CHAPTER XCVI.

MONEY LENT.

ARTICLE I.

OF MONEY LENT.

Section 1. When the action lies. Whenever money is borrowed by one person from another, and there is no taint of illegality in the transaction, the law implies a promise to repay it, and if no time is agreed upon, it is due instanter and without demand. In order to maintain this action, it is not necessary that there should be any writing to evidence either the loan, or a promise to repay it. It is enough if a loan in fact is established, or it is shown that money was paid for the defendant, at his request, or under such circumstances that the law will imply a request, and a consequent promise to repay it (Parker v. Newland, 1 Hill, 87; Whitman v. Lake, 32 Wis. 189); but it must be a loan to the defendant, and if it is a loan to a third person which the defendant agrees to repay, the action cannot be maintained. Marriot v. Lister, 2 Wils. 141. Thus, where the agreement declared upon was, that if A would lend B's son a sum of money not exceeding £5, B would pay the same to A, it was held that the amount could not be recovered upon a count for money lent, because B's son was the borrower, and B's promise was only collateral, "for," say the court, "the same money cannot be lent to two." But the court intimated, and such is still the rule, that if the money had been lent to B, although in fact, at his request, given to B's son, the action would have lain. Butcher v. Andrews, 1 Salk. 23; S. C., 3 id. 15; Douglass v. Reynolds, 7 Pet. (U. S.), 113. The distinction is that the word lent has a technical and certain signification, and can only be applied to the actual borrower. Butcher v. Andrews, 1 Salk. 23. But it is not essential that the money should have been given to the borrower, or that he should have derived any actual benefit therefrom; it is sufficient if the loan was in fact made to him and upon his sole credit and promise, although for the use and benefit of a third person; as, if B, at the request of C and upon C's promise to repay it, lets D have a

certain sum of money, C is the borrower, although D receives the money from B because the money is loaned to him and upon his sole credit. But if C had requested B to loan money to D, and had agreed to repay it if D did not, an action for money lent would not have lain against C, because he was not the borrower, and his promise was only collateral. Douglass v. Reynolds, 7 Pet. (U. S.) 113; Hamilton v. Starkweather, 28 Conn. 138. It is not essential that money in fact should have been loaned, it is sufficient if the borrower received that which was equivalent to money, and upon which money or its equivalent was actually received, as a check, bill of exchange, note, draft, loan certificate or other representative of money. Mansker v. Missouri, 1 Mo. 452.

When a person is permitted by another to take a certain sum of money from money in his hands belonging to such person, with the understanding that it is to be deducted from money thereafter to become due from such person to him for particular articles to be furnished or services to be rendered, if such articles are not furnished or services rendered, an action as for money lent lies to recover the same. Shepherd v. Philips, 2 C. & K. 722. A count for money lent will be sustained for money lent to the wife at the husband's request. Stevenson v. Hardie, 2 W. Black. 872. So, it lies upon an account stated (Payne v. Jenkins, 4 C. & P. 324); upon an I. O. U. (Childers v. Boulnois, 1 D. & R. 8; Douglas v. Holme, 12 Ad. & El. 641); whether it is addressed to any particular person or not (Curtis v. Rickards, 1 M. & G. 46); but the mere fact that the words "for value received" occur in an instrument as in a bill of exchange or promissory note, do not, of themselves, import a money consideration so as to uphold a count for money lent. It must appear that such was in fact the consideration (Morgan v. Jones, 1 C. & J. 162); nor is a right of recovery made out by simply showing that the plaintiff handed the defendant a certain sum of money. It must be shown that it was in fact a loan. Welch v. Seaborn, 1 Stark. 474; Morse v. Bogert, 4 Denio, 108; 1 Comst. 377. The fact that a loan is received by the deposit of collaterals and that the lender agrees to give notice of a certain time before attempting to compel re-payment, does not deprive the lender of his remedy as for money lent, nor is it incumbent upon him to aver or prove an offer to return the securities. Scott v. Parker, 1 Ad. & El. (N. S.) 807. Money advanced to one person by another, upon the agreement and expectation that such person will perform some act for the person advancing it in payment thereof, may be recovered under a count for money lent if such person fails to perform his agreement (Bristowe v. Needham, 9 M. & W. 729); and gener

ally, it may be said that an action as for money lent will lie when money is loaned to another or is given to a third person at his request, he being the borrower, or, when it is paid to him upon the expectation and agreement that it shall be paid in a particular way, and the person fails to perform his agreement. Bristowe v. Needham, 9 M. & W. 729; Stevenson v. Hardie, 2 W. Bl. 872. When a note given for money turns out to be void, the amount may still be recovered under a count for money lent (Moore v. Bank of The Metropolis, 13 Pet. [U. S.] 302); and it seems that a claim for money lent may be recovered under a general count "for sundry matters chargeable in account" (Lovejoy v. Wilson, 1 Cr. [C. C.] 102); and a count for money had and received is sustained by a claim for money lent, the rule being that a count for money had and received will always lie whenever money has been received by the defendant which et æquo et bono belongs to the plaintiff. Tutt v. Ide, 3 Blatchf. (C. C.) 249; Wells v. Neville, 4 Wash. (C. C.) 209; Page's Adm'rs v. Bank of Alexandria, 7 Wheat. (U. S.) 35. Thus, when money is advanced upon forged or counterfeit notes or bills, it has been held that the amount might be recovered under a count for money lent (Bank of England v. Tomkins, 6 Jur. 348); but if the notes or bills had been purchased, instead of being taken as collateral, the count would not lie, as, in order to sustain it, there must be a promise, express or implied, to repay the money. In other words, there must be a loan.

