Smith, J.:
The action is brought to recover $1,325, the balance due upon certain promissory notes aggregating $6,499.18, which were executed by the defendant and upon which payments have been made, so that the balance due is the sum sued for. The answer, after containing some denials, sets up as a first defense that prior to the execution of the notes sued upon the husband of the defendant’s sister, one J. L. Bloch, was adjudged a bankrupt; that upon the day after the petition in bankruptcy was filed the plaintiff, through its officers, accused Bloch of [296]*296having criminally appropriated funds of the bank and threatened to arrest the said Bloch and send him to the penitentiary unless the defendant would execute his notes for $6,499.18. It further alleges that this defendant, believing that the plaintiff would carry out said threats, did sign the said notes in order to save the said Bloch from the infamy of arrest and imprisonment and to save the defendant’s sister from the shame and mortification of the arrest of her husband and from the loss of her sole support which his imprisonment would entail, and further alleges that the signing of said notes was not the voluntary act of this defendant, who was an absolute stranger to the transaction, and was made solely by reason of the plaintiff’s threats and because of the duress, undue influence and compulsion which the plaintiff exercised to force the defendant so to promise. The answer then states as a counterclaim against the plaintiff the same facts alleged in this defense and asks that by reason of such payment so made under undue influence, duress and compulsion the defendant recover of the plaintiff the moneys theretofore paid upon said notes, to wit, the sum of $5,174.18.
The plaintiff has not demurred to the defense, but has demurred to the counterclaim upon the ground that said counterclaim does not state facts sufficient to constitute a cause of action.
It will be noted that nowhere in the defendant’s pleading is found any allegation that Bloch was innocent of the crime charged against him and the fair and only inference which can be drawn from the allegations of the answer is that these moneys were paid to induce the plaintiff to forego the criminal prosecution of the said Bloch which would result in his arrest and imprisonment. These moneys were paid, therefore, for the purpose of compounding a felony and authorities are not necessary to the proposition that moneys so paid cannot be recovered. In Catskill National Bank v. Lasher, No. 1 (165 App. Div. 548; affd., 221 N. Y. 551) it was held that an obligation under the threat of arrest of a relative was invalid, although that threat was merely implied and although there was no proof that the relative was guilty of a crime. In Haynes v. Rudd (102 N. Y. 372) it was held that in an action to recover back moneys paid by plaintiff in payment of a promissory note given [297]*297by him to the defendant where the note was given to compound “ a supposed felony,” it could not be recovered back. The opinion in part reads: “ While fraud, duress and undue influence employed in procuring a contract for the payment of money may vitiate and destroy the obligation created, and render it of no effect, and the party who has been compelled to pay money on account thereof may maintain an action to recover the same, such a right does not exist and cannot be enforced where the consideration of the contract, thus made, arises entirely upon or is in any way affected by the compounding of a felony. When this element enters into the contract, it becomes tainted with a corrupt consideration and cannot be enforced. The correctness of this rule was recognized by the trial judge in his charge to the jury. He charged, among other things, as follows: ‘ Was the note a legal contract or an illegal contract? It was an illegal contract and void between the parties if it was given upon an agreement to suppress the evidence of a crime alleged to have been committed equally as if it were given upon an agreement to suppress the evidence or refrain from pro,securing a crime which had been in fact committed.’ He also charged, ‘ If he impressed upon the plaintiff the idea that he would thus refrain and would conceal the crime if he would give the note, but that he would not refrain if he did not give the note, it was an illegal contract.’ He further charged upon being requested that if the note was given simply to compound a felony, the plaintiff could not recover. So far the charge of the judge was entirely correct, and the case was properly presented to the jury in this respect.”
It is claimed on behalf of the plaintiff that duress cannot be predicated upon a threat to imprison the defendant’s brother-in-law. In my judgment, however, it is not necessary to determine this question.
The order should, therefore, be reversed, with ten dollars costs and disbursements, and the demurrer sustained, with ten dollars costs.
Clarke, P. J., concurs; Dowling and Page, JJ., dissent.
Greenbaum, J.:
Before discussing defendant’s plea of duress, it should be noted that there is incorporated in the counterclaim by refer[298]*298ence to the allegations set up in a separate defense, in addition to what has been mentioned in the opinions of my learned associates, the following allegations: “and that the payment of the said note would enable the plaintiff bank to obtain a secret advantage over the other creditors (who accepted" composition) of the said bankrupt and for this reason too, said note is unenforcible and invalid.”
Of course, if defendant establish upon the trial that the plaintiff signed a composition agreement' and that the notes in suit .were given in pursuance of a secret understanding between the parties, whereby the plaintiff would secure an advantage over other creditors who joined in the composition, such an understanding would operate as a fraud upon such creditors, with the result that plaintiff would not be permitted to recover upon the note upon which this action is brought and the defendant would not be permitted to recover back the proceeds of the note which have heretofore been paid. In other words, the illegal consideration which taints the notes prevents a recovery by the payee on unpaid notes and by the maker of the proceeds of any notes which had been paid. Neither party will be permitted affirmatively to assert a claim against the other.
