Whittington v. H. T. Cottam Co.

• Citation: 158 Miss. 847,130 So. 746
• Decision Date: 17 November 1930
• Docket Number: 28563
• Court: United States State Supreme Court of Mississippi
• Parties: Whittington v. H. T. Cottam Co.

130 So. 746

158 Miss. 847

Whittington
v.
H. T. Cottam Co.

No. 28563

Supreme Court of Mississippi

November 17, 1930

(In Banc.)

1. CONTRACTS.

If party defrauded desires to disaffirm contract procured by fraud, he must do so with reasonable dispatch after discovery of fraud.

2. ACCORD AND SATISFACTION.

If parties contemplate that present performance of contract shall be discharge of original claim, mere contract, standing alone, does not constitute "accord and satisfaction," but performance is necessary.

3. RELEASE. Injured person's failure within reasonable time to notify defendant he would refuse to accept five hundred dollars in satisfaction of accord, with other facts, amounted to irrevocable ratification of settlement.

The check for five hundred dollars was deposited in bank to plaintiff's credit by his father at plaintiff's request while he was in hospital. Plaintiff was treated for his injuries by physician, whose services were paid for by defendant under terms of release, and, after plaintiff knew extent of his injuries he continued to go to such physician for treatment. About twenty-one months after execution of the release plaintiff commenced an [158 Miss. 848] action for his injuries, claiming the release was obtained by fraud.

4. APPEAL AND ERROR.

General rule is that question not raised on appeal will not be considered by supreme court.

5. CONTRACTS.

Contracts in violation of public policy are void, and courts will not aid either of parties.

ETHRIDGE and GRIFFITH, JJ., dissenting.

HON. W. H. POTTER, Judge.

Action by George H. Whittington against the H. T. Cottam Company. From a judgment for defendant, plaintiff appeals. Affirmed.

Barbour & Henry, of Yazoo City, and McNeil & Arrington, of Crystal Springs, for appellant.

There is a fitter place for the execution of a release than the sick room of the sufferer, and a fitter time than a period shortly following the injury. If a release is void, no tender of the money is necessary and whether there was a ratification, because of the delay in bringing the suit is a question for the jury.

Jones v. Railway Co., 72 Miss. 22.

Before there can be a ratification of a void release the party should not only be informed of all the facts and circumstances but also his rights in the premises.

Jones v. Railway Co., 73 Miss. 110; R. R. Co. v. Childs, 86 Miss. 361.

A tender of the sum paid for the fraudulent release was not necessary, and if the release was secured by fraud, and a judgment was obtained, credit for the sum paid would be given.

St. Louis R. R. Co. v. Ault, 101 Miss. 341. [158 Miss. 849]

A release, executed while the plaintiff was under the influence of opiates and he remembered nothing about it, and was stupid from the use of drugs, was void and fraudulently obtained.

Davis v. Elzey, 126 Miss. 789; Daner v. G. & S. I. R. R. Co., 106 Miss. 496; Huff v. Bear Creek Mill Co., 116 Miss. 509; Malkmus v. St. Louis Portland Cement Co. (Mo.), 131 S.W. 148; Marple v. Minn. & St. L. Ry. Co. (Minn.), Ann. Cas. 1912D, 1082.

The whole doctrine of refund on repudiation of a contract of settlement is not technical, but equitable, and requires merely that the practical rights of the other party shall not thereby be prejudiced; that he shall be no worse off than if he had never made the contract of settlement. Under this principle, application of money paid on a void settlement to an actual existing debt due from the payor entirely satisfies all requirements.

23 R. C. L. 414.

The institution of a suit constitutes sufficient notice of the election to rescind and no prior notice is necessary.

Herbert v. Stanford, 12 Ind. 503; 24 A. & E. Ency. of Law, 620; Parker v. Simpson, 180 Mass. 334; Knappen v. Freeman, 47 Minn. 491; Kirby v. Harrison, 2 Ohio St. 326; Arizona Railroad Co. v. Carillo, 17 Ariz. 115, 149 P. 313.

What is a reasonable time within which the party must manifest his election to disaffirm a contract cannot be definitely stated as a matter of law, but it is a question of fact which must be determined in the light of the circumstances in each particular case in which the question arises. Mere delay in seeking to enforce the right to rescind may be so explained as to show that it was not an acquiescence. Neither laches, waiver nor acquiescence can be predicated upon mere delay where the complainant did not have knowledge of the facts giving him the right to ask rescission; and no conduct of his which otherwise might be sufficient to show an election to abide by the [158 Miss. 850] contract can be so construed if at the time he was ignorant of his rights.

24 A. & E. Ency. 625; 4 R. C. L. 515.

The general rules of practice and procedure where a release is involved in no wise differ from those generally applicable. Issues of fact on the question whether a release is a valid contract and binding on the releasor are for the determination of the jury, on the evidence, under proper instructions from the court. The question of ratification of a release, after the execution thereof, is also a question for the jury.

