Court Opinion

ID: 3481715
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:58:22.548059+00
Date Added: 2024-06-11T14:13:26.330195
License: Public Domain

When the employer and employee, after the injury had been sustained, agreed that the facts brought the matter within the contemplation of the Workmen's Compensation Laws, they made a mistake of law.
It is a well-known legal principle that error as to legal rights may not be availed of to avoid the effect of agreements voluntarily entered into and completely executed by both parties.
In a case identical in legal principle the Court of Errors and Appeals of New Jersey, in O'Brien v. Det Forende Damphibs Selskab, 94 N.J. Law, 244, 109 A. 517, 518, said: "We think the mistake clearly one of law. Both parties knew under what circumstances the employee, O'Brien, was killed, and what he was working at, and where, when the accident happened. There was no mistake about any of the facts. They both thought, however, that the legal result of these facts was that the defendant was liable to pay compensation under the New Jersey Workmen's Compensation *Page 650 
Law. In this view of the law they were mistaken. But their mistake was a mistake of law, and does not invalidate the contract which they entered into while laboring under it, if that contract rests upon a valid consideration and was entered into voluntarily."
In article 1846 of the Civil Code appears the following: "* * * A contract, made for the purpose of avoiding litigation, can not be rescinded for error of law. * * *"
Though the facts may have created in plaintiff a right to sue in tort, there was no reason why he could not make any agreement he might see fit looking to the settlement of his tort case, and, when he and the employer agreed to settle on the basis of the compensation laws, they were within their rights in so doing. When they went further and actually made the settlement and plaintiff executed a receipt marked "Final," neither should now be heard to say that he was ignorant of his legal rights. It is not charged that any unfair practices or misrepresentations were resorted to.
If the facts of this case brought it within the doctrine announced by the Supreme Court of Louisiana in Gray v. New Orleans Dry Dock  Shipbuilding Co., 146 La. 826, 84 So. 109, my views would readily yield, of course, but I find at least one fundamental difference which distinguishes that case from the case at bar. Here the settlement had been completely carried out, and the employee, who, admittedly, could read and write, had signed a receipt bearing in large type the word "final." In the Gray Case there had been no completion of the settlement.
Though I would, of course, cheerfully and dutifully accept the views expressed in the Gray Case if I thought those views applicable and controlling here, still I could not banish the thought that no significance should have been attached to the fact, referred to in the Gray Case, that the parties failed to secure judicial approval of their agreement to settle. The court felt that that agreement to settle could be given no consideration because it had not been so approved.
If, as a matter of law, the liability, if any, had been in compensation, then the court's approval would have been necessary, but the liability, if there was any, was not in compensation, and, as a necessary result, it follows that whatever agreement the parties might have reached did not require judicial approval.
Nor can I resist respectfully suggesting that, when it was stated in the Gray Case that in any event the payments which the employer had made under the agreement to settle on the basis of the Compensation Act had created no prejudice to the employer's rights, because the court felt that in either case it was liable to the employee for some amount, there was an overlooking of the fact that it had not been determined that there was any liability in fort; and, had there been a demand for damages ex delicto, the employer might have denied liability, in which event it could not properly have been said that at the time the employer made payments under the compensation agreement it was only paying what it owed in any event.
But I feel, as I have said, that the execution of the "final receipt" distinguishes this case from the Gray Case and estops plaintiff here to assert any other or different claim than that for which he has received the final payment.
I therefore respectfully dissent.