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55-561: This principle derives from late Roman law, as stated in the Latin maxim attributed to Sextus Pomponius , Jure naturae aequum est neminem cum alterius detrimentum et injuria fieri locupletiorem ("By natural law it is just that no one should be enriched by another's loss or injury"). In civil law systems, it is also referred to as enrichment without cause or unjustified enrichment . In pre-modern English common law, restitutionary claims were often brought in an action for assumpsit and later in

110-529: A book on the law up to the time of Hadrian, known as the Enchiridion ( Ancient Greek : Ἐγχειρίδιον , Enkheidírion , "Handbook"). A long excerpt of the work forms part of Justinian 's Digest dealing with the origin of the Roman Constitution and various offices . This article about an Ancient Roman jurist is a stub . You can help Misplaced Pages by expanding it . Equitable tracing Tracing

165-452: A circumstance, B is entitled to get Rs 10 from A under the law of torts. However, B might prefer to apply law of restitution instead (waiver of torts), and claim that he needs a copy of G rather than Rs 10. Whether or not a claimant can seek restitution for a wrong depends to a large extent on the particular wrong in question. For example, in English law, restitution for breach of fiduciary duty

220-470: A claim for money had and received . The seminal case giving a general theory for when restitution would be available is Lord Mansfield 's decision in Moses v Macferlan (1760), which imported into the common law notions of conscience from English chancery . Blackstone's Commentaries also endorsed this approach, citing Moses . Where an individual is unjustly enriched, modern common law imposes an obligation upon

275-512: A crown prosecutor for Hong Kong , received bribes for passing information to organised crime in Hong Kong. Under Hong Kong law, the proceeds of those bribes were held on constructive trusts for the government of Hong Kong. Mr Reid then invested the proceeds of the bribes in land in New Zealand , and the land increased substantially in value. When he was caught, Mr Reid admitted that the money

330-610: A modified version of the Roman concept of causa (cause), which renders contracts actionable even when they are not normally recognized under Roman law. In contrast, the concept of unjustified enrichment is considerably broader and more frequently invoked in Germany and Greece to address issues of restitution as well as restoration for failed juridical acts. Equitable tracing is a particularly well suited remedial tool. ТДрЧ See also : English unjust enrichment law In systems of law derived from

385-457: A prominent early American jurist (and author of influential treatises on equity), held that recovery was available in equity for mistaken improvements to land (i.e., when the person improving the land later learns that he did not own the land), citing the Latin maxim against enrichment at another's detriment. Federal patent and copyright law has long allowed recovery for either damages or profits. In Livingston v. Woodworth , 56 U.S. 546 (1854),

440-410: A solicitor’s account and the solicitor takes that money to buy a painting, then A may be able to make a claim against the painting. This claim will take priority even if the solicitor is bankrupt and has other unsecured claims against him. Judicially, probably the most famous example of a tracing claim is Attorney‐General for Hong Kong v Reid [1994] 1 AC 324, [1994] 1 NZLR 1 (PC), where Mr Reid, then

495-533: A strong influence on the reflexions regarding contracts of prostitution. The interpretations of Roman law principles on unjustified enrichment, by the French jurist Jean Domat and the German jurist Friedrich Carl von Savigny , formed the respective origins of the modern French and German law on unjustified enrichment. Domat developed the French unjustified enrichment principles based on the actio de in rem verso , as well as

550-505: A suit). This may be treated as a distinct basis for restitution, or it may be treated as a subset of unjust enrichment. Unjust enrichment is not to be confused with illicit enrichment , which is a legal concept referring to the enjoyment of an amount of wealth by a person that is not justified by reference to their lawful income. In civil law systems, unjust enrichment is often referred to as unjustified enrichment. Its historical foundation of enrichment without cause can be traced back to

605-439: Is restitution : the restoration of what was conferred to the claimant. In short, the correcting of the injustice that occurred when the claimant suffered a subtraction of wealth and the defendant received a corresponding benefit. Restitution can take the form of a personal or a proprietary remedy. Where a personal remedy is awarded, the defendant is ordered to pay the money value of the benefit received. This personal money award

