Lumley v. Wabash R.

After making the foregoing statement, the opinion was delivered by LURTON, Circuit Judge. The first ground of demurrer questions the sufficiency of the aver-ments of the hill touching the jurisdiction of the court. The averment is that the complainant is “a resident of Ontario and a- citizen of the dominion of Canada.” It is said that the averment should have been that he was “an alien, and a subject of the queen of Great Britain and Ireland,” and that the court is not authorized to infer that he is an alien from the averment of the bill. For this counsel cite Anderson v. Watt, 138 U. S. 694, 702, 11 Sup. Ct. 449, and Stuart v. City of Easton, 156 U. S. 46, 15 Sup. Ct. 268. Without passing upon this question, we think the jurisdiction of the court is clearly to be supported upon the ground that this spit is ancillary to the action at law. Whether the circuit court had jurisdiction in the legal action now pending is not a question which we can review in this dependent and collateral suit. This bill was filed in aid of the legal action, and by direction of the court. We need look no further than the allegations of the bill, which show its collateral character. Compton v. Railroad Co., 31 U. S. App. 529, 15 C. C. A. 397. and 68 Fed. 263. The remaining grounds of demurrer may be considered together. Collectively, they may he said to challenge the sufficiency of the facts stated to justify a court of equity in preventing the respondent from setting up the release obtained from the complainant as an impediment to the recovery at law of compensation for the injuries he has sustained. It cannot be denied that the terms of the release in question are sufficiently comprehensive to prevent a recovery for any of the injuries which may have been sustained by the complainant as a consequence of the negligent collision of which he complains. The consideration stated in the release is both particular and general. The recital is that Lumley received certain injuries, to wit, “severe contused and lacerated wound on Ms forehead, right side, fracture of right arm between wrist and elbow, and various injuries and contusions, both internally and externally, in and on various parts of my body.” The release is from “all actions, suits, claims, reckonings, and demands for or on account of or arising from injuries so as aforesaid received, and any, every, and all results hereafter flowing therefrom.” The gravamen of the hill is that complainant received an injury to his shoulder, by breaking or dislocation, which has permanently disabled Mm, and reduced him to a state of helplessness; that this injury is not a consequence or result of either the contused wound on his [70] head or the fracture of his right arm, but was au independent injury, not mentioned or described in the release except as it may be included under the general term “various injuries,” “internally and externally in and on various parts of my body.” The explicit averment of this bill is that this serious injury was unknown to complainant at the time he gave the release in question, and was not considered as an element for compensation, and, being unknown, hiá right of action was not intentionally released or discharged. He therefore asks that the release be altogether set aside, or confined to the subjects discussed, known, and considered when the release was granted. To give emphasis to this latter equitable contention, the bill states that attention was called to the fact that his shoulder gave him pain, but that no physical examination was made to ascertain the cause; that when he mentioned this fact, the chief surgeon of the defendant, who was giving him surgical assistance, assured him that the pain was “purely sympathetic,” and was attributable to his fractured arm. Thus the matter was dismissed, and a release executed upon the representation of this surgical servant of the-defendant that the known and considered injuries would be well within less than eight weeks. It has now turned out that this unknown and unsuspected injury was the principal injury sustained, and has resulted in a permanent and serious bodily disability. If the terms of the release are so broad and comprehensive as to .embrace a distinct and independent injury, not known or considered by the parties to the release, it will be most inequitable that it should stand as an impediment to the recovery of just 'compensation therefor. There are two distinct grounds upon which relief may be rested in such a case: First. If the existence of this injury was known or suspected by the surgeon of the defendant, it was his duty, under the facts stated in this bill, to have informed Lurnley of the trouble. To say to him that the pain of which he complained was sympathetic, and was caused by the fracture below his elbow, was a positive misrepresentation of the truth, and an operative fraud. To say that Lurnley ought not to have trusted or relied upon his opinions or representations, knowing that he was in the service of the company against whom he had a claim, is no answer. On the facts stated he knew that a release was being bargained for upon the basis of his opinion as to the extent and character of the injuries complainant had received, and the probable time he would lose from his occupation by reason thereof. He was under strong obligation to give his honest opinion upon a matter of professional knowledge, upon which he had every reason to know this ignorant man was implicitly relying. Second. But if this surgeon honestly supposed the shoulder pain to be sympathetic, either because his examination had been superficial, or because he had made none, we would then have a case where a release is comprehensive enough to cover a matter or claim unknown to both parties, and was therefore not the subject of consideration. Equity relieves from mistakes as well as frauds. The case is not one where it was sought to compromise and settle a [71] general claim for all the injuries resulting from a particular accident, known and unknown. If one agrees that he will receive a given amount in satisfaction and settlement of his damages sustained through a particular