Williams v. Rutherfurd Realty Co.

159 A.D. 171, 144 N.Y.S. 357, 1913 N.Y. App. Div. LEXIS 8134

Opinions

Ingraham, P. J.:

This action is brought to recover the sum of $4,340.58, which plaintiff claims she paid to the defendant under duress. Prior to January 1, 1910, the plaintiff or her husband was the owner of certain property on Madison avenue, New York city, upon which there was a mortgage of $160,000, held by the Union Dime Savings Bank, and a second mortgage for $30,000, held by the defendant. Both of these mortgages were due and unpaid, and foreclosure was threatened. The plaintiff or her husband also owned a piece of property at Stamford, Conn., subject to a mortgage for $50,000 on which interest was past due. Plaintiff’s husband also owned a manufacturing plant at Bristol, Va., which he valued at $450,000. The husband seems to have been in full control and management of these properties and to have represented his wife in all of the transactions out of which the present controversy arose. The plaintiff’s husband was in great need of money to save all of these properties from foreclosure.

On October 13, 1909, he had a mortgage executed by his wife and himself on the Stamford property for $25,000, with the name of the mortgagee in blank; upon which he endeavored to obtain money. He had also endeavored to obtain a loan on the Bristol property in Virginia, but apparently without success. He applied to a Mr. Wells, of the firm of Wells & Snedeker, attorneys at law, and who was the managing director of the defendant; his partner was its president; his son its treasurer; all the stock of the defendant, however, was not held by Wells & Snedeker. The plaintiff’s husband had negotiations with Mr. Wells, the object being to obtain an advance of money to save these various properties of his from foreclosure, and he proposed that Mr. Wells or the defendant should advance enough money to pay the back interest, to be secured by a mortgage on the Stamford property. On January 12, 1910, plaintiff’s husband, in a letter to Wells & Snedeker, agreed to give to Wells & Snedeker a mortgage for $35,000 on the Stamford property, out of which their clients were to advance $12,500, to be used as follows: $1,000 and interest thereon to pay the interest to Union Dime Savings Bank on account of Madison avenue property; $900 for interest on the second mortgage; $625 for interest on the Stamford property; and the balance in cash. “The balance of the mortgage, $22,500, less reasonable fees, to be advanced when your clients are satisfied as to the Virginia property and will receive it as security.” At the same time a paper was delivered to Mr. Wells, signed by plaintiff, dated January 12, 1910, in which she stated that her husband “John T. Williams is hereby authorized to receipt for the moneys advanced, or to be advanced upon a certain mortgage this date executed by me on the property at Stamford, Connecticut, and to settle all matters in connection therewith.” Thus the original agreement upon which Wells & Snedeker were to procure from their clients the advances upon this $35,000 mortgage was that the balance of the mortgage loan, less reasonable fees, was to be paid when their clients were satisfied with the Virginia property and willing to receive it as security. The reasonable' fees of Wells & Snedeker, under this agreement, were to be retained by them for the professional services they rendered to the plaintiff and her husband.

