85 Wash. 369 | Wash. | 1915
By stipulation between the parties, the appeals in these two cases have been heard as one appeal.
Anderson is a man forty-four years of age and, since he was about twenty years old, has been a banker and money loaner. From 1901 to 1914 he lived at Davenport, Washington, and was cashier and the principal stockholder of the Lincoln County State Bank, owning $38,000 of its $50,000 capital stock. In 1914, he removed from Davenport to Spokane, where he is engaged in the mortgage and loan business. Appellant Moylan was engaged in the livery business in Davenport for a number of years, and prior to that was a farmer in that vicinity, but removed therefrom to Spokane and is there engaged in the livery business. In 1910, Moylan, together with one Sommers, organized a domestic corporation with a capital stock of one million shares of the par value of one dollar each, naming it the Washington & California Investment Company, in which Anderson and Scott became original subscribers to stock, and the four named composed the original board of trustees of the corporation. Scott was made president and Anderson secretary and treasurer. The stock was nominally subscribed for by Scott, Sommers, and Moylan, and the money required for the company’s operations to commence business was raised by a loan made by Anderson.
There is a great mass of testimony in the record as to how Moylan, Scott and Sommers conducted an energetic campaign for the sale of stock among the farmers about Davenport, most of which is immaterial. The plan adopted, however, was that the stock should be sold in blocks of two
About the latter part of 191£, some dissatisfaction arose among some of the stockholders as to the affairs and management of the company. Scott and a man named Snyder had been placed in charge of the property in California. It was discovered that the land which the company had contracted to sell to the individual stockholders with the stock— that is, the ten-acre tracts, had been sold to other persons who had taken possession of it, and that portions of the land which had been represented as being owned by the company were held only under a contract of purchase and that portions of this had been declared forfeited because of the company’s default in payment. Scott’s management was criticised, among other reasons, because he was not accounting for all the income realized from the property. Polland and Smith had both gone to California late in 191£, to investigate the condition and affairs of the company for themselves. Returning early in 1913, they went to see Anderson concerning the situation. On February 5, they had a conversation with him in Davenport and, at his request, met him the next day in Spokane, together with Moylan, where an
On the 12th of April, the parties again met in Spokane at the Victoria Hotel, and Polland and Smith then insisted that $500 should be added to the amount which they had theretofore agreed should be paid to them of $1,170 per share or block, for the time and expense of their second trip to California, which they claimed was because of the fault of Anderson and Moylan. They were in conference at intervals for two days, and the result of the conference was that Anderson and Moylan executed the notes now sued upon on April 14, 1913. The notes, after being signed by Anderson and Moylan, were sent to Scott in California for his signature. Scott signed the- notes and returned them on April 22, and thereupon the assignments of the share contracts were made and placed in escrow with Freece & Pettyjohn, a firm of lawyers' in Davenport, for delivery when certain conditions had been complied with. The notes fell due November 1, 1913. Anderson did not claim that anything was wrong with the transaction or make any objection to the validity of the notes until October 20, 1913, when he notified
The answers of the appellants are substantially the same in both cases, and set up the defense of duress by threatening each of the appellants with arrest on prosecution on a false criminal charge unless he executed the notes; and also by unlawful confederation and conspiracy to falsely accuse appellant of a crime and threatening his prosecution and arrest for the purpose of compelling him against his will to buy certain stock owned by respondents in the WashingtonCalifomia Investment Company, at a price fixed by them which was more than double its real value, and execute the notes sued on therefor; and that, solely by reason thereof, each appellant executed said notes, and that said notes are without consideration.
The evidence to the issue tendered by the appellants was almost wholly of interested parties as witnesses, and is to some extent conflicting. The trial court had the advantage of seeing and hearing the witnesses and judging of their demeanor upon the stand. The trial court found that the appellants executed the notes freely and voluntarily, and that in doing so they were not acting under duress. The respondents insist that we are concluded upon this finding of the trial court, by reason of the fact that this court has so frequently held that the decision of a trial judge based upon conflicting testimony will not he disturbed unless palpably contrary to the weight of the evidence. But it is also true that, in a case tried to the court without a jury, this court is compelled to try the case de novo; and as was said in Borde v. Kingsley, 76 Wash. 613, 136 Pac. 1172, this court will sustain the findings and judgment of the trial court when, and when only, we can say that we are satisfied that the evidence does not preponderate against the findings. To the same effect see: Baker v. Yakima Valley Camal Co., 77
We have felt impelled, therefore, to make a painstaking and careful examination of the evidence in this case in order to ascertain whether or not the evidence clearly preponderates against the trial court’s findings. Upon the question of duress as a question of law, the appellants insist that the liberal rule applied by the modern authorities should be applied in this case, to the effect that the real test is “that if one party to a transaction is prevented from exercising his free will by reason of threats made by the other, to the end that he may obtain such contract, the person under restraint may at his option repudiate such contract on the ground of duress. It is the condition of the mind of the wronged party at the time of the acts sought to be avoided that is controlling;” citing Galusha v. Sherman, 105 Wis. 263, 81 N. W. 495; Callender Savings Bank v. Loos, 142 Iowa 1, 120 N. W. 317; Kaus v. Gracey, 162 Iowa 671, 144 N. W. 625; Joannin v. Ogilvie, 49 Minn. 564, 52 N. W. 217, 32 Am. St. 581, 16 L. R. A. 376; Price v. Bank of Poynette, 144 Wis. 190, 128 N. W. 895; McCarthy v. Taniska, 84 Conn. 377, 80 Atl. 84; Nebraska Mut. Bond Assn. v. Klee, 70 Neb. 383, 97 N. W. 476; Parmentier v. Pater, 13 Ore. 121, 9 Pac. 59; Wilbur v. Blanchard, 22 Idaho 517, 126 Pac. 1069; Piekenbrock v. Smith (Okl.), 143 Pac. 675, and other authorities from Kansas, Massachusetts, Alabama and Missouri.
