Williams v Bayley

 

[1866] LR 1 HL 200

House of Lords

 

Bayley's son, William, had forged his father's signature on several promissory notes. On discovering the forgeries the bank arranged a meeting of all the parties. At the meeting Williams said to Bayley 'If the bills are yours we are all right; if they are not, we have only one course to pursue; we cannot be parties to compounding a felony.' During further discussions Williams' solicitor said it was 'a serious matter' and Bayley's solicitor added, 'a case of transportation for life.' After further discussion Bayley said to his solicitor 'What be I to do? How can I help myself? You see these men will have their money.' In the end Bayley reached a settlement with the bank by which in return for him mortgaging his property to them they would return the forged notes to him.

 

The issue before the court was whether the agreement should be set aside on the ground that Bayley had not freely consented to the agreement.

 

Lord Cranworth LC

 

... Now is that a transaction which a Court of equity will tolerate, or is it not? I agree very much with a good deal of the argument of Sir Hugh Cairns as to this doctrine of pressure. Many grounds on which a Court of equity has acted in such cases do not apply in this case... But here was a pressure of this nature. We have the means of prosecuting, and so transporting your son. Do you choose to come to his help and take on yourself the amount of his debts - the amount of these forgeries? If you do we will not prosecute; if you do not, we will. That is the plain interpretation of what passed. Is that, or is it not, legal? In my opinion, my Lords, I am bound to go the length of saying that I do not think it is legal. I do not think that a transaction of that sort would have been legal even if, instead of being forced on the father, it had been proposed by him and adopted by the bankers; and I come to that conclusion upon this short ground, that in Wallace v Hardacre... Lord Ellenborough positively states that which has always been understood to be the correct view of the law upon this subject, namely, that although in that case there was no reason for treating the agreement as invalid, yet it would have been otherwise if the agreement had been substantially an agreement to stifle a criminal prosecution... Now, is the agreement in question, or is it not, one the object of which is to stifle a criminal prosecution? If there be really case in which that character can be properly given to an agreement I think that this is such a case, and therefore, in my opinion, the decree is perfectly right...