Adams v. Schiffer

11 Colo. 15 | Colo. | 1887

Elbert, J.

The complainant, Adams, prays for an account, and for a reconveyance of the Aztec mine and Aztec mill-site. We consider first the case made on the pleadings and evidence against the defendant Schiffer. The complainant alleges that he was the owner of the mining property in question; that it was of great value; that the defendant Schiffer knew this, and desired to purchase an interest in it; that the complainant was embarrassed financially, and unable to work the mine advantageously; that the “defendant was possessed of considerable money and property, and claimed to have a considerable acquaintance and influence among moneyed men in the city of New York; that if he could acquire an undivided one-half interest in the property he- would assist in opening and developing the property, and in that manner greatly enhance and increase the value of the remaining half of the property retained by the complainant; that by the aid and influence of the defendant among his moneyed friends and acquaintances in New York, after said property had been opened and developed, he could sell the remaining half interest in said property, or some portion thereof, for a very large sum of money, so that the complainant could in a short time realize a fortune in ready money by the sale thereof;” that the plaintiff, believing and relying upon said representations, made with the said Schiffer the contract of sale of January 24; 1881. With respect to this contract of sale there is no allegation, of fraudulent representations. The only allegation which we find in the bill is in the fourteenth paragraph, and is one of fraudulent intent, namely, that the defendant “ entered into said contract with the intent to deceive and defraud plaintiff.” The theory upon which plaintiff seeks to recover is thus more fully stated by his counsel: “The primary purpose is made plain by the after-conduct of the defendant Schiffer. That he has oppressed, coerced and impoverished plaintiff at every turn throughout the whole transaction, after his purchase of one-half interest, cannot be denied; and from this conduct the inference appears to us to be irresistible that the defendant Schiffer made the original purchase of the half interest for the purpose of getting a hold upon the property, and enabling himself to practice the wrongs and oppressions which he has practiced upon the plaintiff. From this, and what Schiffer did in the end, the conclusion cannot be escaped that he made the promise to use his influence with his friends to sell plaintiff’s remaining interest, and to pay plaintiff the $6,000, with the fraudulent intent not to keep the one, or to perform the other; with the purpose not to carry out the arrangement, but to make use of the situation, which he would gain through the arrangement, to get the title to the property in the end, in exact accordance with what he has shown by the evidence to have accomplished through coercion, intimidation and duress. ” The defendant Schiffer’s representations as to his influence in New York, and his ability to sell, were general. He did not undertake to sell at any sum, much less for any definite sum. He engaged to expend a certain sum in developing the mine; this he did. His demand for reimbursement will be hereafter considered. It does not appear that his representations respecting his influence were false, or that he failed to make the promised effort to sell. He did effect a sale of the remaining interest of the complainant at figures which the complainant voluntarily accepted, although the price did not meet his expectations. There is no evidence that Schiffer could have sold the property for a larger sum, or that he did not make due effort to that end. Had his representations, however, been false, and had he failed to effect a sale, it would not have necessarily been a ground for the relief asked. ‘ ‘ A misrepresentation goes for nothing unless it is a proximate and immediate' cause of the transaction. It is not enough that it may have remotely or indirectly contributed to the transaction, or may have supplied a motive to the other party to enter into it. The representation must be the very ground on which the transaction has taken place. ” Kerr, Fraud & M. 84; Improvement Co. v. Cowan, 5 Colo. 324. While Schaffer’s representations as to his influence in making the sale may have been a motive influencing the complainant in making the contract of January 24, it cannot be said, iu view of the conflicting testimony, that it definitely formed a part of the consideration, or that it was the proximate and immediate cause of the transaction. The distinct allegation of the bill, however, is that in entering into this contract of the 24th of January there was, upon the part of the defendant Schiffer, an intention to defraud. Not an intention to defraud in the transaction of that date, but an intention to defraud thereafter, as explained by counsel, in future dealings with the property. It is claimed by the counsel for the complainant that this intention was pursued and consummated by the sale to Forsch in March, the settlement in respect thereto of the 15th of June, the subsequent sale of all the complainant’s remaining interest to Stern on the 17th of November, the settlement of that date with respect to the money advanced by the defendant Schiffer for working and developing the mine, and the subsequent and final settlement of August 1, 1882. With respect to this proposition, we think it is sufficient to say that the mere intent upon the part of the defendant Schiffer to defraud the complainant in some future transaction could not affect their contract of the 21th of January, which was otherwise unimpeachable. These subsequent transactions which we have mentioned must stand, each upon its own merits. If the complainant was defrauded by any one or all of them, it cannot operate to affect or invalidate a prior, independent contract made, entered into and executed for a good and valuable consideration. A fraud must relate to facts then existing, or which had previously existed; hence non-performance of a promise made in the course of negotiations is not of itself either a fraud or the evidence of a fraud. Cooley, Torts, 171-186. It is true, this rule does not obtain in a class of cases where the promise is the device resorted to to accomplish the fraud, as where one buys property, real or personal, with the existing intention not to pay for it. Cooley, Torts, 187; Dowd v. Tucker, 41 Conn. 203; Dow v. Sanborn, 3 Allen, 182; Richardson v. Adams, 10 Yerg. 273; Gross v. McKee, 53 Miss. 538. It is difficult to bring the case at bar within this class of cases. The deferred payment of $2,000 was paid by Schiffer when due. The subsequent wrongful demand to be released from the contingent payment of the $6,000, like a failure to pay, is not of itself evidence of an original fraudulent intent. Taken in connection with his entire conduct in his dealings with the plaintiff, it is perhaps cumulative evidence that the defendant was a hard and exacting dealer, but to treat it, even when thus supported, as evidence of an original fraudulent intent sufficient to invalidate the several contracts between the plaintiff and defendant of a year and eighteen months before, would be to place the' validity of contracts and conveyances upon very uncertain grounds. We are of the opinion, therefore, that the complainant is not entitled, as against the defendant Schiffer, to reconveyance of the one-half interest sold to him. Still less is the complainant entitled to this relief as against the defendants Forsch and Stern. There is no evidence to support the allegation of conspiracy between them and the defendant Schiffer, or to show that they were other than innocent and bona fide purchasers.

