Court Opinion

ID: 6738415
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:20:16.320641+00
Date Added: 2024-06-11T16:01:52.907135
License: Public Domain

On Petition for Rehearing.
Christianson, J.
Plaintiff has filed a petition for a rehearing. In such petition he contends that “the statutory provisions referred to in the opinion as to the necessity of returning the consideration before suit do not apply in this case, but apply particularly to actions for rescission and cancelation of contracts.” We are unable to agree with this contention. These statutory provisions, by their express terms, apply to all contracts. They are provisions of substantive, and not of adjective, law. They relate to the right, and not to the remedy. They apply not only in suits for rescission or cancelation of contracts, but in any suit wherein the question arises whether a contract has been rescinded or remains effective. It seems self-evident that when a cause of action has been settled, it is extinguished and merged in the contract of settlement. If such contract is valid, it concludes the right of the parties for all time. And if it is voidable for fraud, there is no reason why the party ivho seeks to avoid it should not do what the law requires to be done by one who seeks to avoid a fraudulent contract.
Plaintiff again argues that this court ought to adopt the rule that a party who seeks to repudiate a settlement for personal injuries may be permitted to sue upon the original cause of action without returning or tendering the consideration, received, and that by allowing credit upon the verdict the same purpose is accomplished. In this connection, he argues that the payment of a consideration for a release *276constitutes an implied admission of liability by the party who makes the payment. And in the instant case it is asserted that “there was an implied admission of liability to the extent of $375.” And that “the amount so paid is conceded to be due, whatever the result of the litigation.” While the theory just advanced has been suggested in one of the cases dealing with this subject, it is, in our opinion, entirely unsound. The law favors settlements and compromises. And an offer of compromise by a party who attempts to purchase peace in a controversy is privileged, and does not constitute an admission against the party who makes the offer. 1 Enc. Ev. 596, 599. It is well known to every practising attorney that compromises and settlements are by no means limited to cases wherein liability is unquestioned, but they are at least as, and probably more> frequently effected in cases where liability is doubtful or nonexistent. The cases are by no means infrequent wherein a party deems it better and less expensive to buy his peace than to be put to the trouble and expense of a lawsuit, even though no liability exists. Clearly, the fact that a compromise has been effected and one party has paid a consideration to the other should not be deemed an admission of liability on the part of the one who paid the consideration, where the party who received it seeks to repudiate the contract of settlement under which the consideration was paid.
It is next contended that, inasmuch as the defendant pleaded the release as a defense, an offer to return the consideration received by the plaintiff for the release would have been useless. In other words, it is asserted that the defendant, by pleading the release, waived the necessity of a tender. This contention is without merit. Under the Code, a release is an affirmative defense of new matter, which must be specially pleaded in order to be available. 18 Enc. Pl. & Pr. pp. 89, 90; 34 Cyc. 1094; Comp. Laws 1913, § 7448. If plaintiff’s contention is sustained, it will lead to this result; a defendant who is sued upon a cause of action which has been released must plead the release or he will be precluded from introducing the release in evidence; but if he pleads the release in defense, he waives a return of the consideration on the part of the party who executed and seeks to avoid the release. A bare statement of the contention demonstrates its unsoundness.
The plaintiff also contends that we were in error when we stated *277In the former opinion “that this release was carefully read over to the plaintiff before he signed it. He was not deceived as to its contents or its purpose. He knew that its purpose and effect was to release and discharge his right of action against the defendant. He signed the very instrument which he intended to sign.” It is true, plaintiff in answer to leading questions put to him by his'counsel stated that he did not know the contents or meaning of the instrument which be signed.
But while examined by his own counsel he also testified:
Q. Mr. Swan, who called you down to the doctor’s office at the time you made this settlement with the company ?
A. Claim agent. . . .
Q. Did you have any talk about the settlement in Doctor Watson’s office before Bodenberg came in? On the day the settlement was made ?
A. Yes, sir. ...
Q. Now that was the same day of the settlement, or the same day the settlement was made, at the time you signed the papers?
A. Yes, sir.
(The plaintiff, thereupon, testifies to the effect that the claim agent called Bodenberg,' the interpreter.) He further testified:
Q. The claim agent first talked to Bodenberg and then what • did Bodenberg say to you?
A. I wanted more money than the claim agent would give to me.
Q. What did Bodenberg then tell you ?
A. There was $50 between us, and the claim agent said, “Let’s split that $50,” and I said “All right.”
During the course of plaintiff’s cross-examination the court propounded this question: “How did you happen to be talking about that (the matter of a job) ?”
Plaintiff answered: “I wanted to get $600 and a light job and they just jewed me down to $315 and a light job.”
He further testified:

Q. At the time that you got this $875 and signed this release you. Tcneiv you were settling with the company f

*278
A. Tes.

