Soderberg v. King County

The opinion of the court was delivered by

Gordon, J.

Appeal from judgment of the superior court of King county in favor of defendant. This action was brought by plaintiff, as assignee of divers persons, judgment debtors in various forecloseure proceedings, claiming to be entitled to a surplus arising upon each of such foreclosure sales. There are thirty-five separate and independent causes of action, all based upon similar facts, and governed by a common rule of law. The aggregate amount claimed is $2,004.84. There was no redemption in any case, and the plaintiff in each of the foreclosure actions became the purchaser. From the record it appears that the amount claimed as surplus in each ease was the sum claimed by the sheriff as fees and commission in conducting the sale, and that the sheriff thereafter paid into the treasury of the respondent county the several amounts, under the mistaken belief that it was his duty to deduct a commission from the amount bid in the respective cases, and turn the amount so collected or deducted into the county treasury, as he is by law required to in all cases where fees as compensation for official services are received by him.

Two principal defenses are urged: First, that the sums claimed by plaintiff were not surplus, to which the plaintiff’s assignors were entitled, but constituted a fee or commission which the officer making the sale claimed the right to charge, and which the purchaser at the sale knowingly paid to such officer as a commission charge on said sale; and that “ neither the appellant nor his assignors had or has any interest in or ■concern with the money or transaction, but the same is a matter between the purchaser and the sheriff.” The second .ground of defense is:

“ That the sheriff’s payment to the county of this indebtedness due from him to either the county or the appellant’s assignors was voluntary, with full knowledge of all the facts, under a claim of the county to payment in its own right, and not" in any wise as the agent of or pretending to be authorized to receive the same for or on behalf of appellant’s assignors; that the county claimed said payment as creditor of the sheriff on account of his liability to the county for all fees and commissions received by him; that the sheriff was indebted for the amounts herein claimed as surplus, either to the county as for commissions, or to the respective judgment debtors as for surplus; and that his payment of this indebtedness to the county, an independent claimant, in preference of the respective judgment debtors, also independent claimants, does not invest appellant,'as assignee of said judgment debtors, with a right of action against respondent for the amounts of these payments, upon a money demand, as for money had and received or otherwise, although it may be true that of right the sheriff should have made such payments to appellant’s assignor.”

It becomes necessary to ascertain whether appellant’s assignors were entitled to the respective sums claimed from the sheriff conducting the sales. Counsel for respondent do not seriously contend that they were not, and this court held in State, ex rel. Thompson, v. Prince, 9 Wash. 107 (87 Pac. 291), that a sheriff was not entitled to a commission upon the sale of mortgaged premises under a decree of foreclosure where the property was bid in by the plaintiff for the amount of the mortgage debt. It matters not that the officer believed that 'he was by law entitled to and required to retain a commission upon such sale, and that this opinion was concurred in by the bidder, because, in contemplation of the law, the property is sold for the highest sum bid, and the law makes the application of the purchase price. To give effect to what is asserted to have been the intention of the purchaser, viz.; that a portion of the sum bid by him was in payment of a commission which the sheriff conducting the sale demanded, and which the bidder supposed he had a right to demand, would be, in effect, to give such purchaser a preference at the sale, and would be to permit the bidder and the officer to control and apply the proceeds of the sale. He bids a lump sum for the property, not a certain sum for the land, and an additional sum as and for costs and commission. The reasons-which induced him to make the bid are quite immaterial, and cannot be inquired into. He is conclusively presumed to know the law. Were the rule otherwise, how could it be ascertained that the actual purchaser was the highest bidder? The amount claimed by appellant as a surplus in one of these causes of action is about $500. The logic of respondent’s position is that .the purchase price in that case was theoretically $500 less than the amount actually bid. Who can say that this $500 might not have deterred some other bidder, who likewise would be presumed to know the law, but might well bé ignorant of what was really intended by the rival bidder? There is one sufficient answer to this. That is that the judgment debtor is entitled to an accounting for the sum actually bid as the purchase price of the property sold, and that the law directs how the purchase price shall be applied. Therefore it is not competent to inquire the reasons which may have actuated the purchaser in making his bid. It cannot be told that he would have received the property'had his bid been less than it actually was. Suppose that the judgment debtor had availed himself of his statutory right to redeem from the sale; is it not clear that he would have been obliged to pay the amount for which the property was sold as returned by the sheriff, including the very sum which is here termed a “commission,” wrongfully but mistakenly claimed by the sheriff, and voluntarily paid by the purchaser? Our conclusion is that the sum claimed constituted a surplus in the hands of the sheriff, which it was his duty to have paid to the judgment debtor. Wilkinson v. Baxter’s Estate, 97 Mich. 536 (56 N. W. 931); Mitchell v. Weaver, 118 Ind. 55 (10 Am. St. Rep. 104, 20 N. E. 525).

