The Western Paving Company v. Sifers

• Decision Date: 07 July 1928
• Docket Number: 28,027
• Citation: 126 Kan. 460,268 P. 803
• Parties: THE WESTERN PAVING COMPANY, Appellee, v. E. I. SIFERS et al., Appellants
• Court: Kansas Supreme Court

268 P. 803

126 Kan. 460

THE WESTERN PAVING COMPANY, Appellee, v. E. I. SIFERS et al., Appellants

No. 28,027

Supreme Court of Kansas

July 7, 1928

Decided July, 1928

Appeal from Sedgwick district court, division No. 4; ISAAC N WILLIAMS, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

BILLS AND NOTES--Duress--What Constitutes. The evidence considered in an action in which duress was pleaded as a defense to a promissory note, and held, the facts disclosed were not sufficient in law to furnish a foundation on which to base a charge of duress.

C. H. Brooks, Willard Brooks and Howard T. Fleeson, all of Wichita, for the appellants.

Thomas E. Elcock, James G. Martin, Dale M. Bryant, all of Wichita, and G. A. Paul, of Oklahoma City, Okla., for the appellee.

Burch, J. Hopkins, J., concurs in the result.

OPINION

BURCH, J.

The action was one to recover on a promissory note. The defense was that the note was given under duress. The court directed a verdict for plaintiff. Defendants appeal.

In February, 1923, defendant E. I. Sifers committed a gross fraud upon P. J. Kealy, whereby Sifers received the equivalent to him of $ 6,365. When confronted with the fraud and asked to make reparation, he replied with the flippant falsehood that he had made a fair bargain. Kealy said that if Sifers did not respond with cash, Kealy would see the county attorney and would cause Sifers some trouble. Sifers refused to pay. Kealy complained to the county attorney of Jackson county, Missouri, and on May 12, 1923, the grand jury returned an indictment charging Sifers with fraudulently and feloniously obtaining from Kealy a certain warrant for the sum of $ 6,365. Sifers was not brought to trial, and in February, 1925, he made a settlement with Kealy. The terms of settlement were worked out by attorneys for the parties. A written memorandum of settlement was prepared, and, pursuant to it, Sifers gave his note for $ 3,289.23, payable one year after date, with interest at six per cent per annum. Sifers' wife signed the note. The criminal action was dismissed. In February, 1926, Sifers paid interest on the note and arranged for its renewal. In March, 1927, he forwarded a check to pay interest on the note pursuant to an understanding regarding its renewal, but having consulted an attorney he discovered he had a defense to the note, and he permitted the check to be protested.

Sifers employed an attorney when he was indicted. The attorney was a good lawyer and advised him respecting his rights. In his own mind Sifers was not guilty and owed Kealy nothing, and his attorney advised him he could not be convicted; but he distrusted the Jackson county, Missouri, court. Kealy was an influential man, and they did not always do things just right down there. So in terror that he might "go over the road" under the musty indictment, he went to the office of his attorney, and with nobody present but himself, his wife and his lawyer, but with a will paralyzed by fear, he signed the note. The pang caused by the indictment did not subside until he signed the note. During the two years prosecution lagged; he hardly knew what he was doing. After the indictment was dismissed, his mind was still affected. He was in continual fear of consequences of something for another two-year period, and until he consulted his last lawyer. Whatever he did about the note was not of his free will.

At the time of the trial Sifers was thirty-four years old. He had been in business for fifteen years. He was in the road-building business when he committed the fraud. He operated three companies and did business on a large scale. At the time of the trial he was manager of the Wichita branch of the Sifers Candy Company, which did approximately $ 100,000 worth of business a year. He was married on October 7, 1922, and he asked no special consideration on the ground he was feeble-minded.

