Peters v. Railroad Company.

not in justice to be kept; and it lies only for money which et æquo et bono the defendant ought to refund. Now if a tax-collector receive a tax by a misconstruction of law honestly made, and the tax-payer pays it also in ignorance of the law, and it be paid voluntarily, and the tax-collector pays it over to the State or to a municipal corporation, as the case may be, and the tax so paid is expended by the muncipal corporation in the improvement of the municipality, it may be in improving a street or road in front of the tax-payer's prop erty, it would seem altogether proper that such tax-payer ought not to be permitted to recover such tax back from either the tax-collector of the State or municipality. It would be obviously unjust to permit it to be recovered of the tax-collector who did only what he as well as the tax-payer believed to be his duty, and who has not the money in his hands but has honestly paid it over to the State or municipality. The tax-payer of course could not recover it against the State; for no suit can be brought against the State; and he could not justly recover it of the municipality which has honestly expended it perhaps in a manner directly enhancing the value of the real estate of the party paying the tax. Taylor v. Board of Health, 31 Penn. St. 73.

Again, in some States the payment of certain municipal taxes cannot be enforced by a sale of property by the tax-collector; and the voluntary payment of such a tax to the tax-collector would stand on the same footing as the voluntary payment of a debt to a natural person. This consideration had its weight in the case of the Mayor, etc., of Richmond v. Judah, 5 Leigh, 305, where according to the syllabus: A citizen of Richmond paid money to the corporation under a belief of both parties, that it was due for city taxes imposed by an ordinance of the corporation when it was not so due. Held, it cannot be recovered back.' That the fact that the officer to whom this tax was paid had no means of coercing its payment had its weight in this decision, appears in Judge CARR's opinion, p. 315.

'Again, in some States a tax-payer may enjoin the collection of a tax if it be an illegal tax. When this can be done it might well influence the decision of a case where a tax-payer sought to recover back a tax which he had paid. This question, whether the illegal tax could or could not be enjoined, seems to have been regarded as a material element in determining whether an illegal tax paid could be recovered back. Stephens v. Daniels, 27 Ohio St. 535. The numerous authorities on the question, whether an illegal tax paid can be recovered back, will show other circumstances entering into the decisions of the question, which are peculiar to such cases, and which render their authority of comparatively little weight, where the question is, whether a debt paid to an individual, which was not justly due, can be recovered back. I shall therefore devote no more time to an examination of these cases of illegal taxes paid and then sought to be recovered back, and shall confine my examination to those cases, which either directly or more proximately bear on the question involved in this case, if more freight be demanded by a railroad company than it has a legal right to demand, and such unjust demand is complied with, and more freight is paid than is legally due, he can recover it back, and if so under what circumstances.

"The

case of Thomas v. City of Richmond, 12 Wall. 349, did not involve

Peters v. Railroad Company.

directly the question presented by this record; but Justice BRADLEY, in delivering the opinion of the court, on page 355 lays down certain principles, which, it seems to me, have a considerable bearing on it. He says: Lord Mansfield in Smith v. Bromley, 2 Doug. 696, as long ago as 1760 laid down the doctrine, which has ever since been followed, in these words: 'If the act be itself immoral or the violation of the general law of public policy, both parties are in pari delicto; but when the law violated is calculated for the protection of the subject against oppression, extortion and deceit, and the defendant takes advantage of the plaintiff's condition or situation, then the plaintiff shall recover." The rule thus stated would, when applied to such a case as that before us, lead to the conclusion, that if a party pays to a railroad company more freight than the company could legally demand, he could recover it back, if the railroad company in demanding the illegal amount for freight took advantage of the condition or situation of the plaintiff; for the laws fixing the maximum charges of railroad companies were expressly intended to protect persons sending freight from the extortion or oppression of railroad companies. 'There have been one English case and a number of recent American cases bearing directly on the question. Under what circumstances would the demand of a railroad company of an illegal amount for freight be regarded as a taking advantage of the situation of a party sending freight, so as to make his payment of the illegal amount of freight demanded a payment under compulsion and enable him by an action to recover of the railroad company the amount he paid in excess of the legal charge? The English case is Parker v. Great Western Railway Company, 7 Man. & G. 253, decided in 1844. In that case the plaintiff was charged by the defendant for freight certain rates which it demanded, and it refused to carry the freight for the plaintiff unless he would pay its charges in full; and the plaintiff to get his goods carried paid them in full, protesting that they were greater than the defendant had a right to demand. He afterward brought an action of assumpsit to recover back the money which he had paid in excess of the legal charges, and recovered the amount. On the question whether the money so paid could be recovered back in this action of assumpsit, the court on page 292, 49 Eng. Com. L. says: 'It was argued by the defendant that it could not; for the payments were made voluntarily with a full knowledge of all the circumstances, and the plaintiff was not compelled to make these payments, but in each case must be considered as having made a contract with the company to pay a certain sum of money as the consideration for the carriage of his goods; and having made such contracts he cannot now retract and recover the money paid in pursuance of them. In support of this argument Knibbs v. Hall, 1 Esp. 84; Brown v. McKinley, 1 Esp. 279; Bilbie v. Lumley, 2 East. 469, and Brisbane v. Deans, 5 Taunt. 143 were cited. On the other side it was argued that they could not be considered as voluntary payments; that the parties were not on an equal footing; that the defendant would not, till such payments were made, perform that service for the plaintiff, which he was entitled by law to receive from it without making such payments; and that consequently he was acting under coercion; and in support of this view of the case Dew v. Parsons, 2 B. & Ald. 562; 1 Chitt. 295; Morgan v. Palmer, 2 B. & C. 729; 4 D. & R. 283; and Waterhouse v. Keen, VOL. LI-104

