Payments of claims made through ignorance of the law or where all the facts are known and there is no misplaced confidence and no artifice, deception, or fraudulent practice used by the other party are deemed voluntary and cannot be recovered unless made under an urgent and immediate necessity therefor or to release person or property from detention or to prevent an immediate seizure of person or property. Filing a protest at the time of payment does not change the rule prescribed in this Code section.
(Civil Code 1895, § 3723; Civil Code 1910, § 4317; Code 1933, § 20-1007.)
Law reviews.- For annual survey of local government law, see 56 Mercer L. Rev. 351 (2004). For annual survey on administrative law, see 66 Mercer L. Rev. 1 (2014). For note on the voluntary-payment doctrine in Georgia, see 16 Ga. L. Rev. 893 (1982). For comment, "Refocusing Liquidated Damages Law for Real Estate Contracts: Returning to the Historical Roots of the Penalty Doctrine," see 39 Emory L.J. 267 (1990).
JUDICIAL DECISIONSANALYSIS
Section not unconstitutional for reason that it violates due process clauses of state and federal Constitutions. Strachan Shipping Co. v. Mayor of Savannah, 168 Ga. 309, 147 S.E. 555 (1929) (see O.C.G.A. § 13-1-13).
Statute has been strictly construed by Georgia courts as against one making payments. Atlanta Milling Co. v. Norris Grain Co., 271 F.2d 453 (5th Cir. 1959) (see O.C.G.A. § 13-1-13).
O.C.G.A. § 13-1-13 did not apply to an equitable action by a bank to reform a note which had been mistakenly marked "paid in full." Decatur Fed. Savs. & Loan v. Gibson, 268 Ga. 362, 489 S.E.2d 820 (1997).
Voluntary payment doctrine not a defense to Natural Gas Act consumer claim.
- Trial court erred in dismissing natural gas customers' class action based on the voluntary payment doctrine. O.C.G.A. § 46-4-160.5, which specifically authorized a private right of action for damages against a provider for intentionally and deceptively over charging the customers, prevailed over O.C.G.A. § 13-1-13, the general statute setting forth the voluntary payment doctrine. Southstar Energy Servs., LLC v. Ellison, 286 Ga. 709, 691 S.E.2d 203 (2010).
General presumption that money paid is due and payment voluntary.
- General presumption is that when one pays money to another, money is due and payee is entitled thereto, and the payment is voluntarily made by payer, and in action to recover the money back, burden is on payer to show that payment was not due and that money was not paid by payer voluntarily; this rule applies to payment of insurance premiums by insured to insurer. New York Life Ins. Co. v. Williamson, 53 Ga. App. 28, 184 S.E. 755 (1936).
Burden is on plaintiff to establish that payments were not voluntary. City of Norcross v. Taylor, 153 Ga. App. 836, 267 S.E.2d 255 (1980).
While money voluntarily paid may not ordinarily be recovered, this rule is not without exception. Greene v. McIntyre, 119 Ga. App. 296, 167 S.E.2d 203 (1969).
Burden on plaintiff to establish exception to voluntary payment rule.- Georgia law requires a plaintiff in an overpayment case to prove that the plaintiff was unaware of the true facts at the time the overpayment was made, or fit within an exception to the "voluntary payment" rule. Kleiner v. First Nat'l Bank, 581 F. Supp. 955 (N.D. Ga. 1984).
Construction with equitable principles.
- Although an action for money had and received is governed by O.C.G.A. § 13-1-13, Georgia courts have construed that section and its predecessors, and interpreted the action itself, in conjunction with the equitable principles set forth in the Code, including O.C.G.A. § 23-2-32 and its predecessors. Gulf Life Ins. Co. v. Folsom, 256 Ga. 400, 349 S.E.2d 368 (1986).
Equities to be considered by the jury in the case of a claim for money had and received are: (1) the degree of negligence on the plaintiff's part in erroneously paying over the money; (2) the level of good faith with which the defendant acted in receiving and retaining the money; and (3) prejudice, i.e., whether the defendant's position has so changed that it would be unfair to require the defendant to pay the money back. Gulf Life Ins. Co. v. Folsom, 907 F.2d 1115 (11th Cir. 1990).
In an action for money had and received, where the plaintiff was negligent, the plaintiff is entitled to get the plaintiff's money back - unless the jury decides that he doesn't deserve it back or that the defendant deserves to keep it. Gulf Life Ins. Co. v. Folsom, 907 F.2d 1115 (11th Cir. 1990).
Application of O.C.G.A. § 23-2-22. - O.C.G.A. § 23-2-22 was inapplicable to a company's counterclaim to recover payments under a purchase agreement as § 23-2-22 offered relief following a mistake of law; the company made the payments in ignorance of the law and O.C.G.A. § 13-1-13 prohibited recovery of the payments voluntarily made in ignorance of the law. Wallis v. B & A Construction Co., 273 Ga. App. 68, 614 S.E.2d 193 (2005).
Effect of detrimental reliance by recipient.
- The court did not err in ruling that a recipient of Medicaid reimbursement funds had so changed its position in reliance on its hospital-based classification that it would be unjust to require it to refund the monies in question. Department of Medical Assistance v. Presbyterian Home, Inc., 200 Ga. App. 885, 409 S.E.2d 881 (1991), cert. denied, No. S91C1697, 1992 Ga. LEXIS 357 (1992), cert. denied,.
"Where all the facts are known."
- O.C.G.A. § 13-1-13 by its terms applies "where all the facts are known." This has been construed to include constructive, as well as actual knowledge, under such equitable principles as those in O.C.G.A. § 23-2-29. Gulf Life Ins. Co. v. Folsom, 256 Ga. 400, 349 S.E.2d 368 (1986).
