CONTRACTS-DURESS.

INGEBRIGT v. SEATTLE TAXICAB &

TRANSFER CO.

Supreme Court of Washington. March 9, 1914.

139 Pac. 188.

Where one in good faith believes that he has been wronged and threatens the wrongdoer with a civil suit, and if the wrong includes a violation of the criminal law with a criminal prosecution, without a statement that prosecution has been commenced, and without an actual arrest, is not duress, so as to render a contract executed at the time void, as the threat, to be coercive, must be of an unlawful use of process.

GOSE, J. This is an action for damages (a) for a breach of contract, and (b) for the value of property obtained by duress. At the close of the plaintiff's testimony, the court withdrew the case from the jury and entered a judgment in favor of the defendant. The appeal followed.

(1) On the 23d day of September, 1912, the appellant was employed by the respondent for the period of one year under the terms of a written contract, whereby he agreed to furnish an assistant and a motor truck and devote them to the service of the respondent, in the conduct of its baggage business, from 7 a. m. to 12 o'clock midnight, at an agreed price of $15 per day. The appellant was allowed one hour off duty at "lunch time," and also at "dinner time," without deduction for loss of time. The contract further provided that the appellant should be allowed for overtime, but "that there should be no overtime for services performed at any time of the day or night except between 12 o'clock midnight and 7 o'clock a. m." The appellant was discharged on the 23d day of December, 1912. In his first cause of action he seeks to recover damages for a wrongful termination of the contract. In his second cause of action he alleges that the respondent, by threats of arrest and imprisonment, induced him to convey to it a motor truck of the value of $2,100, for a consideration of $335.

The applicant testified that the respondent had a contract for carrying all the baggage to certain hotels, and that he, knowing that fact, collected and retained the compensation for a part of it. He sought to justify his conduct by saying, "I always tried to do that during my noon hour or my lunch hour." When asked how often this happened, he said, "I don't remember." To the question, "When was your lunch hour?' he answered, "Any time I had time to take it;" that he "never had any regular lunch hour."

This was a nagrant violation of both the letter and the spirit of his contract, and fully war ranted the respondent in terminating it.

(2, 3) In respect to the second cause of action, the threats of imprisonment, the appellant testified that the president of the respondent said to him "that it wouldn't take Prosecuting Attorney Murphy but a short time to send me to Walla Walla;" that "it would be nice for you to lay up in jail to-night;" that "it wouldn't be very nice for you to lay upon the hill in jail to-night;" and that "you better settle up; give us the truck and square up." He was asked, "What, if anything, was said by either of them about when they would send you to jail?" and answered: "There was nothing said about what time, but they said this: That it wouldn't be very nice for me to stay in jail that night. A witness called by the appellant gave substantially the same testimony. The appellant had paid $1,335 on the truck. He conveyed it to the respondent and accepted its check for $335, which he later cashed, and still retains the money. He testified that the respondent claimed that he had received $1,500 for which he had given no account, and that he would not have conveyed to it the motor truck except for threats and through fear of going to jail, although he said that he did not know of any crime that he had committed. The testimony further shows that the settlement, which included the making of a bill of sale for the motor truck and a release of the contract of employment, occupied about two hours. During this time the appellant twice went away from the office of the respondent's president in company with its assistant manager, for the purpose of getting papers connected with the settlement, and his return in each instance was wholly voluntary. After returning the second time, he signed a bill of sale conveying the motor truck to the respondent, received its check, and signed a release of the contract. He testified that there was no representation that a criminal action had been commenced or that a warrant had issued.

Do these facts constitute duress? We think not. Under the appellant's testimony, he had unlawfully appropriated money which belonged to respondent. The respondent had a right to say to him that, if he did not settle, it would commence a civil action. It also had a right to point out to him that he was subject to a criminal prosecution. Under his own testimony, the good faith of the charge that he was subject to criminal prosecution cannot be questioned. It is not duress for one, who in good faith believes that he has been wronged, to threaten the wrongdoer with a civil suit; and

