City of Louisville v. Anderson, &C.

• Citation: 79 Ky. 334
• Parties: City of Louisville v. Anderson, &c. Same v. Joyes.
• Decision Date: 19 March 1881
• Court: Court of Appeals of Kentucky

79 Ky. 334

City of Louisville v. Anderson, &c.

Same v. Joyes.

Court of Appeals of Kentucky.

March 19, 1881.

APPEALS FROM LOUISVILLE CHANCERY COURT.

T. L. BURNETT, CITY ATTORNEY, FOR APPELLANT.

SIMRALL & BODLEY, P. JOYES, AND W. LINDSAY FOR APPELLEES.

JUDGE PRYOR DELIVERED THE OPINION OF THE COURT.

These several actions in equity were instituted in the Louisville chancery court by George W. Anderson and others against the city of Louisville, in which it is alleged that they (the plaintiffs) are the owners of certain real estate in the county of Jefferson, within the corporate limits of the city of Louisville, a municipal corporation created by the laws of the state, and authorized to sue and be sued; that this corporation for a number of years not only claimed the right, but did in fact tax the lands of the plaintiffs (now apellees) for its own municipal purposes, and to defray the expenses of its municipal government. The lands taxed are then particularly described, as well as the assessment, levy, and collection of the taxes for each year, and it is further alleged that the land had been used during those years for farming purposes, and that the same had never been appropriated to or used for city purposes, and the jurisdiction, authority, and government of the city are of no use or benefit to the land or its owners; that the extension of the boundary of the city so as to embrace this land was to enable the corporation to tax it, and thereby increase its revenue, and for no other purpose; that the taxation was unjust and illegal, and is not now imposed on the land, and the said city authorities have, since the collection of these taxes, expressly declared that this land was not the subject of taxation, nor does the corporation now claim or assert the right to tax this property. The appellees also allege, they paid these taxes under a mistake of law and fact, and in ignorance of their rights, and when they believed the city, by reason of its charter, had the right not only to extend its boundaries, but when extended, had the right to tax all property within its corporate limits, and being satisfied the same was a legal charge on the land, and that the corporation would proceed, as it threatened to do, to coerce payment by a sale of the property; that the corporation, on a proper demand made, refused to refund the money wrongfully collected. These, in substance, are the facts alleged in each petition, and the only denial by the city is, the payments were not made under a mistake of law or fact, and an affirmative allegation that, in view of the location of the land and its relation to the city population and improvements, the right of the corporation to tax was at least questionable, and the appellees, with a full knowledge of all the facts, consented to the tax, and paid it voluntarily, and without even a protest. The corporation also pleaded the five years' statute of limitation, and the appellees replied that they did not discover the mistake made by them as to their legal rights until the tenth of January, 1877, to which there was no rejoinder.

The chancellor adjudged the appellees entitled to recover on the ground that they made the payment under a mistaken belief as to the right of the city to impose the taxes, and that it would proceed to sell the property (as it had threatened) if the taxes were not paid. It is plain, if the decision of this court in the case of Courtney against the city is adhered to, the corporation had no right to levy these taxes, and equally as clear the appellees paid them under a mistaken belief that the city had the right to impose the burden. There was no question raised between the corporation and these tax-payers as to their liability for the tax, and therefore it was not paid by way of compromise or when the appellees had reason to doubt the exercise of such a power on the part of the corporation. It is maintained by counsel for the city, in an argument of much force, and not wanting in authority to support it, that although the city may have had no right to tax this property, and the payment of the tax was made by appellees under a mistake as to their legal rights, they cannot recover back the money. This is the sole question in the case.

A demurrer was filed by the city to the several petitions; but that pleading presents the same question as that arising from the proof. This court will assume, without discussing the facts of the case, that the corporation exceeded its power in levying this tax and requiring its payment. The proof is conclusive on that question. It is argued by counsel for the city that this question does not arise upon any contract made between the corporation and the tax-payer, but by reason of a contribution imposed by the former on the latter for public purposes; and when this burden is imposed, there is a moral and political duty resting on the citizen to discharge it, and although the tax is unconstitutional, if voluntarily paid, cannot be recovered back.

In the case of Underwood v. Brockman, 4 Dana, this court said: "When it can be made perfectly evident that the only consideration of a contract was a mistake as to the legal rights or obligations of the parties, and where there has been no fair compromise of bona fide and doubtful claims, we do not doubt that the agreement might be avoided on the ground of a clear mistake of law, and a total want, therefore, of consideration or mutuality." This doctrine had been previously announced by this court, in the case of Fitzgerald v. Peck, and was followed in the case of Ray v. Thornton, 3 B. Mon., in which it is said: "Whenever, by a clear and palpable mistake of law or fact, essentially bearing upon and affecting the contract, money has been paid without cause or consideration, which in law, honor, or conscience was not due and payable, and which in honor and good conscience ought not to be retained, it was and ought to be recovered back." The same doctrine has also been recognized in numerous other cases decided by this court, in all of which the court has been careful to say, in substance, that where the parties are differing as to whether a contract was entered into, or the nature and character of its stipulations, or have made a compromise of an honest and bona fide claim, the chancellor will not grant relief on the ground either of a mistake of law or fact. The Supreme Court of Connecticut, in Northrop v. Grave, 19 Conn., says: "We mean distinctly to assert, that when money is paid by one under a mistake of his rights and duty, and which he was under no legal or moral obligation to pay, and which the recipient has no right in good conscience to retain, it may be recovered back, whether such mistake be one of fact or law, and this, we insist, may be done both upon the principle of Christian morals and the common law." In the class of cases...