We now proceed to the consideration of the three several settlements made by the complainant and defendant, of the 15th of June and of the 17th of November, 1881, and of the 1st of August, 1882, with respect to which the complainant demands relief upon the ground that they were made under duress of goods. Contracts made and money paid under duress of goods have been held, the former void and the latter recoverable, ,in many -well-considered cases both in England and America. The decisions are not uniform in their expression of the law, but they all rest upon the proposition that the duress of property was such as to render the contract or payment involuntary. It seems to be well settled that where* a party has possession or control of the property of another, and refuses to surrender it to the control and use of the owner, except upon compliance with an unlawful demand, a contract made or money paid by the owner under such circumstances to emancipate the property is to be regarded as made under compulsion. The case of Astley v. Reynolds, 2 Strange, 915, is regarded as the leading English case. There a pawnbroker refused to deliver goods pawned, except upon payment of excessive interest. The owner having paid this to obtain possession of his property, he was allowed to recover back the excess. See, also, Smith v. Bromley, 2 Doug. 696. The refusal of common carriers to deliver goods without payment of excessive charges has given rise to numerous cases in which the principle has been applied. Ashmole v. Wainwright, 2. Q. B. 837; Harmony v. Bingham, 12 N. Y. 99; Tutt v. Ide, 3 Blatchf. 249; Beckwith v. Frisbie, 32 Vt. 559. The exaction, of illegal taxes and tolls constitutes another class of cases in which recovery has been allowed upon the same principles. Briggs v. Lewiston, 29 Me. 472; Grim v. School Dist. 57 Pa. St. 433; Preston v. Boston, 12 Pick. 14; Elliott v. Swartwout, 10 Pet. 138; Ripley v. Gelston, 9 Johns. 201; Chase v. Dwinal, 7 Me. 134; Manufacturing Co. v. Amesbury, 17 Mass. 461. So, too, where the duress has been by means of legal process, money paid to release property so held is recoverable. Spaids v. Barrett, 57 Ill. 289; Crawford v. Cato, 22 Ga. 594; Collins v. Westbury, 2 Bay, 211; Chandler v. Sanger, 114 Mass. 364; Bank v. Watkins, 21 Mich. 483. Money wrongfully exacted by a corporation as a condition precedent to a transfer of stock was held recoverable in the case of Bates v. Insurance Co. 3 Johns. Cas. 238. Illegal commissions demanded and paid to secure the surrender of bonds were held recoverable in the case of Scholey v. Mumford, 60 N. Y. 498. Money paid in order to obtain a transfer of patents wrongfully withheld was held recoverable in the case of White v. Heylman, 34 Pa. St. 142. In the case of Vyne v. Glenn, 41 Mich. 112; 1 N. W. Rep. 997, the duress consisted in an unlawful interference by defendant between the plaintiff and other debtors, by means of which he had stopped the payment to plaintiff of sums due him from such other debtors. Mr. Greenleaf states the general doctrine thus: “Under this count [indebitatus assumpsit] the plaintiff may recover back money found to have been obtained from him by duress, extortion, imposition, or taking an undue advantage of his situation, or otherwise involuntarily and wrongfully paid, as by demand of illegal fees, or claims, tolls, duties, taxes, usury, and the like, where goods or the person.were detained until the money has been paid.” 2 Greenl. Ev: § 121. Mr. Cooley says: “Duress of goods consists in seizing by force, or withholding from the party entitled to it, the possession of personal property, and extorting something as the condition for its release, or in demanding and taking personal property under color of legal authority, which, in fact, is either void, or for some other reason does not justify the demand.” Cooley, Torts, 507. 'What shall constitute duress of goods, as a question of fact, is often difficult to determine, and in its determination we are constantly confronted with the maxim, volenti non fit injuria■ — -“an injury cannot be done to a willing person.” Or, as more pointedly put, “if a person consent to a wrong he cannot complain.”

