Moses v. Macferlan

A man endorsed promissory notes to another on an express promise that he would never be sued on them — and was sued on them anyway, in a court he could not defend himself in. He paid the judgment, then turned around and sued to get his money back, even though there was no contract anywhere promising him a refund. Lord Mansfield's answer gave the common law an entirely new category of obligation: one that exists simply because keeping the money would be unjust.

Parties

Moses — plaintiff; had endorsed promissory notes to the defendant on the defendant's promise not to sue him personally on them, and sued to recover money he was later forced to pay despite that promise.

Macferlan — defendant; had received the endorsed notes, promised not to sue Moses on them, but broke that promise and sued him regardless, obtaining and enforcing a judgment against him.

Facts

Moses held promissory notes made by one Jacob, and endorsed them over to Macferlan. Macferlan had agreed, as a condition of receiving this endorsement, that he would not sue Moses personally on the notes — Moses's endorsement was intended only to allow Macferlan to pursue Jacob, the original maker, and not to expose Moses to personal liability. In breach of this agreement, Macferlan nonetheless sued Moses on the endorsements in the Court of Conscience, a small-claims-type court in which Moses had no effective means of raising his defence based on the prior agreement, and obtained judgment against him. Moses paid the amount of the judgment. He then brought an action of indebitatus assumpsit (a common-law action for money had and received) against Macferlan in the Court of King's Bench, seeking to recover the money he had been compelled to pay, on the ground that Macferlan had obtained it in breach of his own promise and had no right in justice to retain it.

Issues Raised

1. Can an action for money had and received be maintained to recover money paid under a judgment obtained by the defendant, where that judgment was obtained in breach of the defendant's own prior promise to the plaintiff?
2. Is such an action confined to a fixed, closed list of previously recognised categories, or can it rest on a broader underlying principle applicable to new situations?
3. Does the fact that Moses had already paid the sum under a valid, unappealed judgment of a court bar him from recovering it in a fresh action, or can the law nonetheless treat Macferlan as obliged to refund it?

Arguments Contended

On behalf of Moses (Plaintiff): It was argued that Macferlan had obtained the money from Moses only by suing him in a court where Moses could not effectively raise his agreement as a defence, in direct breach of Macferlan's own promise never to sue Moses personally on the notes; in natural justice and equity, Macferlan had no right to keep money extracted in this way, and the law should imply an obligation on him to refund it, regardless of whether the facts fit neatly within any previously decided category of case.

On behalf of Macferlan (Defendant): It was argued that he held a valid, unreversed judgment of a competent court against Moses, that Moses had paid that judgment without successfully appealing or setting it aside, and that allowing a fresh action for money had and received to unwind the result of a final judgment would improperly permit litigants to relitigate matters already conclusively decided by a court of competent jurisdiction, undermining the finality the law attaches to judgments.

Court's Reasoning

Lord Mansfield, delivering judgment, reviewed the various established categories in which an action for money had and received had previously been allowed to succeed, and observed that the facts of this case did not fall neatly within any of them. Rather than treating this as fatal to Moses's claim, Lord Mansfield sought to identify the underlying principle that explained and unified all of the settled instances, so that new and previously unclassified situations could be tested against that principle rather than against a closed list of precedents. He held that the action for money had and received is founded not on any fictional or implied contract in the ordinary sense, but on a broader principle: where the defendant is, on the circumstances of the case, obliged by the ties of natural justice and equity to refund money he has received, the law implies a debt and gives this action, treating the obligation as arising "quasi ex contractu" — as if from a contract, though none truly exists.

Applying this principle to the facts, Lord Mansfield reasoned that Macferlan had obtained the money from Moses in a manner that directly contradicted his own prior promise not to sue Moses personally, and that in the circumstances it would be against conscience and natural justice for Macferlan to keep money extracted in breach of that undertaking; the existence of the earlier judgment in the Court of Conscience did not bar this fresh action, since that judgment had been obtained on the notes themselves and did not adjudicate, and could not have adjudicated in that limited forum, the separate question of Macferlan's own obligation in equity to refund the money given his broken promise.

Judgement

The Court of King's Bench held that Moses's action for money had and received was maintainable, and that Macferlan was liable to refund the money Moses had been compelled to pay him, since Macferlan was, by the ties of natural justice and equity, obliged to refund it, notwithstanding the earlier judgment against Moses in the Court of Conscience.

Legal Principle / Ratio

An action for money had and received lies wherever the defendant is, on the circumstances of the case, obliged by the ties of natural justice and equity to refund money received from the plaintiff; the law implies a debt and treats the obligation as arising quasi ex contractu — as if by contract — even though no real contract or agreement to repay exists between the parties. This obligation is not limited to a fixed, closed category of precedents but rests on the general underlying principle against unjust enrichment.

Significance

Moses v. Macferlan is the foundational English authority marking the emergence of quasi-contract as a distinct species of common-law obligation, resting on the principle later expressed in the Latin maxim nemo debet locupletari ex aliena jactura — no one should be enriched at another's expense. Lord Mansfield's "implied promise" reasoning is the direct historical ancestor of Sections 68 to 72 of the Indian Contract Act, 1872, which codify specific instances of the same underlying unjust-enrichment principle into Indian statutory law. The case is regularly read alongside State of West Bengal v. B.K. Mondal & Sons (1962), the leading Indian case applying the same underlying principle under Section 70, to show the continuity between the English common-law origin of quasi-contractual liability and its codified Indian form.

Exam-Important Points

• Facts in one line: Macferlan sued Moses on notes despite promising not to, obtained judgment, and Moses paid; Moses then sued to recover the money as unjustly retained.
• Holding: Moses's action for money had and received succeeded — Macferlan was obliged, by natural justice and equity, to refund the money.
• Key principle: an obligation to refund money arises quasi ex contractu — as if by contract — wherever natural justice and equity require it, even without any real agreement to repay.
• Classic exam trap: students sometimes think quasi-contract requires fitting facts into a pre-existing category — Lord Mansfield's judgment is precisely about identifying the underlying principle so new situations can be tested against it.
• In Indian law, this is the founding case behind the entire quasi-contract chapter, Sections 68–72 of the Indian Contract Act, 1872.

Facts, bench and citation verified against independent case-law summaries (Wikipedia, Trans-Lex.org, Washington and Lee Law Review, Dhyeya Law) — the citation (1760) 2 Burr 1005; 97 ER 676, Lord Mansfield's judgment in the Court of King's Bench, and the 19 May 1760 decision date are confirmed across sources.