Chicago & N.W. Ry. Co. v. Wilcox

• Citation: 116 F. 913
• Decision Date: 14 July 1902
• Docket Number: 1,686.
• Parties: CHICAGO & N.W. RY. CO. v. WILCOX.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

116 F. 913

CHICAGO & N.W. RY. CO. v. WILCOX.

No. 1,686.

United States Court of Appeals, Eighth Circuit.

July 14, 1902

Syllabus by the Court.

In the absence of fraud or mistake an agreement of settlement and release of an unliquidated or disputed claim as conclusively estops the parties from reviving and litigating it as a final judgment. Such agreements of compromise are uniformly favored and upheld by the courts.

A mere preponderance of testimony is insufficient to establish such fraud or mistake as will warrant the avoidance of a written agreement of settlement and release. The proof must be clear unequivocal, and convincing to have this effect.

A mistake of a past or present fact may warrant a rescission of a contract of settlement and release. But a mistake in opinion or belief relative to the future duration or effect of a personal injury, or a mistake in prophecy or opinion as to an uncertain future event, is not a mistake of fact, and is no ground for the avoidance of a release or of a contract of settlement.

Complainant compromised and released a claim for a broken hip. She knew when she settled that her hip had been broken, and that it was a bad break. She was induced by the statement of her own physician, who was also the company's physician, to believe, and did believe, that she would be well within a year, and she settled upon that basis. She was mistaken, and her injury and disability turned out to be permanent. Held her mistake was not a mistake of fact, but a mistake in opinion or belief as to a future event, and it furnished no ground for an avoidance of her release.

N. M Hubbard (Frank F. Dawley and C. E. Wheeler, on the brief) for appellant.

J. R. Caldwell (C. E. Walters, on the brief), for appellee.

This is a suit in equity to rescind a release of a claim for personal injury on the ground of fraud, undue influence, and mistake. The complainant, Lucy A. Wilcox, was a widow, and she had been engaged in the occupation of nursing for 10 years. She was 65 years of age. On December 11, 1898, as she was standing in a passenger car of the defendant, it was suddenly started, and she fell and broke the neck of the femur of her left leg. One week after her injury she compromised her claim against the railway company, and executed a written release of it for $600 and the agreement of the company to pay her doctors' bills. On March 14, 1901, she exhibited her bill in this suit to rescind this release. In this bill she alleged that her release was obtained by the fraud, undue influence, and circumvention of the agents of the defendant, in that the physician of the latter, who was attending her, and the agent of the company informed her that her injuries were temporary, and that she would be well and able to attend to her ordinary avocation within a year, when the injuries were permanent, and she never could recover. She averred that she did not know the serious character of her injury, but relied on the statement of the physician, and was induced thereby to make the settlement and to execute the release. There were general averments of fraud on the part of the company and of incompetence to contract on the part of the complainant, but these allegations were not sustained by the evidence, and the answer denied all the equities of the bill. After a hearing the court below found that the complainant was competent to make the settlement when she signed the release, and that the agents of the defendant were not guilty of any fraud, deceit, or wrongdoing in procuring it, but that the release was executed under a mistake of the probable time she would be incapacitated by her injury, and on account of this mistake it rendered a decree rescinding the contract of settlement. 111 F. 435. The railway company has appealed from this decree.

Before SANBORN and THAYER, Circuit Judges, and LOCHREN, District Judge.

SANBORN Circuit Judge, after stating the case as above, .

