HICKS, Circuit Judge.
Civil action by Maryland Casualty Company against Bertha L. Westgate, herein called Mrs. Westgate. The complaint contained five counts. In the first it was alleged that Elmore Westgate, herein called Westgate, and Mrs. Westgate were each the owners of a one-half interest in the Direct Refineries Stations business; that Howard K. Drake as the agent of Mrs. Westgate applied to plaintiff, herein called Surety Company, for a bond running to the State of Michigan to secure the payment of State taxes upon gasoline, collected by the business; that the bond was issued with Howard K. Drake as the nominal principal, but that the Westgates were the real principals; that upon the strength of the bond a wholesale gasoline license was issued to Howard K. Drake for the year 1939; that from January 1 to February 5, 1939, the business collected gasoline taxes which were not paid over to the State; that neither did a receiver, appointed for the business, pay the taxes, but that upon demand they were paid by the Surety Company, as it was obliged to do under the terms of the bond, and that therefore Mrs. Westgate became indebted to the plaintiff, for the amount so paid.
Counts 2 and 3 made substantially the same averments with respect to payments upon two other bonds signed by N. (Nellie) Drake. Count 4 seeks a recovery for sums paid by the Surety Company.; and count S for amounts paid by the Glen Falls Indemnity Company, assignor of plaintiff. These counts alleged that by virtue of a decree granting a divorce to Mrs. West-gate from Westgate each owned one-half of the business; that for the period above mentioned the business collected and retained the taxes due the State; that Mrs. Westgate as half owner was, at the expense of the State, unjustly enriched by such retention; that the Surety Company discharged its obligation under the bonds by paying over to the State the taxes due; that the State assigned all its right, title and interest against Mrs. Westgate to the Surety Company, which ■ thereby became subrogated to the right, title and interest of the State against Mrs. Westgate and that upon demand she had refused to pay the Surety Company the amount paid by it to the State. Count 5 contains substantially the same averments as those contained in count 4 except that the Surety Company sues as the assignee of the Glen Falls In[179]*179demnity Company which was in turn the assignee of the State.
The case was tried by the court without the intervention of a jury. At the close of the Surety Company’s evidence and at the close of all the evidence, the court denied Mrs. Westgate’s motion for judgment, filed findings of fact and conclusions of law and rendered judgment in the Surety Company’s favor in the amount of $9,785.-64 with interest, being one-half of the amount paid by it. The court found for Mrs. Westgate upon counts 1, 2 and 3, hence this appeal by Mrs. Westgate and counter-appeal by the Surety Company.
The findings of fact1 are not clearly erroneous and we must therefore accept them as the facts of the case. Two or [180]*180three additional undisputed facts will be referred to in the course of this opinion.
Upon a consideration of the facts found, we think that the judgment against Mrs. Westgate was erroneous and that upon her motion she was entitled to a judgment in her favor.
The gravamen of the Surety Company’s suit as set forth in counts 4 and 5 is that Mrs. Westgate was unjustly enriched at the expense of the State; that its cause of action for unjust enrichment was assigned to the Surety Company and that Mrs. Westgate was therefore required to make restitution to the Surety Company.
“Unjust enrichment” as a cause of action falls under indebitatus assumpsit. It is grounded in the equitable principle that one who has been unjustly enriched at the expense of another is required to make restitution. See the enlightening and exhaustive discussion of the subject in Herrmann v. Gleason, 6 Cir., 126 F.2d 936, 939. There we said, “This action, while legal in form, is equitable to the core»”
On November 30, 1938, a Michigan chancery court granted Mrs. Westgate a divorce from Westgate and decreed to her a one-half interest. in all the properties and business of the Direct Refineries Sta[181]*181tions as permanent alimony. But the court recognized that on account of the widespread ramifications of the business the decree, standing alone, was wholly inadequate. It therefore granted supplemental relief, to wit: “Based on her said ownership and interest, plaintiff shall have the right to inaugurate and prosecute such proceeding or proceedings as may be appropriate and necessary for the determination, protection, enforcement and realization of her said rights in said property and business.”
Relying upon this decree, Mrs. Westgate, on February 5, 1939, sought and was granted a receivership of all the assets of the Direct Refineries Stations. The receiver took possession of the assets in so far as he could locate and discover them and has since continued in the control and management thereof under the direction of the court. Between the date of the divorce decree and the appointment of a receiver, to wit, in January and February, 1939, Howard K. and Nellie Drake were in the possession, management and control of the Refineries Stations business under the direction of Westgate, and during this period collected, retained and commingled with the general funds of the business gasoline taxes due the State in the amount of $17,-027.80. The receiver declined to pay the State’s claim .for this amount.
