Case ID: nc_198/html/0123-01.html
Source: Caselaw Access Project
Author: {"author": "CoNNOR, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

WILLIE E. PASS v. McCLAREN RUBBER COMPANY.
    (Filed 18 December, 1929.)
    1. Torts C b — In this case held: evidence of fraud in procurement of release was insufficient to be submitted to jury.
    Where upon a material consideration an injured employee had signed a release of all claims he might have as a result of the injury, in order to set it aside in an action for damages subsequently brought it must be shown that the release was obtained by fraud; and where the evidence tends only to show that the plaintiff executed the release upon the advice of an attorney he had employed for the purpose, and that the representations relied on were only the opinion of the defendant’s physician who attended the plaintiff, that the injury was not permanent, without evidence that the opinion was made in bad faith, and that through later developments it was discovered that the injury was permanent, the evidence of fraud is insufficient to be submitted to the jury, and the plaintiff’s motion as of nonsuit should have been allowed.
    2. Same — Consideration for release as evidence of fraud in its procurement.
    The amount of consideration paid for a release from liability for a negligent injury, to be evidence of fraud in the procurement of the release, must be so grossly inadequate as to compel the conclusion that it was practically nothing, and where it is the payment of five hundred dollars for an injury to an arm with expense of treatment, etc., the fact that the jury had awarded damages in the sum of two thousand dollars will not be held sufficient evidence of fraud in the procurement of the release under the facts of this case.
    
      Appeal by defendant from Binle, Special Judge, at May Special Term, 1929, of Mecklenburg.
    Reversed.
    Action to recover damages for personal injury sustained by plaintiff, while engaged in work a.s an employee of defendant.
    In response to issues submitted by tbe court, tbe jury found that plaintiff was injured by tbe negligence of defendant as alleged in tbe complaint; that plaintiff did not by bis own negligence contribute to bis injury as alleged in tbe answer, and that plaintiff did not assume tbe risk of bis injury, when be contracted with defendant for bis employment, as alleged in tbe answer.
    In bar of plaintiff’s recovery, in this action, defendant set out in its answer, and relied upon a release in writing, executed by tbe plaintiff, prior to tbe commencement of this action, upon tbe payment to him by tbe defendant of tbe sum of $500, of any and all causes of action which plaintiff bad against tbe defendant, at tbe date of tbe release, or which be might have thereafter, by reason of bis injury.
    Plaintiff admitted tbe execution by him of tbe release set out in tbe answer, and tbe payment to him by defendant of tbe sum of $500, as tbe consideration for said release. For tbe purpose of avoiding said release, plaintiff alleged in bis reply that be was induced to execute tbe same by tbe false representations of tbe physician employed by defendant, who operated on bis injured arm, “that said arm bad sustained an ordinary break, and that tbe operation which bad been performed on said arm by said physician, was successful, that said arm was then on tbe road to complete recovery, and that plaintiff would be able to perform bis usual physical labors within tbe course of eight or ten weeks from tbe date of tbe injury.”
    In response to issues submitted by tbe court tbe jury found that tbe release was procured by fraud, or misrepresentation as alleged in tbe reply of plaintiff, and that plaintiff is entitled to recover of defendant as damages resulting from bis injury the sum of $2,000.
    From judgment on tbe verdict that plaintiff recover of tbe defendant tbe sum of two thousand dollars, defendant appealed to tbe Supreme Court.
    
      G. T. Gap swell and Joe W. Ervin for plaintiff.
    
    
      O. H. Gover for defendant.
    
   CoNNOR, J.

Plaintiff, who is about 22 years of age, was injured while at work for defendant, at a fabric machine, on. 11 April, 1928. He was taken immediately after bis injury to a hospital, where bis injured arm was treated by Dr. Hipp, a physician, who was employed for that purpose by tbe defendant. Plaintiff remained in tbe hospital, under the professional care of Dr. Hipp, from 11 April to 24 April, 1928. Dr. Hipp, in response to plaintiff’s inquiry, told him that his injury was not permanent; that his arm would be all right within eight or ten weeks— well enough for plaintiff to return to his work.