Client may recover from attorney where proprieties of relationship demand return of portion of fee paid. Greene v. McIntyre, 119 Ga. App. 296, 167 S.E.2d 203 (1969).
Where purpose for payment fails of accomplishment, money paid cannot be retained.
- Where purpose for which plaintiff parted with the plaintiff's money failed of accomplishment, defendants cannot in good conscience retain money, and plaintiff is entitled to have the money returned to the plaintiff. Broome v. Cavanaugh, 102 Ga. App. 563, 116 S.E.2d 881 (1960).
Accepting employment in confidential relationship without disclosing lack of qualification warrants recovery of money paid.
- One who accepts employment in confidential relationship of attorney and client and fee for such services to be performed, without disclosing lack of qualification and authorization under law to perform services desired, has practiced fraud upon the principal which warrants recovery by principal of fee paid, where services which may have been rendered do not appear to have been of any material benefit to principal. Lowe v. Presley, 86 Ga. App. 328, 71 S.E.2d 730 (1952).
Payments made without duress or fraud, with knowledge of all facts, are voluntary and unrecoverable.
- Payments not made under duress, and made with knowledge of all facts, without fraud or deception on part of person to whom payment is made, though in ignorance of legal rights of party paying, are voluntary, and cannot be recovered. Commerce Fin. Co. v. Perry, 67 Ga. App. 491, 21 S.E.2d 123 (1942).
Trial court erred in not granting a mortgage company's motion for summary judgment on the company's defense under the "voluntary payment rule" codified in O.C.G.A. § 13-1-13 because there was no evidence of artifice, deception, or fraud on the part of the company as the company informed the homeowners more than six months prior to the closing on the sale of the home that the disputed fees were being charged; by their own admission, the homeowners were aware of the fees. Regions Mortg., Inc. v. Jackson, 294 Ga. App. 525, 669 S.E.2d 411 (2008).
Voluntary payments of claims cannot be recovered although contract itself is void and unenforceable. Couch v. Blackwell & Assoc., 150 Ga. App. 739, 258 S.E.2d 552 (1979).
Doctrine did not bar payment made before contract breached.
- The voluntary payment doctrine of O.C.G.A. § 13-1-13 did not preclude a buyer of parts from recovering a partial payment made to the seller. After the buyer made an interim payment the buyer was not required to make, the seller breached the contract by not allowing the buyer to inspect a shipment of parts and by abandoning performance of the contract. Energy & Process Corp. v. Jim Dally & Assocs., 291 Ga. App. 772, 662 S.E.2d 835 (2008).
Recovery of interest payments on null and void contract, unlike payments toward principal, are recoverable.
- Recovery of payments made by borrower towards repayment of principal under null and void loan contract is barred if payments were made voluntarily, but repayment of sums constituting interest on such an invalid loan are recoverable by borrower, since lender's claim to principal stands on different equitable footing than lender's claim to interest on principal sum of loans. Sanders v. Liberty Loan Corp., 153 Ga. App. 859, 267 S.E.2d 286 (1980), aff'd within direction, 246 Ga. 292, 271 S.E.2d 218 (1980).
Payment of illegal demand not recoverable unless within exceptions provided by law.
- Where party pays illegal demand with full knowledge of all facts which render such demand illegal, without immediate and urgent necessity therefor, or unless to release the party's person or property from detention, or to prevent an immediate seizure of the party's person or property, such payment must be deemed voluntary, and cannot be recovered back. McCarty v. Mobley, 14 Ga. App. 225, 80 S.E. 523 (1914); Dennison Mfg. Co. v. Wright, 156 Ga. 789, 120 S.E. 120 (1923).
Section inapplicable where payment induced by misplaced confidence, artifice, deception or fraud of party paid.
- While money voluntarily paid may not ordinarily be recovered back, nevertheless this rule has no application where payment is induced by misplaced confidence, artifice, deception, or fraudulent practice on part of person to whom money is paid. Lowe v. Presley, 86 Ga. App. 328, 71 S.E.2d 730 (1952).
In an action by borrowers claiming that the lender's charging of an illegal notary fee breached the parties' loan agreement, the district court erred in concluding that, regardless of whether a breach occurred, O.C.G.A. § 13-1-13 barred recovery because Georgia's Supreme Court, in response to a certified question, concluded that the borrowers had alleged sufficient artifice, deception, or fraudulent practice to trigger an exception to § 13-1-13. Anthony v. Am. Gen. Fin. Servs., 626 F.3d 1318 (11th Cir. 2010).
Section applicable to insurance premiums voluntarily paid by one entitled to waiver thereof.
- Premiums voluntarily paid by insured, where the insured is entitled to waiver thereof under provisions of policies of insurance sued on, cannot be recovered back by insured except where it is alleged and proved by the insured that the payments were paid under a mistake of facts or because of fraud or artifice practiced upon insured. New York Life Ins. Co. v. Williamson, 53 Ga. App. 28, 184 S.E. 755 (1936).
One cannot avoid legal consequences of one's acts by protesting, at time one does the acts, that one does not intend to subject oneself to such consequences. Lewis v. Colquitt County, 71 Ga. App. 304, 30 S.E.2d 801 (1944).
Section inapplicable to three-cornered transaction resulting in tort claim.
- O.C.G.A. § 13-1-13 does not apply to a three-cornered transaction culminating in a tort claim for damages. Read v. Benedict, 200 Ga. App. 4, 406 S.E.2d 488 (1991).
