Riddle v. Hall

Mr. Justice Meecue delivered the opinion of the court, January 2d 1882. Ex turpi contraetu non oritmr actio, is a well-recognized maxim of common law. In this case the claim is to enforce a mortgage executed by husband and wife, against the real estate of the wife. It is undoubted law that a married woman may by joining with her husband make a valid mortgage of her separate estate to secure his debt or that of a third person. Conceding the general power, the defence alleges the turpitude of the consideration, and the undue influence exercised on the wife in procuring the execution of the mortgage. The court, being of the opinion that the evidence was insufficient to submit to the jury, gave them peremptory instructions to find for the plaintiff below. It is elementary law that an agreement in consideration of stifling or compounding a criminal prosecution or proceedings for a felony or a misdemeanor of a public nature, is void: Chitty on Contracts (ed. 1874) 992. An action will not lie on a bon'd when part of the consideration is an agreement not to prosecute for malicious mischief: Id. in note citing Cameron v. McFarland, 2 Car. Law Rep. 414. So a mortgage given in consideration of an agreement that an indictment found for obtaining mules by false pretences, should be dismissed and the prosecutor not appear, was held void : Kimbrough v. Lane, Court of Appeal of Ky. vol. 15, N. S. Amer. Law Reg. 389. It was held in Harris v. Carmody, by the Supreme Court of Mass., 113 Mass. 51, that a note and mortgage given by a father to the plaintiff, under threats to prosecute and imprison his son for an alleged forgery of the father’s name, may be avoided by the father on the ground of duress. Where any part of the consideration of a promissory note is a promise by the payees to abstain from prosecuting the son of the maker for forgery, the note is void: National Bank of Oxford v. Kirk, 9 Norris 49. The Franklin Savings Bank was not incorporated. Each of the plaintiffs in error, and their two sons James H. Riddle and George D. Riddle were stockholders therein. George R., the husband of Mrs. Riddle, was the president, and James H., her son, was the cashier thereof. Through the improper use of the funds of the bank by these officers, it failed. On complaint of the directors of the bank, an indictment had been found against her son James for embezzlement, and a criminal prosecution was also threatened by them against her husband. A meeting of the stockholders was afterwards held, at which [121] subscriptions were made to raise a fund for the payment of depositors or creditors of the bank. George D. Piddle at first subscribed 02,000, and afterwards increased it to $4,000. He also subscribed 02,000 in the name of his mother. He testified substantially that his increased subscription, and the one in the name of his mother, were made at the request of Hall, the defendant in error, who was a director of the bank, and on his statement that he believed and was satisfied, it would stop the prosecutions, if the witness would get his mother to pay the sums subscribed. Without authority from his mother he subscribed in her name, with that understanding, and was to so inform her. On his notifying her, she answered, if it would stop the criminal prosecutions, she would agree to it. Hall and Dr. Mowry were appointed by the bank a committee to call on Mrs. Piddle to induce her to execute the mortgage for the $6,000. George D. accompanied them. He testifies that she said to them that she “ would not sign the mortgage until the criminal matters were fixed in black and whitethat Dr. Mowry told her “ he was satisfied this would settle the whole criminal trouble,” and Hall said, “ I firmly believe, if you would sign this mortgage, that it will result in settling all this criminal trouble, and if you do not sign it, it will be the worst thing you ever did.” Thereupon she agreed to execute it, and did so the next day. That she agreed to the subscription with the understanding that they would not appear against her son nor prosecute her husband. The evidence of Mrs. Piddle substantially corroborates that of the son; but she states some other facts. She says, while Hall said he would not guarantee that those men would not go on with the prosecution, as he had no right to, yet he was almost certain they would not, and that on his telling her if she did not sign the mortgage it would be the worst thing she ever did, “ that frightened me, and I signed it against my own will and judgment.” She further testified that she signed it for the purpose of saving her son and her husband, and “ would not have signed if she had known the prosecutions were to go on anyhow.” She expected the prosecutions -would go on if she did not sign, but would not if she did sign. Hall testified in chief, that at the interview referred to with Mrs. Piddle the matter of the criminal prosecutions was introduced, and that he said to her he thought if the subscriptions made were carried out in good faith, it would end these troubles, although he had no authority from any person to say so. On cross-examination he testified, “We talked about the criminal prosecution, and it was generally including the whole, that all those difficulties, prosecutions, whatever they might be, that they would end.” lie further told her