When money is lent by one person to another, the mere fact that the note of a third person is given as collateral does not bar an action for money lent. If the note is not paid within the time within which the loan was to be paid, the lender may sue the borrower for money lent. Marston v. Boynton, 6 Metc. (Mass.) 127. The count has been upheld by a memorandum of any kind that prima facie shows a loan and a promise to repay it as "due A. eighty dollars on demand. B." (Hay v. Hide, 1 Chip. [Vt.] 214); or "sent R. $56. I say received by me. P." Peniston v. Wall, 3 J. J. Marsh. (Ky.)37. But an instrument that merely acknowledges the receipt of money, as "received of A. $110," without other evidence, will not sustain the count. McFarland v. Shipp, 17 Ark. 41.

When a person has, through mistake, delivered up a note upon which there is still a balance due, he may recover it in an action for money lent. Baxter v. Paine, 16 Gray, 273. Where money is loaned, the fact that it subsequently depreciates in value, will not prevent a recovery for its actual value at the time when the loan was made, so held in a case where the loan was of Confederate money. Wooten v. Sherrard, 71 N. C. 374. So, although the contract between the parties as to the

time of the repayment of money loaned is void under the statute of frauds, yet, the law will imply a promise to repay the money on demand, and it may be recovered under a count for money lent. Swift v. Swift, 46 Cal. 266. See, also, Vanatta v. State Bank, 9 Ohio St. 27. A check given by the borrower for money loaned, which by agreement was not to be presented for payment, is sufficient to sustain an action for money lent, and the measure of recovery is the amount of the check and interest. Currier v. Davis, 111 Mass. 480.

Where money has been borrowed by an executor without authority, and the estate has received the benefit thereof, the creditor may recover the amount loaned with interest thereon at the legal rate. Deery v. Hamilton, 41 Iowa, 16.

Money deposited by a customer in a banker's hands is money lent with the superadded obligation, that it is to be repaid when called for. Pott v. Clegg, 16 M. & W. 321.

§ 2. When an action for money lent will not lie. In order to maintain an action for money lent, it must be shown that money or its equivalent representative passed from the plaintiff to the defendant, under a promise, express or implied, to repay the same. Payne v. Jen

kins, 4 C. & P. 324.

The action never lies upon a collateral promise (Douglass v. Reynolds, 7 Pet. [U. S.] 113); nor where there is not a promise, express or implied, to repay the money. There must be a loan, and the mere fact that the plaintiff has paid money for the defendant, or that the defend. ant has received and retained money belonging to the plaintiff, will not sustain the action. In such cases, an action for money paid or money had and received is the proper remedy. Smith v. Crocker, 2 Root, (Conn.), 84; Beach v. Vandenburgh, 10 Johns. 361; Charlestown v. Hubbard, 9 N. H. 195; Bancroft v. Abbott, 3 Allen, 524.

A husband is not liable for money lent to his wife, though the money is afterward applied by her in procuring necessaries, for the supply of which he would have been liable. Knox v. Bushell, 3 C. B. (N. S.)

334.

§ 3. Defenses to the action. This action is open to all defenses that legally bar the plaintiff's right of recovery, as usury (Grant v. Merrill, 36 Wis. 390; Tyng v. Commercial Warehouse Company, 58 N. Y. [13 Sick.] 308); payment, or that no loan was in fact made (Johnson v. Jennings, 10 Gratt. [Va.] 1; Richardson v. Williams, 49 Me. 558; Winsor v. Savage, 9 Metc. [Mass.] 346); or that the money was loaned for an illegal purpose (Kingsbury v. Flemming, 66 N. C. 524; McKinnell v. Robinson, 3 M. & W. 434); or indeed any matter that in law defeats a right of recovery. The defendant cannot defend

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upon the ground that the plaintiff received the money from an illegal enterprise (Wintermute v. Stinson, 16 Minn. 468); or that he knew it was borrowed for an illegal enterprise, unless it is also shown that he designed that it should be so used (Bond v. Perkins, 4 Heisk. [Tenn.] 364); or that the money was loaned out of trust funds in the plaintiff's hands (Patchin v. Peck, 38 N. Y. [11 Tiff.] 39); nor, that the instrument given to evidence the loan was not executed according to the formalities provided by law (Boisgerard v. New York Banking Co., 2 Sandf. Ch. 23); nor that the loan consisted of the plaintiff's notes, which were discounted, and were not due at the time when the action was brought (Hinsdale v. Eells, 3 Conn. 377); nor by any matters that do not defeat the right of recovery. Prewitt v. Martin, 59 Mo. 325; Moynahan v. Connor, 30 Mich. 136; Stolp v. Blair, 68 Ill. 541; Harington v. Macmorris, 5 Taunt. 228.

The omission of the officer of a national bank to exact security for moneys lent cannot be made a ground of defense to an action brought by the bank to recover such loan. Union Mining Co. v. Rocky Mt. Nat. Bank, 2 Col. T. 248.