Court Opinion

ID: 5447850
Source: CourtListenerOpinion
Date Created: 2022-01-08 18:14:01.27892+00
Date Added: 2024-06-11T08:32:15.839827
License: Public Domain

Garoutte, J., dissenting.
I dissent. It is claimed that the conduct of defendant practiced toward plaintiff amounts in law to duress, menace, and undue influence. •And, as to whether or not these acts are sufficient in law *381to constitute menace or duress, I will not discuss; for in sustaining the demurrer to the complaint, the trial court conceded a case of undue influence to have been stated, and respondent, by his argument, substantially concurs in such views of the trial court. This being true, the contract is no better and occupies no different position than though menace and duress also entered as elements in its creation.
It will be observed that the present action is not one for a rescission of the contract, but is an action at law for compensatory damages; and the trial court held against the sufficiency of the complaint upon the broad ground that an action at law for damages will not lie in a case like the one at bar, but that relief can alone be obtained by rescission in a court of equity; and the soundness of this ruling is the point involved. It may be said that no authority by either side has been cited in point, for or against the proposition of law under consideration, and my own research fails to recall a single precedent. Respondent, as a last resort, is forced to rely upon the case of Le Caux v. Eden, 2 Doug. 602, where Justice Buller made some very general observations, which are cited in the main opinion. But, in view of the fact that for such wrongs as these a remedy by rescission has always been recognized, and that it would in almost every case be a much more adequate remedy than an action for damages, as the practicers of these frauds are generally financially irresponsible, we think in this case but little weight should be attached to the very general principle declared by the learned English judge. The necessity arid advisability of bringing this character, of action may seldom arise. But» beyond this, the only question here is the applicability of a certain principle of law to a given state of facts, and, even if the question has arisen for the first time, it is as much the duty of the court to now determine it upon principle and reason as if it had come before the court for the first determination a hundred years ago. Precedents go down before principles any way. Again, *382there has been a time when there was no precedent for the decision of any case. Hew precedents are being made at the present, and will continue to be made in the future; and the day is long distant when a precedent may be found for every case arising within the vast domain of the law.
It is not disputed that an action for damages upon a contract secured by fraud will be sustained, and that a resort to a court of equity for relief is not necessary. Such doctrine is elementary, and cases everywhere and without number support it. But it is insisted that the rule of law is different as to menace, duress, and undue influence. In substance, the contention is, that if A deceives me by falsehood, and thereby secures from me a contract to my great loss, I may recover from him in damages, for it is fraud. But if B, with pistol at my head, threatens to kill me, and thereby procures a similar contract, I may not recover from him in damages, because, forsooth, his acts do not constitute fraud, but menace. Or, if 0 procures a similar contract from me by taking a grossly oppressive and unfair advantage of my necessities and distress, no action at law for damages will lie against him, for he has not practiced fraud, but has used undue influence. I am wholly unable to comprehend why a different rule of law is applicable to the two classes of cases furnished by the above illustrations. Certainly, the fraud of A is no more iniquitous than the menace of B, or the undue influence of C; and I think it illy becomes either one of these wrongdoers to say: “You have no choice of actions. Your only remedy is rescission. I will not pay the damage you have suffered from my unlawful acts, but demand that I be placed in my original position.” I think that neither A, B, nor C should be allowed to name the action which may be brought against him, and, if the party injured is able to secure adequate relief by damages, the road to that remedy should be open to him. Let us take the case of valuable securities resting upon a fluctuating market, and before the aggrieved party could *383get into court for relief by rescission, using the diligence demanded by the law, the securities become valueless. Is there no remedy by damages? If not, the wrongdoer is a lucky rogue, for in the interim he may have realized upon these securities, and still be ready to return the worthless paper to the owner upon demand or at the end of litigation. It would seem that such result should not be allowed under the guise of law, for it is gross injustice and a premium upon fraud.
Corporation stock often assumes great value as the time approaches for the election of a new directorate. Upon the day after such election its value may be merely nominal. At the very moment when it is of great value may the owner be deprived of it by menace or undue influence, and his only redress for the wrong be a judgment for the return of the stock at a time when it is utterly worthless? Such a judgment furnishes no redress, for it gives no relief. If this illustration portrays a case of damnum, absque injuria the law is not what it should be. To my mind the law contains no such glaring defect.
Taking a broad view of the question, we are justified in saying that this contract was'procured through fraud. What is undue influence, menace, or duress but fraud? Fraud is certainly a broader word than deceit; by deceit fraud is accomplished, but it is likewise accomplished by many other practices. Mr. Bigelow, in his work upon Fraud, page 6, declares it may be an infringement of the legal rights of another by circumvention and without deceit. Mr. Hilliard declares (Hilliard on Torts, 3d ed., 138): “Fraud properly includes all acts, omissions, and concealments which involve a breach of legal or equitable duty, trust, or confidence reposed, and are injurious to another, or by which an undue, unconscientious advantage is taken of another.” And Cooley, in his work upon Torts, says (Cooley on Torts, *506): “Duress is a species of fraud in which compulsion in some form takes the place of deception in accomplishing the injury.” It will thus be seen that deceit is but *384one of many kinds of fraud, and, while actions for damages arising from contracts procured by deceit alone are of common occurrence, we find no principle declared in those cases which limits the remedy by reason of some inherent quality found in the definition of the word “deceit”; but, rather, deceit is declared to be a fraud, and compensation in the nature of damages for fraud is hut justice in its simplest form.
