Opinion
14866
April 12, 1939.
Before THURMOND, J., Greenwood, April, 1938. Exceptions overruled and judgment affirmed.
Action by B.B. Whitlock, as trustee for the use of Mahala Whitlock, Administratrix of the estate of Wallace Whitlock, deceased, and another against W.H. Creswell and others to foreclose a deed of trust treated as a mortgage securing two notes. Judgment for defendants, and plaintiffs appeal, bringing exceptions.
The order of Judge Thurmond referred to in the opinion follows:
This is an action to foreclose a deed of trust treated as a mortgage, securing two notes, and comes before me on exceptions to the Master's report. It was marked heard at the April, 1938, term of Court and oral argument by counsel and a filing of authorities was made later before me at Chambers.
A brief history of the case would not be amiss. The facts substantially disclose that about 1910 the defendant, W. H. Creswell resided in Spartanburg County, was engaged in trading horses and mules, his practice being to take livestock from dealers on what might be called consignment, giving to the dealer a mortgage over the stock with the understanding that if and when sold the dealer's mortgage would be satisfied from the proceeds of sale or trade.
Creswell's practice of doing business was generally known among those he dealt with. Adverse circumstances overtook Creswell, and according to his own admission he became so financially involved until he deemed it advisable to leave Spartanburg, and moved to Chattanooga, Tennessee. His whereabouts for fifteen years were probably unknown.
On the 11th day of February, 1927, a warrant was executed against the defendant, W.H. Creswell, by a Justice of the peace of the City of Chattanooga, Tennessee, charging him (W.H. Creswell) with being a fugitive from justice from the State of South Carolina. The warrant appears to have been based upon two warrants sworn out by B.B. Whitlock on June 1, 1926, before a Magistrate at Spartanburg, S.C. one of which charged the said Creswell with the offense of disposing of property under a mortgage amounting to two hundred seventeen and 50/100 ($217.50) dollars, the said mortgage being executed to Wallace Whitlock; the other warrant charging a like offense, the amount being two hundred and fifty ($250.00) dollars, and this mortgage was executed to Mabrey Company; the alleged offense in both cases occurring some fourteen or fifteen years prior to the issuance of the warrant.
W.H. Creswell was arrested in Chattanooga. After three or four days in jail, his neighbors there arranged a bond and he was released pending a hearing before the Governor of that state on extradition.
While Creswell was in custody of the law in Chattanooga, W.I. Whitlock, a brother of B.B. Whitlock and son of Wallace Whitlock, he having since died, was notified, and immediately goes to Chattanooga. He communicates with the prosecuting attorney of that city and W.H. Creswell confers with McClure McClure, his attorneys. Conferences were had, and as a result thereof Creswell signed two notes, one in the sum of six hundred sixty-seven and 41/100 ($667.41) dollars, payable to Mahala Whitlock, Administratrix, six months after the death of H.G. Creswell (who is the father of W.H. Creswell) and the other to B.G. Landrum in the sum of seven hundred and fifty-one ($751.00) dollars, payable on the same date; and as security to the said notes, W.H. Creswell and his wife, Lillie Elmina Creswell, executed an instrument in the form of a deed of trust purporting to convey to B.B. Whitlock, as trustee, "All the right, title, interest, claim and demand which the said W.H. Creswell now has or may hereafter have in and to the lands described in the will of Henry Hunter Creswell as being devised to Henry G. Creswell (father of W.H. Creswell) and the heirs of his body, and the lands therein devised to Edward W. Creswell (uncle of W.H. Creswell, now deceased) comprising approximately one hundred and ninety (190) acres of land; it being the intent and purpose of this instrument to convey the remainder interest of said W.H. Creswell as remainder-man after the expiration of the life estate of his father, the said H.G. Creswell."
The pertinent parts of the will of Henry Hunter Creswell, deceased, under which the defendant's title is derived are Items 5, 6 and 7, and are as follows:
"Item 5th — Unfortunate in the career of my sons, I do with profound regret entail the real and personal property devised and bequeathed to them to be held in trust by my executor, hereinafter named and appointed herein, to have and to hold the same unto their use and benefit during their natural lives and to the heirs of their bodies under lawful marriage; failing in this want of such heirs the property of the one or both so failing shall revert back to my estate and be sold as hereinabove mentioned for the benefit equally of my remaining children or their legal representatives or heirs. Said heir receiving the parent's part, the son's part to be in trust as above mentioned.
