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KAUFMAN v. GERSON.

(1904) JELR 87125 (CA)

Court of Appeal  •  24 Feb 1904  •  United Kingdom

Coram
COLLINS M.R.,ROMER L.J.,MATHEW L.J.

Judgement


COLLINS M.R. This is an appeal from a judgment of Wright J., which raises an important question. The defendant, who is the wife of one Gerson, was induced, as the learned judge has found, by threats of a criminal prosecution against her husband in France to give to the plaintiff an undertaking to pay a considerable sum of money. The amount of 801l. 11s. 7d. has been already paid by the defendant under that agreement, by installments spreading over a series of years, leaving a balance still unpaid for which the plaintiff sues the defendant in this action. Two points are raised by way of answer to the action. First, it is said that the agreement upon which the action is brought is bad because the object of it was to stifle a prosecution. Secondly, it is said that it was bad as having been obtained by duress. The learned judge, upon the evidence given by an expert as to the French law on the subject, came to the conclusion on the first point that, according to that law, such an agreement was not invalid on the ground that its object was to stifle a prosecution; and that, the agreement in this case having been made in France by persons domiciled there, and being intended to be performed in that country, the point taken by the defendant afforded no ground for an English Court’s refusing to enforce the agreement, and therefore so far the defence failed. The second point raised was, as I have said, that the defendant was induced to enter into the agreement under such circumstances that an English Court would not enforce it, as having been obtained by coercion. That point involves the question of fact whether the defendant has succeeded in establishing that the agreement was so obtained. It appears to me that Wright J. arrived at the conclusion that she had so succeeded. He says in his judgment: “The facts are in brief these. The plaintiff Kaufman in France placed in the hands of Gerson, as a friend whom he wished to assist, a sum of money to be used in buying skins to be dressed and sold for their joint benefit. Gerson appropriated part of the money to his own use instead of applying it in buying skins. His conduct was criminal in France and a prosecution was threatened. In order to avoid a prosecution, and to protect the good name of Gerson’s children, his wife, the present defendant, under the influence of Kaufman’s threat, and at his instance, agreed in writing to make good by installments out of her own property the amount of the defalcation on the express terms that there should be no prosecution on the part of Kaufman.” The learned judge’s note of the defendant’s evidence appears to me entirely to bear out the conclusion at which he arrived. It was suggested, in answer to the defendant’s contention, that, she and her husband having been married in France under the Code Napoleon with community of goods, and there being no settlement of her property, her husband’s liabilities could have been enforced against it civilly. But, however that may be, the plaintiff was not content with such remedies as he might have by the French law under those circumstances, but desired to obtain some further advantage, which he forced the defendant to concede by the strongest possible moral pressure, namely, by the threat of bringing dishonor upon her name and that of her children. Yielding to that pressure she consented to sign the agreement, and has paid considerable sums of money under it. It is quite obvious that down to the year 1902 those payments were made under the continual threat of criminal proceedings being instituted; and it was not until the defendant was driven by civil proceedings in this country to do so, that she set up this defence as an answer to the plaintiff’s claim for the balance of the money agreed to be paid.

I think that the real point in this case is whether an agreement obtained under such circumstances can be enforced in an English Court. I do not propose to deal with the first point raised, namely, that the agreement, being one which interfered with the course of justice, could not be enforced in an English Court. The law of France with regard to such agreements is said to differ from that of England. I am not prepared to say that, so far as this point is concerned, the agreement in this case, if valid according to the law of France, may not be enforced by an English Court; but I express no final opinion on the matter one way or the other. I propose to decide this case on the second point raised, which, as I have said, appears to me to be the real point in the case.