Counsel for complainant, insist upon the application of the principle of duress of goods to the three several and separate transactions between the complainant and defendant, which we have mentioned under their respective dates. As to the settlement of June 15th, respecting the Forsch sale, the principle involved has no applicability. Schiffer, as the agent of Forsch, charging Adams with certain false representations, refused to pay him the contract price for the interest sold by Adams to Forsch, whether justly or not we need not inquire. Adams was entirely free to accept or reject the smaller sum offered by Schiffer by way of compromise. He says: “I wanted the money, and he would not pay more, and I took it rather than lose the sale.” “ Refusal on demand to pay a debt that is due, thereby forcing the creditor to receipt in full for only a partial payment, does not constitute duress, if the debtor has done nothing unlawful to cause the financial embarrassment which compelled him to submit to the extortion.” Hackley v. Headley, 45 Mich. 576; 8 N. W. Rep. 511. The evidence discloses no ground for saying that Adams, at the time, was financially embarrassed in any- special or extraordinary manner, or, if he was, that Schiffer was in any way the cause of his financial embarrassment.

Nor can the settlement of the 17th of November be regarded as made under duress of goods. It is true that Schiffer claimed that Adams should reimburse him, or secure to him what he claimed as Adams’ share of the money expended in the development of the mine, and this doubtless with a view of inducing Adams to accept the $15,500 offered by Stern for Adams’ remaining interest in the mine. Schiffer was doubtless pushing him, but it was Adams’ duty to resist if the demand made by Schiffer was unjust. He was entirely free to refuse, either to make the sale to Stern, or to secure Schiffer’s claim upon the mine. Schiffer had no control or possession of Adams’ property. The claim for reimbursement was made, according to Adams’ testimony, pending negotiations for the sale to Stern, and with a view, as he says, of coercing a sale. Upon Adams refusing to make the sale to Stern for the sum offered, he says: “We figured up this thing that I owed him upon the expenses for work.” Adams says he offered him security on the ores to be taken out of the mine, but Schiffer refused, and wanted security on Adams’ remaining interest in the mine, in case he refused to sell to Stern. Bather than thus place himself in Schiffer’s power, he says he sold for $15,500. It is true that Adams, in his testimony, says, “When he [Schiffer] came to pay me he said, ‘I am going to take out what you owe me.’ The deed was signed, and I could not help it.” He does not say, however, that the deed had passed from his control or possession to that of Schiffer, or that he demanded its return from Schiffer, or that Schiffer refused to return it. Moreover, even on this state of facts, did they exist, the question would still remain as to the lawfulness or the unlawfulness of Schiffer’s demand. But the gist of Adams’ testimony is to the effect that he made the sale with the full understanding that Schiffer would demand reimbursement out of the proceeds of the sale of an amount “figured up ” and ascertained before the sale. That he yielded to the pressure brought to bear by Schiffer because he needed the money is no ground for holding either the sale or the settlement void. Sales and compromises and contracts under stress of pecuniary needs are of daily occurrence, and if such stress is to affect their validity, “no one,” in the language of Justice Oooley, “could well know when he would be safe in dealing on the ordinary terms of negotiation with a party who professed to be in great need. ” Hackley v. Headley, 45 Mich. 577; 8 N. W. Rep. 511.

