Moak v. American Auto. Ins. Co., 45586

• Decision Date: 06 November 1961
• Docket Number: No. 45586,45586
• Citation: 242 La. 160,134 So.2d 911
• Parties: Mrs. Clemmie MOAK v. AMERICAN AUTOMOBILE INSURANCE COMPANY et al.
• Court: Louisiana Supreme Court

Page 911

134 So.2d 911

242 La. 160

Mrs. Clemmie MOAK v. AMERICAN AUTOMOBILE INSURANCE COMPANY et al.

No. 45586.

Supreme Court of Louisiana.

Nov. 6, 1961.

Rehearings Denied Dec. 11, 1961.

Weber & Weber, Clark W. Taylor, Baton Rouge, for plaintiff-appellant.

Breazeale, Sachse & Wilson; Seale, Hayes, Smith, Keogh & Franklin, Baton Rouge, for defendants-appellees.

HAMITER, Justice.

Mrs. Clemmie Moak instituted the instant suit to recover damages for personal injuries sustained by her in collision between an automobile owned and driven by her husband (Clarence Moak), in which she was a passenger, and a train belonging to and operated by the Illinois Central Railroad Company, one of the defendants herein. Also named and cited as a defendant was the American Automobile Insurance Company, the insurer of the husband's car.

In her original petition plaintiff alleged primarily that the accident resulted solely from the gross negligence of the railroad company. However, she averred alternatively that Clarence Moak and the railroad company were concurrently negligent. In the further alternative she pleaded the negligence of her husband as the sole proximate cause of the accident.

Without answering, the insurance company specially pleaded res judicata, the basis of which plea was a purported written release granted in favor of such defendant by Mr. and Mrs. Moak which recited payment to them of $242. Also, the railroad company filed an exception of no right of action grounded on the release of the insurance company, allegedly a co-tort feasor, which contained no reservation of rights by the grantors as to the exceptor.

Thereupon, plaintiff amended her petition, she asserting the invalidity of the release in that it was confected without consideration and through fraud, misrepresentation and error. Specifically, she alleged: 'That there was no meeting of the minds as to the purported subject matter of the Release; that there was lack of adequate consideration for said purported Release; * * * that in fact this purported release was supposed to be only a release for the personal belongings of Mr. and Mrs. Moak which were destroyed in the automobile and it was definitely not the understanding or intention of Mrs. Moak or Mr. Moak to release the defendants, namely, American Automobile Insurance Company and/or Illinois Central Railroad Company, from any liability for personal injuries, rights or claims accruing to Mr. or Mrs. Moak when they executed the said Release.'

The district court sustained the mentioned plea of res judicata and exception of no right of action, following two separate hearings thereon at which considerable evidence was adduced, and accordingly dismissed the suit. The judgment was affirmed by the Court of Appeal. (See 127 So.2d 6.) We granted a writ of certiorari or review at the instance of plaintiff.

The instrument in question, bearing date of October 3, 1957, was prepared on a printed form. Signed by plaintiff and her husband and reciting a consideration of $242, as aforesaid, it purports to release and discharge 'Clarence Moak and American Automobile Insurance Company * * * from any and all actions, causes of action, claims and demands of whatsoever kind or nature on account of any and all known and unknown injuries, losses and damages by me/us or my/our property sustained or received on or about' August 10, 1957 through the above mentioned collision.

The instrument, in printed verbiage, further states:

'It is expressly understood and agreed that this release and settlement is intended to cover and does cover not only all now known injuries, losses and damages but any future injuries, losses and damages not now known or anticipated but which may later develop or be discovered, including all the effects and consequences thereof.

'And I/we hereby declare that I/we fully understand the terms of this settlement; that the amount stated herein is the sole consideration of this release and that I/we voluntarily accept said sum for the purpose of making a full and final compromise, adjustment and settlement of all claims for injuries, losses and damages resulting or to result from said accident.'

The concluding language of the instrument, appearing in longhand, is this: 'It is agreed and understood that the execution of this release in no way affects my claim under the 'medical payment's' portion of my policy.'

As defendants point out, the Louisiana Revised Civil Code provides that a compromise or transaction has (as between the interested parties) an effect equal to the authority of things adjudged, and it cannot be attacked on account of any error in law or any lesion. Article 3078. However, with equal force, our Civil Code also declares:

'Transactions regulate only the differences which appear clearly to be comprehended in them by the intention of the parties, whether it be explained in a general or particular manner, unless it be the necessary consequence of what is expressed; and they do not extend to differences which the parties never intended to include in them.

'The renunciation, which is made therein to all rights, claims and pretensions, extends only to what relates to the differences on which the transaction arises.' LSA-Civil Code, Article 3073.

'A transaction may be rescinded notwithstanding, whenever there exists an error in the person or on the matter in dispute. It may likewise be rescinded in the cases where there exists fraud or violence.' LSA-Civil Code, Article 3079.

Keeping in mind these codal provisions, which clearly contemplate the introduction of parol evidence to show error as to the subject matter of a compromise or fraud in its confection, we proceed to examine the facts and circumstances surrounding the execution of the purported release involved here.

Shortly after the accident that occurred on August 10, 1957 a wrecker was summoned to remove the Moak car from the scene thereof; and while the towing process was under way a fire occurred in the damaged vehicle and destroyed certain personal effects of the Moaks contained therein, the total value of which admittedly was $342. The Moak policy furnished coverage for such destroyed contents to the extent of $100, this in addition ot its providing insurance respecting the automobile itself for fire, collision, liability, property damage and medical payments. And on August 17, 1957 the defendant insurance company, through its adjuster, paid Mr. Moak the mentioned $100 and the further sum of $747.50 for the damage to the car caused by the collision and the fire. Later, Mr. Moak attempted to collect the balance of his personal effects loss ($242) from the Globe Indemnity Company, the liability insurer of the wrecking service; but he was unsuccessful.

On October 3, 1957 Mr. Moak visited the office of the adjuster for the defendant insurer for the sole purpose of discussing (under the property damage feature of his policy) a claim against him made by the railroad company for damage to its engine; however, while there he mentioned that he had been unable to obtain...