Thomas T. Kelly, Appellee, v. The Board of County Commissioners of the County of Miami, Appellant, 85 Kan. 38

The opinion of the court was delivered by Mason, J.: In 1902 Thomas T. Kelly was a candidate for state treasurer. Charges were made that he had been guilty of misconduct while county clerk from 1890 to 1894, which had resulted in losses to the county. On February 15, 1902, the board of county commissioners made an investigation of the matter, and filed a report in effect sustaining the charges against him.

On April 11, 1902, he presented to the board a written proposal, asking them to make an investigation and determine whether he was indebted to the county, and if so in what amount, and agreeing to accept their findings. At the same time he deposited $1000 with them to cover any amount for which they might find him liable. The commissioners accepted the proposal, made an investigation, and prepared a written report to the effect that he was indebted to the county in the sum of $1324.99, which they filed on May 15, 1902. On that day they notified him of the finding and requested him to pay the balance of $324.99.

On July 7, 1902, he paid that amount. On July 8, 1907, he began action against the county to recover the $1324.99. A referee reported in his favor and a judgment was rendered accordingly, from which the county appeals. The report of the referee is for the most part devoted to the question whether the plaintiff had in fact been indebted to the county.

It includes a finding that the evidence “does not show the wrongful payment of any sum to plaintiff and does not show that he ever at any time obtained any money unlawfully from the county.” This finding is complained of, but it was made by the referee upon a mass of evidence, a part of which was oral, and having been approved by the trial court is not open to review here. Complaint is also made of the rejection of certain evidence, but it is at least doubtful whether a sufficient foundation was laid to make that ruling reviewable.

The present inquiry is therefore limited to the question whether, irrespective of the merits of the original controversy, the plaintiff could maintain his action. The defendant asserts:

(1) That if the commissioners’ acceptance of the plaintiff’s offer constituted a valid. contract, their finding was conclusive, unless they acted in bad faith, which was not the case; (2) that the amount sued for was paid voluntarily, and therefore can not be recovered; and (3) that the claim is barred by the failure to present it to the county board for allowance within two years (Gen. Stat. 1868, ch. 25, §47, Gen. Stat. 1909, § 2123) and by the three-year statute of limitations (Civ. Code, § 17, subdiv. 2).

If the proposal made to the commissioners and accepted and acted upon by them amounted to a contract for the settlement of the controversy, their decision, if made in good faith, was final and binding. The fact that the investigators were representatives of one of the parties would not affect the matter. An officer of a municipality is often made the arbitrator of its disputes with its contractors, and his decisions are as conclusive as though he were disinterested. (23 L. R.

A., n. s., 317, note.) The referee found that the investigation made by the commissioners was “not thoroughly made in accordance with the spirit and intent of the agreement.” This can hardly be regarded as a finding of bad faith, and seems rather to suggest error through want of sufficient information. It will not be necessary, however, to pass upon this feature of the matter, as a similar question, relieved of some of the difficulties of this one, arises upon the consideration of the next contention.

The theory is advanced in behalf of the plaintiff that the $324.99, like the $1000, was merely deposited with the commissioners as security for the payment of whatever sum might be found due upon some final investigation to be made later. But the established facts do not bear out that theory. The decision of the commissioners made on May 15, 1902, purported to be final. On June 5, 1902, they made an order for the application of the $1000 to the claimed indebtedness, and it was accordingly at that time transferred to the treasury for the use and benefit of the county.

Two days later they filed a statement, which was spread upon the journal, setting out the items upon which their finding was based, and giving a

summary of each transaction involved.

On July 14, 1902, an order was made that the board proceed in August to examine the accounts of all county officers for the period between 1888 and 1900; and on October 14, 1902, a report was filed regarding a number of “errors and irregularities,” but this does not appear to have been made the basis of any claim against the plaintiff, and expressly stated that it did not include “the irregularities of his office as shown ... in a former report, whereby he was found to be indebted to, and paid back to Miami county, the sum of $1324.99.” The plaintiff testified that on May 15 the commissioners, after they had finished the investigation, notified him to come in and pay the $324.99; that he gave them a draft for that, sum in payment of the amount they claimed against him, because he had agreed to do so —under the contract.

The referee found that he paid it upon demand of the commissioners, in compliance with the terms of his agreement. He paid it directly to the chairman, who on the same day turned it over to the county treasurer. It is clear that the commissioners treated the report of May 15 as their final decision of the matter submitted to them and that their subsequent inquiry was not intended as a reexamination of it. There was no agreement for a reopening of the inquiry.

Under these circumstances the act of the plaintiff in responding to the call for the additional $324.99 was a recognition of the appropriation of the $1000 to the claim against him, and amounted to the payment of the entire sum of $1324.99 in compliance with a demand made upon him under a claim of right.

The argument is presented that the plaintiff was dealing with the commissioners as such, and not with the county, that the board had no authority to accept money for the county, and that what they did was to hold the fund as a deposit pending a settlement of the controversy between the plaintiff on the one hand and the county on the other. The commissioners were clearly acting as the representatives of the county" and were obviously so dealt with by the plaintiff.» In so doing they were within the scope of their authority, as the statute (Gen. Stat. 1868, ch. 25, § 16, subdiv. 5, Gen.

