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amount found by the jury was for $22,275, and the plaintiffs in error could not be prejudiced by such an instruction, and that the instructions, taken as a whole, fairly presented the issues to the jury.

We are therefore of the opinion that the original opinion handed down by this court on the 16th day

of September, 1924, arrives at the right conclusion, and should be adhered to, and the opinion of the lower court should be and is hereby affirmed.

Petition for writ of certiorari denied by the Supreme Court of the United States March 15, 1926.

ANNOTATION.

Avoidance of release of claims for personal injuries on ground of mistake or fraud relative to the extent or nature of the injuries. [Release, §§ 13-15.]

I. Introduction, 1462.

II. Grounds in general for avoiding release:

a. Preliminary statement, 1464.

b. Mistake, 1464.

c. Fraud, 1486.

III. Specific considerations affecting question:

a. Treatment by releasor's own physician; independent advice, 1508.

b. Authority of physician and connection with transactions; ratification or estoppel on part of releasee, 1510.

c. Time of executing release, and amount of consideration, 1515.

d. Reliance on representations, 1519.

e. Special provisions of release, 1523.

f. Distinctions between law and equity, 1528.

IV. Questions of evidence, pleading, and practice, 1530.

V. Miscellaneous, 1532.

I. Introduction.

The present question is one upon which there is much confusion and apparent difference of opinion. However, many of the cases which do not appear in harmony can be reconciled when the particular facts to which the statements of the court applied are taken into consideration. The subject is one in which general rules are likely to be inaccurate and misleading, when separated from the facts of the particular cases in which they were laid down. It sometimes seems that the court reached the conclusion that, under the particular circumstances, the release should not be held to be binding, that to do so would result in gross injustice, and, having reached this conclusion, formulated a theory on which it might be based, or, as in some cases, announced its conclusion without clearly indicating the grounds. therefor.

In considering the present subject,

various factors should be taken into account. One of these is whether the parties were contracting merely with reference to certain injuries, or whether they were contracting also with reference to the question of the releasee's liability; in other words, whether the liability was assumed or admitted, and the parties, in executing the release, had in mind merely the question of injuries, or whether liability was denied and the settlement was intended as a compromise and release of all claims, the nature or extent of the injuries not being the principal matter upon which the parties were contracting. The nature of the injury and of the subsequent developments is also an important consideration, because it seems clear that the latter may be such that they clearly could not have been within the contemplation of the parties, or, on the other hand, they may be of such a nature as that the court or a jury

might find that the parties had them in mind, or at least had in mind such possibilities, and, therefore, were bound by the terms of the release. As subsequently indicated, the amount of consideration would also seem to be important as bearing on the question of intent, and this has played an important part, though not often discussed as a special feature, in determining the conclusion reached in particular cases.

It has often been said that the law favors compromise. But it will be seen from the cases in the annotation that this rule has not been permitted. to defeat substantial justice, where a

1 See, for example, Kowalke v. Milwaukee Electric R. & Light Co. (1899) 103 Wis. 472, 74 Am. St. Rep. 877, 79 N. W. 762; Borden v. Sandy River & R. L. R. Co. (1913) 110 Me. 327, 86 Atl. 242; Houston & T. C. R. Co. v. McCarty (1901) 94 Tex. 298, 53 L.R.A. 507, 86 Am. St. Rep. 854, 60 S. W. 429, 9 Am. Neg. Rep. 383.

2 By way of illustration, attention is called to General Acci. Fire & Life Assur. Corp. v. Harris (1918) 117 Miss. 834, L.R.A.1918E, 929, 78 So. 778, in which it was held that a release executed by the holder of an accident insurance policy, on settlement with the insurer for disability to time of settlement, under the mistaken belief of himself and his physician that he had recovered from the injury, will not be set aside and recovery permitted for disability continuing beyond that time, where, under the terms of the policy, compensation was not due until submission of final proof of total disability.

So, in Kent v. Ocean Acci. & Guarantee Corp. (1909) 20 Ont. L. Rep. 226, where the insured received an injury in a railway accident causing spinal and brain concussion, and sent a claim to the insurer for eight weeks' total and four weeks' partial disability, not knowing at the time the extent of his injuries, but believing that he had substantially recovered from all serious consequences thereof, and intending to make a full and final settlement when he accepted payment of his claim and signed a receipt stating that he acquitted and discharged the insurer from any and all further claims under the policy which he had or might thereafter have as the result of

release of a claim for personal injuries is executed under mutual mistake of fact or on representations of a fraudulent nature.

