Money Had and Received as a Cause of Action in New York

A cause of action for “money had and received” is a legal tool used when one person or company receives money that, in fairness, belongs to someone else. This type of claim does not depend on a written contract. Instead, it relies on principles of fairness and justice. In New York, a plaintiff must prove three specific elements to succeed on a claim for money had and received.

The Defendant Received Money Belonging to the Plaintiff

The first requirement is that the defendant actually received money that rightfully belongs to the plaintiff. This can happen in many situations, such as overpayments, mistaken transfers, or when a person receives funds as part of an agreement that turns out to be invalid.

For example, if a business mistakenly wires $10,000 to a former vendor who was no longer owed any money, that vendor has received funds that belong to the business. The key issue is not whether there was a formal agreement, but whether the money in the defendant’s hands was truly the plaintiff’s.

The Defendant Benefitted from Receipt of the Money

The second element is that the defendant benefitted in some way from having the money. This can be as simple as the defendant gaining use or control of the funds. The benefit does not have to be large, and the money does not have to still be in the defendant’s possession at the time of the lawsuit. What matters is that the defendant had access to it and could use it as their own.

In the earlier example, the vendor who received the mistaken payment was able to use the money, even if temporarily, which qualifies as a benefit.

It Would Be Unfair for the Defendant to Keep the Money

The third and final element focuses on fairness. The plaintiff must show that, under the circumstances, it would be unjust or inequitable for the defendant to keep the money. This is where courts look at basic principles of good conscience. Even if the defendant didn’t act with bad intent, the question is whether it is fair for them to retain money they should not have received in the first place.

Conclusion

The cause of action for money had and received is rooted in equity. It allows someone to recover funds that were mistakenly or unfairly paid to another person or business. Plaintiffs do not need to prove fraud or breach of contract. Instead, they need to show that the money belongs to them, the defendant received and benefitted from it, and that keeping the money would be unfair. This cause of action is particularly useful in situations where there is no formal agreement but fairness demands that the money be returned.

Find the Law

“The essential elements of a cause of action for money had and received are (1) the defendant received money belonging to the plaintiff, (2) the defendant benefitted from receipt of the money, and (3) under principles of equity and good conscience, the defendant should not be permitted to keep the money (internal citations omitted).” Eastchester Fire Dist. v. Condon, 2017 N.Y. Slip Op. 32975, 3 (N.Y. Sup. Ct. 2017)