"Item 6th — I hereby devise to my eldest son, Edward W. Creswell, the one hundred and fifty (150) acres known as the Henderson tract, valued at ten ($10.00) dollars per acre, and to be held in trust subject to provisions and conditions of Item 5, with said limitations and reversions. He to have all annual rents thereof and paying all taxes thereon but not to have the right to encumber said rents for more than one year at a time. Whatever balance he may be entitled to — to equalize his share in the final settlement. My estate shall be invested by my executor hereinafter mentioned in such way as will give an annual interest and no more than the interest accruing for his benefit.
"Item 7th — Henry G. Creswell, my youngest son, has received three hundred (300) acres valued at ten ($10.00) dollars per acre. The remaining 150 acres, on which he now resides, I hereby devise to him in trust, to be held subject to the provisions, conditions, limitations and revisions of Item 5. Whatever balance he may be entitled to — to equalize his share with the other children in the final settlement shall be invested by my executor hereinafter mentioned in such a way as shall give an annual interest, and no more, accruing for his benefit. Said Henry to enjoy the use of his land as Edward in Item 6 under like restrictions."
The property held by the Bank of Greenwood, as trustee for E.W. Creswell under conveyance from the County Judge, is described as follows: "All that plantation or tract of land situate, lying and being in the County of Greenwood, State of South Carolina, containing one hundred nineteen and one-half (1191/2) acres, more or less, bounded on the north by lands now or formerly of Walter Cork, east by lands of Z. Estelle Flemming; south by lands formerly of E.Z. Seymour, and west by lands of E.W. Creswell. Tract designated as Tract No. 7 purchased at public sale of H.H. Creswell, estate lands by C.A.C. Waller as trustee for E.W. Creswell."
The property held by W.T. Bailey as trustee for Henry G. Creswell under conveyance from the County Judge is described as follows: "All that piece, tract and plantation of land, containing one hundred twenty (120) acres, more or less, situate, lying and being in the State of South Carolina, County of Greenwood, bounded on the north by lands now or formerly of H.G. Creswell; east by lands now or formerly of Geo. Taylor; south and west by lands formerly of estate of H.H. Creswell. This being the tract of lands sold by C.A.C. Waller, executor in the settlement of the estate of H.H. Creswell and is designated as Tract No. 3 of said estate lands shown on plat of same made by T.C. Anderson, surveyor, September 24, 1896, and bid in by C.A.C. Waller as trustee for H.G. Creswell.
"Since the death of his father, W.H. Creswell conveyed to the defendant, J.W. Hunt, `the tract of seven and one-tenth (7.1) acres, situate in Greenwood County, South Carolina, and bounded on the north by lands of the Creswell estate; east by State Highway No. 178; on the south by lands of J.W. Hunt, and on the west by lands of J.W. Hunt. Said tract being more particularly described by plat thereof made by H.B. Kinard, surveyor, dated February 11, 1937.'"
It is admitted that E.W. Creswell died prior to 1927, leaving no children surviving him, and that H.G. Creswell died in March, 1926, leaving as his sole surviving child the defendant W.H. Creswell.
It is perfectly clear from Item 5 of the will of H. H. Creswell, quoted above, that E.W. Creswell had a life estate in the tract of land devised to him, with remainder in his children, if any should survive. He died without issue, and in accordance with said provision, the said tract reverted to the estate of Henry Hunter Creswell for division among his heirs. Therefore, the Master is correct in finding that the deed of trust was a nullity in so far as this tract was concerned. The defendant W.H. Creswell had only an interest in the proceeds and the title never vested in him.
The defendant, the County Bank, has been appointed and is now administrator cum testamento annexo of the estate of Henry Hunter Creswell, and legal title to the E.W. Creswell tract vests in it for sale of the land and disbursement of the proceeds in accordance therewith. And it appears from the deed of trust that his (W. H. Creswell's) intention was solely to bind his interest in the H.G. Creswell tract as remainderman.
