Sec 742

When there has been a total failure of consideration, or where a contract has been abandoned on both sides, or has been rescinded, an action lies for money had and received to recover back any money either paid the other in furtherance of the contract.4 Hence when subscriptions are paid into a business adventure, and this adventure is abandoned before the shares are distributed and the risks begun, the party paying in the subscription may recover it back as money had and received.5 This has been held to be the case in England with regard to money paid as a deposit on application for shares in a company which is abandoned before an allotment of shares;6 and so with respect to money paid for allotments which were held to be ultra vires, and which could not therefore be perfected.7

Money paid on an inoperative contract may be recovered back.

1 Supra, sec 454.

2 Lea V. Cassen, 61 Ala. 312. As to rescission, see supra, sec 282 et seq.

3 Supra, sec 343; Williams V. Carr, 80 N. C. 294.

4 Supra, sec 48 a, 282, 520; Payne V. Whale, 7 East, 274; Danforth V. Dewey, 3 N. H. 79; Cooper V. Newman, 45 N. H. 339; Raymond V. Bearnard, 12 Johns. 275; Lindsley V. Ferguson, 49 N. Y. 625; Feay V. DeCamp, 15 S. & R. 227; Thompson V. Gould, 20 Pick. 134; Middleport Mills V. Titus, 35 Oh. St. 253; Wisner V. Chicago, 6 Ill. Ap. 254; Johnson V. Krassin, 25 Minn. 117; Garber V. Armentrout, 32 Grat. 235; Flinn V. Barber, 59 Ala. 446; Sims V. Hutchins, 8 Sm. & M. 328. In Gist V. Smith, 78 Ky. 367, Cofer, J., said: "Money paid upon a contract declared by statute to be void is not paid under any contract at all; it is paid without consideration, either good or valuable, and may be recovered back unless the transaction is of such a character that the law will not aid either party, which is not the case as to one who pays usurious interest.".

5 Kempson V. Saunders, 4 Bing. 5; see cases cited supra, sec 519 et seq.

6 Leake, 2d ed. 105; Walstab V. Spottiswoode, 15 M. & W. 501; Mowatt V. Londesborough, 4 E. & B. 1; Johnson V. Goslett, 3 C. B. N. S. 569; supra, sec 520.

7 Alison's case, L. R. 9 Ch. 24; Bank of Hindustan V. Alison, L. R. 6 C. P. 222; Campbell ex parte, L. R. 16 Eq. 417, 9 Ch. 1, 12; see Rudge V. Bowman, L. R. 3 Q. B. 689; supra, sec 520. As to mutual subscriptions to charities, see supra, sec 528 et seq.

And, generally, where money has been paid by the plaintiff on a contract, and before any benefit accruing to the plaintiff or detriment to the other side, the consideration wholly fails, or the contract becomes wholly inoperative, the plaintiff may recover in this form of action the money advanced by him.1 So of agreements which are inoperative under the statute of frauds, and which the defendant refuses to perform;2 and of other eases of rescission.3 - A suit for money had and received lies by a purchaser after rescission of contract of sale to recover money paid as consideration for the purchase.4 But where a purchaser pays part of purchase-money, payable in instalments, and then rescinds, he cannot recover back what he has paid if the vendor is ready to perform his part; but if the vendor rescinds, he cannot retain the purchase-money paid.5 - A purchaser who has made payments on a contract of sale with which the vendor has refused to comply, may recover back from the vendor the money so paid.6