This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
A payment made to induce the adversary party to perform his contract is not made under duress and cannot be recovered. Thus excessive payments made to induce an irrigation company to continue to furnish water;1 or payments made to induce a vendor to deliver future installments of coal according to his contract, the payments being the contract price for the coal already delivered which was held not to be of the quality required by the contract;2 or payments made to an agent of what he claimed to be the balance due him from his principal to induce him to deliver butter which was not the principal's until it was delivered,3 can none of them be recovered. So a contractor cannot recover a payment made by him as due on a forfeiture for failure to complete the work in accordance with the terms of the contract on the theory that it was made under duress, although the board of public works, to whom it was made, would not notify the council that the work had been accepted until this payment had been made, and until such notice the council would not appropriate the amount due the contracto 4 Under some circumstances, however, a refusal to perform a contract may have so disastrous an effect upon the business of the adversary party, that a payment made by him to induce performance of such contract, may be held to be made under compulsion. Thus, where a theatrical performance had been advertised, and a short time before it was to begin the actor refused to go unless he was paid the full amount of an item in dispute between himself and the manager, it was held that a payment of such amount by the manager was made under "a species of constraint," and could be recovered.5 B, a building contractor, who was constructing a church in Boston, sent some stone to New York to be cut. For this he was fined five hundred dollars by an association of stone masons. B refused to make such payment, and the association threatened to cause a strike among B's workmen unless such amount was paid. On B's continued refusal, the association caused a strike, which lasted for some time. B was unable to procure laborers competent to complete such job, and he finally paid this amount in order to have the strike declared off. Subsequently, he brought suit against the association and those who had handled the check by
A compulsory or coerced one, there being no element of fraud or other ingredient of oppression in the case." Dickerman v. Lord, 21 la. 338, 343; 89 Am. Dec. 570.
3Kohler y. Wells, 26 Cal. 606; Dickerman v. Lord, 21 la. 338; 89 Am. Dec. 579.
4 Brady v. Royce, 180 Mass. 553; 62 N. E. 960.
5 Pitt v. Coomes, 2 Ad. & El. 459; Cadaval (Duke of) v. Collins, 4 Ad. & El. 858; Colwell v. Peden, 3 Watts (Pa.) 327.
6 Chandler v. Sanger, 114 Mass. 364; 19 Am. Rep. 367.
7 Adams v. Reeves, 68 N. C. 134; 12 Am. Rep. 627.
1 Steck v. Irrigation Co., 4 Colo. App. 323; 35 Pac. 919.
2 Armstrong v. Latimer, 165 Pa. St. 398; 30 Atl. 990.
3 Hubbard v. Mills, 46 Vt. 243. 4Laidlaw v. Detroit, 110 Mich. 1;
67 N. W. 967. But similar fact3 in the formation of a contract have been held to constitute duress. See Sec. 255.
5 Dana v. Kemble, 17 Pick. (Mass.) 545. In this case the judgment in favor of the manager was reversed on the ground of failure which such payment was made and received the money therefor. The lower court held that B had no right of action. For this, the Supreme Court reversed the judgment of the lower court, holding that B had a right of action, although they were undecided whether it was in tort or in assumpsit.0 So payment of illegal charges for water,7 or gas,8 made under threat of cutting off the supply if such illegal charge is not paid, or payment of an illegal water license charge,9 or an illegal charge for rent of a gas meter10 made under like circumstances may be recovered.