This cause of action, in Texas collections, used to be called ‘assumpsit’. It is an equitable claim that usually should be pleaded in the alternative to another claim such as ‘conversion’ which will be discussed later.
This theory is usually applied to prevent unjust enrichment, and is based on a debt not evidenced by a writing, such as contract, promissory note, etc. So we’re talking here about an oral agreement. The theory asks whether Defendant is holding money that belongs to Plaintiff, and therefore, for Dallas collections lawyers, it is less restricted to technical rules and formalities. Staats v. Miller 243 SW2d 686 (Tex. 1951). If the money, in good conscience and equity belongs to Plaintiff, Plaintiff prevails in ‘money had and received’.
Whether Defendant has obtained the money wrongfully is irrelevant to this inquiry, wrongfulness is not the premise, but instead, the question asks whether Defendant received money, and that Plaintiff is the owner of the money, so it rightfully belongs to Plaintiff.
Q- what is what he is holding, is not exactly ‘cash’?
“Money” as used here, includes actual money itself, but also the equivalent of money such as property received as money and/or property converted into money before the lawsuit. Thus, the proceeds of a sale are included, including where parties agree beforehand to divide up proceeds from a sale, or, if property is on consignment. Very often, in Texas collections actions, this is an appropriate theory to collect on a dishonored check. It is also used when money has been paid by mistake. Also refunds being held; Tanglewood v. City of Texarkana 996 SW2d 330 (Texarkana 1999).
Damages recoverable include the amount of money being withheld, obviously, but also, upon proof of fraud and/or malice, exemplary damages are recoverable. Injunctive relief is also available, costs and interest, but not attorney’s fees. Edwards v. Mid-Continent (Dallas 2008); also Nowak v. Los Patios (San Antonio 1995).
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*The foregoing is not intended to provide specific legal advice, but instead only as a generalized discussion
Sam Emerick has over 35 years
experience in Commercial Collections Law,
Factoring Litigation and Wills, Trusts & Probate