This deed of trust was recorded in the office of the Clerk of Court for Greenwood County in Deed Book 41, at page 609.
After the lapse of six months following the death of H. G. Creswell, this action was instituted to foreclose the deed of trust, which was treated as a mortgage, asking that the property be sold and the proceeds applied in payment of the amounts evidenced by the notes.
W.H. Creswell and his wife, Lillie Elmina Creswell, while admitting the execution of the papers sued on allege that the same are invalid because they were signed under duress and given in compromise of an alleged criminal offense.
It is undisputed that on the date the notes and deed of trust were executed, Creswell was under arrest and was facing extradition proceedings before the Governor of Tennessee.
On the issues made, the matter was referred to D.S. Jones, Esq., Master for Greenwood County, who took the testimony, filed a report in which he finds that the note to Whitlock is void and allows recovery on the note to Landrum.
Both plaintiff and defendants filed exceptions challenging the correctness of the Master's findings and report.
In the consideration that I will give of the matter, it will not be necessary to consider the specifications of error in the detail in which they are taken.
The case turns upon the question: Whether or not the two notes and deed of trust were obtained under duress and in compromise of a criminal prosecution. The Master answered the question "yes" as to the Whitlock note and "no" as to the Landrum note. Let us look at the record and see if the transaction as affecting Whitlock and Landrum can be differentiated. Was it not one and the same transaction? The only witness who appeared for the plaintiff testified:
"Q. You were primarily interested in collecting your money that carried you out to Chattanooga, or to bring him back here for trial? A. Well, anyone would rather have the money than to have a guy in jail.
"Q. Did you go out there in the hopes of collecting that debt? A. Yes, I was in hopes of collecting it.
"Q. You took the warrants out in the hope and belief that before going to trial he would settle it and pay the money? A. I did not know he would pay it.
"Q. But you were in hopes of that? A. Why, sure.
"Q. You agreed to settle the warrants and criminal prosecution and he gave you the notes for that debt? A. That is correct.
"Q. Would you have settled those charges against him if he had not given you the security? The only reason you settled it was because he gave you the notes and mortgage? A. Certainly, that was the proper thing to do."
"Q. Did you represent the Landrum note out there? A. Yes, sir.
"Q. Did you confer with him (Landrum) before you left and had full authority to handle his, too? A. Yes, sir."
"Q. State whether or not you had authority to withdraw the criminal prosecution on this (Landrum's) note if he gave you a note and mortgage securing the note. A. I wired him (Landrum) to that effect and his reply as I remember it was to go ahead and settle."
"Q. State whether or not you tried to get the money when you first went up there? A. Yes."
It is clearly apparent from the testimony that Whitlock was the agent for both notes and was clothed with absolute authority to do whatever was necessary in the collection of the notes or pressing the prosecution, and that fact is admitted by the only witness who appeared in plaintiff's behalf. No one in behalf of the Landrum note has offered testimony to contradict that Landrum had nothing to do with the criminal prosecution and the withdrawing of the warrants. Whitlock's testimony is bold. He says he conferred by wire with Landrum before consenting to release Creswell and states that he had rather have the money than to have a guy in jail. B.B. Whitlock, who swore out the two warrants on which Creswell was arrested and held in custody while negotiations and settlement were being made, was named trustee in the deed securing both notes. The testimony does not disclose whether he (Whitlock) would have settled one note without the other, but in the absence of anything to the contrary and in view of what actually took place, it must be assumed that both debts were handled together and the entire matter treated as one transaction.
The Master having found the note to Whitlock was void, the circumstances invalidating the same being substantial fraud, he should have also invalidated the mortgage securing the same. The Court in Garvin v. Garvin, 55 S.C. 360, 33 S.E., 458, 463, says: "`Having reached the conclusion that the plaintiff and Robert G. Garvin were guilty of actual fraud in the execution of the mortgage, it cannot stand as security even for that part of the indebtedness that was bona fide.' In the language of the books the Court is not bound to disentangle a web of fraud to ascertain if any good material be mixed in it. Smith v. Pate, 3 S.C. 204; Bowie v. Free, 3 Rich. Eq., 403; Fryer v. Bryan, 2 Hill Eq., 56; Dickinson v. Way, 3 Rich. Eq., 412."