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660-402: Is a body of legal obligations under the common law and equity – but separate from tort and contract law – that is available to take away an enrichment that lacks an adequate legal basis. A claim of restitution for unjust enrichment “results from a transaction that the law treats as ineffective to work a conclusive alteration in ownership rights.” The Third Restatement and its predecessor,

715-406: Is a legal process, not a remedy, by which a claimant demonstrates what has happened to his/her property, identifies its proceeds and those persons who have handled or received them, and asks the court to award a proprietary remedy in respect of the property, or an asset substituted for the original property or its proceeds. Tracing allows transmission of legal claims from the original assets to either

770-718: Is available for violations of federal securities law because the SEC is authorized to seek “equitable relief” under 15 U.S.C. § 78u(d)(5). In AMG Capital Management, LLC v. FTC (2021), the Supreme Court held that statutory authority for the Federal Trade Commission to sue for an “injunction” does not authorize suit for restitution. The court unanimously held that the statutory language refers to prospective equitable relief, and does not include retrospective monetary relief. In Pearson v. Target Corp. , 968 F.3d 827 (7th Cir. 2020),

825-429: Is generally "available in any intentional-tort case in which the tortfeasor has made a profit that exceeds the victim's damages." (The Third Restatement puts further qualifications, including that restitution for wrongs is not available where an injunction to prevent the tort would have been inequitable.) Sextus Pomponius Sextus Pomponius ( fl.  2nd century ) was a Roman jurist who lived during

880-491: Is mostly determined by the law of each state and territory. However, it can also be a remedy under federal law. Also in 1938, the enactment of the Federal Rules of Civil Procedure merged procedures for law and equity and replaced the common-law forms of action with a single civil action. This has, to some extent, blurred differences between legal and equitable restitution, and obscured awareness of legal restitution's origin in

935-540: Is satisfied if a Plaintiff establishes a reason why the benefit ought not be retained, or if the Defendant demonstrates a convincing argument in favour of retention of the property. Remedy for unjust enrichment is frequently an imposition of constructive trust over the property unjustly retained. The law of unjust enrichment in England rapidly developed during the second half of the 20th century. It has been heavily influenced by

990-466: Is the typical form of restitution ordered. Where a proprietary remedy is awarded, the court recognises (or declares) that the defendant has a beneficial or security interest in specific property of the defendant. Whether proprietary remedies can be awarded depends on the jurisdiction in question. Imagine that A commits a wrong against B and B sues in respect of that wrong. A will certainly be liable to pay compensation to B. If B seeks compensation then

1045-424: Is unjustly enriched at A's expense. On the "absence of basis" approach, B's enrichment has no legitimate explanatory basis because the contract was void. On the "unjust factor" approach, there has been a total failure of consideration – that is, A has received no part of the bargained-for counter-performance; restitution follows automatically from the fact of invalidity. The remedy for unjust enrichment

1100-507: Is widely available but restitution for breach of contract is fairly exceptional. The wrong could be of any one of the following types: Note that 1–5 are all causative events (see above). The law responds to each of them by imposing an obligation to pay compensatory damages. Restitution for wrongs is the subject which deals with the issue of when exactly the law also responds by imposing an obligation to make restitution. In Attorney General v Blake , an English court found itself faced with

1155-659: The Court of Cassation , which has ruled that unjust enrichment is a general principle of law. The Court has stated that the legal basis for unjust enrichment is equity ( ius aequum ). According to the Court, five elements constitute unjust enrichment: The doctrine of unjust enrichment was definitively established as a fully fledged course of action in Canada in Pettkus v. Becker, 1980 CanLII 22 (SCC), [1980] 2 SCR 834 To establish unjust enrichment,

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1210-542: The Restatement on Restitution (1937), advocate for treating restitution as a unified and cohesive body of law, rather than a muddled variety of miscellaneous legal and equitable claims, remedies, and doctrines such as quantum meruit , quantum valebant , account of profits , quasi-contract , constructive trust , money had and received , and so forth. Because the common law is mostly governed by state law, especially after Erie Railroad Co. v. Tompkins (1938), restitution

