Unjust Enrichment by Transfer: Some Comparative Remarks

The fundamental issues in classification of unjust enrichment claims arise from enrichment's core, i.e., subtractive enrichment (or enrichment by impoverishment) by transfer from plaintiff to defendant. Excluding most situations of three-party enrichment, issues of negotiorum gestio and restitution for wrongs, this Article sketches and compares in Part I attempts of English and German law to develop a systematic approach toward law of unjust enrichment. It can be shown that English and German law, in spite of having taken different paths, have often employed very similar techniques to shape their laws of unjust enrichment and will often arrive at similar results. Part II deals with what may be most fundamental remaining difference between common- and civil-law systems in this context, which relates to Roman-law-based concept of causa, or legal ground, which justifies an enrichment. This has been employed by German law, rejected by English law, embraced by Canadian law for last twenty years, and recently mooted in United States by draft of American Law Institute's Restatement (Third) of Restitution and Unjust Enrichment (Draft Restatement).' This Article seeks to distinguish three functions within concept of legal ground and compare degree to which these functions are served by those three legal systems and Draft Restatement. 1. The Path from Moses v. Macferlan It is not particularly original to begin an essay on unjust enrichment with Moses v. Macferlan.2 My pretext is that I will attempt to add a continental perspective to this leading case, in which Lord Mansfield summed up his taxonomy of English law of unjust enrichment (for action for money had and received) in a mere two sentences: It lies only for money which, ex aequo et bono, defendant ought to refund: it does not lie for money paid by plaintiff, which is claimed of him as payable in point of honor and honesty, although it could not have been recovered from him by any course of law; as in payment of a debt barred by Statute of limitations, or contracted during his infancy, or to extent of principal and legal interest upon an usurious contract, or, for money fairly lost at play: because in all these cases, defendant may retain it with a safe conscience, though by positive law he was barred from recovering. But 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 plaintiffs situation, contrary to laws made for protection of persons under those circumstances.3 The first sentence contains a negative list of situations in which defendant had no enforceable claim to enrichment he had received from plaintiff, but was still allowed to keep benefit. This negative list includes, inter alia, debts which were time-barred and gambling and betting debts. The second sentence contains a positive list of situations in which an unjust enrichment action will lie. They include, in modern terminology, mistake, failure of consideration, fraud, duress, and undue influence. Both sentences and both lists are concerned with return of benefits for which defendant could not have sued plaintiff successfully.4 This raises question of how to find out whether a case not clearly covered by one of lists will fall within first list or within second. According to Lord Mansfield, those cases will make positive list in which the defendant, upon circumstances of case, is obliged by ties of natural justice and equity to refund money5 or, as is stated at outset, ought to refund ex aequo et bono. In modern language, rule in Moses v. Macferlan can therefore be summed up as follows: law of unjust enrichment is concerned with surrender of benefits that defendant received, but could not have claimed, from plaintiff. …

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