On the same day, January 12, 1910, the plaintiff and her husband executed a conveyance of the Stamford property to the defendant. This conveyance recited that the said John T. Williams, plaintiff’s husband, was “justly indebted to the said grantee [Eutherfurd Eealty Company] in the sum of thirty-five thousand ($35,000) dollars, as evidenced by his promissory note for that amount of even date herewith, payable to the said grantee ninety days after date, for value received, with interest at the rate of six per cent per annum,” and it contained a condh tion that, if said note should be well and truly paid according to its tenor, and the said grantors should also pay to said grantee when requested all moneys by it expended for insurance on the aforesaid premises, or any part thereof, then the deed should be void, otherwise to remain in full force and effect. This instrument having been delivered, the defendant made advances in cash of $14,935.24; the last advance was made on May 19, 1910. On that day the plaintiff’s husband executed and delivered to Mr. Wells an instrument which recited the execution and delivery of the mortgage on the Stamford property, and that “Whereas various amounts have been advanced thereon, amounting at this date to Eighteen thousand nine hundred and thirty-five and 24/100 dollars ($18,935.24) of principal, and Two hundred and four and 33/100 ($204.33) dollars of interest on advances to this date, Now it is Agreed, that no further advances shall be made but that said mortgage shall stand as security for said amounts and interest, and also as collateral security for a certain other mortgage of Thirty thousand ($30,000) dollars held by said Rutherfurd Realty Company on premises Nos. 778 and 780 Madison Avenue, in the Borough of Manhattan, City of New York, and the said John T. Williams hereby charges the premises described in the mortgage recorded at Stamford with the payment of the said mortgage on Madison Avenue.” So that, on that date, the plaintiff’s husband agreed that the amount of the advances that had then been made was $18,935.24 and $204.33 of interest due on advances. The plaintiff’s husband admitted that he had a talk with Wells & Snedeker with regard to his property in Virginia, that he was to organize a corporation to run that business or to promote through them a corporation to run that property in Virginia. His account of the execution of the agreement of May 19, 1910, was that on that day he saw Mr. Wells and had a conversation with him as to the amount of the fees that his firm would charge for the services rendered to him; that “we talked the matter over and he then called his stenographer in to dictate this memorandum which I eventually signed. * * * I made some objection. He said ‘ it is a question of either getting that $4,000 which we charge for acting as attorneys, or else we shall go ahead and foreclose the mortgage on the property,’ the $30,000 mortgage on the Madison Avenue property.” There seems to have been no other objection or protest to this fee. After the execution of the agreement, on May 19, 1910, the matter remained without further objection or protest on behalf of either plaintiff or her husband, until August 2, 1911, about a year and three months afterwards. On that date Rollins & Rollins wrote a letter to Wells & Snedeker, stating that they were writing in behalf of the plaintiff, the owner of the premises in Stamford, Conn., and asking for a statement giving the dates and amounts of each separate advance making up the total of $18,935.24. In reply to that letter, Wells & Snedeker sent a statement of the advances amounting to $18,935.24 and including the amount of the fee of $4,000 with interest from May 19, 1910, and $204.33 for interest due. This was followed on November 10,1911, by a letter from the plaintiff to the defendant, that stated “ that the item of $4,000 of May 19, 1910, included in that amount, is not an advancement covered by the said note or mortgage, and that you have no right to exact the payment of the same. If you insist that you will not deliver a release of the said mortgage upon payment of $14,935.24 with interest and insist upon your alleged right to receive the additional $4,000, in order to clear the title and carry out my contracts with third parties, a condition of which is the release of your mortgage, I shall pay the same under protest and under duress, and hereby notify you that for this illegal exaction steps will be promptly taken to hold you responsible in suitable legal proceedings. As you are aware, there is not the slightest foundation for any claim on your part that the said $4,000 was advanced to me or to any one on my behalf or with my knowledge, and as you must be aware, there is absolutely no foundation for your contention that the same is due to you and secured by the mortgage in question.” The plaintiff then paid the $18,935.24, and received a satisfaction of the mortgage on the Stamford property, and subsequently brought this action to recover back the $4,000 as money paid under duress.

By the original agreement Wells & Snedeker were to be advanced their reasonable fees out of the money to he advanced by the defendant and secured by the mortgage. There was evidence of discussions between the plaintiff’s husband and the firm of Wells & Snedeker as to the formation of a corporation to take over the Virginia property, and when, in May, 1910, this proposition seems to have been dropped, the plaintiff’s husband and Mr. Wells came to an agreement as to the amount of the fee that Wells & Snedeker were to charge for the services they rendered to the plaintiff, and it was then agreed that the amount due under the Stamford mortgage was $18,935.24, and that amount the plaintiff subsequently paid. When the agreement of May 19, 1910, was signed these parties were acting for themselves. ' Under the original agreement, when the loan was made Wells .& Snedeker were entitled to their fees, whatever they were. When the loan was made both parties contemplated other proceedings which would require the assistance of counsel. When the arrangement was finally completed the amount of Wells & Snedeker’s fee was adjusted at $4,000. There was no evidence that that fee was not reasonable, and there is nothing to justify a finding that the adjustment was illegal or one that plaintiff or her husband was justified subsequently in repudiating. After this agreement the situation continued without change for over a year, and the defendant had the right to demand the payment of its second mortgage on the Madison avenue property and the mortgage on the Stamford property also due at that time. When the defendant demanded the payment of this $18,935.24, which included the $4,000 fee, it seems to me that he had a right to make that demand, the agreement of May 19, 1910, being still in' force and never having been questioned. There certainly was, on May 19, 1910, a settlement of the accounts between the parties. The charge of $4,000 as the amount of his fee was made by Wells and assented to by plaintiff’s husband, who had full authority to represent the plaintiff in relation to the Stamford mortgage on behalf of his wife, and when later defendant demanded that plaintiff pay the amount thus agreed to as a condition of the satisfaction of the mortgage, it had a right to make that demand and there was certainly a basis for the demand. It is very easy tó say that Mr. Wells was the Rutherfurd Realty Company, but of that there is no evidence beyond the fact that he was the managing director and trans acted its business. But, whether or not that was so, as between Wells & Snedeker and plaintiff’s husband, the amount of their fee had been adjusted by an agreement which was knowingly and willingly entered into between Mr. Wells and plaintiff’s husband. On the evidence in this case, as it seems to me, that agreement then settled the rights of the parties as between themselves. The plaintiff has brought no action to cancel or set aside the settlement of May 19, 1910. As long as that agreement stands, and certainly that has not been questioned up to the time of the trial, there was no duress, as I look at it, in requesting the plaintiff or her husband to pay what was due under the agreement. Moreover, had there been any such duress as is alleged, plaintiff’s long and inexcusable delay in seeking relief would be sufficient to bar her recovery in this action. (Oregon Pacific R. R. Co. v. For-rest, 128 N. Y. 83.) The fact that the plaintiff’s right to bring any action to enforce her claims was not barred by the Statute of Limitations does not relieve her from the effect of her delay. (Treadwell v. Clark, 190 N. Y. 51.)

