Dice v. Akron, C. & Y. R. Co.

• Decision Date: 28 March 1951
• Docket Number: No. 32414,32414
• Citation: 155 Ohio St. 185,98 N.E.2d 301,44 O.O. 162
• Parties: , 44 O.O. 162 DICE v. AKRON, CANTON & YOUNGSTOWN R. CO.
• Court: Ohio Supreme Court

Page 185

155 Ohio St. 185

98 N.E.2d 301, 44 O.O. 162

DICE v. AKRON, CANTON & YOUNGSTOWN R. CO.

No. 32414.

Supreme Court of Ohio.

Decided March 28, 1951.

Syllabus by the Court.

1. A complete release is not void because of fraud in the factum, where it was executed by a person of ordinary mind who could read and was not prevented from reading the release before signing it, even if, in reliance upon the false representations of the person to whom the release was given, he did not read the release and believed that such release was only a partial one.

2. 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.

3. In such an instance, the issue, as to whether the person who signed the release was induced to do so by fraud or by mistake, is an issue for determination by the court.

4. While the court, in its discretion, may submit that issue to the jury under proper instructions, the finding of the jury in respect thereto is not binding upon the court.

5. Releases by railroad employees of rights arising under the Federal Employers' Liability Act stand on the same basis as the releases of others. (Callen v. Pennsylvania R. Co., 332 U.S. 625, 68 S.Ct. 296, 92 L.Ed. 242, followed.)

6. Where the forum is a court of the state where such a release was made, the law of that state may determine the rights of the parties with respect to an effort to avoid the release.

7. Such an effort to avoid a release relates to rights arising under the contract of release. (Brown v. Western Ry. of Alabama, 338 U.S. 294, 70 S.Ct. 105, 94 L.Ed. 100, distinguished.)

8. Where a release which is not void is a release of rights of an employee under the Federal Employers' Liability Act, no question relating to rights under that act arises until the contract of release has been set aside.

9. Questions as to the legal effect upon a right under the Federal Employers' Liability Act of a release executed in this state and questions as to the avoidance of such a release are to be determined in the courts of this state by the law of this state.

This was an action brought under the Federal Employers' Liability Act, 45 U.S.C.A. § 51 et seq., by an employee of a railroad to recover for injuries received during employment and claimed to have been caused by the negligence of the railroad.

By its answer, defendant denied any negligence and as a separate defense, pleaded the execution by the plaintiff for a monetary consideration of a written release of all claims, demands and causes of action against the defendant, including any arising by reason of the injuries for which plaintiff sought recovery.

Plaintiff filed an amended reply stating that 'when he reported back to work' an employee of the defendant 'informed him that it would be necessary to sign a paper releasing the defendant company from all claims for loss of time and medical expenses up to that date before he could go back to work and that he relied on said promises and representations'; that he denied 'that he knew at the time of the execution of the purported release set forth in defendant's answer [sic] was a complete release in satisfaction of all claims, demands and causes of action that the plaintiff had against the defendant corporation'; that the employee of the defendant 'represented * * * that said purported release was a release only for the wages lost by this plaintiff to the date thereof, by reason of his being unable to work by reason of the injuries he had sustained on or about May 29th, 1944, and that said representation was false, fraudulent and was relied on by the plaintiff' ; that such representations were 'made for the express purpose and with the intent of defrauding plaintiff, and that by reason thereof said release is null and void'; and that he had tendered back to defendant the money received under the terms of the release but that defendant had refused the tender.

When the case came on for trial, the defendant requested the trial court to determine the question as to the validity of the release before proceeding to trial of the other issues raised by the pleadings. This the court refused to do.

At the conclusion of all the evidence, the defendant requested the court to withdraw the evidence from consideration of the jury and instruct the jury to return a verdict for the defendant. The trial court refused to do this and submitted the case to the jury which returned a verdict for the plaintiff.

