Puget Sound Alumni of Kappa Sigma, Inc. v. City of Seattle

422 P.2d 799, 70 Wash. 2d 222, 1967 Wash. LEXIS 1052

• Court: Washington Supreme Court
• Decided: January 12, 1967
• Docket: 37641, 37642
• Status: Published

Opinions

Hunter, J. —

In these consolidated actions, 12 plaintiffs (respondents-cross-appellants), claiming the right to represent a total of 92 persons in a class action, sought recovery from the defendant (appellant), city of Seattle, of sums paid to t'he defendant in connection with street vacations sought and obtained by such 92 persons. The plaintiffs also sought a permanent injunction enjoining the city from collecting such charges in the future.

The trial court (1) granted 10 of the 12 plaintiffs summary judgment against the city of Seattle, allowing them recovery of the sums which they had paid to the city, less $100 paid by each as a filing fee upon t'heir respective petitions for street vacations; (2) allowed interest upon the amounts recovered from the date such sums were paid to the city; (3) dismissed claims of plaintiffs Topp and West Seattle Congregational Church with prejudice as barred by the statute of limitations; (4) denied with prejudice the claim that a class action could be maintained in behalf of all 92 persons alleged to be similarly situated; and (5) permanently enjoined the city from making any street vacation charges in the future, other than the $100 filing fee upon each petition to vacate thereafter filed.

The city of Seattle appeals from the judgment in its entirety except as to the court’s dismissal of two of the plaintiffs and the denial of plaintiffs’ claim of a class action.

The plaintiffs in King County Cause No. 599874 cross-appeal from the judgment dismissing the claims of plaintiffs Topp and the West Seattle Congregational Church and from the dismissal of the plaintiffs’ claim for a class action in behalf of the unnamed persons who had paid like charges to the city.

The record discloses that since 1937 the city of Seattle has required all petitioners for street vacation to pay an initial fee of $100. The city then processes the petition through the city 'council’s streets and sewers committee. This includes consideration of the petition by 17 departments or subdivisions of city departments, all of which then make recommendations to the Board of Public Works as to whether the petition should be granted. On public notice, a hearing is then held before the streets and sewers committee as provided by RCW 35.79.030, and, if the committee recommends granting the petition to vacate, the petitioner is informed that it is the city council’s policy to charge the petitioner one-half of the appraised value of the area sought to be vacated, less the $100 paid. The city engineer procures such appraisal and notifies the petitioner that the vacation ordinance will not be introduced until such sum is paid. On receipt of such portion of the appraised value, the vacation ordinance is then introduced and considered. If the ordinance fails of passage, the sum paid by petitioners, less the $100 initial filing fee, is refunded.

The record further discloses from an affidavit made by David Levine, a former member of the city council, that the procedure for requiring payment of a filing fee plus 50 per cent of appraised value was pursuant to a motion passed by the city council on April 12, 1937. It appears that such action by the city council is not a matter of public record, and that the city has made such charges since 1937, without any ordinance ever having been enacted, either fixing the $100 filing fee or exacting payment of such portion of the appraised value.

The city’s first assignment of error is to the trial court’s judgments in behalf of the 10 plaintiffs who recovered the vacation charges exacted by the city, less the $100 filing fee.

The city argues that it is proper for the -city to impose reasonable conditions in connection with the granting of street vacations which are for the public benefit, -and. the requirement of a fee equal to one-half the appraised, value of the area sought to be vacated, constitutes such a reasonable condition.

Neither the state statutes nor the -city charter authorizes the imposition of such -a condition for the consideration of a petition by the -city -council for the vacation of a Seattle city street. It appears obvious that the required payment of one-'half the appraised value of the property is unrelated to any administrative cost; that it constitutes a compensation required by the city for a value enuring to the person seeking the vacation of the street abutting his property by reason of its vacation. This is an attempted sale of property to which the city has no fee.

We have never departed from the rule of law first stated by the Territorial Court 98 years ago in Burmeister v. Howard, 1 Wash. Terr. 207, 211 (1867):

[W]hen an easement is taken as a public highway, the soil and freehold remain in the owner of the land encumbered only with the right of passage in the public; and upon a discontinuance of the highway, the soil and freehold revert to the owner, and in the case of streets and alleys, the proprietors of adjacent lots own the soil to the middle of the street, subject only to this right of passage in the public; and upon a discontinuance of such street or alley, the adjacent owners of lots on each side take the soil to the middle of the street.