if the wrong includes a violation of the criminal law, it is not duress to threaten him with a criminal prosecution. Hilborn v. Bucknam, 78 Me. 482, 7 Atl. 272, 57 Am. Rep. 816. A mere threat to imprison, without an actual arrest, does not constitute duress. Bodine v. Morgan, 37 N. J. Eq. 426; Thorn v. Pinkham, 84 Me. 101, 24 Atl. 718, 30 Am. St. Rep. 335. Threats of imprisonment, not accompanied with the statement that the prosecution has been commenced, do not constitute duress. Buchanan v. Sahlein, 9 Mo. App. 552; Sulzner v. C. L. & M. Co., 234 Pac. 162, 83 Atl. 103, 39 L. R. A. (N. S.) 421. In the case last cited the court said: "Ordinarily, when no proceedings have been commenced, threats of arrest, prosecution, or imprisonment do not constitute legal duress to avoid a contract; the threats must be made under such circumstances that they excite the fear of imminent and immediate imprisonment." The threat, in order to be coercive, must be an unlawful use of process. Loan & Protective Ass'n v. Holland, 63 Ill., App. 58. There is no duress where neither a warrant has been issued nor proceedings commenced. Elston v. Chicago, 40 Ill. 514, 89 Am. Dec. 361. "Threats of criminal prosecution, unaccompanied threats of immediate imprisonment, constitute duress." Beath v. Chapoton, 115 Mich. 506, 73 N. W. 806, 69 Am. St. Rep. 589. See, to the same effect, Williams v. Stewart, 115 Ga. 864, 42 S. E. 256. ** It is those contracts made under fear of unlawful arrest, and not those executed under threat of lawful imprisonment, that can be avoided for duress." McCormick Harvesting Machine Co. v. Miller, 54 Neb. 644, 74 N. W. 1061. See, to the same effect, Alexander v. Pierce, 10 N. H. 494; Englert v. Dale (N. D.) 142 N. W. 169. "When a party seeks to avoid a contract because of duress by imprisonment, it is not enough simply to show that he was imprisoned. He must go further and show that the imprisonment was unlawful, or, if lawful, that while imprisoned he was subjected to some coercion that deprived him, in some respect, of his tree agency." Harrison Township v. Addison, 176 Ind. 389, 96 N. E. 146.

do not

lant's own testimony, and upon the testimony of his only witness, the court would be compelled to set aside a verdict in his favor, if one should be returned.

Appellant has cited authorities which seem to sustain his contention that the case should have been submitted to the jury upon the second cause of action. They are, however, in conflict with the weight of authority and what we deem to be the better rule. They are also in conflict with the principle announced in Thorne v. Farrar, 57 Wash. 441, 107 Pac. 347, 27 L. R. A. (N. S.) 385, 135 Am. St. Rep. 995. The better view is that one smarting under a wrong in seeking civil redress may say to the wrongdoer that he is subject to a criminal prosecution, if the wrong is both civil and criminal in its nature, and that a settlement of the civil injury under such circumstances is not subject to the reproach of duress. The case was correctly decided on both causes of action. The judgment is affirmed.

BROW, C. J., and ELLIS, MAIN, and CHADWICK, J. J., concur.

The appellant's testimony shows that he was knowingly guilty of moral turpitude; that the respondent claimed that he had appropriated $1,500 of its money; that it offered to settle on the basis finally agreed upon; that its officers pointed out to him that he was subject to arrest and imprisonment; that after a full discussion, and after he had twice left the office and voluntarily returned, he made the settlement. It seems conclusive that, under the admitted facts, it would be trifling with the law to submit the case to a jury. Upon the appel

And in an Alabama case where a mother was told that there were threats of prosecution of her son and being in great grief and distress of mind she signed away a deed to her property, the conveyance was set aside as having been obtained by duress. Martin v. Evans, 163 Ala. 657, 50 So. 997.

prevent

In Ellyson v. Schoaler, 149 Iowa 332, 128 N. W. 551, where a married woman signed notes to for a prosecution of her husband forgery and she claimed she was induced to do this as a means of saving her son, then fifteen years of age, from the disgrace to result to him if his father were sent to the penitentiary, this was held to constitute duress avoiding the

notes.

And in Nebraska Central B. & L. Assn. v. McCandless, 83 Neb. 536. 120 N. W. 134, where a lawyer had converted money belonging to a client to his own use, and the client went to the lawyer's home, in his absence, and threatened to commence criminal proceedings against him, a mortgage executed by his wife to secure the amount was held unenforceable in equity.

In International Harvesting Co. v. Voborill, 187 Fed. 973, 110 C. C. A. 311, Judge Hook says: "Susceptibility to coercive influence is not uniform, and in determining the question of

duress, sex, age, state of health, family conditions, etc., may be considered with other circumstances. He must assume from the verdict and evidence that threats were made to have her husband arrested and jailed unless she signed and guaranteed the notes, and we cannot say as a matter of law that they were insufficient under the circumstances to deprive her of that freedom of will essential to voluntary action. All men appreciate how susceptible the mind of a wife and mother is to such influences when the liberty of husband and father is believed to be at stake."

