Scott v. O'Hara

Opinion of the Court by Chief Justice Hobson— Reversing on original' and affirming on cross appeal. Plaintiffs, James A. and Charles E. O’Hara, brought this action on May 26, 1908, against defendants, J. T Scott, Kate Martin, D. M. Hall; J. W. Lancaster, J. W. Webb, E. K. Wilson, Robert Childers, J. W. Shields, S M. Bi]liter, Henry McMillan, D. S. Clay, Wm. Stroud J. Glascock, G. S. Webb, R.' T.' Dickerson, F. T. Cunningham and M. S. Clark, to recover the sum of $5,-495.95. The petition charges that' defendants conspired together for the purpose of obtaining, and exj torted said sum from plaintiffs by threatening plaintiffs with criminal prosecution, by intimidating them by — 201 — threats that they would ruin them in purse and in character. That said sum was paid by. plaintiffs on July 23, 1907, by reason of said threats and intimidation, and while plaintiffs were under duress, and without any legal consideration therefor. In obedience to ,a rule to make the alleged prosecution more certain and definite, plaintiffs filed an amended petition, specifying that the alleged prosecution would be on the charges of subornation of purjury, conducting a gambling house, operating felonious games, and having in their possession for the purpose of sale intoxicating liquors, in local option territory. Defendants’ demurrers to the petition were overruled. .They then answered in two paragraphs. The first contained a traverse. In the second paragraph they alleged that plaintiffs had within a year sold liquors to divers persons in Williamstown, where local option was in force; that plaintiffs were, arrested under warrants from the police court, and pleaded thereto. A trial was had, which resulted in the rendition of many judgments on pleas of guilty. That said judgments were entered in .due form, assessing fines against the plaintiffs. That the aggregate amount of fines and costs was $4,995.95, which was paid to the police judge in satisfaction of the costs and fines, and that this was the same money which plaintiffs alleged had' been paid to defendants. To this answer plaintiffs filed a reply, admitting the appearance and trial in the police court, the rendition of the judgments, but stating that the fines and costs aggregated only $4,995.95, while they had paid to defendants $5,495.95, leaving $500 in excess of the. fines and costs, which was paid to E. K. Wilson, and by him turned over to the defendants. The reply also sets out the circumstances under which the judgments in the police court were rendered, and attacks the validity of the judgments on the ground that they were entered fraudulently and in pursuance of the unlawful conspiracy into which defendants had entered. To this portion of the reply the court sustained a demurrer, thus leaving for the determination of the jury the question of defendants’ liability for the remaining $500, which was paid to E. K. Wilson. A trial before a jury on May 1, 1911, resulted in a verdict and a judgment against the defendants, J. T. Scott, D. M. Hall, J. W. Webb, E. K. Wilson, Robert Wilson, J. W. Shields, S. M. Billiter, Henry McMillan and J. Glascock, for the sum of $500, — 202 — ■with interest from July 24, 1907. Under a peremptory instruction from the court, the jury found' for the defendants, Kate Martin* J. W. Lancaster, ¥m. Stroud, B. T. Dickerson and F. A. Cunningham. From the judgment so entered, defendants Scott and others appealed, and from that part of the judgment denying plaintiffs any relief in excess of $500, plaintiffs prosecute a cross-appeal. Appellees, James A. and Charles E. O’Hara, are the owners of a drug store in Williamstown, Grant County, Kentucky. The local option law is in force in that county. Appellant Scott and others are members of the Law and Order League, which was organized by them and other citizens of Grant County, for the purpose of suppressing the illegal sale of intoxicating liquors therein, and other crimes. Some weeks prior to the events hereinafter detailed, the grand jury of Grant County returned a number of indictments against James A. and C. E. O ’Hara, for the offense of selling intoxicating liquors in that county. These indictments, though subsequently dismissed, were pending at the time of the settlement made by the O ’Haras with the Law and- Order League. According to the evidence for appellees, in the month of July, 1907, E. K. Wilson, an attorney acting for the Law and Order Leaguep procured the services of one Bon Lanter for the purpose of obtaining ■ evidence against the O’Haras for the illegal sale of whiskey. Lanter was furnished with the -sum of $100, which was borrowed by Wilson from one of the members of the Law and' Order League. Lanter went before the police judge of Williamstown, and gave evidence upon which sixteen warrants were afterwards issued against James A. and E. C. O’Hara, and C. O. Porter, the latter being a clerk in their employ. At this time there was already a warrant pending in the police court against C. O. Porter, charging him with the illegal sale of whiskey to one John Donahue. There had been a previous trial of this case, in which the jury failed to agree on the verdict. The second trial was set for July 23. Wilson, acting for the League, had an