Facts
M.D. was employed in a managerial position at the company [W. AG] for several years. On June 26, 1989, he terminated the employment relationship effective the end of August 1989. In a board of directors meeting on July 4, 1989, the employer dismissed him without notice on the grounds of breach of contract and criminal acts. M.D. then signed several declarations in which he admitted mistakes and committed to pay damages.
On January 25, 1990, the company [W. AG] filed a criminal complaint against M.D. Thereupon, he declared his declarations to be non-binding, as he had been forced to do so. M.D. in turn filed a criminal complaint against F., the chairman of the board of directors and main shareholder of the company [W. AG], for coercion, extortion, forgery of documents, and false accusation.
With a claim dated August 27, 1990, the company [W. AG] demanded payment of CHF 317,400 plus interest from M.D., based on the debt acknowledgment in the declarations of July 13 and 14, 1989. The District Court and the Cantonal Court dismissed the claim.
Considerations
The Federal Supreme Court confirmed the cantonal court's judgment. It found that M.D. had signed the declarations of July 4, 13, and 14, 1989 under the impression of the threat of criminal prosecution. The court qualified these threats by the plaintiff's governing bodies as threats within the meaning of Art. 29 and 30 of the Swiss Code of Obligations (OR).
While the threat of criminal prosecution is generally permissible if it serves to enforce claims for damages, the plaintiff has…