Section no bar to recovery of premiums not made to satisfy claim.
- In a suit on a contract terminating a business relationship and requiring the defendant to select one of two options regarding an insurance policy, the plaintiff's recovery of insurance premiums the plaintiff paid was not barred by the voluntary payment doctrine of O.C.G.A. § 13-1-13; the plaintiff made premium payments not to satisfy a claim but to keep the policy in effect, and allowing the premium to go unpaid would have defeated the purpose of the parties' agreement. Hibbard v. McMillan, 284 Ga. App. 753, 645 S.E.2d 356 (2007).
Voluntary payment doctrine did not apply to recovery of usury.
- In a class action suit alleging that a bank's charges for ATM overdrafts were usurious, the bank's claim that each class member's ability to recover on claims for conversion and money had and received would depend on an individualized inquiry under the voluntary payment doctrine was rejected because the voluntary payment doctrine did not apply to the recovery of usury. SunTrust Bank v. Bickerstaff, 349 Ga. App. 794, 824 S.E.2d 717 (2019).
Proof required of party seeking recovery.
- Party seeking recovery must prove that the payment was not voluntarily made because certain material facts were not known at the time of payment or a valid reason existed for failure to determine the truth. Rod's Auto Fin., Inc. v. Finance Co., 211 Ga. App. 63, 438 S.E.2d 175 (1993).
Settlement amount.
- Trial court properly granted summary judgment to a general contractor because the general contractor had no legal obligation under the payment bond itself to reimburse an insurance company for the full amount of the settlement with it, plus attorney's fees and costs. Progressive Elec. Servs. v. Task Force Construction, Inc., 327 Ga. App. 608, 760 S.E.2d 621 (2014).
Cited in Hoke v. City of Atlanta, 107 Ga. 416, 33 S.E. 412 (1899); Williams v. Stewart, 115 Ga. 864, 42 S.E. 256 (1902); Everett v. Tabor, 127 Ga. 103, 56 S.E. 123, 119 Am. St. R. 324 (1906); Georgia R.R. & Banking Co. v. Crossley & Co., 128 Ga. 35, 57 S.E. 97 (1907); McDonald v. Sowell, 129 Ga. 242, 58 S.E. 860, 12 Ann. Cas. 701 (1907); Fenwick Shipping Co. v. Clarke Bros., 133 Ga. 43, 65 S.E. 140 (1909); Harris v. Neil, 144 Ga. 519, 87 S.E. 661 (1916); Finch v. Cox Co., 19 Ga. App. 256, 91 S.E. 281 (1917); Burell v. Pirkle, 156 Ga. 398, 119 S.E. 529 (1923); Dennison Mfg. Co. v. Wright, 156 Ga. 789, 120 S.E. 120 (1923); Stern v. Howell, 33 Ga. App. 693, 127 S.E. 775 (1925); Morris v. Scott, 33 Ga. App. 787, 127 S.E. 823 (1925); Mayor of Savannah v. Southern Stevedoring Co., 36 Ga. App. 526, 137 S.E. 123 (1927); Daniel Bros. Co. v. Richardson, 39 Ga. App. 121, 146 S.E. 505 (1929); Wardlaw v. Withers, 39 Ga. App. 600, 148 S.E. 16 (1929); Darby v. City of Vidalia, 168 Ga. 842, 149 S.E. 223 (1929); Trust Co. v. Mobley, 40 Ga. App. 468, 150 S.E. 169 (1929); Davidson v. Citizens' Bank, 171 Ga. 81, 154 S.E. 775 (1930); Morgan v. Shepherd, 171 Ga. 33, 154 S.E. 780 (1930); Davison-Paxon Co. v. Walker, 174 Ga. 532, 163 S.E. 212 (1932); Morris v. Floyd County, 46 Ga. App. 150, 167 S.E. 127 (1932); American Mills Co. v. Doyal, 46 Ga. App. 236, 167 S.E. 312 (1933); Eibel v. Royal Indem. Co., 50 Ga. App. 206, 177 S.E. 350 (1934); M.C. Kiser & Co. v. Doyal, 51 Ga. App. 30, 179 S.E. 578 (1935); Nash Loan Co. v. Dixon, 181 Ga. 297, 182 S.E. 23 (1935); State Revenue Comm'n v. Alexander, 54 Ga. App. 295, 187 S.E. 707 (1936); New York Life Ins. Co. v. Bradford, 55 Ga. App. 248, 189 S.E. 914 (1937); Mayor of Fort Valley v. Levin, 183 Ga. 837, 190 S.E. 14 (1937); Atlanta Coach Co. v. Simmons, 55 Ga. App. 532, 190 S.E. 610 (1937); Crisler v. Bank of Canton, 58 Ga. App. 485, 199 S.E. 252 (1938); Bowers v. Dolen, 187 Ga. 653, 1 S.E.2d 734 (1939); Goodwin v. MacNeill, 188 Ga. 182, 3 S.E.2d 675 (1939); American Sur. Co. v. Groover, 64 Ga. App. 865, 14 S.E.2d 149 (1941); Walker v. Bituminous Cas. Corp., 74 Ga. App. 517, 40 S.E.2d 228 (1946); Hurt & Quinn, Inc. v. Keen, 89 Ga. App. 4, 78 S.E.2d 345 (1953); Rose v. Mayor of Thunderbolt, 89 Ga. App. 599, 80 S.E.2d 725 (1954); Denton v. City of Carrollton, 235 F.2d 481 (5th Cir. 1956); Stein Steel & Supply Co. v. K. & L. Enters., Inc., 97 Ga. App. 71, 102 S.E.2d 99 (1958); Macon Coca-Cola Bottling Co. v. Evans, 214 Ga. 1, 102 S.E.2d 547 (1958); Coleman v. Aronson, 103 Ga. App. 469, 119 S.E.2d 599 (1961); Howell