Court Opinion

ID: 3583007
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:33:45.437519+00
Date Added: 2024-06-11T13:59:23.178511
License: Public Domain

This action was brought to recover from the defendant a sum of money, which, it is alleged, the plaintiff's assignor was compelled to pay to the defendant under duress, in order to obtain the possession of property. The plaintiff's assignor was the American Cocoanut  Importing Company; which, in 1905 and 1906, was engaged in the business of importing cocoanuts from Cuba to the city of Philadelphia, in the state of Pennsylvania. For that purpose it had employed Frye as its purchasing agent, and had limited his authority to purchases of the nuts at a specified price and to payment for them from moneys that the company would forward to him. Arrangements were entered into with the defendant, who was a banker and commission merchant in the city of New York, at first, for the transmission of the company's moneys to its agent, Frye, in Cuba *Page 577 
and, later, for advances to be made by the defendant to Frye, at the rate of $15 per 1,000 cocoanuts, to be secured by a letter of guaranty of the Central Trust  Savings Company of Philadelphia. In February, 1906, the period in which occurred the transactions giving rise to this action, the cocoanut company arranged with the defendant for an advance to Frye of $2,500 upon a cargo of cocoanuts, to be shipped by the vessel "Canada," and furnished a guaranty by the trust company, dated on February 6th, "to reimburse you, (him), for any moneys that may be advanced by your agent in Baracoa to the American Cocoanut  Importing Company, or their representative, for the purchase of cocoanuts intended for shipment on the schooner Canada, pending his presentation of drafts with documents * * * provided, however, that the amount advanced shall not exceed $2,500 on the Canada's cargo." Of this arrangement Fry, being then in New York, was informed. The defendant's correspondent in Baracoa was Arguelles and the next day the company requested the defendant, by letter, if the guaranty was satisfactory, to telegraph him; that there might be no delay in furnishing money to its representative in Baracoa. The defendant, on February 8th, cabled Arguelles, in effect, to advance to Frye on the Canada's cargo, against delivery of shipping documents made out to order of the Central Trust 
Savings Company, $2,500, only. On February 24, 1906, the Cocoanut Company received a notice from the defendant of the arrival of the "Canada" and that "we are in receipt of the documents covering the cargo of 350,958 cocoanuts on schooner `Canada,' consigned to ourselves, against which has been issued by Charles J. Frye to order of A.R. Arguelles a draft on ourselves for $3,500, amount that had been advanced by Arguelles to Fry on said cargo. We have instructions to endorse the documents to you upon payment of said amount, plus our charges and disbursements, amounting to $192.78. * * * Unless we hear from you to the contrary before 1 P.M. by telegraph on Monday, 26th instant, we shall draw on the Central *Page 578 
Trust  Savings Co. for $3,692.78 at sight, attaching bill of lading, consular invoice and insurance certificate and you will please see that our draft be honored at presentation." To this the company replied, by telegraph, not to draw; "amount of draft should be $2,500," and, also, wrote, reminding defendant that his instructions did not permit a draft on the cargo exceeding that sum and that Arguelles must collect "the additional thousand" from Frye. The defendant replied that the advances of $3,500 had been made by Arguelles before receiving special instructions and that, unless paid in full, he was "instructed to sell the cargo for account of whom it may concern." Thereupon, the company's manager telephoned the defendant that the draft would be paid under protest and that he would be held for the $1,000. The next day he telegraphed him to draw on the company through its Philadelphia bank. When advised by defendant of his having drawn, it was replied that "we will honor this draft without prejudice to our rights" and that the company expected to be reimbursed the $1,000, "inasmuch as you have permitted your agent in Baracoa to exceed his authority by permitting an overdraft of $1,000." The draft was paid and by this action the assignee of the company's claim seeks to recover back the sum of $1,000. It appears from the testimony of Arguelles that he had actually advanced $3,500 to Frye, or to Frye's representative at the time, for the cocoanut company, before receiving the defendant's cable of February 8th, instructing an advance of $2,500, only, upon the "Canada's" cargo. He testified that, when he made the loan, he "had no instructions whatsoever" from the defendant; that he knew that the moneys supplied by him "were used in the purchase of cocoanuts," and that they were shipped to the schooner "Canada." It was for that reason that the draft was made out to his order and that he had had the shipping documents run to the defendant; whom he had instructed, when forwarding the papers, either to turn over the cargo to the cocoanut company, upon payment of the draft, or to sell it in the *Page 579 
event of non-payment. This evidence of Arguelles is not contradicted by any evidence of the plaintiff. Arguelles was a banker and merchant, in Baracoa, and was a correspondent of the defendant. He was not his agent, otherwise than as his agency might be availed of in business matters. That the $3,500 had been advanced by Arguelles upon the cargo and a draft for that amount given him was, also, testified to by a witness, Beall, who was present at an interview between Frye, then in New York, and the manager of the cocoanut company, when Frye stated the fact. This testimony was not contradicted upon the manager's later examination.
