Dice v. Akron, Canton Youngstown Co

• Decision Date: 04 February 1952
• Docket Number: No. 374,374
• Parties: DICE v. AKRON, CANTON & YOUNGSTOWN R. CO
• Court: U.S. Supreme Court

342 U.S. 359

72 S.Ct. 312

96 L.Ed. 398

DICE

v AKRON, CANTON & YOUNGSTOWN R. CO.

No. 374.

Argued Dec. 3, 4, 1951.

Decided Feb. 4, 1952.

Mr. Rice A. Hershey, Akron, Ohio, for petitioner.

Mr. William A. Kelly, Akron, Ohio, for respondent.

Opinion of the Court by Mr. Justice BLACK, announced by Mr. Justice DOUGLAS.

Petitioner, a railroad fireman, was seriously injured when an engine in which he was riding jumped the track. Alleging that his injuries were due to respondent's negligence, he brought this action for damages under the Federal Employers' Liability Act, 35 Stat. 65, 45 U.S.C. § 51 et seq., 45 U.S.C.A. § 51 et seq., in an Ohio court of common pleas. Respondent's defenses were (1) a denial of negligence and (2) a written document signed by petitioner purporting to release respondent in full for $924.63. Petitioner admitted that he had signed several receipts for payments made him in connection with his injuries but denied that he had made a full and complete settlement of all his claims. He alleged that the purported release was void because he had signed it relying on respondent's deliberately false statement that the document was nothing more than a mere receipt for back wages.

After both parties had introduced considerable evidence the jury found in favor of petitioner and awarded him a $25,000 verdict. The trial judge later entered judgment notwithstanding the verdict. In doing so he reappraised the evidence as to fraud, found that petitioner had been 'guilty of supine negligence' in failing to read the release, and accordingly held that the facts did not 'sustain either in law or equity the allegations of fraud by clear, unequivocal and convincing evidence.'¹ This judgment notwithstanding the verdict was reversed by the Court of Appeals of Summit County, Ohio, on the ground that under federal law, which controlled, the jury's verdict must stand because there was ample evi- dence to support its finding of fraud. The Ohio Supreme Court, one judge dissenting, reversed the Court of Appeals' judgment and sustained the trial court's action, holding that: (1) Ohio, not federal, law governed; (2) under that law petitioner, a man of ordinary intelligence who could read, was bound by the release even though he had been induced to sign it by the deliberately false statement that it was only a receipt for back wages; and (3) under controlling Ohio law factual issues as to fraud in the execution of this release were properly decided by the judge rather than by the jury. 155 Ohio St. 185, 98 N.E.2d 301. We granted certiorari because the decision of the Supreme Court of Ohio appeared to deviate from previous decisions of this Court that federal law governs cases arising under the Federal Employers' Liability Act. 342 U.S. 811, 72 S.Ct. 59.

First. We agree with the Court of Appeals of Summit County, Ohio, and the dissenting judge in the Ohio Supreme Court and hold that validity of releases under the Federal Employers' Liability Act raises a federal question to be determined by federal rather than state law. Congress in § 1 of the Act granted petitioner a right to recover against his employer for damages negligently inflicted. State laws are not controlling in determining what the incidents of this federal right shall be. Chesapeake & Ohio R. Co. v. Kuhn, 284 U.S. 44, 52 S.Ct. 45, 76 L.Ed. 157; Ricketts v. Pennsylvania R. Co., 2 Cir., 153 F.2d 757, 759, 164 A.L.R. 387. Manifestly the federal rights affording relief to injured railroad employees under a federally declared standard could be defeated if states were permitted to have the final say as to what defenses could and could not be properly interposed to suits under the Act. Moreover, only if federal law controls can the federal Act be given that uniform application throughout the country essential to effectuate its purposes. See Garrett v. Moore-McCormack Co., 317 U.S. 239, 244, 63 S.Ct. 246, 250, 87 L.Ed. 239, and cases there cited. Releases and other devices designed to liquidate or defeat injured employees' claims play an important part in the federal Act's administration. Compare Duncan v. Thompson, 315 U.S. 1, 62 S.Ct. 422, 86 L.Ed. 575. Their validity is but one of the many interrelated questions that must constantly be determined in these cases according to a uniform federal law.