See, also, Nystrand v. O’Malley, 60 Wn.2d 792, 375 P.2d 863 (1962). RCW 35.79.040 expressly states that vacated streets “shall belong to the abutting property owners.”

If the easement for public travel has any value to the city, the street may not be legally vacated. RCW 36.87.060 provides in part:

If the county road is found useful as a part of the county road system it shall not be vacated, but if it is not useful and the public will be benefited by the vacation, the board may vacate the road or any portion thereof.

This statute applies to counties, but the decisional law applying to cities is the same. Young v. Nichols, 152 Wash. 306, 278 Pac. 159 (1929); 25 Am. Jur. Highways § 119, at 416.

The city has nothing to sell in such case. 11 McQuillin, Municipal Corporations § 30.189, at 134 (3d rev. ed.), states:

A municipality is not entitled to compensation for loss of a public easement in streets in which it does not own the fee. It thus follows, where a street is vacated by a court on the application of abutting landowners, the municipality has no such proprietary interest therein as to entitle it to compensation.

This exact issue was before the Supreme Court of Illinois in Lockwood & Strickland Co. v. Chicago, 279 Ill. 445, 117 N.E. 81 (1917), in which the court struck down an ordinance of the city of Chicago requiring payment of $2,694 for vacation of an alley under guise of a fund to indemnify the city against damages arising from the vacation. The court said, at 449:

The legislative powers of a city must be exercised for the public benefit, but that does not authorize a municipality to sell or bargain legislation as a means of obtaining revenue. It would be a novel proposition to hold that a city, as a condition precedent to the exercise of its lawful power and authority to vacate a street or alley no longer needed for public use, could demand and receive from private parties a sum of money for its action. Such a holding would be dangerous in principle, contrary to good morals and against public policy.

Moreover, in the instant case, the city of Seattle has required the payments in question without the enactment of an ordinance as required by its city charter for the exercise of legislative authority.

The charter of the city of Seattle, Art. 4, § 7, provides that “Every legislative act of said city shall be by ordinance. . . .” Art. 4, § 14 enumerates in detail the legislative powers of the city and provides that such powers shall be exercised by ordinance “and not otherwise.” (Italics ours.)

RCW 35.22.020 requires that the manner in which cities of the first class shall exercise the powers conferred upon them by law, with respect to their own government “shall be as provided in the Charters thereof.” Also, see, New Seattle Chamber of Commerce v. Seattle, 88 Wash. 620, 153 Pac. 351 (1915); 5 McQuillin, Municipal Corporations § 15.03, at 57.

Therefore, the 1937 motion as a legislative act constituted an .unlawful exercise of legislative authority.

The city further contends the trial court erred in granting each of the 10 plaintiffs judgment for recovery of sums paid less the $100 filing fees for the reason that the payments were made voluntarily.

The city relies on the rule of law that disallows recovery of voluntary payments when paid to satisfy an- unauthorized demand, unless the one demanding the payment has induced it through coercion or fraud.

This case does not present the usual factual situation which exists in cases of voluntary payment in transactions between individuals. In such cases, the general rule applies that

[A]s between individuals, money voluntarily paid on a claim of right, with full knowledge of all the facts, in the absence of fraud, duress, or compulsion, cannot be recovered back merely because the party at the time of payment was ignorant of or mistook the law as to his liability. 40 Am. Jur. Payment § 205, at 856.

When, however, a citizen makes payment of an illegal demand by one holding an official position, in order to secure a legal right which such citizen may lawfully exercise, then there is an exception to the general rule.

The exception to the rule and the reasoning therefor are correctly stated in the text and footnote in 40 Am. Jur., as follows:

The courts generally favor the view that if an illegal demand is made by a person holding -an official position, with the color of authority to enforce it, and such demand operates as a restraint on the exercise of an undoubted right or privilege, and in its enforcement there is no opportunity of contesting its validity, a payment of the demand in order to remove such restraint is compulsory, and not voluntary. 40 Am. Jur. Payment § 176, at 835.

