
    [No. 17047.
    Department Two.
    November 9, 1922.]
    Mae Seward, Respondent, v. Archibald J. Fisken, Respondent, King County et al., Appellants. 
      
    
    Counties (57)&emdash;Liabilities &emdash; Governmental Capacity. Under Rem. Comp. Stat., § 11254, requiring the treasurer to give a receipt for taxes paid and enter the same on the tax-roll, the county in collecting taxes, acts in a governmental and hot a proprietary capacity.
    Taxation (114)&emdash;Payment&emdash;Effect of Check. The general rule is that a check given in payment of taxes does not discharge the tax unless the check is paid.
    Estoppel (26, 27)&emdash;Aoainst County-&emdash;Payment of Tax&emdash;Vendee of Real Property. The doctrine of estoppel applies to corporations as well as to individuals, where a county issued a receipt signed by the county treasurer for taxes paid by check, and a purchaser of the property relied thereon when the receipt was exhibited to him; in view of Rem. Comp. Stat., § 11254, making it the county treasurer’s duty to issue tax receipts and enter them on the tax roll.
    Appeal from a judgment of the superior court for King county, Honorable S. H. Steele, judge pro tempore, entered November 23, 1921, iipon overruling a demurrer to the cross-complaint, in an action for equitable relief.
    Affirmed.
    
      Malcolm Douglas, Howard A. Hanson, and Arthur Schramm, Jr., for appellants.
    
      Elias A. Wright and Sam A. Wright, for respondent.
    
      
       Reported in 210 Pac. 378.
    
   Main, J.

— This action, as originally instituted, was one to recover a money judgment against Archibald J. Fisken, who was the only defendant named in the complaint. When Fisken answered, he filed a cross-complaint and caused the county of King and its treasurer to be made parties. By the cross-complaint, it was sought to restrain the county and the treasurer from asserting that the taxes upon specified real property for a certain year had not been paid. After the cross-complaint was filed, the original complaint, by stipulation, was amended to ask for the same relief as that sought in the cross-complaint. The county and its treasurer demurred to the cross-complaint, which demurrer was overruled. They elected to stand upon the demurrer, and judgment was entered as prayed for. From this judgment, the county and its treasurer appeal. The facts are not in dispute and will be here sufficiently set forth to present the controlling question.

In June, 1919, the respondent Fisken, as agent for the Mortgage Bond Company of New York, procured from this company for respondent Mae Seward a loan of $3,000, to be secured by mortgage upon lots ten (10) and eleven (11), block one (1), of Densmore’s Summit Addition to the City of Seattle. When Mrs. Seward applied for this loan, she did not own this property, but was about to purchase it from Albert A. B-utledge and wife, to whom the Mortgage Bond Company of New York had previously made a loan of $2,500, secured by a mortgage upon tbe same property. In addition to tbe Rutledge mortgage, there were outstanding at tbe time general taxes for tbe last half of tbe year 1917, and all of tbe year 1918. In consummating tbe transaction, a deed was taken by Mrs. Seward from tbe Rutledges, and a mortgage given by her to tbe Mortgage Bond Company of New York for tbe sum of $3,000, she instructing Fisken to apply the proceeds of tbe loan, $2,407.54, to tbe extinguishment of tbe Rutledge mortgage, and tbe balance of $592.46 upon tbe purchase price to tbe Rutledges, tbe latter not to be paid until Fisken was satisfied that tbe taxes bad been paid. One Mark Munson acted for tbe Rutledges in tbe transaction. Fisken paid tbe Rutledge mortgage as instructed, and when Munson exhibited to him a receipt from tbe county treasurer showing that tbe taxes bad been paid, the $592.46 was paid over to him. Munson bad given bis check to tbe county treasurer in payment of tbe taxes at tbe time tbe receipt was issued. When tbe check was presented, payment was refused for want of sufficient funds. At tbe time tbe check was accepted by tbe county treasurer, be made a notation upon tbe tax rolls that tbe taxes bad been paid, and this notation remained thereon for a period of approximately thirty days, when it was canceled. Thereafter, Mrs. Seward brought this action against Fisken to recover tbe amount of these taxes, and, as above stated, when be answered and filed a cross-complaint, tbe cause was resolved in effect to one by Mrs. Seward and Fisken against tbe county and its treasurer, seeking to restrain them from asserting that the taxes had not been paid, and quieting tbe title of Mrs. Seward to tbe property above described as though tbe taxes bad in fact been paid.