article published' in one of the newspapers, signed, “Law and Order League,” denouncing the O’Haras. A copy of this paper was sent to about five hundred people. Included in this list were all the persons who had been selected to serve as grand jurors, and- many of the persons who had been selected to serve — 203 — as petit jurors, at the ensuing term of the Grant Circuit Court. The League employed Wm. Stroud, the marshal of the town, and his deputy, F. C. Cunningham, whose duty it was to summon witnesses and select jurors in the trial of eases in the police court. At the time, several members of the Law and Order League had subscribed certain sums for the purpose of carrying on the prosecutions. Some of them thought that they should not be required to bear the expense, but that the parties proceeded against should pay something into the treasury of the League. At first it was suggested to the O’Haras that they make a donation to the League of a sum of money ranging from $500 to $1,200, in addition to paying fines upon the sixteen warrants that were held over them but had not been issued. It was represented to the O’Haras that the Law and Order League had full control over the court, and any prosecutions conducted by them would certainly result in a conviction. They stated to the O’Haras that unless they made some sort of a settlement with the League, they would have the O’Haras arrested and prosecuted upon charges other than the mere selling of whiskey. They stated to the O’Haras that if necessary they would be subjected to a prosecution on the charge of inducing John Donahue to commit perjury, and upon a charge of operating felonious games, which, in case of conviction, would result in a term in the penitentiary. They also stated that they were able to procure a witness who would swear out fifty or more warrants against the O’Haras for as many separate offenses of having liquors in their possession for the purpose of sale in local option territory, which, in case of conviction, would involve jail sentences. A few days before the payment of the $5,495.95 sued for,' a meeting was held in the directors ’ room of the Grant ■ County Deposit Bank. This meeting was attended by the O’Haras, and appellants S. M. Billiter, E. K. Wilson and D. M. Hall. At this meeting a committee representing the League, demanding of the O ’Haras that they pay into the treasury of the League the sum of $5,000, and that they also settle the sixteen warrants which had then been issued, by paying fines into police court in the sum of $1,000. The demand was accompanied by a threat that a failure to comply therewith would be followed by prosecutions for felony. It is claimed' that it -was made known to the O’Haras that the League had in' — 204 — its employ an1 irresponsible person who; was ready and willing to swehr ont snch felony warrants as the league demanded. The minutes of the League show that just preceding the settlement which it made with the O’Haras, J. W. Webb was re-elected treasurer of the League, and a new committee, consisting of D. M. Hall, S. M. Billiter, J. W. Webb, Henry McMillan and E. K. Wilson, was appointed to settle with the O’Haras. Up. to this time it is claimed the League was demanding the payment of $5,000 into its treasury, in • addition to the $1,000 to be paid into court. ■ On the following Tuesday, morning the O’Haras were informed that the members of the League had been advised that if they took the money in the manner proposed, they would render themselves liable in a suit to recover it as blackmail. Upon the advice of their attorney, they; concluded that it would be best to settle .the matter through the courts, by judgments regularly entered, but with the understanding that as much as possible of it should go into the treasury of the League. It was proposed that a contract should be made with the town trustees by which E. K. Wilson and C. H. Beasley should receive the sum of $500 each for their services, with the understanding that Beasley should keep his $500, and that Wilson should turn his $500 over to the League. It was further decided that an agreement should be reached with the city attorney by which he would turn over to the League all the money received by him as his pro rata of the fees in excess of $1,000. Finally it was decided that, in addition to the $5,000 paid through the medium .of the court, the O’Haras should pay to E. K. Wilson the additional sum of $500,' which he should turn over to the League. If is claimed that appellants required O. E. O’Hara, who was chairman of the board of trustees of the town, to go to his fellow members and do what he could to obtain their consent to the allowance of $500 each to Beasley and Wilson, the attorneys for the League. To induce the-city attorney to consent to the arrangement, it was represented that unless such an agreement was made, the prosecutions would be taken out of his hands entirely, and he would receive nothing in the way of fines. The contract with the board of trustees, and the agreement with White, they demanded should be reduced to writing and signed by all the parties and placed in their hands as a guarantee that they would receive the money — 205 — they were after before the final steps were