Neibuhr v. Gage

Brief Fact Summary. Plaintiff seeks recovery for damages resulting from duress and identifies the recovery as that found under remedies for deceitful practices.

Synopsis of Rule of Law. The remedy for deceitful practices is the same for actions of duress.

Facts. This action was brought to recover damages, which the Plaintiff claims he suffered when he was forced to transfer certain shares of stock in a corporation to the Defendant under duress. The trial court ruled in favor of the Plaintiff and denied the Defendant’s Motion for Judgment Notwithstanding the Verdict, but granted a new trial. The Defendant contends that if the contract resulted from duress it was voidable, and the sole remedy of the injured party was to either rescind and to restore the benefits, and then bring an action at law for the property he lost, or bring an action in equity. Both parties appealed.

Issue. Whether a party, who has been injured by duress, is entitled to the same remedies as one who has been injured by deception?

Held. (Justice Elliott). Yes. A party injured by duress is entitled to same remedies as one who has been injured by deception. There can be no distinction made between duress and deception. The damages caused by the wrongdoer in either case is the same. The remedies available to one who has been induced to part with his property or execute a contract by ordinary fraud are well understood. One may keep what he has received under the contract and bring an action to recover the damages which he has sustained by reason of the fraud, or he may rescind the contract by his own act, and sue at law for what he parted with by reason of the fraud, or he may sue in equity for a rescission of the contract by the court and recover what he parted with upon such conditions as the court may deem equitable. If he seeks equitable relief, he must proceed promptly and comply with all conditions which equity imposes. If he elects to rescind by his own act and sue at law for what he parted with by reason o
f the fraud, he must do all that he reasonably can to place the Defendant in status quo. The action granting a new trial is reversed, with directions to the trial court to enter a judgment in favor of the Plaintiff upon the verdict.

Discussion. The court views the word “deceit” as a synonymous with the word “duress.” “Fraud is ordinarily accomplished by deceit, but it is also accomplished by many other practices. As commonly understood, fraud is a wrong accomplished by deception but duress is a species of fraud in which compulsion in some form takes the place of deception in accomplishing the injury.

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