Second. In effect the Supreme Court of Ohio held that an employee trusts his employer at his peril, and that the negligence of an innocent worker is sufficient to enable his employer to benefit by its deliberate fraud. Application of so harsh a rule to defeat a railroad employee's claim is wholly incongruous with the general policy of the Act to give railroad employees a right to recover just compensation for injuries negligently inflicted by their employers. And this Ohio rule is out of harmony with modern judicial and legislative practice to relieve injured persons from the effect of releases fraudulently obtained. See cases collected in note, 164 A.L.R. 402—415. See also Union Pacific R. Co. v. Harris, 158 U.S. 326, 15 S.Ct. 843, 39 L.Ed. 1003; Callen v. Pennsylvania R. Co., 332 U.S. 625, 68 S.Ct. 296, 92 L.Ed. 242; Chesapeake & O.R. Co. v. Howard, 14 App.D.C. 262, affirmed 178 U.S. 153, 20 S.Ct. 880, 44 L.Ed. 1015; Graham v. Atchison, T. & S.F.R. Co., 9 Cir., 176 F.2d 819. We hold that the correct federal rule is that announced by the Court of Appeals of Summit County, Ohio, and the dissenting judge in the Ohio Supreme Court—a release of rights under the Act is void when the employee is induced to sign it by the deliberately false and material statements of the railroad's authorized representatives made to deceive the employee as to the contents of the release. The trial court's charge to the jury correctly stated this rule of law.

Third. Ohio provides and has here accorded petitioner the usual jury trial of factual issues relating to negligence. But Ohio treats factual questions of fraudulent releases differently. It permits the judge trying a negligence case to resolve all factual questions of fraud 'other than fraud in the factum.' The factual issue of fraud is thus split into fragments, some to be determined by the judge, others by the jury.

It is contended that since a state may consistently with the Federal Constitutional provide for trial of cases under the Act by a nonunanimous verdict, Minneapolis & St. Louis R. Co. v. Bombolis, 241 U.S. 211, 36 S.Ct. 595, 60 L.Ed. 961, Ohio may lawfully eliminate trial by jury as to one phase of fraud while allowing jury trial as to all other issues raised. The Bombolis case might be more in point had Ohio abolished trial by jury in all negligence cases including those arising under the federal Act. But Ohio has not done this. It has provided jury trials for cases arising under the federal Act but seeks to single out one phase of the question of fraudulent releases for determination by a judge rather than by a jury. Compare Testa v. Katt, 330 U.S. 386, 67 S.Ct. 810, 91 L.Ed. 967.

We have previously held that 'The right to trial by jury is 'a basic and fundamental feature of our system of federal jurisprudence" and that it is 'part and parcel of the remedy afforded railroad workers under the Employers' Liability Act.' Bailey v. Central Vermont R. Co., 319 U.S. 350, 354, 63 S.Ct. 1062, 1064, 87 L.Ed. 1444. We also recognized in that case that to deprive railroad workers of the benefit of a jury trial where there is evidence to support negligence 'is to take away a goodly portion of the relief which Congress has afforded them.' It follows that the right to trial by jury is too substantial a part of the rights accorded by the Act to permit it to be classified as a mere 'local rule of procedure' for denial in the manner that Ohio has here used. Brown v. Western R. Co., 338 U.S. 294, 70 S.Ct. 105, 94 L.Ed. 100.

The trial judge and the Ohio Supreme Court erred in holding that petitioner's rights were to be determined by Ohio law and in taking away petitioner's verdict when the issues of fraud had been submitted to the jury on conflicting evidence and determined in petitioner's favor. The judgment of the Court of Appeals of Summit County, Ohio, was correct and should not have been reversed by the Supreme Court of Ohio. The cause is reversed and remanded to the Supreme Court of Ohio for further action not inconsistent with this opinion.

It is so ordered.

Reversed and remanded with directions.

Mr. Justice FRANKFURTER, whom Mr. Justice REED, Mr. Justice JACKSON and Mr. Justice BURTON join, concurring for reversal but dissenting from the Court's opinion.

Ohio, as do many other States,¹ maintains the old division between law and equity as to the mode of trying issues, even though the same judge administers both. The Ohio Supreme Court has told us what, on one issue, is the division of functions in all negligence actions brought in the Ohio courts: 'Where it is claimed that a release was induced by fraud (other than fraud in the factum) or by mistake, it is * * * necessary, before seeking to enforce a cause of action which such release purports to bar, that equitable relief from the release be secured.' 155 Ohio St. 185, 186, 98 N.E.2d 301, 304. Thus, in all cases in Ohio, the judge is the trier of fact on this issue of fraud, rather than the jury. It is contended that the Federal Employers' Liability Act requires that Ohio courts send the fraud issue to a jury in the cases founded on that Act. To require Ohio to try a particular issue before a different fact-finder in negligence actions brought under the Employers' Liability Act from the fact-finder on the identical issue in every other negligence case disregards the settled distribution of judicial power between Federal and State courts where Congress authorizes concurrent enforcement of federally-created rights.

It has been settled ever since the Second Employers' Liability Cases (Mondou v. New York, N.H. & H.R. Co.) 223 U.S. 1, 32 S.Ct. 169, 56 L.Ed. 327, that no State...