Ludlow v. Free

• Citation: 55 N.E.2d 318,222 Ind. 568
• Decision Date: 14 June 1944
• Docket Number: 28017.
• Parties: LUDLOW et al. v. FREE et al.
• Court: Supreme Court of Indiana

55 N.E.2d 318

222 Ind. 568

LUDLOW et al. v. FREE et al.

No. 28017.

Supreme Court of Indiana

June 14, 1944

Appeal from DeKalb Circuit Court; William P Endicott, Judge.

Arthur W. Parry and Merl A. Barns, both of Fort Wayne, and Porter D. Crowell, of Kendallville, for appellants.

Ralph W. Probst and R. S. Emerick, both of Kendallville, for appellees.

SWAIM Judge.

This is an appeal from a judgment recovered by the appellees Florence C. Free and Jack C. Free, the widow and son respectively, of Carl C. Free, deceased, who died of silicosis, contracted while employed by the appellants as a stone cutter.

On May 5, 1939, the appellants and the appellees entered into a written contract of compromise and settlement which recited the death of Carl C. Free from silicosis; that the appellees were his dependents, and that whereas 'a controversy has arisen between the first party (the appellees) and second party (the appellants) as to the second party's liability and amount owed by virtue of the disability and death of the said Carl C. Free, and

'Whereas for the purpose of compromising the differences between said parties and reaching a settlement of said claim of first party against the second party,

'It is now therefore agreed in consideration of first party not filing any cause of action in any circuit court, or before the Industrial Board of the State of Indiana, except a petition known as form number 110, the said second party agrees to pay to first party the sum of thirty-seven hundred fifty dollars ($3750.00) in full compromise settlement of all claims and demands of first party against the second party which may grow out of or exist by the death of the said Carl C. Free of his employment by second party * * *.'

The agreement then proceeded to provide for the method of the payment of said sum, for certain credits thereon and that in the event of the termination of the dependency of Jack C. Free, prior to the completion of the payment of the entire amount, the amount being paid for him should then belong and be paid to the widow, Florence C. Free. It further provided that it was being executed between the parties 'for the purpose of settling all differences, without further litigation and expense to each party, and shall be effective for all purposes * * *.'

On May 7, 1939, the parties filed with the Industrial Board of Indiana form number 110 which they had executed and which recited the facts of the decedent's employment, the relationship and the dependency of the appellees, the terms of the agreement for the payments of compensation and that the agreement had been made after negotiations in which the parties were represented by their respective attorneys.

The Industrial Board of Indiana refused to take jurisdiction of the matter for the reason that the appellants, as employers, had not expressed their intention of operating under the Indiana Workmen's Occupational Diseases Act by filing notice, in writing, of such election with the Industrial Board. § 40-2204, Burns' 1933 (1940 Replacement), § 16502, Baldwin's 1934 (1937 Supplement). At the time the agreement was made between the parties hereto neither the appellees nor their attorneys had any knowledge of the fact that the appellants had failed to comply with the provisions of said Occupational Diseases Act and that it would, therefore, be impossible for the Industrial Board to enter an award.

On being informed that the Industrial Board refused to take any action in the matter the attorney for the appellees had a conference with the attorneys for the appellants and demanded that the compromise agreement be carried out. Speaking of this conference the attorney for the appellees testified:

'I told him my clients were expecting his clients to pay Three Thousand Seven Hundred and Fifty Dollars, less the credits and the surrendering of that note.

'Q. What did he say? A. He said he didn't know what they was going to do, because the Industrial Board wouldn't have anything to do with it and I said that didn't make any difference, as I would file a suit at Albion, and we could stipulate the terms of the contract so his clients would be fully protected and he said he would let me know in a day or two.'

And again: '* * * I made the statement I would file a common law action and we would stipulate the case, in order that his clients might be protected. There was a question of protection of the defendants on account of the minority of Jack Free.'

