Citizens National Bank v. Polski

• Decision Date: 02 March 1932
• Docket Number: 28126
• Citation: 241 N.W. 110,122 Neb. 658
• Parties: CITIZENS NATIONAL BANK v. ROSE POLSKI, APPELLEE: CLARENCE G. BLISS, RECEIVER, APPELLANT
• Court: Nebraska Supreme Court

241 N.W. 110

122 Neb. 658

CITIZENS NATIONAL BANK v. ROSE POLSKI, APPELLEE:

CLARENCE G. BLISS, RECEIVER, APPELLANT

No. 28126

Supreme Court of Nebraska

March 2, 1932

APPEAL from the district court for Howard county: EDWIN P. CLEMENTS JUDGE. Affirmed.

AFFIRMED.

Syllabus by the Court.

1. When a contract has been executed in consideration of an agreement not to prosecute criminally, the general rule is that no action lies to recover property delivered under its terms. The court will leave the parties in the same position in which it finds them.

2. When such an agreement has been obtained by duress, it may be avoided by the party against whom the duress is exercised.

3. " The equitable principle expressed in the maxim ‘ He who comes into equity must come with clean hands,' being founded on public policy, public policy may require its relaxation or limitation. Even when the parties have been found to be in pari delicto, relief has at times been awarded on the ground that in the particular case public policy has been deemed to be best conserved by that course." Weaverling v. McLennan, 116 Neb. 466, 217 N.W. 956.

4. " Where equity has assumed to act, it must do complete justice, regardless of whether litigants originally came into court with unclean hands." Weaverling v. McLennan, 116 Neb. 466, 217 N.W. 956.

Appeal from District Court, Howard County; Clements, Judge.

Petition in equity by the Citizens' National Bank of Saint Paul, Neb., interpleading Rose Polski, and Clarence G. Bliss, receiver of the Bank of Ashton, as claimants of the proceeds of a certain certificate of deposit. From a decree in favor of Rose Polski, the other claimant appeals.

Affirmed.

Lamont L. Stephens and F. C. Radke, for appellant.

George I. Craven, contra.

Heard before GOSS, C. J., DEAN and PAINE, JJ., and BROADY and RHOADES, District Judges.

OPINION

GOSS, C. J.

The Citizens National Bank filed its petition in equity in August, 1930, interpleading Rose Polski as one claiming the proceeds of a four months' time certificate of deposit in plaintiff bank, dated April 1, 1930, for $ 3,750, bearing 4 per cent. interest, and Clarence G. Bliss, Receiver of Bank of Ashton, as another party claiming such proceeds. Plaintiff asked to be permitted to deposit the principal and interest thereon for four months with the clerk of the court, that said claimants be required to litigate their respective claims, and that plaintiff be discharged upon paying such principal and interest. Issues were joined and trial was had. On August 5, 1931, the court entered a decree finding generally in favor of Mrs. Polski and awarding her the proceeds of the certificate. The receiver appealed.

Bank of Ashton had long been a state bank owned and operated by the Polski family. For some years Stephen S. Polski had been president and managing officer. On November 24, 1929, he died. The bank was closed the next day with heavy liabilities. The evidence suggests misapplication of funds of the bank and of bonds left with the bank for safe-keeping. Polski left considerable insurance, part of which was payable to the bank and part to his wife, Rose Polski. She deposited $ 3,750 in the plaintiff bank and received the certificate of deposit therefor. On June 7, 1930, she indorsed the certificate at her home and it was turned in to the receiver through his assistant, who was present when it was indorsed by Mrs. Polski. At the time she indorsed the certificate it was agreed between the assistant receiver and her that the department of trade and commerce and the receiver would stay prosecution of the officers of the bank or would return the certificate. The assistant to the receiver gave her a written memorandum to that effect. It is in evidence. Mrs. Polski naturally wanted to lighten the obloquy on the family name of her husband and to protect her brothers-in-law, George L. Polski, a director and vice-president of the bank, and Ignac M. Polski, cashier of the bank, who had not only civil liability to the bank but who had reason to fear criminal prosecution. George L. Polski and C. E. Brown, assistant to the receiver, went to the home of Rose Polski on June 7, 1930, on a joint venture. They knew Mrs. Polski had funds. Polski wished to borrow from her and Brown desired him to do so in order that George might pay the bank. They had virtually an all-day session. Mrs. Polski called in her brother-in-law, Garrett H. Lorenz, as her adviser. Ultimately, on that day, she turned over to George L. Polski, among other securities totaling $ 9,950, the certificate of deposit, indorsing her name on the back of it, It was understood he would turn it over to the receiver, which he did soon thereafter by delivering it to Brown, assistant to the receiver. Brown duly indorsed it to Bliss, receiver, who is here claiming the proceeds. Brown signed in ink and delivered to Rose Polski a statement in these words: "If in any case the dept. of trade and commerce or the receiver of the Bank of Ashton should not see fit to accept moneys tendered by Rose Polski to stay prosecution of the officers of the Bank of Ashton, that such certificate of deposit or moneys shall be returned to her. (Signed) C. E. Brown, Asst to Receiver of Bank of Ashton." It is evident the threat of prosecution was the potent influence in obtaining from Mrs. Polski this certificate as the fruit of the day's work.

Mrs. Polski received from George on June 7, 1930, his two notes--one for $ 4,666 (signed also by L. B. Polski) due June 7, 1935, and one for $ 5,000, due June 7, 1940. George gave her a memorandum listing the securities, totaling $ 9,950, and the notes, and showing the balance due Rose Polski to be $ 284. During the trial Mrs. Polski tendered in court the notes and offered to surrender them to the receiver or to the makers. The receiver declined the tender.

Among other things, Rose Polski had pleaded duress on the part of Brown in procuring her to indorse and deliver the...