23 R. C. L. 418; St. Louis Railroad Co. v. McCrory, 56 So. 822; John Bjorlund v. Seattle Electric Co., 35 Wash. 439, 1 A. & E. Ann. Cases 443. Chalmers Potter and Green & Green, of Jackson, for appellee.

The party complaining must have exercised that the degree of diligence which may be fairly expected from a reasonable person. Where a party desires to rescind upon the ground of mistake or fraud, he must, upon discovery of the facts, at once announce his purpose and adhere to it. If he be silent and continue to treat the property as his own, he will be held to waive his objection and will be conclusively bound by the contract as if the mistake or fraud had not occurred.

A. & V. Ry. Co. v. Kropp, 129 Miss. 616, 92 So. 691; Harrison v. Alabama Midland Ry. Co., 40 So. 394-397; Railroad Co. v. Pierce, 64 F. 293; Grymes v. Sanders, 93 U.S. 55-63; Gibson v. Railroad Co., 30 Atl., 308-312; Erin v. Mendel, 78 Ky. 427, 39 Am. Rep. 248; Memphis Street Ry. Co. v. Giardino, 92 S.W. 855.

This being a voidable contract, and there being no tender back of the money received under the fraudulent settlement, plaintiff cannot maintain his action. [158 Miss. 851]

Smith v. St. L. & S. F. Ry. Co., 73 So. 801; Rowe v. Fair, 128 So. 87.

The very idea of rescinding a contract implies that what has been parted with shall be restored on both sides. That one party should be released from his part of the agreement, and that he should be excused from making the other party whole, does not seem agreeable to reason or justice. Hence the general rule is that a party who rescinds an agreement must place the opposite party in statu quo.

6 R. C. L. 936; 13 C. J. 619; Jones v. Smith, 33 Miss. 216; Martin v. Broadus, Freeman's Chancery 35; Simonton v. Bacon, 49 Miss. 582.

To constitute bar to action on the original claim or demand, the accord must be fully executed, unless the agreement or promise, instead of the performance thereof, is accepted as satisfaction. If the compromise, promise, or agreement, itself, and not its performance is accepted in satisfaction and extinction of the demand, it is good as an accord and satisfaction without performance. But, if the parties contemplate that performance of the contract shall be a discharge of the original demand, the mere agreement does not constitute an accord and satisfaction ---the performance is necessary to complete it.

Whitney v. Cook, 53 Miss. 551; Y. & M. V. R. R. Co. v. Fulton, 71 Miss. 385, 14 So. 271; 1 C. J., p. 530; Foster v. City of Meridian, 116 So. 820, 150 Miss. 715.

The evidence offered by the appellant in support of his replication is not clear and convincing and indubitable that the release was procured by fraud or misrepresentation, and this it must be before the settlement can be avoided.

Railway Co. v. Turnbull, 71 Miss. 1029 at page 1039, 16 So. 346.

When the money was tendered under the letter of November 21st, appellant was at liberty, if he saw fit, to accept or not accept that offer there made, and when he [158 Miss. 852] consciously took that money, there was an implied election to treat as valid that theretofore done.

Dana v. Gulf & S. I. R. Co., 64 So. 214, 106 Miss. 497; Hubbard v. Southern Ry. Co., 83 So. 247; Smith v. St. Louis & S. F. R. Co., 73 So. 803, 112 Miss. 878.

One injured who on a compromise settlement, releases his claim for damages, and afterwards, in an action at law, seeks to avoid the release, must show by clear and convincing evidence that it was procured by fraud or misrepresentation such as would authorize its cancellation by a court of equity.

A. & V. Ry. Co. v. Kropp, 92 So. 693; Rowe v. Fair, 128 So. 90; McCain v. Cochran, 120 So. 823; Choate v. Pierce, 126 Miss. 209, 88 So. 627; Carter v. Eastman-Gardner Co., 95 Miss. 651; Christian v. Green, 45 So. 425; Locke v. Keiler, 90 Miss. 3, 43 So. 673.

Before a party can demand a rescission of a contract he should offer to refund the money he may have received and place the other party in the position that he occupied before the making of the contract.

Hanson v. Field, 41 Miss. 712; Jagers v. Griffin, 43 Miss. 134; Martin v. Tarver, 43 Miss. 517; Fitzgerald v. Reed, 9 S. & M. 103. Anderson, J., delivered the opinion of the court.

Appellant brought this action against the appellee in the circuit court of Hinds county to recover damages for a personal injury suffered by appellant resulting from a collision between a Ford automobile, in which appellant was traveling, and a motor truck being used by the appellee in the transportation of goods, alleged to have been caused by the negligence of the driver of appellee's truck.

At the conclusion of the evidence for the appellant, the court, on motion of the appellee, directed a verdict and [158 Miss. 853] judgment in favor of the latter, from which judgment the appellant...