#6750 - Kerrison V. Glyn Mills Currie And Co. - Restitution of Unjust Enrichment BCL

Kerrison v. Glyn, Mills, Currie and Co.

Facts

The appellant, who lived in England, had a standing arrangement with a firm of bankers in New York by virtue of which they were to honour the drafts of a company carrying on business in Mexico, in which the appellant was interested, up to 500 pounds, the appellant agreeing to put them in funds by paying that amount from time to time to their account at the respondents' bank in London. On 21 October 1907, the New York firm wrote to the appellant informing him that the Mexican company had been credited with 500 pounds, and requesting him to pay that amount to their account with the respondents. On receipt of this letter on October 30 the appellant paid 500 pounds to the respondents to the credit of the New York firm. On October 30 the New York firm became bankrupt, and the appellant on becoming aware of this fact on October 31 applied to the respondents for the repayment of the 500 pounds.

The arrangement was described thus in evidence:

“When from time to time the Bote Mining Co had exhausted its credit, Kessler & Co would give additional credit to the company in the equivalent of 500 pounds less1/3 per cent commission, by crediting the account of the company in their books. Upon making this credit in their books they would on the same day write to Mr Kerrison notifying him thereof, and requesting him to pay 500 pounds to Glyn, Mills & Co for their account, and on the same day they would also notify Glyn, Mills & Co that Mr Kerrison would deposit 500 pounds with them for the account of Kessler & Co, and on the same day Kessler & Co would write to the Bote Mining Co advising them that the sum of 500 pounds at current exchange less 1/8 per cent commission had been placed to their credit, specifying the rate of exchange and the amount in dollars. When the Bote Mining Co required for some special payment an amount larger that 500 pounds, that was arranged for by cable, or by correspondence with Mr Kerrison.”

There was no liability at the time the final payment was made:

The dates of these two letters in themselves suggest an explanation of this immediate departure in business from the strict letter of the arrangement made. In the interval between June 18 and 30 it was necessary to finance the mining company, and it may well be that Kerrison, knowing this, in order to avoid delay, and to save himself the trouble of making repeated lodgments on the receipt of repeated advices, anticipated a liability of which he had not been actually advised, but had every reason to think either had actually accrued, or most probably would soon accrue, and lodged the full sum of 500 pounds at once to meet the present or future claims.

Holding

Kerrison, at the time when he paid the money; had not been advised that Kessler & Co had made any advances of their own money to the Bote Mining Co in respect of which he was bound to recoup them. He lodged the money in the belief that Kessler & Co were a living commercial entity able to carry on their business as theretofore, that they were in a position to honour, and would honour, the drafts of the Bote Mining Co up to the sum which he, in anticipation, sent to recoup them for their repeated advances. Kessler & Co had in fact ceased to be in that position. If not commercially dead, they were, at least, in a state of suspended animation, utterly incapable of carrying on business, making advances, or doing the very things which he lodged this money to their credit to enable them to do. I cannot doubt that on general principles he would be entitled to recover money paid in ignorance of these vital matters, as money paid in mistake of fact. It is urged, however, that, although he gave notice to the defendants on October 31 of Kessler & Co's act of bankruptcy, asked them to stop payment of his cheque, and to refund him his money, he is precluded from recovering it from them in this suit because, as they were Kessler & Co's bankers, though not his, the relation between a banker and his own customer is that of creditor and debtor. It was admitted, as I understood, that if money be sent direct from one person to another in payment in advance for some service to be rendered by that other, in the belief that he is alive, when in fact he is dead, it could be recovered by the sender from the person, whether agent or legal personal representative of the deceased, into whose hands it came. The fact that the deceased was largely indebted to such agent, and that the latter would as between himself and the legal personal representative of the deceased be entitled to set off pro tanto the money received as against the debt due to him, could not possibly prejudice the rights of the person transmitting the money. He would obviously have the same rights against an agent to whom the deceased owed money as be would have against an agent of the deceased to whom nothing was owing; and this would be so even though the deceased had authorised the agent to apply the money when received to the discharge pro tanto of the sum due to him.

Here, undoubtedly, the defendants were the agents designated by Kessler & Co to receive the money from Herrison garrison is not shown to have known anything as to how the account between the defendants and Kessler & Co stood. It may well be that money lodged by a customer with his banker is, as between themselves, considered to be a loan to the banker, who may thenceforth deal with the money as his own, but the lodgment of this 500 pounds was not a loan from Kerrison to the defendants. That is clear. It was the mode selected by Kessler & Co themselves by which each of these different sums of 500 pounds should from time to time be paid to them. If it had been transmitted direct by post, neither Kessler & Co nor their assignees in bankruptcy could, I think, on HAMILTON J's decision as to the nature of the arrangement entered into, have retained it. It would be against good morals to permit them to do so. The defendants cannot, I think, have a better right to hold...