BOARD OF COUNTY
SUPERVISORS OF PRINCE WILLIAM COUNTY, ET AL.
OCTOBER 31, 1997
Record No. 962082
BOARD OF COUNTY SUPERVISORS
OF PRINCE WILLIAM COUNTY, ET AL.
OPINION BY JUSTICE CYNTHIA D. KINSER
FROM THE CIRCUIT COURT OF PRINCE WILLIAM COUNTY
LeRoy F. Millette, Jr., Judge
Present: Carrico, C.J., Compton, Lacy, Hassell, Keenan, and
Kinser, JJ., and Whiting, Senior Justice
This appeal concerns an erroneous payment of real estate taxes
on a parcel of land located in Prince William County. Because we
find that an inadvertent payment is a mistake of fact which may
be corrected even if the mistake was unilateral, we will affirm
the lower court’s judgment that the Board of County Supervisors
of Prince William County (the County) can correct the mistake by
refunding the erroneous payment to the payor or by crediting the
payor’s other tax accounts.
In April 1994, GH Associates L.P. (GH) acquired two tracts of
land, Parcel 26 and Parcel 27, by a deed in lieu of foreclosure.
At the time of GH’s acquisition, Daisy Y. Wood (Wood) held a note
secured by a first deed of trust on Parcel 27. In addition,
Parcel 27 was encumbered by delinquent real estate taxes. 
Parcels 26 and 27 were part of a large development in Prince
William County known as the Greenhill Farm Project, which was a
joint venture involving various related entities. One such
entity, Greenhill Farm, L.P. (Greenhill), owned eight parcels of
land in the Greenhill Farm Project. Two other entities, Peterson
Development Corporation (Peterson) and H/P Companies L.C. (H/P),
played a central role in the management of the project. Peterson
acted as a banker by maintaining a central bank account for the
entities associated with the Greenhill Farm Project and by
providing a line of credit when it advanced funds to them. H/P
was a service company and performed accounting functions,
including paying the bills of the different entities. In making
these payments, H/P used funds in Peterson’s central bank
account. H/P then recorded these payments on separate ledgers
that it kept for each entity.
In July 1994, H/P issued a check request form which in turn
generated a check drawn on Peterson’s account. The check, payable
to the County, was for real estate taxes owed on 10 separate tax
accounts. Individual tax tickets designating the real estate upon
which the taxes were being paid accompanied the check. Eight of
the tax tickets were for property owned by Greenhill. The
remaining two tickets were for Parcels 26 and 27, GH’s property.
The amount of the check was $204,002.45, and of that amount,
$78,637.12 was for taxes owed on Greenhill’s property, and
$125,365.33 was for taxes owed on Parcels 26 and 27.  In making this payment,
however, H/P erroneously and without Greenhill’s permission used
Greenhill’s funds to pay the taxes on GH’s property, Parcels 26
and 27. GH had no intention of paying the taxes and did not
authorize or agree to the payment.
Upon realizing the mistake in August l994, H/P contacted the
County and requested that the real estate taxes paid on Parcels
26 and 27 be reversed and credited to other tax accounts for real
estate owned by Greenhill. The County refused to grant H/P’s
request. However, following further communications, the County
did agree to hold the money in escrow until the real estate taxes
for Parcels 26 and 27 were paid in full, at which time the County
would use the funds in escrow to credit other accounts as
directed by H/P.
When Wood learned of the reversal of the payment, she demanded
that the County re-credit the tax payment to Parcel 27. Wood was
concerned that if the real estate taxes were still outstanding,
her lien would be impaired and she would have difficulty
foreclosing on the property. Wood also questioned whether the
County has statutory authority to reverse delinquent tax payments
to the detriment of the first lienholder.
Faced with conflicting demands, the County filed a declaratory
judgment action in the court below in March 1995. In its
petition, the County alleged that it can correct legitimate
mistakes in the application of tax payments and that it does so
routinely. However, because of the controversy, the County
requested the court to determine the proper application of the
erroneous tax payments on Parcels 26 and 27.
At a hearing on June 18, 1996, the trial court determined that
H/P paid the taxes by mistake without any authorization from
Greenhill and that the "proper mechanism" to correct
this mistake was to have the money "either refunded or
applied to accounts that [Greenhill] owes money on."
