A. Definition

• Library: Elements of Civil Causes of Action (SCBar) (2021 Ed.)

A. Definition²

The action for money had and received is ancient and aptly named. Its appellation almost entirely describes the action: the plaintiff had a sum of money, the defendant received it, and the plaintiff is bringing suit to get it back.³ The early South Carolina appellate decision of Marvin v. M'Rae,⁴ succinctly stated the gist of the action when it said that if one has money in his or her hands that belongs to another, the latter may sue the former in an action for money had and received.⁵

The action emerged from the old common law action of assumpsit and was known as one of the "common counts" in assumpsit.⁶ Assumpsit is a term one occasionally finds in modern South Carolina decisions,⁷ and, in relation to money had and received, was more frequently used in 19^th and early 20^th Century South Carolina cases.⁸ The United States Supreme Court explained the cause many years ago where it said that an action to recover a tax erroneously paid was an action at law, but equitable in function and was the lineal successor of the common count in indebitatus assumpsit for money had and received. The action was, said the court, originally one for recovery of a debt and was favored for its convenience and flexibility. Gradually, it expanded to become a means for recovery on "every form of quasi-contractual obligation in which the duty to pay money is imposed by law, independently of contract, express or implied in fact."⁹

Assumpsit had a colorful past,¹⁰ so much so that the South Carolina Supreme Court once referred to the distinction between its different forms as "confounding."¹¹ It appears to have encompassed everything from breach of warranty,¹² unjust enrichment,¹³ and quantum meruit,¹⁴ to a "case by simple contract"¹⁵ as well as money had and received. As the spawn of a shadowy parent, the action for money had and received is a bit difficult to pin down. It is variously described as a contract action,¹⁶ an action at law governed by equitable principles,¹⁷ an equitable remedy,¹⁸ and as nearly identical to unjust enrichment.¹⁹ Trying to fit it into a specific slot — rather than treating it as a discrete action with a unique function — is a dangerous enterprise. The South Carolina Court of Appeals faced that peril in Okatie River, L.L.C. v. Southeastern Site Prep, L.L.C.²⁰ In so doing, it placed the very viability of money had and received as an independent cause of action in considerable doubt by stating that "in theory and actual practice" it has been "subsumed and amalgamated under the theories of quantum meruit/quasi-contract/implied by law actions."²¹ There are, however, several problems with that statement.²²

¹⁷ McDonald's Corp. v. Moore, 237 F. Supp. 874 (D.S.C. 1965) (although action in assumpsit for money had and received is technically considered one at law, it is equitable in nature and governed by equitable principles); Bennettsville v. Bledsoe, 226 S.C. 214, 84 S.E.2d 554 (S.C. 1954); Huggins v. Commercial & Sav. Bank, 141 S.C. 480, 140 S.E. 177 (S.C. 1927); Southern R. Co. v. City Council of Greenville, 49 S.C. 449, 27 S.E. 652 (S.C. 1897) (action for money had and received treated in some cases as "somewhat in the nature" of equitable action, based on principle that one who has received money belonging to another should ex aequo et bono be required to return it); Okatie River, L.L.C. v. Southeastern Site Prep, L.L.C., 353 S.C. 327, 577 S.E.2d 468 (S.C. App. 2003) (once requirements of action for money had and received are proven, equitable principles of unjust enrichment and restitution provide remedy). Consider Newell Contracting Co. v. Blankenship, 130 S.C. 131, 125 S.E. 420 (S.C. 1924) (unnamed action demanding return of overpayment on contract was one for recovery of money only and at law; if alleged overpayments were due to mistake, court of law would not be ousted from jurisdiction and could enforce repayment of money paid under mistake just as could court of equity).

¹⁸ See, e.g., Glenn v. Shannon, 12 S.C. 570 (S.C. 1880) (parties considered it case in chancery because mistake was ground on which relief was demanded; appellate court noted jury was dispensed with); Lanier v. Griffin, 11 S.C. 565 (S.C. 1879) (demand of testator's creditor against legatee who has received legacy leaving debts unpaid and without available assets for payment, would be in equity, in nature of action for money had and received). See also Frontier Management Co. v. Balboa Ins. Co., 658 F. Supp. 987, 993 (D. Mass. 1986) (action for monies had and received is not one on contract, it is equity action aimed at restoring wrongfully obtained monies to rightful owner, regardless of how that money was obtained or what basis of rightful owner's claim might be).