It follows that if the secret agreement were the sole issue between the parties, the defense would be good and the counterclaim bad.
The defendant, however, alleges more than an illegal secret agreement. " He alleges that his will was “ constrained ” when he signed the notes and that his act was not voluntary, but done to save his brother-in-law “ from the infamy of arrest and imprisonment,” which the plaintiff threatened unless he “ would execute his notes for said $6,499.19 ” and “ to save ” his “ sister from the shame and mortification of the arrest of. her husband, and from the loss of her sole support, which his imprisonment would entail.”
The claim of defendant is that the notes were signed under duress. Numerous cases are cited in support of this plea. An examination of them shows that some of them were actions in equity to set aside conveyances, mortgages or other securities in which duress was not fundamentally considered by the court, but in which the element of fraud existed, as where false claims were asserted by the creditors or an imposition [299]
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Smith, J.:
The action is brought to recover $1,325, the balance due upon certain promissory notes aggregating $6,499.18, which were executed by the defendant and upon which payments have been made, so that the balance due is the sum sued for. The answer, after containing some denials, sets up as a first defense that prior to the execution of the notes sued upon the husband of the defendant’s sister, one J. L. Bloch, was adjudged a bankrupt; that upon the day after the petition in bankruptcy was filed the plaintiff, through its officers, accused Bloch of [296]*296having criminally appropriated funds of the bank and threatened to arrest the said Bloch and send him to the penitentiary unless the defendant would execute his notes for $6,499.18. It further alleges that this defendant, believing that the plaintiff would carry out said threats, did sign the said notes in order to save the said Bloch from the infamy of arrest and imprisonment and to save the defendant’s sister from the shame and mortification of the arrest of her husband and from the loss of her sole support which his imprisonment would entail, and further alleges that the signing of said notes was not the voluntary act of this defendant, who was an absolute stranger to the transaction, and was made solely by reason of the plaintiff’s threats and because of the duress, undue influence and compulsion which the plaintiff exercised to force the defendant so to promise. The answer then states as a counterclaim against the plaintiff the same facts alleged in this defense and asks that by reason of such payment so made under undue influence, duress and compulsion the defendant recover of the plaintiff the moneys theretofore paid upon said notes, to wit, the sum of $5,174.18.
The plaintiff has not demurred to the defense, but has demurred to the counterclaim upon the ground that said counterclaim does not state facts sufficient to constitute a cause of action.
It will be noted that nowhere in the defendant’s pleading is found any allegation that Bloch was innocent of the crime charged against him and the fair and only inference which can be drawn from the allegations of the answer is that these moneys were paid to induce the plaintiff to forego the criminal prosecution of the said Bloch which would result in his arrest and imprisonment. These moneys were paid, therefore, for the purpose of compounding a felony and authorities are not necessary to the proposition that moneys so paid cannot be recovered. In Catskill National Bank v. Lasher, No. 1 (165 App. Div. 548; affd., 221 N. Y. 551) it was held that an obligation under the threat of arrest of a relative was invalid, although that threat was merely implied and although there was no proof that the relative was guilty of a crime. In Haynes v. Rudd (102 N. Y. 372) it was held that in an action to recover back moneys paid by plaintiff in payment of a promissory note given [297]*297by him to the defendant where the note was given to compound “ a supposed felony,” it could not be recovered back. The opinion in part reads: “ While fraud, duress and undue influence employed in procuring a contract for the payment of money may vitiate and destroy the obligation created, and render it of no effect, and the party who has been compelled to pay money on account thereof may maintain an action to recover the same, such a right does not exist and cannot be enforced where the consideration of the contract, thus made, arises entirely upon or is in any way affected by the compounding of a felony. When this element enters into the contract, it becomes tainted with a corrupt consideration and cannot be enforced. The correctness of this rule was recognized by the trial judge in his charge to the jury. He charged, among other things, as follows: ‘ Was the note a legal contract or an illegal contract? It was an illegal contract and void between the parties if it was given upon an agreement to suppress the evidence of a crime alleged to have been committed equally as if it were given upon an agreement to suppress the evidence or refrain from pro,securing a crime which had been in fact committed.’ He also charged, ‘ If he impressed upon the plaintiff the idea that he would thus refrain and would conceal the crime if he would give the note, but that he would not refrain if he did not give the note, it was an illegal contract.’ He further charged upon being requested that if the note was given simply to compound a felony, the plaintiff could not recover. So far the charge of the judge was entirely correct, and the case was properly presented to the jury in this respect.”
It is claimed on behalf of the plaintiff that duress cannot be predicated upon a threat to imprison the defendant’s brother-in-law. In my judgment, however, it is not necessary to determine this question.
The order should, therefore, be reversed, with ten dollars costs and disbursements, and the demurrer sustained, with ten dollars costs.
Clarke, P. J., concurs; Dowling and Page, JJ., dissent.
