Peterson v. Panovitz

• Decision Date: 14 July 1932
• Docket Number: 5991
• Citation: 243 N.W. 798,62 N.D. 328
• Court: North Dakota Supreme Court

243 N.W. 798

62 N.D. 328

ROBERT PETERSON, Respondent, v. WILLIAM PANOVITZ, Appellant

No. 5991

Supreme Court of North Dakota

July 14, 1932

Appeal from the District Court of Grand Forks County Swenson, J. Defendant appeals from an order over-ruling a demurrer to plaintiff's reply.

Affirmed.

George A. Bangs, for appellant.

The right to contract is vouchsafed to every citizen by the law of the land. Pittsburg, C.C. & St. L. Co. v Carmody, 188 Ky. 588, 222 S.W. 1070, 12 A.L.R. 469; Baltimore & O.S.W.R. Co. v. Voight, 176 U.S. 498, 44 L. ed. 560, 20 S.Ct. 387; Printing etc. Co. v. Sampson L.R. 19 Eq. 21 Eng. Rul. Cas. 696; Coppage v. Kansas, 236 U.S. 1, 59 L. ed. 441, 35 S.Ct. 243, L.R.A. 1915C, 960; Mayers v. Memphis, 135 Tenn. 263, 186 S.W. 112, Ann. Cas. 1918C, 845.

The courts must obey the constitution rather than the law making department of the government. Marbury v. Madison, 1 Cranch, 137, 2 L. ed. 60.

The police power of the state extends only to such measures as are reasonable, and the general rule is that all police regulations must be reasonable under all circumstances. 6 R.C.L. 236; Betley v. Sidney, 79 Mont. 314, 257 P. 1007, 56 A.L.R. 872.

Reasonableness is one of the inherent limitations of the power. Rideout v. Knox, 148 Mass. 368, 19 N.E. 390, 2 L.R.A. 81, 12 Am. St. Rep. 560; Ex parte Jentzsch, 112 Cal. 468, 44 P. 804, 32 L.R.A. 664; Adkins v. Children's Hospital, 261 U.S. 525, 43 S.Ct. 394, 67 L. ed. 785, 24 A.L.R. 1238; Adams v. Tanner, 244 U.S. 590, 61 L. ed. 1336, L.R.A.1917F, 1163, 37 S.Ct. 664, Ann. Cas. 1917D, 973; Officers v. Bonton, 273 U.S. 418, 47 S.Ct. 432, 71 L. ed. 718, 58 A.L.R. 1236; Sonnely v. Decker, 58 Wis. 461, 46 Am. Rep. 637, 17 N.W. 389; State v. Redman, 134 Wis. 89, 114 N.W. 137, 14 L.R.A.(N.S.) 229, 126 Am. St. Rep. 1003, 15 Ann. Cas. 408.

Our government was not designed to be paternal in form. Ex parte Jentzsch, 112 Cal. 468, 44 P. 803.

Freedom of contract is the general rule and restraint the exception. Adkins v. Children's Hospital, 67 L. ed. 785; Palmetto F.I. Co. v. Beha, 13 F.2d 500; Meyer v. Nebraska, 67 L. ed. 1042, 29 A.L.R. 1446; Williams v. Standard Oil Co. 24 F.2d 455; Frost v. Cal. R.R. Commissioners, 70 L. ed. 1101, 47 A.L.R. 457; Frost v. Corp. Commission, 73 L. ed. 483; Jay Burns Baking Co. v. Bryan, 68 L. ed. 812, 32 A.L.R. 661.

If one suffers an injury to both person and property as the result of a single transaction, there is but one cause of action. King v. Railroad Co. 80 Minn. 83, 81 Am. St. Rep. 238, 82 N.W. 113; Anderson v. Jacobson, 42 N.D. 87, 172 N.W. 64.

O'Keefe & Peterson, for respondent.

Every presumption should be resolved in favor of the constitutionality of the statutes. Warren v. Brown (S.D.) 234 N.W. 38

Statutes should be construed to make them constitutional if possible. State v. Wallace, 48 N.D. 805, 187 N.W. 728; People v. Sweetser, 1 Dak. 308, 46 N.W. 452; Re Watson, 17 S.D. 486, 97 N.W. 463; 12 C.J. 787.

Police power of the state is not limited to regulations necessary for the preservation of good order, safety, health, etc. The prevention of fraud and deceit, cheating and imposition, and unfair competition are within its province. Cofman v. Ousterhous, 40 N.D. 390, 168 N.W. 826.

A person has freedom of contract, or liberty of contract, but this freedom is not absolute. 12 C.J. 949; State v. Newman Lumber Co. (Miss.) 45 L.R.A.(N.S.) 859; State v. Armour, 27 N.D. 177, 145 N.W. 145; State ex rel. Mackintosh (Wash.) 101 P. 357, 21 L.R.A.(N.S.) 821.