Sifers did some road work in Osceola, Ark., and claimed the sum of $ 11,000 was due him. Kealy sold rock asphalt to Jackson county, Missouri, and was paid with a warrant for $ 6,365, payable out of road funds to be collected the next year. Sifers owed the Magnolia Petroleum Company for road-building material, and the Petroleum company was pressing for payment. Kealy turned over his warrant to Sifers at a discount of ten per cent, and Sifers turned it over to the petroleum company at par. Sifers agreed to pay Kealy for the warrant the sum of $ 5,789.70 in cash out of the funds then due him from Osceola. Kealy testified as follows:

"For the warrant, he agreed to give me cash, which he stated was immediately due him from Osceola, Ark. The representative of the Magnolia Petroleum Company was in his office insisting that something be done that day. Sifers told me that the council had something to do with the paying of this money at Osceola, and it had been a matter over which there was some controversy; that the controversy had been settled and he was about to receive his money in two or three days. For me to make certain of that fact, he suggested for me to call, as I understood him to say, the city attorney of Osceola. So I called the attorney on the long distance phone, and he told me this was due Sifers and would be paid in a few days. I pressed him as to just when, and he stated that he couldn't state definitely, but certainly not later than Wednesday or Thursday of next week. Thereupon I gave Sifers the warrant, and he gave me a statement in which he agreed to pay this sum of cash. . . .

"The following week I didn't receive the cash. I again called on Mr. Cochran, who I thought was the city attorney, and he said there had been a slight hitch and it would be a day or two more, and days dragged into weeks, and weeks into years, and to this day I have never had a settlement out of Osceola. Later on, I would judge in April, I went to Osceola and then for the first time found that Cochran is not the city attorney but Mr. Sifers' attorney, and this money was not due. It was not payable. . . . I told Sifers that he had misrepresented the situation to me in several particulars: First, there were assignments and attachments against the account; second, it was not cash that was coming to him, but this was a bill payable after five years; and third, that Cochran was his attorney and not city attorney, and that I wanted the matter straightened out; that I had sold him the warrant for cash and he had used it for cash, and I was looking to him to settle the affair. . . .

"I instituted civil proceedings in Missouri against Sifers to collect in Missouri and Tennessee and Arkansas and laid a complaint before the prosecutor of Jackson county."

The written statement which Sifers signed and gave to Kealy reads as follows:

"In consideration of the purchase of warrant No. 3066, dated December 12, 1922, in the principal amount of $ 6,365 on the bridge and road fund of Jackson county, Missouri, receipt of which is hereby acknowledged, I agree to pay the sum of $ 5,789.70 in cash for said warrant out of the amount now due and payable to E. I. Sifers, operating as the Arkansas Good Roads Company, from the city of Osceola, Arkansas, for work performed, and which amount now due is considerably in excess of the sum herein agreed to be paid.

"It is also hereby affirmed that there are no liens or attachments against this amount, and the said sum is free of all incumbrances; and this is an order on Judge J. T. Coston or the Osceola Street Maintenance District No. 1, of Osceola, Arkansas, for the sum of $ 5,789.70, or on the drawer of this order out of the amount now due and payable for work performed."

Existence of this writing precluded Sifers from disputing his fraudulent representations, had he been disposed to do so, and he did not deny, qualify, or mitigate by explanation, any statement of fact embraced in Kealy's narrative. Kealy's detailed account of what occurred affected Sifers' personal integrity, his integrity and standing as a business man, and bore directly upon an important feature of the lawsuit. In view of the nature of the imputation and the circumstances under which it was made, the court is not disposed to quibble about it, and the inference will be indulged that culpability sealed Sifers' lips.

Sifers' account of the conversation with Kealy when Kealy returned empty-handed from Osceola follows:

"Mr. Kealy came to my office and stated that he was unable to collect on the order I had given him on the city of Osceola, and stated that if I wasn't willing to give him cash in exchange for this order I had given him that he would see the prosecuting attorney and cause me some trouble, and I told him that we had made a fair trade and that I would not do that. I refused to pay him the cash he demanded and told him there was more than sufficient due from the work we had completed to take care of the order. As I recollect there was approximately $ 11,000 due. I further told him that I would assist him in any way possible, but he didn't want that."

The law defines duress. Whether, in a given instance, duress has been exercised is a question of fact. To constitute duress by threats the actor's manifestation must be made for the purpose of coercing the other; must have for its object the securing of undue advantage ...