The defendant Creswell pleads duress as one of his defenses to the action, and duress is defined to "consist in any illegal imprisonment, or legal imprisonment used for an illegal purpose or threats of bodily or other harm, or other means amounting to or tending to coerce the will of another and actually inducing him to do an act contrary to his free will." Black's Law Dictionary.
That Creswell was under arrest and facing a hearing before the Governor of Tennessee on extradition is admitted. He was without financial means, and his wife and children were solely dependent on him for a living. The probability of his being returned to South Carolina for trial in Spartanburg no doubt bulked large before him, and under the circumstances he naturally would dread the event of trial and the probability of imprisonment awaiting trial if requisition were granted.
The defendant says by way of additional defense that the notes and deed of trust were given to compromise a criminal prosecution. The testimony, along with the exhibits, substantially admits this defense. Included in deed of trust were such items of reward, jail expenses and attorney's fees.
I think the testimony shows conclusively that, while Whitlock was the author of the two warrants causing Creswell's arrest and imprisonment, the prime object was not to vindicate the law, but to use the courts to collect a debt; that after Creswell's arrest and imprisonment, Whitlock conferred with Landrum and he (Whitlock) was then authorized to take advantage of the situation in the collection of both debts; that they were handled as a single transaction under one deed of trust; were obtained while Creswell was under duress and in satisfaction of a criminal prosecution.
Plaintiff's attorneys urge that if the notes were obtained in satisfaction of a criminal prosecution, but were founded upon a valid consideration, they would nevertheless be valid and binding obligations. In addition, however, to the compromise of a criminal prosecution, the question of obtaining the same by duress is of equal importance.
The decision I have reached makes it unnecessary to consider whether or not there was a valid existing indebtedness between the parties at the time the notes and deed of trust were executed. If there is such an indebtedness, the parties are not left without a remedy. Creswell is a nonresident of the State, but he has land in the State and jurisdiction may be had by attachment. It will not be amiss, however, to state that the record disclosed that the two hundred seventeen and 50/100 ($217.50) dollar mortgage, which formed the basis of one of the warrants of arrest, was produced, marked paid by Creswell after he was taken into custody. The two hundred and fifty ($250.00) dollar mortgage executed to Mabrey Company was not produced except by certified copy, and this did not disclose a transfer to Whitlock, nor does the record show any direct testimony that as a result of that mortgage Whitlock suffered a specific loss. In the absence of either transfer or right of subrogation, Whitlock's title to or right of protection under the Mabrey Company mortgage must fail.
As to the Landrum indebtedness, we have there only pencil memoranda of figures furnished by Whitlock of the amount alleged to be due by Creswell to Landrum at the time the notes were executed, and while Creswell was under arrest and not in a position to assert his rights freely; and whether or not a valid indebtedness existed between Creswell on the one part and Landrum and Whitlock, respectively, on the other part, the means adopted of renewing or securing this indebtedness does not appeal to the Court nor justify the results obtained. Within recent years there has been an increasing tendency by a great many individuals, as well as some nations, to regard entirely too lightly financial obligations. One of the fundamental principles of good citizenship and good government is honest and fair dealing. However, not infrequently do we find laws that are made for the protection of society being taken advantage of for personal gain. The Court wishes to state here that it is unwilling, irrespective of the age of an indebtedness, to lend its aid to anyone in avoiding payment of an honest obligation. The Court is not impressed with defendant Creswell's conduct in leaving his creditors, moving to another State, keeping his whereabouts unknown for a long period of time and changing his name; but that is not sufficient to warrant the Court in holding valid and legal written instruments obtained under duress and given in compromise of a criminal prosecution.
