Court Opinion

ID: 3913082
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:41:26.6069+00
Date Added: 2024-06-11T13:43:06.376254
License: Public Domain

It seems to me there are at least two obstacles to an affirmance of this judgment. One is that the pleadings did not present a cause of action to cancel the release of the cause of action for damages; the grounds for cancellation being presented only by way of avoidance of the release. The other is that, as a matter of law, the evidence properly appraised, in connection with the terms of the release, was insufficient to authorize cancellation of the release.
Both of these questions are rendered difficult by reason of decisions apparently supporting contrary answers.
The first question, it is believed, should be controlled by the proper answer to this further question: Did the plaintiff, under the record, have a cause of action for damages? The question is not whether such cause of action was alleged, but did it, in fact, exist? Within the purview of the question it may be granted that such cause of action did exist, unless it ceased to do so as the legal effect of the release.
If the release was valid the cause of action for damages ceased to exist from the time of its execution. If the release was void, it, of course, had no effect on the continued existence of the cause of action; and plaintiff did have a cause of action for damages at the time of filing the suit. Example, forgery. But the release was in fact executed. If its execution was induced by fraud the release was voidable, but not void. Until its invalidity was adjudicated, it had precisely the same effect upon the pre-existent cause of action as if it was valid. Limitation could not run against such pre-existent cause of action for the very obvious reason that there was no such cause of action upon which limitation could operate. Deaton v. Rush, 113 Tex. 176, 252 S.W. 1025; Port Arthur Rice Milling Co. v. Beaumont Rice Mills, 105 Tex. 514,143 S.W. 926, 148 S.W. 283, 150 S.W. 884, 152 S.W. 629; Moore v. Snowball,98 Tex. 16, 81 S.W. 5, 66 L.R.A. 745, 107 Am. St. Rep. 596. That when a cause of action is suspended by a deed, release or other executed contract, not void, but voidable, the cause of action is as though it had never existed, until the *Page 922 
instrument which bars it is adjudged to be invalid, is a proposition supported more or less directly, but certainly, by the three decisions above cited and among others, the following: Williams v. Pure Oil Co.,124 Tex. 341, 78 S.W.2d 929; Chicago, T.  M. C. Ry. Co. v. Titterington, 84 Tex. 218, 19 S.W. 472, 31 Am. St. Rep. 39; Stanley v. Schwalby, 85 Tex. 348, 19 S.W. 264, 265; McCampbell v. Durst,15 Tex. Civ. App. 522, 40 S.W. 315; Cleveland State Bank v. Gardner, Tex.Com.App., 286 S.W. 173; Southwestern Lumber Co. v. Evans, Tex. Civ. App. 275 S.W. 1078; American Exchange Nat. Bank v. Keeley, Tex. Civ. App.39 S.W.2d 929; Humble O.  R. Co. v. Andrews, Tex. Civ. App.285 S.W. 894; Stewart v. Miller, Tex. Civ. App. 271 S.W. 311; Universal Life  Acc. Ins. Co. v. Johnson, Tex. Civ. App. 120 S.W.2d 314.
The same proposition is impliedly, if not expressly, supported by the decisions in Rutherford v. Carr, 99 Tex. 101, 87 S.W. 815; Gilmore v. O'Neil, 107 Tex. 18, 173 S.W. 203; Eckert v. Wendel, 120 Tex. 618,40 S.W.2d 796, 76 A.L.R. 855, which were distinguished on the ground that they dealt with void, and not merely voidable, instruments.
Under these authorities, the existence of any cause of action for damages such as alleged in this case depended upon the nonexistence of a release, or, if any, that it was absolutely void and not merely voidable. In other words, to the only cause of action alleged in plaintiff's petition, the release itself was conclusive as a bar to recovery, wholly without regard to the existence of a cause of action (not alleged) to have it adjudged invalid. To express the idea still differently, since the right of plaintiff to enforce any cause of action for damages was wholly contingent upon the successful assertion of another and different cause of action — the cancellation of the release — it was essential for plaintiff to allege in his petition a cause of action for such cancellation, as well as the contingent cause of action for damages for tort. The cause of action for cancellation of the release was the primary cause of action. The other only incident.
