Unjustified Enrichment
(1) Nature and Origins: The Condictio
The beginnings of unjustified enrichment lie in a form of action called the condictio.[2674] This form of action was not specific to unjustified enrichment.
Rather, it was origiÂnally one of a number of pre-classical procedural forms that we met in Chapter 2, called the legis actiones, although the condictio was a fairly late member of that group.[2675]The condictio had a great practical advantage that it was not necessary when raising an action based on it to state the basis of the debt being claimed, only that the debt existed. The condictio simply narrated that a debt of a particular amount was being claimed, and directed the judge to condemn or absolve the defender with respect to that in accordance with the evidence. This gave the condictio treÂmendous flexibility, and it was the normal procedural form for a variety of difÂferent types of claim. For example, in Chapter 24 we saw it, as the condictio furtiva, being used against thieves.[2676] Of particular importance here, though, is the use of the condictio to enforce repayment of money or property lent under a contract of mutuum. As we saw in Chapter 19, this was a loan for consumption, with an equivalent to be repaid by the borrower rather than the original item being given back.[2677] As with all of the category of real contracts, in a mutuum the contract was not created by the mere agreement of the parties, but instead by the delivery of the property or money that was its subject matter.
The question then arises: what if money or property is handed over, not in order to create an obligation, but to discharge an obligation that is mistakenly believed already to exist? For example, I believe that I owe you a certain sum of money under a contract, so I pay you this sum. In fact, the money is not due.
Perhaps I have already paid you, or else maybe the contract under which we believe the money to be due is invalid for some reason. Gaius makes an analogy between this situation and mutuum:He also is obliged by a real obligation who receives something not due to him from someone who pays in error. For the clause in the condictio, ‘if it appears that he ought to give’, lies against him just as if he had received payment by way of loan.[2678]
Thus, he says, the transferee is liable under the condictio in such circumstances to make repayment, even though the intention was to discharge an obligation rather than to create one. We may add also (though Gaius did not, having no such category) that this is what justifies classing this situation as quasi-contrac- tual: it looks like mutuum, but is not, because the parties did not intend to create a contractual relationship.
(2) Grounds of Enrichment
This claim for repayment of something not due is known to us as the condictio indeÂbiti, and is the most straightforward case of unjustified enrichment. In principle, this was only available if the payer believed the payment to be due.[2679] A payment could, however, be recovered if it was made on the basis that it would be repaid if it turned out not to be due.[2680] This allowed payment to be made provisionally, in circumstances where there was uncertainty as to whether the debt existed. The condictio indebiti was excluded where payment had been made towards a liability, in cases where denial of liability increased that liability.[2681] The claim under the condictio indebiti included any fruits, such as offspring, derived from the property, with deduction for expenses of maintenance.[2682]
Gaius andJustinian mention only the condictio indebiti in their respective Institutes. However, further types of unjustified enrichment claims were developed. One of these was the condictio causa data causa non secuta, the claim for something given for a cause that had failed.
A standard example would be a gift given for a wedding that did not then take place. Ulpian explains this as essentially a variant on the condictio indebiti: ‘If money is given for a purpose that is not improper, for example that a son be emancipated or a slave manumitted or that court proceedings be abandoned, the right of recovery ceases once the purpose has been achieved.'[2683] In other words, the recipient is initially liable to repay, because the money or propÂerty given was not in fact due. However, this ceases to be true once the anticipated state of affairs has come about.[2684]Another was the condictio ob turpem vel iniustam causam, the claim for something given for a corrupt or unlawful cause. Where something was given for an unworÂthy purpose, the giver could potentially recover it even if the intended purpose did in fact materialise.[2685] Examples might be a kidnapper accepting a ransom to release a victim, or a person intending to commit murder accepting money not to do so. Whether recovery would be possible depended on whether both parties had acted immorally or unlawfully, or only one of them had done so. Where only the receiver had acted wrongfully, recovery was possible; if both were tainted, the loss would be allowed to lie where it fell.[2686]
There were, however, always cases that did not readily fit into one of these condictiones. The jurists never lost sight of the fact that all of these claims rested on a general principle that, in the words of Pomponius, ‘it is by nature fair that nobody should enrich himself at another's expense'.[2687] For these cases, there was the condictio sine causa, the final two words of that expression meaning ‘without legal basis'. Ulpian gives an example:
A fuller contracts to wash clothes, then, the clothes having been lost, pays the owner their price on being sued under the contract. The owner then finds the clothes. By which action should the fuller recover the price he paid? And Cassius says that he can pursue the owner not only using an action based on the contract, but also using the condictio. I think that he can at any rate sue on the basis of the contract.