I think that the facts have been sufficiently referred to, in order to understand the situation at the time, when, as the plaintiff alleges, her assignor, the cocoanut company, was coerced into paying to the defendant a sum of money, in excess of what he had the right to demand under the agreement between them, as a condition of obtaining the cargo of cocoanuts, which had been consigned to him. That situation was that Frye, the agent of the cocoanut company in Cuba, had exceeded his authority in borrowing upon the "Canada's" cargo, to the extent of $1,000, and that the defendant, through the arrangements made with him by the company for a credit to Frye, knew of the latter's limited authority. That Arguelles was acting as the defendant's agent in executing these business transactions is not material; if, as the uncontroverted evidence is, he had made the advance to the company's agent before being informed by the defendant of the limitation of credit to $2,500. Two courses were open to the plaintiff's assignor; it could repudiate the act of Frye, as having been in excess of his authority, and refuse to be bound by the transaction; or it could pay the draft, accept the cargo and hold its agent liable for any damages it could prove to have been sustained as the result. If the plaintiff could show that there had been any breach by the defendant of his agreement in the matter with her assignor, the cocoanut company, then, possibly, an action might lie against *Page 580 
him for damages if any were sustained in consequence of the breach assigned. But the plaintiff is not seeking to recover for any damages occasioned to her assignor. Evidence bearing upon the question of whether the company suffered any loss was objected to by her and was excluded. The plaintiff stands upon a cause of action arising in the alleged duress exercised upon the cocoanut company by the defendant when refusing to deliver the cargo "until $1,000 was paid, over and above the amount which the cocoanut company had authorized him to expend." Was there duress of property in law? It is well settled that there is such duress when a party has in his possession property belonging to another and refuses to deliver it to that other unless the latter pays him a sum of money, which he has no right to receive, and, in order to obtain possession of his property, the other pays that sum. Money so paid is a payment by compulsion. (Shaw v.Woodcock, 7 B.  C. 14; Scholey v. Mumford, 60 N.Y. 498.) As it was said in Scholey v. Mumford, (supra), "an action will lie to recover back money paid to release goods wrongfully detained on a claim of lien." (p. 501.) The essential foundation for such an action is, always, the illegal character of the claim asserted by the holder of the goods against their owner and the compulsion upon the latter to do that which he would not do voluntarily. I think that there was no duress in law, here. The defendant had the right to receive the sum he demanded of the cocoanut company, as the condition of his assigning to it the cargo; because that sum represented the moneys advanced by Arguelles to the company through its agent, upon the shipment of the cocoanuts. If the cargo was not obtained through the use of the moneys advanced, the burden was upon the plaintiff to show the fact. There was no such proof. The company's agent purchased with Arguelles' money and by his procurement the title of his principal was subjected to the right of Arguelles to claim reimbursement of the moneys obtained from him. This constituted the demand of the defendant; to whom Arguelles had caused the cargo to be consigned, as security *Page 581 
for the payment of the draft for $3,500, drawn on the former. As has been stated, above, the moneys were advanced for the cargo and whatever the departure of Frye, the company's agent, from his authority, it came into the defendant's hands pledged for their repayment. In view of the facts, the company, repudiating its agent's act, might have refused to take the cargo; or it could have paid the draft and have taken the goods, reserving a claim for any resultant damages against Frye. There was, therefore, no coercive proceeding on the defendant's part to exact a wrongful payment of money and if that be true, then, there was no cause of action in duress.
For these reasons, I think that the complaint should have been dismissed and, for the error in denying the defendant's motion for a dismissal, the judgment should be reversed and a new trial ordered; the costs to abide the event.
HAIGHT, VANN and HISCOCK, JJ., concur with COLLIN, J.; CULLEN, Ch. J., and CHASE, J., concur with GRAY, J.
Judgment affirmed.