By Chijioke M. Agbo Esq.

The common law cause of action of “money had and received” from its historical origin rests on the fiction of a promise implied in law and in which a Defendant who received money is compelled by equity to pay over to the Plaintiff.

See Moses Vs Macferlan (1760) 2 Burr. 1005, Sinclair Vs Brougham (1914) A.C. 398 @ 415, 453. Whilst “money paid for consideration which has wholly failed”, as the phrase implies, means no more than failure or absence of “consideration” in the contract between parties. In the law of contract, “consideration” constitutes a fundamental component of making of contract. Its absence or failure negatives a contract. The learned authors of “Precedents of Pleadings”, Bullen, Leake and Jacob, 12th edition at page 666, while writing under the sub-head of “money paid for consideration which has wholly failed” summed up the law thus:

“Money paid by the Plaintiff for a consideration that has wholly failed may be recovered as money had and received to his use”.

The learned authors went further to list out instances or circumstances which constitute “money had and received” or “money paid for consideration which has wholly failed”, which includes “money given for bonds sold as valid bonds, but which proved defective and worthless. See Young Vs Cole (1837) 3 Bing N.C. 724”… Money paid as deposit on scrip for shares in a railway or mining scheme which turned out abortive. Moore Vs Garwood (1849) 4 Ex. 681… “Money paid for a purpose which afterwards became impossible” (Brown Vs Overbury (1856) 11 Ex. 715”.

From the foregoing statements of the law by the learned authors of “Precedents of Pleadings”, the two phrases of “money had and received” and “money paid for a consideration which has wholly failed” can be used interchangeably and mean the same thing.

The Black’s Law Dictionary, 9th Edition at page 33, citing Robert Goff & Gareth Jones, The Law of Restitution 3 (3rd Ed. 1986), stated thus:

“The action for money had and received lay to recover money which the Plaintiff had paid to the Defendant, on the ground that it had been paid under a mistake or compulsion, or for a consideration which had wholly failed…”,(emphasis supplied).

The same Black’s Law Dictionary, 9th Edition defined failure of consideration thus:

“A seriously deficient contractual performance, that causes a contract’s basis or inducement to cease to exist or to become worthless”.

I, have shown supra, the scenarios or circumstances which in the law of contract, action can be founded for money had and received or money paid for consideration which has wholly failed. What remains to be demonstrated is how our Courts in Nigeria have adopted and pronounced on these dual common law causes of action.

In the case of OZIMS V. ANORUO (1991) 3 NWLR (PT. 181) 571, Oguntade, JCA; (as he then was), dwelling on the legal basis of money had and received held thus:

“An action for money had and received, simpliciter, is based on what is generally described as quasi-contract. It is an equitable remedy for which the action lies for the recovery of money had and received under circumstances where any notion of an actual contract is excluded. It lies for money paid by mistake; or upon a failure of consideration, or for money gotten by imposition, expresses or implied;…It is imposed by the court under circumstances which it considers just and reasonable having regard to the relationship of the parties on equitable grounds…”.

Also in the case of F.B.N PLC V. OZOKWERE (2006) 4 NWLR (PT. 970), the Court of Appeal per Galadima, JCA held thus:

“The cause of action for money had and received for consideration that has failed, is founded on the equitable doctrine of quantum meruit. The objective is to eliminate the concept of unjust enrichment. It is now trite that, where a party pays money to another under an ineffective contract, the party who pays is entitled to recover the money in quasi contract as money had and received for a consideration that has failed”.

See also the cases of Igwe Ukuta v. Alliance International (Nig) Ltd. (1992) 8 NWLR (Pt. 259) 374; Ibe v. Ibhaze (2016) LPELR-41556 (CA); and C. N. Ekwuogor Investment (Nig) Ltd v. Zenith Bank & Ors. (2018) LPELR – 46602 (CA); IGWE UKUTA Vs ALLIANCE INTERNATIONAL (NIG.) LTD (1992) 8 NWLR (PT. 259) 374 and FIRST BANK OF (NIG.) LTD V. AFRICAN PETROLEUM LTD (1996) 4 NWLR (PT. 443) 438 @ 449.

Furthermore, in DANTATA v. MOHAMMED (2000) 7 NWLR (PT. 664) 176, the court held:

“It is a trite law that a complete failure of consideration in an agreement/contract occurs where one of the contracting parties fails to receive the benefits of what he paid for. Where there is a claim of total failure of consideration, the Innocent party is entitled to restitution”.

Flowing from my tacit submissions so far, it has become clear like a crystal that an action for money had and received would in law lie for money paid by mistake, or for money paid upon a consideration which happens to fail, or for money got through imposition, express or implied, or for money obtained by extortion, oppression, or undue advantage taken of the claimant’s position. The action is based on quasi contract imposing the obligation on the defendant a promise to pay, either actual or implied by law, as if the defendant had incurred a debt and is therefore bound by the tie of natural justice to refund founded on the equity of the claimant’s case, as if it were upon a contract; showing the obligation to repay is imposed by the Court simply under the circumstances of the case and on what the Court considers just and reasonable having regard to the relationship of the parties. It is in that wise a debt or obligation constituted by the act of the law, apart from any consent or intention of the parties or privity of contract. In a nutshell, the two concepts are based on conscience rooted in the adage that one should not be allowed to reap where he did not sow.

Written By Chijioke M. Agbo Esq., agbochijioke24@gmail.com, Associate Counsel @ Ike, Ike & Associates, Arena of Law, 3 Carr Street, Asata Enugu.