Stat. 1909, § 2075, subdiv. 5) empowers them “to represent the county and have the . . . management of the business and concerns of the county, in all cases where no other provision is made by law,” and they are held to have the power to compromise and settle doubtful claims. (Comm’rs of Labette Co. v. Elliott, 27 Kan. 606.) The demand for payment was made by them on behalf of the county, and although the amount passed through their hands it was in effect paid by the plaintiff to the county.

The law is well settled that a payment made in response to a claim asserted as a matter of right is placed upon the same footing as an accord and satisfaction or a compromise and settlement, and can be recovered only upon proof of fraud, duress, or mistake of fact. (22 A. & E. Encycl. of L. 609-630; 30 Cyc. 1298-1319; Barbour’s Law of Payment, ch. 18; 94 Am. St. Rep. 408, note; County of Wabaunsee v. Walker, 8 Kan. 431; K. P. Rly. Co. v. Comm’rs of Wyandotte Co., 16 Kan. 587; Cummings v.

Sigerson, 63 Kan. 340.) In the last case cited it was said of one who sought to recover a payment voluntarily made: “The law does not give him the right to pay a demand for which he knows he is not legally liable and then give him a right of action to recover his payment back.” (63 Kan. 343.) In the note froxn the American State Reports just cited the reason for the rule is thus stated: “If one would resist an unjust or illegal demand for payment, he should do so at the threshold. If litigation is' intended by the party making payment, it should precede payment.

Otherwise, the privilege is left to him of selecting his own time and convenience for litigation, delaying it, as the case may be, until the evidence on which his adversary would have relied to sustain his claim may be lost by the lapse of time and the many casualties to which human affairs are exposed.” (Note, 94 Am. St. Rep. 408, 410.) The plaintiff testified that while the investigation was in progress he told the chairman he wished to come before the board; that the reply given was that he would be notified when they were ready for him; and that he was not sent for until after the decision had been made.

This evidence tends to impeach the fairness of the investigation, but not to show any fraud practiced upon .the plaintiff to induce him to pay the amount found against him. Whatever injustice characterized either the methods or the results of the investigation were known to him, and his course in electing to make the payment was taken with full knowledge of the facts. He paid the sum demanded, not because he was deceived into believing that he had caused a loss of that amount to the county, but because of his agreement to be governed by the finding made.

His action therefore was not influenced either by fraud or by mistake of fact. The petition was not framed upon the theory that the paymeht was made under duress, nor did the referee so find, but it is suggested in a supplemental brief that as there is evidence to support such a view this court should pass upon that aspect of the case. It may well be contended that the plaintiff’s candidacy for a state office placed him in a position where he had just grounds for believing that a refusal to acquiesce in the demand for payment would expose him to a greater injury than the loss of the money.

The restraint he was under in this" respect is not of the same character as that discussed in any cases to which our attention has been directed, but the modern tendency is to recognize what is termed moral duress wherever “the payment has been obtained by taking an undue advantage of the situation of the payer.’? (30 Cyc. 1305; 22 A. & E. Encycl. of L. 613; 2 A. & E. Ann. Cas. 825, note; 2 L. R. A., n. s., 574, note.) If, however, the payment may justly be regarded as having been made under compulsion, this is only because of the plaintiff’s candidacy for office, coupled with the nearness of the election.

With the close of the polls in November, 1902, his situation was entirely changed. A controversy with the county commissioners could no longer place him at any peculiar disadvantage. It was then incumbent upon him to act with promptness and to dis-affirm the payment within a reasonable time. Whether or not the statute (Gen. Stat. 1868, ch. 25, § 47, GenStat. 1909, § 2123) requiring claims against a county to be presented within two years is fully applicable, as in a somewhat similar situation has been said to be probable (Richards v. Comm’rs of Wyandotte Co., 28 Kan. 326; Rork v.

Comm’rs of Douglas Co., 46 Kan. 175), it furnishes by analogy a limit within which some step must have been taken to reclaim the money. We think the inaction of the plaintiff for that period amounted to a final acquiescence in the existing conditions, and that thereafter no action could be maintained to recover the payment. In any event we must conclude that the plaintiff’s action is barred by the statute of limitations.

He contends that it is founded upon a written contract and •could not be barred inside of five years, and also that the fund was held in trust and that the statute of limitations was not at once set in operation. These contentions turn upon the question already considered— whether the final $324.99 was intended and treated by the parties as a deposit or as a payment, and consequently whether or not the 1000-dollar deposit was converted into a payment.

Inasmuch as we hold, upon the grounds already stated, that the entire sum must be regarded as a payment and not as a deposit, it follows that whatever right he had to its recovery grew •out of the legal obligation to restore it, and his remedy was upon, the county’s implied contract to do so,. (27 Cyc. 866; 15 A. & E. Encycl. of L. 1101.) The three-year statute therefore applies. (Burrows v. Johntz, 57 Kan. 778, 782.) The judgment is reversed with directions to render .judgment for the defendant.