v. Muscogee County, 105 Ga. App. 515, 125 S.E.2d 139 (1962); Oxford v. Shuman, 106 Ga. App. 73, 126 S.E.2d 522 (1962); Seaboard Air Line R.R. v. Richmond Lumber, Inc., 109 Ga. App. 328, 136 S.E.2d 144 (1964); Gulf Am. Fire & Cas. Co. v. Harper, 117 Ga. App. 356, 160 S.E.2d 663 (1968); Hawes v. Smith, 120 Ga. App. 158, 169 S.E.2d 823 (1969); Byers v. Lieberman, 126 Ga. App. 582, 191 S.E.2d 470 (1972); United States Lines v. United States, 470 F.2d 487 (5th Cir. 1972); Blackmon v. Ewing, 231 Ga. 239, 201 S.E.2d 138 (1973); Flanders v. Columbia Nitrogen Corp., 135 Ga. App. 21, 217 S.E.2d 363 (1975); Town of Lyerly v. Short, 234 Ga. 877, 218 S.E.2d 588 (1975); Deevers v. Associated Distribs., Inc., 138 Ga. App. 751, 227 S.E.2d 485 (1976); Yeargin v. Farmers Mut. Ins. Ass'n, 142 Ga. App. 76, 234 S.E.2d 856 (1977); Cooper v. Public Fin. Corp., 144 Ga. App. 572, 241 S.E.2d 839 (1978); Grizzard v. Petkas, 146 Ga. App. 318, 246 S.E.2d 375 (1978); Cooper v. Public Fin. Corp., 146 Ga. App. 250, 246 S.E.2d 684 (1978); Jones v. Howard, 153 Ga. App. 137, 264 S.E.2d 587 (1980); Blanton v. Blanton, 154 Ga. App. 646, 269 S.E.2d 505 (1980); City of Norcross v. Taylor, 157 Ga. App. 335, 277 S.E.2d 327 (1981); Kay Solar Sys. v. Rome Printing Co., 160 Ga. App. 825, 287 S.E.2d 675 (1982); Georgia Power Co. v. Foster Wheeler Corp., 161 Ga. App. 641, 288 S.E.2d 720 (1982); United States v. DeKalb County, 729 F.2d 738 (11th Cir. 1984); Head v. Hook, 254 Ga. 293, 329 S.E.2d 145 (1985); Levinson v. American Thermex, Inc., 196 Ga. App. 291, 396 S.E.2d 252 (1990); Nix v. Crews, 200 Ga. App. 58, 406 S.E.2d 566 (1991); Watts v. Promina Gwinnett Health Sys., Inc., 242 Ga. App. 377, 530 S.E.2d 14 (2000); Liberty Nat'l Life Ins. Co. v. Radiotherapy of Ga., P.C., 252 Ga. App. 543, 557 S.E.2d 59 (2001).
Voluntary Payments
Payment in response to threat to levy execution if not paid promptly not involuntary.
- Payment of judgment alleged to be void, where facts are all known by defendant, and there is no misplaced confidence, and no artifice, deception, or fraudulent practice used by other party, is voluntary payment, and cannot be recovered, unless made under urgent and immediate necessity therefor, or to release person or property, although such payment is made under protest. Mere threat to levy execution if not paid promptly or at once does not render payment involuntary. West v. Brown, 165 Ga. 187, 140 S.E. 500 (1927), citing Williams v. Stewart, 115 Ga. 864, 42 S.E. 256 (1902).
Mere apprehension or threats of civil proceeding to enforce claim do not render claim involuntary.
- Mere apprehension or threats of civil proceeding to enforce claim, unaccompanied by any act of hardship or of oppression, does not render payment in response thereto involuntary. Strachan Shipping Co. v. Mayor of Savannah, 168 Ga. 309, 147 S.E. 555 (1929).
Threatened levy upon land not seizure as would render payment involuntary.
- Threatened levy upon land is neither an immediate seizure of one's goods or arrest of one's person such as would make payment in lieu of levy less than voluntary. Dunton v. Norton, 42 Ga. App. 310, 155 S.E. 775 (1930).
Voluntary expenditures made by intervenor in partition suit not recoverable.
- Expenditures voluntarily made by intervenor in partition suit while living with his wife and mother, (plaintiff and defendant) and in providing home for himself, his wife, and his mother, not recoverable by him. Mills v. Williams, 208 Ga. 425, 67 S.E.2d 212 (1951).
Application of doctrine to mistaken duplicate payment.
- The voluntary payment doctrine did not bar a city's unjust enrichment and conversion claims filed against a construction contractor as the contractor failed to show that: (1) a genuine issue of material fact remained over whether the city was negligent in ascertaining the true facts; and (2) any prejudice would result if the mistaken duplicate payment the city made to the contractor were returned to the city. D & H Constr. Co. v. City of Woodstock, 284 Ga. App. 314, 643 S.E.2d 826 (2007).
Overpayment in posting of bail bonds.
- Family's suit to recover an overpayment the family made to two bail bondspersons to post bail bonds was not barred by O.C.G.A. § 13-1-13 even though the payments to the bondspersons were voluntarily made as the family paid the money to release a family member from detention. Borison v. Christian, 257 Ga. App. 257, 570 S.E.2d 696 (2002).
