Peterson v. Panovitz

• Decision Date: 14 July 1932
• Docket Number: No. 5991.,5991.
• Citation: 62 N.D. 328,243 N.W. 798
• Parties: PETERSON v. PANOVITZ.
• Court: North Dakota Supreme Court

62 N.D. 328

243 N.W. 798

PETERSON

v.PANOVITZ.

No. 5991.

Supreme Court of North Dakota.

July 14, 1932.

Syllabus by the Court.

1. A person who is liable in damages for personal injuries sustained by another is not deprived of his property without due process, or denied the equal protection of the laws, guaranteed to him by section 13 of the Constitution of the State of North Dakota and the Fourteenth Amendment to the Constitution of the United States by chapter 179, Laws 1917 (sections 5941a1, 5941a2, Comp. Laws Supp. 1925), which provides that “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 * * * shall be voidable if made while the person so injured is under disability from the effect of the injuries so received, or if made within thirty days after the date of such injury.”

2. Said chapter 179, Laws 1917 (sections 5941a1, 5941a2, Comp. Laws Supp. 1925), is not violative of section 11 of the Constitution of North Dakota, which requires that all laws of a general nature shall have a uniform operation.

Appeal from District Court, Grand Forks County; Swenson, Judge.

Action by Robert Peterson against William Panovitz. From an order overruling his demurrer to the plaintiff's reply, the defendant appeals.

Order affirmed.

Geo. A. Bangs, of Grand Forks, for appellant.

O'Keefe & Peterson, of Grand Forks, for respondent.

CHRISTIANSON, C. J.

Plaintiff brought this action to recover damages for personal injuries which he claims to have sustained by reason of a collision (on August 3d, 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 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 13, 1930, wherein and whereby the plaintiff, in consideration of said sum of $600, 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 (sections 5941a1, 5941a2, Comp. Laws Supp. 1925).

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 (sections 5941a1, 5941a2, Comp. Laws Supp. 1925), 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 sections 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:

Ҥ 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.

§ 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 counter claim to the amount of damages recoverable, if any.

§ 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 sections 1, 11, and 13 of the Constitution of North Dakota and by the First, Fifth, and Fourteenth Amendments to the Constitution of the Unitied States, and that consequently the statute is void and of no effect.

[1][2] 1. Appellant's first contention is that the statute interferes with, and in effect denies, the liberty of contract guaranteed by section 13 of the Constitution of the State of North Dakota and the Fourteenth Amendmentto 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, 18 S. Ct. 383, 42 L. Ed. 780, 791;Minnesota Iron Co. v. Kline, 199 U. S. 593, 598, 26 S. Ct. 159, 50 L. Ed. 322, 325.

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, 31 S. Ct. 259, 262, 55 L. Ed. 337: “There is no absolute freedom to do as one wills or to contract as one chooses. The guaranty of liberty does not withdraw from legislative supervision that wide department of activity which consists of the making of contracts, or deny to government the power to provide restrictive safeguards. Liberty implies the absence of arbitrary restraint, not immunity from reasonable regulations and prohibitions imposed in the interests of the community. * * * Where the legislative action is arbitrary and has no reasonable relation to a purpose which it is competent for government to effect, the legislature transcends the limits of its power in interfering with liberty of contract; but where there is reasonable relation to an object within the governmental authority, the exercise of the legislative discretion is not subject to judicial review. The scope of judicial inquiry in deciding the question of power is not to be confused with the scope of legislative considerations in dealing with the matter of policy. Whether the enactment is wise or unwise, whether it is based on sound economic theory, whether it is the best means to achieve the desired result, whether, in short, the legislative discretion within its prescribed limits should be exercised in a particular manner, are matters for the judgment of the legislature, and the earnest conflict of serious opinion does not suffice to bring them within the range of judicial cognizance. * * * The legislature, being familiar with local conditions, is, primarily, the judge of the necessity of such enactments. The mere fact that a court may differ with the legislature in its views of public policy, or that judges may hold views inconsistent with the propriety of the legislation in question, affords no ground for judicial interference, unless the act in question is unmistakably and palpably in excess of legislative power. * * * If there existed a condition of affairs concerning which the legislature of the state, exercising its conceded right to enact laws for the protection of the health, safety, or welfare of the people, might pass the law, it must be sustained; if such action was arbitrary interference with the right to contract or carry on business, and having no just relation to the protection of the public within the scope of legislative power, the act must fail.”

The object the North Dakota Legislature had in mind in enacting the statute under consideration here is quite obvious. It sought to deal with and exercise some control over the undesirable practice commonly known as “ambulance chasing.” North Dakota is not the only state that has found it necessary or desirable to look for some means of control over this practice. Journal of American Judicature Society, August 1928, p. 36-40; Kelley v. Boyne, 239 Mich. 204, 214 N. W. 316, 53 A. L. R. 273.

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