Plaintiff urges that as Creswell did not institute an action to cancel the notes and deed of trust that he is guilty of laches and his defense is not now available. This question was not passed on by the Master, and I assume was not raised before him. The doctrine of laches is applied to prevent the commission of a wrong and is a weapon of defense. In Edwards v. Johnson, 90 S.C. 90, 103, 72 S.E., 638, 644, the Court says, "In order to constitute laches, there must be shown, not merely neglect for a time to enforce a legal or equitable right, where such neglect is for a period short of that which is a bar under the statute of limitations, but it must further be made to appear that such delay was accompanied either by a failure to perform some legal duty, whereby prejudice has resulted to the person pleading such neglect, or that such delay was accompanied by some act on the part of the person so negligent, which operated to mislead the person pleading such neglect, to his prejudice to such an extent that it would be unjust and inequitable thereafter to permit such negligent party to enforce such right." Demuth v. Bank, 85 Md., 315, 37 A., 266, 60 Am. St. Rep., 322; Hellams v. Prior, 64 S.C. 296, 42 S.E., 106.
The mortgage sought to be foreclosed in this action covered only a contingent interest of the defendant in lands devised by his grandfather, H.H. Creswell, to his father, H.G. Creswell. It was due and payable six months after the death of his (W.H. Creswell's) father. Measured by the foregoing rule, can it be successfully contended that the defendant is barred from now asking relief of a mortgage that was given under duress and in settlement of a criminal prosecution? The neglect for a time to enforce a legal or equitable right is not sufficient alone to make out the defense, and at most, that is all Creswell could be guilty of, and this to some extent may be explained by the fact that not until he survived the death of his father would the mortgage be of any value. Certainly there is no testimony that by the lapse of time any prejudice has resulted to the plaintiff, or that such delay was accompanied by any act which operated to mislead the plaintiff.
There is no ratification, such as the payment of interest on the notes secured by the mortgage, but the entire matter appears to have been dormant from the date the papers were executed to the date foreclosure proceedings were instituted. Time from the beginning of the transaction in this matter has been dealt with gently. Practically fifteen years elapsed from the commission of the alleged crime until the arrest by plaintiff of Creswell.
Almost immediately upon the maturity of the mortgage plaintiff instituted foreclosure proceedings, about the same time the defendant's interest in the property ripened into a title. To have instituted an action sooner to set the mortgage aside might have been asking the Court to do a worthless deed, for defendant's interest might never have ripened into a title.
Duress is a form of fraud, but would a cause of action lie if the fraudulent act does no one an injury, when no wrong is provable? Not until the death of the defendant's father did his interest in the land under foreclosure ripen into a title, and then and only then would the fraudulent act give rise to a cause of action; and upon the happening of this event mortgage foreclosure was instituted and the defense of duress was interposed. I think the evidence completely fails to establish the claim of laches on the part of the defendant. A more pertinent equitable maxim would be that one who comes into Court must come with clean hands, and where contracts are made with the view of compromising a criminal prosecution, or where such contracts were obtained by duress or undue influence, Courts of equity will not lend their aid in enforcing such.
"The general rule (in this State) is that agreements for compromise of public prosecutions are illegal and void. * * * Courts of equity watch with extreme jealousy all contracts made by a party while under imprisonment, and if there is the slightest ground to suspect oppression or imposition in such case, it will set the contracts aside." Williams v. Walker Fleming Company, 18 S.C. 577.
"The law is well settled that any security given to compound a criminal prosecution is null and void, as being against public policy." Tucker v. Cox, as Trustee, 101 S.C. 473, 475, 86 S.E., 28, 29, and cases cited therein; Corley v. Williams, 1 Bailey 588, 17 S.C.L., 588; Groesbeck v. Marshall, 44 S.C. 538, 543, 22 S.E., 743; Bleckley Co. v. Goodwin, 51 S.C. 362, 29 S.E., 3.
In 41 C.J., 441: "Where the consideration for a note or other obligation for the payment of money was an agreement on the part of the payee to * * * stifle, settle or abandon a criminal prosecution begun by him against the maker, the obligation is void, as being illegal and contrary to public policy; and if a mortgage was given to secure the payment of the same, a Court of Equity will not permit its foreclosure. It is doubtful, however, how far equity will be disposed in such a case to give relief to the mortgagor, as by cancelling the mortgage or setting it aside as cloud on his title; in some jurisdictions, the doctrine prevails that the parties are in pari delicto, and that the Courts should not aid either of them, but should leave them where they stand * * *."