Recovery of overpayments from energy company.
- Trial court erred by dismissing a class action complaint under O.C.G.A. § 9-11-12(b)(6) for failure to state a cause of action in a suit brought by customers against an energy company seeking recovery of overpayments as the voluntary payment doctrine did not apply to bar the action. Ellison v. Southstar Energy Servs., LLC, 298 Ga. App. 170, 679 S.E.2d 750 (2009), aff'd, 286 Ga. 709, 691 S.E.2d 203 (2010).
Money paid under apprehension or threat of criminal prosecution where no immediate danger not involuntary.
- Money paid under apprehension or threat of criminal prosecution, when no warrant has been issued or proceeding begun, and there is no urgent and immediate danger, does not constitute duress so as to make payment compulsory. Strachan Shipping Co. v. Mayor of Savannah, 168 Ga. 309, 147 S.E. 555 (1929).
Payments resulting from threats by one clothed with governmental authority to execute threats, generally recoverable.
- To above rule there is this exception: Where there are demands and threats by persons clothed with governmental authority to carry the threats into execution by arrest and prosecution, case stands on a different footing from demands and threats of private individuals, and money paid as a result may generally be recovered. Strachan Shipping Co. v. Mayor of Savannah, 168 Ga. 309, 147 S.E. 555 (1929).
Partial insurance settlement.
- Acceptance of a partial settlement of an insurance claim in exchange for a general release because of ignorance of rights which would have allowed full payment was a voluntary action under O.C.G.A. § 13-1-13. Hawkins v. Travelers Ins. Co., 162 Ga. App. 231, 290 S.E.2d 348 (1982).
Settlement for amount in excess of liability limit.
- Insurance company which settled a lawsuit for $600,000, prior to a declaratory judgment holding that the limit of liability was $500,000, could not recover the $100,000 overpayment, which constituted a voluntary payment. Insurance Co. of N. Am. v. Kyla, Inc., 193 Ga. App. 555, 388 S.E.2d 530 (1989).
Contribution by employer to tort settlement voluntary.
- Where a "statutory employer," within the meaning of the workers' compensation law, enjoyed tort immunity at the time it contributed to a tort settlement, its payment constituted a voluntary payment, and the employer was not entitled to credit for funds it contributed to the settlement. Travelers Ins. Co. v. McNabb, 201 Ga. App. 297, 410 S.E.2d 788, cert. denied, 201 Ga. App. 904, 410 S.E.2d 748 (1991), overruled on other grounds, Yoho v. Ringier of Am., Inc., 263 Ga. 338, 434 S.E.2d 57 (1993).
Retirement benefits.
- Summary judgment for a retirement system was reversed as there were fact issues as to voluntary payment under O.C.G.A. § 13-1-13, and equitable estoppel under O.C.G.A. § 23-2-32, as a son claimed that his mother told him that her benefits would continue to be paid after her death; details of how the retirement system discovered the mother's death were needed to resolve the possibility that the son retained and spent the money in good faith. Applebury v. Teachers' Ret. Sys., 275 Ga. App. 194, 620 S.E.2d 452 (2005).
Recovery of payments by county.
- In an action by a county to recover payments the county made to a company in connection with road improvement projects, the county could not raise the argument that the provisions of O.C.G.A. § 36-10-1, regarding requirements for county contracts, were not followed when the county paid the amounts and then waited more than two years to file suit to recover the monies paid. Twiggs County v. Oconee Elec. Mbrshp. Corp., 245 Ga. App. 231, 536 S.E.2d 553 (2000).
County was not entitled to recover voluntary payments made to the county tax commissioner in the form of commissions the commissioner received in the commissioner's capacity as tag fee agent, even though it was later determined that the commissioner was not entitled to receive a portion of tag fees as compensation, as the parties were operating under the mistaken belief that the law permitted the commissioner to be paid the commissions, both parties knew that the commissioner was being paid a commission from the fees collected, and there was no deception or fraud on the commissioner's part regarding the fact that the commissioner was receiving the commissions. Montgomery County v. Sharpe, 261 Ga. App. 389, 582 S.E.2d 545 (2003).
Right to recoup taxes forfeited.
- Superior court did not err in reversing the decision of the Georgia Department of Revenue that a corporate officer was liable for a restaurant's sales and use taxes pursuant to O.C.G.A. § 48-2-52 because the release of and refund payment to the majority owner of the restaurant operated as a release of the officer; under O.C.G.A. § 13-1-13, by voluntarily paying the owner a settlement amount with full awareness of any potential joint claim the owner had against the officer, the Department forfeited any right the Department had to recoup from the officer the payment the Department made to the owner. Ga. Dep't of Revenue v. Moore, 317 Ga. App. 31, 730 S.E.2d 671 (2012).
Doctrine does not apply to tax indebtedness.
- In an assessment action under O.C.G.A. § 48-2-52, the Georgia Court of Appeals erred by concluding that because the Georgia Department of Revenue voluntarily refunded a tax payment made by a majority owner of a restaurant, it could not seek payment from a second responsible party as the voluntary payment doctrine applied to contracts, not tax indebtedness; it was necessary to remand the case to see if the second responsible party was a necessary party to the majority owner's refund action. Ga. Dep't of Revenue v. Moore, 294 Ga. 20, 751 S.E.2d 57 (2013).
Voluntary payment doctrine set forth in O.C.G.A. § 13-1-13 is a concept applicable to contracts, not tax indebtedness. Ga. Dep't of Revenue v. Moore, 294 Ga. 20, 751 S.E.2d 57 (2013).