if she executed [122] the mortgage or carried out the subscription, that would be the end of the matter. It was proved that after the execution of the mortgage a nolle prosequi was entered in the prosecution against James, and o'n complaint of the directors of the bank an indictment was found against him and his father, the son and husband of Mrs. Riddle, for conspiracy, on which they were tried, convicted, and sentenced. Some of the facts narrated are denied by -the witnesses of the defendant in error; but the credibility of the witnesses and the weight of the evidence are questions for the jury. The main complaint is that the jury was not permitted to pass on the evidence. It is an undoubted fact that Mrs. Riddle was induced to give this mortgage on her land to secure the payment of subscriptions for which she was not legally bound to pay anything. There is certainly some evidence that the operative inducement and controlling consideration in her mind were to stop and prevent the prosecutions begun and threatened against her son and her husband. Her confidence and assurance that such would be the effect of giving the mortgage were derived from the two persons who acted as a committee from the bank. To such an extent did Hall assume power and authority to stipulate in regard to all the conditions on which she should give a mortgage that it was given to him. He it was, that she testified, used the strongest assurance that on her giving it, all prosecutions would be stopped, and who frightened her by suggesting alarming consequences if she refused. A mortgagee is not the purchaser of an estate. He is simply a lien creditor, holding the mortgage as security for the payment of the bond therein recited. This mortgage was assigned by Hall to the trustee of the bank. Although it was originally designed for the benefit of the latter, yet for all purposes of defence connected with the giving of the mortgage, the bank stands on no higher ground than Hall occupied. Not only is he the legal party of record: but when the bank seeks to enforce a contract made by its agent, for its benefit, it is bound by the acts of the agent which affect the validity of the contract in the making thereof: Swope v. Jefferson Fire Ins. Co., 8 W. N. C. 481. If this mortgage was executed in consideration of an agreement to stifle or desist from a criminal prosecution against’ the husband and son of Mrs. Riddle, or against either of them, or if that was a part of the consideration, it was an illegal consideration which destroys the validity of the mortgage. To constitute a defence on this ground, the agreement must be found. Whether there was such in this case is to be decided by a consideration of all the facts and circumstances given in evidence. [123] The fact that Mrs. Kiddle was under no legal liability to give the mortgage or to pay the debt therein referred to, and the reasons urged"by Hall and Mowry to induce her to _give it, are proper to consider. The inquiry need not stop with a critical view of the words used by Hall and Mowry; but due regard should be given to the meaning they were intended to convey, and reasonably did convey. If they used the language stated with the intention of thereby assuring Mrs. Kiddle that all criminal proceedings would be stopped if she would give the mortgage, and she, relying on that assurance, and in consideration thereof, did give it, the question is for the jury to find whether that did not enter into and form a part of the agreement under which the mortgage was given: National Bank of Oxford v. Kirk, supra. Was or was not it understood by both parties to the mortgage that a part of the consideration was that the criminal proceedings should be stopped % If it was, it matters not whether they were stopped or prosecuted to judgment. The agreement itself vitiated the mortgage as it rested on an illegal consideration. If, however, neither Hall nor Mowry did agree that no criminal proceeding should be had against either her husband or her son; yet, if their allegations and representations relating thereto were intended to deceive and did deceive Mrs. Kiddle, and she, relying on their statements that none would be had, and by reason thereof, did execute the mortgage, the subsequent proceedings against her husband and son released her from its payment. It"was said by Mr. Chief Justice Gibson, in Frevall v. Fitch, 5 Whar. 325, “ It is an elementary principle that an agreement founded in a false conception1 is a nullity in respect to the party who misconceived, because he assented to it, not absolutely, but on a condition not verified by the event.” In the present case the rights of no third persons have intervened, so as to exclude any defence Mrs. Kiddle may have, arising from the facts and circumstances under which the mortgage was given. We discover no sufficient reason for rejecting the evidence covered by the first assignment: but substantially it was after-wards received, so no harm resulted from the first rejection. We discover no error in the third assignment; nor, under the evidence, do we see error in refusing to affirm the point covered by the fourth assignment. The fifth and sixth assignments are sustained, and the second so far as the error therein alleged is in conflict with this opinion. Judgment reversed, and a venire facias de novo awarded.