In Galusha v. Sherman, 105 Wis. 263, 81 N. W. 495, 47 L. R. A. 417, the court described the old law as requiring that duress could exist only where there was such threat of danger to the object of it, as was deemed sufficient to deprive a constant and courageous man of his free will. Duress strictly so-called was a matter of law. Then it became what was sufficient to overcome the will of a man of ordinary firmness. Now it is said that: "Duress in its broad sense, now includes all instances where a condition of mind of a person, caused by fear of a personal injury or loss of limb, or injury to such person's property, wife, child or husband, is produced by the wrongful conduct of another, rendering such person incompetent to contract with the exercise of his free will power, whether formally relievable at law on the ground of duress or in equity on the ground of wrongful compulsion. The law no longer allows

a person to enjoy, without disturbance, the fruits of his iniquity, because his victim was not a person of ordinary courage." In this case the evidence shows a hard-working, middle-aged farmer, induced by threats of arrest and imprisonment, making a settlement and the contract was set aside.

In Bentley v. Robson, 117 Mich. 691, 76 N. W. 146, there was a mortgage by an old lady to save her son-in-law from jail, and it was held void for duress.

the

In Leflore County v. Allen, 80 Miss. 298, 31 So. 815, there was a threat against a defaulting county treasurer with prosecution unless wife would convey all her property to the county. She refused, but later, while her husband was still liable to prosecution and on renewal of the application she did, the deed was held void, notwithstanding that the threats w were not repeated.

In Benedict v. Roome, 106 Mich. 378, 64 N. W. 193, merely mentioning to a wife that her husband was guilty of embezzlement and seeing her time and again about getting security therefor, was held sufficient to have a mortgage set aside on the ground of its procurement by duress. The court said: "Mr. W. and his attorney studiously sought to avoid any such threats as would vitiate the security they might make. If the court were to be governed by the words used to her by them, the position of defendants might be sustained; but we cannot ignore the conclusion that the conduct of her husband was suddenly disclosed to her, that she understood he had committed a crime and that the papers referred to by Mr. W. as lying upon the table were prepared as the basis of a criminal prosecution, we think it clear that she gave the mortgage under an implied threat of criminal prosecution."

Many other cases of this kind might be produced but the substance of them generally is, that if the threat coerced one to do what he would not otherwise do, that the old rule of its overcoming the will of a firm person no longer obtains. C.

ITEMS OF PROFESSIONAL

INTEREST.

RECENT DECISIONS BY THE NEW YORK COUNTY LAWYERS' ASSOCIATION COMMITTEE ON PROFESSIONAL

ETHICS.*

In answering questions this Committee acts by virtue of the following provisions of the bylaws of the Association, Article XVI, Section III:

"This Committee shall be empowered when consulted to advise inquirers respecting questions of proper professional conduct, reporting its action to the Board of Directors from time to time."

It is understood that this Committee acts on specific questions submitted ex parte, and in its answers bases its opinion on such facts only as are set forth in the question.

QUESTION NO. 42.

A is a practicing attorney in this state. B is a member of the bar of a Western state, but has moved to New York City. B's business in New York City is looking after nis own investments. In the course of B's business a considerable amount of legal work comes to him, which he can not handle because he is not a member of the bar of this state, and he desires to turn over all such legal matters to A for attention, upon condition that A will give B a portion of the fees received in such matters.

Is it the opinion of your committee that it would be unprofessional for A to make such arrangement with B?

ANSWER NO. 42. The Committee is of the opinion that any division of fees by a lawyer should be based upon a sharing of professional responsibility or of legal services, and no such division should be made except with a member of the legal profession associated in the employment as a lawyer. Any other division would appear to be a mere payment for securing professional employment, which is to be condemned.

*Questions 43 to 46 answered in 78 Cent. L. Journal 75; question 47 in 78 Cent. L. Journal 298.

If in the question propounded, the employment of B is by clients to whom he assumes responsibility by reason of his office as a lawyer in the Western state, we should not consider the division improper per se, though it is still possible that section 274 of the Penal Law might condemn it.

On the other hand, the question seems to mean that the employment is not the result of the Western lawyer's practice for clients in his own state, but rather the creation of employment as a lawyer in New York by reason of the Western man's activity as a business man in New York. If this interpretation be correct, we would consider the division improper: it might (under some circumstances which we do not assume to construe) even be a violation of section 274 of the Penal Law, which is as follows:

"Section 274. BUYING DEMANDS ON WHICH BRING AN ACTION.

An attorney or counsellor shall not:

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1. Directly or indirectly, buy, or be in any manner interested in buying, a bond, promissory note, bill of exchange, book debt, or other thing in action, with the intent and for the purpose of bringing an action thereon.

2. By himself, or by or in the name of another person either before or after action brought, promise or give, or procure to be promised or given, a valuable consideration to any person, as an inducement to placing, or in consideration of having placed, in his hands, or in the hands of another person, a demand of any kind, for the purpose of bringing an action thereon, or of representing the claimant in the pursuit of any civil remedy for the recovery thereof. But this subdivision does not apply to an agreement between attorneys and counsellors, or either, to divide between themselves the compensation to be received.

