Whittington v. H. T. Cottam Co.

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 judgment in favor of the latter, from which judgment the appellant prosecutes this appeal.

The appellee pleaded the general issue and gave notice thereunder that it would show, by the evidence, an accord and satisfaction between the parties of whatever damages appellant had suffered because of the alleged negligence of the appellee. Appellant replied to the notice that the release relied on by appellee as an accord and satisfaction was procured by fraud, and was, therefore, void and not binding on appellant. The court sustained the appellee's motion to exclude the evidence, and directed a verdict in favor of the appellee upon the ground that the evidence established, without conflict, an accord and satisfaction. The appellant's contention is that, under the evidence, it was a question for the jury whether an accord and satisfaction had been established, and that, therefore, the court erred in directing a verdict in the appellee's favor.

Stating the case made by the evidence most favorably to the appellant, the following facts were established: The injury occurred on November 16, 1927. The evidence showed that the appellant was injured through the negligence of the driver of the appellee's truck and the negligent manner in which the truck was lighted, and that his injuries were serious and permanent. The release, which the court held to be an accord and satisfaction, was executed on November 19th, three days after the injury. At the time the release was executed, there were present, beside the appellant, E.L. Stidham, the agent of the Travelers' Insurance Company, appellee's indemnitor; George Whittington; W.B. Montgomery, former county surveyor of Hinds county; W.K. Robinette, deputy sheriff of Hinds county; and J.H. Whittington, an uncle of appellant. Montgomery, Robinette, J.H. Whittington and E.L. Stidham witnessed the execution of the release by the appellant and signed same as such witnesses. The certificate to the release signed by them, among other things, recited that they were present at the signing of the release and that the appellant, of his own free will and accord, released the appellee of all responsibility for the injury suffered by the appellant, and that the appellant appeared to be sound mentally, and to understand the nature and import of the release.

The appellant did not offer Montgomery, Robinette, or Stidham as witnesses to establish that the release was procured by fraud. The appellant, as a witness in his own behalf, testified that he had no recollection of signing the release; that when he did sign it he did not know what he was doing; that at the time of the execution of the release he was suffering intense physical and mental pain and was under the influence of opiates and was incapable of executing the release. Other evidence on behalf of the appellant tended to corroborate his testimony in that respect. The appellant testified that he was first conscious on Sunday, the afternoon of November 20th, the next day after the execution of the release.

The consideration to be paid appellant for the release was the sum of five hundred dollars which was not paid at the time of its execution, but was to be, and was, paid later. On November 21, 1927, two days after the release had been executed, J.F. Hogan, agent of the Travelers' Insurance Company, wrote appellant this letter: "Attached you will find our draft No. E — 518614 payable to your order, for the sum of five hundred dollars. This is in accordance with the settlement which you effected with Mr. Stidham of this office." This letter and check could not have been received earlier than the next day, November 22d. The evidence showed that before the appellant received the letter and check his father knew that the release had been executed. At the request of the appellant, his father, about November 29, 1927, deposited the check in a bank to the credit of appellant. The father testified that the check was lying on a table in the room occupied by the appellant at the hospital, and when he was leaving the appellant said: "Papa, there is a paper — he says `take it and tend to it.'" Accordingly the father took the check, and, as stated, deposited it in a bank to the appellant's credit. This was done with appellant's knowledge and consent. Appellant was treated for his injuries by Dr. Gordon, knowing that under the terms of the release Dr. Gordon was being paid for his services by the appellee. After the appellant knew the extent of his injuries he continued to go to Dr. Gordon for treatment with full knowledge of all the facts. This continued until the latter part of December, 1928. The appellant spent all the five hundred dollars received under the release as compensation for his injuries. In March, 1929, a barber told the appellant that, if the release was signed at a time when the appellant did not know what he was doing, it was void and would not bind him. The appellant thereupon saw Mr. Arrington, one of his counsel in this case, who made an investigation of the facts and brought this action in August, 1929, about twenty-one months after the execution of the release.

The appellant argues that the judgment should be reversed under the principles laid down in Jones v. Ry. Co., 72 Miss. 22, 16 So. 379; Ry. Co. v. Jones, 73 Miss. 110, 19 So. 105, 106, 55 Am. St. Rep. 488; Kansas City R.R. Co. v. Chiles, 86 Miss. 361, 38 So. 498; St. L. San F.R.R. Co. v. Ault, 101 Miss. 341, 58 So. 102; Davis v. Elzey, 126 Miss. 789, 88 So. 630, 89 So. 666, and Dana v. R.R. Co., 106 Miss. 497, 64 So. 214.