It is said that by the law of France an agreement obtained by moral pressure, such as was exercised in the present case, can be enforced. The view of the learned judge seems to have been that, though there was in this case such pressure as would amount to coercion, and render an agreement unenforceable, according to English law, nevertheless, an agreement so procured being valid according to the French law, this agreement could be enforced by an English Court. He said in giving judgment: “The second ground on which the contract in the present case is impeached is that it was obtained by the undue influence or duress of a threat to prosecute the husband for crime. If this objection is to be regarded as based on considerations of public policy, the same answer applies as in the case of the first objection. It seems, however, to be more in the nature of an objection to the proof of consent of the defendant to the contract, a consent induced by duress or undue influence being by English law treated as no consent. If this be the correct view, it would seem that the law of the country in which the contract is made and is to be performed and in which the parties are domiciled, ought to prevail, unless there is such duress as must be considered to avoid the contract under any but unreasonable and uncivilized institutions of law – a description which would be applicable to such a case as that of consent obtained, e.g., by physical torture of by the use of drugs, but which cannot properly be applied to this case”. The whole point of the judgment appears to be contained in the last few lines. The judge seems to admit that, if the agreement had been obtained by the threat of physical volence, e.g., by threatening the defendant with a pistol, or something of that kind, the case would be brought within a general principle, upon which the Court would be entitled to refuse to enforced the contract, whatever might be the law of any other country on the subject; and it was not denied by the plaintiff’s counsel that this would be so. But, if so, what does it matter what particular form of coercion is used, so long as the will is coerced? Some persons would be more easily coerced by moral pressure, such as was exercised here, than by the threat of physical violence. It seems to me impossible to say that it is not coercion to threaten a wife with the dishonor of her husband and children. It is argued that it is only upon some principle which is recognized and applied in all civilized countries that an English Court can refuse to enforce a contract which is valid and enforceable according to the law of the country where it was made; and, therefore, although there may be a principle upon which an English Court would refuse to enforce such a contract as this, if made in England, if there is any civilized country, the law of which does not accept that principle, an English Court is debarred from acting upon it. I cannot accept that view. The authorities which have been cited do not appear to me to bear it out. The plaintiff’s counsel cited two passages from Story’s Conflict of Laws, which appear to me to shew that, where an English Court is asked to enforce a contract made in a foreign country, it is entitled to inquire whether, though the contract may be valid according to the laws of that country, it violates some moral principle, which, if it is not, ought to be universally recognized. I think that in this case, as in other cases, the principle applies that a plaintiff, who seeks the assistance of the Court, must come with clean hands; and, if the plaintiff is setting up a contract obtained in a manner which, in the case of an English contract, the law deems contrary to morality, an English Court will not help him to enforce it, whatever may be the law of the country in which the contract was made. I think the principle which I am endeavouring to express is well established by authority. There is the passage, which was cited, in paragraph 258 of Story’s Conflict of Laws, 7th ed. P. 292, where the learned author says with regard to all contracts which in their own nature are founded in moral turpitude of society: “All such contracts, even though they might be held valid in the country where they are made, would be held void elsewhere, or at least ought to be, if the dictates of Christian morality, or of even natural justice, are allowed to have their due force and influence in the administration of international jurisprudence”. Romen L.J. has referred to a passage in Westlake on Private International Law, 3rd ed. S215, p. 260, where the learned author says: “Where a contract conflicts with what are deemed in England to be essential public or moral interests, it cannot be enforced here, notwithstanding it may have been valid by its proper law. The plaintiff in such a case encounters that reservation in favour of any stringent domestic policy, with which alone any maxims for giving effect to foreign laws can be received . ... The difficulty in every particular instance cannot be with regard to the principle, but merely whether the public or moral interests concerned are essential enough to call it into operation; and where a breach of English law is not contemplated, this is necessarily a question on which there is room for much difference of opinion among judge”. Here, the question, which arises in the particular case, is whether a contract obtained by such moral pressure as was brought to hear on the defendant is one which an English Court ought not to enforced, even if it would be enforced by the Courts of a foreign country in which it was made. It appears to me that the principle upon which English Courts act in refusing to enforce such a contract is one which, if it is not, ought to be universally recognized; and I do not think that this Court ought to violate that principle, even on the assumption that this contract could have been enforced by the law of France. The decision which I am pronouncing does not appear to me to be inconsistent with any of the decisions to which our attention has been called; on the contrary, it is, I think, supported by several cases, or at any rate by weighty dicta therein, as for instance by the observations of Turner L.J. in Hope v. Hope (1), with which Knight Bruce L.J. appears to have agreed, and by those of Fry J. in Rousillon v. Rousillon. (2) On the broad general principle that the Court will not enforce a contract which has been obtained by means of such moral coercion as was here used, I think the defendant is entitled to the protection of an English Court, and that we ought to refuse to enforce a contract which ought never to have been made.

ROMER L.J. I am of the same opinion. The principle of law applicable to this case appears to me to be succinctly and accurately stated in the passage from Westlake on Private International Law, which has been read by the Master of the Rolls. The only question is as to the application of that principle to the facts of the present case. Shortly stated those facts appear to amount to this, namely, that the plaintiff extorted a contract from a wife by threats of criminal proceedings against her husband, if she did not comply, those proceedings being such that, if taken, they would probably have resulted in the ruin of the husband, and the disgrace of his wife and children. That being so, the principle to which I have referred, in my opinion, applies. I think that to enforce a contract so procured would be to contravene what by the law of this country is deemed an essential moral interest; and therefore that the Court ought not, at the instance of the plaintiff, to assist him in this case to enforce a contract which he has obtained by such means.

MATHEW L.J. I agree. The policy of the English Courts in such cases appears to have been to refuse the assistance of the law to a litigant seeking to enforce a contract that he has obtained by means which the Court regards as unjust and immoral. In this case the execution of the contract sued upon was, in my opinion, obtained by such means; for the evidence shews that pressure which amounted to torture was applied in order to coerce the defendant into signing the contract. I think it would be a violation of principle, if this Court were to allow its process to b used to enforce a contract so procured.

Appeal allowed.


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