Cases where one who is injured had an accident policy and settled with the insurance company under a mistake as to the extent of the injury sometimes turn on the provisions of the policy, or other considerations not distinctive to the present subject, and are therefore, as a class, not covered in the annotation, although individual cases of the kind may be included because of their general value on the subject under discussion.2

his injury, it was held that he was not entitled to recover further indemnity on account of his injury, although he was mistaken as to his condition, and it subsequently proved that he was further disabled. The decision turns on the particular terms of the policy and of the receipt.

Among possibly other cases holding that a general release by the insurer precluded further recovery, although the insured at the time was mistaken as to the extent of his injuries, see also Wood v. Massachusetts Mut. Acci. Asso. (1899) 174 Mass. 217, 54 N. E. 541, where subsequent complications as a result of the injury caused the death of the insured.

But in Dominicis v. United States Casualty Co. (1909) 132 App. Div. 553, 116 N. Y. Supp. 975, in which it was held that the release might be rescinded by the insured, the decision is based on the ground that it was executed under a mutual mistake of fact as to the existing conditions, where a policy provided for the payment of a certain sum for the loss of an arm caused by accident and for the payment of benefits in case of loss of time caused by accident; and, the insured's arm being injured, he was advised by his physician that he would not lose it and that the injury would not be permanent, and he accordingly made a claim for loss of time, which the insurer paid in ignorance of the true condition of the arm; and a release was executed on payment of a sum for loss of time, purporting to discharge the insurer from liability for all claims, neither party knowing of a condition in the arm which eventually necessitated its amputation.

II. Grounds in general for avoiding

release.

a. Preliminary statement.

It seems desirable, in considering the present question, to keep in mind the different theories on which the cases are decided, and not to confuse those dealing with mutual mistake with cases involving fraud. The separation of the cases, however, into these two groups, the one involving mistake and the other fraud, is not an easy matter, particularly in view of the fact that in some instances a doctrine of constructive fraud, or fraud in law, has entered into the decision, which might otherwise have been based apparently just as properly on the doctrine of mutual mistake. And, although it seems advisable to keep these two grounds for avoidance of the release clearly in view as at least potentially separate and distinct, they seem in practice to be somewhat connected by the middle ground of constructive fraud, or fraud in law, under which the good or bad faith of the physician or other agent of the releasee who makes the alleged misrepresentation as to the nature or extent of the injuries is not a material ele

And in Jones v. Commercial Travelers' Mut. Acci. Asso. (1908) 114 N. Y. Supp. 589, affirmed in (1909) 134 App. Div. 936, 118 N. Y. Supp. 1116, which was modified on other grounds in (1911) 201 N. Y. 576, 95 N. E. 1130, it was held that the settlement was obtained by fraud, and that the insured was entitled to have the release rescinded and to recover the amount provided for in case of permanent incapacity, where the policy provided for the payment of a stated sum in case the insured should become permanently incapacitated by accidental injury, and for a certain sum per week for temporary incapacity; and the insured, a commercial traveler, was accidentally injured, and, as he believed, temporarily incapacitated, and made his claim accordingly; but it appeared that his injury was a permanent one, which prevented him from following his occupation, and that the insurer's medical examiner knew this, but induced the insured to settle and execute a release on the basis of a temporary disability.

ment. Occasionally both fraud and mistake will be relied on as a ground of the decision, and sometimes it is not clear which constitutes the chief factor.

Also, when one begins consideration of the cases, he is confronted with some decisions which turn on the construction of the release. In some instances, the general terms of the release have been held to be limited by the specific recital of injuries, and for that reason the release has been held not to prevent recovery for serious injuries which were unknown at the time the release was executed, and were, therefore, not then within the contemplation of the parties. Attention is called subsequently to cases of this kind, chiefly because of the similarity of the facts to those of other cases in the annotation."

b. Mistake.

There are numerous cases supporting the doctrine that a release of a claim for personal injuries cannot be avoided on the ground of mistake, merely because the injuries prove more serious than the releasor at the time of executing the release believed them to be.⭑

The decision in Clanton v. Travelers' Protective Asso. (1903) 101 Mo. App. 312, 74 S. W. 510, in which it was contended that the insured was ignorant at the time he executed a release, on payment of a sum for total disability, that he would be thereafter further totally disabled because of the injury, that there could be no recovery for the subsequent disability, is based on the ground that the insured had made no proof of loss as required by the policy.

3 As to special provisions of release as affecting the question under annotation, see III. e, infra.

4United States.-Lumley v. Wabash R. Co. (1896) 22 C. C. A. 60, 43 U. S. App. 476, 76 Fed. 66 (dictum); Chicago & N. W. R. Co. v. Wilcox (1902) 54 C. C. A. 147, 116 Fed. 913; Great Northern R. Co. v. Fowler (1905) 69 C. C. A. 106, 136 Fed. 118, petition for writ of certiorari denied in (1904) 197 U. S. 624, 49 L. ed. 911, 25 Sup. Ct. Rep. 800 (dictum).