A few preliminary statements will tend to simplify tbe discussion upon tbe controlling question in tbe case. It must be remembered that this is not a com troversy between the person paying the taxes, and the county, but is one by an innocent third person, Mrs. Seward, who purchased the property and paid over a portion of the purchase price sufficient to pay the tax, in reliance upon a receipt exhibited to her agent which had been issued by the county treasurer showing that the taxes had been paid. The act of the county treasurer in issuing the receipt was not one where power was entirely lacking, but was the exercise of an existing power in a defective or irregular manner. Under this statute, Rem. Comp. Stat., § 11254, the county treasurer, upon the payment of any tax, is required to give a receipt therefor and enter the same upon the tax roll. The general rule is that a cheek given in payment of taxes does not operate to discharge the tax unless the check be in fact paid. The county, acting through its treasurer in collecting taxes, acts in a governmental and not in a proprietary capacity. The question, then, is reduced to this: Will the county be estopped from asserting that a tax has been paid, as against a complaining party who has purchased the property covered by the tax and paid over the purchase money, or a portion of it, to the seller in reliance upon a receipt exhibited, signed by the county treasurer, showing that the taxes have been paid?

Upon this question there is a dearth of authority. So far as we are advised, it has been before the courts upon only two or three occasions and is little discussed by the text writers. In Curnen v. Mayor etc., 79 N. Y. 511, the action was to compel the defendant to discharge a lot in the city of New York belonging to the plaintiff from the lien of certain assessments. It appeared that, before the plaintiff paid the purchase price, she ascertained at the proper office from the official records that the assessments had been paid. Plaintiff thereupon, after deducting certain assessments which appeared as paid upon the records, paid the balance of the purchase price for the property. The assessments were in fact paid at the time stated by a person not owning the property, through a mistake. This party, after discovering his mistake, brought an action-and recovered the amount of money thus paid. The plaintiff, or the purchaser of the property, who had relied upon the records, was not a party to that action. After the person paying the taxes had prevailed in the action brought by him, the entry of payment was cancelled. Thereafter, the plaintiff, who was the purchaser, brought action to restrain the defendant from asserting as against her that the taxes had not been paid, and it was there held that she was entitled to the relief sought, since, being a bona fide purchaser of the property and in making the purchase relied upon the records showing that the assessments had been paid, the defendant would be estopped from asserting that they had not been paid. It was there said:

“The record is for the public; with the book no one but its owner has concern, and of itself, it avails nothing; there is, therefore, no analogy in the modes of treatment to which they may be subjected. The assessment-roll is akin to a judgment; both records, and each creating a lien to be enforced by subsequent proceedings, if the debt or duty is not otherwise discharged. (Mayor, etc., v. Colgate, supra.) If the latter is erroneously discharged, its lien cannot be restored so as to affect bona fide purchasers, or others standing in a similar relation, whose transactions were entered into in ignorance of the error, and in reliance upon the truth of the record. (King v. Harris, 34 N. Y. 330.) The same rule applies here. There can be no doubt tbat tbe plaintiff was led by tbe entry upon the roll to believe that tbe assessments bad been paid, and if they are enforced now, it will be'to her prejudice.”

It is sought to distinguish tbat case because there tbe taxes were paid, not by check, but in money. This is true, but tbe money was paid over under a mistake of fact. A third person who innocently deals with tbe property is in exactly tbe same position whether tbe taxes or assessments in question have been paid by money or by tbe giving of a check, when in one case tbe money is paid under a mistake of fact, and in tbe other tbe check is returned not paid. Tbe record in both cases showing tbat tbe taxes bad been paid, tbe effect is tbe same. But even if there is tbe distinction between tbat case and this which is sought to be made, tbe argument and discussion in tbat case and tbe bolding sustain tbe position tbat tbe doctrine of estoppel will apply. In tbe later case of O’Leary v. Board of Education of the City of New York, 93 N. Y. 1, 45 Am. Rep. 156, it was said:

‘‘A fact once admitted by a corporation through its officer duly and properly acting’ within tbe scope of bis authority, is evidence against it and cannot be withdrawn to tbe prejudice of anyone who in reliance upon it has changed bis situation in respect to tbe matter affected thereby. In such a case tbe doctrine of estoppel applies to a corporation as well as to an individual.”

citing tbe Curnen case.