However, it has been questioned whether he can bring the condictio, because he did not give something that was not owed, unless perhaps we hold him to bring the condictio as where something is given with no basis, for once the clothes are found it seems as though the giving was without any basis.[2688]Another example would be a case in which you requested a loan from me and also from someone else. I told my own debtor to pay you (thus discharging his debt to me), but you believed he was paying on behalf of the other person he asked. There is therefore no contract between us, and no direct payment from me to you. Nonetheless, there has in a sense been a transfer of value from me to you, and it is fair that you should have to repay me: after all, you were expecting to have to pay the money back to someone, and there is no good reason why you should get a windfall from your own mistake. I therefore would have the condictio sine causa to reclaim the money from you.[2689] [2690] [2691] (3) Enrichment in Modern Law Modern Scots law has certainly drawn heavily on Roman law in this area, not least in the use of condictio-based terminology. For example, in Cantiere San Rocco, SA v Clyde Shipbuilding & Engineering Co Ltd2 a contract had been made in May 1914 by which a Scottish firm of engineers was to supply marine engines to an Austrian firm of shipbuilders. After payment of the first instalment, but before the engines had been supplied, war broke out and rendered performance of the contract legally impossible. After hostilities ended, it was held that the shipbuildÂers were entitled to repayment. This was said, with copious citation of Roman texts and the Scots institutional writers drawing on them, to be based on the condictio causa data causa non secutab At the same time, though, unjustified enrichÂment does not appear in the Scots institutional writers as a discrete category,[2692] and modern enrichment law includes certain claims that would not have been covered by the condictiones of Roman law.[2693] The major task of modern unjustiÂfied enrichment law is to break away from the specific condictiones and develop a general principle for the reversal of unjustified enrichment, while still drawing on the Roman tradition.[2694] Another example of a case in which considerable use was made of Roman and Ius Commune thinking in this area was Morgan Guaranty Trust Co of New York v Lothian Regional Council.3 In this case, there had been an agreement between Lothian Regional Council and a firm of merchant bankers involving payments of money between the two. Probably the most important case in modern Scots enrichment law has been Shilliday v Smith.[2700] In that case, the parties had been in a cohabiting relationship. They had become engaged. The pursuer had paid for materials and repair work for the defender’s property, with a view to living there together as husband and wife. Following their separation, the pursuer was held to be entitled to recover his expenditure on the basis of the condictio causa data causa non secuta. The Lord President (Rodger) made this statement of principle: ‘a person may be said to be unjustly enriched at another’s expense when he has obtained a benefit from the other’s actings or expenditure, without there being a legal ground which would justify him in retaining that benefit’.[2701] The individual condictiones are not separate remedies, but rather each is used ‘to describe one particular group of situations in which the law may provide a remedy because one party is enriched at the expense of the other’.[2702] In other words, they are specific examples of the applicaÂtion of a more general principle. In Shilliday, the parties were engaged to be married. It is less clear, though, that unjustified enrichment is of much use in cohabitation situations more genÂerally. Unjustified enrichment is not an apt tool for disentangling the financial affairs of separating cohabitants. The condictio indebiti is clearly not appropriate, as contributions by each party are not intended to discharge a supposed legal obligation. As for the condictio causa data causa non secuta, if the parties were not intending to marry then it will often be difficult to identify any definite outcome that has failed to transpire, and which has made retention of the contributions unjust.[2703] If a disappointed expectation of continued cohabitation is enough for this, then it is not fanciful to imagine a financially vulnerable cohabitant being coerced into continuing the relationship by the threat of financial ruin if the party who has made the greater financial contribution must be repaid following separation. That the court might, on equitable grounds, exclude such a claim does not entirely remove the risk.[2704] C.