Jordan v. Brady Transfer & Storage Co.

• Decision Date: 07 February 1939
• Docket Number: No. 44492.,44492.
• Citation: 226 Iowa 137,284 N.W. 73
• Parties: JORDAN v. BRADY TRANSFER & STORAGE CO.
• Court: Iowa Supreme Court

226 Iowa 137

284 N.W. 73

JORDAN

v.BRADY TRANSFER & STORAGE CO.

No. 44492.

Supreme Court of Iowa.

Feb. 7, 1939.

Appeal from District Court, Webster County; O. J. Henderson, Judge.

Action at law for damages in an automobile collision. From a judgment on a verdict for plaintiff, the defendant has appealed.

Affirmed.Miller, Miller & Miller, of Des Moines, and Mitchell & Loth, of Fort Dodge, for appellant.

Helsell, Burnquist, Bradshaw & Dolliver, of Fort Dodge, for appellee.

BLISS, Justice.

Appellant has described this action as “an attempt to upset a settlement.” The appellee was injured on August 22, 1935, when an automobile, parked partly on a paved highway, in which he was seated as a guest, was struck by a truck of the defendant.

The petition contained the allegations usual to the statement of a cause of action for personal injuries received through the alleged negligence of a defendant under such circumstances. In the first division of its answer, the defendant denied generally, and in the second division, it alleged that the plaintiff was barred from recovery because the plaintiff, on September 20, 1935, had accepted $530.80 in full settlement of his damages, and had executed and delivered to defendant a covenant not to sue it or its driver, in consideration of the payment. In his reply the plaintiff admitted execution of this instrument, and the receipt of the sum stated, for which credit was given in his petition, but alleged that the instrument never became binding because of the mutual mistake of the parties in its execution. In an amendment to his reply, the plaintiff tendered to the defendant the $530.80 he had received, and renewed the tender in open court at the close of all the evidence. The defendant refused the tender for the stated reason that it was not a legal tender, and came too late.

At the close of the evidence the defendant filed and argued a motion for a directed verdict in its favor on the following grounds (Exhibit I referred to was the covenant not to sue):

“Motion for a Directed Verdict.

The defendant moves the Court at the close of the evidence to direct a verdict in favor of the defendant on each of the following grounds:

1. That as the record now stands, Exhibit 1 of the evidence is a complete defense to the plaintiff's claim, and that there is no evidence competent, sufficient, or admissible, to overcome the effect of Exhibit 1 as such defense.

2. That there is no evidence of the alleged mistake upon which plaintiff relies in his reply as amended.

3. That there is no sufficient evidence of any such mistake of fact as would justify the Court in ignoring or permitting the jury to avoid the effect of Exhibit 1, both because the evidence shows no more than a mistake as to a future development and also because it fails to show that any mistake which could be relied on therein would be a mutual mistake or was known to or participated in by the defendant.

4. Because it is not competent in a law action and in advance of an equitable decree cancelling or setting aside the covenant not to sue, to evade or ignore its effect upon the basis of any mistake of which there is any testimony whatsoever, and that the matter of avoiding Exhibit 1 for a mistake as distinguished from fraud, which isn't pleaded or proved, is one of equitable cognizance and which in no event could be submitted to a jury in a law action, and that the exhibit is binding and in full force in the absence of any decree for its cancellation.

5. That if the jury should return a verdict for the plaintiff, it would be the duty of the Court and the Court would set it aside.

6. Because there is no evidence of any mutual mistake of any present existing fact, and that the evidence at most shows that the plaintiff didn't realize the seriousness of his injury at the time that he made the settlement, that any such condition is not the fault and is not claimed to be the fault of the defendant, that there is no evidence that it was the fault of the defendant, participated in by the defendant, nor that the defendant is in any wise responsible therefor.

7. Because in no event could Exhibit 1 be ignored or set aside without a tender of the amount received thereunder, and no such tender was made until yesterday, which was entirely too late, and that the plaintiff by retaining the money all during that time ratified the covenant, if it wouldn't otherwise be valid.

