Freeman v Jeffries: CExC 1868

(Court of Exchequer) The incoming tenant plaintiff had agreed to buy the outgoing tenant’s interest in a farm at a price determined by two valuers. He paid pounds 2,000 on account; the valuation took place; the plaintiff gave to the outgoing tenant a post-dated promissory note for pounds 3,319, being the amount of the valuation (after deducting the pounds 2,000 paid on account); and the plaintiff entered into possession. Later, when he sold his interest in the farm to a third party, he claimed to have discovered errors in the valuation in respect of the inclusion of items that ought not to have been included, and items that did not exist. Nevertheless, he paid the promissory note at maturity without objection, but later, without any prior complaint or demand for repayment, he sued the defendant, claiming as moneys had and received to his use the whole price paid, namely pounds 5,319; alternatively, the deposit of pounds 2,000; alternatively, the remaining pounds 3,319; or, alternatively, an undefined sum that a jury should find to be the value of the items that ought not to have been included in the valuation.
Held: He was not entitled to recover. The valuers’ award was final between the parties.
Kelly CB and Martin B held that the conduct of the claimant had made it impossible to restore the parties to their original condition, or to do justice between them (ie rescind), and that therefore the claimant could not maintain an action for money had and received. Martin and Bramwell BB held that, to enable the plaintiff to maintain an action for money paid by mistake as money had and received by the defendant, notice of the mistake must have been given to the defendant and a demand made.
Martin B said: ‘The parties have entered into an agreement for the sale of the defendant’s interest in the farm, stock and crops, for an entire sum to be put on it by two valuers, and of which 2000l. was paid down . . A promissory note is given for the amount of the valuation according to the agreement, and is paid; the plaintiff enters into possession of the farm; he again sells his interest, and so ceases to be able to return to the defendant what he had got from him; and now, the valuer on this sale having discovered what he thinks to be a mistake (and what we must suppose to be such) in the former valuation, the plaintiff without notice brings an action against the defendant to recover the whole sum which he has paid under that valuation. We are asked to treat the whole affair as a nullity, and are told that this is the essence of justice. But the effect contended for could only be produced by a rescission of the contract, and the contract cannot be rescinded unless the parties can be restored to their original condition. But if one party has done an act by reason of which it has become impossible to put the other in the same situation as before, there can be no rescission, and the remedy, if any, must be on the contract. It is contended that under these circumstances, a contract will be implied to return the money; but I am not of that opinion. If an action lies for recovering the money paid for those items which ought not to have been included in the valuation, it would be an action for the return of a portion of the money paid, on the ground that the consideration had failed, and after notice given that it had failed. But unless some communication has been made by the plaintiff, he is not entitled to recover either the whole or any part of this sum. On the ground, therefore, that the plaintiff is not in a position to sue without having made a demand on the defendant, I am of opinion that this rule must be made absolute.’
Bramwell B said: ‘I give no opinion on many of the questions which have been discussed; but on the ground I am about to mention I think this rule must be made absolute. The plaintiff’s case is this: ‘I have paid money which I was not bound to pay, and which, if I had known facts which I now know, I should not have paid. I paid it on the footing of a valuation having been made, when, in fact, no valuation had been made; neither a valuation including in distinct items the matters which were to be valued, nor a valuation in general of the whole of the items for which I ought to pay.’ But if the plaintiff were under the circumstances entitled to be repaid the sum he claims, he ought to have given notice to the defendant of the facts by reason of which he was so entitled; because until he did so there could be no duty on the defendant to pay, it over.’
Orse Freeman v Jefferies

Kelly CB, and Martin and Pigott BB
(1868-69) LR 4 Ex 189
England and Wales
CitedWilkinson And Another v Godefroy 17-Jan-1839
The court considered a claim for the recovery of money from a stakeholder to whom it had been entrusted, in which case a demand is necessary to throw upon the depositee a duty to repay. . .

Cited by:
DistinguishedBaker v Courage and Co 1910
The plaintiff had owned a public house. On selling the leasehold to the defendants brewers, they had overpaid him by andpound;1,000. He deposited a sum at interest with the defendants. When he came to withdraw the last of the deposit (by coincidence . .
CitedFuller v Happy Shopper Markets Ltd and Another ChD 6-Mar-2001
A tenant complained to the landlord about his failure to repair. He ceased paying rent, and the landlord eventually distrained for rent by direct action.
Held: The tenant was unable to claim a legal set-off because there was no context of . .

Lists of cited by and citing cases may be incomplete.

Equity, Landlord and Tenant

Updated: 20 December 2021; Ref: scu.416722