The evidence touching the settlement of the 1st of August following presents a much closer question. In the month of April preceding Adams had been notified by Schiffer that his checks against his deposit at the Eio Grande County Bank would not thereafter -be honored until the matter of his son’s claim of title to the mining property was settled. The bank appears to have been under the control of the defendant and his brother, Abraham Schiffer, under the firm name of H. Schiffer & Bro. Adams had, at the time, about $8,000 on deposit at the bank, subject to his check. After receiving this notice from defendant, upon application by Adams to the bank for his money, Abraham Schiffer told him he didn’t dare to let him have it without the consent of his brother. The refusal to let Adams draw on his money at the bank was peremptory and absolute, except for “enough to live on.” Thus the matter stood until the settlement of the 1st of August. In the meantime Adams had addressed himself to the matter of his son’s claim of title to the mine, and had obtained a deed from his son to Schiffer, the consideration being $10,000, which was paid by the defendant. He had also obtained a deed from the administrator of the estate of his deceased wife, at Schiffer’s request. With respect to this claim of title of the son of Adams there does not appear to be any foundation for the charge that father and son were acting in concert for the purpose of compelling defendant Schiffer to pay a further sum of money for the mine. The son seems to have been undutiful and beyond the control or influence of the father. Some time prior to 1874 the complainant had given the son what is called a bill of sale of the mine, and had taken back a power of attorney to himself, dated February 19,1874, and recorded May 6, 1874. This power of attorney was afterwards revoked by the son, at what date the record does not disclose. The bill of sale to the son was without consideration, and made for the purpose of putting the property beyond the reach of certain divorce proceedings instituted by the wife of Adams, but afterwards discontinued. There is nothing to show that it was a conveyance, either in form or effect. Schiffer had obtained an abstract of title from the county clerk’s office prior to his purchase from Adams in January, 1881, •and had full knowledge of its condition at the time of his purchase. His contract with Adams of the 21th of January, for the one-half interest, calls for a good and sufficient deed of conveyance, “passing to the said Schiffer a good and perfect title to the said above-described property.” On the 15th of June following, after Adams had made his relocation and entry of the mine and mill-site, under the name of the “Aztec,” Adams, in pursuance of this contract, conveyed to Schiffer the one-half interest by a deed of quitclaim, without covenants. Schiffer must be taken to have accepted this deed as a full compliance with and discharge of the contract of January 21th. Forsch’s contract with Adams, of the 21st of March, for one-sixteenth interest in the mining property called for a “good warranty deed as soon as a duplicate receipt for patent is issued from the United States land office.” On the 15th of June, Adams, in pursuance of his contract, conveyed to Forsch this one-sixteenth interest by deed of quitclaim, without covenants, and delivered it to Schiffer as Forsch’s agent. This also must be taken as having been accepted in full discharge of his agreement of the 21st of March. The conveyance by Adams to Stern, under the date of November 17th, is by ordinary deed of quitclaim, but with the covenant added: “And the said party of the first part, for the consideration above stated, does hereby covenant and agree with the said party of the second part that he has full right and power to sell and convey the said premises, and that said premises are now free and clear from all incumbrances, sale or mortgage made or suffered by the said party of the first part.” These covenants were broken at the time of the conveyance, if broken at all. Will. Real Est. 413. The covenant of right to convey amounts to a covenant of seizin; they are synonymous. The principles and practice applicable to the one apply to the other. 3 Washb. Real Prop. 448; Will. Real Est. 415; Rickert v. Snyder, 9 Wend. 421. There was no breach of this covenant, as, at the time of the conveyance, Adams was in possession of the property conveyed, and had a right to convey, within the meaning of the covenant. 3 Washb. Real Prop. 449. Nor can we say that there was breach of the covenant against incumbrance and sale. An existing, outstanding, paramount title is held to constitute a breach of the covenant against incumbrances. 3 Washb. Real Prop. 461; Cornell v. Jackson, 3 Cush. 506. But the claim of title made by R. O. Adams does not appear to have been of any such substantial character. What is called a bill of sale to him from his father is not set forth in the record. So far as we can see, his claim was without any foundation in law. He does not appear to have ever been in possession of the mining property, nor to have taken any of the steps necessary under the law to perfect or preserve title. What little evidence we have on the subject goes to show that the property was subject to relocation by the complainant and that the title he gave was good. Afterwards Adams, on his own behalf, and as attorney in fact for his son, R. O. Adams, executed and delivered to Schiffer a quitclaim deed for the entire property. This deed is dated November 11, 1881, but is acknowledged February 14, 1882, and was mqde in compliance with a. request of Schiffer, contained in his letter of January 22, 1882. He writes: “* * * I had abstracts sent east, but since I am here a party wishes also a quitclaim deed signed by you, as attorney for R. O. Adams, as it cleans up all interest or pretended interest in the former location. I therefore inclose you quitclaim deed for you to sign. There is no value attached; only matter of form. * * *” This deed likewise is without covenants, and Adams testifies that Schiffer, at the time, knew that E. O. Adams had theretofore revoked his power of attorney to his father. Schiffer does not contradict this statement.

