King v. Atlantic Coast Line Railroad

Aluekt, J.,

after stating the case: The plaintiff having introduced evidence tending to prove that he was injured by the negligence of the defendant, it follows that there was error in the ruling- of his Honor, unless' the acceptance of benefits from the relief department by the plaintiff, after his injury, operates to release the defendant company from liability. We think it does not have this effect under the evidence in this case, for two reasons:

1. It does not appear that there is any consideration for the release, moving from the defendant. The answer alleges that the defendant has expended large sums in maintaining the relief department, and in contributions to the 'fund from which benefits are paid to members; but these are matters of defense, and under our system of pleading are deemed to be denied by the plaintiff, and no evidence was introduced in support of the allegations of the answer.

The evidence does not disclose that the defendant has paid one dollar for operating expenses or otherwise, or that the plaintiff has received anything that he has not paid for by his own contributions. The only reference in the evidence to the payment of any sum by the defendant is in the following question and answer: “I ask you if all this money that has been paid into the relief department, and upon which the relief department has been operated, has not been the wages taken out of-the laborers of the Atlantic Coast Line?” Answer: “No, sir.”

The authorities are uniform that a release must be founded on a valuable consideration, and that the plea is not good unless the consideration is alleged. A. and E. Ency. Pl. and Pr., vol. 18-92; Story Eq. PL, sec. 797; 1 Dan. Ch. Pr., 670; Hale v. Grayon, 99 Ky., 173; Maness v. Henry, 96 Ala., 458; Swan v. Benson, 31 Ark., 730; Scott v. Scott, 105 Ind., 584.

In Crawley v. Timberlake, 36 N. C., 460, Chief Justice Ruf-fin says: “A court of equity does not sustain these shorthand bars, such as a release, a stated account, and the like, unless they be pleaded as not only existing instruments, t but also as being fair and wise, and proper to be equitably enforced. . . . So, with respect to this particular subject of a release now before us, Lord Redisdale states (in Hughes v. Kearney, 1 Sch. and Lef.) that the plea of release must set out the consideration upon which it was made, if it be impeached in that point. . . . In other words, the release, unless fairly obtained and on a proper consideration, ought not to preclude the court from going into the case and dealing out justice to the parties according to its real facts.”

This case was approved in Shaw v. Williams, 100 N. C., 281, and in Boutten v. R. R., 128 N. C., 341, the Court quotes with approval this language from Shaw v. Williams, supra: “And so every release must be founded on some consideration; otherwise, fraud must be presumed.”

Some of the authorities speak of transactions of this character as a release, and others as an accord and satisfaction, but by whatever name it is called, it is pleaded by the defendant as a binding contract, existing between it and the plaintiff, and a promise without consideration cannot be enforced. If it is necessary to a good plea to allege the consideration, the party relying on the defense assumes the burden of proving the allegations as made. He is not required to prove a full consideration, but it must be valuable, and as such must not be so small as to cause one of ordinary discretion and judgment to say he paid nothing. Fullenweider v. Roberts, 20 N. C., 420; Worthy v. Caddell, 16 N. C., 86.

The defendant contends, however, that in the absence of evidence proving the payment of a consideration, the guarantee by the defendant to fulfill the obligations of the department, and its agreement to supply the necessary facilities for conducting its business and to pay all the operating-expenses furnishes a consideration. Ordinarily this would be true, but we cannot concede its sufficiency, standing alone, to support a release of the plaintiff’s cause of action, when considered in connection with the other regulations of the department.

The department has been established by the defendant, and its rules and regulations made by it. Under these rules and regulations it retains the control of the department, with the power to make changes as it sees fit, and it determines the contributions of members, and may decrease or increase them.

It is, therefore, possible for the defendant to fix the amounts to be contributed by members large enough to insure it harmless from loss on account of accident and negligence, and to throw on the employees a burden which does not rightfully belong to them.