1265-469: The Seventh Circuit held that equitable restitution is available for a practice known as "objector blackmail," where objectors to a class action settlement drop their objections on behalf of the class in return for a private payment in excess of the rest of the class. In Williams Electronics Games, Inc. v. Garrity , 366 F.3d 569 (7th Cir. 2004), Judge Richard Posner held that restitution for wrongs

1320-483: The Corpus Iuris Civilis. While the concept of enrichment without cause was unknown in classical Roman law, Roman legal compilers eventually enunciated the principle of unjustified enrichment based on two actions of the classical Roman period—the condictio and the actio de in rem verso . The condictio authorized recovery by the plaintiff of a certain object or money in the hands of the defendant. The defendant

1375-465: The English common law , the historical core of the law of unjust enrichment lies in quasi-contract . These were common law (as distinct from equitable ) claims giving rise to a personal liability to pay the money value of a benefit received from another. Legal scholars from Oxford , Cambridge and Harvard at the turn of the 20th century began to rationalise these disparate actions into a coherent body of law. The principle said to underlie these actions

1430-483: The Justinian Code, based on Roman pragmatism with equitable considerations and moral principles of Greek philosophy. In the Justinian Code, condictiones were grouped into categories, such as when the plaintiff had given a thing or money: Further, the actio de in rem verso gradually expanded to cover instances in which third parties were enriched at the expense of the impoverished obligee, and unjustified enrichment

1485-588: The Plaintiff needs to show: (i) enrichment; (ii) deprivation; (iii) causal connection between enrichment and deprivation; and (iv) absence of juristic justification for the enrichment. The concept of deprivation and enrichment are extremely broad. Deprivation refers to any loss of money or money's worth in the form of contribution while A is enriched if B contributes to the acquisition of assets in A's name. The causal connection between enrichment and deprivation must be "substantial and direct". The absence of juristic reason

1540-594: The Supreme Court held that a patent-owner could sue in equity for an infringer’s profits, saying that the ill-gotten profits belonged “ ex aequo et bono ” to the owner of the patent. Later, recovery for either damages or profits was codified in statute. The Supreme Court identified recovery of profits under the Copyright Act as a form of equitable relief for “unjust enrichment” in Sheldon v. Metro-Goldwyn Pictures Corp. (1940). In Trustees v. Greenough 105 U.S. 527 (1881),

1595-555: The Supreme Court held that, in a representative suit in equity (later known as a class action ), a representative plaintiff who recovers a "common fund" for the benefit of all represented plaintiffs (absent class members) may recover attorney fees from the fund, preventing enrichment of the absent plaintiffs at the expense of the representative plaintiff. This is an exception to the " American rule " that litigants must pay their own attorney fees (absent statutory exceptions). In Central Railroad & Banking Co. of Georgia v. Pettus (1885),

1650-479: The Supreme Court ordered restitution by Nebraska as an equitable remedy for breach of an interstate water-sharing agreement with Kansas. The majority cited the Third Restatement to support the availability of restitution for “ opportunistic breach ” of contract. In Liu v. Securities and Exchange Commission (2020), the Supreme Court held that restitution (usually called “disgorgement” in U.S. securities law)

1705-475: The United States had to return the money paid for the lease.) In Great-West Life and Annuity Insurance Company v. Knudson , 534 U.S. 204 (2002), the Supreme Court noted that legal restitution and equitable restitution are not historically identical, and so it held that legal restitution is not covered by a provision of ERISA authorizing only equitable relief. In Kansas v. Nebraska , 574 U.S. 445 (2015),

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1760-522: The action of assumpsit . One early case in the Supreme Court, Bingham v. Cabot (1795), was a suit at law for money had and received , quantum meruit , and quantum valebant (three "common counts" for legal restitution). (The decision focused on other questions, including whether the case should have been brought in admiralty and whether in deciding a writ of error the court could take notice of certain facts.) In Bright v. Boyd , 4 F. Cas. 127, 132-34 (C.C.D. Maine 1841), Justice Joseph Story ,

