Barbarich v. Chicago, M., St. P. & P. Ry. Co.

• Decision Date: 22 March 1932
• Docket Number: 6899.
• Parties: BARBARICH v. CHICAGO, M., ST. P. & P. RY. CO. et al.
• Court: Montana Supreme Court

9 P.2d 797

92 Mont. 1

BARBARICH v. CHICAGO, M., ST. P. & P. RY. CO. et al.

No. 6899.

Supreme Court of Montana

March 22, 1932

Appeal from District Court, Lewis and Clark County; W. H. Poorman Judge.

Action by Tony Barbarich against the Chicago, Milwaukee, St. Paul & Pacific Railway Company and others. From the judgment plaintiff appeals.

Reversed and remanded with directions.

R Lewis Brown, of Butte, for appellant.

Murphy & Whitlock, of Missoula, for respondents.

MATTHEWS J.

In June, 1930, Wellington D. Rankin, Esq., commenced an action against the Chicago, Milwaukee, St. Paul & Pacific Railway Company to recover damages for injuries received by the plaintiff, Tony Barbarich, while in the employ of the defendant company. A demurrer was sustained to the complaint on the sole ground that causes of action were therein improperly united, and plaintiff was granted time within which to amend, but no amended complaint was filed.

Negotiations between Attorney Rankin and A. N. Whitlock, of counsel for the defendant company, finally resulted in an offer by the latter to pay $500 in full settlement. On or about November 4, 1930, plaintiff being present, Rankin called Whitlock on the long-distance telephone to inquire as to whether or not the defendant would not make a better offer; the reply was in the negative. Holding the connection, Rankin consulted with his client and was advised that Barbarich desired to go to Chicago to live with his brother and would accept the $500 if the company would also issue him a pass to Chicago. Rankin communicated the counter offer to Whitlock, who stated that he would recommend such a settlement to the claim department, and this promise was communicated by Rankin to his client and found to be satisfactory. The recommendation was made at once and promptly acted upon by the issuance of a draft for the money and the pass, which were duly delivered to Rankin on December 5, 1930. Barbarich had returned to his home in Butte, and Rankin promptly advised him that "your check and pass are here" and requested him to come to Helena and settle the matter. Receiving no reply, Rankin called upon his client on December 10 when he was advised that Barbarich had received a letter from his brother telling him to "stay where you are," and that, consequently, the settlement was off.

On December 8, without discharging his original attorney or notifying him of the intended action, Barbarich consulted R. Lewis Brown, Esq., of Butte, who, without knowledge of the action pending in Lewis and Clark county, commenced a similar action in Silver Bow county; the following day the plaintiff personally, without advising Rankin, his attorney of record, filed a praecipe here for the dismissal of the action "without prejudice," and on notice thereof the defendant filed its motion for dismissal of the action "upon the merits" on the ground that the parties had entered into an agreement to "settle and compromise" the action, and that the terms of the agreement had been "fully carried out by the defendant."

On a hearing had it was admitted that Rankin still represented the plaintiff and still held the draft and pass; the defendant offered to pay $500 in cash in lieu of the former, which offer was rejected. The court sustained defendant's motion and a judgment on the merits "with prejudice" was duly entered. Plaintiff has appealed from the judgment.

The question presented is as to whether or not the facts warrant the judgment, or, in other words, did the agreement, shown to have been made, extinguish plaintiff's cause of action for damages for personal injuries alleged to have been sustained?

Plaintiff contends that the facts show but an accord without satisfaction, which is ineffectual in so far as the motion is concerned; while the defendant asserts that there was a binding compromise agreement constituting a bar to the action.

The law favors the settlement of disputes out of court, either before or after an action is begun, and when the parties are shown to have made a valid settlement they will be held thereto, in the absence of fraud or mistake (Norum v. Ohio Oil Co., 83 Mont. 353, 272 P. 534); this is especially true in tort actions (Black v. Martin, 88 Mont. 256, 292 P. 577, 580). Here the plaintiff made an offer of settlement which was accepted by the defendant, and he should be bound thereby; but having refused to settle, his agreement warrants the dismissal of his action only if the agreement effected the extinction of his cause of action.

