Lichtenstein v. Wilensky

Atkinson, J. The right to the equitable relief is founded on alleged duress. The Civil Code, § 4255, provides: " The free assent of the parties being essential to a valid contract, duress, either of [358] imprisonment or by threats, or other arts, by which the free will of the party is restrained and his consent induced, will void the contract. Legal imprisonment, if not used for illegal purposes, is not duress.” It is declared in § 4116: “ Duress consists in any illegal imprisonment, or legal imprisonment used for an illegal purpose, or threats of bodily or other harm, or other means amounting to or tending to "coerce the will of another, and actually inducing him. to do an act contrary to his free will.” See also § 4112. The case of Whitt v. Blount, 124 Ga. 671 (53 S. E. 205), was a suit upon a note. The defendants filed a plea in which it was alleged, in substance : “ That the defendants, the year before the notes were given, had placed plaintiff in control of their business in North Carolina, which extended also into the States of South Carolina and Virginia; that he had a thorough knowledge and control of such business; that he had entered into numerous contracts involving large sums of money, for the execution of work pertaining to the business; that he had collected and had in his possession nearly $850 in money belonging to the defendants; that he also had control of numerous writings, contracts, and other property relating to the business; that under the circumstances no one but plaintiff could carry on the business except at great financial loss to defendants; that the plaintiff had brought about this state of affairs in pursuance of a preconceived plan to coerce the defendants into giving him the notes; that he was insolvent; that he threatened to leave the employment of the defendants and take with him their money, contracts, and other property, unless they gave him the notes and paid him a certain sum of money; and that, fearing he would carry out such threats to their great financial loss, they gave him the notes.” It was held, that while the plea was not technically accurate, it was in substance a good plea of duress. In the course of the opinion, reference was made to the above sections of the Civil Code, and to the doctrine of the common law as regards duress; and it was said that the former essentially modify the latter. Finally the decision sustaining the plea applied the doctrine that “The unlawful detention of another’s goods under oppressive circumstances, or their threatened detention, will avoid a contract on the ground of duress, for the reason that in such cases there is nothing but the form of agreement, without its substance. Clark on' Contracts, § 143; 9 Cyc. 451. Where the parties are not at arms’ [359] length, bnt one of them is in a position to dictate, the courts will treat agreements which are influenced by threats of injury to or withholding of property as made under duress.” The same doctrine was again applied in Fenwick Shipping Co. v. Clarke, 133 Ga. 43 (65 S. E. 140), where it was held: "Money extorted under duress to discharge a claim unfounded in law or fact, and known to the payee to be unfounded, may be recovered at law upon proper proceedings instituted therefor.” The duress in that case consisted of the following facts: Clarke, a resident of Darien, Georgia, was in England on his way to complete an itinerary-laid out for important business purposes, and which included Genoa, Marseilles, Nancy, Brussels, Antwerp, Havre, and a number of other European cities, where the traveler had engagements fixed in advance, which engagements it was important that he should keep, they being of a business character and involving interests of importance. While so in England, Esplín, an agent of Fenwick, demanded of Clarke a return of certain commissions paid at Darien by Fenwick; and upon his refusing to return the money, Esplín, in a harsh and menacing manner, threatened to attach and levy upon the baggage of Clarke. A few days later summons issued and was served upon Clarke personally, directing him to answer the suit of Fenwick eight days after service. Under these circumstances Clarke, caused his Liverpool agents to pay the amount, and left several days before the summons was to be answered. In the course of the opinion it was said: " Under these circumstances a threatened seizure of the traveler’s person could hardly have had a stronger coercive influence, tending to secure compliance with the unfounded claims of the shipping company, than the threatened seizure of the baggage.” In Mallory v. Royston Bank, 135 Ga. 702 (70 S. E. 586), the question under consideration was whether certain promissory notes executed by J. G. Mallory and his son, Paul