O'Brien v. Chicago, Milwaukee & St. Paul Railway Co.

• Decision Date: 19 January 1894
• Citation: 57 N.W. 425,89 Iowa 644
• Parties: J. C. O'BRIEN, Appellee, v. CHICAGO, MILWAUKEE & ST. PAUL RAILWAY COMPANY, Appellant
• Court: Iowa Supreme Court

57 N.W. 425

89 Iowa 644

J. C. O'BRIEN, Appellee, v. CHICAGO, MILWAUKEE & ST. PAUL RAILWAY COMPANY, Appellant

Supreme Court of Iowa, Des Moines

January 19, 1894

Appeal from Linn District Court.--HON. J. H. PRESTON, Judge.

ACTION at law to recover damages for a personal injury which the plaintiff sustained while engaged in the service of the defendant as brakeman on a freight train. There was a trial by jury, and a verdict and judgment for the plaintiff. The defendant appeals.

Affirmed.

Mills & Keeler, for appellant.

The neglect of the plaintiff to return the money received under the settlement is fatal to his recovery. He can not repudiate the contract of settlement, upon the ground of fraud, while retaining all the fruits thereof. Prompt return, or tender of the money received was a condition precedent to suit upon the original cause of action. East Tenn., Va. & Ga R'y Co. v. Hayes, 10 S.E. 350; 15 S.E. 361; Kreuzen v. R'y Co., 13 N.Y.S. 588; Peterson v. R'y Co., 31 N.W. 516 (Minn.) ; Bisbee v Ham, 47 Maine, 543; Gould v. Cayuga Bank, 86 N.Y. 75; McMichael v. Kilmer, 76 N.Y. 36; Brown v. Hartford Ins. Co., 117 Mass. 479; Schiffer v. Dietz, 83 N.Y. 300; Bairds v. Mayor, etc., 96 N.Y. 598; Cobb v. Hatfield, 46 N.Y. 536; Rigdon v. Walcott, 31 N.E. 161 (Ill.) ; Deane v. Lockwood, 115 Ill. 490; Strong v. Lord, 107 Ill. 25; Estabrook v. Swett, 116 Mass. 303; Coolidge v. Brigham, 42 Mass. 550; Kimball v. Cunningham, 4 Mass. 502; Merrill v. Wilson, 33 N.W. 721 (Mich.) ; 1 Bigelow on Frauds [Ed. 1888], 420; Van Vechten v. Smith, 59 Iowa 177. The money was paid upon the settlement, as consideration therefor, and not as a mere gratuity. The court required the jury to allow it as so much paid on account. This instruction was radically erroneous. 1 Bigelow on Frauds [Ed. 1888], 425; Rigdon v. Walcott, 31 N.E. 162; Bisbee v. Ham, 47 Maine, 547; Gould v. Cayuga Bank, 86 N.Y. 84, and other cases cited above. Again, even if obtained by fraud as charged, still O'Brien afterward recognized and ratified the contract of settlement, by retaining and using the consideration received therefor, after knowledge of the facts; and then by bringing suit to enforce an alleged provision of the contract, regarding future employment. A person who has been defrauded must act promptly; and if he would repudiate the contract he must do nothing in affirmance of it after ascertaining the facts. Moreover, he can not repudiate it, and retain the fruits or benefits of the transaction at the same time. Merrill v. Wilson, 33 N.W. 721 (Mich.) ; Gould v. Cayuga Bank, 86 N.Y. 82; R'y Co. v. Brazzil, 14 S.W. 609; R'y Co. v. Brazzil, 10 S.W. 406; Peterson v. C., M. & St. P. R'y Co., 31 N.W. 516; Cobbs v. Hatfield, 46 N.Y. 537; Baird v. Mayor, etc., 96 N.Y. 598. Where the creditor brings an action to recover damages for the fraud, retaining what he has received, he thereby affirms the compromise. Walsh v. Sisson, 49 Mich. 423; Merrill v. Wilson, 33 N.W. 721 (Mich.) ; Butler v. Hildreth, 46 Mass. 49; Buckley v. Morgan, 46 Conn. 393; Strong v. Strong, 102 N.Y. 73. Settlements deliberately made, in writing, can not be impeached upon such flimsy pretexts as made in this case. Wallace v. R'y Co., 67 Iowa 550; Gulliher v. R'y Co., 59 Iowa 422; R'y Co. v. Cox, 76 Iowa 310; McCormack v. Molberg, 43 Iowa 562; McKinney v. Herrick, 66 Iowa 414; Jenkins v. Clyde Coal Co., 48 N.W. 971; Roundy v. Kent, 75 Iowa 666; Spitze v. B. & O. R'y Co., 23 A. (1892) 310. Also Pa. R'y Co. v. Shay, 82 Pa.St. 202. A mere failure to perform an agreement never constitutes fraud. Van Vechten v. Smith, 59 Iowa 177; Spitze v. R'y Co., 23 A. 309. A promise to be performed in the future, although intentionally broken, is insufficient to avoid a contract of settlement, upon the ground of fraud. Gulliher v. R'y Co., 59 Iowa 422; Rose v. R'y Co., A. (Pa.) 82; Van Vechten v. Smith, 59 Iowa 177; Lumpkin v. Snook, 63 Iowa 519. Fraud, in general, consists in the misrepresentation of matters of fact, not in the failure to keep a promise, thereafter to do or omit something. Hazlett v. Burge, 22 Iowa 538; Hartshorn et al. v. Day, 19 How. 211; Osterhouse v. Shoemaker et al., 3 Hill (N. Y.) 513; Belden v. Davies, 2 Hall (N. Y.) 433; Franchot v. Leach, 5 Cow. (N. Y.) 506; SWAYNE, J., in George v. Tate, 102 U.S. 570; Byard v. Holmes, 34 N. J. Law, 296; Taylor v. Fleet, 1 Barb. 471; Frenzel v. Miller, 37 Ind. 3. To avoid a contract on the ground of fraud, the facts, and not the law, must have been misrepresented. Both parties to a compromise are bound to know the law, and whether they have a good case or not. 8 Am. and Eng. Encyclopedia of Law, 636, title, "Fraud." Fraud will not be presumed, when the facts upon which it is sought to predicate it are consistent with honesty and good faith. Lyman v. Cessford, 15 Iowa 229; Schofield v. Blind, 33 Iowa 176; Pritchard v. Hopkins, 52 Iowa 122. The true doctrine undoubtedly is that the circumstances relied on to show fraud must lead naturally and fairly to the conclusion sought to be established, and must be inconsistent with any other reasonable or probable theory. Turner v. Younker, 76 Iowa 261; Turner v. Hardin, 80 Iowa 695. The evidence of fraudulent misrepresentations, to set aside a release of damages for personal injury, must be clear, precise, and indubitable; otherwise it should be withdrawn from the jury. A scintilla of evidence is not enough. Pa. R'y Co. v. Shay, 82 Pa.St. 202. The law favors such settlements of controversies, and finds a consideration for the contract looking to the compromise, in the mutual agreement of the parties to abide the result of the settlement. Richardson, etc., Co. v. Ind. Dist., 70 Iowa 576; Adams v. Morton, 37 Iowa 257; 3 Am. and Eng. Encyclopedia of Law, 837, and cases cited; Kinser v. Soap Creek Coal Co., 51 N.W. 1153. There can be no doubt that the release was not void, i. e., a nullity, even if obtained by false and fraudulent representations. At most, it was simply voidable at the election of the injured party. O'Brien alone could disaffirm it. Until he did so, it was binding upon the company. Bishop on Contracts, secs. 671, 678 and 692; 3 Am. and Eng. Encyclopedia of Law, 931, and cases cited. Rigdon v. Wolcott, 31 N.W. 161.