If such a result should be reached, and it appeared affirmatively that the defendant paid nothing under its rules and regulations, the promise of the defendant “to guarantee, etc.,y would be promises incorporated in the regulations by the .defendant, without any expectation of being called on to perform them, and would not furnish a consideration, and under such circumstances the acceptance of benefits would not affect the right to recover.

2. If a consideration had been proven, it appears, according to the evidence of the plaintiff, that he was entitled to receive benefits for eight months, and that he was paid for four months.

In the.consideration of this phase of the case it must be remembered that it is the “acceptance of benefits,” not the acceptance of a promise to pay benefits, that bars a recovery.

The transaction partakes of the nature of an accord and satisfaction, which to be effectual must be performed in its entirety. If performed in part only, the original right of action remains and the party to be charged is allowed what he has paid in diminution of the amount claimed.

Chief Justice Bleckley states the rule, with its qualifications, in Railway Co. v. Clem, 80 Ga., 539. He says: “As long-as the accord is executory, although it is partially performed, the original cause of action is not extinguished, and an action may be brought upon it, and the remedy of the defendant is to plead his part performance as a satisfaction pro tanto. He gets credit for all he has paid upon it, but the right of action is not extinguished by an accord, merely, without complete satisfaction, where the parol contract is that performance, not mere promise, is to constitute the satisfaction, though if a promise is to constitute it before performance, then the accord is executed by the promise.”

Blackstone says: “An accord is a satisfaction agreed upon between the party injuring and the party injured, which, when performed, is a bar to all actions on -this account.” 3 Bl. Com., 15.

“Accord executory without performance accepted is no bar. Accord with part execution cannot be pleaded in satisfaction. The accord must be completely executed to sustain a plea of accord and satisfaction.” Bacon Abr., title “Accord and Satisfaction,” A. and C.

In Peytoes’ case, 9 Co., 79, it is said: “And every accord ought to be full, perfect, and complete, for if divers tilings are to be done and performed by the accord, the performance of part is not sufficient, but all ought to be performed.”

These and other authorities to the same effect are cited with approval in Kramer v. Heim, 75 N. Y., 574, and in conclusion tbe Court there says: “The doctrine which has sometimes been asserted, that mutual promises, which give a right of action, may operate and are good as an accord and satisfaction of a prior obligation, must, in this State, be taken with the qualification that the intent was to accept the new promise as a satisfaction of the prior obligation. Where the performance of the new promise was -the thing to be received in satisfaction, then, until performance, there is not complete accord, and the original obligation remains in force.”

The following authorities announce the same rule: Lawson E. and E., vol. 5, secs. 2567-8; Par. Con., vol. 2, p. 683, 5th Ed.; Oye., vol. 1, p. 315, and cases in note; Clark Con., 491.

There are three cases bearing directly on the effect of the payment of a part of the benefits due under the provisions of a relief department on the original cause of action for negligence: Penn Co. v. Chapman, 220 Ill., 428; Johnson v. R. R., 58 S. C., 488, and Petty v. Brunswick R. R., 109 Ga., 666. In the Illinois case it is held that part performance does not extinguish the right of action for negligence, and the cases from South Carolina and Georgia hold to the contrary.

These last cases from South Carolina and Georgia proceed upon the idea that by the terms of the relief department then before the Court, the employee had stipulated that the acceptance of any benefit released the right of action, as appears from what is said in the Petty case. “Petty (the plaintiff) therein expressly stipulated that acceptance by him from the relief and hospital department of any of the benefits provided for by its regulations should operate, without more, to release the defendant company from all claims for damages he might have against it”; and it is upon this ground that the case is distinguished from Railway Co. v. Clem, supra. We do not so understand the rules and regulations before us.

In an extended note to Johnson v. Fargo, 6 Am. and Eng. Ann. Cases, practically all the cases considering the terms of relief departments and their legal effect are collected, and among others the three above referred to. After stating the rule adopted by the Georgia and South Carolina courts, the editors say: “It will be observed that this doctrine is not only opposed to the reasoning in Penn Co. v. Chapman, but is inconsistent with the well-considered cases, cited supra, holding that it is the receipt of benefits under the contract, and not the contract itself, that binds the employee.” (

We conclude, therefore, that the weight of authority and the reason of the thing favor the rule that a payment of a part of the benefits to which the employee is entitled does not prevent the prosecution of an action to recover damages for negligence, in the absence of an express stipulation that the acceptance of a part shall have that effect, and we so hold.

