Endicott-Johnson Co. v. Simpson

91 N.E. 1012, 206 Mass. 14, 1910 Mass. LEXIS 744

• Court: Massachusetts Supreme Judicial Court
• Decided: May 18, 1910
• Status: Published

Opinion

Knowlton, C. J.

The plaintiff corporation now relies only upon its count for money had and received. Its first contention is that it should be permitted to recover as for money paid by mistake, and, secondly, it argues that the receipt and subsequent collection of the check by the defendants was a fraud upon it, and that it can recover for the money so collected.

There was a mistake by the plaintiff’s bookkeeper in overpaying Bemis and Wright, the defendants’ assignors, for the shipments of goods before September first. Afterwards other shipments were made, after two of which checks were sent at different times in payment. Upon every sale a discount of seven per cent was allowed if payment was made within ten days. In payment for the shipment of September 5 a check was sent on September 15 for $436.52, the exact amount due, less the discount. This amount the plaintiff now seeks to recover as money paid under a mistake of fact.

There was no mistake of fact that entered into this transaction. The goods were sent, the plaintiff received them, they were of the value stated and the plaintiff owed for them. It sent this check in payment for these specific goods, and the check was received and collected, and applied in payment. The only mistake was in reference to the fact that the former account for goods sent before September 1 had been overpaid to the amount of $1,500. Bemis and Wright owed the plaintiff this sum. The plaintiff could have set off this overpayment against its indebtedness for the shipments made after September 1. But it did not attempt to do this. It paid for two of these shipments, including the one in question, without seeking to apply the former overpayment in set-off. This left Bemis and Wright owing it $1,500 for the overpayment, and it owed Bemis and Wright for the two-shipments which were later than this for which the check of $436.52 was sent by a mistake that did not enter directly into the transaction. See Franklin Bank v. Raymond, 3 Wend. 69; Labarge v. Renshaw, 28 Mo. 363. Its failure to set off the debt due it for the overpayment did not affect its substantive rights. R. L. c. 174, § 1. Fiske v. Steele, 152 Mass. 260.

On September 19, 1908, this check was turned over to the defendants as a part of the assets of Bemis and Wright, conveyed to them under a general assignment for the benefit of creditors. They did not attempt to collect it at once, having learned a few days later that the books of Bemis and Wright showed a substantial balance due the plaintiff. On September 30, they deposited it in a bank and it was paid without question. The plaintiff had actual notice of the assignment and of the state of the account, before the check was paid.

There was no fraud or wrong on the part of the defendants as assignees in collecting this check which was received in payment for specific goods sold and delivered to the plaintiff. Their failure to collect it, for nearly two weeks after it came into their hands, gave the plaintiff an opportunity to stop payment of it if it chose, and to avail itself of all its legal rights of set-off, or of whatever kind, in connection with the shipments which it had received. It has a valid claim against Bemis and Wright on account of the overpayment, of which it can take advantage through the assignment to the defendants, or otherwise.

We discover no ground on which it can recover the amount of this check which was sent and was received and collected in the usual course of business as a payment for specific goods sold and delivered to the plaintiff.

Judgment affirmed.