The reason underlying the rule is that the officer and the public who have business to transact with him do not stand on an equal footing. It is his special business to be conversant with the law under which he acts, and to know precisely how much he is authorized to demand for his services; but with them it is different. They have neither the time nor the opportunity of acquiring the information necessary to enable them to know whether he is claiming too much or not, and as a general rule, relying on his honesty and integrity, they acquiesce in his demands. . . . American S.S. Co. v. Young, 89 Pa 186, 33 Am Rep 748, affirmed, without ruling on this point, in 105 US 41, 26 L ed 966. 40 Am. Jur. Payment § 176 note 7, at 835.

The facts in the instant case, when considered with our street vacation statutes, come clearly within this exception. The motion made in 1937 establishing the policy pursuant to which these exactions were made provided that “No petition for the vacation of any street . . . shall be granted . . . until and unless the petitioners” shall pay the sums required by the city. The requirement for payment as a prerequisite to the introduction of the vacation ordinance is stated in the form letters mailed to petitioners by the city engineer: “The ordinance effectuating this vacation will not be introduced in the city council until receipt” of the sum demanded. “You have until March 26 to complete this transaction. Unless the matter is settled by that date, the vacation will be indefinitely postponed and the transaction terminated.” RCW 35.79.010 and 35.79.030 provide that when a petition to vacate a street is signed by the owners of more than two-thirds of the private property abutting upon the part of the street sought to be vacated, the petition shall be heard. These sections of the statute make mandatory the rights of property owners so petitioning to be heard by the city council. An exaction of money by the city under the above circumstances from the plaintiffs to secure their right so given by statute constituted an involuntary payment. The city’s other arguments as to the voluntariness of payment are without merit.

The city further argues that there can be no recovery by the plaintiffs because the payments were not made under protest. This is not a case where payment under protest is a prerequisite for recovery as in a taxpayer’s suit. A party faced with an exaction of money as in the instant case is not required to pay under protest or bring mandamus or other action as a prerequisite to the right of recovery of money so paid. Trower v. City & County of San Francisco, 157 Cal. 762, 109 Pac. 617 (1910). See, also, Diocese of Fargo v. Cass Cy., 28 N.D. 209, 148 N.W. 541 (1914).

The city claims error in the allowance of interest from date of payment as provided in the summary judgment. The plaintiffs’ right to recover interest is supported by prior decisions of this court. Doric Co. v. King Cy., 59 Wn.2d 741, 370 P.2d 254 (1962), land cases cited therein.

The city assigns error to the trial court’s failure to dismiss all of the plaintiffs’ claims, because of their failure to comply with Art. 4, § 24 of the charter of the city of Seattle requiring the filing of claims for damages within 30 days after the time when such claim accrues. The city claims that filing such a claim is 'a condition precedent to each plaintiff’s right to bring a cause of action in this case.

The city’s contention would be well founded if the plaintiffs’ claims could be deemed actions for recovery of damages. However, plaintiffs’ claims in this case do not seek recovery of damages from the city. The city’s identical contention was answered adversely to the city’s position in Byram v. Thurston Cy., 141 Wash. 28, 251 Pac. 103, 252 Pac. 943 (1926).

In Puget Constr. Co. v. Pierce Cy., 64 Wn.2d 453, 456, 392 P.2d 227 (1964), the court makes this comment on Byram v. Thurston Cy., supra:

Plaintiff relies heavily upon our decision in Byram v. Thurston Cy., 141 Wash. 28, 251 Pac. 103, 252 Pac. 943 (1926), which says, inter alia, that only those cases sounding in tort and giving rise to actions for damages are contemplated by the above statute. But Byram, while giving a measure of comfort to plaintiff, does not support its position. Byram brought suit to recover from the county taxes illegally assessed, paid under protest, and wrongfully kept. This court did not see the action as arising either ex contractu or ex delicto or as an action for damages, but rather one to restore money illegally obtained by an agency of government. Labeling the action does not reveal its real nature. As we said:

"... Such funds are ‘moneys got through imposition,’ and the obligation to do justice rests upon all persons, natural or artificial; and, if the county obtains money or property from others without authority of law, [the law] independent of any statute compels restitution or compensation.”

