State Bank of Chatham v. Hutchinson

• Decision Date: 09 June 1900
• Docket Number: 11,583
• Citation: 61 P. 443,62 Kan. 9
• Parties: STATE BANK OF CHATHAM, NEW YORK, v. W. E. HUTCHINSON et al
• Court: Kansas Supreme Court

61 P. 443

62 Kan. 9

STATE BANK OF CHATHAM, NEW YORK, v. W. E. HUTCHINSON et al

No. 11,583

Supreme Court of Kansas

June 9, 1900

Decided July, 1900.

Error from Reno district court; MATTHEW P. SIMPSON, judge.

Judgment affirmed.

McKinstry & Fairchild, for plaintiff in error.

Martin & Roberts, and H. Whiteside, for defendants in error.

OPINION

DOSTER, C. J.:

This was an action brought by the State Bank of Chatham, New York against W. E. Hutchinson, and Annie P. Hutchinson, his wife on two promissory notes and separate mortgages securing them. One of the notes was for $ 4000, and the mortgage securing it was given on property in the city of Hutchinson, part of which constituted the homestead of the Hutchinsons. The other note was for $ 6000, and the mortgage securing it was given on a section of farming land. The Valley State Bank and the Bank of Hutchinson, being claimants to a mortgage lien on the section of land, were made defendants to the action.

W. E Hutchinson was the president of the Valley State Bank, of Hutchinson. He was indebted to the State Bank of Chatham on a personal obligation in the sum of $ 10,000. As collateral security to his indebtedness, he had transferred certain notes and chattel mortgages on cattle. One George L. Morris, the president of the plaintiff bank, came to Kansas to investigate the chattel-mortgage collaterals and adjust the Hutchinson indebtedness. He could not find the cattle described in the mortgages nor the makers of those instruments. He accused Hutchinson of fraud, and threatened to prosecute him criminally and cause him to be sent to the penitentiary unless the indebtedness due to his bank was at once paid or secured. These threats were not made to Hutchinson personally but were made to one C. B. Wilfley and one John J. Welch, officers of the bank of which Hutchinson was president. They communicated the threats to Hutchinson, who, in turn, communicated them to his wife. In order to satisfy Morris, as agent of the plaintiff bank, and induce him to forego a criminal prosecution against Hutchinson, the latter, together with Wilfley and Welch, the other officers of the Valley State Bank, agreed with Morris to convey to Mrs. Hutchinson a section of farming land, owned by the bank, in order that the Hutchinsons might give a mortgage on it, along with their homestead and other city property, as security for the debt which Hutchinson owed to the State Bank of Chatham. This conveyance was made. The title to the section of land did not stand in the name of the Valley State Bank, but stood in the name of the before-mentioned John J. Welch, one of its officers. Morris, however, had full knowledge that this land belonged to the bank, and that the title to it was held by Welch merely as a trustee. After the conveyance of the land the Hutchinsons executed the above-mentioned mortgage of $ 6000 on it, and also at the same time executed the mortgage of $ 4000 on their homestead and other city property. The indebtedness secured by these mortgages was not paid, and action was therefore commenced as before stated.

It will be most convenient to state and discuss separately the two causes of action on the notes and mortgages.

The jury found that the note and mortgage of $ 4000 on the homestead were executed by Mrs. Hutchinson under the duress of her fears excited by Morris's threat to arrest and criminally prosecute her husband. As before stated, this threat was not made to her, nor was it made to her husband, but it was made to her husband's business associates and by them communicated to him and by him to her. Counsel for plaintiff in error contend that a plea of duress by eats threats can only be sustained by proof of threats directly made to the person from whom the unwilling act was required or the involuntary contract extorted; or that, if such threat is not thus directly made, but is conveyed through an intermediary, it must be by an agent of the threatener's choosing, specifically designed by him to be an organ of communication. The evidence did not show that any agency for the communication of the threat was selected by Morris or that he had any specific design that it should be communicated to Mrs. Hutchinson. Notwithstanding this we feel clear that the threats need not be directly communicated. If one makes threats the natural and reasonable consequence of which is to put another in a state of fear, and if they do put the other in a state of fear, and induce, through the duress of such fear, the performance of an act by him, the one who makes the threats should be held responsible for his wrong. The effect is one which, in the law of causal connection, proximately results from the unlawful act. Nor need there be, as we think, a specific design in the mind of the wrong-doer to produce the effect which follows. It is sufficient that the effect be one which follows as a natural and reasonable consequence from the unlawful act.

