East Tennessee, V. & G. Ry. Co. v. Hayes

• Decision Date: 28 October 1889
• Citation: 10 S.E. 350,83 Ga. 558
• Parties: EAST TENNESSEE, V. & G. RY. Co. v. HAYES.
• Court: Georgia Supreme Court

10 S.E. 350

83 Ga. 558

EAST TENNESSEE, V. & G. RY. Co. v. HAYES.

Supreme Court of Georgia

October 28, 1889

Error from city court of Atlanta; VAN EPPS, Judge.

Action by one Hayes against the east Tennessee, Virginia & Georgia Railway Company, for damages for personal injuries. Judgment for plaintiff, and defendant brings error.

Bacon & Rutherford and P. L. Mynatt, for plaintiff in error.

Alexander & Turnbull. for defendant in error.

BLANDFORD J.

The defendant in error brought his action in the court below against the plaintiff in error to recover damages for injuries which he alleged he had received by reason of the carelessness and negligence of its servants and agents To this action the defendant pleaded the general issue, and accord and satisfaction, in this, that before the commencement of the plaintiff's action the plaintiff and defendant had agreed upon a settlement, by which the plaintiff was to receive, and did receive, $100 in satisfaction of any injury which he had received from the defendant and by which he released all right of action for any damages which he had theretofore received by reason of the carelessness and negligence of the agents and servants of the defendant company. Issue having been taken upon this plea testimony was introduced by the plaintiff in the court below tending to show that this agreement of settlement, set out in the plea of accord and satisfaction, was obtained from him by the fraud of the plaintiff in error; to which evidence thus offered the defendant excepted. The objection was overruled and the defendant excepted, and assigned error thereon.

Many are the grounds of exception taken by the plaintiff in error to the rulings and decisions of the court below, but the main question in this case is, could the action be maintained on the part of the defendant in error without showing that this contract of settlement pleaded in the accord and satisfaction had been rescinded before the commencement of the action? Fraud avoids all contracts. Code, § 2751. Fraud, as a general rule, vitiates all contracts. Coffee v. Newsom, 2 Ga. 442. While fraud may vitiate or avoid all contracts, the contract is nevertheless not void, but voidable only, at the instance of the person defrauded. He who perpetrates the fraud cannot avoid the same, or vitiate it, on account of his own conduct. It may be a good contract until it is avoided by the action or at the instance of him who is defrauded. Though, because of the fraud, the injured party may in certain cases terminate it, and require a restoration of the status quo, in technical language, the contract is said to be voidable, not void. Big. Frauds, 73, 74. Something must be done by the party defrauded before the contract can cease to bind. When that something has been done, and the engagement has been terminated, the contract is said to have been rescinded, and the process by which this result is effected is called "rescission." Id. 74. A contract may be rescinded, out of court, at the instance of the party defrauded, where an agreement has been made, and something of value has been received by the defrauded party whether vendor or purchaser it matters not. This must, before suit, be tendered back to the wrong-doer in the name of rescission, with demand of return of what the wrong-doer has received. The object of the tender is to effect a restoration of the status quo, and in this class of cases it is a condition precedent to rescission. Id. 75. In the case of Gould v. Bank, 86 N.Y. 75, the court of appeals in New York held that one who seeks to rescind a compromise of a disputed claim on the ground of fraud must promptly, on the discovery of the fraud, restore, or offer to restore, to the other party whatever he has received by virtue of it, if of any value. The tender must be without qualifications or conditions. In that case the action was to recover damages for the breach of an agreement made to return to the plaintiff in that case certain bonds loaned by him to the bank; and a compromise agreement was entered into whereby the bank agreed to pay to the plaintiff, in satisfaction of its claim against...