Q. You knew at the time you settled you had the rupture, didn’t you?
A. Yes, sir.
Some reference is also made in plaintiff’s testimony to the effect that he wanted the claim agent to give “it on black and white,” and that in reply the claim agent “knocked on his breast” and said, “I am standing good for it, that you get a light job.”
The claim agent, Mulcahy, testified:
I think I went to Mr. Swan’s house and he came to doctor’s office with me, or we telephoned, either one of those. We had had some previous conversation regarding a settlement, and he wanted on that day $500, but I told him I couldn’t pay him that. I offered $300 and to pay the doctor’s bill and buy him a truss and also for an operation if he wanted it. He stated he didn’t want an operation, so we finally got down to business and he accepted $375.
Q.'Was Mr. Rodenberg present?
A. Yes, sir.
Q. Were you talking to Mr. Rodenberg in English and then he would translate it to Swan, then Swan talk to him and Mr. Rodenberg translate back to you?
A. Yes.
‘ Q. And as you talked about all the conversation took place between you and Mr. Rodenberg, the interpreter?
A. Yes, he was acting as interpreter for Swan.
Q. Do you recollect the testimony of Mr. Rodenberg as to a light job?
A. Yes, sir.
Q. Do you recollect just what the conversation was about the job; how it came up?
A. When Mr. Rodenberg was reading the release to him and explaining it to bim, and when he came to where it states, There is no promise for future employment to have been made as a part consideration of the release, Swan objected to that part and asked if I couldn’t leave that out, and I told him, “no,” the company wouldn’t make any promises of any future employment whatever; that it had to be just *279as tbe release was, but I, myself, would use my influence to see he got a job.
Rodenberg, who acted as interpreter between the claim agent and the plaintiff at the time the release was executed, testified as follows:
Q. Was there anything said, Mr. Rodenberg, by Mr. Mulcahy and interpreted by you to Mr. Swan as to whether or not the company would put any provisions in this settlement as to a job ?
A. Yes, there was something said..
Q. What was said ?
A. The claim agerd said he couldn’t put it in the release. He couldn’t put anything in the release about the job.
Q. Did he say why he couldn’t?
A. He said the company wouldn’t accept the release.
Q. What did Mr. Mulcahy say to Mr. Swan and what did Mr. Swan say back?
A. Swan said he wouldn’t sign the release if no job was put in.
Q. What did the claim agent say ?
A. He couldn’t put it in the release, but he would get him a job.
Q. What was said next?
A. Swan, he doubted it, he would like to have it in black and white, and the agent says he couldn’t do it, as the railway company wouldn’t accept the release, and he promised him a job again absolutely.
Q. What did he say that made you think that ?
A. He said, knocking his breast, I will see you get a job.
Q. Did you interpret that to Swan?
A. I did.
When all this testimony is considered and the most favorable construction placed upon plaintiff’s testimony, it seems clear that reasonable men can reach only one conclusion; namely, that he was well aware of the transaction in which he was engaged. He knew that he was maldng a settlement for his personal injuries. Offers and counter offers were made. He signed an instrument, the purpose and effect of which was to complete the settlement. He knowingly received $875, stipulated as a consideration, and this he has kept and never offered to return. We are entirely satisfied that the instant case falls within the rule announced in our former opinion, that a party who repudiates *280a settlemént for personal injuries because of fraud and sues upon the original cause of action must return or tender a return of the consideration received. And “it is no answer to the objection that the money- has not been returned, or offered to be returned, that the amount received by the- plaintiff under the i*elease has been discounted from the verdict. Suppose the verdict had been found for the defendants, because of insufficient proof of negligence on their part, or because of contributory negligence on the part of the plaintiff, what would have been the predicament of the defendants in respect to the money paid under the release ? Clearly they could have no recourse to recover it back from the plaintiff. The plaintiff cannot be allowed both to affirm and disaffirm, according as the case may terminate; he cannot affirm for what he has received, and disaffirm and repudiate the release as to the difference between that amount and what he might expect-to recover by the verdict of the jury. He must disaffirm and rescind the release in ioto, if the facts justify him in so doing, and return or offer to return what he has received under it.” Lyons v. Allen, 11 App. D. C. 543, 552.
It is suggested that the decision deprives plaintiff of all remedy for the fraud alleged to have been practised upon him by the defendant. The suggestion, while not material, is incorrect. Even though it be true (as plaintiff assumes) that it is now too late to tender or return the consideration and sue upon the original cause of action (and 'upon this question we express no opinion), the plaintiff still has the right to maintain an action for the deceit which he claims was practised upon him, and, if he prevails in such action, he will receive all the relief to which he is justly entitled.
A rehearing is denied.