No cause of action for cancellation of the release was alleged. Plaintiff did not allege it, his petition making no mention of it; and, of course, the defendant, relying upon the release, did not attempt to allege a cause of action for its cancellation. The release was pleaded by the defendant not as a cause of action, but as a defense against the otherwise conclusive effect of the release. Fraud was pleaded by the plaintiff, not in his petition as part of a cause of action for cancellation of the release, but in his supplemental petition as a defense. As just said, the allegations of fraud appear only in plaintiff's supplemental petition. In our system of pleading, it is never the function of plaintiff's supplemental petition to include allegations of a cause of action as a basis for the judgment sought by the suit. Crescent Ins. Co. v. Camp, 64 Tex. 521; Sanger Bros. v. Barrett, Tex. Civ. App. 221 S.W. 1087; Parkinson v. Sears, Tex. Civ. App. 290 S.W. 556; San Antonio U.  G. R. Co. v. Johnson et al., Tex. Civ. App.1 S.W.2d 350; Bradley v. Fagala, Tex. Civ. App. 25 S.W.2d 255; Stephens v. Anson Motor Co., Tex. Civ. App. 21 S.W.2d 699; Thompson v. Caldwell, Tex. Civ. App. 22 S.W.2d 720; Atlas Metal Works v. City of  Dallas, Tex. Civ. App. 30 S.W.2d 431, 432; St. L.  S.W. Ry. Co. v. Larkin, Tex. Civ. App. 34 S.W.2d 693; Smith v. Fort, Tex. Civ. App.  58 S.W.2d 1080; First Nat. Bank v. Boyd, Tex. Civ. App. 75 S.W.2d 928, and cases cited. The subject matter of a supplemental petition is purely defensive against the operation of affirmative defenses alleged by  defendant. In this case plaintiff's supplemental petition purports to  contain nothing other than matters of defense against the release.
It must be admitted that the law books are full of cases just like this one. However, so far as we have found they do not discuss the question now under consideration. It seems to have been assumed that whether a release be void or voidable, the facts rendering it void or voidable are pleadable as matters of defense in a suit seeking to recover only upon the released cause of action. But if there be no distinction in this respect between a void and voidable release then it is difficult to understand why the Supreme Court in Gilmore v. O'Neil, supra, and more especially in Eckert v. Wendel, supra, labored so to make plain such difference as the basis for distinguishing those cases from the others above cited. The distinction declared by these decisions between void and voidable contracts as applicable to the very question of pleading under consideration seems to me to be decisive.
No distinction in principle is perceivable in the application of the law to void and *Page 923 
voidable judgment on the one hand, and to void and voidable releases of causes of action on the other. Can one under the necessity of maintaining a bill of review, in order to adjudicate the invalidity of a judgment, and, contingently thereupon, to recover upon the cause of action barred by the judgment, simply allege the nonexistent cause of action, and when the judgment is pleaded in defense, collaterally attack it by a supplemental petition? That, it seems to me, would hardly be contended. Such could in no proper sense be denominated the required suit, in equity, directly attacking the judgment which is universally recognized as necessary. Neither would it seem that the pleadings in this case show that the suit is one asserting a cause of action in equity for the direct purpose of setting aside the release. The attack upon the release may, not inappropriately, be denominated collateral, in precisely the same sense as would be the attack upon a judgment under similar pleadings.
It is true the distinctions involved in the conclusion expressed may, as a practical matter, in a majority of the cases not result in injury to the parties to the suit. That no doubt accounts for the great number of cases which have apparently assumed the correctness of procedure similar to that employed in this case. The apparent lack of harmony in the decisions manifestly does not result from any difference in applicable provisions of the law. It is important to understand the law and correctly apply it in every case, regardless of the fact that no party to a particular suit may be injured by a failure to do so.
If we look alone to the record proper, and to all of such record, it clearly shows that the cause of action upon the establishment of which any judgment for the plaintiff must necessarily rest, was not alleged in plaintiff's original petition (the trial pleading) nor any trial amendment, nor was any part of the subject matter of such cause of action alleged in any pleadings of the plaintiff, except as purportedly matters of defense in his First Supplemental Petition. To the question of whether a judgment is supported by such a record, it seems to me, there ought to be but one answer in a court of law.
In this case, the injury occurred on March 24, 1937. The release of the cause of action was executed April 30, 1937. Let us suppose the suit had not been filed until March 25, 1939. Would a plea of limitation have been good? No; because after April 30, 1937, no cause of action had existed upon which the statutes of limitations could operate to effect a bar. Because the suit was actually filed before either cause of action, if existing, could have been barred, certainly does not affect the question of the continuing nonexistence of the released cause of action, nor the necessity of alleging the only existent cause of action. Suppose the plaintiff had been continued in the employment of the defendant for, say, 3 1/2 years, and had then been "fired" and became possessed of information that the defendant had from the first never intended to give him permanent employment, would his cause of action for damages be barred? If not, why? Is it not the obvious answer that he had no such cause of action to become barred? And the only cause of action which he would have had was not barred, being one to which the applicable period of limitation was four years and even further tolled for such time, if any, as such cause of action may have remained undiscovered by reason of defendant's fraud? Had plaintiff delayed the filing of suit until more than two years after the date of his injury, it is a safe assumption that he would not have brought this suit as he did merely alleging as the basis of the only relief sought, the released cause of action. Had he done so, and the defendant had merely pleaded limitation, he would have been under the necessity of admitting, in effect, that he had no such cause of action as he had alleged. He would have been confronted with the necessity of pleading another and different cause of action — one so certainly so that even the statutes of limitation applicable to it are different. But the mere time he files his suit cannot change the fact that he must allege in his petition the cause of action upon which any judgment is to be rendered in his favor. That, it is plain, he has not done in this case.
