Summary
In Cleveland, a mortgage company sought recovery of monies paid for delinquent sewerage charges under threat to disconnect water services and upon a claim of mistaken belief that the city had a valid tax lien on account of the sewerage service.
Summary of this case from First Fed. S. L. Assn. of Galion v. HayesOpinion
No. 29568
Decided December 15, 1943.
Municipal corporations — Sewerage service charges — Payment of valid lien, upon threat of discontinuance of water service — Not involuntary payment under duress, when — Repayment not required as payment under mistake of fact or misrepresentation, when.
1. Payment to a municipality in satisfaction of a valid lien for sewerage service charges, upon the mere threat that water service would be discontinued if such payment was withheld, does not constitute involuntary payment under duress whereby the amount can be recovered.
2. If by the exercise of reasonable diligence one can obtain knowledge of a fact and fails or neglects to do so and thereupon pays money to discharge a legitimate debt, he cannot require its return as having been paid under a mistake of fact or a misapprehension.
CERTIFIED by the Court of Appeals of Cuyahoga county.
The present action was begun in the Court of Common Pleas of Cuyahoga county by Union Properties, Inc., as plaintiff, against the city of Cleveland, as defendant, to recover the sum of $1,408.92, with interest.
Two causes of action were set up in the petition. It was alleged as the first cause that by virtue of a city ordinance certain sewerage service charges were made by the city against a number of parcels of real estate on which plaintiff then held mortgages; that plaintiff purchased these properties at sheriff's sale upon foreclosure; that thereafter the auditor of Cuyahoga county placed such sewerage service charges upon the county records as a lien against the properties purchased; and that plaintiff paid such charges in the amount of $1,258.97, under threat by the city to disconnect the water service into such properties and under the mistaken belief that the city had a valid tax lien upon such properties on account of the sewerage service.
The second cause of action involved, another group of properties sold by the sheriff upon mortgage foreclosures instituted by plaintiff, and against which sewerage service charges were assessed and placed on the tax duplicate after the commencement of the foreclosure proceedings. The claim is made that the sheriff paid such charges to the county treasurer for the benefit of the city, in the sum of $149.95, under the mistake of fact that the charges represented taxes and were a valid lien upon the properties.
A demurrer to the petition being overruled, the city filed an answer and an amended answer, the latter containing the defenses: (1) That all payments made by plaintiff on account of sewerage service were voluntarily made to extinguish proper charges; (2) that plaintiff's right to recover most of such payments was barred by the one-year "statute of limitations" in Section 12075, General Code; and (3) that the sewerage service charges paid by plaintiff or on its account represented valid tax liens upon the respective properties prior to any lien, if any, which plaintiff may have had, and the payments were not recoverable for that reason.
The cause was tried upon the pleadings and an agreed statement of facts, and resulted in a judgment for the plaintiff for the principal amount claimed. On appeal to the Court of Appeals, the judgment below was reversed for "error of law," and final judgment rendered for the defendant.
In its opinion the Court of Appeals held: (1) That the liens for sewerage service charges were in the nature of taxes and assessments, and were properly enforceable; (2) that most of the payments, on account of the sewerage service charges, having been made more than a year before plaintiff commenced the action, their recovery was barred by Section 12075, General Code; and (3) that the payments, having been voluntarily made to discharge valid liens, were not recoverable.
The judges of the Court of Appeals finding the judgment of reversal to be in conflict with the judgment of the Court of Appeals in Grim v. Village of Louisville, 54 Ohio App. 270, 6 N.E.2d 998, certified the case to this court for review and final determination.
Mr. Harold O. Ziegler and Mr. Sylvester Marx, for appellant.
Mr. Thomas A. Burke, Jr., director of law, and Mr. James M. McSweeney, for appellee.
Was the Court of Appeals correct in reversing the judgment of the trial court and denying the plaintiff recovery?
Section 3891-1, General Code, appearing in the chapted entitled "Assessments," authorizes the council of a municipality by ordinance to establish fair rates or charges for the use of the municipal sewerage system which "shall constitute a lien upon the property served by such connection and if not paid when due shall be collected in the same manner as other city and village taxes."
Pursuant to this statute, the city of Cleveland enacted ordinance No. 558-A-38, authorizing and fixing charges for the use of its sewerage system and providing that the amount of an unpaid charge be certified by the director of finance to the auditor of Cuyahoga county to be placed on the county tax duplicate, against the property served, for collection as other taxes are collected.
Under the foregoing statute and ordinance the city makes the principal contention that a lien was created for sewerage service "in the nature of a tax, as a special assessment," which takes precedence over all claims of the plaintiff.
