tract by the duress of her husband; nevertheless, it was held that her defense of duress was available.

202

There can be no such thing as estoppel in pais, except by reason of something said or done by the person estopped; certainly not by the independent act of another person, even though such other be her husband. The mere fact that the defendant delivered the package to her husband, as directed in the presence of, and acquiesced in by, the plaintiff's agent, does not make it inequitable for her to resist the enforcement of an executory contract which she signed only by reason of the plaintiff's duress. It is a well-recognized principle of law that, where a loss must be borne by one of two innocent persons, it shall be borne by him who occasioned it: Karow v. Continental Ins. Co., 57 Wis. 61; 46 Am. Rep. 17, and cases there cited. If the two parties were equally innocent, yet if the notes contained in the envelope were destroyed by Mr. Kusworm without the privity of his wife, then it was in consequence of Stone's direction, with Gebhart's consent, that they should be delivered to him, and not that the defendant was the mere instrument of making such delivery. But the parties were not equally innocent. On the contrary, as appears from the evidence, the defendant was the victim of very cruel duress on the part of the plaintiff.

There seems to be a dearth of authorities upon the precise question here presented. In some of the numerous cases cited, and especially those in equity, restoration was made or tendered or made a condition of the judgment, while in others the question is not mentioned. In Jordon v. Elliott, 12 Week. Not. Cas. 56, the victim of the duress was induced to sign a receipt acknowledging the surrender of her son's note, and a policy of insurance on his life held by Jordan as collateral thereto, which he assigned to the defendant. Jordan burned the note in the presence of the defendant, but left the policy and the assignment thereof at her house. Of course, there could be no restoration of the note, and it does not appear that the policy was restored; but the supreme court of Pennsylvania affirmed the judgment in favor of the mother. There are numerous cases where duress or fraud has been made available as a 203 defense on the ground of recovering back money paid or setting aside contracts executed, without restoration: Foss v. Hildreth, 10 Allen, 76; Manning v. Albee, 11 Allen, 520; Kent v. Bornstein, 12 Allen, 342; Chandler v. Simmons, 97 Mass. 508; 93 Am. Dec. 117;

Brewster v. Burnett, 125 Mass. 68; 28 Am. Rep. 203; Morse v. Woodworth, 155 Mass. 233; Higham v. Harris, 108 Ind. 246; Baldwin v. Hutchison, 8 Ind. App. 454; Dimmitt v. Robbins, 74 Tex. 441; Brown v. Peck, 2 Wis. 261. In some of these cases there was a failure to return a lease of a claim, or a discharge of a former suit; in some, a failure to return a note and worthless securities; in some, a failure to return counterfeit bills; in some, a failure to restore money paid to a minor and by him wasted; in some, a failure to restore money or property paid or delivered to some person other than the victim of the duress or fraud. The rule seems to be stated fairly well by the late Mr. Justice Mitchell, of Indiana, in one of the cases cited, as follows: "If the results of a contract or settlement by which a party is sought to be estopped, or which is set up to prevent the assertion of a right, are such as to be of no benefit to one, or no detriment to the other, contracting party, that is, if nothing of value was parted with on the one hand or received on the other, the contract may be disaffirmed without a formal restoration, on the principle that the law does not require an idle ceremony": Higham v. Harris, 108 Ind. 246, 254. Here the defendant received for herself no pecuniary benefit or thing of value. Should it be made to appear upon a trial that the defendant, as executrix of her husband's estate, actually received the notes contained in the package, or otherwise became a party to the destruction or conversion of them, a different question would be presented.

By the COURT. The judgment of the circuit court is reversed, and the cause is remanded for a new trial.

From this opinion Justices WINSLOW and PINNEY dissented in an opinion written by the former, in which he said: "That an executory contract may be avoided or rescinded which has been made under the influence of such duress as the evidence here tends to prove is quite well established, and I shall spend no time on that question. The avoidance or rescission in such a case stands on the same ground as avoidance or rescission of a contract induced by fraud. Duress is, in fact, a species of fraud: Cooley on Torts, 2d ed., 592; Reynolds v. Copeland, 71 Ind. 422; 6 Wait's Actions and Defenses, sec. 12, p. 663. Logically and necessarily the same conditions will be imposed in a case of duress as in a case of the more common kinds of fraud. One of these conditions universally insisted upon is that the defrauded party must return, or offer to return, the consideration, if any has been received, or its equivalent, in case return of the specific consideration be impossible. Citation of authorities on this proposition seems unnecesary, and I content myself with one case in this court, where the rule is

well stated, with authorities: Van Trott v. Wiese, 36 Wis. 439-448. I know of no exception to this rule, at least as applicable to persons of full age and mental competency. It is true that, where a consideration has been received which is worthless or represents nothing of value, its return will not be required, because such return would be a mere idle ceremony. This is not an exception in fact to the rule, but rather a demonstration of the existence of the rule itself, because in such cases failure to return the consideration is always excused by the courts on the very ground that there is practically nothing to be returned, thus emphasizing the general rule. With deference, 1 say that most of the cases relied upon in the majority opinion as justifying the decision in this case are cases where the return of the consideration was excused because it was absolutely worthless.

