unending litigation is properly met and repulsed by the courts which do permit relief. Moreover it is difficult to see why the majority rule does not actively encourage perjury and in effect place a premium on obtaining judgments by false testimony, since it grants no relief against judgments so obtained. In attempting to avert one evil it creates a greater one. The improbable prosecution and conviction for perjury is not a sufficient deterrent in view of the huge spoils which await those who will but practice such frauds. Yet courts everywhere have, it would seem, blindly followed the rule of the Throckmorton decision. Few courts today have departed from it.

35

Quite soon after the Throckmorton decision the Supreme Court in Marshall v. Holmes stated a different and broader rule. Equitable relief was to depend not upon whether the fraud was extrinsic or intrinsic, but on whether, according to the facts of the case, it appeared to be against conscience to permit the execution of the judgment. The decision however was not subsequently followed, the court choosing to revert to the rule of the previous case. An early Wisconsin case had a similar history. A later Wisconsin cases departed from the rule of the Throckmorton case and the break has become complete under more recent decisions in the same state." In the Alabama case of Bolden v. Sloss-Sheffield Steel & Iron Co., supra the court enjoined the enforcement of the judgment. It did so while admitting the authority of the Throckmorton decision and based its decision on the fact that the fraud was one on the court as well as on the defendant company. It was therefore held to be extrinsic. The jurisdiction of the court was invoked by a false claim that the plaintiff was the wife of the deceased employee. A very convincing dissenting opinion repudiates the distinction. The decision seems to be in irreconcilable conflict with previous decisions of the court as pointed out in the dissent. It would seem that the case was incorrectly decided under the rule of the Throckmorton case

34141 U. S. 589, 12 Sup. Ct. 62 (1891).

35Stowell v. Eldred, 26 Wis. 504 (1870).

36Boring v. Ott, 138 Wis. 260, 119 N. W. 865 (1909) through Justice Kerwin: "It is not easy to see... why an issue determined in favor of the prevailing party solely by perjury does not amount to such a (extrinsic) fraud, where such perjury was unknown to the defeated party and could not by the exercise of reasonable diligence have been discovered. It would seem that a judgment thus obtained is as unconscionable as one secured against a party by keeping him away from court or by other corrupt means, and thereby preventing a fair trial on the merits... Any objection that such a rule necessitates a reopening and retrial of the issues determined in the original action is equally applicable to any newly discovered evidence."

37Laun v. Kipp, 155 Wis. 347, 145 N. W. 183 (1914) repudiates the test as to extrinsic fraud and takes the broad position that the vital question is whether the judgment is secured under such circumstances as warrants equity in granting relief. Freeman, commenting, says: "This position seems more in harmony with the spirit and purpose of equity as originally conceived, and is a commendable attempt to escape from the rigidity of rules which to a considerable extent have destroyed the discretion and effectiveness of equity courts" 3 FREEMAN, JUDGMENTS (5th ed. 1925) § 1233 at 2570; see also 1241 at page 2584; First Nat. Bank v. Harvey, supra note 26; (1907) L. R. A. (N. S.) 216 at 217 (note).

and the rule followed in Alabama. Assuming the clear and conclusive proof of the perjury, the diligence of the defendant company, and the conceded materiality of the perjury, the result reached is commendable. If the case had been decided under the minority rule, however, not only would the same commendable result have been attained, but it would clearly have been decided correctly under the law.

Robert H. Dann.

Landlord and Tenant: Restrictive covenant: Liability of covenantor for breach by the lessee.-The New York Court of Appeals, in the case of Peoples Trust Co. v. Schultz Novelty and Sporting Goods Co., 244 N. Y. 14 (1926), passed, among others, on the question of what constitutes a breach of an agreement between a landowner and his lessee, or an adjoining landowner, that he will not let his premises to anyone engaging in the same or similar business as that of the lessee or adjoining landowner. In this case the plaintiff sues as the assignee of Miller Bros. who agreed not to "let any portion of the premises No. 120 Nassau street during the term of their lease to any person for the use of any business of the same or similar nature as that conducted by" the defendant. The defendant agreed to pay $300 a month in consideration of this agreement and the plaintiff now sues for default in this payment for a period of eleven months. The defence was breach of the above quoted covenant by the covenantor. Miller Bros. had leased their premises to one Hirschberg, who in turn leased to the firm of Silver and Herman, the tenants who were alleged to have competed with the defendants in their business, specifying in the sublease that the premises should be used as a retail haberdashery, "provided, however, that said tenants do not sell or offer for sale any merchandise similar to that now sold or offered for sale" by the defendant. The plaintiff contended that Hirschberg performed all his obligations to the defendant, under said covenant, when he exacted a covenant in the sublease; and that the agreement in suit was not broken because it applied only to the purpose for which the land was leased and not to the use to which it was actually put. The court held, however, that the lessor in such a case could not be said to comply with his agreement by merely inserting a restriction in the sublease which he does not attempt to enforce, though it is within his power to do so, and he has knowledge of its breach.