There are some collection agencies in town which are incorporated and which solicit bills for collection. It is their custom to turn over some of them to lawyers for suit. In such cases the collection agency always wishes to deal with a lawyer as if it were his client and wishes collections remitted to it instead of directly to the creditor. In your opinion, is not that method of doing business improper? This question arises frequently and is quite troublesome because, so far as I know, there has been no adjudication of the matter.

ANSWER NO. 51. In the opinion of the Committee, the patron of the collection agency is the client, but the Committee sees no impropriety in the lawyer's complying with the wish of the collection agency in remitting to it; assuming (as the Committee does) that the agency is the authorized agent of its patron to deal in his behalf with the lawyer. (See our answers to Question No. 47.)

QUESTION NO. 52.

First: When a judge of a court of review or of last resort has a dispute which he wishes to litigate, may he, without impropriety or a

breach of the ethics of the profession, prosecute his suit in a court from which an appeal or writ of error lies to the court of which he is a member? Or should he, before bringing suit, resign from his office as judge?

Second: When the judgment in such case comes before the court of review or of last resort, of which the plaintiff is a member, is it sufficient to meet the requirements of the ethics of the profession, or for the due, proper, and impartial administration of the law, for the reviewing court in deciding the case merely to say that the plaintiff in the case did not sit? Or, if not, what is the proper action?

ANSWER No. 52. First: In the opinion of the Committee, the judge may properly prosecute his suit without resigning his office.

Second: The reviewing court could, it seems to the Committee, be fully expected to deal properly with the case. The plaintiff should, of course, not sit as a judge in his own cause, but this does not disqualify his colleagues, who should not (and doubtless would not) permit him to participate in their deliberations or influence them in any way whatever. It does not seem to us that any formal action or comment of any sort by the court upon the judge's disqualification is necessary. A proper precaution to avoid possible, but not probable, misunderstanding would be an informal announcement that the disqualified judge did not participate in the deliberations or action of the court.

In the opinion of the Committee, the judge should not personally try or argue his own cause.

QUESTION NO. 56.

I invite the expression of the opinion of the Committee in respect to the following sug gestion about which I have been recently con sulted:

A receiver and his counsel agree to divide their fees, i. e., the receiver to pay to his counsel one-half of the commissions which the court might allow to him, and the counsel to pay to the receiver one-half of the amount which the court awarded to him as counsel for the receiver.

Query: 1. Was this agreement void as against public policy?

2. If not void, was it proper according to proper ethics?

ANSWER NO. 56. In the opinion of the Committee, the agreement is contrary to the proper rules of professional conduct, and is probably illegal.

PUBLIC ESTHETICS AS A BASIS FOR LEGISLATION.

An inherent function of sovereignty, as parens patriae, is to protect social interests. The police power to regulate the exercise of individual property rights, or, if necessary, to destroy the property itself, springs from the necessity of this function. But to be entitled to such legislative protection the interest must be one that is actually recognized and one the promotion of which will benefit, at least indirectly, the pub-. lic as a whole. Although these interests were originally thought of as confined to health, safety and morals, the courts are unquestionably tending toward a broader test. A recent case, on the other hand, holds that public esthetics is not such an interest, and that a statute is unconstitutional which prohibits the building of retail stores in residential sections without the consent of a majority of the abutters (People v. Chicago, 103 N. E., 609, Ill.). This view is consistent with the authorities.

It has been urged that unsightliness may be legislated against as much as smoke or noise. But the two groups are distinct. The comfort or even health of substantially every one in the neighborhood is disturbed by smoke and noise, and so its prevention is of direct public benefit. Probably the display of revolting diseases in patent medicine advertisements could be prohibited on this ground. But only a limited group of esthetes can be thought of as suffering serious discomfort or inconvenience from the spectacle of unsightly buildings. True, the public may be uplifted by the presence of architectural beauties, but it is not offended by their absence. There is therefore no direct harm to the public as a whole. Nor is the social interest in the protection of the individual or the fastidious few from esthetic discomfort strong enough to justify the restriction of pe sonal liberty. Legislation to protect the weak, poor and unfortunate from economic duress presents extreme examples of the justifiable use of the police power in favor of a particular class. On the score of the social interest involved there is a clear distinction between such legislation and a statute shielding the esthetic members of the community from sense discomfort. The police power, it may be said, exists to protect, not to uplift. Thus, esthetic considerations, it would seem, fall outside the scope of the police power until the sensibilities of the community as a whole become so highly developed that the public is shocked and disturbed by what is ugly.

In the exercise of the right of eminent domain the sovereign is thought of not as a protector, but as a purchaser of private property