Let us assume that contracts procured through menace, duress, or undue influence are made through agencies which may not technically come within the definition of fraud. What matters it? All the parties stand upon the same plane. The practices in either case are equally forbidden by the law. They are all morally bad. They are violative of the same rights of the party injured. They are violative of the same duties incumbent upon the party doing the wrong. Again, the contract made is no better or worse in the one case than in the other; and I know of no reason why the remedies should not be as many and as full and complete in the one case as in the other. The wrongdoer accomplishes the same wrong in each, and does it with the same bad intent; and, as to the victim’s remedy, it would seem to be wholly immaterial whether the means to the end be fraud, undue influence, or duress. The cases upon principle are analogous, and the law applicable to the one state of facts must of necessity control the other.
It is claimed that in the case of fraud the party injured does not know the facts, while the contrary conditions exist in a case of duress, menace, or undue influence. Conceding the claim, the principle involved is not changed thereby. In one case the act is induced by a want of knowledge, and in the other by overpowering influences. There is no more consent in the one than in the other, and there is the same wrongful interference with the party’s rights in both. Neither does the principle of acquiescence in the contract occupy any different position in the two cases. In a case of fraud nothing is done and no remedy invoked until the *385fraud is discovered, and, when discovered, the party seeking relief is in exactly the same position, as to the contract and the facts leading up to it, as though it had been obtained by undue influence or duress. When the fraud is discovered the party is called upon to act, and may either elect to confirm the contract and sue for damages at law for the detriment, or go into a court of equity for relief upon, the rescission of the contract; and upon analogous reason a like choice of remedies must be open to him in a case similar to the one at bar.
The Civil Code of this state, in speaking of obligations imposed by law, declares (section 1708): “ Every person is bound without contract to abstain from injuring the person or property of another, or infringing upon any of his rights.” Section 1428 declares that obligations may arise by operation of law, and further provides: “An obligation arising from operation of law may be enforced in the manner provided by law, or by civil action or proceeding.” Section 3281 declares: “ Every person who suffers detriment from the unlawful act or omission of another may recover from the person in fault a compensation therefor in money which is called damages.” These principles would seem to be but reiterations of elementary law, but, if not, and they take advanced ground, then beyond question they blaze a path through virgin forests plainly leading to a court of law for relief. By unlawful means defendant induced plaintiff to part with his property for an inadequate consideration. This was a violation of an obligation imposed upon him by law, for it was an infringement upon plaintiff’s rights, and he was entitled to damages in an amount which would compensate him for the detriment directly caused thereby. It is contended by defendant that cases involving the principle here discussed form exceptions to the law as declared in section 3281, supra. The section states no exception, but, upon the contrary, is as broad as language can make it. Neither do I find any exception stated elsewhere in the code. While it is true the code provides *386for “ specific and preventive relief,” still there is nothing to indicate that the remedies there declared should be exclusive. Again, the contention, if sound, would likewise deny, any remedy for damages in a case of a contract procured by fraud or deceit, and this we have seen is not the law of this state or any other state. In the case of Wood v. Franks, 56 Cal. 217, the principle of law to which we hold is fairly illustrated and fully supported. In that case, after quoting the sections of the Civil Code, to which reference has been made, the court said: “ Thus it will be seen that wherever there is an obligation arising from operation of law, and a breach of that obligation, the party injured may, by action, recover the amount which will compensate him for all the detriment proximately caused by the breach.”
To support the conclusion I have arrived at in this case, I do not hold that in all cases of contract procured by “ undue influence” the remedy of damages is open. Rescission is the only remedy in a case of “ mistake,” for no fraud has been practiced; there has been no wrongdoing, the transaction has been innocent, and the parties must be, and should be, satisfied to return to their original position. Such should also be the rule in many cases of undue influence, as where the relations of the contracting parties were such that the law, regardless of any question of bad and wicked intention, would declare the contract void. But the rule here declared is limited to those cases possessing the characteristics of torts, where an act has been done intentionally and knowingly for the very purpose of securing the undue advantage which results. There must be bad faith and a sense of wrongdoing; and such was certainly this case, as shown by the allegations of the complaint.
Harrison, J., concurred in the foregoing opinion of Mr. Justice Garoutte.
Mr. Justice Van Fleet, being disqualified^ did not participate in the decision of this cause.
Rehearing denied.