1815-415: The actual cost of "G". For example, suppose B possesses a rare book from the 14th century (G), which cost only Rs 10 in that period. A has illegally stolen G (from B) and has destroyed it. Currently very few samples of G exist in the world, yet since its demand is not much, G still costs Rs 10. Since very few samples exist in the world, it is near impossible to find a person from whom G could be bought. In such

1870-405: The background of a complex factual matrix. However, the law itself is also complex, and a number of key aspects of the law remain ambiguous in many countries. In most jurisdictions, there are several reasonably well establishing defences to tracing claims, although the case law is not entirely consistent. The common defences to an equitable tracing claim are: Importantly, in each case it is only

1925-462: The claimant. However, the court was careful to point out that the normal legal response to a breach of contract is to award compensation. An order to make restitution was said to be available only in exceptional circumstances. Whether there is a distinct body of law in Australia known as the law of unjust enrichment is a highly controversial question. In Pavey & Mathews v Paul (1987) 162 CLR 221

1980-582: The concept of unjust enrichment was expressly endorsed by the High Court of Australia. This was subsequently followed in numerous first instance and appellate decisions, as well as by the High Court itself. Considerable skepticism about the utility of the concept of unjust enrichment has been expressed in recent years. The equitable basis for the action for money had and received has instead been emphasised and in Australian Financial v Hills [2014] HCA 14

2035-402: The conceptual approach does not affect the outcome of a case. For example, suppose that A makes an oral contract with B under which A will pay $ 100 for certain services to be provided by B. Further suppose that A pays the money but B discovers that, pursuant to legislation, contracts for such services are void unless in writing. B refuses to perform. Can A recover his payment? On both approaches, B

2090-406: The court award will be measured by reference to the loss that B has suffered as a result of A's wrongful act. However, in certain circumstances it will be open to B to seek restitution rather than compensation. It will be in B's interest to do so if the profit that A made by his wrongful act is greater than the loss suffered by B. Or in some circumstances, the lost good "G" carries more value to B than

2145-503: The court held that the representative plaintiff could not, however, recover a salary for the time spent litigating. Restitution is available in equity to recover money previously paid to satisfy a court judgment that is later reversed, as the Supreme Court held in Atlantic Coast Line R. Co. v. Florida , 295 U.S. 301 (1935). However, the Court therefore noted that equitable defenses are available where it would not be fair to require

2200-482: The equitable process is almost universally relied upon, as equitable tracing can be performed into a mixed fund. "Tracing is thus neither a claim nor a remedy. It is merely a process by which a claimant demonstrates what has happened to his property, identifies its proceeds and the persons who have handled or received them, and justifies his claim that the proceeds can properly be regarded as representing his property." - Foskett v. McKeown For example, if A has money in

2255-429: The following claim. The defendant had made a profit somewhere in the region of £60,000 as a direct result of breaching his contract with the claimant. The claimant was undoubtedly entitled to claim compensatory damages but had suffered little or no identifiable loss. It therefore decided to seek restitution for the wrong of breach of contract. The claimant won the case and the defendant was ordered to pay over his profits to

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2310-540: The fragmented law into one framework, drawing from the principles of Roman Law upon which Scots Law as a whole is based (note the term "unjustified" is preferred to "unjust" in Scotland). Unjustified enrichment is more established as a fundamental part of the Scots law of obligations than unjust enrichment is in English law. The Restatement (Third) of Restitution and Unjust Enrichment (2011) (“R3RUE”) states that unjust enrichment

2365-506: The mere receipt of a benefit from another is unobjectionable and does not attract legal consequences. The exception is where such receipt is "unjust" or "unjustified". Both civil and common law legal systems have bodies of law providing remedies to reverse such enrichment. A conceptual split, albeit one not necessarily coextensive with the common law - civil distinction, is between systems based on an "unjust factor" approach and systems based on an "absence of basis" approach. In most cases,

