Johnson v. Chicago, M. & St. P. Ry. Co.

• Decision Date: 01 May 1915
• Docket Number: 54.
• Court: U.S. District Court — Western District of Washington
• Parties: JOHNSON v. CHICAGO, M. & ST. P. RY. CO.

224 F. 196

JOHNSON v. CHICAGO, M. & ST. P. RY. CO.

No. 54.

United States District Court, W.D. Washington, Northern Division.

May, 1915

Dudley G. Wooten, E. K. Hawkins, and John N. Perkins, all of Seattle, Wash., for plaintiff.

George W. Korte, of Seattle, Wash., for defendant.

NETERER District Judge.

The bill, after stating jurisdictional facts, alleges in substance that plaintiff was injured through defendant's negligence while in its employ, March 5, 1910; was treated by defendant's physicians, and after three weeks discharged as practically well; that further disorder developed because of the injury, and plaintiff was thereafter treated and operated upon by defendant's physicians; that after the operation he experienced new symptoms of disease, which are described in detail; that on or about April 29, 1912, at the instance and request of defendant, and influenced thereto solely by the representations and statements of defendant's physicians to the effect that he would gradually recover from his injuries and symptoms of disease following the same, as well as the surgical operation plaintiff signed a written release in full of claims against the defendant for injuries received, in consideration of $2,585 paid by the defendant to the plaintiff; that such settlement was merely the cost and expense of hospital and medical and surgical treatment while being cared for by defendant, and the value of his time for said period estimated at the wages he was earning; that subsequent to the execution of the release plaintiff rapidly grew worse and suffered a complication of ailments, fully described in the bill, which subject him to great agony of mind and body and intolerable shame and humiliation among his associates besides rendering it impossible for him to seek or secure any kind of employment; that at the time he executed the release he had no knowledge, suspicion, or intimation that he was in danger of the conditions and symptoms described in the bill, and that defendant's physicians were either themselves ignorant of the facts, or purposely and fraudulently concealed them from plaintiff, in order to induce him to sign the release; that plaintiff brought an action for damages against defendant in the King county superior court, in which he estimated his total damages at $30,000, and deducted as a credit the sum of $2,585, the amount paid as aforesaid, which money was paid in various amounts and at different times during the period when he was under the care of defendant's physicians, and not as a lump sum by way of compensation for any future or permanent injury for which defendant might be liable; that it is utterly impossible for plaintiff to repay the $2,585, or any part thereof, at this time, or to make tender of repayment, and that, having deducted this sum from the total amount of damages claimed, his failure to repay or tender repayment should not prejudice his rights and relief as set forth in the bill; and prays that the release referred to be canceled, and plaintiff restored to all his rights in the premises. Defendant alleges in its brief, and it is not denied, that service in the lawsuit was made upon defendant December 22, 1914, and filed January 9, 1915. The law action referred to was removed to this court, where it is now pending.

Defendant has moved the court to dismiss the bill, upon the ground that the facts stated therein are insufficient to constitute a valid cause of action in equity, in that (a) the release signed by plaintiff relates to personal injuries and a satisfaction of the damage and claim for personal injuries occurring March 5, 1910, and that plaintiff's cause of action, if any, for injuries received on that date, accrued at that time, and that the law action commenced by plaintiff is barred by section 159 of Remington & Ballinger's Code of Washington, which provides that an action for an injury by one person to the person of another must be commenced within three years from the date of the accrual of the cause of action; (b) that it appears on the face of the bill that plaintiff was paid $2,585 at the time of the execution of the release, and there is no allegation in the bill that plaintiff has returned, or made an offer to return, the money so received by him, and he still retains the fruits received under the claimed fraudulent transaction.

Defendant, in its brief, submits that it is the uniform rule of the Circuit Court of Appeals of this circuit, as well as of this court, that 'a party executing a release to a railroad company for a claim for personal injuries cannot avoid it, as obtained by false and fraudulent representations, unless he first returns, or offers to return, the money received as the consideration for its execution,' and cites Hill v. Northern Pacific Ry. Co., 113 F. 914, 51 C.C.A. 544, Price v. Connors, 146 F. 503, 77 C.C.A. 17, Cook v. Fidelity & Deposit Co., 167 F. 95, 92 C.C.A. 547, Mahr v. Railway Co., 170 F. 699, 96 C.C.A. 19, Standard Portland Cement Co. v. Evans, 205 F. 1, 125 C.C.A. 1, all decided by the Circuit Court of this circuit, and Maine Northwestern Development Co. v. Northern Commercial Co. (D.C.) 213 F. 103, and Columbia Digger Co. v. Rector (D.C.) 215 F. 619. The number and fullness of the cases spare much discussion.

Hill v. Northern Pacific Ry. Co., supra, was an action for damages for the death of plaintiff's husband through negligence of the defendant company. The defense set up a release signed by plaintiff, and plaintiff alleged fraud in obtaining the release. The reply contained no averment of tender of the money received upon the settlement, nor offered to return any of the money, but averred a willingness to deduct this amount from the total damages claimed. Judge Ross, for the court, said:

'We find it unnecessary in this case to decide whether the question of fraud leading up to and inducing the execution of such instruments may be inquired into and determined in an action at law in a federal court, for the reason that, conceding that it may be, good faith and fair dealing would require the plaintiff, as a condition precedent to the presentation and maintenance of such an issue, to return or offer to return the money received in consideration of the instruments. * * * Whatever exceptions there may be to the general rule certainly should not embrace a case like the present one, where a trial might establish that the plaintiffs have no valid claim, and at the same time leave the defendant's money in the plaintiff's pockets.'

In Price v. Connors, supra, which was an action for damages for injuries sustained as the result of a gunshot wound, defendants introduced in evidence a written release, executed and acknowledged by plaintiff, who denied all knowledge of the execution. It was alleged in the reply that plaintiff was intoxicated at the time of the execution of the release, but the evidence on that question was conflicting. The trial court refused to instruct the jury that it was plaintiff's duty to restore, or offer to restore, everything of value which he received as a consideration for the release, and in the event of his failure to do so he would be bound by the release, even though the jury should believe he was so intoxicated at the time of signing it as to be incompetent of executing it. The Circuit Court (146 F. at page 504) said: 'We are of the opinion that the court below erred in giving the instructions complained of. The case was not one of that class wherein the court, having it within its power to fully protect the interest of the adverse party in case of rescission, might proceed to a hearing without requiring the repayment or tender of the money received in consideration of the release, illustrations of which class of cases may be found in Thackrah v. Haas, 119 U.S. 499 (7 Sup.Ct. 311, 30 L.Ed. 486), and Billings v. Smelting Co., 52 F. 250 (30 C.C.A. 69). In the present case the jury might have found that the whole of the damage suffered by the plaintiff did not, in fact, amount to $500, the amount the defendants paid the plaintiff in settlement. And since the defendants put in issue all of the allegations of the complaint, it might, if the evidence justified it, have been found by the jury that the plaintiff was not entitled to recover at all.'

Mahr v. Union Pacific Ry. Co., supra, involved the validity of a settlement and release of a claim for personal injuries. There was no evidence offered in support of the allegation of the amended reply that plaintiff had offered to return the money he had received in settlement of his claim, or that he had tendered the same in court. The trial court directed a verdict for the defendant, which decision was affirmed by the Circuit Court of Appeals.

Defendant has also cited several decisions of Circuit Courts of Appeals of other circuits following the rule established in this circuit. In Stephenson v. Supreme Council A.L.H (C.C.) 130 F. 491, cited, it was found...