Sloan v. Standard Oil Co.

• Decision Date: 23 December 1964
• Docket Number: No. 38186,38186
• Citation: 29 O.O.2d 355,203 N.E.2d 237,177 Ohio St. 149
• Parties: , 29 O.O.2d 355 SLOAN, Appellee, v. The STANDARD OIL CO., Appellant.
• Court: Ohio Supreme Court

Page 149

177 Ohio St. 149

203 N.E.2d 237, 29 O.O.2d 355

SLOAN, Appellee, v. The STANDARD OIL CO., Appellant.

No. 38186.

Supreme Court of Ohio.

Dec. 23, 1964.

Syllabus by the Court

1. A release may be avoided where the releasor can establish by clear and convincing evidence that it was executed by mutual mistake, as between himself and the releasee, of a past or present fact material to the release, as where there was a mutual mistake as to the existence of any injury of the releasor, unless it appears further that the parties intended that claims for all injuries, whether known or unknown at the time of the execution of the release, be relinquished. (O'Donnel v. Langdon, 170 Ohio St. 528, 166 N.E.2d 756, overruled.)

2. Whether the parties to a release actually intended to discharge all liability is a question of fact for the trier of the facts.

3. The terms of a release cannot circumvent the powers of equity to correct mistakes.

James C. Sloan, appellee herein, filed a petition in the Court of Common Pleas of Marion County, alleging two causes of action. The first cause of action seeks to cancel a release executed between plaintiff and defendant, The Standard Oil Company, appellant herein, as the result of an automobile-truck collision between plaintiff and an employee of defendant, acting within the scope of his employment. The second cause of action seeks to recover damages for personal injuries alleged to have been sustained as a result of the collision. Plaintiff, while stopped at a trafficway intersection, was struck in the rear of his automobile by a pick-up truck driven by such employee of defendant.

Judgment on the first cause of action heard by the court was entered for the plaintiff, holding that a mutual mistake of a material fact existed between the parties to the release at the time of its execution, and that, therefore, the release was invalid and not a bar to plaintiff's second cause of action. The terms of the release are as follows:

'Know all men by these presents, that we, the undersigned, for and in consideration of the sum of twenty and 19/100 dollars ($20.19) to us in hand paid by The Standard Oil Company, an Ohio corporation, the receipt of which is acknowledged, have released and discharged, and by these presents do hereby forever release and discharge the said The Standard Oil Company, its successors and assigns, for any from any and all liability, claims, demands, controversies, damages, actions and causes of actions on account of personal injuries and any and all other loss and damage of every kind and nature occasioned to the undersigned by or resulting from an accident which occurred on or about the 27th day of January 1957, wherein my 1950 Mercury automobile was damaged when involved in an accident with Standard Oil Company truck No. 5960 on E. Church Street, Marion, Ohio, ^* and of and from all liability, claims, demands, controversies, damages, actions, and cause of action whatsoever, either in law or equity, which the undersigned, their heirs, executors, administrators, successors and assigns, have or may have, now or hereafter by reason of or in any wise incident to or resulting from the accident herein-before mentioned.

'As inducement to the payment of the sum aforesaid the undersigned declare that they fully understand the terms of this settlement, and that they voluntarily accept said sum for the purpose of making full and final compromise, adjustment and settlement of all loss, damages and injuries herein-before mentioned or referred to, and that the payment of said sum for this release is not an admission of liability by the payor, but the payor expressly denies liability.

'It is expressly understood and agreed that said sum hereinbefore stated is the sole consideration for this release, and that the consideration stated therein is contractual and not merely recital, and that all agreements and understandings between the parties in reference thereto are embodied herein.

'In witness whereof, we hereunto set our hands this 4th day of March 1957.

'[Sig.] James C. Sloan.

'In presence of:

'[Sig.] Mary Ellen North

'[Sig.] F. E. Arthur.'

The second cause of action was tried by a jury, resulting in a judgment for the plaintiff, damages being assessed at $8,500.

Upon appeal to the Court of Appeals for Marion County, the judgment of the trial court on the two causes of action was affirmed.

The cause is now before this court upon the allowance of a motion of defendant to certify the record.

Mickley, Frericks & Howard and William P. Moloney, Marion, for appellee.

McAfee, Hanning, Newcomer, Hazlett & Wheeler, H. Vincent Mitchell and William T. Smith, Cleveland, for appellant.

HERBERT, Judge.

Defendant presents one issue to this court for determination: Whether the setting aside of the release was contrary to law. No controversy exists between the parties as to the jury's finding of liability or its assessment of damages.

Defendant places great emphasis on the case of O'Donnel v. Langdon (1960), 170 Ohio St. 528, 166 N.E.2d 756. Research indicates that this court has had little occasion to consider the legal principles applicable to releases for personal injuries, despite the fact that an overwhelming number of sister states have been so concerned. It is the opinion of this court that an analysis of this area of the law is needed in Ohio. As a consequence, the O'Connel decision is hereby overruled.

Can equity grant relief where parties executed a release while operating under a mistake of fact? Equity from its inception has had jurisdiction to concern itself with mistakes. 3 Pomeroy, Equity Jurisprudence, 281, Section 838. The equitable remedy of cancellation or rescission of contracts and other instruments has long been available as a method of granting relief from the consequences of any mistake of fact which is a material element of the transaction. Restatement, Contracts, Section 502; Restatement, Torts, Section 900; 37 Ohio Jurisprudence (2d), 82, Mistake, Accident or Surprise, Section 4.

A general statement of the rule applicable to releases and personal injuries, as followed in other jurisdictions, is as follows:

'A release may be avoided where the releasor can show that it was executed by mutual mistake, as between himself and the releasee, of a past or present fact, material to the release * * * as where there was a mutual mistake as to the nature, extent, or degree of gravity of the releasor's injury, unless it further appears that the parties intended that claims for all injuries, whether known or unknown at the time of the execution of the release, be relinquished.' (Emphasis added.) 76 C.J.S. Release § 25, p. 645.

The most comprehensive analysis of this area of law to date as found in annotation, 71 A.L.R. (2d), 82, 90 (1960). Therein some 29 states are...