This is a diversity of citizenship action by the appellee Equilease Corporation (Equilease) to recover $100,665.40 which it mistakenly paid for the benefit of the appellants, John G. Hentz, Jr., Ruth A. Hentz, John Leslie Hentz and Frances H. Hentz (hereinafter collectively referred to as appellants). The district court, following a non-jury trial, found that the appellants had been unjustly enriched by the payment and ordered restitution; however, the court found in favor of the appellants' third party claim against Lando. On this appeal only the district court's holding requiring appellants to repay Equilease is at issue.1 We reverse this holding.

The facts, though complex, are for the most part undisputed. Prior to October, 1973, the appellants owned a dairy farm located in Washington County, Florida. Marianna Production Credit Association ("MPCA") held a mortgage on the farm securing a renewable loan account, which in October, 1973, had a balance of approximately $300,000. On October 11, 1973, the appellants sold the farm and equipment to Dr. Lester Lando at a price of $1,250,000. In return, Lando paid a sum of money and agreed to assume payment of appellants' real property mortgages to MPCA and Mutual of New York (MONY). Lando also agreed to pay the appellants $1,500 per month. This payment was consideration for appellants allowing another farm owned by appellants in Bay County, Florida, to remain encumbered by the mortgages to MPCA and MONY assumed by Lando. These two mortgages were secured by the Washington County farm and the Bay County farm. Lando also executed a note for $300,000, the unpaid balance of the purchase price. The note and other obligations were secured by a mortgage on the real estate and a security agreement on the equipment at issue here, both in favor of the appellants. The mortgage was filed with the Clerk of the Circuit Court in and for Washington County. A financing statement covering the equipment was filed in the office of Secretary of State of Florida but was not filed in Washington County, as required by Florida law, until much later, i. e., June 20, 1975.

On January 21, 1974, Lando and his brother Solomon Lando sold the farm equipment to Tri-Continental Leasing Company; Tri-Continental, in turn, leased the equipment back to the Landos. One week later, Tri-Continental assigned the lease to the appellee, Equilease Corporation. Equilease took a security interest in the equipment.

Although a record search commissioned by Equilease revealed no prior liens on the equipment, MPCA had informed Tri-Continental and Equilease that it held a security interest in the equipment. In fact, MPCA had only a mortgage on the realty.2 The Landos directed Tri-Continental to pay a portion of the proceeds of the equipment sale to MPCA "to satisfy recorded lein(s) (sic) covering the equipment." (Plaintiff's exhibit 1). Tri-Continental then directed Equilease to pay a portion of the proceeds of the sale to MPCA as Lando had directed, and the balance of the proceeds to Lando. (Plaintiff's exhibit 2)3 Thereupon, Equilease paid $100,665.40 to MPCA and paid the remainder of the proceeds, approximately $25,000, to the Landos. MPCA informed the appellants of the payment and the money was used to satisfy appellants' obligation to MPCA.

Lando defaulted on his obligations to the appellants and they filed suit in the Circuit Court in and for Washington County, Florida, for foreclosure of their mortgage and security agreement. A judgment of foreclosure was entered and appellants acquired title to the property at a public auction; however, Lando was given credit for the $100,665.40 paid by Equilease to MPCA.

Upon discovering that MPCA did not have a security interest in the equipment, Equilease filed the instant suit to recover the money it paid to MPCA for appellants' benefit. The district court, without a jury, found that the payment was made as a result of a mistake of fact and that the appellants had been unjustly enriched by the payment. The court concluded that equity required that the appellants make restitution of the money.

This is a diversity case in which the substantive law of Florida applies. Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938). Under Florida law, a plaintiff may recover money paid by mistake of fact to a defendant if, in equity and good conscience, the defendant should not be allowed to keep the money. See Moss v. Condict, 154 Fla. 153, 16 So. 2d 921 (1944); Central Bank & Trust Co. v. General Finance Corp., 297 F.2d 126 (5th Cir. 1961); 11 Fla.Jur.2d, Contracts § 242. The form of such a cause of action is alternatively referred to as one for restitution, unjust enrichment, quasi-contract, or an action for money had and received. By whatever name, the theory of recovery is a creature of equity and governed by principles of equity. Consequently, restitution may be denied where circumstances make it unfair or unjust to require the payee or recipient to repay the money or benefit conferred.