The meaning of "due process" is that no person shall be deprived of life, liberty or property unless the matter be adjudicated against him on trial and according to the course of common law. People v. Sponsler, 1 Dak. 289, 46 N.D. 459; Neer v. Livestock Board, 40 N.D. 340, 168 N.W. 601; 12 C.J. 1197 and 1200; Gunn v. Mpls., etc. R. Co. 34 N.D. 418, 158 N.W. 1004; 1 C.J. 1118 and 1119; Bismarck v. Hughes, 53 N.D. 838, 208 N.W. 711.

Christianson, Ch. J. Burke, Birdzell, Nuessle and Burr, JJ., concur.

OPINION

CHRISTIANSON

Plaintiff brought this action to recover damages for personal injuries which he claims to have sustained by reason of a collision (on August 3rd, 1930) between a truck, driven by the plaintiff, and an automobile belonging to the defendant, driven and operated by a member of defendant's family. The defendant interposed an answer wherein he admitted that the plaintiff was injured as a result of the collision, and alleged that after such collision plaintiff made a claim against the defendant for damages on account of such injuries; that thereupon an adjustment and settlement of such claim was made and that there was paid to the plaintiff the sum of $ 600.00 by a certain insurance company; that plaintiff accepted such sum as payment and settlement in full for all damages suffered by him as a result of such collision, and that the plaintiff executed and delivered a written release, dated August 13th, 1930, wherein and whereby the plaintiff, in consideration of said sum of $ 600.00 released and discharged all claims and demands against the defendant, which said plaintiff then held on account of injuries arising as a result of said collision.

The plaintiff interposed a reply to the answer wherein he alleged that the written release was executed by the plaintiff on "the 13th day of August, 1930, while plaintiff was under physical disability from the effect of the injuries received and as alleged in plaintiff's complaint, and also within 30 days after the date of such injuries so sustained" by the plaintiff; that plaintiff thereafter elected to avoid said settlement and release and notified defendant of such election in writing within six months after the date of the injury; that said release so given on August 13, 1930, became and is void by virtue of the provisions of chapter 179, Laws 1917 (§§ 5941A1, 5941A2, 1925 Supplement).

The defendant demurred to the reply on the ground that the same did not set forth facts sufficient to constitute any defense to the settlement, release, satisfaction or discharge set forth in the answer; that said chapter 179, Laws 1917 (§§ 5941A1, 5941A2, 1925 Supplement) under which plaintiff claims the right to disaffirm and repudiate the settlement and the written release executed by him is void and of no effect because in conflict with §§ 11 and 13 of the Constitution of the state of North Dakota and the First, Fifth and Fourteenth Amendments to the Constitution of the United States.

The sole question presented on this appeal is the constitutional question raised by the demurrer.

The statute, the validity of which is drawn in question, reads as follows:

"Sec. 1. Every settlement or adjustment of any cause of action and every contract of retainer or employment to prosecute an action for damages on account of any personal injuries received, whether death ensue or not to the person injured, shall be voidable if made while the person so injured is under disability from the effect of the injury so received, or if made within thirty days after the date of such injury.

"Sec. 2. The person so injured, or in case of his death, his personal representative, may elect, at any time within six months after the date of such injury to avoid such settlement, adjustment or contract by a notice in writing to that effect or by bringing an action to recover damages therefor. Whenever such action shall be so commenced, within the period of time so limited, the amount received by the person so injured or his representative in case of his decease, in any settlement or adjustment so made, shall not be a bar to the prosecution of such action, but may be set up as an offset or counterclaim to the amount of damages recoverable, if any."

"Sec. 3. All acts and parts of acts in conflict with the provisions of this act are hereby repealed."

It is the contention of the defendant that the statute infringes rights guaranteed by §§ 1, 11 and 13 of the Constitution of North Dakota and by the First, Fifth and Fourteenth Amendments to the Constitution of the United States, and that consequently, the statute is void and of no effect.

1. Appellant's first contention is that the statute interferes with, and in effect denies, the liberty of contract guaranteed by § 13 of the Constitution of the state of North Dakota and the 14th Amendment to the Constitution of the United States.

That the statute does interfere in some degree with the freedom to make contracts which formerly existed cannot be denied. In the absence of the statute, of course, the parties who fall within its provisions might make a contract for the settlement of damages resulting from personal injuries immediately after such injuries have been sustained, absolutely binding upon both parties; whereas, under the statute a contract for the settlement or adjustment of such injuries is voidable at the option of the injured party if made while the person so injured is under disability from the effect of the injury, or, if made within thirty days after the injury. It does not follow, however, from the fact that certain limitations have been prescribed as regards such contracts that the statute is unconstitutional; for the right of contract is itself subject to certain restrictions which the state may lawfully impose in the exercise of its police power. Holden v. Hardy, 169 U.S. 366, 391, 42 L. ed. 780, 790, 18 S.Ct. 383; Minnesota Iron Co. v. Kline, 199 U.S. 593, 598, 50 L. ed. 322, 325, 26 S.Ct. 159, 19 Am. Neg. Rep. 625.

As was said by the Supreme Court of the United States in the case of Chicago, B. & Q.R. Co. v. McGuire, 219 U.S. 563, 55 L. ed. 337, 31 S.Ct. 259:

"There is no absolute freedom to do as one wills or to contract as one chooses. The guaranty of liberty does not withdraw from...