taken to consummate their purpose, by the entering of the judgments in the police court. Late in the afternoon the committee met, and the contract with the board of trustees, and the agreement with the city attorney and the League’s 'attorney were turned over to them. By an arrangement with the judge of the police court, it was agreed that a sufficient number of warrants for selling whiskey should be written out, and a record made in the police court, of judgments, of guilty and. not guilty, that would aggregate the'sum of $5,000 in fines and costs. Then, by the instructions of the committee, one of its members, E. K. Wilson, drafted a paper settling the whole matter, which the O’Haras, together with their •clerk, signed. That night the warrants were prepared, and C. E. O’Hara assisted in their preparation. The next day the O’Haras'paid to the police court judge the sum of $4,995.95, and to E. K. Wilson the sum of $500. At the time of the payment of the money to the police court judge, there had been no judgments entered upon the record of the police court. During the next few days he checked' up the amounts of the separate fines and costs in each case, according to the memorandum furnished by E. K. Wilson, and made up his record at leisure. That record shows that in some cases there were pleas of guilty, and in others a submission of the law and facts, in which the court determined by the judgment that some of the persons mentioned'in each warrant were guilty and others were not guilty. The town board paid to Beasley the sum of $500, which he was allowed to keep as his fee. A similar warrant for the same amount was drawn in favor of E. K. Wilson. Three or four days later, the League received from the city attorney the sum of $1,346.50, which was its part of the fees in excess of $1,000. Wilson paid to the treasurer of the League the $500 that was paid him by the O’Haras. Thus it will be seen that the League received in actual cash the sum of $1,846.50. On August 5, 1907, the minutes of the Law and Order League of Williamstown, Ky., show the following: “The report of the executive committee in regard to the settlement of J. A. and C. E. O’Hara, C. O. Porter and B. S. Pranks, was read, filed and approved by the League.” — 206 — That report is as follows: “To the Law and Order League: Your committee having the direct supervision of the prosecutions for violations of law, especially with reference to the illegal sale of spirituous, vinous and malt liquors, in the town of Williamstown, Ky., beg to report that the object desired has been attained to a most notable degree, and while the result may not have been according to the views of each member of this committee and League, we think, on the whole, it was most satisfactory. There had-been criticism of the low amount of fines against B. S. Pranks, but it -was considered that at the time of his apprehension, he had quit his illegal business, and the further fact that he had not, as others involved in the prosecution, promised to desist from the same and failed to do so. Mr. Pranks was fined $400, and paid our attorneys $250, $125 of which was turned over to the League by them. The O’Haras paid into police court $4,955.95 in fines and costs, and $500 to our attorney. By an arrangement with the city attorney of Williams-town, Ky., by our attorney, they received from his $1,-347, and the trustees of the town allowed them attorney’s fees of $1,000, $500 of which was turned over to the League, who paid out in attorneys and other fees, the sum of $477, leaving in the treasury of the League $1,497. We make as a part of this report the contract with the parties at the time.” The foregoing report was signed by E. K. Wilson, James W. Webb, Henry McMillan and D. M. Hall. About this time the $100 borrowed from the member of-the League to pay Lanter was returned, and $200 was paid the marshal, Wm. Stroud, and $200 to his assist-, ant. Appellees testify that they made the settlement because of the constant threats and representations of the appellants that they had the court officers in their employ who- would select the juries, and that they could easily find men who would swear out warrants against them for felonies, and support them by the necessary evidence; that because of these threats, and. the consequent fear that they would be subjected to numerous criminal prosecutions involving not only heavy fines and jail sentences, but sentences in the penitentiary, and the belief superinduced by the representations of appellants that appellants were in control of the court and. its officers, and that they would not be able to secure a — 207 — fair trial, they were perfectly helpless and submitted’ themselves to the mercy of appellants. During the progress of the trial it developed that those defendants in , whose favor the court directed a verdict were not concerned in any way in the settlement made with the O’Haras, or strenuously objected thereto, and for that reason the court held that they were not liable. The testimony for the defendants below is to the effect that the settlement was the result of insistence on the part of the O’Haras, who for more than two weeks besought the members of the League to compromise the pending prosecutions by