Arkansas.-Francis v. St. Louis, I. M. & S. R. Co. (1912) 102 Ark. 616,

The question in each case is whether the minds of the parties met upon

145 S. W. 534; Kansas City Southern R. Co. v. Armstrong (1914) 115 Ark. 123, 171 S. W. 123; Chicago, R. I. & P. R. Co. v. Smith (1917) 128 Ark. 223, 193 S. W. 791.

Colorado.-Colorado Springs & Interurban R. Co. v. Huntling (1919) 66 Colo. 515, 181 Pac. 129 (recognizing rule).

Georgia.-Morris v. Seaboard AirLine R. Co. (1919) 23 Ga. App. 554, 99 S. E. 133.

Iowa.-Owens v. Norwood White Coal Co. (1912) 157 Iowa, 389, 138 N. W. 483, later appeal in (1919) 188 Iowa, 1092, 174 N. W. 851; Seymour v. Chicago & N. W. R. Co. (1917) 181 Iowa, 218, 164 N. W. 352; Pahl v. Tri-City R. Co. (1921) 190 Iowa, 1364, 181 N. W. 670. See also Kilmartin v. Chicago, B. & Q. R. Co. (1908) 137 Iowa, 64, 114 N. W. 522; Nason v. Chicago, R. I. & P. R. Co. (1908) 140 Iowa, 533, 118 N. W. 751, later appeal in (1910) 149 Iowa, 608, 128 N. W. 854; Douda v. Chicago, R. I. & P. R. Co. (1909) 141 Iowa, 82, 119 N. W. 272.

Kansas. Atchison, T. & S. F. R. Co. v. Bennett (1901) 63 Kan. 781, 66 Pac. 1018; Tucker v. Atchison, T. & S. F. R. Co. (1926) 120 Kan. 244, 243 Pac. 269, 25 N. C. C. A. 843; Powell v. Kansas-Missouri R. & Terminal Co. (1926) 121 Kan. 622, 249 Pac. 675.

Kentucky.-Louisville & N. R. Co. v. Carter (1902) 23 Ky. L. Rep. 2017, 66 S. W. 508.

Maine.-Borden v. Sandy River & R. L. R. Co. (1913) 110 Me. 327, 86 Atl. 242.

Massachusetts.-See Walsh v. Fore River Shipbuilding Co. (1918) 230 Mass. 89, 119 N. E. 680. Missouri. Newcomb v. Payne (1923) Mo., 250 S. W. 553; Hogard v. Kansas City R. Co. (1918) Mo. App. —, 202 S. W. 431.

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Oklahoma.-Davis v. Higgins (1923) 95 Okla. 32, 217 Pac. 193; Chicago, R. I. & P. R. Co. v. Perkins (1925) 115 Okla. 233, 242 Pac. 535.

Oregon.-See Nielsen v. Portland Gas & Coke Co. (1915) 76 Or. 505, 147 Pac. 554 (release not voidable at law on this ground; see note 81, infra).

Pennsylvania.-Seeley v. Citizens Traction Co. (1897) 179 Pa. 334, 36 Atl. 229, 1 Am. Neg. Rep. 179. See also Kane v. Chester Traction Co.

the understanding that the payment and acceptance of the consideration

(1898) 186 Pa. 145, 65 Am. St. Rep. 846, 40 Atl. 320.

South Carolina.-Lawton v. Charleston & W. C. R. Co. (1911) 91 S. C. 332, 74 S. E. 750.

Texas.-Houston & T. C. R. Co. v. McCarty (1901) 94 Tex. 298, 53 L.R.A. 507, 86 Am. St. Rep. 854, 60 S. W 429, 9 Am. Neg. Rep. 383; Quebe v. Gulf, C. & S. F. R. Co. (1904) 98 Tex. 6, 66 L.R.A. 734, 81 S. W. 20, 4 Ann. Cas. 545; San Antonio & A. Pass. R. Co. v. Polka (1910) 57 Tex. Civ. App. 626, 124 S. W. 226; El Paso & S. W. R. Co. v. Kramer (1911) Tex. Civ. App. 141 S. W. 122. Utah.-Anderson v. Oregon Short Line R. Co. (1916) 47 Utah, 614, 155 Pac. 446.

Wisconsin.-Kowalke v. Milwaukee Electric R. & Light Co. (1899) 103 Wis. 472, 74 Am. St. Rep. 877, 79 N. W. 762.

England.-Rideal v. Great Western R. Co. (1859) 1 Fost. & F. 706.

