United States Cast Iron & Foundry Co. v. Marler

This was a suit for damages, brought by an employé against his employer under subdivision 5 of section 3910 of the Code 1907. Plaintiff was injured, it was alleged, as the result of the negligence of one W.S. Brown, who on behalf of defendant was in charge and control of an engine and car upon a railroad track. The pleadings were in short by consent. The defenses interposed were contributory negligence, release, accord, and satisfaction.

It appears from the testimony that plaintiff was a mechanic's helper, and was assisting one Kiker, whose duty it was to repair breakdowns wherever they occurred in the plant of the defendant. A breakdown occurred in that part of the plant known as the "mud mill," and in repairing this breakdown it became necessary for Kiker and plaintiff to insert a new core bar. To get this core bar to the place where it was needed, plaintiff and Kiker had taken the core bar to the track of a narrow-gauge railway which the defendant operated on its premises for the purpose of moving heavy materials. Plaintiff was standing near the track, and the engine was backing a flat car to the place where plaintiff was standing. It was the purpose of plaintiff and Kiker to load the core bar on the flat car. As the car approached plaintiff, it struck a core bar head, which was lying on the ground, and jammed the same against plaintiff's leg, causing the injury complained of. The engine was operated by one Walker, who was the engineer.

There was evidence tending to show that Brown was in charge or in control of the engine and car, and that as a proximate consequence of his negligence the plaintiff was injured. There was also evidence tending to show the plaintiff's earning capacity had been impaired and decreased on account of the injury suffered by him.

The assignments of error based upon the written charges requested by defendant, relating respectively to the negligence of Brown, and to his control of the engine and car, and to the decreased earning capacity of plaintiff, are without merit. L. N. R. Co. v. Richardson, 100 Ala. 232, 14 So. 209; L. N. R. Co. v. Goss, 137 Ala. 319, 34 So. 1007; L. N. R. Co. v. Fitzgerald, 161 Ala. 397, 49 So. 860; Alabama Fuel Iron Co. v. Ward, 194 Ala. 242, 69 So. 621.

This brings us to the main defense relied upon by appellant. The plaintiff Marler, in consideration of $50, signed the paper, a copy of which is set out in the record, releasing the defendant from all liability for damages sustained by plaintiff on account of this accident. It is conceded that the plaintiff executed this instrument and received from the defendant the consideration recited therein, and that at the time of the trial this consideration had not been returned to the defendant. The plaintiff sought to avoid the effect of this release and of his failure to return the consideration received therefor by introducing testimony tending to show that this release was secured by fraud.

The issue upon this question was sharply contested. Plaintiff's testimony that he signed this release, while in a helpless condition from physical pain and mental suffering, under the belief, induced by the false and fraudulent representation of defendant's agents, that he was signing, not a release of his cause of action, but a receipt for money he was entitled to under a contract of insurance, was met by testimony of defendant that plaintiff was able to read and write, that the contents of the release were carefully explained to him, and that he signed the same voluntarily.

Assuming that plaintiff's testimony relating to this issue was all true, and that defendant's testimony was all false, we reach the conclusion that plaintiff, with capacity to read, signed this release, and received therefor $50 as the result of fraudulent and untruthful representations, by reason of which he was led to believe and did believe that he was attaching his signature, not to a release, but to a receipt for money rightfully his. This undoubtedly gave plaintiff the right, within a reasonable time after discovery of the fraud, to repudiate this release by returning the consideration received therefor and to place his cause of action in the same position it was before the release was ever signed.

The plaintiff had the right to repudiate the release, if it was obtained through fraud; but he could not repudiate it by piecemeal. He could not retain unto himself the benefits of the settlement and at the same time deny to the defendant by repudiation those benefits which inured to the defendant therefrom. He could repudiate only in toto, and therefore necessarily only by putting himself and the defendant back in statu quo. He could not restore the former status without a return of the money which had been paid as inducement for signing the release.

The decisions of foreign jurisdictions are in hopeless conflict on the necessity of returning or tendering the consideration upon repudiation of a release of damages for personal injuries procured by fraud. See note, Ann. Cas. 1912D, 1084. Therefore an attempt to differentiate the present case from the cases considered by foreign courts of last resort would be useless. The Supreme Court of Alabama is firmly committed to the principle that, where money is paid as an inducement for signing a release, there can be no repudiation of the release without first tendering back the money as paid. Birmingham Railway, Light Power Co. v. Jordan, 170 Ala. 530,54 So. 280; Harrison v. Alabama Midland R. Co., 144 Ala. 246,40 So. 394, 6 Ann. Cas. 804; Kelly v. L. N. R. Co.,154 Ala. 578, 45 So. 906; Birmingham R. Co. v. Hinton,158 Ala. 470, 48 So. 546; Stephenson v. Allison, 123 Ala. 439,26 So. 290; Dill v. Camp, 22 Ala. 249; Barnett v. Stanton,2 Ala. 181. The case of Western Ry. of Ala. v. Arnett, 137 Ala. 414,34 So. 997, and the later case of B. R., L. P. Co. v. Jordan, 170 Ala. 530, 54 So. 280, as well as the case of Illinois Central R. R. Co. v. Johnston (decided by the Supreme Court of Alabama on the 30th day of June, 1920) 87 So. 866, all recognize the rule just stated.

