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 

delinquent real estate taxes.1

 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 

was for taxes owed on Parcels 26 and 27.2

 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 

escrow agreement. Wood appeals.3

 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.