The voluntary payment doctrine states that where one party pays an illegal demand with full knowledge of all the facts, then it may not recover that payment. The exceptions to that are three in number. The first one is where there is an immediate and urgent necessity for the payment. The second exception is where the payment is made to release the person or property from detention. The third exception is where there is an immediate seizure of person or property and the payment is made to prevent such. D.R. Horton, Inc. v. Board of Supervisors of County of Warren, 285 Va. 467 (2013)
All such payments are presumed to be voluntary until the contrary is shown. Town of Phoebus v. Manhattan Social Club, 105 Va. 144, 149 (1906)
Voluntary Payment Doctrine-Fraud or Misconduct
In the D.R. Horton case, Horton argued that it paid fees involuntarily to the county because of the county’s refusal to issue building permits without the payment of those fees. Horton then argued that constituted a seizure of a property right including Horton’s right to develop the property. The Supreme Court held that Horton did not in any way lose its right to develop the property as a result of this demand. To prevail in this case, Horton would need to prove that it did not have time and opportunity to relieve itself of its predicament by resorting to some legal relief. Horton’s protest against the payments did not make its payment of the fee involuntary.
In Sheehy v. Williams, 299 Va. 274, 278 (2020), the court noted that the premise of the doctrine is that absent a showing of fraud or other misconduct, the claimant could not demand that a court return money that he had voluntarily paid to another. Every person is presumed to know the law. If a person voluntarily makes a payment which the law does not compel, then he has no basis for legal relief. In general the payment is deemed to be voluntary unless the law compels the payment.
Call, or contact us for a free consult. Also for more info on the Voluntary Payment Doctrine see the Wikipedia pages. Also see the post on this site dealing with contract issues.