2420-415: The money to be returned. In Mobil Oil Exploration & Producing Southeast, Inc. v. United States , 530 US 604 (2000), the Supreme Court ruled that, in a contract with the United States (one of few areas where federal contract law applies), repudiation is grounds for restitution, even if the contract was repudiated by a statute. (Congress had blocked Mobil's offshore oil lease, so

2475-537: The plurality held that the concept of unjust enrichment was effectively 'inconsistent' with the law of restitution as it had developed in Australia. It is worth noting that the analytic framework had been expressly endorsed by the High Court just two years before in Equuscorp v Haxton [2012] HCA 7 . For the moment, the concept of unjust enrichment appears to serve only a taxonomical function. The reception of unjust enrichment into Belgian law has been upheld multiple times by

2530-403: The proceeds of sale of the assets or new substituted assets. Tracing ordinarily facilitates an equitable remedy , and is subject to the usual limitations and bars on equitable remedies in common law countries. In many common law countries, there are two concurrent processes, tracing at common law and tracing in equity . However, because the right to trace at common law is so circumscribed,

2585-451: The recipient to make restitution , subject to defences such as change of position and the protection of bona fide purchasers from contrary equitable title. Liability for an unjust enrichment arises irrespective of wrongdoing on the part of the recipient, though it may affect available remedies. And restitution can also be ordered for wrongs (also called "waiver of tort" because election of remedies historically occurred when first filing

2640-484: The reigns of Hadrian , Antoninus Pius , and Marcus Aurelius . Sextus was a fairly common Roman given name ( praenomen ) while his surname seems to indicate he belonged to the Pomponia family ( gens ). Other writers have expressed a view that the name Sextus Pomponius was shared by another jurist, although Puchta suggested the assumption of two Pomponii was unsupported by the evidence. S. Pomponius wrote

2695-496: The writing of Professor Peter Birks and expressly endorsed by English courts. The framework provides a useful taxonomical function in Australian law, though, the concept of unjust enrichment has been subject to inconsistent treatment by Australian courts, as discussed below. Stated at this level of abstraction, the framework is a useful grounding for comparative study between common law and civil law jurisdictions. Generally speaking,

2750-426: The writings of jurists from Oxford and Cambridge . England adopts the "unjust factor" approach. In Scotland, the law developed in a piecemeal fashion through the twentieth century, culminating in three pivotal cases in the late 1990s. The most crucial of these was Shilliday v Smith , in which Lord Roger essentially laid the bedrock for what is now considered modern Scots unjustified enrichment law, bringing together

2805-416: Was considered a borrower who was charged with returning the object or money. For the actio de in rem verso , the plaintiff bore the burden of specifying the cause for his demand, namely, demanding the restitution of assets that had exited the plaintiff's patrimony and entered the defendant’s patrimony through the acts of the defendant’s servants. The coherent concept of unjustified enrichment then appeared in

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2860-403: Was entitled to the full value of the land, as without his wrong, Mr Reid would never have made those profits and it would be grossly inequitable for him to keep them. Tracing claims have two key advantages to claimants. The law of tracing is enormously complex, even to practitioners. Characteristically, tracing claims tend to involve fraud, and as a result most claims (and case law) are against

2915-461: Was eventually recognized as unjust enrichment. Subsequent scholarship has sought to expand the explanatory power of the principle of unjust enrichment and it is now often said (albeit not without controversy) to encompass both common law and equitable claims. Cases of unjust (or unjustified) enrichment can be examined in the following way: These questions are a familiar part of the modern English law of unjust enrichment , having been popularised by

2970-453: Was recognized as a source of obligations under the heading of "quasi-contract". For the School of Salamanca members, like Tomás de Mercado , the prohibition of unjustified enrichment finds directly his source in natural law , which doesn't allow a privileged party, and in the principle of commutative justice. Thus it manages apply to the entire law on propriety and contract. It had, for example,

3025-574: Was subject to a constructive trust, but argued that he should only be liable to repay the amount of the bribes, and then any profit attributable to the increase in value of the land in New Zealand was not connected with his wrongdoing. However, the Judicial Committee of the Privy Council held that the government of Hong Kong's claim to the money could be traced into the land, and thus the claimant

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