Sec 754

Money paid voluntarily cannot be recovered back when the mistake is purely one of law. It is on this ground that the court placed an early ruling that though an insurance was actually void in law in consequence of a material misrepresentation by the insured, yet money paid by the insurer to the insured on the loss could not be recovered back since the mistake which led to the payment was exclusively one of law.1 Yet when the question is of the application of law to a complex state of facts, there is no more reason why relief should not be given to a party paying money by mistake, than there is why relief should not be given to a party making a contract by mistake;2 supposing there is nothing to equitably estop the plaintiff from recovery after such a payment by mistake.3 But where the mistake is purely one of law, the party paying cannot recover back. Thus it has been held in Massachusetts that although under the statute there in force no greater rate of interest than six per cent. can be received in any action unless on an agreement in writing, yet a party who has paid interest on an oral agreement in excess of six per cent. cannot recover back the money so paid.4

Sec 755

It is no defence in a suit by a third party against an agent to whom money has been paid by mistake, that the money has been paid over to the principal, supposing that the agent at the time of so paying over had notice of the third party's claim.1 It is otherwise, however, when before notice the money has been paid over by the agent to his principal, or allowed for in the agent's accounts with the principal.2

Money paid in mistake of law cannot be recovered back.

When money paid by third person to agent can be recovered back.

1 Bilbie V. Lnmley, 2 East, 469; Leake, 2d ed. 104, citing also Lowry V. Bourdien, 2 Doug. 468; Brisbane V. Dacres, 5 Taunt. 143; Lamborn V. County Com., 97 U. S. 181; Norton V. Marden, 15 Me. 45; Fellows V. District, 39 Me. 559; Benson V. Munroe, 7 Cush. 125; Wilde V. Baker, 14 Allen, 349; Northrop V. Graves, 19 Conn. 548; Clarke V. Dutcher, 9 Cow. 674; Real Est. Inst. V. Linder, 74 Penn. St. 371; and cases cited supra, sec 198-9.

2 See supra, sec 199; Hall V. Jackson Co., 5 Ill. App. 609.

3 James ex parte, L. R. 9 Ch. 609. As to estoppel, see supra, sec 196, 202 a. "There are some cases in which this court has not adhered strictly to the rule that a mistake in law is incapable of being remedied; but relief has never been given in the case of a simple money demand by one person against another, there being between those persons no fiduciary relation, and no equity to supervene by reason of the conduct of either." James, L. J., Rogers V. Ingham, L. R. 3 C. D. 351. The last is a very broad exception, at least as broad as the rule already stated, that mistake in the subsumption of facts under a legal principle is a mistake of fact and not of law; supra, sec 199.

4 Marvin V. Mandell, 125 Mass. 562.

1 Elliott V. Swartwood, 10 Pet. 137; Garland V. Bank, 9 Mass. 408; Frye V. Lockwood, 4 Cow. 454; Mowatt V. Mc-Clellan, 1 Wend. 173; Wharton V. Hudson, 3 Rawle, 390, and other cases cited 2 Ch. on Cont. 11th Am. ed. 911.

2 Wh. on Ag. sec 576; Holland V. Russell, 1 B. & S. 424; Cox V. Prentice, 3 M. & S. 344; Peto V. Blades, 5 Taunt. 657; Carew V. Otis, 1 Johns. 418; La Farge V. Kneeland, 7 Cow. 456; Granger V. Hathaway, 17 Mich. 500.