Giddings v. Iowa Savings Bank

Waterman, J. I. The record before us discloses these fact©: The plaintiff© .are husband .and wife. F. H. Giddings, the husband, was for some years the cashier of defendant bank, which is located at Ruthven, in this state. During the time he occupied this position he made loans of the bank’s fund© to- himself, and to the firm of Galkins & Giddings, of which he was a. member, .and also to F. W. Galkins, the senior member of said firm. Some of the loans 'were without security, and in other cases the security was insufficient. Early in January, 1894, Giddings resigned as cashier, and the president of the bank, with two of the directors, undertook to look over the accounts and make a settlement with him.. It is claimed by plaintiff that said bank officer©, finding the loan© mentioned standing as an existing indebtedness to the bank, wrongfully insisted that he was a defaulter or embezzler, and that he had violated a criminal statute of the state; that they threatened him with criminal prosecution, and put him in fear, and that like threat© were made to his wife, and that by such duress the plaintiffs, were coerced into giving the promissory note in question, and also the mortgage securing it, which covers plaintiff’s homestead in Ruthven, title to which is in the wife. Some months thereafter, to correct a misdescription of the real estate in the mortgage, plaintiffs, gave another mortgage, in which the homestead was correctly described. This action was begun January 21, 1896, to recover possession of the note and mortgage, on the ■ground that they were obtained by duress.. We are not attempting in what we say to- set out the facts, further than to give an outline of plaintiff’s case, sufficient to an understanding of our rulings on certain legal propositions presented for determination. The errors assigned by appellant are numerous, but we shall [679] endeavor in what we say to give consideration to all sucli as are material. 1 II. The wife was. not present at the interview between the bank officers .and Giddings, when the alleged threats were made, but plaintiffs claim that she was told by him what had occurred when he came home in the evening. Both husband and wife were permitted, over defendant’s objection, to testify to. what was said by the husband to the wife on this occasion. The bank officers, in the interview with Giddings, were .demanding a mortgage on his homestead. They knew that this instrument must be signed by the wife. If they unlawfully threatened Giddings. in order to procure the mortgage and note, they must have known that to comply with their demands he would be compelled to disclose the facts to his wife. In principle, it is the same as though defendant’s officers had requested Giddings to inform his wife of their desire and purpose. The evidence, we think, wag. rightfully admitted. Schultz v. Catlin, 78 Wis. 611 (47 N. W. Rep. 946); Taylor v. Jaques, 106 Mass. 291. The gist of this testimony was simply that the husband told his wife what had been said to him by defendant’s officers.' Its admission did not contravene section 3642, Oode 1873, which forbids husband or wife divulging confidential communications, made by one to the other. [679] III. It is contended by appellant that a claim of duress cannot properly be predicated upon .a threat of lawful prosecution or imprisonment; that, if Giddings was in fact guilty of the crime charged, a threat by defendant to prosecute him therefor, unless, he secured the bank against loss, would not amount to duress. This states the rule very broadly, but we may, for present purposes; concede it to be true as to Giddings. The instructions of the trial court recognize this rule. But we think a different doctrine prevails in case of the wife. Where the fears or affection of a wife are worked upon through threats made against [680] her husband, and- she is induced thereby against her will, to- convey her property to- secure hi-s debt, there i-s duress as to her, -even though -the debt was; valid, and the threat was of lawful prosecution for -a crime that had in- fact been committed by the husband. Gohegan v. Leach, 24 Iowa, 509; Beindorff v. Kaufman, 41 Neb. 824 (60 N. W. Rep. 101); Meech v. Lee, 87 Mich. 274 (46 N. W. Rep. 383), and cases, cited. Appellant insists that the case of Green v. Scranage, 19 Iowa, 461, lays down a different rule; but we think not. Speaking upon the matter, the court says in that case: “On the other hand, if the wife w-a-s induced to execute the mortgage from fear excited by threats made to her, by the plaintiffs, of an illegal criminal prosecution against her husband, the instrument thus obtained would not be binding upon her. * * * But if the debt were just, and the criminal accusation was well founded, or, upon reasonable grounds, believed to be so- by the plaintiffs, and the ioife freely, upon her oton deliberate conviction of what was best, and without undue influence exercised by the plaintiffs, executed the security, it would be valid-,” etc. W-e have italicized- the qualification in this opinion which we deem important. At a glance, it will appear that what is there said begs the question at issue here, for it is assumed that the act of the wife was vo-1-untary and -deliberate. Another claim m-ade by -appellant i-s, in substance, that, if Giddings was not, in fact, guilty of a crime, the threats- o-f prosecution o-r imprisonment would not amount to- -duress, if defendant’s officers -at the time had reasonable groun-d to believe that he was so guilty. We think this contention is based upon a casual remark in the passage just quoted from Green v. Scranage, supra. No such issue was involved in that case. We are not inclined to sanction- any such rule. Whatever may have been the belief of the bank officials, -a threat to imprison Giddm-gs for [681] an offense of which he was. in fact innoeent would be, as to him, a threat of unlawful imprisonment. 4 IY. The trial court, in its instructions, told the jury, in effect, that, if the note was voluntarily signed by the husband, it could not be recovered in this action, although the wife’s signature thereto was procured by duress, but that a different rule obtained in case of the mortgage, and that it might be recovered if signed under coercion, by the wife, though voluntarily executed by the husband. Defendant’s contention is that, this being a joint action, a recovery can be had only on a showing of joint right in both plaintiffs. That, generally, is the correct rule; but, in this case, if the husband, intending to join his wife in the execution of a mortgage on her separate property, signed the instrument freely, while her signature was obtained by compulsion, exerted by others, then, when she sets up the invalidity of the instrument, as against her, he may properly join with her in the claim, for it is not the instrument he intended to execute. 5 V. Exception is taken to the eleventh instruction, which is as follows: “And, in determining whether the mortgage was executed by Mrs. Giddings under duress, it is wholly immaterial whether or not F. H. Gid'dings had, in fact, committed' the crime of embezzlement, and it is wholly immaterial whether or not the several claims secured by said mortgage were valid existing obligations of the plaintiff F. H. Giddings.” And in the fourteenth instruction this thought is repeated in a more extended form, for the jury is there told that they need not consider these matters in determining whether either Giddings or his wife executed the mortgage under duress. These instructions are clearly erroneous. It is impossible to see how the jury could fairly pass upon the rights, of the parties without having in mind all of the facts and circumstances of the transaction. It is true that, if there [682] was, in. fact, duress of the wife, it is immaterial whether her husband, owed the debt or was guilty of the charged crime. Beindorff v. Kaufman, supra. But these are important matters, to be considered in determining whether there was any coercion. The defendant’s theory was that Giddings had unlawfully made the loans in question, and that he was. liable, both civilly and criminally, therefor, and that, because he was so liable, he and his wife voluntarily executed the note and mortgage in question. It was. its right to have the jury consider these matters in determining how it came that said instruments were executed. For the error pointed out in the last instruction considered, the judgment below is reversed.