Shasta Water Co. v. Croke

[762]

NOURSE, P. J.

This is an action for breach of a written contract. The court sitting without a jury gave judgment for defendants and plaintiff appeals.

In the agreement of July 6, 1951, incorporated by reference in the complaint, plaintiff released all claims against defendants, their former employees, for shortages on inventories and operations occurred during their employment and for shortages occurred on a bottling contract between plaintiff and Ginger Beer Bottlers, Ltd., in consideration of $20,000 to be paid by defendants—$5,000 cash and $15,000 in installments to be secured by certain trust deed; in addition defendants agreed to pay $25 in settlement of miscellaneous bottles and to return an accumulating table. It was alleged that the agreement was breached by defendants by failure and refusal to fulfill any of these obligations except the return of the table. Defendants denied having caused shortages, admitted the signing of the agreement, but alleged that it was obtained through fraud, duress and intimidation, among which were threats of criminal prosecution, that it lacked consideration and that defendants had notified plaintiff of their rescission.

At the end of the trial the court orally expressed its opinion that the defense of duress had not been made out by a preponderance of the evidence and that the only issue left was that of consideration. However, later the court found not only that there was no consideration for the purported agreement but also that said purported agreement was obtained from the defendants under threats of criminal prosecution, menace and duress. A motion for a new trial, made on most of the grounds specified in section 657, Code of Civil Procedure, but argued mainly on the ground of irregularities preventing a fair trial, was denied.

That there was substantial evidence of threats of criminal prosecution and of menace in general cannot be denied. As to the background, it is undisputed that the defendants Croke and Wendell had been employed at the Los Angeles office of plaintiff which had been a losing operation for several years. Defendant Croke took his position with plaintiff in 1949 only and was then manager of the Los Angeles branch.

Appellant urges that as a matter of law and of fact the agreement was supported by consideration and that the finding as to threats of criminal prosecution, menace and duress was contrary to the evidence and due to sympathy and prejudice of the judge shown by the irregularity of the proceedings.