A case strongly relied upon by plaintiff is that of Bankhead v. Shed, 80 S.C. 253, 61 S.E., 425, 426, 16 L.R.A., N.S., 971, 15 Ann. Cas., 308. In this case, however, the mortgage was given to secure a valid existing indebtedness, the money had been induced by a promise of mortgagee not to prosecute the mortgagor for violation of a criminal statute if paid at maturity, the Court says: "It seems to us that the only inference of which the testimony is susceptible is that the mortgage was given to secure a valid existing indebtedness, but that this result was induced by the promise of the mortgagee not to prosecute the mortgagor * * * if the mortgage was paid in ten days," and that, "moreover, in this case there was no duress by imprisonment and no prosecution had been begun. At most there was a mere threat to prosecute under a void statute, if the debt was not adjusted."
The facts there are not analogous to those in the instant case. There was a promise not to prosecute; here a prosecution had actually begun. There, no duress by imprisonment; here, was duress and imprisonment. There, a void statute; here, a valid statute.
A case more in point is that of Pierson v. Green, 69 S.C. 559, 48 S.E., 624: "A bonded mortgage given by wife for money to pay her husband's debts and to compromise a criminal prosecution against him, which the mortgagee actively aided in carrying into effect, is void as to so much of the mortgage debt as was used in compromising the criminal prosecution, but valid as to the remainder used in paying husband's debt."
There are two lines of authorities in this State, one of which deals with debts of third parties and the other with debts between the original parties. The latter line is applicable to the case under consideration.
In Pierson v. Green, supra, the wife was also under indictment, but the Court held that anyone who actively aided in carrying into effect the vicious trade or bargain should lose the benefits obtained.
Landrum and Whitlock were interested in the deed of trust under consideration. Each held a note secured thereby; each of them knew the conditions and circumstances under which the notes and deed of trust were executed; the consent of both to release from prosecution was necessary, and was given only after the notes and deed of trust were executed. The fact that Landrum was not actually present when the transaction was consummated, or the fact that he did not sign one of the warrants that caused the arrest and imprisonment of Creswell, does not protect the advantage he gained through the illegal act. Whitlock was on the ground acting as the agent for Landrum and conferred by wire with him while negotiations were pending. Can Landrum now plead innocence, and will the Court protect him in an advantage gained through the illegal conduct of his agent?
It is an elementary principle of law that Courts will not protect persons in illegal transactions of their agents with third parties if the agent is acting within the scope of his employment. Rogers v. Atlantic Life Insurance Company, 135 S.C. 89, 133 S.E., 215, 45 A.L. R., 1172; Huestess v. Atlantic Life Insurance Company, 88 S.C. 31, 70 S.E., 403; Fludd v. Equitable Life Assurance Society, 75 S.C. 315, 55 S.E., 762; Hankinson v. Piedmont Insurance Company, 80 S.C. 392, 61 S.E., 905.
In this case, I find that Landrum knew of, actively participated in, and consented to the transaction.
In 2 C.J., 431, the authorities hold: "Acts which, if done by the principal, would be illegal, as in violation of the common law, or of some statutory provision, cannot be done through the agency of another. Mequire v. Corwine, 101 U.S. 108, 25 L.Ed., 899; American Banana Company v. United Fruit Company, 2 Cir., 166 F., 261, 92 C.C.A., 325. * * * There can be no such thing as an agency in the perpetration of a crime and therefore, all persons actively participating are principals."
I have great respect for the opinion filed by D.S. Jones, Esq., Master for Greenwood County, who is an able lawyer, but a careful examination of the record and the authorities applicable thereto convinces me that no distinction can be made between the handling of Whitlock's and Landrum's debts; that it was one and the same transaction, secured by a single deed of trust; that they were obtained while Creswell was under duress, and were given solely to compromise a criminal prosecution; and that both notes and the deed of trust should be set aside and declared null and void, and the parties left in their original status. To this extent I must disagree in the Master's Report. In all other respects the same is confirmed.