In tbe case of Kuhl v. Mayor of Jersey City, 23 N. J. Eq. 84, tbe plaintiff bad purchased certain land, and at tbe time of tbe purchase bad procured a certificate from tbe city tax collector showing tbe amount of tbe taxes and assessments in arrear against tbe property. On tbe day when the deed was delivered and the consideration paid, the seller of the property went to the office of the city collector of taxes and paid the same by giving a check, which the collector received and thereupon receipted the tax bills. The tax receipts were presented to the plaintiff, the purchaser of the property, and in reliance thereon the deed was accepted from the seller and the consideration paid to him. The check was not paid, and thereafter the entry of payment upon the books of the collector was canceled. The action was by the purchaser of the property to restrain the defendants from asserting as against him, who was a bona fide purchaser, that the taxes and assessments had not been paid. It was there held that the defendants were not estopped, because in issuing the receipt the tax collector had no intention to influence the conduct of any one by it, and it was not apparent to him that the issuing of the receipt might operate as a representation that the taxes had been paid. It was said that, before there will be an estoppel, “there must be such intention, or that it must be so apparent that the representation will have that effect, that the intention must be presumed.” The rule there stated is the same rule which is applied in this state where a public or municipal corporation is acting in a proprietary capacity as distinguished from a governmental. There is no discussion in the opinion as to the difference in the two capacities in which a municipal corporation may act.

In Franklin County v. Carstens, 68 Wash. 176, 122 Pac. 999, it was held that the defendant, which, by declaration and conduct of its officers, had induced certain conduct, would be estopped.

The basis of the Kuhl case, supra, which deals with a corporation acting in a governmental capacity, and that of Franklin County, which deals with a municipal corporation acting in a private capacity, are the same. If the same rule is to he applied hy the court deciding the Kuhl case when the question is one involving a governmental function as when a municipal corporation is acting in a proprietary capacity, then the view of that court would not he in harmony with the doctrine of the Franklin County case.

In Philadelphia Mortgage & Trust Co. v. Omaha, 63 Neb. 280, 88 N. W. 523, 93 Am. St. 442, 57 L. R. A. 150, the view was first expressed, though the question was not involved in the case, which was to the effect that estoppel would not operate against a municipal corporation acting in a governmental capacity. Upon a rehearing, a second opinion was written in which that question was reserved. The language of the opinion upon rehearing, so far as it has any hearing at all, would seem to indicate that the court was leaning in the opposite direction from that indicated in the first opinion. It is of the essence of justice to have a fixed standard and that there should not be one standard for the state or its municipal corporations and another for the citizen. If it should he held that the county was not estopped in a case like the present, it would seriously interfere with the facility with which real estate transactions are conducted. It is a well known fact that it is a common occurrence for the purchaser of property, before he pays over the purchase price, to have exhibited to him receipts showing the payment of taxes, and in reliance upon these the purchase price is paid. If the purchaser cannot rely upon the official receipt of the proper officer, it would lead to endless inconvenience. It is said, however, if the doctrine of estoppel he applied, then it will interfere with the convenient practice which is now adopted hy county treasurers in accepting checks in payment of the taxes and issuing a receipt therefor. It can hardly be assumed that a county treasurer makes it the invariable practice to issue a receipt upon the presentation and acceptance of every check presented in the payment of taxes. In issuing the receipt, a county treasurer could hardly be ignorant of the fact that it does constitute a representation, or may be relied upon by a party purchasing the property therein described, that the taxes are in fact paid. It seems to us that the better rule is that announced in Curnen v. Mayor etc., supra.

The questions whether Mrs. Seward, the respondent, would have had a right to maintain an action against the county treasurer and his bondsmen, and whether the county will now have a right to maintain such action, are not now before us and we express no opinion thereon.

The judgment will be affirmed.

Parker, O. J., Holcomb, Mackintosh, and Hovey, JJ., concur.  