Payment of late charges.
- The voluntary payment doctrine barred claims for recovery of late fees paid by cable television subscribers under a service agreement with the cable company which stated that a late fee would be charged to a customer's account if payment was not received by the due date. Telescripps Cable Co. v. Welsh, 247 Ga. App. 282, 542 S.E.2d 640 (2000).
On facts, payment voluntary.
- J.A. Jones Constr. Co. v. Greenbriar Shopping Ctr., 332 F. Supp. 1336 (N.D. Ga. 1971), aff'd, 461 F.2d 1269 (5th Cir. 1972); Rod's Auto Fin., Inc. v. Finance Co., 211 Ga. App. 63, 438 S.E.2d 175 (1993); Chemin v. State Farm Mut. Auto. Ins. Co., 226 Ga. App. 702, 487 S.E.2d 638 (1997).
Payment not accepted.
- Evidence showed that plaintiff who was awarded judgment did not accept payment of $43,166 which defendant made in an attempt to satisfy the judgment prior to appeal, and the appellate court held that plaintiff was not entitled to take advantage of defendant by arguing that the check was a voluntary payment under O.C.G.A. § 13-1-13 and did not have to be returned, but that plaintiff was required to return the money to comply with the appellate court's judgment reversing the trial court's judgment in plaintiff's favor. Blanton v. Bank of Am., 263 Ga. App. 284, 587 S.E.2d 411 (2003).
Subrogee's claim barred.
- Voluntary payment doctrine in O.C.G.A. § 13-1-13 barred a subrogee/insurer's claim for contractual indemnification against a subcontractor for damage done to a roadway during a construction project managed by the insured, a general contractor, because the subrogee's commercial general liability policy only covered damages caused by an unforeseen "accident" or "occurrence" to a third party. Mass. Bay Ins. Co. v. Sunbelt Directional Drilling, Inc., F. Supp. 2d (N.D. Ga. Feb. 14, 2008).
Trial court did not err in granting a contractor summary judgment in an insurer's action to recover for the property damage a church sustained when the contractor installed an air conditioning system because the action was barred by the voluntary payment doctrine since the insurer paid the church for the church's loss and had no contractual obligation to do so, and under the church's policy, the insurer could not recover for a loss against a third party unless the loss was paid under the covered property coverage; prior to paying the church, the insurer had full knowledge of the facts pertaining to the loss, having received several reports from an adjuster, and the fact that the insurer had an assignment did not change the result because it was trying to recover the same amount from the contractor that the insurer paid for the loss. Southern Mut. Church Ins. Co. v. ARS Mech., LLC, 306 Ga. App. 748, 703 S.E.2d 363 (2010).
Legal fees paid by spouse who killed other spouse.
- In an estate administrator's conversion suit against a law firm, the trial court properly granted the law firm summary judgment with regard to the administrator attempting to recover $125,000 in legal fees the decedent's spouse had paid to the law firm as the law firm accepted the fees from the decedent's spouse in good faith since it was not determined until sometime later that the spouse had killed the decedent after the spouse pled guilty to the homicide. Further, there was no evidence that the spouse did not have title to the money when the money was paid. Levenson v. Word, 294 Ga. App. 104, 668 S.E.2d 763 (2008), aff'd, 286 Ga. 114, 686 S.E.2d 236 (2009).
Wages voluntarily paid could not be recovered.
- Under an employment contract, a business consultant was granted back wages as a matter of law because the company failed to show that the consultant misled the company about the hours the consultant actually worked and had paid the consultant wages up until the date of termination as a form of severance package, even though the company had concerns that the consultant might not have put in full work weeks; because the company chose not to act on the company's concerns, the company was barred from recovering wages paid by the voluntary payment doctrine codified at O.C.G.A. § 13-1-13. Tura v. White Oak Group, Inc., F. Supp. 2d (N.D. Ga. Sept. 15, 2008).
Misplaced confidence doctrine applied to payment made after installation.
- Voluntary payment doctrine in O.C.G.A. § 13-1-13 did not bar a customer's claims alleging that a home improvement store improperly installed the customer's dryer; although the customer had constructive notice of the installation conditions and the manufacturer's specifications at the time of payment, the store's guarantee of a quality, reliable, and professional installation of each dryer that the store sold provided material facts supporting the misplaced confidence exception to the voluntary payment doctrine thereby precluding judgment as a matter of law. Goldstein v. Home Depot U.S.A., Inc., 609 F. Supp. 2d 1340 (N.D. Ga. 2009).
Voluntary payment doctrine not a bar to recovery of excessive notary charges.
- In response to certified questions from a federal action which arose with respect to a mortgagee's charges that included substantial notary fees from a refinancing transaction, it was determined that the voluntary payment doctrine of O.C.G.A. § 13-1-13 did not bar a breach of contract claim based on the excessiveness of the charges, as there was sufficient artifice, deception, or fraudulent practice by the mortgagee's misrepresentation under O.C.G.A. § 45-17-11(d) that the charges were "reasonable and necessary." Anthony v. Am. Gen. Fin. Servs., 287 Ga. 448, 697 S.E.2d 166 (2010).
Payment voluntary regardless of protest by counsel.
- After the debtor arranged to refinance the remaining debt through an investment company, and the parties to the original loan eventually agreed on a payoff amount of $308,982.41, which was wired to the creditor, the payment was a voluntary payment that extinguished the debt memorialized in the original note and security deed, and the fact that counsel for the debtor purported to make the payment with a form of protest did not affect that conclusion; thus, the creditor erred in refusing to cancel the security deed. CB Lending, LLC v. Strategic Property Consulting Group, LLC, 353 Ga. App. 114, 834 S.E.2d 618 (2019).