It is therefore ordered, adjudged and decreed:
1. That the report of D.S. Jones, as Master for Greenwood County, be, and the same is hereby, affirmed except so much thereof as validates the note to B.G. Landrum and the deed of trust securing the same, and, as to that part of the said report, the same is reversed.
2. That the two notes executed by W.H. Creswell to Mrs. Mahala Whitlock, administratrix, dated the 18th day of February, 1927, in the principal sum of Six Hundred Sixty-seven and 41/100 ($667.41) Dollars, and to B.G. Landrum on the same date in the principal sum of Seven Hundred and Fifty-one and 10/100 ($751.10) Dollars, respectively, be, and the same are declared null and void and of none effect.
3. That the deed of trust executed by W.H. Creswell, dated February 18th, 1927, and recorded in the office of the Clerk of Court for Greenwood County in Deed Book 41, at page 609, be, and the same is hereby, declared null and void, and the Clerk of Court for Greenwood County is hereby authorized and directed to cancel the same on his records.
Messrs Lambright Sams and L.K. Leonard, for appellants, cite: Duress: 13 C.J., 620; 69 S.C. 559; 48 S.E., 624; 43 S.C. 193; 20 S.E., 972; 132 S.C. 370; 128 S.E., 720. Consideration: 80 S.C. 253; 61 S.E., 425; 132 S.C. 370; 128 S.E., 720; 18 S.C. 584; 101 S.C. 477; 44 S.C. 542; 41 C.J., 437; 12 C.J., 347; 11 Rich. Eq., 110; 1 Bail. L., 84; 182 S.C. 527; 189 S.E., 890; 42 S.C. 193; 20 S.E., 972. Laches: 1 Strob. L., 396; 44 S.C. 430; 22 S.E., 470; 43 A.L.R., 916; 122 P., 793; 270 U.S. 440; 70 L.Ed., 671; 35 A.L.R., 866; Ann. Cas., 1916-D, 1224.
Messrs. W.K. Charles and Wm. P. Greene, Jr., for respondents, cite: Agency: 135 S.C. 89; 70 S.E., 403; 75 S.C. 315; 55 S.E., 762; 80 S.C. 392; 61 S.E., 905; 2 C.J., 431; 101 U.S. 108; 25 L.Ed., 899; 166 F., 261; 81 Am. Dec., 601. Illegal contracts: 18 S.C. 577; 101 S.C. 475; 86 S.E., 28; 17 S.C.L., 587; 44 S.C. 543; 22 S.E., 743; 51 S.C. 362; 29 S.E., 3; 132 S.C. 370; 128 S.E., 720; Fraud: 55 S.C. 360; 33 S.E., 458; 3 S.C. 204; 3 Rich. Eq., 402. As to security given to compromise criminal prosecution: 101 S.C. 475; 86 S.E., 28; 44 S.C. 543; 22 S.E., 743; 18 S.C. 584; 51 S.C. 362; 29 S.E., 3. Duress: 81 Am. Dec., 597; 182 S.C. 52; 189 S.E., 890; 6 L.R.A., 491; 15 A.S.R., 447; 23 N.E., 7; 48 S.W. 912. Contracts against public policy: 50 S.E., 216; 52 L.R.A., 271; 37 S.E., 729; 80 A.S.R., 692; 63 P., 902. Laches: 151 S.E., 920; 73 S.C. 393; 53 S.E., 614; 90 S.C. 103; 72 S.E., 884; 60 A.S.R., 322; 64 S.C. 396; 42 S.E., 106; 138 S.C. 10; 135 S.E., 644; 154 S.E., 415.
April 12, 1939. The opinion of the Court was delivered by
We take from the statement in the Transcript of Record a summary of the issues made by the pleadings.
The action was brought by B.B. Whitlock, as trustee, to foreclose a deed of trust made to him to secure two notes, one in the sum of $751.10, payable to Mrs. Mahala Whitlock, as administratrix of the estate of Wallace Whitlock, deceased, and the other in the sum of $667.41, in favor of B.G. Landrum. Both notes were signed by W.H. Creswell, and the deed of trust was signed by W.H. Creswell and his wife, Lillie Elmina Creswell.