In view of the facts we do not see that Schiffer had any legal ground for his claim that Adams was hound to protect him and his associates, Borsch and Stern, against the claim of title made by the younger Adams. But whatever the rights of Schiffer under the several contracts and conveyances, he must be held to have waived them, if they existed. After much dispute in respect to the matter, Schiffer distinctly announced to Adams that he himself was willing to pay $10,000 for a quitclaim deed from his son. It was'upon this reiterated proposition that Adams addressed himself to the work of securing his son’s deed. He says in his testimony: “Mr. Schiffer said, ‘If you accomplish a settlement, and he [the son] will give me a quitclaim deed, I will give him $10,000.’ I said, ‘I don’t know anything more about that boy than you do. He has been nothing to me for four years; but I will do what I can.’ * * * After he said he would help, I went to work with a determination to accomplish it. I never admitted the title of my son to Mr. Schiffer. I went to work negotiating with my son by letter and telegraph, and at last he agreed to relinquish all claims to Mr. Schiffer by giving a quitclaim deed for $10-,000.” There can be no doubt upon this point, accepting the testimony of the defendant Schiffer himself. In the postscript to his letter under date of June 16, 1882, he writes: “You certainly can’t expect me to pay $10,000 without seeing the deeds and getting everything satisfactorily arranged, after agreeing to pay this sum without owing a cent for it; but I will not fail upon my word, and will pay. for deeds satisfactory all around, so there will be no more hereafter. I want you plainly to understand, if I agree to do anything I never fail, except by accident or death. * * * ” ‘ ‘ Question. What do you mean when you state in your letter — I have forgotten the date of it- — -that you would pay $10,000 ? Did you mean, when you said that, that Dr. Adams was to pay any part of that $10,000 ? Answer. I agreed to pay $10,000. Q. Did you tell Dr. Adams at that time that he was to pay his proportion of that $10,000? A. I did not say so at that time. * * * When I made the $10,000 proposition to Dr. Adams I authorized him to make the proposition to his son, and I said in case he brought it about I would pay $10,000. Q. When you made that proposition did you tell him in any way, shape or manner that he would be required to pay any part of that $10,000? A. I didn’t. Q. Did you not give him to understand that you would pay that $10,000 yourself for the sake of having the matter settled? A. Tes; I told him I would pay it to have the matter settled.” Again he says: “I told Mr. Adams then, in order to have this thing settled, the best I would do, and all I would do, was, I would give him $10,000, although I don’t know your son, and I consider it your business to defend it.” After having obtained this deed from his son, and also a deed from the administrator of his deceased wife, Adams went to the bank of defendant on the 1st day of August, 1882, for the purpose of settlement. Whether the defendant snatched the administrator’s deed from the hand of the complainant or not is immaterial; he admits that he refused to return it to Adams, and took it and put it on record. He then, for the first time, tells Adams that he was to reimburse him the $10,000 paid to the son. He says: “I had it recorded, and then I went back to the bank and found Mr. Adams there, and Mr. Keyser [cashier] was there also. I asked Mr. Keyser how much was due Mr. Adams. Mr. Keyser looked up the books, and found between sixty-three and sixty-four hundred dollars, — -$6,437.34. I told Mr. Adams I had an offset; I have an offset against you of $10,000 that I paid your son, which I had no business in the world to pay. It was for you to settle; it was a suit brought by your son against you, but you did not do anything towards it. I had to bear it, and I want you to stand it.’ * * * He wouldn’t submit to it. I says, ‘I will tell you what I will do, and that is all I will do; if you stand $2,500 out of this ten thousand, and release me from the payment of the six thousand I was to pay you according to our contract at" any time I should sell the property for $10,000, or my half for $20,000, we will settle right here.’ I says, ‘If you ain’t satisfied with that you can sue, but that is the best I will do.’ He asked me to put it down on a piece of paper what I was willing to pay. I says, ‘All right, it is in black and white; we have some $6,100 due you; you take off $2,500, which will leave a balance of thirty-nine hundred and some odd dollars, and you discharge me from paying that six thousand.’ It was all on a piece of paper, and I think he took that paper. He says, ‘ Is that the best you will do?’and I said, ‘Yes.’ He said, ‘I will see you later,’ and left the bank. * * * Some time about 2 o’clock Mr. Adams came back to the office and says, ‘Now, Herman, let us settle this matter; I have had enough of this trouble; I want my money.’ I told him that his money was ready. He looked at the paper he had and said, ‘Now, can’t you make this an even sum of $1,000.’ I says, ‘No, I can’t; but if you want to accept this you can do so.’ He studied awhile and said, ‘1 suppose I am satisfied with it.’ * * * I went out and called Mr. Wilson, and told him that we had settled. * * * Mr. Wilson went out, and in an hour or so came back and brought the papers to the office, and read us the settlement papers. * * * Mr. Wilson read both of them to Adams. Adams made no objection; he signed them. I gave him a receipt in full, and he accepted it. That finished everything, except some small accounts, which were not settled in that.”

