Lilienthal v. George Bechtel Brewing Co.

Scott, J.: The complaint alleges that a contract was entered into on March 4, 1904, for sale and delivery by plaintiffs to defendant of a quantity of hops, of which a part was to be delivered and received during the season commencing in December, 1905, and a part during the season commencing December, 1906; that defendant has repudiated the contract and refused to accept the hops deliveranle in the [206] season beginning in December, 1905. The purpose of the action is to recover damages for the breach. The defendant sets up a counterclaim, the plaintiffs’ demurrer to which has bben overruled. The counterclaim alleges that after making the contract set up in the complaint, and in October,'1904, the defendant was in great business distress by reason of the maturity of two notes held by plaintiffs which had fallen due on -September fifteenth and October twelfth respectively, and which defendant was unable to meet; that plaintiffs threatened that they would bring suit on the said matured notes and put the same in judgment unless defendant would cancel a part of the contract of March 4, 1904, and would sell back to plaintiffs at a reduced price another contract made in January, 1904; that at the time the hops covered by the last-mentioned contract were worth much more than the contract price, and plaintiffs should have paid defendant a considerable sum for the cancellation of that contract, instead of exacting a payment from it; that ■ the plaintiffs knew the extreme necessity' under which defendant was, and that if defendant permitted the said notes to be put in suit and judgment taken thereon, it would result in the collapse and ruin of the business of defendant; that owing to its business necessities defendant was compelled to accede to the demands of plaintiffs, and made the cancellation required and gave to plaintiffs its-note for $800 payable eight months after date, without interest; that said' note was paid at or after its maturity, and that no consideration therefor passed from plaintiffs to defendant, but said note was extorted by plaintiffs from defendant through duress and by reason of the imminent danger in which defendant’s business was at that time, all of which was'well known to plaintiffs'; that the matured notes aforesaid which were extended by plaintiffs were thereafter duly paid; that for the reasons aforesaid the plaintiffs on or about June 14, 1905, received the sum of $800 from defendant without consideration moving to defendant, and judgment is asked for that sum. . ' . Tn the court below the counterclaim seems to have been treated as one sounding in tort, allowable, however, because it arose out -of the same transaction set forth in the complaint". It is clear that the cause of action, if there be one stated in the counterclaim, did not [207] arise out of the contract of March 4, 1904, for the sale of hops, but out of. a transaction alleged to ■ have taken place subsequently, to wit, in October, 1904, and in this aspect the counterclaim is not one of those authorized by the Code of Civil Procedure. The defendant insists, however, that it had counterclaimed for money had and received, waiving the tort, and it is only in this aspect that the pleading can be seriously considered. Even thus considered, however, the counterclaim is insufficient. If alleges that the defendant, being unable to meet certain obligations at maturity, sought an extension from plaintiffs which the plaintiffs were unwilling to give except upon the térms set forth. In taking this attitude the plaintiffs were clearly within their legal rights. They were asked to extend a favor to defendant which they were at liberty to grant or refuse, and if they granted it they were entitled to attach conditions and exact consideration for the favor. What it is said, they threatened to do ivas no more than to pursue a legal remedy- to which they were entitled, and this does not constitute duress. (Martin v. New Rochelle Water Co., 11 App. Div. 177; affd., 162 N. Y. 599 ; Dunham v. Griswold, 100 id. 224 ; Secor v. Clark, 117 id. 350.) Defendant relies upon Van Dyke v. Wood (60 App. Div. 208) which differs so completely as to its facts from the present case that it is not applicable at all. In that case not only was there a duress of property, but the thing which the defendant refused to do without further compensation she had already been fully -compensated for and had expressly promised to do. As the court was careful to point out, the plaintiff’s assignor in that case was not in the position of one who comes to ask of another a favor which the other may or may not grant at his will. That, however, was the precise position of this defendant when it sought an extension of its over-due obligation. Finally, even if defendant had shown duress, it has effectually waived it. The rule is that when a contract is sought to be avoided as having been procured by duress the party claiming to have been wronged must proceed promptly. If he remains silent, keeps the property received or recognizes the contract by making payments thereon he will be held to have waived the duress. (Buck v. Houghtaling, 110 App. Div. 57.) In the present case if any duress could be said to be alleged it was with reference to the [208] making of the $800 note, not with regard to its payment some months later. That payment waived the duress. The judgment must be.reversed, with costs and disbursements, and the demurrer sustained, with costs, with leave to defendant- to amend the answer upon payment of said costs. Patterson, P. J., Laughlin, Houghton and Lambert, JJ., concurred. Judgment reversed, with costs, and demurrer sustained, with costs, with leave.to- defendant to amend on payment of costs in this court and in the court below. Order filed.