2. The remaining question is, will assumpsit lie against the county for the recovery of such surplus which the sheriff has wrongfully and mistakenly paid into its treasury? Counsel for the respondent insist that the county stands in the position of an independent and adverse claimant, and that it only received from' the sheriff payment of a claim alleged upon its part, and that payment by the sheriff “upon its independent claim does not discharge the sheriff from .such indebtedness if, as a matter of' right, appellant’s assignors were entitled to have it paid to them by the sheriff.” It is not pretended that the respondent has any valid or legal-right to the moneys in controversy. It received the moneys of plaintiff’s assignors without' right or consideration, and it would be inequitable for it to retain the sums so received. Under such circumstances, the law implies a promise of restitution for the benefit of the rightful owner. As was said by Judge Field in Pimental v. City of San Francisco, 21 Cal. 352:

“ If the city obtain the money of another by mistake, or without authority of law, it is her duty to refund it. . . . If she obtain other property, which does not belong to her, it is her duty to restore it, or, if used, to render an equivalent therefor. . . . The legal liability springs from the moral duty to make restitution. And we do not appreciate the morality which denies in such cases any rights to the individual whose money or other property has been thus appropriated. The law countenances no such wretched ethics; its command always is to do justice.”

Nor can plaintiff’s right of action be defeated upon the ground of “ voluntary payment ” made to respondent by the sheriff. As regards the plaintiff or his assignors, the payment is not to be considered a voluntary payment.' It was made without their knowledge or consent.

But it is insisted that there is no privity between the plaintiff or his assignors and the respondent respecting the transaction. It is well settled that

“ An action for money had and received lies against any one who has money in his hands which he is not entitled to hold as against the plaintiff, and want of privity between the parties is no obstacle to the action.” Bank of Metropolis v. First Nat. Bank of Jersey City, 19 Fed. 301.

In Bayne v. United States, 93 U. S. 642, the supreme court of the United States say :

“Assumpsit will lie whenever the defendant has received money which is the property of the plaintiff, and which the defendant is obliged by natural justice and equity to refund.”

A well-considered case, which involved this very question, is that of State v. Village of St. Johnsbury, 59 Vt. 332 (10 Atl. 531, 533). In the course of the opinion in that case, this language appears :

“But'it is said that assumpsit for money had and received will not lie, for that there is no privity between the state and the village, as the latter received from third persons, and has retained the money in good faith, under an adverse claim of right and ownership. But, in order to maintain this action, there need be no privity between the parties, nor any promise to pay, other than what arises and is implied from the fact that the defendant has money in his hands belonging to the plaintiff, that he has no right conscientiously to retain. In such case the equitable principle on which the action is founded implies the promise. When the fact is found that the defendant has the plaintiff’s money, if he can show neither legal nor equitable ground for keeping it, the law creates the privity and the promise.”

The rule was announced by ' the court of king’s bench as early as 1725, in the case of Attorney General v. Perry, 2 Com. 481, that

“ Whenever a man receives money belonging to another without any reason, authority, or consideration, an action lies against the receiver as for money received to the other’s use; and this as well where the money is received through mistake, under color, and upon an apprehension, though a mistaken apprehension of having good authority to receive it, as where it is received by imposition, fraud, or deceit in the receiver.”

In addition to the authorities already cited, the proposition is fully sustained in Haebler v. Myers, 132 N. Y. 363 (28 Am. St. Rep. 589) (30 N. E. 963); United States v. State Bank, 96 U. S. 30; Criswell v. Whitney, 13 Ind. App. 67 (41 N. E. 78); Board v. Robinson, (N. M.) 34 Pac. 295; Brand v. Williams, 29 Minn. 238 (13 N. W. 42); Knapp v. Hobbs, 50 N. H. 476. Respondent’s counsel concede “that the considerations relating to the liabilities of individuals in such cases apply to respondent;” and we know of no reason why (hecommon obligation to do justice, which is binding upon individuals, is not equally applicable to a county. Indeed, in many of the cases cited, the action was upheld against municipal corporations.

A further defense, of the statute of limitations, was interposed by respondent to five of the thirty-five causes of action. As to this defense, the lower court found against the respondent, and we think its finding in this particular was correct.

For the reasons given, we think that the appellant is entitled to recover; and the judgment will be reversed, and the cause remanded for further proceedings in accordance herewith.

Anders and Dunbar, JJ., concur.