Plaintiff assumes the position that the charges for sewerage service are neither a tax nor an assessment, and if construed as a tax would be violative of Section 2. Article XII of the Constitution of Ohio; that the mortgage indebtedness owed it on the various properties takes priority over the sewerage service charges; and that such charges were paid involuntarily under duress, or under a mistake of fact.
Since it is apparent that under an ordinance having statutory sanction charges for sewerage service were duly certified and entered against the premises served, on the real property duplicate of the county, valid liens were thereby created against such realty. Home Owners' Loan Corp. v. Tyson, 133 Ohio St. 184, 12 N.E.2d 478.
Certain stipulations in the agreed statement of facts are revealing. It is agreed that the property described in the statement of the first cause of action in the petition was acquired by the plaintiff, and the charges for sewerage service were paid by it directly to the treasurer of the city of Cleveland. That as to the property described in the statement of the second cause of action the charges were paid by the plaintiff to the sheriff of Cuyahoga county who in turn paid them to the county treasurer, the latter disbursing the same to the city treasurer.
Other stipulations are:
"13. That plaintiff would testify that threats had been made to disconnect water service serving the various parcels unless the plaintiff paid said sewerage charges, and would further testify that if said water service was disconnected the properties would become unsanitary and a menace to the health and safety of the occupants of said property and to the general public.
"14. That the defendant would call the commissioner of water for the city of Cleveland who would testify that within his knowledge and from the records in said department there was no threat to disconnect water for failure to pay sewerage charges. He would further testify that it is not and was not the policy of the water department of the city of Cleveland to discontinue water service for failure to pay sewerage charges.
"That plaintiff would call Mr. E.F. Chapman, an officer of the plaintiff, who would testify [over objection] that he believed the city would disconnect the water service for failure to pay the sewerage charge, * * *.
"15. That the sheriff paid to the county treasurer the sewerage charges as though they were collected as taxes."
In 17 American Jurisprudence, 875, Section 4, it is said:
"To constitute duress, making a payment of money involuntarily, there must be unlawful coercion, destroying free agency to pay or not to pay, according to one's own will."
And later in the same volume it is stated, at page 885, Section 11:
"The mere fact that a person is in fear of some impending peril or injury, or in a state of mental perturbation at the time of doing any act, is not sufficient ground for holding that the act was done under duress."
Compare, Moore v. Adams, 8 Ohio, 372, 374, 32 Am. Dec., 723; 9 Ohio Jurisprudence, 285, Section 52.
Here, the most that plaintiff claims with respect to the payment it sent directly to the city treasurer is that the same was made under threat that water service would be discontinued and upon the belief of one of its officers that the water service would in fact be disconnected. Surely, payment under these circumstances falls short of involuntary payment under duress or compulsion within the above definitions.
The cases of Peters, Ricker Co. v. Marietta Cincinnati Rd. Co., 42 Ohio St. 275, 51 Am. Rep., 814, and Reinhard v. City of Columbus, 49 Ohio St. 257, 31 N.E. 35, relied upon by plaintiff, involved forced payment of claims having an illegal foundation, and are therefore distinguishable from the instant case.
Plaintiff also contends that the payment made by it directly to the city treasurer and the one made through the sheriff were due to a mistake of fact, which entitles it to a return of the payments.
Some duty rested on plaintiff to ascertain for what purpose it was expending its money. Upon slight investigation it would have discovered that its funds were being delivered to be applied in satisfaction of a valid lien against its real estate, and if it believed, after such investigation, that no obligation to pay existed, payment could have been withheld. Had the city, without right or justification, actually discontinued the water service for refusal to pay, the courts were open for prompt relief.
The rule is that if by reasonable diligence one, under a legal duty to do so, can obtain knowledge of a fact, and fails or neglects to do so, and thereupon pays money to discharge a legitimate debt, he cannot require its return as having been paid under a mistake of fact or a misapprehension. Simmons v. Looney, 41 W. Va. 7138, 24 S.E. 677.
Also distinguishable from the present case is the one of Woolley v. Staley, Treas., 39 Ohio St. 354, cited by plaintiff in its brief, where a taxpayer, under the justified belief that there was a legal charge against his property upon the tax duplicate, paid the amount thereof, when in fact no such charge appeared and he was under no legal or moral duty to respond. In that situation, the court sanctioned recovery on the ground that payment was exacted under a mistake of fact.
Taking the view of the instant case as indicated, it is unnecessary to consider or decide whether the lien for sewerage service charges placed against the real estate on the tax duplicate was in the nature of taxes or assessments, taking priority over the indebtedness due plaintiff on its mortgages.
The judgment of the Court of Appeals was correct and is accordingly affirmed.
Judgment affirmed.
WEYGANDT, C.J., MATTHIAS, HART, BELL, WILLIAMS and TURNER, JJ., concur.