The Jones case was twice before the supreme court, first as reported in 72 Miss. and again in 73 Miss. The plaintiff in that case was an ignorant negro. In less than twelve hours after the amputation of his foot which had been crushed by a railroad train, he was visited in his home by a railroad official, and while stupid from opiates, and ignorant of what was transpiring, awakening only when aroused, and while suffering mentally and bodily, and in the absence of any friends competent to advise him, was induced to sign a release of all damages in consideration of the payment to him by the railroad company of five hundred dollars. The court held that the release was fraudulent and void. The plaintiff knew nothing of the settlement for about two weeks, and, when told of it, stated that, if he had been in his right mind, he would not have made it, and as soon as possible he consulted trusted white friends who, with plaintiff's wife, shortly afterwards, secured counsel. Plaintiff remained in bed for about two months after signing the release and spent all the money paid him by the railroad company, but several months afterward tendered the amount back to the company. The court held that it was a question for the jury whether the plaintiff had ratified the release. On the second appeal of the case from a judgment against the railroad company, the court held that the plaintiff was not bound by the release, "unless, after being fully informed of all the facts, and of his rights in the premises, he concluded to treat it as a final settlement, notwithstanding such imposition upon him."

In the Chiles case, the court held that good faith on the part of a wrongdoer, by whose negligence a personal injury is caused, and a full understanding on the part of the person injured as to his rights, are indispensable to the validity of a release of a claim for the injury, and that the evidence as to all the surrounding conditions and the attitude of the contracting parties is admissible on the issue as to the validity of the release. In the Ault case the court held that, where a release from damages for a personal injury is obtained by fraud, it is void, and the plaintiff on bringing suit need not tender the money received thereunder, but the jury, on rendering verdict for the plaintiff, should give the defendant credit for the money paid for such release and legal interest thereon. In the Elzey case the court held that, where a person is injured in a collision with a railroad train and a release is relied on by the railroad company as a defense to the action, and the evidence is in conflict as to the capacity of such person to make the settlement, it is a question for the jury whether such release is binding. In the Dana case, the court held that, where an employee of a railroad company sued the company for damages for a personal injury, and the railroad company defended on the ground that there had been an accord and satisfaction of the plaintiff's claim, to which the latter replied that the accord was fraudulently obtained, it was error for the court to sustain a demurrer to such replication.

We do not think any of those cases is directly in point and decisive of the question here involved. Here we have a delay of about twenty-one months before suit was brought. The evidence showed, without conflict, that during at least a period of twenty months after the execution of the release, and before suit, the appellant had full knowledge of all the facts and circumstances connected with the release and full knowledge of the extent of his injuries, and, in addition, that he deliberately spent for his own purposes the consideration of five hundred dollars paid him for the release. During that time the appellant took no steps whatever to rescind the settlement except to consult counsel in reference thereto about fifteen months after the execution of the release.

If a party defrauded desires to disaffirm a contract procured by fraud, he must do so with reasonable dispatch after discovery of the fraud. He must make his election, and this election must be made unreservedly. Knowing the facts, he cannot deal with the subject-matter of the contract and afterwards rescind it. The election is with him. He may affirm or disaffirm the contract, but he cannot do both. If he has full opportunity to learn all the facts and the law applicable thereto, and fails, within a reasonable time, to rescind the contract, he is bound by it. He must exercise that degree of diligence which may be fairly expected from a reasonable person. Alabama V.R.R. Co. v. Kropp,129 Miss. 616, 92 So. 691, 693; Grymes v. Sanders, 93 U.S. 55, 61, 23 L.Ed. 798; Harrison v. Ry. Co., 144 Ala. 246, 40 So. 394, 6 Ann. Cas. 804; R.R. Co. v. Pierce (C.C.A.), 64 F. 293; Gibson v. R.R. Co., 164 Pa. 142, 30 A. 308, 44 Am. St. Rep. 586; Aaron v. Mendel, 78 Ky. 427, 39 Am. Rep. 248; Ry. Co. v. Giardino, 116 Tenn. 368, 92 S.W. 855, 8 Ann. Cas. 176.