Peters v. Railroad Company.

4 B. & C. 200; 6 D. & R. 257, were cited. We are of opinion the payments were not voluntary. They were made in order to induce the company to do that which they were bound to do without them; and for the refusal to do which an action on the case might have been maintained, as expressly decided in the case of Pichford v. Grand Junction R. Co., 10 M. & W. 399; and in this respect the case very much resembles that of v. Pigott, mentioned by Lord KENYON in Cartwright v. Rowley, 2 Esp. 723. That was an action brought to recover back money paid to the steward of a manor for producing at a trial some deeds and court-rolls, for which he had charged extravagantly. The objection was that the money had been voluntarily paid, and so could not be recovered back again; but it appearing that the party could not do without the deeds, so that the money was paid through necessity and the urgency of the case, it was held to be recoverable. We think the principle on which this decision proceeds is a sound one, and strictly applicable in the present case, and that the defendants cannot by the assistance of that rule of law, on which they relied, retain the money they have improperly received.'

"In Swift Company v. United States, 111 U. S. 29, the court citing the above case approvingly, says: The appellant had no choice. The only alternative was to submit to an illegal exaction or discontinue its business. It was in the power of the officers of the law and could only do as they required. Money paid or other value parted with under such pressure has never been regarded as a voluntary act within the meaning of the maxim volenti non fit injuria. In Close v. Phipps, 7 M. & Gr. 586, which was a case of money paid in excess of what was due to prevant a threatened sale of mortgaged property, TINDAL, Ch. J., said: The interest of the plaintiff to prevent the sale by submitting to the demand was so great, that it may well be seen the payment was made under what the law calls a species of duress.' And in Parker v. G. W. Ry. Co., 7 M. & Gr. 253, the wholesome principle was recognized, that payments made to a common carrier to induce it to do what by law without them it was bound to do, were not voluntary and might be recovered back. Illegal interest, paid as a condition to redeem a farm, was held in Astley v. Reynolds, 2 Stra. 915, to be payment by compulsion. This case was followed after a satisfactory review of the authorities in Tatt v. Ide, 3 Blatchf. 249; and in Ogden v. Maxwell, 3 Blatchf., it was held that illegal fees exacted by a collector, though santioned by long continued usage and practice in the office under a mistaken construction of the statute, even when paid without protest, might be recovered back, on the ground that the payment was compulsory and not voluntary. And in Maxwell v. Griswold, 10 How. 242-253, it was said by this court: Now it can hardly be meant in this class of cases, that to make a payment voluntary, it should be by actual violence or any physical duress. It suffices if the payment is caused on the one part by an illegal demand, and made on the other part reluctantly and in consequence of that illegality and without being able to regain possession of his property, except by submitting to the payment.' To the same effect are American Steamship Co. v. Young, 89 Penn. St. 186; s. c., 33 Am. Rep. 748; Cunningham v. Munroe, 15 Gray, 471 ; Carrew v. Rutherford, 106 Mass. 1; Preston v. Boston, 12 Pick. 7. In Beckwith v. Frisbie, 32 Vt. 559-566, it was said: "To make a payment voluntary

Peters v. Railroad Company.

the parties should stand upon an equal footing.' If a person illegally claims a fee colore officii, the payment is not voluntary so as to preclude the party from recovering it back. Morgan v. Palmer, 2 B. & C. 729. In Steel v. Williams, 8 Exch. 625, MARTIN, B., said: 'If a statute prescribes certain fees for certain services, and a party assuming to act under it insists upon having more, the payment cannot be said to be voluntary. No formal protest made at the time is by statute a condition to the present right of action, or in cases of action against the collector to recover back illegal taxes exacted.'

"In the same spirit as these remarks are the views expressed by the Supreme Court of the United States in Railroad Company v. Lockwood, 17 Wall. 379, in speaking of contracts by a railroad company, with customers for exemptions from responsibilities. The court say: 'The carrier and his customer do not stand upon a footing of equality. The latter is only one individual of a million. He cannot afford to higgle or stand out and seek redress in the courts. His business will not admit of such a course. He prefers rather to accept any bill of lading or sign any paper the carrier presents, often indeed without knowing what one or the other contains. In most cases he has no other alternative but to do this or abandon his business.'