The refusal of Schiffer to allow Adams to draw on his money in bank, his agreement to pay $10,000 for his son’s deed, his subsequent refusal to pay it after getting the deed in his possession, and the demand that Adams should pay it, was a clear attempt to perpetrate an unmitigated fraud. Adams did not admit any title in his son, or, if it existed, that he was called upon to defend it; nor is it to be presumed that he ever would have submitted to the final demand made by Schiffer but for the control which Schiffer had over his money on deposit with the firm of H. Schiffer & Brother. Money deposited with a banker by a customer in the ordinary way is money lent to the bank, with the superadded obligation that it is to he paid when demanded by check. Ball, Banks, 83. The money deposited by Adams, and withheld from him, was due him, not from the defendant Herman Schiffer, but from the banking firm of H. Schiffer & Brother. The defendant's control and influence in the business matters of the firm were such as to control the firm in its action in this matter. It was, therefore, not a mere withholding of a debt due from himself, but an unlawful interference between the plaintiff and other debtors, by means of which he stopped the payment to plaintiff of sums due him; and presents a case analogous to that of Vyne v. Glenn, 41 Mich. 112; 1 N. W. Rep. 997, reviewed by Mr. Justice Cooley in the case of Hackley v. Headley, 45 Mich. 577; 8 N. W. Rep. 511. We are of the opinion that the settlement of the 1st of August was clearly made under duress of property, and must be held null and void.

The court erred in dismissing the bill. The views expressed preclude a recovery in respect to the matters embraced in the settlements of the 15th of June and the 17th of November. Upon some, if not all, of the remaining issues made by tbe pleadings, we are of the opinion that both complainant and defendant should have an opportunity to introduce further evidence, if they should be so advised. We do not, therefore, direct a decree, but remand the cause for further proceedings. The decree of the court below is reversed.

Reversed.

Case Details

Case Name: Adams v. Schiffer

Court Name: Supreme Court of Colorado

Date Published: Dec 15, 1887

Citation: 11 Colo. 15

Court Abbreviation: Colo.