Accordingly, the court, by an order dated July 22, 1996, ruled as
follows: (1) that the County has the authority to correct factual
mistakes made in the payment of real estate taxes and can do so
by refunding the payment or crediting other accounts; (2) that
the party who mistakenly paid the taxes has the right to have the
payment corrected; (3) that H/P’s payment of GH’s taxes with
Greenhill’s funds was an inadvertent factual mistake, and H/P has
the right to direct that the payment be credited to other tax
accounts; and (4) that the County has the authority to enter into
the escrow agreement. Wood appeals. 
The only issue raised in Wood’s assignment of error is whether
a mistake of fact requires mutuality.  Wood
contends that mutuality is a necessary element to relieve a party
from a mistake of fact and that mutuality is absent in this case.
She argues that H/P’s mistake was unilateral because neither she
nor the County was a party to the mistake.
"The principle upon which a right of recovery is based,
in the case of money paid by mistake of fact, is well
settled." W.B. Hibbs & Co. v. First Nat’l Bank of
Alexandria, 133 Va. 94, 105-06, 112 S.E. 669, 673 (1922). In Hughes
v. Foley, 203 Va. 904, 128 S.E.2d 261 (1962), we stated that
"the right of recovery is based upon the promise to return
the money which the law implies, irrespective of any actual
promise, and even against the refusal to make it, whenever the
circumstances are such that in equity and good conscience the
money should be paid back." Id. at 906, 128 S.E.2d at
In Virginia Ins. Rating Bureau v. Commonwealth of Virginia,
186 Va. 270, 42 S.E.2d 419 (1947), we addressed a mistake of fact
in the context of whether an insurer was entitled to a refund of
an assessment that it had paid to the Virginia Insurance Rating
Bureau, also known as the Fire Bureau. The insurer had insisted
for several years that it was not required to make payments on
the basis of its automobile collision insurance premium income,
but, in 1943, it inadvertently included its collision premium
income in a report to the Rating Bureau. This Court held that
"[a] payment mistakenly made as the result of forgetfulness
or inadvertence is a mistake of fact and is recoverable"
when the person receiving the payment is not entitled to it and
therefore, cannot retain it. Id. at 283, 42 S.E.2d at 425.
The fact that the insurer’s mistake was unilateral did not affect
our decision that it was entitled to a refund.
Wood attempts to distinguish Virginia Insurance by
arguing that the Rating Bureau had no legitimate claim to the
insurer’s money whereas Prince William County was, in fact, owed
the taxes on Parcel 27. However, the issue here is not whether
the County is entitled to a tax payment but whether a mistake of
fact in making a payment may only be corrected upon a finding of
mutual mistake. If the County, through its own mistake, had
erroneously applied Greenhill’s payment to Parcel 27, the County
would be obliged to rectify the mistake and apply the payment to
the correct tax ticket, despite the fact that the County was owed
the money. Accordingly, the result should be no different just
because H/P made the mistake when it tendered the payment.
Finally, we perceive no inequity in the trial court’s
decision. Wood is in no worse position than she would have been
if H/P had never erroneously paid the delinquent taxes on Parcel
27. Moreover, she did not change her position as a result of the
payment. See Hibbs, 133 Va. at 106, 112 S.E. at 673
("[M]oney paid under a mistake of fact cannot be recovered
back where the payment has caused such a change in the position
of the payee that it would be unjust to require him to
Accordingly, for the reasons stated above, we will affirm the
judgment of the trial court.
 Parcel 26 was likewise
encumbered by delinquent real estate taxes in addition to a deed
of trust held by Samuel M. Jones (Jones).
 Out of the $125,365.33 paid on
GH’s accounts, $83,114.39 was for Parcel 26 and $42,250.94 was
for Parcel 27.
 We also awarded Jones an appeal
regarding the County’s statutory authority to refund or credit
erroneous tax payments. However, following a settlement of his
Jones withdrew his appeal, and that issue is no longer before
 In her petition for appeal,
Wood assigned the following error:
The trial court erred in granting a refund of taxes to
the management corporation which paid taxes on behalf of
a client from an account utilized by numerous separate
clients when neither the taxing county or secured
noteholder participated in or contributed to the mistake.
Nevertheless, Wood made the following arguments on brief and
orally: GH, H/P, and Greenhill are not separate entities; no
mistake of fact occurred; if there was a mistake, it resulted
from negligence; and the County has no statutory authority to
refund the payment. The Court will not address these issues since
Wood did not include them in her assignment of error. See Hamilton
Dev. Co. v. Broad Rock Club, Inc., 248 Va. 40, 44, 445 S.E.2d
140, 143 (1994) (“The language of an assignment of error may not
be changed.”). Furthermore, we stated in an order dated July 30,
l997, that the case would be limited to the error assigned by
Wood in her petition for appeal.