This disposes of the appeal, but the rules and regulations of the relief department are in evidence, and the question has been fully argued as to the effect of an acceptance of all the benefits to which an employee is entitled, from a fund to which the defendant has contributed, on his right of action for negligence, and as the question will necessarily arise again, it is our duty to consider it.

The question is undecided by this Court. The views expressed in Barden v. R. R., 152 N. C., 318, relied on by the plaintiff, are entitled.to great respect, emanating, as they do, from a member of this Court of learning and of much capacity for research; but the point in controversy here was not raised in that case.

In the Barden case no benefits were paid to the employee and the defendant railroad company did not rely on the provisions of the relief department as a defense. On the contrary, both plaintiff and defendant admitted the validity of the rules and regulations of the department.

The case in brief was this: The plaintiff alleged in his complaint:

(1) That the defendant was a railroad corporation.

(2) That it maintained a relief department.

(3) That as a part of its relief department it maintained a hospital.

(4) That in this hospital it employed surgeons and physicians.

'(5) That he was an employee of the defendant and a member of the relief department.

(6) That as such he was entitled to be treated in the hospital when sick or disabled.

(7) That he was suffering from fistula and was admitted to the hospital and there negligently treated by the physicians.

The argument of' the plaintiff was that the relief department was an agency of the railroad; that the hospital was a part of the department; that the physicians were employed in the hospital, and the conclusion deduced was that the physicians were agents of the railroad and therefore it was responsible for their negligence.

The defendant demurred to the complaint upon the ground that it did not state a cause of action, in that it was not alleged that the defendant failed to exercise due care in the selection of the physicians. The demurrer was overruled by the Judge of the Superior Court, but on appeal this ruling was reversed and the complaint held to be insufficient.

We therefore regard the question as an open one, presented for our decision.

It has been considered by the highest courts of Alabama, Georgia, South Carolina, Maryland, Pennsylvania, New Jersey, New York, Ohio, Indiana, Illinois, Iowa, and Nebraska, and by the Circuit Courts and the Circuit Courts of Appeal of the United States, and with two exceptions it has been held that an acceptance of all the benefits under the rules and regulations of a relief department, when it is the voluntary act of the employee, and is free from undue influence or'fraud, bars an action for negligence. The exceptions are Pittsburg R. R. v. Montgomery, 152 Ind., 1, which was overruled in Pittsburg R. R. v. Moore, 152 Ind., 345, and Miller v. R. R., 65 P. R., 305, which was disapproved on this point on appeal .to the Circuit Court of Appeals, 76 F. R., 439.

Ve do not cite in support of the proposition the English eases of Clement v. R. R., 2 Q. B. Div., 490; Griffiths v. Dudley, 9 Q. B. Div., 362, and the Queen v. Grenier, 3 Can. Sup. C., 30, p. 50, because they hold that a regulation is permissible which gives no option to the employee to accept benefits or sue, and which compels him to accept the benefits although injured by the negligence of his employer, which we would not follow.

In the eases which have come before the courts,' it would seem that every attack conceivable has been made on the relief department.

It has been urged that it is against public policy, that there is no privity of contract between, the employee and the railroad, and that there is no consideration to support a release of a right of action, and in reply the courts say, as stated in Eckmon v. R. R., 169 Ill., 318:

