Present: Carrico, C.J., Compton, Lacy, Hassell, Keenan, and
Kinser, JJ., and Whiting, Senior Justice

DAISY WOOD

v. Record No. 962082    OPINION BY JUSTICE CYNTHIA D. KINSER
                                      OCTOBER 31, 1997
BOARD OF COUNTY SUPERVISORS
OF PRINCE WILLIAM COUNTY, ET AL.

         FROM THE CIRCUIT COURT OF PRINCE WILLIAM COUNTY
                  LeRoy F. Millette, Jr., Judge


     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.
                                I.

     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
                                1
delinquent real estate taxes.

     Parcels 26 and 27 were part of a large development in

Prince William County known as the Greenhill Farm Project,
     1
       Parcel 26 was likewise encumbered by delinquent real
estate taxes in addition to a deed of trust held by Samuel
M. Jones (Jones).
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
                                             2
was for taxes owed on Parcels 26 and 27.         In making this
        2
       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.
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
                                       3
escrow agreement.      Wood appeals.
                                 II.

       The only issue raised in Wood's assignment of error is

whether a mistake of fact requires mutuality. 4     Wood
       3
       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 case,
Jones withdrew his appeal, and that issue is no longer
before us.
       4
       In her petition for appeal, Wood assigned the
following error:
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 262.


     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.
     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 refund.").
     Accordingly, for the reasons stated above, we will

affirm the judgment of the trial court.

                                                     Affirmed.