After plaintiff was discharged from the hospital, but while he was still under the professional care of Dr. Hipp, he entered into negotiations with the attorney of defendant for the settlement of his claim for damages. Plaintiff declined to accept the sum offered by said attorney' and employed an attorney at law, as his counsel to advise him with respect to the settlement of his claim against defendant. He made a full statement to his counsel of the circumstances under which he was injured and also as to the extent of his injury. He told his counsel that he had been advised by Dr. Hipp that his injury was not permanent and that his arm would be well enough within eight or ten weeks for him to return to his work. As a result of further negotiations between plaintiff and his counsel, and the attorney for defendant, it was agreed that defendant should pay to plaintiff, in full settlement of his claim for damages the sum of $500, and that plaintiff should execute the release, which was read to plaintiff by his counsel. During these negotiations the attorney for the defendant showed to plaintiff and his counsel a letter from Dr. Hipp to the defendant, in which Dr. Hipp advised defendant that plaintiff’s injury was not permanent, and that plaintiff would be able to return to his work within eight or ten weeks from the date of the injury. Plaintiff and his counsel relied upon the opinion of Dr. Hipp, expressed both to plaintiff and to defendant, as to the extent of plaintiff’s injury. On 4 May, 1928, in the presence of his counsel, and upon his advice, plaintiff executed the release set out in defendant’s answer, and accepted from defendant the sum of $500, as the consideration for said release.

After the execution of the release by plaintiff, and prior to the commencement of this action, it developed that plaintiff’s injury is permanent; he was not able, because of his injury, to return to his former work, or to do work equally as remunerative as his former work, at the expiration of ten weeks from the date of his injury. The bones in plaintiff’s broken arm made a good union, but there was a nerve involvement which, notwithstanding several operations on plaintiff’s arm, has rendered his arm practically useless to him. None of the operations was successful. Plaintiff’s surgeon, as a witness in his behalf, expressed the opinion that no treatment, surgical or otherwise, could restore his arm to its former strength; that his injury is permanent. The jury found from evidence, to which there was no objection, and under instructions of the court, to which there was no exception, that plaintiff has sustained damages, as the result of his injury, in the sum of $2,000. The only question presented for decision by defendant’s motion, at the close of the evidence, for judgment as of nonsuit, was whether there was evidence tending to show that the release executed by plaintiff was procured under circumstances which render said release ineffectual as a bar to plaintiff’s recovery of damages in this action. The defendant assigns as error upon its appeal to this Court the refusal of the court to allow its motion.

There was no evidence tending to sustain the contention of plaintiff that the release was procured by fraud. It is doubtful whether there are allegations in the complaint sufficient to raise an issue of fraud in the procurement of the release. But conceding that the facts alleged in the complaint are sufficient to raise such issue, we are of the opinion, and so decide, that there was a want of evidence tending to show that the release was procured by fraud. The evidence shows that the negotiations for a settlement of his claim against the defendant for dámages, were begun after the plaintiff had left the hospital, and that these negotiations were initiated by the plaintiff, and not by the defendant. The facts in .this case, as shown by all the evidence, with respect to the circumstances surrounding plaintiff, at the time the settlement was made and the release signed, differentiate this case from Butler v. Fertilizer Works, 193 N. C., 632, 137 S. E., 813. In that case the negotiations for a settlement of the injured employee’s claim for damages against the defendant, were begun by its agent, and the release was procured while such employee was confined in the hospital, and before he had recovered from the shock resulting from his injury. Plaintiff did not read the release, before he signed it, and there was evidence tending to show that its contents were misrepresented to him by the agent of the defendant. At the time the release was signed, plaintiff was without the aid or advice of friends or counsel. In the instant case, the negotiations which resulted in the settlement of plaintiff’s claim, and the execution by him of the release, were begun by the plaintiff, and were conducted for him by an attorney at law, retained by him for that purpose. The good character and high professional standing of this attorney at law is conceded.