The appellants contend that the trial court did not apply this test in the broad and liberal spirit now recognized by modern authorities, but that he was obdurate in the idea that the facts alleged by appellants in their answer were not sufficient to constitute duress, and that the case was controlled by Ingebrigt v. Seattle Taxicab & Transfer Co., 78 Wash. 433, 139 Pac. 188. They complain that the learned trial
Under the strict common law rule, an act could be avoided for duress per mmas only when the threatened danger to avoid which it was done was either loss of life, loss of member, mayhem, or imprisonment. Some of the expressions used in the Ingebrigt case referred to would seem to indicate that the opinion writer was applying the same strict common law rule; but in any event the test is practically as stated by appellants, with the addition that it is one of fact in the particular case.' It would not be proper to simply hold that, merely because' a person who has made a contract declares under oath that he was intimidated and acting under fear and duress when the contract was made by him, the contract should by reason of his mere statement be avoided. If that rule were adopted- most contracts would be avoided. In con
Applying some of these tests to the appellant here, under the facts, we find that they are both men in the prime of life; that Anderson, who seems to have been the person principally intimidated, was a man of more than ordinary experience, at least of ordinary intelligence, who had been able to conduct a banking business for a great many years, and who was still mentally and physically competent to conduct a business requiring large intelligence and considerable sagacity, decision and ability. We further find that the negotiations between appellants and respondents commenced on February 5, 1913, and that the contract which resulted on February 6, 1913, gave them thirty days in which to comply therewith, during all of which time appellants had ample opportunity to reflect upon their situation and upon the alleged threats and accusations made against them; that appellants never sought legal counsel; that when the negotiations were resumed on April 12, 1913, they were conducted at intervals for two days; that they separated several times during the negotiations, and that during those times appellants did not seek legal counsel or the counsel of any other disinterested person. They proceeded very deliberately and did much calculating.
There is a conflict in the testimony between appellants and respondents as to just what threats were used. Appellants insist that respondents threatened to prosecute them and Scott and to throw the company into the hands of a receiver. The respondents insist in their testimony that they never at any time threatened to prosecute Moylan and Anderson, but did express the opinion that Scott was guilty of embezzlement or some such offense, did demand a change in the management, and did threaten to bring an action to put the company in the hands of a receiver. Anderson insists that the
There is considerable suggestion in the record that the affairs of the company in the hands of Scott in California were not properly handled, and there is a suggestion that the sale of the ten-acre tracts which were to be given by the original stockholders of the company to others was known to appellants long before it was known to any of the other stockholders. There is also justification for the belief that the sale of the Reid ranch, together with the other assets of the company, would give the appellants a profit equal to the difference between the amounts which respondents had paid in for their stock and the amounts which appellants agreed to give them for their shares. It is fairly inferable from the facts that the appellants had reason to consider at the time that they were receiving fair value for their notes as well as being rid of troublesome factors in the company.
Nor does the fact that appellants remained silent as to their coercion until a short time before the maturity of the notes justify a very strong inference that appellants had been coerced at the time of the making of the notes. Anderson himself wrote a letter to Scott in California, on April 12, two days before the execution of the notes, referring to the price agreed upon for the sale of the Cornwall, Polland, and Smith shares, in which he stated that Polland, Cornwall, and Smith “said that they will ask for a receiver for the company, and also that they will immediately take out papers against you and give them to Brockman to have you brought into this state to face a criminal charge.” He makes no reference whatever in the letter to any threat being made to prose
“It is not duress for oné who in good faith believes he has been wronged to threaten the wrongdoer with a civil suit; and if the wrong includes a violation of the criminal law, it is not duress to threaten him with a criminal prosecution.” Ingebrigt v. Seattle Taxicab & Transfer Co., 78 Wash. 433, 139 Pac. 188.
“Ordinarily, when no proceedings have been commenced, threats of arrest, prosecution, or imprisonment do not constitute legal duress to avoid a contract; the threats must be made under such circumstances that they excite the fear of imminent and immediate imprisonment.” Sulzner v. Cappeau-Lemley & Miller Co., 234 Pa. 162, 83 Atl. 103, 39 L. R. A. (N. S.) 421.
In the instant case, none of the evidence, even taking appellants’ testimony for it, tended in any way to show that there was any threat of imminent and immediate arrest and imprisonment. The threats at most were of prosecution at some indefinite time in the future. There was no restraint imminent at the time of signing the contract or signing the notes that could be considered as constraining the mind of an ordinary person.
There is 'an effort made by the appellants to classify the cases upon the question of what constitutes duress per minas.
After considering all the testimony, we are convinced that the evidence does not preponderate against the findings of the court, and that the judgments should be affirmed.
Morris, C. J., Parker, Mount, and Chadwick, JJ., concur.