Phillips v. Musgrave

ROSS, C. J. (After Stating the Facts as Above.)— The appellee has made no appearance in this court to defend the judgment secured by him in the lower court. The facts conclusively show that appellee had obligated himself to appellant in a large sum of money; that suit had been instituted to recove]’ some portion thereof; that issues had been formed and a real controversy was pending. Now, whether in justice and equity the appellee owed appellant anything or not, they composed their’ differences by appellant’s agreeing to accept a very much reduced sum and canceling the contract; the appellee delivering up possession of the land he had purchased anc agreeing to pay the smaller sum. There was a compromise and settlement. An agreement of compromise, like any other contract, may be avoided or set aside for fraud, deceit, or mistake, but not otherwise. . The appellee in his answer does not attack the settlement on any of those grounds. He simply ignores the ■ settlement and compromise, and interposes the same defense to this suit that he interposed to the former suit. This, as we understand the law, he may not do. “The law favors the compromise and settlement of disputed claims and will sustain such settlements if fairly made, because it is to the interest of the state that there should be an end to litigation. Therefore a court of equity, in the absence of fraud or mistake, will not aid a party to an action to [595] violate a settlement of the litigation out of court, voluntarily entered into with the other parties.” 12 O. J. 336, § 32. Another statement of the law is as follows: “The settlement of a controversy is valid and binding, not because it is the settlement of a valid claim, but because it is the settlement of a controversy, and when such settlement is characterized by good faith the court will not look into the question ,of law or fact in dispute between the parties, and determine which is right. All that it needs to know is that there was a controversy between the parties, each claiming in good faith rights in himself against the other and that such. controversy has .been settled.” Smith v. Farra, 21 Or. 395, 20 L. R. A. 115, 28 Pac. 241. The suggestion contained in appellee’s pleadings that he compromised with appellant because some third parties, who were negotiating to purchase the mortgaged premises, would not consent to deal unless the foreclosure suit was settled, if true, would be no evidence that he was not indebted to appellant. Whatever his motive for compromising, so long as it was not induced by mistake or the fraudulent misrepresentations of appellant, it was binding. The lower court should have granted the appellant’s motion for judgment on the pleadings, as also the motion for an instructed verdict. The judgment is reversed and the cause remanded, with directions that appellant’s motion for judgment on the pleadings be granted. MoALISTER and FLANIGAN, JJ., concur.