In the case of Taylor v. Jaques, 106 Mass. 291, it appeared that a promissory note was signed under the duress of fears excited by threats not communicated directly by the creditor to the debtor, but communicated by the former to another, and by him to the debtor. The court held that, "on an issue whether a promissory note was made under duress, evidence is admissible that the person to whom the payee made threats against the maker reported them to the maker, in the absence of the payee, just before the making of the note." In Schultz v. Catlin, 78 Wis. 611, 47 N.W. 946, it was ruled:

"A note signed by a sister because of threats by the payee to prosecute her brother for a crime, and in order to avoid such prosecution, cannot be enforced against her by such payee. It is immaterial that the threats were not made directly to the sister, if they were intended to be communicated to her and were so communicated."

The case of Giddings v. Iowa Savings Bank, 104 Iowa 676, 74 N.W. 21, is quite like the one we have for consideration. In that case a creditor charged his debtor with being a defaulter in respect to a mutual business trust, and threatened him with a criminal prosecution and imprisonment unless he and his wife would execute a mortgage on their homestead to secure the amount of the default. The husband communicated the threat to his wife, and under the duress of her fears excited thereby she executed the mortgage. The evidence of this secondary communication, although that of the husband, was received and held proper. We disagree, however, with that case in one particular. We do not believe that the husband was a competent witness to prove the communication to his wife of the threats which had been made to him. However, the point raised by counsel, and which we have thus far considered only, does not concern the competency of the testimony by which the secondary communication was proved, but it concerns the question whether the communication must be direct, or whether it may be secondary or otherwise more remote.

Upon that question the case cited is an authority.

The case of Schultz v. Catlin, supra, intimates that, in order to the reception of the evidence of threats secondarily communicated, there must be a specific design in the mind of the threatener that the communication should be made. In this we do not agree, but believe that the general rule which holds a wrongdoer liable for the consequences which naturally and reasonably follow his act applies in such case as it does in other and analogous ones. It also appears in that case, and likewise in Giddings v. Iowa Savings Bank, supra, that the reception of the evidence of the secondary communication was rested somewhat upon the theory of an implied agency in the one to whom the threats were made to act as a medium of communication to the third person. Without holding to the contrary of such theory, we are persuaded that the better ground upon which to rest the rule of admissibility of the evidence is the one which we have above stated.

Counsel for plaintiff in error strenuously object to a portion of Mrs. Hutchinson's testimony, because, as they say, it was given in violation of the statute which prohibits husband or wife from testifying to communications which one of them has made to the other. The testimony to which objection was made was, in substance, that the witness heard that her husband was threatened with a criminal prosecution and sentence to the penitentiary; that in consequence she became alarmed and disturbed in mind and overpowered in will, and executed the mortgage on her homestead to avert the threatened calamity. During the examination in chief of Mrs. Hutchinson, the trial court, upon objection, carefully excluded from the jury all of her testimony tending to show a communication to her by her husband. Nothing but the bare fact that she heard of the threats and the effect they produced upon her mind and will were allowed to go to the jury in the first instance. Counsel for plaintiff in error, upon their cross-examination, developed the fact that the story she heard of the threats was a communication from her husband, and they then moved to exclude that part of her testimony from the jury. This motion the court denied. Did the testimony thus elicited upon cross-examination justify the exclusion from the jury of the bare statement, made on direct examination, that she had heard of the making of threats against her husband?

We have given much thought to the question, and are entirely convinced that the rulings of the trial court were correct. No case involving the precise point has been called to our attention by counsel for either side, nor have we, with research, been able to find a case in point. The question therefore, appears to be one of first impression, and, in the lack...