Rickel, Crocker & Christie, for appellee.

The very fact that a release in full has been obtained for all claims for damages for so severe an injury for so small a consideration, is sufficient in itself to call for an explanation as to the transaction, and is strong evidence of fraud. Cleere v. Cleere, 3 S. Rep. 111; 2 Pom. Eq. Jur., sec. 927; Saltonstall v. Gordon, 33 Ala. 149; Huguenin v. Basely, 2 Lead. Cas. Eq. 1238; 2 Story's Equity Jurisprudence [2 Ed.] sec. 928. The disparity between the parties was a question to be taken into consideration by the jury in determining whether the release was obtained by fraud, oppression or undue influence. Conner v. Dundee Chemical Works, 17 A. 975; Bussian v. M. L. S. & W. R'y, 10 Am. & Eng. R. R. Cases, 716. If the release was obtained by fraud, it was void, and should no more be considered than as if it never existed. This court has expressly held that if a contract is procured by fraud, a party is not required to pay or tender back the consideration paid before bringing an action in disregard of it. Hendrickson v. Hendrickson, 51 Iowa 65. The matter has also been passed upon by other courts who have taken the same views as are contended for by appellee herein. C., R. I. & P. R'y Co. v. Lewis, 109 Ill. 120; s. c., 19 Am. & Eng. R. R. Cases, 224-230; C., R. I. & P. v. Doyle, 18 Kansas, 58; Kley v. Healey et al., 28 N.E. 592; Allerton v. Allerton, 50 N.Y. 670. If, as the evidence tended to show, that the plaintiff never assented, by reason of his incapacity, to the terms of the release, but was induced by the representations of the defendant, into the belief that the paper he signed was simply a voucher for an amount of money equal to four months' pay, it would not constitute a release of plaintiff's claim for such personal injuries. C., R. I. & P. R'y Co. v. Lewis, 109 Ill. 120; Ill. Cent. R'y Co. v. Welch, 52 Ill. 183; Mueller v. Old Colony R'y Co., 127 Mass. 86.

OPINION

ROTHROCK, J.

The plaintiff was rear brakeman on a freight train running between Savanna, Ill., and Van Horne, Iowa. At the time he sustained the injury for which this action was brought he was about forty years old, had a family, and had been in railroad service for fifteen years. He had been in the employ of the defendant for about four months. On the eighth day of September, 1890, while engaged in said employment, his left hand was crushed, while attempting to make a coupling so that it was necessary to amputate three fingers. It appears that the two cars which were to be coupled together were equipped with what is known as the "Janney coupler," which is a new improved devise. This coupler may be attached to the old style coupler by the use of a link and pin, and there was a link and pin in one of the couplers, which it was necessary to remove before the cars came together. The link and pin were in the standing or dead car. The plaintiff claims that, as the train was backed down toward the standing car, he observed the link and pin, and, knowing that they must be removed, he signaled the engineer to stop the train, and his signal was obeyed, and the train stopped, when he went between the cars to remove the link and pin; that the pin was fast, and could not readily be removed, and while engaged in the attempt to remove it he was standing with his back toward the train; when, without any signal or sign from him, the train was carelessly and negligently backed down upon him, and his hand caught between the couplers, and was crushed. Some two or three other employees testified as witnesses in...