Union Insurance v. City of Allegheny

Mr. Justice Mercur

delivered the opinion of the court, November 20th 1882.

This suit was to recover money paid by the plaintiff under the following circumstances. One Logan owned certain lands, in the City of Allegheny, and in August 1874 executed a mortgage thereon to the plaintiff in the sum of $4,000. The latter obtained judgment, issued execution, sold the property at sheriff’s sale, bid it in for $50 and obtained a deed therefor in July 1877.

Municipal taxes had been assessed on the property for the years 1875 and 1876 which coidd not be collected for want of goods and chattels on which to levy. In March 1878 claims for these taxes were filed in the Prothonotary’s office under the Act of 14th July 1863, which provides for the entry of judgment thereon, the issuing of execution forthwith, and a sale of the *255 real estate. Execution had issued on one of the judgments thus obtained, the real estate then owned by the plaintiff was levied on, and advertised to be sold. The plaintiff paid the judgment under protest. A year thereafter the city solicitor demanded of the plaintiff payment of the other judgment for the taxes of 1876 with threat unless paid he would proceed to enforce payment by sale of its property. The plaintiff thereupon paid this judgment under protest. This action is to recover the sums thus paid for the taxes, interest and costs covered by both judgments.

It is conceded now that the lien of these taxes was discharged by the sheriff’s sale of the property made in 1877. The filing of the claims the year thereafter created no lien on the property. Does the fact that they were paid under protest when they were no lien, to prevent the form of sale being had, give a right to recover the sums so paid ?

It is well settled as a general rule of law, that money voluntarily paid on k claim of right, where there has been no mistake of fact, cannot be recovered back on the ground that the party supposed he was bound in law to pay it when in truth he was not: Clarke v. Dutcher, 9 Cowen 674. He shall not bo permitted to allege his ignorance of the law, and it shall be considered a voluntary payment: Id. In Brisbane v. Dacres, 5 Taunt. 144, Mr. Justice Gibbs said, where a man demands money of another as a matter of right, and he pays it with a full knowledge of the facts on which the demand is founded, he can never recover back the sum he has so voluntarily paid. The same principle is ruled in Morvall v. Wright, 1 Wend. 355 ; and Lyon v. Richmond, 2 Johns. Ch. Rep. 51 . Mr. Chief Justice Waite in pronouncing the judgment of the court in Railroad Co. v. Commissioners, 8 Otto 541 , which was a suit to recover back, taxes which the company had paid, declared it to be a rule of the common law that “ where a party pays an illegal demand with a full knowledge of all the facts which render such demand illegal, without immediate and urgent necessity therefor, or unless to release his person or property from detention or to prevent an immediate seizure of his person or property, such payment must be deemed voluntary, and cannot be recovered. And the fact that the party at the time of making the payment files a written protest does not make the payment involuntary.” He evidently referred to personal property of which the owner might summarily be dispossessed.

In Colwell v. Peden, 3 Watts 327 it was held that assumpsit would not lie against a landlord for money paid by a tenant after a warrant of distress had issued in good faith to recover rent alleged to be in arrear, although in fact no rent was actually due. It was there argued that tlie payment was *256 not voluntary, that the tenant must either pay or have his furniture sold ; yet the court held the tenant could not recover by reason of there being no rent due. He might have maintained either trespass or replevin. Espy v. Allison, 9 Id. 462 , was the case of a purchaser of land at sheriff’s sale, who, under the impression that he was liable to pay a bond, secured by mortgage on the property purchased, paid the same, and afterwards discovered that he was not bound to pay it by reason of the mortgage having previously been satisfied of record, it was held he could not recover the money back, as the holder of the bond had conscientiously received the same. In Boas v. Updegrove, 5 Barr 516, an execution had issued on a judgment against the former owner of the laud to sell it. The terre-tenant supposing the judgment to still be a lien on the land after it was advertised for sale paid the money to the sheriff who returned the writ “ money made by” the terre-tenant. Before the return day of the writ the latter ruled the money into court and proved that the judgment was no lien and that he had paid it under a mistake. It was held to be a voluntary payment which the terretenant could not have recovered back, and that the plaintiff in the execution was entitled to the money. It was said to be money which the creditor might conseionably receive and which he might conseionably retain. In Taylor v. The Board of Health, 7 Casey 73, it was held that a payment of taxes is not compulsory because made under a threat, express or implied, that the legal remedies for its collection will be resorted to. It is there said, “we state the case as one of a.voluntary payment of taxes because there is no pretence that the defendant’s officers did any more than demand the tax under a supposed authority of the law ; and this is no more a compulsion than when an individual demands a supposed right.”

Again, in Real Estate Savings Institution v. Linder, 24 P. F. Smith 371, it was held that one who voluntarily pays money with knowledge or means of knowledge of the facts, and without fraud on him, cannot recover it back, because he paid it in ignorance of the law. In Dillon on Municipal Cor. § 751, the requisites to maintain .an action ex contractu against a municipal corporation to recover back money paid to it for taxes are said to bo three: 1. The authority to levy the tax must be wholly wanting or the tax itself wholly unauthorized, so that the tax is absolutely void. 2. The money sued for must have been actually received by the defendant corporation for its own use. 3. The payment by the plaintiff must have been made upon compulsion to prevent the immediate seizure of, his goods or the arrest of the person and not voluntarily. “ Unless these conditions concur, payment under protest will not give a right of recovery.” No authority is found which holds *257 that money paid to prevent the sale of lands under a threat to sell the same on a judgment which is nob a lien thereon, can be recovered back by reason thereof.

Then to refer to the facts in‘this- case we find no allegation that the taxes were illegally laid. No averment of irregularity in making the assessment or in laying the taxes. The city had undoubted jurisdiction and power, and all the forms of the law were complied with. The only alleged wrong consists- in the attempt to collect the taxes by proceedings against the land after it ceased to be liable for the payment thereof. At the time the taxes were paid each party was fully informed of all the facts bearing on the case. The plaintiff knew them then as well as now. They were all of record, and most of them in the direct line of its title. It knew when the mortgage was executed. It knew the time when it purchased the property at sheriff’s sale. The claims filed showed on their face that they were for taxes laid after the execution of the mortgage, and for years prior to the sheriff’s sale. The only question about which the parties could possibly differ was one of law. That was whether under the well known and undisputed facts the lien of the taxes was divested. The city proposed to test it in a regular legal form. They had been duly laid ; they had never been paid to the city ; the property did not sell for enough to pay them, if it had claimed and obtained the whole fund produced by the sale. They remained unsatisfied against Logan. There was nothing inequitable or unconscionable in the city’s acceptance of the taxes and in retaining them.

It is said the plaintiff had not had its day in court. True, it had not. The taxes were not laid against it, nor its property. The company did not propose to attack the validity of the assessment. In several of the cases cited the party had had no day in court'. No hearing or opportunity of being heard ; yet he might have had it before making payment, by appropriate action. Failing to avail himself of it, be waived his rights. So .here by application to the equitable powers of the-court or by bill in equity execution might have been staid, and the claim removed from the record. No immediate and urgent necessity existed for the payment of the taxes to protect the property of the .plaintiffs. Its goods were not about to be seized. The execution could not take from it the possession of the land ; nor could a sale if made, have had such effect. It follows that all the facts in the ease are clearly insufficient to enable the plaintiff to maintain this action, and the learned judge was correct in so holding. Judgment affirmed.

Sharswood, C. J., and Gordon and Trunkey,. JJ., dissented;