G. Mallory, were executed by them under duress. It was alleged in the plea, which was disallowed, that Paul G. Mallory had recently resigned his office as cashier of the bank; that Paid and his father were called together by officers of the bank, who knowingly and falsely stated to them that Paul Mallory had violated certain criminal laws of the State, in that, being cashier of the bank, he, in connection- with another person, who was a director of the bank, had used money of the bank with which to speculate, re [360] ferring to a certain store building which had been erected by them with funds largely borrowed from the bank, but which in fact had been borrowed with the full consent of the board of directors, which consent, with the approval of the loan, had been duly entered on the minutes of the bank. It was also stated to them that the bonding company which had been surety upon the bond of Paul G. Mallory as cashier was liable for all of his shortcomings, and it would only be necessary to turn the defendant P. G. Mallory over to the bonding company, which would doubtless prosecute him for all the alleged felonies he had committed; and that even if by any technicality of the law he escaped a just conviction, he could never get a place in a bank again, for his record would be tarnished and his business career ruined by exposure of his many “ defections.” The defendants believed that the officers of the bank were telling the truth about “such laws,” and that the borrowing of the bank’s funds in the manner above indicated for speculation was a penal offense under the laws of the State, and they became greatly confused and alarmed; and after their fears were thus aroused, they were told by the officers of the bank that if they would sign certain notes, including the note in suit, they would not prosecute Paul G. Mallory, and, being thus induced, the defendants executed the notes. It was held that the allegations of the plea did not make out a case of duress. In the course of the opinion it was said: “The facts alleged could not form the basis of a criminal prosecution of any character, or furnish grounds for the arrest of the officer so borrowing the money, nor could they furnish grounds for aspersions against his character, nor does it appear how it could put him in bad odor with the bonding company. The defendants were men of experience, dealing at arms’ length with the officers of the bank, were charged with notice of the law, bound to know that it was no violation of law or other duty for them to borrow money under the circumstances enumerated ; and could not ascribe their act in executing the note to a constrained consent or to fraud or duress in a legal sense. . . The allegations . . present an example of pure threat without any color of power or authority to make it effective.” On the general subject see: Russell v. McCarty, 45 Ga. 197; Bond v. Kidd, 122 Ga. 812 (50 S. E. 934); Dorsey v. Bryans, 143 Ga. 186 (84 S. E. 467, Ann. Cas. 1917A, 172); Williams v. Stewart, 115 Ga. 864 (42 S. [361] E. 256); Strange v. Franklin, 126 Ga. 715, 717 (55 S. E. 943); Hoke v. Atlanta, 107 Ga. 416 (33 S. E. 412), and cit.; Hickman v. Cornwell, 145 Ga. 368 (89 S. E. 330); 9 C. J. 1180; 13 C. J. 396. According to the allegations of fact (as distinguished from mere conclusions of the pleader) relied on to show duress, the plaintiff and the defendant were men of broad business experience and capable of managing their own affairs. Their business and other relations did not demand that defendant continue rendering financial aid to the plaintiff, or prevent him from seeking reimbursement for liabilities that he had incurred on plaintiff’s account. He had a legal right to proceed in the manner and under the circumstances alleged, and the fact that he exercised such right did not amount to driress within the meaning of the statute. The alleged misconduct of the defendant did not amount to restraint of the person or property of the plaintiff or of injury or threatened injury to the person, property, or wife of the plaintiff, which the latter could not avoid. The plaintiff and his wife were voluntary inmates of defendant’s home, and in no sense was either of them restrained from leaving when they should desire. Under the circumstances' it was in the power of the plaintiff to shield his wife from annoyance by the defendant, without being driven to the necessity of executing the papers. Taking the petition in its entirety, the allegations show that the plaintiff, in executing the papers, acted with due deliberation and without improper coercion upon the part of the defendant. A case of duress was not alleged; and the judge did not err in dismissing the petition on general demurrer. Judgment affirmed. All the Justices concur. '