We are of opinion that this case falls within the principle ofPeyser v. The Mayor, etc. (70 N.Y. 497). In that case the plaintiff, after having paid an assessment,
which was an apparent lien upon his property, obtained an adjudication vacating and setting aside the assessment, and this court decided that he was entitled to a return of the money paid, and could maintain an action against the city therefor. The case was held to be analogous to that of one who, after judgment against him, pays the judgment, and subsequently obtains a reversal of it on appeal. He becomes in such case entitled to restitution of what he has paid. In the present case the plaintiff was not the party assessed, nor was he the petitioner in the proceedings to vacate the assessment; but he had a valuable leasehold interest in the property, upon which the assessment was an apparent lien, and he was also bound by the covenants in his lease to pay all assessments. He was, therefore, the real party in interest in the proceedings instituted by his landlord to vacate the assessment. He might have instituted them himself, and was, we think, entitled to avail himself of the favorable result obtained by his landlord. Under the decision in the Peyser Case, if the payment in question had been made by the landlord, during the pendency of the proceedings, he would have been entitled to recover it back, and we see no reason why the plaintiff should not have the same right. He was not a mere volunteer, but was the party ultimately responsible in case the validity of the assessment was sustained, and so long as it remained as an apparent lien upon the property, he was disabled from disposing of his interest therein. The payment was not recoverable on the ground that it was made under duress, in fact, but it was made upon an apparent lien, which was in the PeyserCase held to be in the nature of a judgment, and on the reversal of that judgment by competent authority, the city became bound to restore what it had received under it from the party in whose interest the reversal was obtained, and it is not a case for the application of the doctrine of voluntary payments. If the payment had been made before any proceedings had been instituted to vacate the assessment, the case could not have arisen, for, as we have held, such proceedings cannot be instituted after payment, but no harm or injustice can be done by holding that if, pending the
proceedings, the payment is made, it is received by the city subject to their final result, and must be restored if the assessment is finally vacated in those proceedings. Of course, this right of restitution would not extend to any but the parties by whom or in whose behalf the proceedings were instituted, and one property-owner could not avail himself of proceedings instituted by the owner of other property affected by the same assessment. But where, as in the present case, the proceedings are instituted by the owner of the fee, we think it should inure to the benefit of those holding under him, and who are ultimately liable for the assessment if sustained.
The judgment should be reversed and a new trial ordered, costs to abide the event.
All concur, except MILLER, J., dissenting; FOLGER, Ch. J., absent.
Judgment reversed.