“ 'The various courts which have had this question under consideration appear to agree that the stipulation in question is not opposed to sound public policy, but, on the whole, is conducive to the well-being of those whom it immediately affects, inasmuch as many railroad employees, owing to the dangerous character of their employment, are hurt without any culpable negligence on the part of their employer, and inasmuch as the employee retains, until after he sustains an injury, the right to elect whether he will sue his employer for negligence or accept benefits from the association. It also appears to be agreed that the obligation assumed by the .employer to maintain and -support such association by contributing the funds necessary for that purpose creates a privity of .contract between the employer and all the members of the association and at the same time furnishes, a sufficient consideration to support such contract.’ Substantially the same language and reasoning have been used in the. following cases, all of which sustain the sufficiency of- such a defense: Maine v. R. R. (Iowa), 70 N. W. Rep., 630; R. R. v. Bell, 44 Neb., 44; Donald v. R. R. (Iowa), 61 N. W. Rep., 971; R. R. v. Wymore, 40 Neb., 645; Vickers v. R. R., 71 Fed. Rep., 139; Leas v. Pennsylvania Co., 10 Ind. App., 47; Ringle v. Pennsylvania Co., 164 Pa. St., 529; Shaver v. Pennsylvania Co., 71 Fed. Rep., 931; Otis v. Pennsylvania Co., 71 id., 136; Johnson v. R. R., 163 Pa. St., 127; Spitzer v. R. R., 75 Md., 162; Fuller v. Relief Assn., 67 id., 433; Graft v. R. R. (Pa.), 8 Atl. Rep., 206; Martin v. R. R., 41 Fed. Rep., 125; S. v. R. R., 36 id., 655; Owens v. R. R., 35 id., 715. ... . In the case at bar the appellee contributes largely to the fund under its agreement to make up or guarantee deficits, to furnish surgical aid attendance, to pay all tbe expenses of administration and management, and to become responsible for tbe safe-keeping of tbe funds of tbe relief department.”

It is tbe fact tbat tbe employee is not compelled to accept tbe benefits — tbat be bas tbe choice after his injury to accept benefits or to sue to recover damages — wbi'cb saves tbe rules and regulations from condemnation as a contract against public policy or against negligence. To deny tbis right of exercising bis choice to tbe employee would be equivalent to saying tbat when injured be can make no settlement with bis employer.

“Tbe injured party, therefore, is not stipulating for tbe future, but settling for tbe past; be is not agreeing to exempt tbe company from liability for negligence, but accepting compensation for any injury already caused thereby. He may as well accept it in installments as in a single sum, and from an appointed fund to which tbe company bas contributed as from tbe company’s treasury, as a result of litigation. Tbe substantial feature of tbe contract, which distinguishes it from those held void as against public policy, is tbat tbe party retains whatever right of action be may have until after knowledge of all tbe facts, and an opportunity to make bis choice between tbe sure benefits of tbe association or tbe chances of litigation. Having accepted tbe former, he cannot justly ask tbe latter in addition.” Johnson v. R. R., 163 Pa. St., 127.

Tbe same reasoning meets tbe objection tbat tbe rules and regulations are in violation of tbe statutes existing in many States, invalidating agreements .between employer and employee, having for their object the exemption of tbe employer from liability for negligence. Hamilton v. R. R., 118 Fed. Rep., 92; Petty v. R. R., 109 Ga., 666; Pittsburg R. R. v. Moore, 152 Ind., 345; Pittsburg R. R. v. Hosea, 152 Ind., 412; Donald v. R. R., 93 Iowa, 284; Pittsburg v. Cox, 55 Ohio St., 497; Day v. R. R., 179 Fed. Rep., 30.

Tbe opinion in the last ease was written by Connor, J., and concurred in by Judges Goff and Pritchard, in which it is said:

