Wise v. Prescott

• Decision Date: 04 June 1962
• Docket Number: No. 451,451
• Citation: 142 So.2d 613
• Parties: Mrs. Corinne CLOHECY, Widow of Daniel J. WISE v. Vester PRESCOTT, Allstate Insurance Company, Harry J. Miller, Jr., New Orleans Public Service Incorporated and Travelers Indemnity Company.
• Court: Court of Appeal of Louisiana — District of US

Page 613

142 So.2d 613

Mrs. Corinne CLOHECY, Widow of Daniel J. WISE v. Vester PRESCOTT, Allstate Insurance Company, Harry J Miller, Jr., New Orleans Public Service Incorporated and Travelers Indemnity Company.

No. 451.

Court of Appeal of Louisiana, Fourth Circuit.

June 4, 1962.

Rehearings Denied July 2, 1962.

John P. Dowling and Calvin H. McBride, New Orleans, for plaintiff and appellee.

Alvin R. Christovich, Sr. and William W. Ogden, New Orleans, for New Orleans Public Service, Inc. and Harry J. Miller, Jr., defendants and appellants.

Sessions, Fishman, Rosenson & Snellings and Curtis R. Boisfontaine, New Orleans, for Vester Prescott and Allstate Ins. Co., defendants and appellants.

Before McBRIDE, SAMUEL and JOHNSON, JJ.

McBRIDE, Judge.

On the afternoon of May 25, 1958, a passenger bus of the New Orleans Public Service, Inc., operated by its employee, Miller, which was proceeding on North Miro Street in an uptown direction, was run into by an automobile, operated by Prescott and insured by Allstate Insurance Company, which was traveling toward the lake on St. Roch Avenue, the collision occurring in the intersection formed by North Miro Street and the outbound traffic roadway of St. Roch Avenue. Plaintiff, aged 74, a passenger on the bus, was physically injured, and she brought this suit against the owner of the bus, Miller, Prescott, and Allstate Insurance Company, in solido, seeking to recover a large sum in damages on the allegations that Both Miller and Prescott were guilty of joint negligence which proximated the accident.

After a trial, by jury, which consumed four full days, a verdict was returned in favor of plaintiff against the bus company, Miller, and Prescott for $11,024.50 and against Allstate Insurance Company in the sum of $5,000 (the maximum of its liability under the policy covering the automobile driven by Prescott), and judgment was rendered accordingly. All four defendants prefected appeals.

Prescott and Allstate Insurance Company in answer first tender the defense they had entered into a transaction or compromise with plaintiff under which defendant-insurer paid her $105, in consideration of which she executed a full release of all of her claims against them. Plaintiff at a later date attempted to return the amount to the insurer, but tender was refused. Said defendants now contend vigorously that the compromise they entered into with plaintiff is a complete bar to any claims she makes against them.

Plaintiff in her petition alleged that there had been a pretended adjustment and settlement of her claims as against Allstate Insurance Company and its assured, which fact she learned from her counsel when he demanded and received from the insurer a photostatic copy of the release. She avers the compromise was effected through deceit, imposition, misrepresentation, suppression of pertinent facts and information that should have been known to her, and at a time when she was not sufficiently possessed of her mental faculties to enable her to exercise the same care and prudence in connection with her signing of the release as she would have under ordinary circumstances. She prayed that the release be set aside. The jury evidently believed the compromise to be null and void, for it ignored the release and brought in its verdict against all defendants. The judgment subsequently rendered makes no mention of the release.

Whereas Allstate Insurance Company and Prescott are standing squarely on the compromise and the release given by plaintiff as a bar to her demands, it is necessary now to determine the validity vel non thereof.

Immediately after the accident, plaintiff was conveyed to the Charity Hospital where certain X-rays were made and she was given some medication to alleviate pain. She was returned to her home the same evening suffering 'with my head' and the pills 'made me a little woosy, like.' She states that the next morning she was sore 'all over,' and that her back, hips, legs and one eye were black and blue and that the left side of her face was swollen. She did not take to bed but reclined in an easy chair. In the afternoon Kollin, an adjuster for Allstate Insurance Company, went to plaintiff's apartment and was admitted by a Mrs. Carver, a neighbor of plaintiff who was present in the apartment in order to give such assistance as she could to plaintiff. At the time of Kollin's call plaintiff had not received treatment for her injuries (except having ingested the pain-killing pills received from the hospital) as she did not see her physician (Dr. Drewes) until May 28, 1958. After some conversation between the adjuster and plaintiff, it was agreed that she would be given $105. She testified that the adjuster asserted he represented Prescott who felt sorry for her, and that he was giving her the money on behalf of Prescott in order to help her out in the matter of payment for the X-rays and any additional medical bills. She admits receiving a check and signing the release, but pretends that she did not know the nature of the document or that she received the money from the insurance company. She states that her glasses had been broken in the accident and that without them she could not see, and therefore did not know the contents of the document.