The case of Kilpatrick v. Germania Life Ins. Co. (183 N. Y. 163), relied upon by the plaintiff, is so entirely unlike this case that it is difficult to see how it can have any bearing. There a mortgage was payable on August 1, 1901, with interest, and contained a provision that after August 28, 1900, and prior to August 1, 1901, the mortgagor could pay the principal and interest, upon condition that $1,000 was paid in addition to the principal and interest. There was default on August 1, 1900, and the mortgagor tried to make some arrangement to prevent foreclosure but was informed that counsel had been instructed to foreclose as an action was commenced. Thereafter the mortgagor informed the defendant that he was ready to pay the principal and interest. The defendant’s counsel then informed the mortgagor that the defendant had withdrawn the foreclosure action and proposed to sue for the interest only, and that they would not receive the payment of the principal sum due under the bond and mortgage 'unless the mortgagor paid an additional sum of $1,000. The mortgagor paid the principal sum and interest and $1,000 bonus and protested that the latter payment was an illegal exaction and was money not due the defendant. There the entire amount of the mortgage was due, and the court held the exaction of an additional $1,000 was without reason. In this case the amount due had been agreed upon by the parties and the agreement was not void because it related to the amount due to Wells & Snedeker for services they had rendered. The defendant made no threat, commenced no proceedings to recover the money, and was entirely willing to allow the mortgage to remain. It simply refused to satisfy the mortgage until it received what it claimed was due.

If the plaintiff had disputed the amount due on the mortgage, she had adequate remedy. She could have tendered the amount in payment of the mortgage and, if the amount tendered was the amount due on the mortgage the lien was discharged and she could have commenced an action to have the mortgage discharged of record. It is elementary that to constitute duress there must be some actual or threatened exercise of power possessed or believed to be possessed by the party exacting or receiving the payment over the person or property of another, from which the latter has no other immediate relief than by making the payment (Radich v. Hutchins, 95 U. S. 210) and of this there was no evidence. I think, therefore, there was no cause of action.

At the end of the testimony the defendant moved to dismiss the complaint or to direct a verdict for the defendant. This motion was denied, and defendant excepted. I think this was error, but if there was any doubt as to the right of the defendant to have a verdict directed in its favor, there were several requests to charge, which would require a reversal of the judgment. Certainly the defendant was entitled to the charges, “ That an account stated may be.made by an agent with proper authority as well as by a principal,” and “ That an account stated is conclusive upon the parties to it, unless impeached by fraud or mistake,” and “ That fraud or mistake has not been alleged or proved in this action,” and “That if the jury believe that Mr. Williams as the agent for his wife, went over figures and agreed with the defendant as to the amount that was due to it, that this constituted an account stated, and the verdict must he for the defendant.” These requests to charge were refused and the defendant excepted.

The judgment must, therefore, he reversed and a new trial ordered, with costs to the appellant to abide the event.

Scott and Hotchkiss, JJ., concurred; Clarke' and Dowling, JJ., dissented.