Greenbaum, J.:
Before discussing defendant’s plea of duress, it should be noted that there is incorporated in the counterclaim by refer[298]*298ence to the allegations set up in a separate defense, in addition to what has been mentioned in the opinions of my learned associates, the following allegations: “and that the payment of the said note would enable the plaintiff bank to obtain a secret advantage over the other creditors (who accepted" composition) of the said bankrupt and for this reason too, said note is unenforcible and invalid.”
Of course, if defendant establish upon the trial that the plaintiff signed a composition agreement' and that the notes in suit .were given in pursuance of a secret understanding between the parties, whereby the plaintiff would secure an advantage over other creditors who joined in the composition, such an understanding would operate as a fraud upon such creditors, with the result that plaintiff would not be permitted to recover upon the note upon which this action is brought and the defendant would not be permitted to recover back the proceeds of the note which have heretofore been paid. In other words, the illegal consideration which taints the notes prevents a recovery by the payee on unpaid notes and by the maker of the proceeds of any notes which had been paid. Neither party will be permitted affirmatively to assert a claim against the other.
It follows that if the secret agreement were the sole issue between the parties, the defense would be good and the counterclaim bad.
The defendant, however, alleges more than an illegal secret agreement. " He alleges that his will was “ constrained ” when he signed the notes and that his act was not voluntary, but done to save his brother-in-law “ from the infamy of arrest and imprisonment,” which the plaintiff threatened unless he “ would execute his notes for said $6,499.19 ” and “ to save ” his “ sister from the shame and mortification of the arrest of. her husband, and from the loss of her sole support, which his imprisonment would entail.”
The claim of defendant is that the notes were signed under duress. Numerous cases are cited in support of this plea. An examination of them shows that some of them were actions in equity to set aside conveyances, mortgages or other securities in which duress was not fundamentally considered by the court, but in which the element of fraud existed, as where false claims were asserted by the creditors or an imposition [299]*299practiced by them, or where other facts existed justifying a court of equity to set aside a voidable contract.
In Adams v. Irving National Bank (116 N. Y. 606) the wife of a bankrupt who was charged by the defendant bank with having misappropriated its funds made a settlement with the defendant in order to prevent her husband’s arrest. She subsequently brought an action to recover back moneys paid to the defendant pursuant to the terms of the settlement, alleging that the payment to the bank “ was not the free, unconstrained and voluntary act of the plaintiff, but was induced by the fear of her husband’s arrest on the eve of their departure for Europe and the effect such an act might have upon his health at that time, shattered and feeble from the misfortune that had overtaken him.”
Said the court at page 611: “It is not an accurate use of language to apply the term duress to the facts upon which the plaintiff seeks to recover. The case falls rather within the equitable principle which renders voidable contracts obtained by undue influence. However we may classify the case, the rule is firmly established that in relation to husband and wife, or parent and child, each may avoid a contract induced and obtained by threats of imprisonment of the other, and it is of no consequence whether the threat is of a lawful or unlawful imprisonment.”
The rule which the court stated as “ firmly established ” was fully discussed in Solinger v. Earle (82 N. Y. 393) which was cited in the opinion in the Adams case. It is there shown that the rule originated in the English courts which allowed “ a father to plead the duress of a child, or a husband the duress of his wife, or a child the duress of the parent,” and the court then stated: “We are of opinion that the doctrine of that [referring to Smith v. Bromley, 2 Doug. 696] and the subsequent cases referred to can only be asserted in behalf of the debtor himself, or of a wife or husband, or near relative of the blood of the debtor, who intervenes in his behalf, and that a person in the situation of the plaintiff [a brother-in-láw] remotely related by marriage, with a debtor, who pays money to a creditor to induce him to sign a composition, cannot be deemed to have paid under duress, by reason simply of that relationship, or of the interest which he might naturally take in his relative’s affairs.”
[300]*300It is true that in the Solinger case it does not appear that any threats to -imprison the debtor had been made, but the court was discussing the broad question of duress in which a near relative of a debtor may plead duress.
The case at bar is quite analogous to the situation in the Solinger case, in view of the element of a composition coupled with a secret agreement to give an advantage to plaintiff in fraud of the rights of other creditors which appear in that and in this case and in view of the opinion of the Court of Appeals in the Adams Case (supra) that the allegation as to threats made to the debtor’s wife was not sufficient to establish duress. It, therefore, seems to me that we may not ignore the opinion of the Court of Appeals in Solinger v. Earle (supra) in which it expresses the law of this State, that a brother-in-law is not in a position to avail himself of the plea of duress upon the state of facts which are set forth in the counterclaim.
Moreover, in my opinion the plea of duress which has been made available to third parties who are directly and immediately personally affected by the distress of the debtor in consequence of their intimate and close relationship to him, and of the reciprocal obligations and duties, whether legal or moral, subsisting between them, should be strictly confined to a near blood relationship. To make it available to a brother-in-law, who is only indirectly interested in the debtor by reason of the fact that his sister is directly affected by her husband’s calamities, is straining the rule beyond reasonable imitations.
Assuming, therefore, all the facts alleged in the counterclaim, I am of the opinion that they are insufficient to warrant a recovery, and that the order appealed from should be reversed and plaintiff’s motion granted.