These two defendants filed separate answers, which admitted the execution of the notes and the deed of trust, but which alleged that the notes and the deed of trust were null and void because they were obtained by duress and were given in compromise of a criminal prosecution.
The issues were referred to the Master for Greenwood County. On exceptions to his report, the matter came on to be heard by Honorable J. Strom Thurmond, Circuit Judge. His decree is satisfactory to this Court, and is adopted by it. It will be reported.
The decree contains a full statement of the facts and circumstances relating to the issues involved in the litigation.
One or two matters made by appellants' exceptions to the Circuit decree would seem to merit some attention.
Appellants, by Exception 16, contend that it was error to permit Creswell to retain possession of original notes given him by these appellants, and thereby failing to place the parties in statu quo.
We find no evidence in support of the allegation that Creswell was permitted to retain the original notes given him by appellants. On the contrary we find at folio 79 of the Transcript the following (W.H. Creswell was being examined): "Q. Did Mr. Whitlock, or his attorney, Mr. Miller, after you signed the notes and trust deed, give you any papers? A. No, sir. They did not give me anything."
It is plain that there is no foundation for the position taken by Exception 16.
We shall not undertake to consider the exceptions. We are satisfied that none of them is of sufficient merit to warrant this Court in reversing the Circuit decree. The exceptions do not overcome the legal grounds upon which the decree is built.
Appellants contend that even though the prosecution was dropped when the notes and the trust deed were signed, that Creswell was indebted to plaintiffs on past due obligations and these furnished sufficient consideration to support the notes and deed of trust. We do not think the evidence shows conclusively that Creswell was legally indebted to these plaintiffs in such way as to make valid the notes and trust deed. If it be said that in some jurisdictions, and by some authority in this jurisdiction, it has been so held, we do not think it is the prevailing opinion in this State. We have examined the authorities submitted in support of this contention but we think that in this jurisdiction the accepted doctrine is as is declared in Williams v. Walker, Fleming Co., 18 S.C. 577, to-wit:
"* * * `Courts of equity watch with extreme jealousy all contracts made by a party while under imprisonment, and if there is the slightest ground to suspect oppression or imposition in such cases, they will set the contracts aside.' 1 Story Eq., § 239.
"The general rule is that agreements for compromise of public prosecution are illegal and void. * * *"
The opinion of the Court, which then consisted of Simpson, Chief Justice, and Mclver and McGowan, Associate Justices, was delivered by McIver, Associate Justice, in which he said: "A Court of equity will not readily sanction or recognize a contract which one has been induced to enter into for the purpose of securing immunity from a criminal prosecution. Such a use of criminal process violates every consideration of public policy, and whoever resorts to it should meet with condemnation rather than encouragement. * * *"
In the Circuit decree in that case, which was affirmed by the Supreme Court, this occurs: "The general rule is that agreements for compromise of public prosecutions are illegal and void. This doctrine was conceded in Corley v. Williams, 1 Bail., 588, and the only exception contended for was that it did not apply to assaults and batteries, and other misdemeanors of a private nature. * * *"
From respondents' argument we take the following from the case of Galusha v. Sherman, 105 Wis. 263, 81 N.W., 495, 501, 47 L.R.A., 417: "`The true doctrine of duress, at the present day, both in this country and England, is that a contract obtained by so oppressing a person by threats regarding his personal safety or liberty, or that of his property, or of a member of his family, as to deprive him of the free exercise of his will and prevent the meeting of minds necessary to a valid contract, may be avoided on the ground of duress. * * *'"
One has but to read the testimony in this case to see that while Creswell was in jail, his wife was distraught with fear and anxiety for her husband's safety, and the welfare of herself and her children.
We shall not further discuss the case. The Circuit decree fully and carefully considered it, and has rightly decided it.
The exceptions are overruled and the judgment is affirmed.
MR. CHIEF JUSTICE STABLER and MESSRS. JUSTICES BAKER and FISHBURNE, and MR. ACTING ASSOCIATE JUSTICE H.F. RICE concur.
MR. JUSTICE CARTER did not participate on account of illness.