Involuntary Payments
Failure to disclose salient facts.
- When the breach of duty on which recovery is based is failure to disclose salient facts to the plaintiff, the payments cannot be deemed voluntary within the language of O.C.G.A. § 13-1-13. City of Commerce v. Duncan & Godfrey, Inc., 157 Ga. App. 337, 277 S.E.2d 266 (1981).
Payment of earnest money under real estate sale contract was not voluntary payment. Williams v. Gottlieb, 90 Ga. App. 438, 83 S.E.2d 245 (1954).
Fact that there is pending litigation regarding a party's obligation to pay money does not render payments made during the litigation involuntary unless the payments come within an exception specified in O.C.G.A. § 13-1-13. Yeazel v. Burger King Corp., 241 Ga. App. 90, 526 S.E.2d 112 (1999).
No evidence of immediate threat.
- Although the tenant of a commercial lease may have feared that the landlord would take action if the tenant failed to make the payments in the amount demanded, there was no evidence that the payments were made to counter an immediate threat to person or property so as to come within an exception to O.C.G.A. § 13-1-13. Yeazel v. Burger King Corp., 241 Ga. App. 90, 526 S.E.2d 112 (1999).
Payment to recover possession of personalty wrongfully detained not voluntary.
- Voluntary payments, though illegally demanded, cannot be recovered back. But a payment made for purpose of recovering possession of personal property wrongfully detained is not voluntary, and may be recovered back. This is true when owner does not know who has possession of property, but makes payment to third person to be used in securing release of goods. DuVall v. Norris, 119 Ga. 947, 47 S.E. 212 (1904).
Overcharge of freight paid under protest in order to obtain goods is recoverable.
- Carrier is liable to suit by shipper for recovery of overcharge of freight paid under protest in order to obtain the shipper's goods and which carrier refused to repay on demand. Southern Ry. v. Schlittler, 1 Ga. App. 20, 58 S.E. 59 (1907).
Payment to prevent detention resulting from conviction unsupported by valid ordinance, not voluntary.
- Where one has been convicted in recorder's court, and no valid ordinance authorizes such conviction, payment of fine to prevent immediate seizure of person is not voluntary payment, and may be recovered back. Rose v. Mayor of Thunderbolt, 89 Ga. App. 599, 80 S.E.2d 725 (1954).
Premiums paid to prevent insurer from treating policy as lapsed not voluntary.
- Premiums paid after furnishing proof of disability and required in order to prevent insurer from treating policy as lapsed are recoverable as payments made under urgent and immediate necessity, and are not voluntary. Metropolitan Life Ins. Co. v. Saul, 182 Ga. 284, 185 S.E. 266 (1936).
Payment on condition that difference in amount due to be adjusted later not voluntary.
- Where county commissioners proposed to settle for $1,200.00 all of amount that auditors claimed was due county by clerk of superior and city courts, and clerk on the clerk's part, to avoid delay, agreed to deposit $1,200.00, on condition that difference as to amount due should be adjusted later, and at same time county commissioners on their part agreed that, if on investigation amount proved to be incorrect, matter would be adjusted by refunding to clerk amount incorrectly charged to the clerk, this was not a voluntary payment, and hence whatever part of $1,200.00 that was incorrectly charged to plaintiff clerk could be recovered as money had and received. Lewis v. Colquitt County, 71 Ga. App. 304, 30 S.E.2d 801 (1944).
Shareholder's payment to avoid seizure of corporate property not involuntary.
- Shareholder's payment of $70,000 for stock was not considered "involuntary" so as to fall outside the ambit of O.C.G.A. § 13-1-13, merely because it was made under what the shareholder perceived to be an "urgent and immediate necessity" of preventing another's "eventual and imminent seizure" of the corporation's property. Graham v. Cook, 179 Ga. App. 603, 347 S.E.2d 623 (1986).
On facts, payment involuntary.
- See Speed Oil Co. v. Aycock, 188 Ga. 46, 2 S.E.2d 666 (1939).
Mistake
Application to one paying money by mistake, without valid reason for ascertaining truth.
- One paying money by mistake without valid reason for failing to ascertain truth cannot recover payment. Barker v. Federated Life Ins. Co., 111 Ga. App. 171, 141 S.E.2d 206 (1965).
Section applies not only when one pays money with knowledge of all facts but also when one pays by mistake without valid reason for failing to ascertain truth. Bohannon v. Manhattan Life Ins. Co., 555 F.2d 1205 (5th Cir. 1977); Insurance Co. of N. Am. v. Kyla, Inc., 193 Ga. App. 555, 388 S.E.2d 530 (1989).
Money paid under mistake or in ignorance of fact recoverable in appropriate circumstances.
- Even where money is paid under mistake of fact, or in ignorance of facts, the money cannot be recovered, unless circumstances are such that party receiving the money ought not, in equity and good conscience, to be allowed to retain the money. In equity and good conscience refers only to acts and intentions of person receiving money as affecting other party to transaction. If one has acted in good faith and in good conscience with person paying money, one is entitled to retain the money, even if one's actions and intentions may not have been in good faith and in good conscience as regards other persons not connected with transaction. Bryant v. Guaranty Life Ins. Co., 40 Ga. App. 573, 150 S.E. 596 (1929).