8. For the reason that plaintiff having admitted the execution of Exhibit No. 1, and admitted the receipt of the consideration recited in Exhibit No. 1, said covenant not to sue evidenced by Exhibit No. 1 is binding upon the plaintiff, and the terms of the instrument are exclusive and exclude all other agreements and transactions had at the time of the execution of said instrument, and the plaintiff has failed to establish that such instrument was conditioned upon the diagnosis of Mr. Tillotson, has failed to establish that the instrument was signed under a mistake of a knowable existing fact, fails to establish that the execution of said instrument was obtained by any fraud on the part of Tillotson, and if the jury were to return a verdict in favor of the plaintiff and against the defendant, the verdict would be contrary to the evidence and contrary to the law applicable to the evidence, and it would be the duty of the Court to set the same aside.

9. That the evidence discloses that Dr. Dorsey was plaintiff's own physician and in no way connected with the defendant or the Employers Mutual Casualty Company, and that the defendant and Employers Mutual Casualty Company would not be bound by any errors in judgment by Dr. Dorsey as to facts, the existence of which were not knowable to the Doctor, or as to mistakes in judgment of the doctors in regard to the future period of disability after the settlement was made, and therefore the plantiff has failed to establish that the covenant not to sue evidenced by Exhibit 1 is not binding on the plaintiff and said covenant not to sue is a complete bar to plaintiff's cause of action.”

The motion was denied and the cause was submitted to a jury which returned a verdict for plaintiff for $1500. Appellant appealed from the judgment on the verdict, and from the order overruling its motion to direct, and from all other orders and rulings adverse to it.

The only error assigned or relied upon for reversal is the order of the court overruling the motion to direct a verdict. The fourth and seventh grounds of this motion have not been argued and will not be considered. This court, however, has held against both of these contentions. Reddington v. Blue & Raftery, 168 Iowa 34, 149 N.W. 933;Malloy v. Chicago G. W. R. Co., 185 Iowa 346, 170 N.W. 481.

The only contention of appellant on this appeal is that there is no evidence sufficient to overcome the covenant not to sue executed, and warranting the submission of the case to the jury on the question of mistake. Both parties concede this.

The covenant not to sue signed by plaintiff was as follows:

“Whereas on or about the 22d day of August, 1935, at 8 miles west of Ft. Dodge, Ia. in Webster County, Iowa, the undersigned sustained injuries and damages to person and property as the result of an accident with a car owned by Brady Transfer & Storage Co. and driven by J. A. Hayes:

Whereas the undersigned has considered bringing suit against the said Brady Transfer & Storage Company and J. A. Hayes for all damages he has or may sustain as a result of said accident, but is now desirous of avoiding the expense of any litigation against the said Brady Transfer & Storage Co. and J. A. Hayes;

Whereas the said Brady Transfer & Storage Co. and J. A. Hayes claims there is no legal liability upon their part arising out of said accident but is desirous of avoiding the expense of litigation;

Now therefore it is agreed by the undersigned that in consideration of $530.80 this day paid to him by said Brady Transfer & Storage Company and J. A. Hayes, receipt of which is hereby acknowledged, the undersigned does hereby covenant and agree that he will not institute any civil proceedings of any kind against the said Brady Transfer and Storage Company and J. A. Hayes and particularly agrees that he will not institute any action at law or in Equity in any of the Federal or State Courts of Iowa or any other State, and specifically covenants and agrees not to sue the said Brady Transfer & Storage Co. and J. A. Hayes in this or any other State on account of any injuries or damages sustained by him or that may hereafter be sustained by him for or on account of said injuries and damages, past, present, or future, growing out of or which may hereafter grow out of said accident.

It is further expressly understood and agreed that this instrument is, and is to be construed to be, only a covenant not to sue, and is in nowise, nor to be construed as, a release. I the undersigned hereby voluntarily sign this instrument with no promises or representations made to me other than the agreements and considerations herein expressed.

Read over and signed by me this 20th day of September, 1935.”

[1] The court reports of every jurisdiction contain many cases involving the avoidance of instruments of this kind, or of a similar nature, because of fraud or mistake or overreaching of some kind in their procurement. In some jurisdictions chancery is the proper forum, but under the liberal procedure of this state the relief may be granted at law. But in either forum the relief when granted is based upon equitable principles. There is little disagreement in the controlling basic principles, but, as is often the case, the difficulty lies in their application.

[2] This is the conclusion of the commentator whose brief appears in 48 A.L.R. 1462 et seq. He states:

“Avoidance of release of claims for personal injuries on ground of mistake relative to the extent or nature of the injuries, is one upon which there is much confusion and apparent...