“Assuming tbat tbe averments of tbe declaration bring tbe plaintiff’s case within tbe provisions of tbe Constitution, and tbat ‘he was injured by an act or omission of a fellow-servant,’ as defined, and limited by tbe language of tbe section, does tbe contract, set forth in tbe special plea, waive any of tbe ‘benefits’ conferred by said section? It is manifest tbat, by becoming a member of tbe relief department, plaintiff did not waive or deprive bimself of tbe right to maintain an action against defendant for an injury sustained by him while in its service as defined by'the Constitution ‘by an act or omission of a fellow-servant.’ There is nothing in tbe rules and regulations of tbe relief department which could be averred or pleaded in bar of an action brought by him for such injury; nor did be, by becoming a member thereof, make any ‘contract, express or implied,’ by which he waived any of the ‘benefits’ conferred upon or secured to him by the Constitution. Giving the language of the section the most liberal construction possible, nothing more is secured to the employee, injured by the .negligence of a fellow-servant, than the right to recover from the common master damages for such injury, in the same manner and to the same extent as if the same acts or omissions were those of the master himself in the performance of a nonassignable duty. We are unable to perceive how, by any possible interpretation, the scheme known as the relief department, or becoming a member thereof, can be said to waive the right of action secured to the employee by the Constitution. As uniformly held by other courts, in which the same contention has been made, the employee does not waive, or agree to waive, any rights to which he is entitled by becoming a member of the relief department. . He simply agrees that, after the injury is sustained, and his cause of action accrues, he will elect whether to sue for damages or accept the benefits secured by the relief department; that he will not do both. There is no suggestion that plaintiff made his election under such circumstances or conditions, either mental, moral, or physical, making it inequitable to enforce it. Similar statutes have been enacted, wRereby agreements made in advance of an injury, caused by the negligence of a fellow-servant or defective appliances, ways or means, are declared to be invalid. The courts have held that becoming, a member of the relief department was not within the letter or .spirit of these statutes.”

Again, it is contended that tbe business is that of insurance, and that it is outside of tbe powers granted to a corporation to do a railroad business. Tbe authorities bold tbe contrary view. Maine v. R. R., 109 Iowa, 260; S. v. R. R., 68 Obio St., 41; Beck v. R. R., 63 N. J. L., 232.

„ In tbe New Jersey case tbe Court says: “We must recognize that it (tbe railroad) bas either express or implied power to engage tbe services of many men, and' contract with them as to tbe compensation, they shall receive for their services. Each of such employees is engaged in an employment which subjects him to tbe hazard of injury and tbe danger of death. Each is possessed of tbe liberty to contract with tbe employer respecting bis compensation. A contract by which an employee permits such an employer to create a fund in part out of bis wages, supplemented by a contribution by tbe employer when necessary, out of which relief for sick and injured employees is provided, and by which tbe employer undertakes to manage tbe fund and furnish tbe agreed-on relief, is, in my judgment, within tbe implied powers of tbe employer, if a corporation. On tbe part of tbe employer such a scheme may be deemed likely to increase tbe efficiency of tbe force it employs, and on tbe part of tbe employee it may tend to relieve from anxiety as to support if injured by any of tbe many dangers to which he is daily and hourly exposed. As incidental to the contract of employment and compensation, therefore, it is not ultra vires."

The following-authorities are also in point: Sturgess v. R. R., 60 S. E. Rep., 940; Fuller v. Relief Assn., 61 Md., 436; Chicago v. Curtis, 44 Neb., 55; Chicago v. Bell, 51 Neb., 462; Harrison v. R. R., 144 Ala., 252; A. C. L. v. Downing, 166 Fed. Rep., 850; Carter v. R. R., 115 Ga., 853; Owens v. R. R., 35 Fed Rep., 718; Spitzer v. R. R., 75 Md., 168; Otis v. R. R., 71 Fed. Rep., 136; Lease v. R. R., 10 Ind. App., 57; Ringle v. R. R., 164 Pa., 532; R. R. v. Edward, 25 Ind. App., 674; Brown v. R. R., 6 Dist. C. App. cases, 244; Graft v. R. R., 8 Atl. R., 207; Clinton v. R. R., 60 Neb., 692; Black v. R. R., 36 Fed. Rep., 655; Martin v. R. R., 41 Fed. Rep., 126; Coliazzi v. R. R., App. Div., 4th Dept., March Term, 1911; Elliott on Railroads, vol. 3, sec. 1379 et seq.

