Strang v. Peterson — 31 N.Y. St. Rep. 462

Majority

p. 462

Ami K. Strang, App’lt, v. Catharine Peterson et al., Resp’ts.

(Supreme Court, General Term, Second Department,

Filed May 12, 1890.)

Headnote

Duress—Fear or prosecution op relative.

A security obtained through fear of prosecution ol a near relative, for crime, is void for duress, and the fact that no crime had actually been committed and the course of justice has not been interfered with by its execution will not make such security valid.

(Dykman, J., dissents .>

Appeal from judgment m iavor ot defendants, entered upon the report of a referee.

Action to foreclose a mortgage made by defendants, Catharine Peterson and Henry Peterson. By their amended answer they set up the defense of duress in its execution.

Prior to March 13, 1880, Herman F- Peterson, son of defendant Catharine, had endorsed plaintiff's name on several notes given for cattle purchased by said Herman F Peterson. He claimed to have done so by plaintiff’s authority, which plaintiff denied and claimed the endorsements were forgeries.

On that day the plaintiff, a justice of the peace, the plaintiff’s ' brother-in-law and a creditor of the plaintiff, four in all, came to defendant's house.

The plaintiff says to Catharine Peterson: “lam in great trouble with your son about using my name * * * he wanted to know if she could pay it * * * $700. * * * She said she could not * * * he told her then he would have to shut hiña up * * * plaintiff wanted a chattel mortgage on this property * ' * * she asked him what it was * * * he said it was a writing she must put her name to * * * she said she could not do such a thing without her husband knowing it * * •• plaintiff said it could be kept secret * * * he told her if she did not put her name to it * * * he ‘would shut him up.’ * * * ' Take him right away.’ *• * * She still said she did not want to do it * * * he then said 1 he must shut. him up (meaning her son),’ and as she says, ‘that was too much forme.’ She says she was frightened and excited and ‘to save her son from prison ’ she signed this bond and mortgage.”

Travis & Smith, for app’lt; Eugene B. Travis, for def’ts Peterson; Elbert P. James, for def’ts White and Whitney.

It is entirely clear that the motive impelling Mrs. Peterson to make the mortgage in suit was her belief that her son had been guilty of forgery and would be punished criminally if she did not secure the debt

The referee has found that the son was thus guilty, and that a prosecution therefor was estopped by the giving of the mortgage. There is abundant evidence to sustain the referee’s conclusion.

It is now suggested by plaintiff that the referee was in error in this finding. That he should have given faith to the testimony

Dissent

p. 463

that Peterson was authorized to ■ place Strang’s name on the note; in which case no crime had been committed, and the course of justice was not interfered with by giving the mortgage.

But such facts would not make the mortgage valid.

Eadie v. Slimmon, 26 N. Y., 9 , is authority that fear of a prosecution of a near relative is such duress that a security obtained by means thereof cannot stand.

Bayley v. Williams, 4 Giff., 638, affirmed, L. R., 1 H. L. Cases, 200, is to the same effect. See, also, Pollock on Contracts, 557.

Judgment affirmed, with costs,

Barnard, P. J., concurs.

(dissenting).—This is an action to foreclose a mortgage made by Catharine Peterson to the plaintiff. Catharine Peterson answered the complaint, setting up her coverture and the consequent invalidity of the. bond and mortgage, and denied the execution of those instruments with knowledge of their character.

The administrators of Seth Whitney were afterwards brought in as defendants, and they served an answer denying that they had any lien upon the mortgaged premisés subsequent to the lien of the plaintiff’s mortgage, and claiming priority of lien for a mortgage which they held.

In this state of the pleadings the action went to a referee to be tried and determined, and during the progress of the trial Catharine Peterson and the administrators of Whitney were permitted by the referee against the objection and exception of the plaintiff to amend their answers by setting up fraud and duress in the procurement of the bond and mortgage, and that they were obtained and executed under an agreement to suppress a criminal prosecution for forgery against the son of Catharine Peterson.

