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Contracts with Bankrupts and their Trustees.

So where, at the time of the bankruptcy, a contract which CH. VII. s. 7. relates merely to the person of the bankrupt, for example, a contract for the employment of his personal skill and labour, remains to be executed, and cannot be executed without the co-operation of the bankrupt, the trustee cannot enforce such contract-at all events, unless he can procure the bankrupt to co-operate (a), although by sect. 24 (3) the bankrupt is to aid in the realisation and distribution of his property; he cannot be compelled to enhance it, nor does the section throw new duties on him; for instance, he cannot "be called upon to plough part of his farm, or ride his horse, or show his goods in the case of the trustee requiring him to facilitate and improve a sale of his effects" (b). By sect. 57 of the Bankruptcy Act, 1883, the trustee may, with permission of the committee, carry on the business of the bankrupt so far as is necessary for the beneficial winding up (c), and in so doing may, by sect. 64, appoint the bankrupt to manage. bankrupt And in such a case persons contracting with a business so carried managing. on have a preferential right to payment in full as against the previous creditors, or if, when there is a scheme of arrangement under sect. 18, the debtor trades with their knowledge and approval (d).

Contracts

with trustee carrying on

trade of bank

rupt or

SECT. 8.-Persons under Duress.

at law.

To give validity to a contract the law requires, as we have General rule said, the free assent of the party who is to become chargeable thereon and it therefore avoids any promise extorted from him by terror or violence, whether on the part of the person to whom the promise or obligation is made, or on that of his agent (e). Contracts made in such circumstances are said to be made under duress, and duress may consist either in the abuse of legal pro- In what ceedings or actual violence to the person, or threats of violence duress may such as deprive the contractor of freewill.

So either a bond and deed or an agreement not under seal, made with prosecutor by a person in prison under a criminal charge, or under threats of a criminal charge, will be voidable (ƒ).

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630; Engelback v. Nixon (1875), L. R.,
10 C. P. 645; Ex parte Robertson (1873),
L. R. 8 Ch. 962; Ex parte Ford (1876),

Ch. D. 521, C. A.; Ex parte Bolland
(1878), 9 Ch. D. 312, C. A.; Ex parte
Allard (1881), 16 Ch. D. 505, C. A. As
to where discharged bankrupt has traded
and the bankruptcy is reopened, see Ex
parte Pitt (1882), 20 Ch. D. 308, C. A.
(e) 1 Roll. Abr. 687.

(f) Bac. Abr. and Vin. Abr. tit.

consist.

Criminal charge or threat thereof.

CH. VII. s. 8.

with Persons

But where the proceedings are only quasi criminal, as for penalContracts ties under the Stamp Act, or Trade Marks Acts, an agreement under Duress. entered into with the prosecutor will not be void on the ground of duress (g); and a release, though found by a jury to have been obtained by undue pressure, has been held effective to bar an action for arrears of salary released by it (h).

Release.

Civil proceedings, not duress.

Actual

violence or threats

thereof.

But where in civil proceedings the defendant is imprisoned, an agreement entered into with the plaintiff to obtain his discharge will not be considered as entered into under duress (i), for executio juris non habet injuriam; and, therefore, if a man be lawfully in custody under the process of a Court of competent jurisdiction, and he voluntarily enters into a contract in order to obtain his enlargement, he will be bound thereby (k).

And it has been held that an agreement made by a party, in order to obtain his discharge from custody under process in a civil action, regular in form, but where in fact the plaintiff had no cause of action, was not void on the ground of duress (1).

Nor is a threat to make a man bankrupt or to bring an action duress so as to avoid an agreement (m); but in a person of weak mind a threat of legal proceedings may produce such terror as to amount to duress (n).

And so as to violence, or threats of violence that produce fear, what amount will make a duress depends on the sufferer's condition. "It has been sometimes said that in order to avoid a contract entered into through fear, the fear must be such as would impel a person of ordinary courage to yield to it. I do not think this an accurate statement of the law. Whenever from natural weakness of intellect, or from fear-whether reasonably entertained or not-either party is actually in a state of mental incompetence to resist pressure improperly brought to bear, there is no more consent than in the case of a person of stronger intellect and more robust courage yielding to a more serious danger. The difficulty consists not in an uncertainty of the law on the subject, but in its application to the facts of each individual case " (n).

And where an infant ward of Court who had married without leave was shown by his solicitor an order of the Court requiring him to execute a settlement, and told that he would get into

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(i) Smith v. Monteith (1844), 13 M. &W. 427.

(k) Stepney v. Lloyd (1598), Cro. Eliz. 647; 1 Roll. Abr. 687; pl. 1, 2.

(l) Anon. (1663), 1 Lev. 68. (m) Powell v. Hoyland (1851), 6 Ex. 67; Ex parte Hall (1882), 19 Ch. D. 580.

(n) Scott v. Sebright (1886), 12 P. D. 21, per Butt, J.

Contracts with Persons

trouble if he did not execute it, which he accordingly did, it was CH. VII, s. 8. decided that such a settlement was executed in invitum, and there being no power in the Court to make him execute, such settlement under Duress. was set aside at his suit on coming of age (o).

But duress of goods, i.e., where a person voluntarily agrees to Duress of pay money to recover goods, is not duress; there is a distinction goods, &c. between duress of, or menace to, the person and duress of goods. The reason is, “the former is constraining force, which not only takes away the free agency, but may leave no room to the law for a remedy; a man, therefore, is not bound by the agreement which he enters into under such circumstances; but the fear that goods may be taken or injured does not deprive any one of his free agency who possesses that ordinary degree of firmness which the law requires all to exert" (p).

suffered.

