State Ex Rel. Bradford v. King County , 197 Wash. 393 ( 1938 )

The judgment should be affirmed. No part of the claim of respondent was barred by the statute of limitations, inasmuch as the respondent and his assignors labored under the fear, which was well founded, that, if they sued on the first of any month they were unpaid, they would be discharged. Duress or undue influence, such as that which obtained in the case at bar, tolls the statute of limitations until cessation of the duress or undue influence.

"In suits for relief on the ground of duress or undue influence, such as to set aside deeds, etc., the statute does not begin to run until the duress or undue influence ceases, notwithstanding it does not cease until the death of the party on whom it has been practiced, although it will run from that time." 37 C.J. 949.

See, also, Eureka Bank v. Bay, 90 Kan. 506, 135 P. 584;Allen v. Leflore County, 78 Miss. 671, 29 So. 161; Aldrich v.Steen, 71 Neb. 33, 98 N.W. 445, 100 N.W. 311; Bither v.Packard, 115 Me. 306, 98 A. 929; Durazo v. Durazo, 19 Ariz. 571,173 P. 350.

It is a general rule that, in the case of fraud, the party defrauded must act with promptness on the discovery of the fraud; however, in that species of fraud involving undue influence or pressure, the courts uniformly hold that time does not run against the injured party until he is emancipated from the dominion under which he stood at the date of the transaction.

We held in Ramp Buildings Corp. v. Northwest Building Co.,164 Wash. 603, 4 P.2d 507, 79 A.L.R. 651, that one who, in consequence of threats of suit for alleged violation of a patent by the building he was constructing, could not get advances on a building loan until he had obtained a license from the owner of the patent, which he accordingly obtained in order to avoid bankruptcy, may, if the patent is invalid or was not being infringed by him, recover the amount paid for the license as having been obtained by business compulsion.

In other words, we held that the threat to interfere with the lawful business of the appellant in the case unless the appellant agreed to illegal exaction constituted "business compulsion," and that the one so victimized could recover, from the one who intimidated him, the amount thus obtained; that is, when the threat or intimidation puts a business man in such fear of losing his business that he submits to an illegal exaction, the business man is a victim of business compulsion, which is nothing more than a species of duress. It differs not in principle from the case at bar, where, on the same economic ground, the respondent submitted to an illegal exaction. He was compelled to submit to a salary reduction not authorized or approved by the appropriate legislative body of the county. The business man would lose his business — his living — if he did not accede to an illegal demand. The wage earner or salaried employee, if he did not submit to the illegal reduction of pay, would lose his job or position — lose his living.

As observed by the editor in the annotation on the subject of "Business Compulsion," 79 A.L.R. 655,

"The doctrine of ``business compulsion' has been sometimes regarded as something different from duress. In the sense that it is a relaxation of the early common-law rules, this is true. Yet, broadly speaking, ``business compulsion' is a species of duress — not the common-law duress to be sure, but duress clothed in modern dress."

We are in accord with the rule that money voluntarily paid under a claim of right to the payment, with knowledge of the facts by the person making the payment, can not be requested back on the ground that the claim was illegal. However, as we held inRamp Buildings Corp. v. Northwest Building Co., 164 Wash. 603,4 P.2d 507, 79 A.L.R. 651, where the party submits to an illegal exaction because of some necessity which amounts to compulsion, the victim may recover the amount paid as having been obtained by business compulsion. Where one, to prevent injury to his person, business, or property, is compelled to make payment of money which the party demanding has no right to receive, and no adequate opportunity is afforded the payer effectively to resist such payment, it is made under duress or business compulsion and can be recovered. So, too, where one, to prevent loss of his job or position, is compelled to submit to the withholding of a portion of his wages or salary which the party (either in person or by agent) demanding has no right to withhold and the employee is not afforded an adequate opportunity effectively to resist such withholding or reduction of his pay, that withholding or reduction is made under duress. There is no magic in a name.

At the common law, duress meant duress only of person; and nothing short of a reasonable apprehension of imminent danger to life, limb, or liberty sufficed as a basis for an action to recover money paid. Illinois Merchants Trust Co. v. Harvey,335 Ill. 284, 167 N.E. 69.

The doctrine has been gradually extended, so that the payment of money or the making of a contract under the circumstances of business necessity which obtained inRamp Buildings Corp. v. Northwest Building Co., supra, rendered the payment involuntary and entitled the party so coerced to recover the money paid. That doctrine is supported by many decisions. See 79 A.L.R. 657, 658. The same rule is applicable to the facts in the case at bar.

STEINERT, C.J., and MAIN, J., concur with MILLARD, J.