'The oldest decision in this country directly on the question under discussion which I have found, was rendered in 1871. It was the case of McGregor v. Erie R. Co., 35 N. J. 89. In that case the court say: The defendants at the time of the delivery of the goods disputed a part of the charges made by the railroad company, but paid them, and afterward brought an action of assumpsit to recover back the amount over paid.' On page 112 the court say: 'It is undoubtedly a general rule of law, that money voluntarily paid with a full knowledge of the facts even if for an unjust claim, and even if paid under protest simply, cannot be recovered back. There are many cases however to which this rule does not apply. The action for money had and received, speaking generally, lies to recover money which in equity and good conscience ought to be refunded. But this expression is too general as a guide. The ordinary cases where it is maintained are stated by Lord MANSFIELD in the case of Moses v. McFarland, 2 Burr. 1009, very concisely as follows: 'But it lies for money paid by mistake, or upon a consideration which happens to fail, or for money got through imposition, express or implied, or an undue advantage taken of the plaintiff's situation, contrary to laws made for the protection of persons under those circumstances.' Although the decision in Moses v. Mc Farland is overruled, yet this statement of the Lord Chief Justice is cited approvingly in the law. In ordinary cases between individuals, where a person has no power to enforce an unjust claim but by legal remedies, and another pays it, even under protest, he cannot recover it. Both parties are on an equal footing. But where they are not on an equal footing and money is paid, not by compulsion of law, but by compulsion of the circumstances, as when it is paid to relieve goods from illegal restraint which could not otherwise be reasonably obtained, or to compel the performance by others in order to enjoy or obtain a right, then it may be recovered back. Of this latter kind are moneys paid under order of tolls or charges on turnpikes or railroads. Feamley v. Morley, 5 B. & C. 25; Parker v. G. W. R. Co., 7 M. & G. 253; Parker v. Bristol

Peters v. Railroad Company.

and Exeter R. Co., 6 Exch. 702. The principle of these cases is that money was paid involuntarily in point of fact and in order to induce the parties to do what they were obliged to do without requiring the payment. It was the right of the plaintiffs to have their goods carried for the legal rates, and if it was reasonably necessary for the plaintiffs to pay the unjust demand in order to enjoy that right, and they did then pay under protest, the payment will not be considered as voluntary. The case of Parker v. G. W. R. Co., the company refused in terms to carry the goods unless paid its demands. In the case of Feamley v. Morley, 5 B. & C. 25, the gate of a turnpike being closed, a coachman was prevented from proceeding, the coachman protesting but paying the toll demanded. In these cases there was an express refusal; but I do not consider it necessary that the refusal should be express. It is sufficient if the person has just and reasonable ground to apprehend that unless the money is paid his goods will not be carried or will be withheld. Where a corporation or person has the power to refuse a right, to which a party is entitled, unless he complies with an unjust demand, they do not stand upon an equal footing. The courts will not be illiberal in allowing a person to act upon his reasonable apprehension of such refusal when the circumstances fairly show that unless he does submit to the illegal demand, his right will be withheld, There are indications in the following cases to that effect in principle. Valpy v. Manley, 1 M. G. & S. 594; Morgan v. Palmer, 2 B. & C. 729; Steel v. Williams, 8 Exch. 624. I find no case directly ruling this point, but the principle seems to be this; that if in the dealing with a railroad corporation the illegal demand is of such a character, as that a person of ordinary prudence would be justified in believing, that unless he did submit to it, the carriage of his goods or their delivery when carried would be denied, and he does submit under protest, then it is not voluntary; and in most cases the facts should be left to the jury to say whether the payment under the particular circumstances was voluntarily

or not.

In the case before us the company had issued a general order to their agents to make an additional charge. It was peremptory, without any modification, and the company have no right to say that was an experiment. The local agents had no right to receive goods at less rates or to take less in payment of carriage. The plaintiffs were doing a daily business which could not help but be injured by interruptions. Their business was done in this way: There would be at least one freight each way a day; the bill from the down freight from Paterson and the up freight from Jersey City would be paid the next day after the carriage was accomplished and the goods generally delivered. When the two first bills were presented, after the terminal was imposed, which was about the next day after the up and down freights of November 1, 1869, the plaintiffs refused to pay the terminal, and protested against it, but afterward paid it, and protested against succeeding bills a number of times, and asked the cashier if it was necessary to have this protest in writing and he said no; then they asked him if it was necessary to protest every time, and the cashier said it was considered a protest against all the bills the plaintiffs would have to pay. The undisputed facts of the case show that the plaintiffs and the cashier considered that these sums were being paid under protest, and were