52 Wash. 369 | Wash. | 1909
Prior to January 26, 1907, defendant Charles H. Spencer was engaged in the insurance business in the city of Seattle, where he controlled and operated the Merchants Fire Association. About that time C. K. Holloway and others had organized the Walla Walla Fire Insurance Company, with its principal place of business at Walla Walla. The latter company was in need of a manager experienced in the promotion of new insurance companies. After some negotiations, extending over a period of some
At the time the contract was entered into, Mr. Holloway, the managing director of the plaintiff, had some oral understanding with Spencer that he would not employ his son, L. E. Spencer, in any capacity whatever, in or about the business to be established at Chicago. After Spencer had opened his office in Chicago, he wrote Holloway, saying that because
The ground upon which appellant bases its claim for cancellation of the agreement of October 12, 1907, and the notes executed in accordance therewith, is that the respondent Charles H. Spencer fraudulently took advantage of the then situation of the company — appellant was in disfavor with the insurance departments of several states, and was the subject of hostile criticism by the insurance press of the East— by threats of litigation, and that he would immediately proceed to put the company in the hands of a receiver if it did not execute and deliver the notes now sought to be cancelled.
No useful purpose would be served by a critical review of
“Minutes of special meeting of the board of trustees of the Walla Walla Fire Insurance Company held at the office of the company at 2: 00 p. m., Wednesday, October 16, 1907.
“The meeting was an adjourned meeting called by the president pursuant to a notice given in the manner'provided in the by-laws of said company on Saturday, October 12, 1907, for Tuesday, October 15th. There being no quorum present at the hour fixed for said meeting, upon motion, said meeting was duly adjourned until October 16, 1907, at the hour of 2:00 p. m., and notices of said adjourned meeting were mailed upon order of the vice president to all of the trustees at their last known postoffice address. The president called the meeting to order with trustees Barnett and Smalley in attendance, and upon motion duly seconded, the board ratified the action of the meeting of trustees held on Oct. 12, 1907, approving the execution on the part of the president and assistant secretary of the contract, which is fully set out in the minute record of the company on pages No. 34 and No. 35 thereof. On motion duly seconded, the trustees further approved the minutes of the meeting of trustees, held on Oct. 12, 1907. On motion duly seconded, the minutes of this meeting as read by the assistant secretary were approved.”
The new agent in Chicago was advised that all differences with Spencer had been adjusted. The money was paid to Spencer and the notes delivered in consideration of the sur
Appellant relies principally upon the case of Rose v. Owen (Ind. App.), 85 N. E. 129. That case is in some respects very like the one before us. It in our judgment carries the rule beyond reasonable limits. The learned judge who wrote the opinion, after stating the law as follows:
“The injury feared would result if the receivership action was instituted regardless of the merits of the case. Whatever defenses appellee or said company might have would be unavailable to avert the threatened injury since it must result before such defense could be interposed;”
says:
“A contract made under duress is voidable at the election of the party coerced, provided the contract be not ratified, and the election is made within a reasonable time.”
The proviso he makes should have been applied as the law of the casé, for the transaction which then engaged his attention was certainly ratified, not as completely, but as effectually as the contract was ratified in this case. Dangerous, indeed, would be the doctrine that contracts could be repudiated at will, when entered into by competent and capable men of comprehensive experience and sound judgment. If, in fact, they became the victims of duress, they cannot at the same time ratify, and bide their pleasure to disavow their act. A threat of litigation by one who has a legal right to sue, is not generally held to be duress within the meaning of the law. Certainly Spencer had the privilege of litigating the right of appellant to break its contract. All compromist contracts partake to a greater or less extent of coercion. The one party or the other will yield his contention to avoid a law
“Duress is that degree of severity, either threatened and impending, or actually inflicted, which is sufficient to overcome the mind and will of a person of ordinary firmness.” £ Greenleaf, Evidence, § 301.
The record shows that appellant acted, not because of duress but voluntarily, and that the settlement was regarded at the time as beneficial. The following authorities sustain our conclusion: McClair v. Wilson, 18 Colo. 82, 31 Pac. 502; Holt v. Thomas, 105 Cal. 273, 38 Pac. 891; Silliman v. United States, 101 U. S. 465, 25 L. Ed. 987; Hackley v. Headley, 45 Mich. 569, 8 N. W. 511; Hilborn v. Bucknam, 78 Me. 482, 7 Atl. 272, 57 Am. Rep. 816; Heysham v. Dettre, 89 Pa. St. 506.
The judgment is affirmed.
Rudkin, C. J., Mount, Crow, Fullerton, and Gose, JJ., concur.
Dunbar, J., took no part.
Parker, J., having been of counsel, took no part.