The trial was then continued under the new pleadings, and the referee decided in favor of the defendants, and dismissed the plaintiff’s complaint.

The allowance of the amendment to the answers by the referee upon the trial was clearly erroneous. Hew issues were thereby introduced into the case which entirely changed the character of the defense, and that is inadmissible upon the trial

As our view of the case will require a reversal of the judgment, we will proceed to an examination of the merits.

We will make no further examination of that error, however, as our view of the whole case is essentially different from that of the referee who rendered the judgment

The material facts are these: Herman F„ Peterson, the son of Catharine F. Peterson, the mortgagor, was a butcher, and prior to March 13, 1880, the date of the mortgage in question, Herman became indebted to Benet Miller and Edward B. Brady in considerable sums for cattle purchased of them respectively, and for such indebtedness he had made, his promissory notes to each of them, payable to the order of the plaintiff, Ami K. Strang,, and endorsed them himself with the name of Strang, and delivered the same to Miller and Brady, respectively. Such endorsements were forgeries. *

p. 464

When it became known that Strang denied the authenticity of the endorsements upon these notes, the holders began to demand payment or security, and used language indictive of a purpose to invoke the aid of the criminal law if some arrangement was not made for the payment of their claims.

Under pressure of those circumstances, Herman endeavored to induce Strang to take an assignment of some claims of his, and assume the payment of the notes, which Strang declined to do.

Then Strang, at the request of Herman, had an interview with his mother, and an arrangement was made by which she was to give Strang a mortgage upon her property, and he was to undertake the payment of the notes. In pursuance of that arrangement the mortgage in suit was executed and delivered to Strang, and he paid the notes. Upon this subject the finding of the referee is that Strang called upon the mortgagor to learn if she would give him a mortgage on her real estate to secure him for his endorsement of the notes, and she finally consented to do so.

The referee has found that the bond and mortgage were made under an agreement that their execution would prevent the prosecution of her son criminally for the forgeries of the endorsements of Strang, and that the parties interested in such notes would refrain from such prosecution, and that the only consideration to her for giving the bond and mortgage was to save her son from such prosecution.

Assuming, as we may, that the referee intended to find that the execution of the bond and mortgage was induced and obtained by threats of imprisonment of the son of the mortgagor, then she could avoid those instruments if they had been given to the creditors of her son to secure the payment of his liabilities to them. Adams v. Irving National Bank, 116 N. Y., 606 . 27 N. Y. State Rep., 733 ; Eadie v. Slimmon, 26 N. Y., 9 .

This case, however, is not like that of Adams and others of a kindred character, for in all those cases where the doctrine has been applied the threats of arrest have proceeded from the creditors, and the payments have been made or the securities executed to them. Here the case is very different. Strang had nothing at stake, and no reason to institute criminal proceedings against Herman. The spurious paper was not passed upon him and the forgery gave him no concern. If the criminal law was to be set in motion the creditors alone “were interested in its movement. He simply agreed to assume the payment of the notes upon receiving security for the assumption of such liability. In substance and legal effect he agreed to make a loan of money to discharge the debts evidenced by the notes, and he made the loan in reliance upon the security he received, and the purposp of the loan or the use to which the money was to be appropriated was a matter of entire indifference to him. Suppose the bond and mortgage had been made to another person, they could not be avoided because their execution was induced by a desire to raise money to prevent the arrest and imprisonment of the son of the mortgagor, and we suppose the same rule applies to Strang. He has been induced* to make a loan in reliance upon the bond and mort

p. 465

gage, and the mortgagor having thus obtained his money should not now be permitted to repudiate the transaction.

The question of priority between the two mortgages must be settled upon another trial.

It must be borne m mind that this is not a case of the composition or compounding of a felony, and the decision proceeds upon no such ground, and is not in hostility to the decisions in the cases where that question has been involved.

The-judgment should be reversed and a new trial granted, with costs to abide the event.

Judgment affirmed, with costs.