In a number of cases compromise agreements entered into by persons who had suffered damages have been annulled by our courts. As in the case of fraud, each case must depend upon its own peculiar facts and circumstances. There are cases wherein it has been held that bereavement and grief, coupled with receipt of an unreasonably small amount, when it is obvious that the mental condition of the one receiving does not permit of rational and clear thinking, or where the receiver could not read or write or could not speak or understand the English language and did not understand the nature of the documents he signed, are enough to warrant the rescinding of the contract. Davenport v. F. B. Dubach Lumber Co., 112 La. 943, 36 So. 812; Waagen v. Indiana Lumbermens Mutual Insurance Company, La.App., 136 So.2d 831; McDaniel v. Audubon Insurance Company, La.App., 121 So.2d 531; Lervick v. White Top Cabs, Inc., La.App., 10 So.2d 67; McCastle v. Architectural Stone Co., La.App., 4 So.2d 120; Davis v. Whatley, La.App., 175 So. 422; Galt v. Travelers' Ins. Co., La.App., 141 So. 105; Brandon v. Gottlieb, 16 La.App. 676, 132 So. 283; Reed v. Holderith, 3 La.App. 378.

The adjuster denied making any false representations or telling plaintiff the money came from Prescott as a gift. He stated that plaintiff seemed to fully understand everything that was said and that before signing, she held the release in front of her as though she were reading it.

We have very carefully examined the testimony and our conclusion is that plaintiff, though an elderly woman, was an intelligent person who, despite her injuries, was fully capable of understanding the nature and import of such a transaction, and we fail to discern any grounds upon which the compromise should be set aside. She was mentally alert enough to inquire of the adjuster whether her acceptance of the money would adversely affect her case and she signed the release only when she was assured it would not. Her denial that she knew the settlement was coming from the Allstate Insurance Company is not impressive, and we believe plaintiff understood the reason for the payment to her and by whom the payment was being made. She received and cashed the insurer's check. The adjuster states that he drafted a restricted release so that plaintiff's rights against the other two defendants would be preserved.

A transaction or compromise is an agreement between two or more persons who, for for preventing or putting an end to a lawsuit, adjust their differences by mutual consent in the manner which they agree on and which every one of them prefers to the hope of gaining, balanced by the danger of losing. LSA-C.C. art. 3071. According to LSA-C.C. art. 3078 a voluntary compromise agreement, lawfully consummated, has the force of a definitive judgment in such transaction.

In Russ v. Union Oil Co., 113 La. 196, 36 So. 937, the Supreme Court said:

'There is no rule of law, morals, or ethics which denies to the ordinary citizen the right to compromise, with the person asserting it, a claim against him for damages, nor is that right defeated by any previous employment of counsel to prosecute such claim; and, when the compromise is effected in the manner provided by law, it has the force of the thing adjudged, and cannot be attacked collaterally, or for error of law or lesion, in a direct action. * * *'

The law on the subject of compromise as above detailed is also expressed in Jackson v. U.S. Fidelity & Guaranty Co., La.App., 199 So. 419; Head v. Rex Drilling Co., Inc., La.App., 182 So. 380; Beck v. Continental Casualty Company, La.App., 145 So. 810. In the latter case the court discussed the binding effect of a compromise thus:

'The law in its wisdom, and out of a solicitude to end or avert threatened litigation, encourages the settlement of disputes by compromise, and does not sanction the solemn acts of contending parties settling their disagreements being lightly brushed aside, unless there be present evidence of bad faith, error, fraud, etc. If such were not the law, there would be little incentive to any one to part with anything of value in the desire to escape the harassments of litigation. A compromise agreement, when freely entered into, is intended to have the binding effect of the thing adjudged. The law has ordained that such transactions have the dignity and force of a definitive judgment, in so far as definitely and irrevocably fixing the rights and liabilities of the parties thereto, as relates to the subject-matter dealt with. It is simply the act of the parties determining their own liabilities and obligations, instead of the court.'

If the asserted ground of annulment that plaintiff did not...