Although the jury has found that plaintiff has suffered damages in the sum of $2,000, by reason of his injury, it cannot be held that the sum of $500, paid to plaintiff by defendant, in settlement of his claim, before the commencement of this action, was grossly inadequate, and that therefore this fact alone is evidence of fraud. In Knight v. Bridge Co., 172 N. C., 393, 90 S. E., 412, it is said that “the controlling principle established by our authorities is that inadequacy of consideration- is a circumstance to be considered on the issue of fraud, and that if it is so gross that it would cause one to say that nothing was paid, it would be sufficient to be submitted to the jury without other evidence; but we have not said that a contract could be set aside as a matter of law because of gross inadequacy.” It is only when the consideration for the contract is so grossly inadequate as to cause general comment tbat nothing was received by tbe party against wbom tbe contract is alleged to be conclusive, tbat sucb consideration alone is sufficient evidence tbat tbe contract was procured by fraud. Tbe payment of $500, in settlement of an unliquidated claim for damages, before liability bas been established, and without tbe delay and expense necessarily incident to litigation, is not grossly inadequate, although tbe damages are thereafter assessed by a jury, in an action involving issues of liability as well as an issue of damages, at $2,000. In tbe instant case, tbe evidence shows tbat defendant paid to plaintiff, not only tbe sum of $500, but also all expenses incurred by him, both before and after tbe execution of tbe release, for hospital and surgical services, required because of bis injury.

Tbe fact as shown by the evidence tbat plaintiff and bis attorney relied upon tbe representations made to both tbe plaintiff and tbe defendant, by Dr. Hipp, tbe physician employed by defendant to treat plaintiff’s injured arm, with respect to plaintiff’s recovery from bis injury, was not sufficient to avoid tbe release. Both plaintiff and bis attorney understood from tbe very nature of tbe representations tbat they were based upon tbe opinion which Dr. Hipp bad formed of tbe extent and character of plaintiff’s injury. There was no evidence tending to show tbat tbe representations were not made in good faith, upon an opinion honestly formed, after a skillful treatment of plaintiff’s injured arm by Dr. Hipp. There was no evidence tending to show tbat tbe representations as to bis opinion with respect to plaintiff’s recovery from bis injury, were made by Dr. Hipp to induce plaintiff to settle bis claim against tbe defendant for damages. There was no evidence tending to show a misrepresentation by Dr. Hipp as to tbe condition of plaintiff’s arm, at tbe date of tbe representation; all tbe representations were as to tbe future. All tbe evidence shows tbat Dr. Hipp is a highly reputable physician, residing in tbe city of Charlotte, N. C.; tbat as tbe result of bis treatment of plaintiff’s broken arm, there was a good union of tbe broken bones, and tbat tbe condition of plaintiff’s arm at tbe time of tbe trial is due to a nerve involvement which was discovered after tbe date of tbe release. When plaintiff accepted tbe sum of $500, in settlement of bis claim against defendant for damages, and executed tbe release, before tbe expiration of tbe time within which Dr. Hipp advised him tbat be would be able to return to work, be did so .at bis risk, tbat bis damages might exceed tbe sum voluntarily paid by defendant.

In McMahan v. Spruce Co., 180 N. C., 636, 105 S. E., 439, there was evidence of an actual misrepresentation of plaintiff’s condition, resulting from bis injury, by tbe physician who was employed by defendant to treat bis injury. There was also evidence of fraud in procuring tbe release and a want of consideration therefor. It was held that the evidence was properly submitted to the jury. The decision in that case is not authoritative in the instant ease.

It has been repeatedly held by this Court that a release executed by an injured party, and based on a valuable consideration, is a complete defense to an action for damages for the injuries. It is only when it is alleged and established by evidence that the release was procured by fraud, or duress, or oppression that it can be avoided. In the instant ease, we find no evidence upon which the plaintiff can be relieved from the terms of his contract with defendant, that upon the payment to him of the sum of $500, he would release defendant of any and all causes of action which he had, or which he might thereafter have, against defendant for damages by reason of his injury sustained on 11 April, 1928. Plaintiff having chosen to settle his claim before the full extent of his injury had been ascertained, thereby taking the risk that his damages might exceed the sum paid to him in settlement of his claim, must abide his contract. He has failed to show any facts upon which this Court, which has been jealous of the rights of injured employees to damages for which the employer is liable, may relieve him of the effect of his contract. The judgment must be

Reversed.