In Pahl v. Tri-City R. Co. (1921) 190 Iowa, 1364, 181 N. W. 670, the rule is laid down that where parties knowingly and purposely make an agreement to compromise and settle a doubtful claim whose character and extent are conditioned upon future contingencies, the settlement may not be avoided simply because the event happened quite differently from the expectation, opinion, or belief of one or both of the parties.

or

And in Great Northern R. Co. v. Fowler (1905) 69 C. C. A. 106, 136 Fed. 118, petition for writ of certiorari denied in (1904) 197 U. S. 624, 49 L. ed. 911, 25 Sup. Ct. Rep. 800, the court said (dictum) that where there is no misrepresentation fraud on the part of the releasee, a releasor cannot subsequently avoid his release on the ground that his injuries were more serious than he thought them to be, even though his opinion at the time of making the settlement may have been based upon that of a physician employed by the releasee to examine and report on the extent of his injuries.

In Hogard v. Kansas City R. Co. (1918) Mo. App. —, 202 S. W. 431, the court said that, as the release covered all injuries and all claims in reference thereto, the fact that injurious consequences subsequently arose, of which the releasor was not aware at

were in full settlement of the releasee's liability; if they did, without fraud or unfair conduct on either side, the contract must stand, although subsequent events may show that one of the parties made a bad bargain because of a wrong estimate of the damages that would accrue.5 And the release will not be set aside merely because the injury proves permanent instead of temporary, the

the time, had no effect in removing the bar as to them. The case was one

where a motorman on a street car, who was injured by being thrown backward at the time of a collision, was treated by the company's physician and given a certificate by the latter four days after the accident, stating that he was able to resume work; he thereupon executed a release, and returned to work, but later resigned because of the seriousness of injuries which then became apparent. principal question was whether there was a consideration for the release, it being said that there was no claim of fraud or mistake.

The

In a case where a railroad employee had sustained a fracture of the bones of the leg, the injury proving permanent, and had executed a release of claims against the railway company, the consideration being more than $5,000, the court in Davis v. Higgins (1923) 95 Okla. 32, 217 Pac. 193, laid down the rule that one who executes a release for a claim for damages for personal injuries received, and who acts deliberately and intelligently, cannot rescind it for fraudulent representations, on discovering that the injuries did not heal as rapidly as he supposed at the time of signing the release, even though the attending surgeon (of the releasee) told him that he would be all right in six months, where no fraud, deceit, or imposition was practised upon him and the opinion of the surgeon was given in good faith.

And the same rule is laid down in Chicago, R. I. & P. R. Co. v. Perkins (1925) 115 Okla. 233, 242 Pac. 535, where a railway employee sought to avoid a release of a claim against the railway company for injury consisting of a broken wrist.

In Seeley v. Citizens Traction Co. (1897) 179 Pa. 334, 36 Atl. 229, 1 Am. Neg. Rep. 179, where a passenger who had sustained an injury on a street

rule applying that where parties have knowingly and purposely made an agreement to compromise and settle a doubtful claim, whose character and extent is necessarily conditioned by future contingent events, it is no ground for avoidance of the contract that the events happened differently from the expectation, opinion, or belief of one or both of the parties. And the doctrine indicated applies

car through being thrown to the floor when the car was suddenly stopped executed a release, six days after the accident, of all further claims against the railway company, in consideration of $25, it appearing that at first her injuries were apparently slight, but that they later proved to be of such an aggravated character as to cause permanent disability, the court held that the release was a complete defense to an action by the releasor for damages on account of the injury, and that, admitting that the releasor did not at the time know the extent of the injuries which he had received, this fact was insufficient, in the absence of any evidence of fraud, to prevent operation of the release as a bar.

5 Kowalke v. Milwaukee Electric R. & Light Co. (1899) 103 Wis. 472, 74 Am. St. Rep. 877, 79 N. W. 762.

6 Chicago & N. W. R. Co. v. Wilcox (1902) 54 C. C. A. 147, 116 Fed. 913.

In Powell v. Kansas-Missouri R. & Terminal Co. (1926) 121 Kan. 622, 249 Pac. 675, the court said: "The material fact was whether the result of the injury would be the stiffening of plaintiff's finger, and there was not even a prophecy what the result would be. That was a future event which neither party knew or attempted to forecast, and neither had any misconception as to that event. It was treated by both as a matter of doubt and uncertainty, and necessarily there was no mistake of fact which could have influenced the making of the compromise and release. Both being in doubt, and not wishing to await the result, a compromise was agreed upon and a lease executed. Compromises made without deception or fraud of any kind, and which avoid litigation, are encouraged by courts. . . . The parties entered into the contract because of the uncertainty of a future, contingent event. It is a compromise which they chose to make on account of the uncertainty involved as to the future effect of the

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