The other question, which assumes the sufficiency of the pleadings, is complicated by the decisions almost as much as the first one. Here is the question: Can one asserting a cause of action to cancel the release of a cause of action for damages for tort, on the ground that such release, although duly executed, was induced by a false promise of the releasee to give permanent employment to the releasor, support such cause of action by evidence of *Page 924 
the fact of the alleged false promise, when the release itself declares that no such promise was made? The question must be carefully distinguished from those wherein the fraud relates to the execution of the release as distinct from matters of inducement. In the instant case, plaintiff makes no contention that he did not read the release. He advances no theory to the effect that he was excused from being aware, at the time of its execution, of all the provisions of the instrument. The release asserted, purportedly in the words of the releasee, that "No promise of employment nor other agreement not herein expressed has been made by said Company, nor by any of its representatives, agents or employees." Can plaintiff impeach the release on the sole ground that it was induced by a fraudulent promise of employment? That is but another way of stating the question at issue. The majority opinion cites Supreme Court decisions which, on the facts, seem incapable of being distinguished. In the main, however, they declare propositions of law about which there is little room for differences of opinion. They simply assert, in effect, that since fraud voids a contract, the person defrauded cannot be held bound by any of the provisions of the written instrument, because it is not a contract. The logic of that proposition is not debatable. But it is not a question of being bound, or not bound, by a particular provision in the purported contract as a contract. It is rather a question of the insufficiency or inadequacy of evidence to establish the alleged fraud. One of the legal elements of the fraud, alleged to have consisted of the false promise of employment, was "that the releasor had a right to rely upon it." 53 C.J. sec. 35, p. 1219. As further said in the same connection: "A releasor, in order to avoid a release on the ground of fraud or misrepresentation, must show that he had a right to rely on the misrepresentation, and that he did in fact rely on it in executing the release." Plaintiff's declaration in the release that no promise of employment had been made him was not induced by any fraud. Since, if there was no promise of employment, there could be no fraudulent promise of employment, plaintiff voluntarily declared in the release the nonexistence of any such fraud as now asserted. The legal effect of such voluntary declaration included at least the admission that he did not rely upon such promise. It shows that he had no right to rely upon it. No effect should be given to his testimony to the contrary. The principle involves a species of estoppel. To permit one to make solemn declarations, in a contract not tainted by any fraud relating to the fact or manner of its execution, and then permit him to avoid the very contract by falsifying his own declarations, is contrary to the most elementary principles of justice.
This view is believed to be supported by two recent opinions of the Supreme Court. Distributors Inv. Co. v. Patton, 130 Tex. 449, 110 S.W.2d 47
and Texas  P. R. Co. v. Poe, 115 S.W.2d 591. The Poe case is different from this in that the fraud relied upon related to the execution of the instrument. The Supreme Court did not determine that the release was not voidable because of fraud in its execution, but because Poe kept in his possession for three or four days, and cashed, a check, the terms of which advised him that the release was not a receipt as he supposed, the court held him conclusively bound by the presumed knowledge furnished by the terms of the check.
The other case, it is believed, is directly in point. It must, of course, be read with the distinction in mind, that it involved, not fraud in the execution of an instrument by which the releasor did not know and was excused from knowing the terms of the writing. There are not a great number of decisions in addition to those cited supporting this view, but there are some, of which may be mentioned the following: Lane v. Urbahn, Tex. Civ. App. 246 S.W. 1070; Cassel v. West, Tex. Civ. App. 98 S.W.2d 437; Wright v. Couch, Tex. Civ. App. 54 S.W.2d 207; Murray Co. v. Putman,61 Tex. Civ. App. 517, 130 S.W. 631; Lerner v. Roth, Sup., 136 N.Y.S. 61; Boswell v. Johnson, 5 Ga. App. 251, 62 S.E. 1003; Kreshover v. Berger,62 Misc. 613, 116 N.Y.S. 20. *Page 925