In the Kropp case the plaintiff suffered an injury at the hands of the railroad company, and shortly thereafter, in consideration of the settlement of his claim for the injury, accepted the sum of one hundred twenty-five dollars from the railroad company. The settlement was embodied in a written release executed by the plaintiff. The injury suffered by the plaintiff was severe and resulted in the amputation of one of his legs. The release was pleaded by the railroad company as a defense to the action. The plaintiff replied that the release was procured by a false and fraudulent promise by the railroad company to give him employment which had been refused him. The court in its opinion, among other things, said, that: "He had full opportunity to learn all the facts and to learn the law with reference thereto. . . . Again, we think that, if these views were not sound, it would have been the duty of the complainant to have learned the facts or make reasonable efforts to do so and to have sought rescission of the contract because of the fraud within a reasonable time after he was refused employment. . . . If his version of the settlement be true, it would have been natural for him to have sought to place himself upon the pay roll as quickly as possible and to have found out the reason why, and, if the contract was not lived up to, to have elected to rescind and sue for his damages. . . . Having waited more than five years after he was entitled to be re-employed, and during all of that time retaining the funds received by the settlement, this warrants the court in holding that he had ratified the contract as written, and that it is too late now to seek rescission."

There is another element of ratification in this case that should be considered. When the appellant accepted the five hundred dollars, the consideration for the release, according to his own testimony, he was in his right mind. He knew exactly what he was doing. If the parties to a contract contemplate that the present performance of the contract shall be a discharge of the original claim, the mere contract, standing alone, does not constitute an accord and satisfaction — the performance of the contract is necessary to complete it. Whitney v. Cook, 53 Miss. 551; Yazoo M.V.R.R. Co. v. Fulton, 71 Miss. 385, 14 So. 271; Foster v. City of Meridian, 150 Miss. 715, 116 So. 820. It is clear from the facts and circumstances surrounding the execution of the release by the appellant that the parties did not contemplate that the release alone should constitute an accord and satisfaction, but that the performance by the appellant of the contract — the actual payment of the five hundred dollars — was necessary to complete the contract. In other words, until the five hundred dollars was actually paid, there had been only an accord, not an accord and satisfaction.

When the appellant regained his mind and found the letter and check for five hundred on the table in his room, he admits that he knew exactly what it meant. He should have known that the transaction would not be completed until he had accepted the five hundred dollars. Under the law, he was due, if not then and there, certainly within a reasonable time, to notify the appellee that he would refuse to accept the five hundred dollars in satisfaction of the accord. His failure to do so in connection with the other facts above set out in this opinion, about which there was no conflict in the evidence, we think, amounted to an irrevocable ratification of the settlement and was binding on the appellant.

The ground upon which the two dissenting opinions in this case are based was not presented or passed upon in the circuit court, nor was it argued or briefed by counsel for either of the parties in this court. The general rule is that a question not raised on appeal will not be considered by the court. 3 C.J., page 1431, section 1594. We think it should be a very unusual case to authorize the supreme court to violate that rule. We have no such case here. On the contrary, every question argued and briefed is settled by decisions of this court. If this court will decide correctly the questions presented and briefed in cases, it will be doing well, without going out on a hunt for other questions.

The dissenting judges would have the court to hold that a contract with a person, while such person is suffering from a serious injury or sickness, which contract has to do directly with that injury or sickness, shall be presumed prima facie to be void, as against public policy; but that such presumption may be rebutted by evidence of the fairness of the contract, and that the injured or sick person entered into the contract knowing his condition, and the nature and quality of the act he was doing. No authority is cited in either of the dissenting opinions to sustain such a proposition of law, and we have been unable to find any. Contracts in violation of public policy are not voidable, but absolutely void, and the courts will refuse aid to either of the parties. Harris v. McKissack, 34 Miss. 464; Hoover v. Pierce, 26 Miss. 627; Deans v. McLendon, 30 Miss. 343; Am. Mfg. Co. v. Crescent Drug Co., 113 Miss. 130, 73 So. 883; L.R.A. 1917D, 482, note; Mitchell v. Campbell, 111 Miss. 806, 72 So. 231; Dixie Rubber Co. v. Catoe, 145 Miss. 342, 110 So. 670.

The dissenting judges would have the court to hold, further, that such a contract, being prima-facie void as against public policy, could not be ratified by the injured person, notwithstanding conduct tending to show ratification might have a very strong probative value on the question whether the contract was fairly entered into.

Affirmed.