S. P. Dunham & Co. v. Kudra

44 N.J. Super. 565, 131 A.2d 306 (Super. Ct. App. Div. 1957)

 

RULE:

The test for economic duress is simply this: is the person complaining constrained to do what he otherwise does not do?

FACTS:

Plaintiff department store leased its fur department to a concessionaire. When the concessionaire went bankrupt, plaintiff offered to pay defendant fur cleaners, whom the concessionaire had employed, for the return of plaintiff's customers' garments. Defendants agreed to return the garments if plaintiff would pay an additional $ 3,855 that was owed to defendants by the concessionaire. Plaintiff paid the additional money. Plaintiff then brought an action against defendants for restitution of the $ 3,855, which plaintiff claimed it had paid under business compulsion. The trial court entered judgment for plaintiff. The court affirmed the trial court’s judgment.

ISSUE:

Did plaintiff department store act under duress when it paid the additional $ 3,855 that was owed to defendant fur cleaners by the concessionaire?

ANSWER:

Yes.

CONCLUSION:

Plaintiff department store did not have an adequate remedy at law before it paid defendant fur cleaners because plaintiff did not want it to be publicly known that defendants, plaintiff's competitors, attended to the storing and cleaning of plaintiff's customers' furs. Defendants' contention that plaintiff knew of the concessionaire's financial difficulty and therefore had placed itself under the duress that it charged to defendants was without the slightest substance.

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