"In Foss v. Hildreth, 10 Allen, 76, the party who was seeking to avoid a contract induced by fraud and duress did not return a discharge of a ground. less action pending against him, and the court says that such return was not necessary, because 'the discharge is not property of any value to the de fendant, nor is it of any use to the plaintiff.' It appeared in that case, also, that the plaintiff made the voidable contract while intoxicated, and the court remarks that, where a person non compos makes a deed and receives a valu. able consideration for it, he may avoid it without first returning the consid. eration. Manning v. Albee, 11 Allen, 520, was an action of replevin for a quantity of clothing which Manning had been induced to trade to one French, in exchange for French's promissory note, with certain bonds as collateral, The bonds were represented as very valuable, but were in fact worthless. Albee afterward took possession of the clothing, claiming to have bought it of French, and French disappeared. Manning then ascertained that the bonds were worthless, and brought replevin for the goods against Albee, French not being found. The objection was made that the action could not be maintained without surrender of the note and bonds, but the court holds that to be unnecessary, because it appeared that French could not be found, so that the tender to him was impossible, and the defendant was in no event entitled to them. In Kent v. Bornstein, 12 Allen, 342, the return of a counterfeit bill was held unnecessary because it was entirely worthless. In Chandler v. Simmons, 97 Mass. 508, 93 Am. Dec. 117, it was held unnecessary for a minor, in avoiding his deed made during infancy, to return such part of the consideration as he has wasted or spent during minority, but the decision is placed upon the express ground that the consideration had been spent during minority, and the principle is recognized that, if he retained the consideration after becoming of age, he would affirm the contract. In Brewster v. Burnett, 125 Mass. 68, 28 Am. Rep. 203, the return of counter. feit bonds was not required, because they were entirely worthless. In Morse v. Woodworth, 155 Mass. 233, the plaintiff was not required to return a release given by defendant, because it was not property, and after rescission it became of no effect. In Higham v. Harris, 108 Ind. 246, it was held that, if nothing of value was parted with on the one hand or received on the other the contract may be disaffirmed without a formal restoration, on the principle that the law does not require an idle ceremony.' In Baldwin v. Hutchison, 8 Ind. App. 454, the return of an agreement not to prosecute the plaintiff was held unnecessary, because it was 'wholly valueless.' The case of Dimmitt v. Robbins, 74 Tex. 441, was a case where Dinmitt was attacked by armed robbers, who demanded a ransom. Robbins, who was present, pretended to give the robbers $2,500 in an envelope for Dimmitt's release, and afterward sued Dimmitt for the $2,500, as for money loaned. A judg

ment in favor of Robbins was reversed, because the evidence did not show that the envelope contained $2,500, and further, because the evidence showed that Robbins was a confederate of the robbers, which fact rendered void any contract such as claimed by Robbins. In Brown v. Peck, 2 Wis. 261, Brown was excused from returning the $100 which it was claimed he had received, because in fact he never received it. The court says: 'There was in fact no valid, legal payment made, nor any received.' The money was left in the hands of one Leland, and never came into the possession of Brown.

"The foregoing cases seem to be relied upon in the opinion of the court as justifying in some way the proposition that a contract may be rescinded without return of the consideration. As a matter of fact, it is apparent that not one of them sustains the proposition that, where any thing of value has been received under a contract, rescission can be had without return of such value, except, perhaps, in the case of a minor or a person non compos mentis. The case of Jordan v. Elliott, 12 Week. Not. Cas. 56, is still more unfortunate as an authority. It is said in the majority opinion that in that case a policy of insurance, and the assignment thereof, were left at defend. ant's house, and that it does not appear that the policy was restored. My reading of this case convinces me that the defendant never received any thing. It is true she signed a receipt acknowledging that she had received her son's note and policy of life insurance and assignment thereof, but the opinion of the court expressly holds that this receipt was obtained by fraudulent representations as to its contents, and that at the same time the defendant refused to receive either the note or the policy'; and in another place they are referred to as a 'valueless consideration, which she (defendant) refused to accept.' How this case supports the view of the majority of the court I leave for others to say.

