City of Seattle v. Walker

• Decision Date: 28 October 1915
• Docket Number: 12396.
• Citation: 152 P. 330,87 Wash. 609
• Parties: CITY OF SEATTLE v. WALKER et al.
• Court: Washington Supreme Court

152 P. 330

87 Wash. 609

CITY OF SEATTLE v. WALKER et al.

No. 12396.

Supreme Court of Washington

October 28, 1915

Department 2. Appeal from Superior Court, King County; Everett Smith Judge.

Action by the City of Seattle against George W. Walker, contractor and another. From a judgment for defendants, plaintiff appeals. Affirmed.

Jas. E Bradford and Howard A. Hanson, both of Seattle, for appellant.

Turner & Hartge, of Seattle, for respondents.

MORRIS C.J.

The city of Seattle brought this action on November 19, 1913, to recover interest which it had illegally paid to the respondent Walker on certain local improvement district bonds issued by the city. The contracts, for payment of which the bonds were delivered, and the provisions of the bonds, were generally the same as those under consideration in the case of State ex rel. Grant Smith & Co. v. Seattle, 74 Wash. 438, 133 P. 1005. The bonds bore coupons carrying interest from their date until maturity, but were not delivered to the contractor until the monthly payments and final settlement on the contract became due; the final delivery not being made until over a year from the date of the bonds. As a result of this delivery long after their issuance, interest had accrued on the bonds when the respondent became entitled to receive them at their face value. We held in the Grant Smith Case, supra, that payment of any interest for the period between the date of the bonds and their delivery to the contractor was illegal. In this action the city sought to recover the interest thus illegally paid to the respondent. The respondent demurred to the complaint on the ground, among others, that the action was barred by the statute of limitations, and, the demurrer having been sustained by the trial court upon that ground, the city appeals. The appeal involves the consideration of two questions: First, what statute controls? Second, when does the statute begin to run?

1. The statutes, one of which is applicable to this case, are:

The three-year statute (Rem. & Bal. Code, § 159, subd. 3):

'An action upon a contract or liability, express or implied, which is not in writing, and does not arise out of any written instrument.'

The six-year statute (Rem. & Bal. Code, § 157, subd. 2):

'An action upon a contract in writing or liability express or implied arising out of a written agreement.'

The two-year statute (Rem. & Bal. Code, § 165):

'An action for relief not hereinbefore provided for shall be commenced within two years after the cause of action shall have accrued.'

In view of our decision in the Grant Smith Case, it will not be questioned that this payment was a payment made in violation of law, which may be recovered by the city in a proper action. The city has made an unlawful overpayment. The respondent has received an unmerited enrichment the retention of which is unjust, and in equity and good conscience he should repay the city. The law in such cases implies a liability to refund the illegal payment, and, if not refunded, an action will lie to recover the amount unjustly retained. Keener, Quasi Contracts, p. 40.

The action, therefore, arises out of an implied liability, and the two-year statute may be eliminated. While this payment was incidental to a lawful payment made pursuant to the terms of a written instrument, the payment itself was illegal, and was not contemplated by the terms of that instrument. The payment being in violation of the terms of the written contract,...