permitting them to plead guilty to a sufficient number of warrants to make up the sum of $5,000. The members of the League claimed that several of them were really friendly towards the O’Haras, and that they insisted on a compromise' at a much less sum than was finally agreed on. They state that they were constantly urged and begged to take the course that was subsequently taken. They claim that no representations were made to the O’Haras that they would be prosecuted upon any other charges than those of the illegal sale of whiskey; that the O’Haras were anxious for a settlement all the time, and the only question involved was the amount of the settlement. Appellants further testify that they were engaged in an at-' tempt to clean up the town and stop the illegal sale of whiskey. For this purpose they employed lawyers who were regular practitioners at the bar, and committed to them the prosecutions, not only against the O’Haras, but all other violators of the law. Appellants further state that C. E. 0 ’Hara himself suggested' that he would see the members of the town board, and did see them, for the purpose of getting their consent to the payment of the attorneys’ fees to Wilson and Beasley. The evidence further shows that C. E. 0 ’Hara was present when the numerous warrants were drawn up, and assisted in their preparation. It is also shown that some of the witnesses on these warrants were witnesses who had appeared before the grand jury, and that his purpose in having them as witnesses was to prevent any other prosecutions based on their testimony. Some of the defendants claim that they had no knowledge of the fact that any portion of the money paid by the 0 ’Haras came into the treasury ’of the League. — 208 — It would serve no good purpose to detail the evidence more at length. We conclude that upon the question of conspiracy, and of the participation of the appellants therein, there was sufficient evidence to justify the submission of the ease to the jury. The evidence leaves no doubt that the sum of $1,846 was turned into the treasury of the League. Those who claim to know nothing about the settlement also claim that they had no knowledge of the fact that such a sum was turned over to the League, and yet the minutes of' the League show this conclusively. The question to be determined is; should the court, on these facts, lend its aid to appellees to recover the money which they paid under the illegal arrangement? All the parties understood, fully, what they were doing. They entered into a deliberate attempt to stifle certain public prosecutions, in which appellees might have been both fined and imprisoned and after the prosecutions have been stifled and it is too late for them to be renewed on account of limitation, appellees seek to recover the money which they paid out to stifle the prosecutions. In Swan v. Chandler, 8 B. Monroe, 97, this court said: “Any contract to impede the due course of public justice is illegal. It is against public policy to permit individuals to settle and adjust offenses of a criminal nature, the punishment of which is deemed essential to the general welfare. The effect of such contracts is to encourage the commission of crime and the law denounces them as impolitic and illegal.” In Gardner v. Maxey, 9 Ben Monroe, 90, the court said: “The Commonwealth, it is true, does not desire the prosecution, and much less the conviction of the innocent, but would prefer rather that even the guilty should escape. But it is the interest of the Commonwealth, and the policy and intention of the law, and is essential to\ public order and individual security, that the laws against offenses injurious to the public, should be fairly administered and enforced. And to this end it is essential that the course of public justice should not be obstructed by private combinations or agreements for preventing the fair investigation of alleged offenses. The Commanwealth has a right to rely upon the individual who has received special injury from the commission of a public offense, as the special instrument for its — 209 — ascertainment and punishment in the due course of law. The particular interest which he may he supposed to feel in bringing the offender to justice, is one of the securities on which the public relies, and has a .right to rely for the enforcement of the laws and its own safety; and an agreement by which this interest is turned against the Commonwealth, is in violation of her rights and policy. ” To the same effect see note to Town of Hinesburgh v. Sumner, 31 Amer. Dec., 600; 15 Amer. & Eng. Cyc. of Law, 979; Bishop on Contracts, section 493, and cases cited. In Kimbrough v. Lane, 11 Bush, 556, Kimbrough had a claim against Lane for several thousand dollars. Kimbrough was foreman of the grand jury and induced the grand jury to find an indictment against Lane. He then agreed with Lane that if Lane would pay, or sesure, him three thousand dollars he would procure a dismissal of the indictment. Lane executed a note, and mortgage to Kimbrough, which was sought to be enforced. These facts being shown, the court refused any relief. The court said: “It is urged' by some of the appellant’s counsel that as Lee purchased the land mortgaged by Owings subject