This is an action for money had and received. Such action lies when one has money in Ms hands which he is not entitled to retain as against another. Such an action is based on quasi contract, or contract implied in law. King Cy. v. Odman, 8 Wn.2d 32, 111 P.2d 228, 133 A.L.R. 1440 (1941). Such action is not a claim for damages, but rests on equitable principles. Bosworth v. Wolfe, 146 Wash. 615, 264 Pac. 413, 56 A.L.R. 1117 (1928); Seekamp v. Small, 39 Wn.2d 578, 237 P.2d 489 (1951). In tMs type of action, no claim need be filed under the provision of the Seattle city charter. Byram v. Thurston Cy., supra.

The cross-appeal of the plaintiffs asserts that the trial court erred in dismissing the claims of Topp and West Seattle Congregational Church because of the bar of the statute of limitations.

The city and the plaintiffs agree that the 3-year statute of limitations, which limits the time for commencement of actions upon implied contracts, applies in this case. The sole controversy is over the date upon wMch the cause of action of the two plaintiffs above named accrued. They admit that their payments to the city were made more than 3 years prior to April, 1960, the date of commencement of the action. It is their contention that the 3 years should rim from the effective date of the vacation ordinances since the payments were conditioned upon passage of the ordinances.

We agree. The payments did not become final until the passage of the ordinances. It is undisputed that the money paid to the city would be returned to the plaintiffs in the event the street vacation ordinances were not passed, and that prior to the passage of the ordinances the plaintiffs could voluntarily withdraw their payments in lieu of the consideration of their petitions. Thus, the payments did not become final and the cause of action for their return did not accrue until the passage of the vacation ordinances. The trial court therefore was in error when it dismissed the claims of Topp and West Seattle Congregational Church as being barred by the statute of limitations.

The plaintiffs (cross-appellants) contend the trial court erred by dismissing with prejudice the third cause of action in King County Cause No. 599874, wherein they were seeking to establish a class action in behalf of 92 persons, who, it is claimed, paid the city within the statutory period one-half the appraised value of the property vacated by the city, less the $100 fee. Of these 92, 12 joined as plaintiffs in this action and 28 more now have independent actions pending against the city.

Prior to the commencement of this action, the President of Puget Sound Alumni of Kappa Sigma, Inc., wrote a letter to these 92 persons requesting that they join in the proposed action against the city and advising them that “only those joining as parties plaintiff can recover the moneys we believe were wrongfully paid, if the court finds the charge illegal.” He was correct in this statement.

Class actions are provided for in Rule of Pleading, Practice and Procedure 23, RCW vol. O. Effective on January 1, 1960, we adopted Federal Rule 23(a) and 23(c) without change and Rule 23(b) with only a slight modification, necessary to conform to state practice. Rule 23(a) provides:

Representation. If persons constituting a class are so numerous as to make it impracticable to bring them all before the the court, such of them, one or more, as will fairly insure the adequate representation of all may, on behalf of all, sue or be sued, when the character of the right sought to be enforced for or against the class is

(1) Joint, or common, or secondary in the sense that the owner of a primary right refuses to enforce that right and a member of the class thereby becomes entitled to enforce it;

(2) Several, and the object of the action is the adjudication of claims which do or may affect specific property involved in the action; or

(3) Several, and there is a common question of law or fact affecting the several rights and a common relief is sought.

Shortly after Federal Rule 23 was promulgated in the Preliminary Draft of the Federal Rules of Civil Procedure, Professor Moore applied a somewhat unique nomenclature to the three types of class actions provided for under Rule 23(a). He applied to the class suit brought under Rule 23(a)(1) the designation of “true” class action, to the suit brought under Rule 23(a)(2) the name “hybrid” class action and, to a claim brought under Rule 23(a)(3) the title “spurious” class action. Moore, Federal Rules of Civil Procedure: Some Problems Raised by the Preliminary Draft, 25 Geo. L.J. 551, 570, et seq. While such terminology has been criticized, 2 Barron & Holtzoff, Federal Practice and Procedure § 562 (rules ed.), most courts use the Moore terminology only as a handy labeling device and not as truly descriptive, and we do likewise.

We are not here concerned with the hybrid class action (a) (2), nor with the derivative claims authorized in (a) (1), but it is necessary to determine whether the claim which plaintiffs attempt to assert in behalf of all 92 persons is a true class action based on a right characterized as joint or common, or whether the claim is a spurious class action.

The correct classification of an asserted claim is dependent upon the jural relationship of the members of the class. It is this character of the right sought to be enforced for or against the class which determines its classification.

