Clark v. N. Pac. Ry. Co.

• Citation: 162 N.W. 406,36 N.D. 503
• Parties: CLARK v. NORTHERN PAC. RY. CO.
• Decision Date: 18 April 1917
• Court: United States State Supreme Court of North Dakota

36 N.D. 503

162 N.W. 406

CLARK

v.NORTHERN PAC. RY. CO.

Supreme Court of North Dakota.

April 18, 1917.

Syllabus by the Court.

Where a person, who receives injuries while a passenger upon a railway train, is induced to make settlement of and release his cause of action, against the railway company, by reason of false representations of material facts made by the claim agent, during the negotiations of settlement and prior to the execution of the release, such settlement and release may be rescinded and avoided, even though such false representations were made without knowledge of their falsity and without wrongful or fraudulent intent on the part of the claim agent.

A release given by such passenger may be avoided, in an action at law, and an action for damages maintained without first obtaining a decree canceling the release.

Additional Syllabus by Editorial Staff.

All questions of fraud, collusion, and misrepresentation in the obtaining or execution of a release, and the question whether a release of plaintiff's claim was obtained by defendant in good faith, with a full understanding on plaintiff's part of her legal rights, are for the jury.

In a passenger's action for personal injuries, defended on the ground of her release of her cause of action, evidence held to make the false representations of material facts by the carrier's claim agent a question for the jury.

Appeal from District Court, Stark County; Crawford, Judge.

Action by Ella Clark against the Northern Pacific Railway Company. Judgment for plaintiff, and defendant appeals. Affirmed.Watson & Young and E. T. Conmy, all of Fargo, for appellant. Casey & Burgeson, of Dickinson, for respondent.

PER CURIAM.

A rehearing was ordered in this case. The former opinion, which has not been reported, was prepared by Mr. Justice BURKE. The reargument was had after he had ceased to be a member of the court. The controlling legal questions involved are stated in the syllabus, and, after a careful consideration thereof by the present members of the court, we reaffirm the legal conclusions stated in the syllabus, and readopt the former opinion, which is as follows:

On the 28th of September, 1913, plaintiff was a passenger upon one of defendant's regular passenger trains from Dickinson to Gladstone. This train stopped about a mile and a half from Gladstone. A heavy freight train running in the same direction struck it from the rear, and plaintiff was injured. She was taken to Gladstone, which by the way was her destination, and placed in the house where her stepmother and stepsister resided. A few hours later the company's physician, Dr. Wyrens, examined her body and told her that her injuries were very slight and that she would be well and at work within two or three days. The following day a claim agent called, while she was still in bed, and effected a settlement for $100. Plaintiff claims that said claim agent told her that he had seen Dr. Wyrens and had been told by him that her injuries were slight and that she would be at work within three or four days, or a week at the most. She further testified that the claim agent told her repeatedly that she was not badly injured, and that if she took her case to a lawyer most of the money that she recovered would go to him, citing instances occurring in Dickinson. Finally, she signed a release and received a check for $100. Plaintiff testifies that she afterwards discovered that her back had been seriously injured as well as her knee, and she thereupon repudiated the settlement, returned the check, and brought this action. Defendant relied wholly upon the release. At the close of the testimony, it moved that the court direct a verdict in its favor upon the ground that the evidence was insufficient to support any verdict and insufficient to go to the jury on the question of fraud in procuring the execution of the release. At the conclusion of his brief filed in this case, defendant says:

“Summing up, it is the contention of the defendant:

First. That all the testimony offered here only tends to show some fraud as to collateral matters inducing the plaintiff to sign a release and is a matter purely cognizable by a court of equity.

Secondly. There is absolutely no testimony shown here sufficient to send the case to the jury and let them pass upon the question of fraud.”

[2][3] 1. Taking up the first proposition, that the question of the sufficiency of the release was one cognizable in a court of equity, we find the authorities against his contention. The question is a question of fact for the jury. At 34 Cyc. 1105, 1106, the rule is stated:

“All questions of fraud, collusion, and misrepresentation in the obtaining or execution of a release are for the jury, as is also the question whether a release of plaintiff's claim was obtained by defendant in good faith with a full understanding on plaintiff's part of his legal rights.”

