Johnson v. Ford.

L. J. C. P. N. S., 1; Bennett v. Healey, 6 Minn., 240, Gil., 158; Freeman v. Etter, 21 Minn., 3; McMurtrie v. Keenan, 109 Mass., 185."

The doctrine of duress of property, in its modern application, is well covered by a note in Ann. Cas. 1918B, page 516 et seq., from which the following quotations are taken :

"The actual or threatened exercise of power possessed or believed to be possessed by a private person, over the person or property of another who is thereby rendered apprehensive of injury to his business interests, and has no other means of immediate relief than by making a demanded payment, will ordinarily render the payment involuntary. Rowland v. Watson, 4 Cal. App., 476, 88 Pac., 495; Carew v. Rutherford, 106 Mass., 1, 8 Am. Rep., 287; 'Matthews v. Williams Brewing Co., 26 Misc., 46, 25 N. Y. S., 241; Kamenitsky v. Corcoran, 97 Misc., 384, 161 N. Y. S., 756; Newland v. Buncombe Turnpike Co., 26 N. C., 372; Redford v. Weller, 27 S. D., 334, 131 N. W., 296. See, also, Rees v. Schmits, 164 Ill. App., 250; Hackley v. Headley, 45 Mich., 569, 8 N. W., 511.

"Where such duress is exerted under circumstances sufficient to influence the apprehensions and conduct of a prudent business man, payment of money wrongfully induced thereby ought not to be regarded as voluntary. Burke v. Gould, 105 Cal., 277, 38 Pac., 733.

"Moral duress consists in imposition, oppression, undue influence, or the taking of undue advantage of the business or financial stress or extreme necessities or weakness of another; the theory under which relief is granted being that the party profiting thereby has received money, property or other advantage, which in equity and good con

Johnson v. Ford.

science he ought not to be permitted to retain.' Rees v. Schmits, 164 Ill. App., 250.

"So in Carew v. Rutherford, 106 Mass., 1, 8 Am. Rep., 287, wherein it appeared that a labor organization threatened the plaintiff, who was an employer of labor, with taking away a number of his working people and deterring others from entering his employ unless he paid them a sum of money, it was held that the payment when made by the plaintiff, who was reasonably apprehensive of an injury to his business, was made under duress.

"In Newland v. Buncombe Turnpike Co., 26 N. C., 372, a payment by the plaintiff, who had contracted to carry the public mail, of tolls illegally exacted by the defendant turnpike company, which threatened to close the gates against the plaintiff unless he paid the tolls, was held to have been made under duress.

"In Rowland v. Watson, 4 Cal. App., 476, 88 Pac., 495, it appeared that the plaintiff paid a sum far in excess of what was due from him to the defendant, who knew of the plaintiff's distress, and who declined to release his lien unless he was paid the excessive amount demanded. A failure to pay would have forced the plaintiff into bankruptcy. It was held that the payment could be recovered back.

"In Brown v. Worthington, 162 Mo. App., 508, 142 S. W., 1082, it appeared that the plaintiff was given an option to buy a quantity of hogs at a stipulated price. Before the time within which he might exercise the option expired, the plaintiff entered into a contract with a third person for the resale of the hogs in question, after which the plaintiff tendered the amount agreed on, which the defendant declined to accept, and demanded $1,500 in excess of the

Johnson v. Ford.

agreed price. Owing to the urgent necessities of the situation, the plaintiff, in order to be able to fulfill his contract with the third party, paid the excessive demand, and sued for such excess on the ground that he paid same under duress and coercion. The court . said:

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The strictness of the common-law rule touching the matter of duress has been much relaxed in the development of the law. Originally "duress" meant only duress of the person, and nothing short of such duress, amounting to a reasonable apprehension of imminent danger to life, limb or liberty, was sufficient to enable the party to recover back the money paid. Subsequently, in keeping with the principles of equity and good morals, the doctrine was extended so as to recognize duress of property as a sort of moral duress, which might, equally with the duress of the person, entitle the party to recover back money paid under its influence.

"Under this view, it is said the real and ultimate fact to be determined in every case is whether or not the party paying the money really had a choice, that is, whether he bad his freedom of exercising his will. Numerous authorities declare that if one is compelled by business necessity to surrender to the constraint involved in the unlawful demand and make the payment, moral duress appears. In other words, in such circumstances, it may be found as a fact that the party paying has not had his freedom of exercising his will and paid the money under moral duress, in which event, if it is against equity and good conscience for the money to be withheld from plaintiff, it may be recovered.'"

In the case of Lonergan et al. v. Marcus B. Buford et al., 148 U. S., 581, 13 Sup. Ct., 684, 37 L. Ed., 569, the plain

Johnson v. Ford.

tiffs had contracted to purchase a lot of cattle from the defendants, but the cattle had never been delivered, nor had the title passed. It was insisted by the defendants that the plaintiffs (speaking in round numbers) owed them a balance of $14,000. The defendants declined to deliver the cattle until the $14,000 was paid. Plaintiffs thereupon paid the $14,000, obtained possession of the cattle, and brought suit to recover the $14,000 paid under duress of property. Mr. Justice BREWER, in delivering the opinion. of the court, said:

"Finally, it is objected that the last payment was voluntary, and therefore cannot be recovered, either in whole or in part, although it was in terms made under protest. It appears from the testimony that the defendants refused to deliver any of the property without full payment. This was at the commencement of the winter. The plaintiffs had already paid $175,500, and without payment of the balance they could not get possession of the property, and it might be exposed to great loss unless properly cared for during the winter season. Under those circumstances, we think the payment was one under duress. It was apparently the only way in which possession could be obtained, except at the end of a lawsuit, and in the meantime the property was in danger of loss or destruction."

In the instant cause there was no duress of person, but there was duress of property. The complainants had involved themselves to the extent of many thousands of dollars. Under existing conditions it was imperative that the plant be constructed immediately. The obligations were incurred upon the faith of defendants' promise to convey their water rights for $10,000. Complainants called upon defendants to perform, and they declined, but stated that

Johnson v. Ford.

they would convey for $25,000. The complainants were in a position where they had to pay the $25,000, or lose what they had expended and contracted to expend. They were thus forced against their will to pay $25,000. It was an involuntary payment made necessary by the fraud and bad faith of the defendants. To permit the defendants to escape in the circumstances would be to condone their wrongdoing, and permit them to profit by their own inequity. By decreeing to complainants the $15,000, we would not be taking anything from the defendants that rightfully belonged to them. They would still have the $10,000 which they fixed as a maximum price for their water rights.

We have examined the cases relied upon by the defendants, and none of them support their theory, or, at least, they can be distinguished from those cited hereinabove.

It is also insisted on behalf of the defendants that the demand of the complainants is in the nature of a rescission, and that complainants cannot rescind in part, but this is a misconception of the theory of the bill. The complainants are not seeking a rescission. They are simply undertaking to recover $15,000, which they allege the defendants obtained from them by duress of property. If it were necessary to return the property, then complainants would not have accomplished anything by meeting the unjust demand, and when money is thus unjustly obtained from them, they have no remedy, but must submit to the duress.

It will be noted in the cases set forth hereinabove, in support of the duress of property rule, that it was not required that the property be returned, and to require the property to be returned would be to reject the rule.

It is also insisted that the duress only, existed at the time when the second option was obtained, and not at the time of the execution of the deed pursuant thereto.