The Missouri Pacific Railway Company v. Goodholm

• Decision Date: 05 May 1900
• Docket Number: 11,560
• Parties: THE MISSOURI PACIFIC RAILWAY COMPANY v. J. H. GOODHOLM
• Court: Kansas Supreme Court

60 P. 1066

61 Kan. 758

THE MISSOURI PACIFIC RAILWAY COMPANY v. J. H. GOODHOLM

No. 11,560

Supreme Court of Kansas

May 5, 1900

Decided January, 1900.

Error from McPherson district court; MATTHEW P. SIMPSON, judge.

judgment reversed and the cause remanded for a new trial.

Waggener Horton & Orr, for plaintiff in error.

Grattan & Grattan, for defendant in error.

OPINION

JOHNSTON, J.:

On July 18, 1897, J. H. Goodholm was a passenger on a train of the Missouri Pacific Railway Company which collided with a freight-train on the same track, and was thrown from his seat and suffered serious injuries. In his petition he alleged that the collision was due to the negligence of the company, set forth the injuries inflicted, and stated that he had sustained damages to the extent of $ 15,060. The company interposed the defense that Goodholm, for a consideration of $ 15, had settled his claim for damages, and had executed a full release and discharge therefrom. The reply was that the settlement and release were induced and obtained by misrepresentation and fraud of the railway company. A trial before a jury resulted in a verdict and judgment for Goodholm in the sum of $ 5500, and the company alleges error.

It appears that the collision occurred about noon on July 18 and when Goodholm got out of the wreck it was found that he had a cut on his cheek, a bruise on the back of the neck near the base of the skull, an injury to the top of his head, and a bruise on his knee. Doctor Brubaker, the local surgeon for the company at Lindsborg, was notified by the agent of the company of Goodholm's injury, and proceeded to his residence, where he made an examination of the injuries inflicted and dressed the wounds. On the evening of the same day the local agent of the company at Lindsborg, accompanied by Doctor Brubaker, again visited Goodholm and obtained from him a statement of the accident and the injuries inflicted. Early on the morning of the 19th the claim agent of the company arrived at Lindsborg, and, after procuring Doctor Brubaker to accompany him, visited Goodholm at his residence. After some conversation and negotiations, participated in by the claim agent, the doctor, and Goodholm, the injured man signed a paper, purporting to release and forever discharge the company from all claims or liabilities growing out of the injuries sustained by him in the collision, in consideration of the payment to him of the sum of fifteen dollars.

In answer to particular questions of fact, the jury found that Goodholm received severe and lasting injuries, both mental and physical; that he was very weak and feeble in the afternoon and evening of July 18, and suffered intense headache and bodily pain; that he passed a restless and sleepless night; and that on the following morning, when he was visited by Doctor Brubaker and the claim agent, he was still weak and sick, and was suffering great pain. It was found, too, that the mental faculties of the plaintiff were weakened by the injuries, and have remained so ever since the collision. The jury found that the doctor did not give Goodholm his honest opinion when he told him that his injuries were slight and temporary, and that he would be able in a week to go to his usual labor; but, on the other hand, that he intended to deceive and mislead him, and that the company through its agents did impose on and use undue influence on the plaintiff, and failed to use the highest good faith in its dealings with him.

Among other findings, the jury answered that the release which was signed by Goodholm was read over to him and he was informed of its character and provisions, but that Earhart, the claim agent, and the doctor knowingly misrepresented facts and deceived him in order to induce him to sign the same, and that he believed the representations to be true and relied and acted on them in executing the release. It was also found that Goodholm was not mentally incapable of making a contract on that morning, but that he signed the release without understanding or comprehending its import. The findings further showed that Goodholm accepted the fifteen dollars which was paid to him in order to obtain the release, and that he did not return it to the railway company, or offer to return the same, prior to the commencement of the action.

It is first contended that there has been no rescission of the contract of settlement, and therefore that there was no cause of action existing in favor of Goodholm when he filed his petition. If the release was procured by misrepresentation and fraud, it may be ignored by Goodholm and an action for the injuries actually suffered may be maintained. It is not necessary that it should be first set aside in a proceeding in equity. While the fraud charged is a ground of equitable jurisdiction, legal and equitable rights are administered under our system in a single court and in one form of proceeding, and the rights of the parties can be fully protected in an action such as the plaintiff brought. A decree of rescission or to cancel the release was therefore not a prerequisite.

Nor do we think that Goodholm was precluded from attacking the release set up as a defense because the trifling amount paid when it was executed was not restored or tendered before the suit was brought. The general rule is that one who seeks to set aside a contract or conveyance should return or offer to return the consideration received for the same. This rule is peculiarly applicable where the property or consideration is the thing in controversy; or, rather, where the cause of action arises out of the fraudulent transaction that is attacked. Here, a right of action existed prior to and independent of the execution of the release alleged to be fraudulent and void. There was an implied admission of liability of the company to the extent of fifteen dollars, and as the amount paid is conceded to be due, whatever the result of the litigation, what good reason is there for returning it? Restoration or tender is required on equitable considerations, but what injustice or inequity could result to the company if...