to the mortgage, and he will be.so much the gainer if the appellant fails in his efforts to foreclose, while Owings and Lane will gain nothing, this ought to have some weight with the court in deciding the question. “It is sufficient to say on this point that the rule of law inhibiting such contracts was not made for the benefit of the obligors therein. They stand in no better position in the eyes of the law than the obligees. The courts will not enforce such contracts, because they are leveled at the safety and repose of society, and are calculated to shield the guilty from punishment and leave them free to prey upon the public. If money is paid upon such a contract, the courts will not aid in recovering it back; they will leave both parties in the exact position in which they have placed themselves.” The rule that money paid upon an illegal contract cannot be recovered in a court of justice has been followed by the court in many cases. Jennings v. Flanagan, 5 Dana, 217; Ratcliff v. Smith, 13 Bush, 173; C. & O. Ry. Co. v. Maysville Brick Company, 132 Ky., 643, and — 210 — cases cited. In Feltner v. Feltner, 132 Ky., 705, money was placed in the defendant’s hands to be held until a witness left the State and did not appear on the trial on the case and the money was then to be paid over to the witness. It was held that the witness could not maintain an action against the defendant for the money as the court would not lend its aid to any of the parties to such an agreement. In The American National Bank v. Madison, the facts were these: Josephine Madison had executed her notes to Clay-pool & Company, who had discounted them to the American National Bank. The bank brought suit against her on the notes. By way of defense she pleaded that she was coerced into their execution by Claypool with a threat that he would prosecute her son for embezzlement if she did not do so and that the notes were executed under duress and under the agreement of Clay-pool not to prosecute her son for embezzlement if the notes were given. The bank pleaded that it was the holder of the notes in due course and without notice. Mrs. Madison then set- up that Claypool had sold the notes to the bank and received the proceeds; she sought judgment against him to this extent for what she might have to pay the bank. The circuit court adjudged her this relief. ' Reversing the judgment, this court said: ‘ ‘ It was clearly an illegal contract, one which the law would not enforce, nor against which will it afford relief. If appellee, instead of executing her notes and mortgage had paid to Claypool the $2,500' in cash, and then thereafter sought to recover of him this money on the ground that it was paid for the purpose indicated, the law. would have afforded her no relief. She is in no better position as to the notes by reason of the unlawful, vicious and void contract into which she entered. The law will not lend its aid to the enforcement of such a contract, but simply leaves the parties where it finds them.” (144 Ky., 158.) "We are unable to see that this case can be distinguished from those cited. It is insisted that the appellees were under duress and that relief may be granted on that ground, but if such a principle were applied on the facts of this case the rule that the courts leave the parties to illegal transactions where it finds them would amount to nothing. The appellees and appellants were — 211 — all men of intelligence. There was no relation of trust or confidence between them. The facts were fully understood by them all and the arrangement was made with much deliberation and evidently after careful consultation. One side was as able to take care of itself as the other, and if the mere fact that a prosecution or prosecutions were threatened, would take such a case out of the rule, the rule would be valueless. In Kimbrough v. Lane, the prosecution had actually been set on foot for the purpose of extorting the money. In The American National Bank v. Madison the defendants were threatening to begin the prosecution and in that case the person threatened was the mother who executed the papers to protect her son. In a number of cases which have been relied on the court simply refuses to give its aid to the enforcement of the illegal contract. In others there were peculiar facts and circumstances not applicable here which were deemed by the court sufficient to take the case out of the general rule, but as was well said, in Porter v. Jones, 6 Cold., 313, the principle that a court will grant relief to a party to an illegal contract where he acted under oppression and was compelled by hardship or necessity has often been pushed further than justice or the facts will warrant. In 5 Lawson on Rights and Eemedies, section 2364,'the common law rule as to duress is thus stated: “Duress may consist either in actual imprisonment of the person, or in threats to imprison or do violence. It consists, not merely in the act of imprisonment or other hardship to which the party was subjected, but in the state of mind produced by those circumstances, and in which the act sought to be avoided was done. The imprisonment must be illegal. A legal imprisonment is not duress. But the process may be regular; yet if the arrest