See Bank of Spearfish v. Graham, 16 S. D. 49, 91 N. W. 340;Moore v. Copp, 119 Cal. 429, 51 Pac. 630;Reddington v. Blue, 168 Iowa, 34, 149 N. W. 933, where the following language is found:

“This instruction is challenged on many grounds. One is that the release cannot be avoided in an action at law, and that plaintiff's only remedy was to go into a court of equity to have the same reformed or rescinded. There is nothing in this point. Under our liberal rules of procedure, it was proper for plaintiff to avoid the release by proof of fraud or mistake. (Cases cited.)”

See Rauen v. Insurance Co., 129 Iowa, 725, 106 N. W. 198;Bussian v. Milwaukee Ry. Co., 56 Wis. 325, 14 N. W. 452, wherein it is said:

“A release of all claims, which is pleaded as a bar to an action at law, may, in that action, be shown to have been obtained by fraud, misrepresentation, or undue influence, if all the parties to the release are parties to the action, and the finding of the jury upon the question of fraud has the same force as their verdict upon any other issue in the action.”

In Missouri Pacific Ry. Co. v. Goodholm, 61 Kan. 758, 60 Pac. 1066, it is said:

“If the release was procured by misrepresentation and fraud, it may be ignored by Goodholm, and an action for the injuries actually suffered may be maintained. It is not necessary that it should be first set aside in a proceeding in equity.”

In Pope v. Bailey-Marsh, 29 N. D. 355, 151 N. W. 18, it is merely held that the facts in that case were undisputed and were therefore a question for the court. It was not even intimated that the question was not ordinarily one for the jury. So much for the contention that the issues were one in equity for the court.

2. The next question raised by appellant is the sufficiency of the evidence to justify the submission of the question of the release to a jury. In the brief it is said:

“We claim that there is absolutely no proof of fraud shown here sufficient so that a jury can put its hands upon the case. * * * The evidence not only fails to be clear and definite and free from doubt, but that it is not even sufficient to make out a prima facie case of fraud.”

[1] A discussion of this proposition may be roughly divided into two parts: A discussion of the law; and, second, its application to the facts in this case. Two representations were made to this woman to induce her to settle, those by the company's physician and those by the claim agent. We need discuss only the statement made by the physician. A discussion of the law and a résumé of the cases under this heading can be had by consulting notes at 5 L. R. A. (N. S.) p. 663, and 50 L. R. A. (N. S.) 1091. Those notes are so full that we will try no improvement thereon. At the beginning of the note at 5 L. R. A. (N. S.) 663, it is said:

“It is difficult to formulate a general rule which will cover the validity of every release procured by, or under the influence of, a physician acting as agent of him for whose benefit the release was obtained, as each case will be governed by the particular facts of that case. It may be stated, however, that the courts do not favor ‘ambulance chasing’ on the part of agents of persons whose negligence has caused an injury.”

The first case cited in that note is Missouri Pacific Ry. Co. v. Goodholm, 61 Kan. 758, 60 Pac. 1066, where a passenger was negligently injured in a railway wreck and was treated by a physician of the railway company who told him that his injuries were slight and temporary, thus inducing a release of all claims for damages. It was held that he was not bound by such release. The next case cited in the note is Eagle Packet Co. v. Defries, 94 Ill. 598, 34 Am. Rep. 245, to the same effect. The next case cited is Jones v. Gulf Ry. Co., 32 Tex. Civ. App. 198, 73 S. W. 1082, wherein the company physician and claim agent stated that the woman's injuries were slight and that she would be well in a few weeks and would be able to do and perform her usual duties. The release was set aside. To the same effect was Houston Ry. Co. v. Brown (Tex. Civ. App.) 69 S. W. 651. It was held that similar statements of the physician, though honestly made in the belief by the physician that they were true, would justify a rescission of the settlement. In International Ry. Co. v. Shuford, 36 Tex. Civ. App. 251, 81 S. W. 1189, the physician stated that the injuries were slight and that she would soon recover and that the sum offered her was more than she would recover at law. The release was set aside. In Galveston Ry. v. Cade (Tex. Civ. App.) 93 S. W. 124, the physician represented that Cade had recovered and would suffer no more, and a settlement was effected. Upon proof that the injuries were permanent, a rescission of the settlement was allowed. However, in Gulf Ry. Co. v. Huyett, 99 Tex. 630, 92 S. W. 454, 5 L. R. A. (N. S.) 669, a slightly different rule was announced. Also in Quebe v. Gulf Ry. Co., 98 Tex. 6, 81 S. W. 20, 66 L. R. A. 734, 4 Ann. Cas. 545, and Doty v. Chicago Ry. Co., 49 Minn. 499, 52 N. W. 135. In those cases it was held...