Adams v. Irving Nat. Bank

• Decision Date: 03 December 1889
• Citation: 116 N.Y. 606,23 N.E. 7
• Parties: ADAMS v. IRVING NAT. BANK.
• Court: New York Court of Appeals Court of Appeals

116 N.Y. 606

23 N.E. 7

ADAMS

v.IRVING NAT. BANK.¹

Court of Appeals of New York,

Second Division.

Dec. 3, 1889.

Appeal from a judgment of the general term of the superior court of the city of New York, which affirmed a judgment in favor of the plaintiff entered upon a verdict of a jury.

This action was to recover money claimed to have been obtained from the plaintiff by threats, coercion, and undue influence. The facts out of which it arose are as follows: The plaintiff is the wife of Jay L. Adams, who was adjudged a bankrupt in 1878. The defendant was a creditor of Adams to the amount of several thousand dollars. Adams' health was broken as a result of his misfortunes, and the plaintiff had been advised to go with him to Europe, and their passage had been engaged for June 17, 1879. Shortly prior to this date Adams was examined in the bankrupt court by counsel for the defendant, and the fact was developed that an entry on the stub of his check-book, which read, ‘F. Munoz, taxes and expenses,’ did not relate to any ‘taxes or expenses,’ and that Munoz was merely the messenger who received the money from the bank, the check having been payable to bearer. That Adams had received the money, and had delivered it to a Mr. Warner, with a request that it be kept for him, and at the time of the examination it was still in Warner's possession. Adams claimed that, in secreting this money, his intention was to pay an indebtedness to the widow of his brother. It had not been applied to that purpose, and he admitted, had it not been discovered, he might have changed his mind, and applied it to other purposes. The money was obtained from Warner after this disclosure, and delivered to the assignee in bankruptcy. A few days before the date on which Adams and his wife were to sail for Europe, Adams heard that the defendant and its attorney were threatening to arrest him unless some settlement was made. He immediately went to Mr. Castre, vice-president, and a director of the defendant, and a personal friend of Adams and his wife, and talked with him about the arrest, and asked him if he would become his bail. Castre consented to do so, but suggested that some settlement be made with the bank, and that the plaintiff had the means to make such settlement, and advised him to go to the office of the counsel of the bank, and make some adjustment of the claim. Adams informed his wife that he had heard he was to be arrested, and she went to see Mr. Castre. She testified to this interview, in substance, as follows: That she asked Mr. Castre if he had heard anything about the arrest, and he said he had. That he had heard it was the intention of the attorney of the bank to arrest her husband on board the steamer. She asked if her husband had committed any crime, and Castre replied that he had not, but that any man could be arrested, and asked: ‘How would you like to have your husband arrested on Saturday night, too late to obtain bail?’ That Castre proposed the settlement, advised her not to consult a lawyer, and told her she had nearly money enough in the Irving Savings Bank, and that the pursuit would be withdrawn if the money was paid. She further testified that she was excited, and was willing to make the payment to save her husband. Plaintiff paid $2,000 to the bank, and agreed to pay $2,000 more in monthly installments of $50 each. She paid $400, and then refused to pay more, and subsequently brought this action to recover back the money that it had obtained from her by undue influence and duress.

John E. Parsons, for appellant.

Austin G. Fox, for respondent.

BROWN, J., ( after stating the facts as above.)

The evidence as to the statements and representations made to the plaintiff to induce her to make the settlement with the bank was conflicting. The jury were, however, entitled to, and upon the defendant's appeal we must assume they did, adopt the view of the transaction properly inferable from the plaintiff's evidence. This evidence justified the inference that the payment to the bank was not the free, unconstrained, and voluntary act of the plaintiff, but was induced by the fear of her husband's arrest on the eve of their departure for Europe, and the effect such an act might have upon his health, at that time shattered and feeble from the misfortune that had overtaken him. It cannot be successfully claimed, in view of the finding of the jury, that Mr. Castre did not act for the bank. Although perhaps not in the first instance a party to any attempt to secure a settlement of the claim from the plaintiff, in all that he did after he was consulted he acted for the bank, and he testified: ‘I supposed Mrs. Adams was able to take care of herself. I performed my duty towards the bank, in which I was a stockholder, and let her look after herself.’ The bank, having received the proceeds of the settlement, cannot now be heard to deny the agency through which it was obtained. Krumm v. Beach, 96 N. Y. 398.

It is claimed by the appellant that the plaintiff was not entitled to recover, if there was a lawful ground for the arrest of her husband; in other words, that a threat of unlawful arrest and imprisonment is necessary to constitute a duress per minas. This was the strict common-law rule applied in cases where the duress was against the person seeking to be relieved from his contract. But in practice the narrowness of this doctrine was much mitigated, and money paid under practical compulsion was in many cases allowed to be recovered back, as, for example, payment made to obtain goods wrongfully detained; excessive fees, when taken under color of office; excessive charges collected for performance of a duty, etc. In all such cases there was a moral coercion which destroyed the contract. The rule cited by the appellant has no application to a case like the present, where money has been obtained from a wife by threats to imprision her husband, and none of the cases cited by the appellant so hold. Insurance Co. v. Meeker, 85 N. Y. 614, was a case where the defendant was held to be estopped to deny the validity of a mortgage. In Haynes v. Rudd, 83 N. Y. 251, and 102 N. Y. 372, 7 N. E. Rep. 287, the decisions went upon the ground that the note was given to compound a felony, and the contract was for that reason illegal. Smith v. Rowley, 66 Barb. 502, was decided on grounds similar to Haynes v. Rudd. In Solinger v. Earle, 82 N. Y. 393, plaintiff gave the note in suit to induce the defendant to sign a composition of debts of a firm of Newman & Bernhard. The note was transferred to a bona fide holder, and, having been compelled to pay it, plaintiff brought the suit to recover from defendants the amount paid. The court held the contract was illegal, and the same rule that would have protected plaintiff in an action on the note by the payees protected the defendant in resisting an action to recover back the money paid on it. Farmer v. Walter, 2 Edw. Ch. 601;Knapp v. Hyde, 60 Barb. 80;Dunham v. Griswold, 100 N. Y. 224, 3 N. E. Rep. 76; Quincey v. White, 63 N. Y. 370,-were actions in which the contract was made by the person against whom the duress was claimed to have been exerted.

It is not an accurate use of language to apply the term ‘duress' to the facts upon which the plaintiff seeks to recover. The case falls rather within the equitable principle which renders voidable contracts obtained by undue influence. However we may classify the case, the rule is firmly established that, in relation to husband and wife or parent and child, each may avoid a contract induced and obtained by threats of ...