and imprisonment is malicious, and without probable cause, there is duress which will void a contract. Where the only coercion influencing the person’s mind is the fear of the consequences of his own criminal act, this is not legal duress.” This court has steadily declined to extend the common law rule; Edwards v. Handley, Hardin, 611; Hazelrigg v. Donaldson, 2 Met., 445. In Anderson v. Meredith, 82 Ky., 564, a strong man had imposed upon a weak one under a relation of confidence and so procured from — 212 — him his. property to prevent its being reached by his creditors and' it was simply held that they were not' in pari delicto. It is essential to the peace of society that the laws be executed. All agreements having for their purpose the suppression of public justice are not only illegal but-must be known to be illegal by all persons of ordinary intelligence. To say that a man of ordinary intelligence may have the aid of a court of law to recover back what he has paid under such an agreement simply because he was threatened with prosecution would be to destroy the rule for such agreements are rarely ever made in the absence of such threats either by word of mouth or by conduct. The appellants have put themselves in a very bad attitude. They have no right to the money which they have received. Their conduct deserves condemnation but the rule of law is not for their benefit. The purpose of the rule is to prevent such agreements being made. To hold that money may be recovered back upon -the ground of duress, upon such proof as we have here, would be to lay down a' rule that would tend to' promote the making of such agreements; for, the defendant could then, in this way, get rid of the prosecution, and after he was safe from that, have a chance to get his money back. Sound public policy requires that the rule should be ...strictly enforced; that the court will not lend its aid to either of -the parties in such illegal contracts, but will leave them where it finds them. The fact that the process of the police court was resorted to adds nothing to the rights of the appellees. Both sides entered into this plan to accomplish their purpose, desiring the shield of the police court proceedings. If the police judge would not give a fair trial, the defendants could have had a change of venue under section 1107, Ky. Stat., and if he declined to vacate the bench, he • could have been required to do so by a writ from this court. Rush v. Denhart, 138 Ky., 238. If the marshal could not properly summons the jury, another officer might have been designated for the purpose. Criminal Code of Practice, section 193. Appellees could have appealed from the judgment of the police court to the circuit court, and from it to this court, and thus corrected any injustice which might be done them there. To shut off a public trial, they went into that court, assisted in preparing the warrants, and procured the proceedings — 213 — which were there had. They paid to Wilson the $500.00 under the agreement with appellants by which these judgments were procured. The whole arrangement was a manifest attempt to obstruct public justice. ■ There is no charge that the police judge or the marshal were parties- to any conspiracy, and no evidence to warrant such a conclusion. If appellees could not have recovered the $1,846.50 paid by them, if the payment had been made directly to appellants and not through the police court proceedings, certainly they have no greater rights when they themselves went into that -court and procured the proceedings which were there had. The fact that the parties veiled their transaction in the form of a legal proceeding subtracts nothing from its illegal purpose, and appellees are in no better position now than they would be if they had paid the $1,846.50 to appellants,, and those proceedings were never had. So, the question in the end comes to this: What would be the rights of appellees if they had paid the $1,846.50 directly to appellants without any proceeding in the-police court? But if it were shown that the police judge and the marshal were in the scheme, the result would not be différent. He who corrupts the officers of justice cannot have the aid of a court of justice to recover money paid out to obstruct justice. The officer may be punished for. misfeasance in office, but the shortcomings of its officers is no reason for the court’s relaxing the rule against attempts to stifle justice. 'The law afforded appellees ample remedy to secure fair officers, if justice had been what -they wanted. When they paid out the $1,846.50 rather than take the remedies the law provided, it cannot be said in any sense of the word that they labored under duress. They, who unlawfully conspire to extort money from another or enter into any other unlawful conspiracy may be indicted and punished. And it is more fitting that this remedy be pursued than that they who obstruct public justice should be aided by the courts in the recovery of what they pay out for this end. We, -therefore, conclude that the court should have instructed the jury peremptorily to find for the defendant. Judgment reversed and cause remanded for further proceedings consistent herewith. On -cross-appeal, the judgment is affirmed.