It has been said, that the duress must be suffered by the party By whom who enters into the contract (q); and that a contract entered into by a stranger, in consideration of the discharge of a third party from duress, is void as a mere nudum pactum (r). But if an agent enter into a contract for his principal, from the same fear of the inconvenience which may arise to the principal from the latter being kept in confinement, as would affect the mind of the principal himself, such contract will be void on the ground of duress (8). So, duress to a wife will avoid a contract given under its influence by the husband; and duress to a parent will avoid a contract obtained by means thereof from a child (t). And where a bond was given by a third person, on the discharge of one who had been unlawfully impressed, conditioned for the man's being returned into custody, or in default thereof for the payment of 501., the bond was held void. For the impressing of the man was unlawful; and besides, the officer had no power to commute the services of one who had been impressed, or to discharge him in consideration of money to be paid (u).

taken

And a Court of Equity will set aside an agreement where, although there was no duress, one of the parties has advantage of the situation of the other, and has used influence to force an agreement from him (x).

(0) In re Leigh (1888), 40 Ch. D. 290, C. A.

(p) Skeate v. Beale (1841), 11 Ad. & El. 983, Ex. Ch., per Lord Denman, C.J.; and see Atlee v. Backhouse (1838), 3 M. & W. 633. But although duress of goods will not avoid a contract, an action will lie to recover money paid in order to get possession of goods wrongfully detained. Per Cur., Wakefield v. Newbon (1844), 6 Q. B. 276; see ante, Ch. III.,

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undue

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sect. 3, "Money had and received."
(g) See Roll. Abr. 687, pl. 6; Bac.
Abr. Duress (B.).

(r) See Smith v. Monteith (1844), 13
M. & W. 427.

(s) See Cumming v. Ince (1847), 11 Q. B. 112.

(t) 1 Roll. Abr. 687, pl. 5, 6.

(u) Pole v. Harrobin (1782), 9 East, 417, note.

(x) See note (ƒ), supra; also cases

CH. VII. s. 8.

Contracts with Persons

under Duress.

Contract may be enforced by the other party.

Such a contract may be affirmed. Salvage.

Clearly, a contract made under duress would be available in favour of the party suffering the duress, and against the party inflicting the same.

A man who has entered into a contract under duress, may either affirm or avoid such contract after the duress has ceased (y); and if he has so voluntarily acted under it with a full knowledge of all the circumstances, he may be held bound on the ground of ratification (z).

Under the head of duress may be noticed contracts for payment of services to a ship in distress, or "salvage." Where the contract is implied only, the terms of payment are regulated by the Merchant Shipping Act, 1894, 57 & 58 Vict. c. 60, ss. 544— 564, sect. 547 providing for their settlement in case of dispute by the High Court, or if the property salved or amount claimed do not exceed 1,000l. or 300l. respectively, or if jurisdiction be given by consent, by a County Court having Admiralty jurisdicdiction. Where the contract is express, its terms, if unreasonable, may be modified by the High Court, on the ground that the contract was entered into under compulsion, and it is laid down that the sort of pressure requisite to the interference of the Court is less than the duress required at common law to invalidate an agreement (a).

cited in Nevill v. Snelling (1880), 15
Ch. D. 679; and post, Ch. XXI.

(y) 2 Inst. 483; Whelpdale's case (1605),
5 Co. 119, Res. 2; 1 Steph. Com. 442.

(z) Ormes v. Beadel (1860), 2 De G. F. & J. 333, App.

(a) The Rialto, [1891] P. D. 175; The Mark Lane (1890), 15 P. D. 135.

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SECT. 1.-Contracts binding the Wife as to Separate Estate.

(a) Antenuptial Contracts.

Law.

THE Common law, considering that the husband took the rents Effect of and profits of his wife's realty during coverture, with a possible marriage on antenuptial estate by the curtesy, and all her personalty absolutely, rendered debts him liable to all his wife's antenuptial debts. For these husband At Common and wife could be sued jointly, and a joint judgment recovered against husband and wife. The joint judgment could be executed by the persons of both being taken into execution, and when the wife was so taken she was only discharged as a matter of indulgence in the discretion of the Court, when it appeared that she had no separate property out of which the judgment could be satisfied, or when there was fraud or collusion of the husband to keep her in prison (a).

But in equity, if the husband did not satisfy the wife's ante- In Equity nuptial creditors, the separate estate of the wife secured to her could be rendered liable in an action against her and her trustees to her antenuptial creditors, and judgment satisfied by equitable execution. This liability overrode her equity to a settlement (b), and could not be defeated by a settlement by her of her property on her marriage to herself for her sole and separate use (c), and 247; Miller v. Campbell, W. N. 1871, p. 210.

(a) See Benyon v. Jones (1846), 15 M. & W. 566; Newton v. Boodle (1847), 9 Q. B. 948; Ivens v. Butler (1857), 26 L. J., Q. B. 145.

(b) Bonner v. Bonner (1853), 17 Beav. 86; Barnard v. Ford (1869), L. R. 4 Ch.

(c) Biscoe v. Kennedy (1762), 2 Bro. C. C. 17, n.; followed in Chubb v. Stretch (1870), 9 Eq. 555.

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