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S.P. Dunham & Company (Dunham) (plaintiff) operated a department store. It leased its fur department to Elmer A. Hurwitz & Co. (Hurwitz). Dunham’s customers brought their fur coats to Hurwitz for storage and cleaning. Unbeknownst to Dunham’s customers, Hurwitz turned the coats over to George M. Kudra (defendant), a competitor of Dunham’s, for storage and cleaning. In November 1955, Hurwitz underwent bankruptcy. At the time, Kudra was in possession of 412 coats, for which Hurwitz owed $622.50. Dunham offered to pay the balance. However, Kudra demanded Dunham also pay Hurwitz’s additional outstanding balance of $3,232.55 before Kudra would return the coats. Dunham requested a few days to consider the demand. In the interim, many of Dunham’s customers began demanding their coats due to a drop in temperature that fall. Dunham sought further negotiations, and Kudra proposed that Kudra deliver the coats directly to Dunham’s customers and bill them directly. Dunham refused this proposal. On November 29, 1955, Dunham paid the entire sum previously demanded by Kudra. On December 15, 1955, Dunham sued Kudra, seeking a return of $3,232.55 on grounds that the amount was paid under business compulsion. The trial court ruled in Dunham’s favor. Kudra appealed.
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