“Money Had and Received” Claims Under Texas Law

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“Money Had and Received” Claims Under Texas Law

Texas law provides for a cause of action known as “money had and received.” The cause of action for money had and received is equitable in nature.  The claim belongs conceptually to the doctrine of unjust enrichment and seeks equitable relief.  The question, in an action for money had and received, is to which party does the money — in equity, justice, and law — belong. As such, a plaintiff need only show that defendant holds money that in equity and good conscience belongs to him.

The Texas Supreme Court has described a cause of action for money had and received as “less restricted and fettered by technical rules and formalities than any other form of action. It aims at the abstract justice of the case, and looks solely to the inquiry, whether the defendant holds money, that belongs to the plaintiff.”  A claim for money had and received seeks to restore money where equity and good conscience require restitution; it is not premised on wrongdoing, but seeks to determine to which party the money rightfully belongs; and it seeks to prevent unconscionable loss to the payor and unjust enrichment to the payee.

Money had and received is a category of general assumpsit to restore money where equity and good conscience require refund. A cause of action for money had and received is not premised on wrongdoing, but looks only to the justice of the case and inquires whether the defendant has received money that rightfully belongs to another. In short, it is an equitable doctrine applied to prevent unjust enrichment.

A claim for money had and received is quasi-contractual in nature and is a cause of action for a debt not evidenced by a written contract between the parties. Generally, when a valid, express contract covers the subject matter of the parties’ dispute, there can be no recovery under a quasi-contract theory.  The application of this general rule in the context of a claim for money had and received, however, is somewhat unclear under Texas law, and courts have allowed such claims even where a contract exists.

Recovery under a “money had and received” claim focuses on whether receiving compensation would unjustly enrich the other party, not the parties’ agreement or intent. The issue is whether the defendant received money that rightfully belonged to the plaintiff.

The elements for a successful “money had and received” claim are:

(1) the defendant has, or had, possession of money and

(2) the money belongs to the plaintiff in equity and good conscience.

Again, the plaintiff is not required to show that the defendant acted wrongfully, only that the defendant has money that rightfully belongs to the plaintiff. A defendant, however, may present any facts and raise any defenses that would deny the claimant’s right or show that in equity and good conscience the claimant should not recover.