While courts and text-writers attempt to distinguish between "compromise" and "accord," and between "compromise and settlement" and "accord and satisfaction," the distinctions drawn are generally found to be unsound in the light of the general rules applied. The term "compromise" usually carries the idea of a mutual yielding of opposing claims; the surrender of a claimed right and a like surrender of some counterclaim (Hunt on Accord & Satisfaction,§ 76, p. 160; Rankin v. Schofield, 70 Ark. 83, 66 S.W. 197; Gregg v. Weathersfield, 55 Vt. 385); while an "accord" is the substitution of an agreement "between the party injuring and the party injured" in lieu of the original obligation (see 1 R. C. L. 177); but the term "compromise" is often defined as "to compound," "to settle," "to accord" (12 C.J. 314, note c).

In 12 Corpus Juris, at page 315, it is said: "The distinction which is usually made between compromise and settlement, and accord and satisfaction, is that while an unexecuted accord does not afford a bar to the original cause of action, a valid compromise agreement, although executory, operates as a bar. Since, however, there are many cases of accord and satisfaction in which the promise of one or both of the parties is accepted as satisfaction and extinguishes the original demand, and conversely there are cases of compromise in which courts have stated broadly that the original cause of action is not barred until the compromise is executed, this distinction is of little practical value. Another distinction drawn *** is that in the case of an accord and satisfaction the claim involved may be undisputed, while in the case of compromise the claim must be in dispute. This distinction is obviously invalidated by the fact that by the weight of authority an accord and satisfaction may be had as to unliquidated demands. As a matter of fact, in many cases there has been interchangeable use of the terms 'accord and satisfaction' and 'compromise and settlement."'

In the foregoing quotation the agreement which, "although executory," is said to operate as a bar, is not a "compromise" but a "compromise agreement," wherein the new agreement or promise is accepted in satisfaction of the original obligation, while a mere "compromise," like an "accord," must be executed in order to be a bar. Hunt on Accord & Satisfaction, p. 161. Here again it is demonstrated that the distinctions drawn have little weight, for it is the intention of the parties that is controlling, and an accord, on which an agreement is reached to the effect that the injured party will accept the promise of the injuring party, will extinguish the original claim or demand as effectively as will a compromise agreement. 1 C.J. 567; 1 R. C. L. 200. In other words, the parties may either compromise by agreement to accept mutual promises, or may reach an accord by which a promise is accepted in satisfaction of the original obligation; thus again the distinction between a compromise agreement and accord and satisfaction is of little practical importance.

In an exhaustive note in 100 Am. St. Rep. (note c, at page 417), the manner in which the phrases "accord and satisfaction" and "compromise and settlement" are used interchangeably, as stated in the foregoing quotation from Corpus Juris, is exemplified thus: "The rule that causes of action for damages arising from the commission of torts can be compromised and settled by means of an accord and satisfaction seems to be universally admitted." Citing cases. "The damages arising from the commission of torts being generally of an unliquidated nature and almost invariably disputed, form an ideal subject matter for accord and satisfaction." See also 1 R. C. L. 179, and Hunt on Accord and Satisfaction, 49.

The author of the text in California Jurisprudence says that accord and satisfaction must be carefully distinguished from "compromise which is always based on a disputed claim"; he then quotes the above declaration that because the claims in personal injury cases are almost invariably disputed they are ideal subjects for an accord and satisfaction, and closes the paragraph with, "and it has been held in California that there may be satisfaction of a tort liability for personal injuries," citing Urton v. Price, 57 Cal. 270, to which reference will later be made. 1 Cal. Jur. 125.

Our Codes do not employ the term "compromise" in the sense here used; while therein executors, administrators, and guardians are authorized to "compromise" claims (sections 10264 and 10418, Rev. Codes 1921), and a joint debtor is permitted to "compromise with a creditor" (section 9768), and provision is made for an "offer of compromise" in a pending action (section 9770), the only further reference to the term is found in the provision that "a written agreement of compromise or settlement" need not be under seal (section 10582). Such a written agreement of compromise and settlement of a personal injury action is construed in Black v. Martin, above; but, as in that case there was a full "settlement" or "satisfaction" under the agreement, the mere designation of the agreement as a "compromise" was wholly immaterial. It is there pointed out that the intention of the parties is controlling, and,...