The policy of the law has always been to promote and sustain the compromise and settlement of disputed claims. It loves peace, hates broils and dissensions, and discourages the prolongation of litigation and the revival of controversies which have once been closed. The judgment of a court settles the claims submitted to it, and estops the parties from again litigating them after they have been adjudicated. In the absence of fraud or mistake, an executed agreement of settlement of an unliquidated or disputed claim constitutes as conclusive and as effectual an estoppel against the parties to the compromise from again litigating the claim thus settled as the final judgment of a court of competent jurisdiction, to the effect that the rights of the parties are as they are set forth in the agreement; and such a contract is always upheld by the courts. Kercheval v. Doty, 31 Wis. 476, 484; Bank v. McGeoch, 92 Wis. 286, 313, 66 N.W. 606, 614; Hennessey v. Bacon, 137 U.S. 78, 11 Sup.Ct. 17, 34 L.Ed. 605; Van Trott v. Wiese, 36 Wis. 439; Zimmer v. Becker, 66 Wis. 527, 29 N.W., 228; Woodford v. Marshall, 72 Wis. 132, 39 N.W. 376. Nor will such agreements be lightly disturbed upon confused, conflicting, or uncertain evidence of fraud or mistake. The burden is always upon the assailant of the contract to establish the vice which he alleges induced it, and a bare preponderance of evidence will not sustain the burden. A written agreement of settlement and release may not be rescinded for fraud or mistake, unless the evidence of the fraud or mistake is clear, unequivocal, and convincing. Chicago, St. P., M. & O. Ry. Co. v. Belliwith, 28 C.C.A. 358, 361, 83 F. 437, 440; Insurance Co. v. Nelson, 103 U.S. 544, 548, 549, 26 L.Ed. 436; Maxwell Land-Grant Case, 121 U.S. 325, 381, 7 Sup.Ct. 1015, 30 L.Ed. 949; Howland v. Blake, 97 U.S. 624, 626, 24 L.Ed. 1027; Insurance Co. v. Henderson, 16 C.C.A. 390, 392, 69 F. 762, 765. Again, it is not every mistake that will lay the foundation for the rescission of an agreement. That foundation can be laid only by a mistake of a past or present fact material to the agreement. Such an effect cannot be produced by a mistake in prophecy or in opinion, or by a mistake in belief relative to an uncertain future event. A mistake as to the future unknowable effect of existing facts, a mistake as to the future uncertain duration of a known condition, or a mistake as to the future effect of a personal injury, cannot have this effect, because these future happenings are not facts, and in the nature of things are not capable of exact knowledge; and everyone who contracts in reliance upon opinions or beliefs concerning them knows that these opinions and beliefs are conjectural and makes his agreement in view of the well-known fact that they may turn out to be mistaken, and assumes the chances that they will do so. Hence, where parties have knowingly and purposely made an agreement to compromise and settle a doubtful claim, whose character and extent are necessarily conditioned by future contingent events, it is no ground for the avoidance of the contract that the events happen very differently from the expectation, opinion, or belief of one or both of the parties. Kowalke v. Light Co. (Wis.) 79 N.W. 762, 764, 74 Am.St.Rep. 877; Bank v. McGeoch, 92 Wis. 286, 313, 66 N.W., 606, 614; Pom. Eq. Jur. Sec. 855; Beach Mod. Eq. Jur. Secs. 43, 56; Seeley v. Traction Co., 179 Pa. 334, 338, 36 A. 229; Homuth v. Railway Co., 129 Mo. 639, 646, 31 S.W. 903; Klauber v. Wright, 52 Wis. 303, 314, 8 N.W. 893.

In view of these indisputable principles of the law, is the evidence in this case clear and convincing that the complainant was induced to compromise her claim and to execute her release by a mistake of a past or present fact material to her contract? She was 65 years old. She had been a nurse for 10 years, and had frequently tended the patients of Dr. Thompson. Dr Thompson had been and was her physician. At the same time he was the physician of the railway company. Dr Schultz attended her the first day or two after the accident, and Dr. Thompson from that time until she was able to be taken from her bed. She was told on the first or second day after her injury that she had a fracture of the neck of the femur. Both the doctors told her that it was a bad break. She was taken from a neighboring town to her home, and her hip bone was set by Dr. Thompson, and then she lay in bed awaiting the union of the broken bone until after she made her settlement. One week after the accident, the agent of the railway company and Dr. Thompson went to her home, and the agent told her that she really had no claim against the railway company, but that it would give her $300 for a release. Her sister, Mrs. Blodgett, was her nurse. Mrs. Blodgett told her not to settle until later, when she would learn more definitely how serious her injury was to be. Dr. Thompson and Mr. Brokhausen, a friend, had previously given her the same advice. After a conversation of more than two hours, during which the injury and the probable duration of her disability to pursue her occupation were discussed, and during which she refused the offer of $300, an agreement of compromise was made, to the effect that the company should pay her $500, should pay her nurse, Mrs. Blodgett, $100, and should pay her doctors' bills. The sum of $500 paid to the complainant was reached by a computation of the loss of her wages at the rate of $10 per week for about a year. She executed a written contract, which was read to her, and which in terms released the company from all claims which she then had, or thereafter might have, by reason of the injuries she received from the accident on December 22, 1898, in which her left hip was fractured. The company took the release, and paid the consideration named in it. The injury of the...