In the Arnett Case the plaintiff had been paid not as inducement for signing the paper which he signed. The payment of the money and the signing of the release had nothing whatever to do with each other. The defendant had not said, "If you will sign this paper, we will pay you $25." On the contrary, it appeared that the defendant's representative, after expressing extreme solicitation of the defendant's president on the plaintiff's behalf, and after promising the plaintiff lifelong employment by the defendant, said defendant's president further desired to make him a gift of $25. Thereupon the money was paid. Later (the principle would have been no different if days or weeks had intervened) the defendant's representative asked the plaintiff to sign a certain writing, and assured him that it had nothing whatever to do with the payment of the money; "that it did not amount to anything; that it was simply a paper stating that plaintiff had no ill will or hard feelings against defendant company." From the fact, as aforestated, it clearly appears that the payment of the money had not been an inducement for the signing of the paper, and was no part of the same transaction. On the other hand, in the Jordan Case the money had been paid as the inducement for signing the release, and the Supreme Court held that, inasmuch as the payment of the money and the signing of the release were inseparable parts of the same transaction, there could not be a rescission in toto without a return of the money.

The instant case cannot be differentiated from the Jordan Case. In that case plaintiff had lost in currency $18.25 on one of the defendant's cars. The loss occurred concurrently with certain injuries, for which she brought suit. This $18.25 was absolutely her money, and, though she was injured, should have been returned to her. In that respect there could be no difference, because the claim of the plaintiff in the instant case was for insurance money due him. Miss Jordan's contention was that she was being paid money that belonged to her. She signed a paper, which was later shown to be a full release of the defendant from all liability for her personal injuries. Upon this paper's being introduced as a defense, she sought to avoid it by saying that she did not have to return the money which had been paid her, because the company owed her that much money as restoration of what she had lost on defendant's car, and which belonged to her. Therefore the money that was received by her was the same thing as her own money, and was not paid as compensation for her damages.

The plaintiff in the instant case says the money which was paid him was represented to be insurance money that belonged to him; that he should not return the money as a condition to repudiating the release which he signed, because he was being paid what belonged to him, or what was due him, and the payment was not made in compensation of his damages. In the Jordan Case the Supreme Court of Alabama says, in effect, that while the $18.25 did belong to Miss Jordan, and while the representative upon which she signed the receipt for the money was false, and the receipt fraudulent, in that it was a complete discharge from liability, she could not repudiate the release without returning the money paid her for signing it. Under no process of reasoning can there be a different application of the principle to the instant case, for the plaintiff in this case is doing practically the same thing Miss Jordan did. He sets up the return of the money paid to him should not be made a condition to his repudiating the fraud by which he was in, duced to sign what turned out to be, not a receipt for the money that was due him, and paid, but a release from all liability.

The case of Illinois Central R. R. Co. v. Johnston, 87 So. 866, which has been very recently decided, recognizes the distinction aforesaid. The case here is clearly distinguishable from the Arnett Case, and is controlled by B. R., L. P. Co, v. Jordan, supra. The logic of the situation in the instant case is as follows:

The money would not have been paid, unless the plaintiff signed the paper, which was a release. The plaintiff signed said paper in order to get the money. The plaintiff was induced to sign said paper by false representations as to its contents. The plaintiff having been induced by fraud to sign the paper in order that he could get the money, which would not have been paid him under any other condition, the fraudulent representation was inherent in the one transaction. It is because of this fraud that plaintiff seeks by repudiation thereof to set aside the one transaction. The law is, as announced by the Supreme Court of Alabama, that as a condition to repudiating the transaction for fraud the plaintiff must return or offer to return what he received as the result of the fraud. What did plaintiff receive as the result of the fraud practiced on him? Money which he was told was paid him as insurance due, and for the payment of which he thought he was signing a receipt, but which was a full release of defendant from all damages to plaintiff for personal injuries. The very essence of the fraud, as contended by plaintiff, is that he was being paid money due him as insurance, when as a matter of fact defendant was paying him the money as compensation for his injuries and obtaining from him a release therefor.

In addition to what has just been said, it is a potent fact that in this regard there is no evidence as to the exact amount that was due plaintiff for insurance, if anything was due, and there is no evidence as to whether the $50 that was paid plaintiff was more than the insurance or less than the insurance. In view of the facts of this case, we are constrained to the conclusion that the plaintiff's failure to return or offer to return the money which was paid to him at the time he executed the release rendered his disaffirmance and attempted repudiation of this release ineffective, and that his failure to pay back or offer to pay back said money should have defeated his recovery.

The judgment of the lower court is reversed, and the cause remanded.

Reversed and remanded.