If we should undertake a review of the very large number of miscellaneous matters that have had the consideration of both the Circuit and Supreme Courts of Michigan growing out of the divorce decree, we would confuse rather than clarify the questions presented here. It is enough to say that, with all the interested parties except the Surety Company before the court, the Supreme Court handed down the opinion and entered the decree, both of which were quoted from in the findings of fact.
The Supreme Court considered and determined the identical question presented here, i.e., whether Mrs. Westgate’s interest in the Direct Refineries Stations business would be enhanced by the taxes collected by the Drakes and unremitted to the State. It held that in equity Mrs. Westgate’s interest should be charged only with any deficiencies remaining after the State had exhausted its remedies against Westgate, the Drakes, their sureties and the receiver.
Its decree was res adjudicata as between the State and Mrs. Westgate. We think that it was likewise res adjudicata between the Surety Company and Mrs. West-gate. It is a commonly accepted principle that where an assignor is precluded by judgment his assignee will also be precluded. It is an equitable maxim that “he who takes the place of another as to any right or property holds it subject to all the rights of the assignor.” See Tillman v. National City Bank of New York, 2 Cir., 118 F.2d 631, 633.
We think it clear enough under the decree of the Supreme Court of Michigan that the Surety Company, as between itself and Mrs. Westgate, was compelled to exhaust its remedies against Westgate, the Drakes and the receiver.
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HICKS, Circuit Judge.
Civil action by Maryland Casualty Company against Bertha L. Westgate, herein called Mrs. Westgate. The complaint contained five counts. In the first it was alleged that Elmore Westgate, herein called Westgate, and Mrs. Westgate were each the owners of a one-half interest in the Direct Refineries Stations business; that Howard K. Drake as the agent of Mrs. Westgate applied to plaintiff, herein called Surety Company, for a bond running to the State of Michigan to secure the payment of State taxes upon gasoline, collected by the business; that the bond was issued with Howard K. Drake as the nominal principal, but that the Westgates were the real principals; that upon the strength of the bond a wholesale gasoline license was issued to Howard K. Drake for the year 1939; that from January 1 to February 5, 1939, the business collected gasoline taxes which were not paid over to the State; that neither did a receiver, appointed for the business, pay the taxes, but that upon demand they were paid by the Surety Company, as it was obliged to do under the terms of the bond, and that therefore Mrs. Westgate became indebted to the plaintiff, for the amount so paid.
Counts 2 and 3 made substantially the same averments with respect to payments upon two other bonds signed by N. (Nellie) Drake. Count 4 seeks a recovery for sums paid by the Surety Company.; and count S for amounts paid by the Glen Falls Indemnity Company, assignor of plaintiff. These counts alleged that by virtue of a decree granting a divorce to Mrs. West-gate from Westgate each owned one-half of the business; that for the period above mentioned the business collected and retained the taxes due the State; that Mrs. Westgate as half owner was, at the expense of the State, unjustly enriched by such retention; that the Surety Company discharged its obligation under the bonds by paying over to the State the taxes due; that the State assigned all its right, title and interest against Mrs. Westgate to the Surety Company, which ■ thereby became subrogated to the right, title and interest of the State against Mrs. Westgate and that upon demand she had refused to pay the Surety Company the amount paid by it to the State. Count 5 contains substantially the same averments as those contained in count 4 except that the Surety Company sues as the assignee of the Glen Falls In[179]*179demnity Company which was in turn the assignee of the State.
The case was tried by the court without the intervention of a jury. At the close of the Surety Company’s evidence and at the close of all the evidence, the court denied Mrs. Westgate’s motion for judgment, filed findings of fact and conclusions of law and rendered judgment in the Surety Company’s favor in the amount of $9,785.-64 with interest, being one-half of the amount paid by it. The court found for Mrs. Westgate upon counts 1, 2 and 3, hence this appeal by Mrs. Westgate and counter-appeal by the Surety Company.
The findings of fact1 are not clearly erroneous and we must therefore accept them as the facts of the case. Two or [180]*180three additional undisputed facts will be referred to in the course of this opinion.
Upon a consideration of the facts found, we think that the judgment against Mrs. Westgate was erroneous and that upon her motion she was entitled to a judgment in her favor.
The gravamen of the Surety Company’s suit as set forth in counts 4 and 5 is that Mrs. Westgate was unjustly enriched at the expense of the State; that its cause of action for unjust enrichment was assigned to the Surety Company and that Mrs. Westgate was therefore required to make restitution to the Surety Company.
“Unjust enrichment” as a cause of action falls under indebitatus assumpsit. It is grounded in the equitable principle that one who has been unjustly enriched at the expense of another is required to make restitution. See the enlightening and exhaustive discussion of the subject in Herrmann v. Gleason, 6 Cir., 126 F.2d 936, 939. There we said, “This action, while legal in form, is equitable to the core»”
On November 30, 1938, a Michigan chancery court granted Mrs. Westgate a divorce from Westgate and decreed to her a one-half interest. in all the properties and business of the Direct Refineries Sta[181]*181tions as permanent alimony. But the court recognized that on account of the widespread ramifications of the business the decree, standing alone, was wholly inadequate. It therefore granted supplemental relief, to wit: “Based on her said ownership and interest, plaintiff shall have the right to inaugurate and prosecute such proceeding or proceedings as may be appropriate and necessary for the determination, protection, enforcement and realization of her said rights in said property and business.”