"In the present case there is absolutely no question but that Mrs. Kusworm received from the bank, in consideration of her note and mortgage, a large amount of negotiable securities. According to the testimony of the witness Stone (which is uncontradicted), Mr. Gebhart handed to him (Stone), when he received Mrs. Kusworm's note, two notes of $4,100 and $800, respectively, signed M. Kusworm,' together with four or five collateral notes signed by other persons and aggregating $7,000 or $8,000 which were collateral to the M. Kusworm notes. All of these notes Mr. Stone immediately passed over to Mrs. Kusworm. There was no claim or proof that all of the notes were forged or worthless. The utmost claim made by Gebhart was, according to Mrs. Kusworm's own testimony, 'I have notes here for $4,900, which your husband has forged.' Granting this to be true, there were still notes aggregating $7,000 or $8,000 which were genuine and valuable securities, which passed into Mrs. Kusworm's hands as a consideration for the notes which she now seeks to avoid. The effect of the decision of the court is that she may avoid her own contract without accounting for or returning the consideration thereof, and without showing it to be worthless. I think this is contrary to all the law on the subject. It is said that she received no pecuniary benefit from it, because she turned all the notes over to her husband. Still, the bank parted with it, and, according to the rule laid down by Mr. Justice Mitchell, quoted with approval in the majority opinion, in order to justify rescission without restoration, there must have been nothing of value parted with on the one hand or received on the other.' But there was value received by Mrs. Kusworm. The fact that she turned them over to

her husband, according to Stone's advice, surely cuts no figure. Stone was not the agent of the bank in any sense. He was simply the friend of Mrs. Kusworm. The sum and substance of the matter is that she voluntarily, on the advice of a friend, turned the notes over to her husband, and thus disabled herself from returning them. Was it ever held that a person, by voluntarily destroying a consideration received, or placing it in the hands of a third party, could relieve himself from the necessity of returning it or its value in case of rescission? I have yet to see the case which holds such a doctrine. There seems to me no element of estoppel here as against the bank resulting from the fact that Gebhart heard Stone direct Mrs. Kus. worm to turn over the notes to her husband, and said nothing. The notes had passed entirely beyond the bank's control. Gebhart had received Mrs. Kusworm's note and mortgage as full and complete satisfaction for the bank's right and interest in them. She could do as she pleased with them, and the bank could say neither yea nor nay. There was no duty then resting upon Gebhart to speak, and consequently no estoppel from his failure to speak.

"The net result seems to be, from the conclusions reached by the court, that the plaintiff loses, without possibility of recovery, the notes of M. Kusworm, and the collaterals which it lawfully held thereto, as well as the note and mortgage of Mrs. Kusworm. Against such a result I respectfully protest."

COMPOUNDING FELONY.-A mortgage given to suppress a criminal pros ecution is void: Note to Morrill v. Nightingale, 27 Am. St. Rep. 212. A note given to settle an agent's embezzlement is valid if there is not an agreement to stifle the prosecution: See Miller v. Minor Lumber Co., 98 Mich. 163; 39 Am. St. Rep. 524, and note.

DURESS-THREATS OF IMPRISONMENT.-In relation to husband and wife, parent and child, each may avoid a contract induced and obtained by threats of the imprisonment of the other; and it is of no consequence whether the threat is of lawful or unlawful imprisonment. The principle which underlies all this class of cases is, that whenever a party is so situated as to exercise a controlling influence over the conduct and interest of another, contracts thus made will be set aside: Adams v. Irving Nat. Bank, 116 N. Y. 606; 15 Am. St. Rep. 447.

EQUITABLE ESTOPPEL-HOW ARISES.-To create an equitable estoppel the person sought to be estopped must do some act or make some admission to influence the conduct of another, which is inconsistent with his present claim, and the other party must have acted on the strength of such act or omission. Equitable estoppel depends upon the facts and circumstances of each particular case: Terrell v. Weymouth, 32 Fla. 255; 37 Am. St. Rep. 94, and note.

WHEN ONE OF TWO INNOCENT PERSONS MUST SUFFER, he whose fault, neglect, or accident has caused the loss must bear it: Caldwell v. Neil, 21 La. Ann. 342; 99 Am. Dec. 738, and note; Beach v. Schoff, 28 Pa. St. 195; 70 Am. Dec. 122; McCoy v. Morrow, 18 Ill. 519; 68 Am. Dec. 578; Ridg way's Appeal, 15 Pa. St. 177; 53 Am. Dec. 586.