The appellants raise two well-known defenses to an action for restitution. First, they allege that they received the payment in good faith in partial satisfaction of a valid claim against Lando. Second, they argue that they have changed their position in reliance on the payment by crediting it toward Lando's obligation.

It is well settled under Florida law that money paid under a mistake of fact cannot be recovered where the payee "received it in good faith in satisfaction of an equitable claim, nor where it was due in honor and conscience." Pensacola and A. R. Co. v. Braxton, 34 Fla. 471, 16 So. 317 (1894). The rule enjoys universal acceptance. See Strubbe v. Sonnenschein, 299 F.2d 185 (2d Cir. 1962); Restatement of Restitution §§ 13 and 14; 58 C.J.S., Money Received, § 28. "In situations of endless variety, courts have denied restitution because money paid by one party was received in good faith by the other, in satisfaction of or as security for a valid claim against a third person." III G. Palmer, The Law of Restitution, § 16.6 at 490-91 (1978) (footnotes omitted). It is patently unfair to require an innocent payee who has received and used the money to satisfy a debt to repay the money. In this case, the undisputed facts show that Equilease owed the money to Lando either as the purchase price for the equipment or as loan proceeds. At Lando's request and under the mistaken belief that MPCA had a lien on the equipment, Equilease paid the $100,665.40 to MPCA. MPCA in turn used the money to retire the appellants' debt to it4 and the appellants credited the payment toward satisfaction of Lando's admittedly valid obligation to appellants. The payment was not gratuitous. The situation is the same as if Equilease had paid Lando and Lando had used the money to help satisfy his obligation to appellants. Under those circumstances, Equilease would have absolutely no claim against the appellants, because the appellants would have had a right to receive the money. Therefore, we believe that the facts demonstrate that appellants received the payment in good faith in partial satisfaction of a valid claim against Lando. They fall within the claim of right defense, i. e., they had a sufficient legal or equitable claim so that equity will not compel restitution.5

The second defense is that the appellants changed their position in reliance upon the payment of money. Change of position or detrimental reliance is also a defense to an action to recover money paid by mistake if the circumstance renders it inequitable to require restitution. Goodbody & Co., Inc. v. Sultan, 346 F. Supp. 1375 (S.D.Fla.1972); Langbein v. Comerford, 215 So. 2d 630 (Fla.App.1968); Restatement of Restitution, § 142; Annot. 40 A.L.R. 2d 997 (1955). In reliance upon the payment, the appellants credited Lando for the payment at the foreclosure on the farm. There is some question as to whether the mere bookkeeping act of crediting a partial payment to the payor's account is a sufficient change in position to make restitution inequitable. See III G. Palmer, The Law of Restitution, § 16.8 (1978); Annot. 40 A.L.R. 2d 997, 1016 (1955). In this case, however, the appellants have irrevocably changed their position by crediting Lando with the payment so that the judgment of foreclosure did not include the $100,665.40. See Richey v. Clark, 11 Utah 467, 40 P. 717 (1895).6 We conclude that it would be inequitable to require the appellants to make restitution.

We have examined the considerations which would make restitution inequitable from the appellants' point of view, as the cited authorities suggest is proper. However, since restitution is an equitable remedy, common sense suggests that we also examine the equities with respect to Equilease. We note that Equilease did not make a mistake in paying the money, but rather made a mistake as to the proper payee. It is undisputed that Equilease was going to pay the money at issue to Lando if it had not paid MPCA. Therefore, to restore the parties to the status quo would require the appellants to repay Equilease and would require Equilease to pay the money to Lando. Equilease has neither more nor less money as a result of the mistake. There is no equity at all supporting a required repayment to Equilease.7 Moreover, if we focus on the equities as between Lando and appellants, it is clearly not equitable to make appellants repay Lando because Lando owed that money and more to appellants and Lando knew he had given appellants a security interest in the very equipment he was trying to sell or mortgage to Equilease.8

REVERSED.