Up to this point we have considered the effect of the voluntary acceptance by the employee of the benefits to which he is entitled, based upon the language of the rules and regulations, and uninfluenced by other matters, and hold that such acceptance operates as a release or an accord and satisfaction of a claim for damages on account of negligence, when based on a consideration moving from the defendant. If, however, the release is not voluntary; and if it- is procured by undue influence or fraud, or has no consideration to support it, it will not avail as a defense.

The history of the rblief department justifies the courts in subjecting settlements made thereunder to close scrutiny. They seem to have kept pa.ce with the employer’s liability acts, and as one of these was passed a relief department would be organized.

The English act, on which most of the American, statutes are based, went into effect on 1 January, 1880, and on the same day the owner of a colliery notified his employees they must look to the department in the event of injury by negligence, and from then until now the effort has continued to avoid the increased liability imposed by the acts. In so far as those efforts are legitimate and fair they should be upheld, and no further.

By undue influence is meant a controlling influence, one which impels a person to do an act he would not otherwise do. Westbrook v. Wilson, 135 N. C., 402; In re Abee, 146 N. C., 274.

As is well said by Justice Brown In re Will Amelia Everett, 153 N. C., 85: “Experience has shown that direct proof of undue or fraudulent influence is rarely obtainable, but inference from circumstances must determine it. . . . Undue influence is generally proved by a number of facts, each one of which standing alone may be of little weight, but when collectively stated may satisfy a rational mind of its existence.”

When it is in issue the jury have the right to consider the relation of the parties, the circumstances connected with their relationship, the condition and situation of the parties at the time of the transaction, the adequacy of the consideration, and other relevant facts.

Tbe relation of employer and employee is not one of those regarded as confidential, from which a presumption of fraud or undue influence will arise, but it is recognized by the courts that the employer has great influence in determining the conduct of the employee and may use it to his injury. It is upon this ground that the statutes regulating the hours of labor are sustained, as stated in Holden v. Hardy, 169 U. S., 366. “The Legislature has° also recognized the fact, which the experience of legislators in many States has corroborated, that the proprietors of these establishments and their operatives do not stand upon an equality, and that their interests are, to a certain extent, conflicting. The former naturally desire to obtain as much labor as possible from their employees, while the latter are often induced by the fear of discharge to conform to regulations which their judgment, fairly exercised, would pronounce to be detrimental to their health or strength. In other words, the proprietors lay down the rules and the laborers are practically constrained to obey them. In such cases self-interest is often an unsafe guide, and the Legislature may properly interpose its authority.” This language was approved by the Supreme Court of the United States in an opinion written by Mr. Justice Hughes in R. R. v. Maguire, 219 U. S., 552.

It is also competent to consider the fact that the option to accept benefits or sue is in the application for membership, and that the defendant has control of the department and prescribes its rules and regulations. It is true that it is the acceptance of benefits that bars the action, when free from fraud or undue influence, but this acceptance receives its vitality from the clause in the application for membership, or, as is said in the Maguire case: “The payment of benefits is the performance of the promise to pay contained in the contract of membership.”

The situation of the employee at the time he accepts the benefits, his condition and surroundings, are relevant. Was it soon after his injury and while suffering, or was he surrounded by the employees of the company, with no opportunity 1 o confer with relations or friends?

In Pom. Eq. Jur., vol. 2, sec. 948, it is said: “Whenever a person is in pecuniary necessity and distress, so that he would be likely to make any undue sacrifice, and advantage is taken o£ such condition to obtain from bim a conveyance or contract which is unfair, made upon an inadequate consideration and the like, even though there be no actual duress or threats, equity may relieve defensively or affirmatively.” Note, however, that it is not pecuniary necessity and distress which are the basis of the equity jurisdiction,- but. it is taking advantage of this condition.

Again Pomeroy says, vol. 2, sec. 851: “Where there is no coercion amounting to duress, but a transaction is the result of a moral, social, or domestic force exerted upon a party, controlling the free action of his will and preventing any true consent, equity may relieve against the transaction on the ground of undue influence, even though there may be no invalidity at law. In the vast majority of instances undue influence naturally has a field to work upon in the condition or circumstances of the person influenced which render him peculiarly susceptible and yielding — his dependent or fiduciary relation towards the one exerting the influence, his mental or physical weakness, his pecuniary necessity, his ignorance, lack of advice, and the like. All these circumstances, however, are incidental, not essential.”