The English view, on the contrary, is that the mere insertion of a restrictive clause in the lease or sublease is a compliance by the lessor or sublessor with his own covenant, provided he is not in collusion with the tenant and does not acquiesce in the violation of the covenant which he himself exacted; but he does not have to go to the extent of bringing an action to enforce this covenant.' This rule was first applied in the case of Hall v. Ewin2 in which the decision

1Kemp v. Bird, L. R. 5 Ch. Div. 974 (1877); Hall v. Ewin, L. R. 37 Ch. Div. 74 (1887); Ashby v. Wilson, L. R. [1900] 1 Ch. Div. 66.

2Supra note 1.

for the defendant rested on two grounds. First, that the doctrine of equitable easements, as established by the case of Tulk v. Moxhays should not be extended to this class of cases on the ground that its application was confined to those cases where the covenant was purely restrictive and should not be applied where it would require affirmative action. The scope of this comment is not intended to include a discussion of this phase of the question but is limited to a consideration of the problem passed on in the main case: viz. assuming the defendant to be bound by the covenant, is mere non action a breach? The second ground for the decision of Hall v. Ewin was that the lessor had not breached his agreement even though it specified that the lessor was not to use the premises or suffer them to be used for a particular type of business; that, since he had objected to such use and was not in collusion with the offender he had not suffered them to be used in the objectionable manner. Consequently in England it is held that the defendant fulfills his agreement when he inserts a restrictive clause in the sublease. In some of the English cases where the defendant covenanted not to use the premises in a particular manner, he is held liable on the ground that it is an absolute covenant that the premises shall not be used in that manner, extending the holding of Hall v. Ewin.

The conflict between the American and English cases would seem to be the interpretation placed on the words of an agreement not to let the premises for a specified purpose, nor suffer them to be used in a specified manner. The courts of this country in such a situation generally interpret the covenant as an absolute one that the land will not be used for the forbidden purpose and so the covenantor is not discharged by inserting a restrictive covenant in the second lease; but that unless he enforces it he is guilty of a violation of his own covenant with the plaintiff." Maryland, however, inclines toward the English view, that a failure to sue on the second covenant is not a breach by the defendant of his own covenant."

32 Phil. 774 (1848).

"In Kemp v. Bird, supra note 1, the covenant was that the defendent "shall not, during the said term, demise or let any * of the tenements to any person whomsoever for the purpose of carrying on the trade or business of an eating house." The court held that if there was intended a positive restriction on the use of the premises, the parties should have made it expressly so in the covenant; that to interpret it so would be to deduce from the terms of the covenant something beyond its express wording. In Ashby v. Wilson, supra note 1, it was said: "I do not think any words would justify Mr. Lawrence's argument, except such as these: 'and that during the continuance of this demise the other houses shall not be used, etc.', and even if these words were in the covenant there might be some difficulty; but I think that nothing less explicit than words such as these would suffice.'

'Bryant v. Hancock and Co., L. R. [1898] 1 Q. B. Div. 716; Mumford v. Walker, 71 L. J. Rep., K. B. D. 19 (1902); Prothero v. Bell, 22 L. T. R. 370 (1906). "University Club v. Deakin, 265 Ill. 257, 106 N. E. 790 (1915); Wheeler v. Earle, 5 Cush. 31 (Mass. 1849); Miller v. Prescott, 163 Mass. 12, 39 N. E. 409 (1895); Crowe v. Riley, 63 Oh. St. 1, 57 N. E. 956(1900); Granite Building Association v. Greene, 25 R. I. 48, 54 Atl. 792 (1903).

'Lucente v. Davis, 101 Md. 526, 61 Atl. 622 (1905). In this case there was not even a restrictive covenant, exacted by the covenantor in the second lease, and the court held that there was no breach unless the lessee was under contract with the covenantor to carry on the prohibited business, or had authority from the covenantor to do so.

It would seem clear that, although a literal interpretation of the wording of such agreements might be said to indicate that the intention of the parties is that the premises should not be let for the purpose of carrying on the prohibited business, their actual intention is that the property is absolutely not to be used for such business. In view of the great opportunity, afforded under the English view, for fraud on the part of the covenantor, or collusion between the covenantor and the second tenant, which might easily be concealed, New York, passing on the point for the first time, has adopted the better doctrine.

George H. Kenny.

