
Assuming that, in certain cases, no action can be brought until demand is made, what rules shall be applied in dealing with the Statute of Limitations? The rule ordinarily being that, where a demand is necessary, the Statute of Limitations does not run until demand is made, suppose the plaintiff learns of the mistake soon after the payment of the money to the defendant, is he to be allowed to prolong the defendant’s liability indefinitely by failing to make a demand? It would seem not. That which is required of a plaintiff out of regard for the defendant should not be used by the plaintiff to the defendant’s disadvantage, when, in denying his right so to use it, nothing inequitable is done. And surely a plaintiff who has it in his power to entitle himself to bring an action at any time cannot complain that he must do so under the penalty of losing his right if it is not exercised within a given period. Stafford v. Richardson, though not a case of money paid under mistake, was decided on this principle.
Suppose a bill in equity to be filed against an innocent receiver of money paid under mistake. Is it necessary for the plaintiff to make a demand before filing his bill? As a Court of equity, differing from a Court of law where the successful party is entitled, as of right, to costs, can give costs against a successful party, the result of allowing the bill to be filed without
- Sturgis v. Perton, 134 Mass. 372.
- Sharkey v. Mansfield, 90 N. Y. 227.
- Finch. J., in Sharkey v. Mansfield, supra, at p. 229.
- 15 Wend. 302.