While money paid under mistake of fact or in ignorance of facts may be recovered back if circumstances are such that party receiving ought not in equity and good conscience retain the money, to entitle a party to recover back money which the party has paid on ground that the money was paid to defendant through mistake or ignorance of facts, which one sets up as showing there was no legal liability on the party to pay, plaintiff should allege and show on trial that at time of payment plaintiff was mistaken as to such facts or ignorant of their existence. New York Life Ins. Co. v. Williamson, 53 Ga. App. 28, 184 S.E. 755 (1936).
In an action for money had and received, the plaintiff generally can recover a payment mistakenly made when that mistake was caused by the plaintiff's lack of diligence or the plaintiff's negligence in ascertaining the true facts and the other party would not be prejudiced by refunding the payment, subject to a weighing of the equities between the parties by the trier of fact. Gulf Life Ins. Co. v. Folsom, 256 Ga. 400, 349 S.E.2d 368 (1986); Graham v. Hogan, 185 Ga. App. 842, 366 S.E.2d 219 (1988); Landers v. Heritage Bank, 188 Ga. App. 785, 374 S.E.2d 353 (1988).
Where both parties to a construction contract labored under a mutual mistake of fact that there was a valid contract and since plaintiff made the deposit with the defendants in belief that such was required under the contract, then O.C.G.A. § 13-1-13 has no application because the money was not due and payable under a void contract. Cochran v. Ogletree, 244 Ga. App. 537, 536 S.E.2d 194 (2000).
Reliance on computer records.
- A jury issue exists as to whether the plaintiff was negligent in relying solely on the plaintiff's computer, considering the facts of the current widespread use of computers for the purpose of keeping business records, and that, although the computer here, though negligently programmed by the plaintiff's subsidiary, may not have been known to be inaccurate. Gulf Life Ins. Co. v. Folsom, 256 Ga. 400, 349 S.E.2d 368 (1986).
There is distinction between mistake and ignorance of law and section applicable only to latter.
- There is a distinction between ignorance and mistake of law. Ignorance implies passiveness; mistake implies action. Ignorance does not pretend to knowledge, but mistakes assumes to know. Ignorance may be result of laches, but mistake argues diligence. Mere ignorance is no mistake, but mistake involves more than ignorance. Hence, the statute does not apply to money paid under mistake of law. Whitehurst v. Mason, 140 Ga. 148, 78 S.E. 938 (1913).
Money paid under mistaken apprehension of liability not recoverable.
- There can be no recovery of money paid by lodge as funeral expenses for member when the amounts were paid out under mistaken apprehension as to lodge's liability for amount of that benefit. Chapman v. Ellis, 58 Ga. App. 614, 199 S.E. 650 (1938).
Affidavit that insurance paid without knowledge of payment by another not proving lack of knowledge.
- Affidavit by insurer which stated that claim was paid without knowledge of any other policy or that payments had been made under any other policy was not sufficient to prove lack of knowledge. Aetna Life Ins. Co. v. Cash, 121 Ga. App. 8, 172 S.E.2d 629 (1970).
Mistake of law.
- While money voluntarily paid may not ordinarily be recovered, this rule is not without exception. If payment was made in ignorance of law, recovery is barred; if in mistake of law, recovery is permitted. Emond v. State Farm Mut. Auto. Ins. Co., 175 Ga. App. 548, 333 S.E.2d 656 (1985).
Duress
In order for payment to be involuntary it must be paid under duress, and if payment is made under urgent and immediate necessity therefor or to prevent an immediate seizure of person or property, it is made under duress. Taranto v. Richardson, 50 Ga. App. 851, 179 S.E. 202 (1935).
Disadvantage and unequal bargaining power not grounds of duress.
- One may not void a contract on grounds of duress merely because one entered into the contract with reluctance, the contract was very disadvantageous to the party, the bargaining power of the parties was unequal or there was some unfairness in the negotiations preceding the agreement. Graham v. Cook, 179 Ga. App. 603, 347 S.E.2d 623 (1986).
Threat of prosecution not necessarily duress.
- Mere threats of prosecution of one who has committed no crime, or by one who has apparently made no moves toward carrying out of such threats, do not amount to duress in law. Taranto v. Richardson, 50 Ga. App. 851, 179 S.E. 202 (1935).
Claim for rescission of a settlement agreement was meritless where, at the time of the settlement, plaintiff was acting on a court order with full knowledge of all the extant facts and was not under immediate threat of seizure of property. Sellers Bros., Inc. v. Imperial Flowers, Inc., 232 Ga. App. 687, 503 S.E.2d 573 (1998).
OPINIONS OF THE ATTORNEY GENERAL
Payment of liquor license by licensee who subsequently sells business not recoverable.
- Payment of retail liquor license by owner of store, which the owner shortly thereafter sold to another, is not recoverable where voluntarily made. 1948-49 Op. Att'y Gen. p. 593.
Occupational tax not refundable to car dealer prohibited from using dealer tags.- One who has paid occupational tax as used car dealer but who is prohibited from receiving and using dealer tags because one did not register under Used Car Dealers Registration Act is not entitled to refund of occupational tax. 1969 Op. Att'y Gen. No. 69-167.
RESEARCH REFERENCES
C.J.S.
- 70 C.J.S., Payment, §§ 132 et seq., 155, 156, 160.
ALR.
- Right to restitution of one paying, or advancing money upon the same security to pay, debt secured by supposedly valid lien where the lien proves invalid, 159 A.L.R. 487.
Partial payment on private building or construction contract as waiver of defects, 66 A.L.R.2d 570.
When statute of limitations begins to run against action to recover money paid by mistake, 79 A.L.R.3d 754.
Right of insurer under health or hospitalization policy to restitution of payments made under mistake, 79 A.L.R.3d 1113.