Quasi-Contracts: Money paid under a mistake of fact: Payment induced by the fraud of a third person.-R. E. Jones, Ltd. v. Waring & Gillow, Ltd., 1926 Appeal Cases 670, is an action for the recovery of money paid under mistake of fact. The action arose out of circumstances which, as Lord Chancellor Viscount Cave declares in the course of his opinion, were “fortunately unusual." The defendants were a well-known firm which carried on business as furniture dealers. They supplied one, B, with furniture to the amount of £10,000 for which he agreed to make an initial payment of £5,000 under a hirepurchase agreement. A check of B's for this amount was dishonored and the defendants retook the furniture. B, in order to get funds to meet this initial payment, called upon the plaintiff company, motor car dealers, and represented that he was the agent of "International Motors," a firm manufacturing a motor car, the "Roma". He falsely represented that the defendant company was financially behind it. He asked the plaintiffs to become agents for the cars. Induced by these fraudulent representations, the plaintiff company entered into an agreement for the purchase of 500 "Roma" cars, and agreed to pay £5000 as a deposit. The plaintiffs sent their check to the defendants as the deposit by B. The defendant endorsed and cashed it. The defendants took the check in the belief that it was intended as payment of B's debt to them. On the faith of it, the defendants again delivered the goods previously sold to B on the hirepurchase agreement. The defendants advised the plaintiffs that they had received the money on account of B and would send him a receipt. Two weeks later the fraud was discovered and the defendants retook the furniture.

The case of Waldorf Seegar Co. v. Saloman, 109 A. D. 65, 95 N. Y. Supp. 1053 (1st Dept. 1905) was one that closely approached the question in the main case but did not decide it because the court held that a lease expressly permitting the grocery business was a permission to sell cigars and tobacco and therefore the breach of the covenantor rested on positive action rather than a mere failure to act. In Standard Fashion Co. v. Siegel-Cooper Co., 157 N. Y. 60, 51 N. E. 408 (1898) there was a direct breach of the covenant by leasing without even inserting restrictive covenants in the second lease. In Ludwig Bauman v. Manwitt Corp., 213 A. D. 300, 207 N. Y. Supp. 437 (2nd Dept. 1925), it was held that a lease for the purpose of selling floor lamps was a breach of an agreement not to lease for the purpose of selling furniture and so the case is analagous to the Waldorf case supra.

Three of the judges, relying on Kelly v. Solari,' held that the plaintiffs were entitled to recover money which was honestly paid under a mistake of facts. Two of the judges, in dissenting, were of the opinion that the plaintiff, having by their conduct induced the defendants to believe that the plaintiffs were indebted to them in the amount of the check, and the defendants having acted to their detriment on the faith of that belief, were estopped from recovering the money.

The general rule is that money paid under a material mistake of fact may be recovered back. This quasi-contractual obligation to repay money paid under a mistake of fact is based on the equitable theory that it would be unconscientious for the defendant to retain it.3 Lord Mansfield said in Moses v. MacFerlan': “*** It lies only for money which, ex aequo et bono, the defendant ought to refund. *** It lies for money paid by mistake; or upon a consideration which happens to fail; or for money got through imposition, (express or implied); or extortion; or oppression; or an undue advantage taken of the plaintiff's situation, contrary to laws made for the protection of persons under those circumstances. In one word, the gist of this kind of action is, that the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to refund the money."

The general rule is well illustrated by the following cases. In Baltimore & Susquehanna R. R. v. Faunce the plaintiff was permitted to recover where the payment was made in the mistaken belief that the sum paid was the true balance appearing due by the final estimate and that the agent who made the payment for the plaintiffs intending to pay that balance, and not noticing the deduction of $870 paid a sum larger by that amount than he intended. In the more recent case of Bank of Belmont v. Judson Lumber Co, where the lumber company paid the bank on an invoice for lumber and by mistake paid for two cars when the bank had an assignment for proceeds of only one, it was permitted to recover the amount paid by mistake. Care and diligence are not an essential element of the right to recover." The fact that the payor, when making payment, has means of knowing the facts, will not ordinarily preclude him from recovering back

19 M. & W. 54 (Ex. 1841).

WOODWARD, QUASI-CONTRACTS (1913) 11; KbeneR, QUASI-CONTRActs (1893) 26; Royal Italian Gov't v. National Brass & Copper Tube Co., 294 Fed. 23 (C. C. A. 2d 1923); Harris v. Loyd, 5 M. & W. 432 (Ex. 1839); Citizens' Bank of Fitzgerald v. Rudisill, 4 Ga. App. 37, 60 S. E. 818 (1908); Rohn v. Gilmore, 37 Idaho 544, 217 Pac. 602 (1923); Robertson v. Jefferson County, 205 Ky. 479, 266 S. W. 27 (1924); Edwards v. Harwood Mfg. Co., 59 Minn. 178, 60 N. W. 1097 (1894); Tinslor v. May, 8 Wend. 561 (N. Y. 1832); Kingston Bank v. Eltinge, 40 N. Y. 391 (1869); Woodruff v. Claflin, 198 N. Y. 470, 91 N. E. 1103 (1910).

Baylis v. Bishop of London [1913] 1 Ch. 127.

42 Burr. 1005 (K. B. 1760) at 1008.

6 Gill. 68 (Md. 1847).

108 So. 440 (Miss. 1926).

'Chicago, M. & St. P. Ry. Co. v. Malleable Iron Range Co., 187 Wis. 93, 203 N. W. 738 (1925).