¹⁹ Jelmoli Holding, Inc. v. Raymond James Fin. Servs., 470 F.3d 14, n. 2 (1st Cir. 2006) (unjust enrichment is equitable claim with same elements as money had and received except that it is not limited to enrichment by money or its equivalent; unjust enrichment and money had and received are close in character — one rooted in common law and the other equity — and many say they are, for practical purposes, identical).

²⁰ Okatie River, L.L.C. v. Southeastern Site Prep, L.L.C., 353 S.C. 327, 577 S.E.2d 468 (Ct. App. 2003). The court could probably have easily avoided any discussion of money had and received at all. Instead, it chose to treat the case as unequivocally an action for money had and received. The case concerned one of three shareholders in a corporation who gave money to a limited liability company in which he had an interest. The other shareholders were unaware of the transfer of funds. They, through their corporation, brought an action against the limited liability company for return of the money, alleging it was a loan or an "advance." The parties stipulated that the money was in fact a loan. The issue — as the appellate court noted — was the terms, conditions, and obligations of repayment. The trial court treated the money as a loan and determined it was payable on demand because there was no due date. It held the plaintiff was entitled to judgment and prejudgment interest, and ruled the defendant would be unjustly enriched if it did not pay the judgment. The appellate court affirmed saying there was evidence in the record to support the judgment that the transaction "actually amounted to money had and received or money lent (an implied by law contract/quasi-contract)." By phrasing the choices in the alternative, the court implied they were not the same. Indeed, they are not. When the trial court resolved the case by treating the money as a loan, it in essence found a contract, whether actual, quasi, or implied. The appellate court could have simply affirmed on that basis without discussing the action for money had and received. Why it chose to do so is anything but clear. One reason is found in its reference to 42 C.J.S. Implied Contracts §§ 14 & 19 which it cites in support of the proposition that "[e]xamples of when an action for money had and received will lie are when the plaintiff paid money to the defendant under an unenforceable contract or where the defendant received money from the plaintiff for a special purpose and the money has not been applied to the purpose, the specific purpose has been abandoned, or the specific purpose cannot be carried out." Okatie River, L.L.C. v. Southeastern Site Prep, L.L.C., 353 S.C. 327, 335, 577 S.E.2d 468, 472 (Ct. App. 2003).

²¹ Okatie River, L.L.C. v. Southeastern Site Prep, L.L.C, 353 S.C. 327, 336, 577 S.E.2d 468, 473 (Ct. App. 2003). The action is probably better characterized as a cousin to quantum meruit. See Nelson, Americanization of the Common Law: The Impact of Legal Change on Massachusetts Society, 1760-1830, pp. 54-55 (University of Georgia Press, 1975) (comparing indebitatus assumpsit, quantum meruit, and quantum valebant). In fact, there are clear distinctions between the two actions. One factor that distinguishes quantum meruit from money had and received is the existence of a contract. It appears well-settled that there can be no recovery on quantum meruit on a complaint setting up an express contract. Hursey v. Surles, 91 S.C. 284, 74 S.E. 618 (S.C. 1912). However, the fact that there is a contract between the parties should not necessarily defeat an action for money had and received. See Saunders v. A. C. Phelps Co., 53 S.C. 173, 31 S.E. 54 (S.C. 1898) (in case of executory illegal contract, law will neither enforce it nor award damages, but while contract is executory, party paying money, or putting up property, may rescind contract and recover back money; where action is in disaffirmance of illegal contract, action may be maintained for money had and received). See also Greenwood Cotton Mill v. Tolbert, 105 S.C. 273, 89 S.E. 653 (S.C. 1916) (assumpsit for money had been received would not lie until contract had been rescinded).

²² One relatively small problem is the reliance of Okatie River on the Supreme Court decision of Myrtle Beach Hospital, Inc. v. City of Myrtle Beach, 341 S.C. 1, 532 S.E.2d 868 (2000) where the court simply said that "quantum meruit, quasi-contract, and implied by law contract are equivalent terms for an equitable remedy," and adopted the same elements for evaluating all three. Nowhere, however, in the opinion did the court mention money had and received.

First, the court began its analysis by saying that an "... action for money had and received is based upon a quasi-contract or a contract implied in law." Thus, it straightaway mired itself in the terminological quagmire that assumpsit conceived. It did so when it conflated "based upon" with "identical to." Money had and received is based on quasi or implied contract in the sense that it came from the branch of assumpsit concerned with equitable results, but it is not identical to quasi or implied contract.²³ The most serious problem, however, is that, having equated money had and received with quantum...