The consideration paid to the employee is important, and may he controlling, but it is not to be determined .alone by the amount of benefits paid to the employee, and the proportion this may bear to a fair compensation for his injury.

On the part of the employee it must be remembered that he has. contributed to the fund out of which he is paid, and that the department has been established primarily for the benefit of the railroad and not as a charity, and that it has been relieved of liability for negligence in many instances, under its' rules and regulations. On the part of the railroad, that the party injured is a member of the relief department, and as such is entitled, upon the payment of a small sum, to hospital treatment and benefits when sick or disabled, or when injured by accident, and to larger benefits at death; that to maintain the department it is necessary to-keep up its membership; that the railroad has been compelled to expend large sums in'operating expenses, and in contributions to the relief fund — if this appears. When due weight is given to these matters, and there is evidence that the consideration is inadequate, it is a circumstance which, in connection with other circumstances, may be submitted to the jury, and if grossly inadequate, it alone is sufficient to carry the question of fraud or undue influence to the jury. Pom. Eq. Jur., vol. 2, secs. 926-7. .

At the last term, this Court said, in Leonard v. Power Co., 155 N. C., 10, on this question: “In Byers v. Surget, 19 How., 311, the Supreme Court of the United States says: ‘To meet the objection made to' the sale in this case, founded on the inadequacy of the price at which the land was sold, it is insisted that inadequacy of consideration, singly, cannot amount to proof of fraud. This position, however, is scarcely reconcilable with the qualification annexed to it by the courts, namely, unless such inadequacy be so gross as to shock the ’ conscience, for this qualification implies necessarily the affirmation that, if the inadequacy be of a nature so gross as to shock the conscience, it will amount to proof of fraud.’ And again, in Hume v. U. S., 132 U. S., 411, 10 Sup. Ct., 136 (33 L. Ed., 393): ‘It (fraud) may be apparent from the intrinsic nature and subject of the bargain itself, such as no man in his senses, and not under delusion, would make on the one hand, and as no honest and fair man would accept on the other.’ Our Court, speaking through Justice Broiun, so declares the law in reference to awards and other transactions, in Perry v. Insurance Co., 137 N. C., 406, 49 S. E., 890. He says: ‘Where there is a charge of fraud or partiality made against an award, the fact that it is plainly and palpably wrong would be evidence in support of the charge, entitled to greater or less weight according to the extent or effect of the error and the other circumstances of the case. There might be a case of error in an award so plain and gross that a court or jury could arrive only at the conclusion that it was not the result of an impartial exercise of their-judgment by the arbitrators. Goddard v. King, 40 Minn., 164, 41 N. W., 659. The settled rule, which is applicable not only to awards, but to other transactions, is that mere inadequacy alone is not sufficient to set aside the award; but if the inadequacy be so gross and palpable as to shock the moral sense, it is sufficient evidence to be submitted to the jury on tbe issues'relating to fraud and corruption, or partiality and bias.’ Where there is inadequacy of consideration, but it is not gross, it may be considered in connection with other evidence upon the issue of fraud, but will not, standing alone, justify setting aside a contract or other paper-writing on the ground of fraud.”

In the enforcement of these principles, relief should be granted with caution. If nothing appears except that the employee has signed the application for membership, the rules and regulations of the department that the employee was not with his friends and that the consideration is inadequate, but not grossly so, relief should be denied. The employee is required to exercise diligence in protecting his rights, and will not be excused on the ground of want of knowledge when he has the opportunity to learn.

If the issue of fraud or undue influence is found in favor of the employee, and he has been injured by the negligence of the railroad, he may recover damages, without returning what he has received as benefits, but this will be allowed in reduction of the damages. Hayes v. R. R., 143 N. C., 125.

There must be a

New trial.