The undisputed evidence shows that the plaintiff was able to read. There was no evidence tending to indicate that anything was done to prevent the plaintiff from reading the release before he signed it. The evidence was in conflict with respect to the allegations of fraud and mistake set forth in the plaintiff's amended reply. The written release was admittedly signed by the plaintiff who also signed a certificate appended thereto stating that he fully understood its contents and that his signing was his free and voluntary act. There was also appended to the release a written receipt for the consideration provided therein stating that the amount paid was 'in full satisfaction of the obligations of' defendant to plaintiff 'under the provisions of the above contract.' This receipt was also signed by plaintiff. The check given to plaintiff at the time of his execution of the release, certificate and receipt was payable to plaintiff and stated on its face, 'in full settlement account injury received at Rushmore, Ohio, 10:08 a. m. on May 29th, 1944.' This is the injury for which plaintiff seeks to recover. On the back of the check and above the endorsement of plaintiff there was the statement: 'This voucher check is a payment in full of the within account, and it is agreed that the payee's endorsement hereon shall constitute an acknowledgment of such payment.' Plaintiff had the check in his possession for about 24 hours before he cashed it. Admittedly, plaintiff received the consideration provided for in the release.

After the jury had returned its verdict for the plaintiff and before the court had rendered judgment thereon, the defendant filed a motion for judgment notwithstanding the verdict.

Thereafter, the trial judge made a finding wherein it was indicated that the questions of fraud and mistake had been submitted to the jury, pursuant to the theory laid down in Flynn v. Sharon Steel Corp., 142 Ohio St. 145, 50 N.E.2d 319; and that, in accordance with that case (paragraph five of the syllabus), he did not regard himself bound by the finding of the jury on those issues. This finding reads in part:

'Although the court thoughly charged the jury upon the questions of fraud with reference to the release * * *, the jury seemed to have misapprehended the whole concept of fraud, and the case is now before the court on a motion for judgment notwithstanding the verdict.

'* * *

'* * * the facts do not sustain either in law or equity the allegations of fraud by clear, unequivocal and convincing evidence.

'* * * therefore * * * the motion for judgment notwithstanding the verdict should be sustained.'

The motion was thereupon granted and judgment was rendered for the defendant.

Plaintiff thereupon appealed from the judgment to the Court of Appeals on questions of law only. Cf. Meyer v. Meyer, 153 Ohio St. 408, 91 N.E.2d 892, where appeal was on questions of law and fact.

The judgment of the trial court was reversed by the Court of Appeals and the cause was remanded to the trial court with instructions to render judgment for the plaintiff on the verdict of the jury.

The case is before this court on appeal, a motion to certify having been allowed.

Wise, Roetzel, Maxon, Kelly & Andress, Akron, for appellant.

Gottwald, Hershey & Hatch, Akron, for appellee.

TAFT, Judge.

The question to be decided is: May a trial court ordinarily determine the issue as to whether an employee of a railroad was induced by fraud (other than fraud in the factum) or by mistake to execute a release of his claim arising under the Federal Employers' Liability Act?

In considering the validity of release and other contracts, this court has often called attention to the difference between fraud in the factum and fraud in the inducement. Meyer v. Meyer, supra; Picklesimer v. Baltimore & Ohio R. Co., 151 Ohio St. 1, 84 N.E.2d 214; Flynn v. Sharon Steel Corp., supra; Perry v. M. O'Neil & Co., 78 Ohio St. 200, 85 N.E. 41; De Camp v. Hamma, Ex'r., 29 Ohio St. 467, 470. See Manhattan Life Ins. Co. v. Burke, 69 Ohio St. 294, 70 N.E. 74, 100 Am.St.Rep. 666.

It has been held that, where there has been fraud in the factum, the release or other contract is void and may be disregarded as a nullity. Flynn v. Sharon Steel Corp., supra; Perry v. M. O'Neil & Co., supra; and De Camp v. Hamma, Ex'r., supra.

Plaintiff does not seriously contend that there was any evidence in the instant case to justify a finding of fraud in the factum. He apparently recognizes that there could be no such fraud in the instant case. Even if, as alleged in the amended reply, defendant did misrepresent to plaintiff the contents of the release and plaintiff executed the release in reliance upon that misrepresentation and in the belief that it was something else, plaintiff could admittedly read the release and there was no evidence that anything was done to prevent him from reading it. Plaintiff testified that he was told by defendant's employee that he would not have to read the release. This was denied by defendant's employee. However, there was no evidence tending to prove that plaintiff was denied an opportunity to read the release.

A person of ordinary mind cannot say that he was misled into signing a paper which was different from what he intended to sign when he could have known the truth by merely looking when he signed. De...