Relying upon this decree, Mrs. Westgate, on February 5, 1939, sought and was granted a receivership of all the assets of the Direct Refineries Stations. The receiver took possession of the assets in so far as he could locate and discover them and has since continued in the control and management thereof under the direction of the court. Between the date of the divorce decree and the appointment of a receiver, to wit, in January and February, 1939, Howard K. and Nellie Drake were in the possession, management and control of the Refineries Stations business under the direction of Westgate, and during this period collected, retained and commingled with the general funds of the business gasoline taxes due the State in the amount of $17,-027.80. The receiver declined to pay the State’s claim .for this amount.
If we should undertake a review of the very large number of miscellaneous matters that have had the consideration of both the Circuit and Supreme Courts of Michigan growing out of the divorce decree, we would confuse rather than clarify the questions presented here. It is enough to say that, with all the interested parties except the Surety Company before the court, the Supreme Court handed down the opinion and entered the decree, both of which were quoted from in the findings of fact.
The Supreme Court considered and determined the identical question presented here, i.e., whether Mrs. Westgate’s interest in the Direct Refineries Stations business would be enhanced by the taxes collected by the Drakes and unremitted to the State. It held that in equity Mrs. Westgate’s interest should be charged only with any deficiencies remaining after the State had exhausted its remedies against Westgate, the Drakes, their sureties and the receiver.
Its decree was res adjudicata as between the State and Mrs. Westgate. We think that it was likewise res adjudicata between the Surety Company and Mrs. West-gate. It is a commonly accepted principle that where an assignor is precluded by judgment his assignee will also be precluded. It is an equitable maxim that “he who takes the place of another as to any right or property holds it subject to all the rights of the assignor.” See Tillman v. National City Bank of New York, 2 Cir., 118 F.2d 631, 633.
We think it clear enough under the decree of the Supreme Court of Michigan that the Surety Company, as between itself and Mrs. Westgate, was compelled to exhaust its remedies against Westgate, the Drakes and the receiver. It would probably have been futile to have proceeded against Westgate and the Drakes for apparently they were each insolvent, but there is no evidence that the Surety Company exhausted its remedies against the receiver, who, judging from the record, obviously had sufficient assets to discharge its claim; at least there is no evidence that it did not have such assets. These assets are still in the possession and under the control of the State court through its receiver and none of them have been distributed to Mrs. Westgate except the sum of $100 per month since the 5th day of November, 1939.
It is obviously inequitable to burden Mrs. Westgate with a personal judgment for $9,785.64 with interest or for any other amount upon this state of the record. Mrs. Westgate has not received or realized any pecuniary benefits from that decree except the monthly payments which she received as distribution of receivership assets. Her interest is wholly under the control and management of the Michigan court, and the amount, if anything, by which she will be finally benefited, depends entirely upon the settlement of the receivership and the distribution of assets by the court itself. The order appointing the receiver makes this self-evident.
In Herrmann v. Gleason, supra, 126 F.2d at page 940, we said: “The essential elements of a quasi contractual obligation, upon which a recovery may be had, are the receipt of a benefit by a defendant from a plaintiff, which benefit it is inequitable that the defendant retain.”
We can say no more here. We think in all good conscience the Surety Company is not entitled to recover at this time.
[182]*182We find no evidence even that the monthly distributions to Mrs. Westgate are unjustly held by her. There is no evidence that the assets still in the receiver’s hands will upon the settlement of his accounts be insufficient ito satisfy any amount to which the Surety Company might be entitled.
The findings on the cross-appeal are set forth under finding No. 2. We have examined these findings in connection with the evidence, and they are substantially correct. There is no evidence that Mrs. Westgate had any connection with placing the Drakes in the management and control of the Direct Refineries Stations business, or that she expressly or impliedly ratified the obligation of the Drakes, found in their applications for the bonds, to indemnify the Surety Company from loss. The conclusion of law found in paragraph 1 that the Surety Company was not entitled to recover. under counts 1, 2 or 3 for the reason that no evidence warrants the conclusion that there was either express or implied ratification of the agreement of the Drakes,to indemnify it or its assignor for losses incurred in connection with the operations covered by the surety bonds, is correct. There is no judgment entry dismissing the case upon counts 1, 2 and 3 of the complaint, but Mrs. Westgate is entitled to such judgment.
The order of this.court is, that the judgment appealed from by Mrs. Westgate be and the same is reversed and the entire case remanded for entry of judgment dismissing the action.