Rochester Bridge Co. v. McNeill

• Citation: 122 N.E. 662,188 Ind. 432
• Decision Date: 26 March 1919
• Docket Number: No. 23227.,23227.
• Parties: ROCHESTER BRIDGE CO. et al. v. McNEILL.
• Court: Supreme Court of Indiana

188 Ind. 432

122 N.E. 662

ROCHESTER BRIDGE CO. et al.

v.McNEILL.

No. 23227.

Supreme Court of Indiana.

March 26, 1919.

Appeal from Circuit Court, Fulton County; Smith N. Stevens, Judge.

Action by Walter E. McNeill against the Rochester Bridge Company and another. Judgment for plaintiff, and defendants appeal. Reversed, with instructions to grant new trial.

Holman, Bernetha & Bryant, of Rochester, for appellants.

Charles C. Campbell and Edward E. Murphy, both of Rochester, for appellee.

MYERS, J.

This is an action by appellee against appellants founded on an alleged deceit by false representations.

Appellants' separate demurrer to the complaint for want of facts was overruled, whereupon they answered by general denials. Trial by jury, verdict in favor of appellee for $14,125, which during the pendency of the motion for a new trial was reduced by a remittitur to $7,500. Each of the appellants for error rely on the overruling of its demurrer to the complaint and the overruling of its motion for a new trial.

In substance, it appears from the complaint that on May 7, 1913, appellant Bridge Company was engaged in operating a plant at Rochester, Ind., in which, by the use of various machines, it prepared from steel plates structural work for steel bridges. Appellee on that date, and as an employé of the Bridge Company, was engaged in operating one of these machines. While pursuing his work of punching holes in a steel plate a particle of steel was thrown off, striking him in his left eye, whereby he was permanently injured. On May 10th he was taken to a hospital at Rochester, Ind., for treatment, where he remained about 20 days. On May 14th, and while he was a patient at the hospital, he was taken to South Bend by the Bridge Company, and there examined by an X-ray expert. On May 25th appellee executed a contract whereby he received from the Bridge Company $105 in full settlement for all damages incurred by reason of said injuries. On July 3d he resumed his work with the Bridge Company, but later, about October 1st, on account of the injury to his eye, he returned to the hospital for further treatment, resulting in the removal of his eye. The latter part of October he recommenced work with the Bridge Company, but soon became weak, nervous, and sick, and quit this employment.

The complaint also charges the Bridge Company with negligence in failing to furnish appellee with a reasonably safe punching machine, and in detail describes wherein the machine was defective and unfit for use; that the company negligently failed to keep a certain set screw inserted through one side of the groove block which was a part of the machine, and showing the purpose and use of this set screw, which was also alleged to be out of repair, and no longer fit for the purpose for which it was intended; also negligence in attempting to hold the screw in place by tying the same with cotton strings-all to the knowledge of the Bridge Company and unknown to appellee.

It also appears that at the time of the aforesaid injury the Bridge Company was insured by the appellant Insurance Company against loss by damage to life, health, and body of the servants, of which appellee was one.

“That said Bridge Company and said Insurance Company, through their agents and servants, entered into a plan and conspiracy of deceit to cheat and defraud this plaintiff out of his said cause of action and damages, and immediately after said accident took place, and as a part of the plan, they took charge of the plaintiff, took him to the hospital and to an X-ray expert, and employed physicians and medical attendants, and had him examined, cared for, and treated to cure him if possible, if not to learn the extent of his injuries, so they might further their plan of conspiracy, and on May 23, 1913, in pursuance of said plan, and while the plaintiff was still under said charge at said hospital, and suffering great pain, both in mind and body, and could not see to read, and was unfit to do business, they called upon the plaintiff at the hospital and stated to him that they had consulted physicians and knew that his injuries were only temporary; that his eye would be fully restored, and would be well in a few days; that the X-ray showed there was nothing the matter with his eye; that his only damage would be the loss of a short period of time and compensation for medical services; that they were willing to make the plaintiff a donation of a sum equal to plaintiff's loss of time and cost of medical services for such temporary injuries; that if he went to court he could get no more than pay for such loss of time and medical services, and offered to pay this plaintiff for such loss of time $105, and for said medical services, and asked him to sign a receipt as evidencing a gratuity, and not as a settlement.

The plaintiff believed and relied on said statements as true, accepted said sum of $105, and did sign a receipt; that the essential parts of said statements were false; that the plaintiff's injuries were and are permanent; that said receipt was a contract for a full settlement for all damages incurred by reason of said injuries, with a consideration of $196, of which the plaintiff never received more than $105; that the plaintiff did not and could not know the contents of said receipt before bringing this action; that by reason of the facts stated herein plaintiff lost his cause of action against said Bridge Company, and now brings this action as an action of deceit on said fraudulent settlement, and demands judgment for $19,800, and all proper relief.”

[1] If this were an action to recover damages resulting from the negligence of appellant Bridge Company, the unrescinded contract of settlement which appellee has affirmed would preclude a recovery, for the reason that matter must be regarded as settled. South Bend & Mishawaka Gas Co. et al. v. Jensem, 182 Ind. 557, 105 N. E. 774;Indianapolis Abattoir Co. v. Bailey, 54 Ind. App. 370, 102 N. E. 970.

The case at bar proceeds upon an entirely different theory. It is an action for damages resulting from the alleged fraud and deceit. It originated when appellee acted upon the alleged deceit charged to have been practiced upon him by the appellants. By this form of action he affirms the contract of release and proceeds upon the principle announced in Home Insurance Co. v. Howard, 111 Ind. 544, 13 N. E. 103, that “a person so circumstanced may retain what he has received, and sue whoever is liable for the consequences of the deceit by which the compromise was brought about, and recover whatever damages resulted therefrom.” See, also, Michigan Mutual Life Insurance Co. v. Naugle, 130 Ind. 79, 86, 29 N. E. 393;Baker v. Becker, 153 Wis. 369, 381, 141 N. W. 304.

This principle has been frequently applied in fraud cases involving land deals, insurance settlements, and various other transactions, but seldom invoked in cases growing out of the settlement of damages for personal injuries. This may be accounted for on the ground that the measure of damages for deceit is not necessarily the amount which might be recovered in an action on the original tort, but it is the amount on which the parties might have agreed irrevocably in the absence of the alleged deceit, or had they alike known the facts upon which the settlement was made.

[2] Appellants insist that the allegations in the complaint relied on to show fraud, for the most part, are mere expressions of opinion; that they were not statements of existing facts; that appellee had an equal opportunity with appellants to know or learn the facts; that he was in a better position to know his real condition than either of the appellants.

The complaint shows that appellants called upon him at the hospital, and among other things “stated to him that they had consulted physicians, and knew that his injuries were only temporary, and that his eye would be fully restored, and would be well in a few days; that the X-ray showed there was nothing the matter with his eye; that his only damage would be the loss of a short period of time and the compensation for medical services.” These statements are alleged to be false, but that plaintiff believed and relied on them as true, and accepted the sum of $105 in settlement.

The statements set forth in the pleading give some foundation for appellants' contention, but when the nature of the representations and meaning of the language used in the complaint as a whole is considered and applied to the subject-matter here in controversy, the objections must fail. In the absence of a general rule applicable alike to all cases of fraud, each case, to a large extent, must be determined upon its own facts....