In the true class action, the character of the right asserted must be joint, common, or derivative. In this type of action, the joinder of all interested parties would be necessary except for the device provided by this rule of court. Tunstall v. Brotherhood of Locomotive Firemen & Enginemen, 148 F.2d 403 (4th Cir. 1945). The term “common” in the rule has precipitated problems.

The principal difficulty is caused by the inclusion of “common” rights. The term “common” has not previously been used in connection with joinder of parties. The courts and the learned writers have had difficulty in defining when a right is “common,” and the class suit thus “true,” and when it is merely “several,” and the suit thus “hybrid” or “spurious.” 2 Barron & Holtzoff, Federal Practice and Procedure § 562.1, at 267 (Rules ed.).

Characteristic of an action based on common rights is Supreme Tribe of Ben-Hur v. Cauble, 255 U.S. 356, 65 L. Ed. 673, 41 Sup. Ct. 338 (1921). In that case, it was determined that an action brought by policyholders against a fraternal benefit association attacking the association’s reorganization plan as inimical to the interest of all policyholders, was based upon a common right, and the decree entered was conclusive and binding upon all persons having such common rights, even though not parties to the action. This action was under Federal Equity Rule 38 which, in 1937, became, in effect, Rule 23 (a) 1.

The spurious class action is well characterized by Professor Moore as follows:

The spurious class suit is a permissive joinder device. The presence of numerous persons interested in a common question of law or fact warrants its use by persons desiring to clean up a litigious situation. While a purist may not liked to have the third type of class action termed spurious, this label serves to direct attention to the practical realities of litigation. The character of the right sought to be enforced for or against the class is

“(3) several, and there is a common question of law or fact affecting the several rights and a common relief is sought.”

There is no jural relationship between the members of the class; unlike, for example, the members of an unincorporated. association, they have taken no steps to create a legal relationship among themselves. They are not fellow travellers by agreement. The right or liability of each is distinct. The class is formed solely by the presence of a common question of law or fact. When a suit is brought by or against such a class, it is merely an invitation to joinder — an invitation to become a fellow traveller in the litigation, which may or may not be accepted. It is an invitation and not a command performance. Assume that a railroad negligently sets fire to property, and widespread damage to many property owners ensues. Here there is a question of law or fact common to many persons. A, B, and C bring an action on behalf of themselves, and all others similarly situated, against the railroad. 3 Moore, Federal Practice § 23.10(3), at 3442 (2d ed.).

The distinction between the true class action and the spurious class action was well presented in Rank v. (Krug) United States, 142 F. Supp. 1 (1956), at 154, et seq. This was an action brought by landowners in California’s San Joaquin Valley to enjoin the Bureau of Reclamation from interfering with the plaintiffs’ riparian and overlying right to waters of the San Joaquin River. The plaintiffs did not seek to establish their respective separate rights to a given quantity of water, but sought only to establish a common right to a common source of water. The court determined, therefore, that the plaintiffs’ action should be classified as a true class action under Rule 23 (a) (1) and not an action to assert a “several” right under either subdivision (2) or (3) of that rule.

In the present case, the claims asserted against the city of Seattle do not have the characters of either joint or common right as used in class actions under Rule 23. Each claim for recovery differs upon the respective appraised values of the vacated streets abutting the respective properties. This is a spurious class action and the rights of absent parties may not be determined in this action. See Elston v. King Cy., 178 Wash. 210, 34 P.2d 906 (1934), referred to by Professor Orland as illustrative of a spurious class action brought long before the adoption of Rule 23. 3 Orland, Wash. Prac., at 707.

The city asserts error in the granting of a permanent injunction enjoining the city from making future charges in connection with street vacations such as the trial court held illegal in this action. In oral argument, the plaintiffs admitted that the issuance of such injunction should not be sustained unless the court determined that this is a true class action.

In view of our determination that this is a spurious class action, this court will accept the plaintiffs’ position on this assignment of error and will vacate and dissolve the injunction.

The judgment dismissing the claims of plaintiffs Topp and West Seattle Congregational Church is reversed, with direction that recovery be allowed as in the case of the other 10 plaintiffs, according to the sums paid less the $100 filing fees. The injunction against the city is vacated and dissolved. The judgment is otherwise affirmed. The plaintiffs will recover their costs on appeal.

Hill, Donworth, Weaver, Rosellini, Ott, and Hamilton, JJ., concur.