And again in redirect examination he testified: '* * * the conversation that Mr. Crowell and I had was to the effect there would be a common law action filed and we would stipulate Plaintiffs' Exhibit 1 into a judgment, so everyone would be protected and * * * I so informed Mrs. Free.'

In answer to the question: 'Did you state, Mr. Probst, that on this occasion on May 25th that Mr. Crowell told you the reason why the defendants were not paying this Three Thousand Seven Hundred and Fifty Dollars was on account of the minority of Jack C. Free?' A. 'Yes, that is one of the things we discussed, because his name had been signed to this contract by his mother and he was a minor.'

'Q. And that is when you told him that the contract could be amended and a common law case filed and the contract stipulated into the judgment so that his clients would be protected? A. Yes, and Mrs. Free could be made administratrix.'

Mrs. Free, shortly thereafter, moved her home to Omaha, Nebraska. She testified that before she left for Omaha she understood that the agreement would be carried out in some manner. The attorney for the appellant testified that he, in said conversation with the attorney for the appellee, '* * * perhaps stated as one reason for considering the contract as of no effect the fact that one of the plaintiffs was a minor and one of the principal purposes of this agreement and submission to the Industrial Board was in order to safeguard the defendants in this case from any further claims and liability on the part of this minor and that if there was no award made by the Industrial Board that the defendants here would be without that protection and in reply to that Mr. Probst suggested that this contract be submitted to the Noble Circuit Court on some petition for damages, or otherwise, and the terms and conditions of that contract be submitted to the Noble Circuit Court for judgment * * *.'

This conversation took place May 26, 1939, and without any further conversation between the attorneys or between the parties, a complaint for damages was filed on June 23, 1939. Appearance was entered for the defendants (appellants) and they were ruled to answer on or before October 2, 1939. On October 4, 1939, they filed a motion to strike out certain parts of the complaint which motion was sustained in part and they then filed a demurrer to the complaint, which was sustained. The plaintiffs (appellees) then filed an amended complaint in two paragraphs, one similar to the original complaint for damages for negligence and the other on the compromise agreement.

To this complaint in two paragraphs the appellants demurred on the ground that several causes of action had been improperly joined in said complaint. The demurrer was sustained by the court and the clerk was directed to docket the second paragraph of said complaint as a separate cause of action and the appellees were ordered to file a complaint in each of said causes forthwith. The judgment for which this appeal is prosecuted was rendered in the action on the contract. The other action for damages for negligence is still pending.

The appellants make two principal contentions in this appeal. In the first place they insist that the stipulation in the agreement that an award of the Industrial Board should be obtained was a vital condition of the contract and one which went to the very heart of the cause for which the appellants were contracting.

While the parties had a right to contract that an award by the Industrial Board should be a condition precedent to the liability of the appellants to pay, we have seen that said condition in this case was impossible of performance for the reason that the appellants had not complied with the provisions of the Indiana Workmen's Occupational Diseases Act in such a manner as to bring them within the act and give the Industrial Board jurisdiction. At the time the agreement was made appellants knew they had not taken the necessary steps to comply with said Act and were bound to know that an award of the Industrial Board could not be procured. When a promisor stipulates in a contract for the performance of a condition which he then knows can not be performed, and the impossibility of performance is unknown to the other party to the contract, the promisor must be held to have intended to make himself absolutely liable without regard to the performance of the condition. 17 C.J.S., Contracts, § 462, and cases there cited. See, also, Kimbell Milling Co. v. Greene, Tex.Civ.App., 1942, 162 S.W.2d 991.

The principal contention urged by the appellants in this case, however, is that the appellees, by filing the action for damages for negligence, made an election of remedies by which they were precluded from thereafter maintaining an action on the contract.

The appellants contend for the application of a strict rule on election of remedies, a rule which would preclude a party having two inconsistent remedial rights, who has merely commenced an action to enforce one of such rights from thereafter maintaining an action on the other right even though the first action was dismissed before judgment or the original complaint was amended to present the alternative remedy. Appellants say that the mere commencement of the first action amounts to a...