accident, it is not essential that every possible consequence of the tort shall be mentioned, considered, or enumerated. The subsequent discovery by one giving such a release that he was worse hurt than he had supposed, would not, in a,nd of itself, be ground for setting aside the settlement or limiting the release. We put our judgment upon the facts stated in this bill, to wit, that both parties supposed complainant had received certain injuries, the extent and character of which were considered and discussed with reference to the time which the injured party would probably lose in consequence thereof. In such a case, if a release is given specifically mentioning the particular injuries known and considered as the basis of settlement, general language following will be held not to include a particular injury then unknown to both parties of a character so serious as to clearly indicate that, if it had been known, the release would not have been signed. This jurisdiction is well known, and has frequently been applied in cases of release affecting property rights, both in courts of law and equity. In Cholmondeley v. Clinton. 2 Mer. 173-352, Sir William Grant, master of the rolls, mentions the case of Farewell v. Coker, decided by Lord King, where a release was executed so general in its terms as to pass a reversion in fee. A bill being filed to set aside this release; upon the ground that it was meant only for a particular purpose, Lord King directed an issue to try — First, whether, at the time of the execution of the release, she knew or was apprised of her title under the will to the reversion; secondly, whether she intended by the release to pass that reversion. This decree was affirmed by the house of lords. In Ramsden v. Hylton, 2 Ves. Sr. 304—309, Lord Hardwicke, in considering whether or not a certain demand was within the terms of a release, said: •‘First. It is 'certain that 1C a release is given on a particular consideration recited, notwithstanding that the release concludes with general words, yet the law, in order to prevent surprise, will construe it to relate to the particular matter recited, which was under the contemplation of the parties and intended to be released. The particular point in consideration was not relative to this estate, but what they could have against him as representative to his mother, brother, or father’s personal estate, to which the words.-are particularly confined. But there is no occasion to rely on the law for this, for it is clear that it would not in a court of equity, it being admitted on all hands, and it must be so taken, that this settlement was unknown to all the parties. Nor did the daughters know of this contingent provision, beside which they had no other provision out of this estate; and all they could be entitled to must arise out of the personal estate of their father or other relations. It is impossible, then, to imply within the general release that which neither party could have under consideration, and which it is admitted neither side knew of; and, as this release cannot have its effect to har this demand, so it cannot he set up against them in a court of equity.” In Lyall v. Edwards, 6 Hurl. & N. 336, this principle was applied in the eonrt of exchequer. A release was pleaded to an ac [72] tion for conversion of certain goods. ' To this a release was pleaded in terms broad enough to cover the claim involved. , The replication was that at the time of the release the plaintiff did not know that the defendants had committed the grievance in the declaration mentioned, or that plaintiff had any claim or cause of action against the defendants in respect of the goods in the declaration mentioned. Pollock, C. B., said: “The replication was good. ,* * * It is a principle long sanctioned in courts of equity that a release cannot apply, or he intended to apply, to circumstances of which a party had no knowledge at the time he executed it, and that, if it is so general in its terms as to include matters never contemplated, the party will be entitled to relief.” See, also, London & S. W. R. Co. v. Blackmore, L. R. 4 H. L. 610-623; 1 Story, Eq. Jur. § 145; and Phillips v. Clagett, 11 Mees. & W. 84. It may be said that this doctrine that a release cannot apply or be intended to apply to circumstances of which the releasing party-had no knowledge at the time of the release has no practical application to damages originating in the same cause of action; that, if this release had been expressly limited to such damages as were recoverable by reason of complainant’s fractured arm and contused head, it would nevertheless operate as a bar to an action for the other part of his damages having a common origin in a single tort. The general rule is that damages resulting from one and the same cause of action must be sued for and recovered once for all. But this is a rule of procedure, a rule of which Lord Blackburn, in Colliery Co. v. Mitchell, 11 App. Gas. 188, said: “I do not think it is one of those rules of law which depend upon natural justice. I think it is an artificial rule of positive law, introduced on the balance of convenience and inconvenience.” As a rule of positive law it has its exceptions. In Roberts v. Railway Co., 1 Fost. & F. 460, the court refused to- apply it in a case where the plaintiff’s action was for personal injuries sustained in a railway accident, whereby he at the same time lost his hat. For the latter he had settled and given a receipt. This was pleaded as an accord and satisfaction. The plea was overruled, Cock-burn, C. J., saying: “It could not be seriously urged that, if the plaintiff has been seriously injured, he is precluded from recovery because he agreed to • accept two pounds for his hat.” This case was cited with approval in Lee v. Railway, L. R. 6 Ch. App. 527-537. The rule of procedure alluded to has application only where the plaintiff has split up his cause of action, and recovered judgment in one suit for part of his damages, and then brought suit for the other part. This is the real basis for the ruling in Roberts v. Railroad, cited above. In Bliss v. Railroad Co., 160 Mass. 447, 36 N. E. 65, the court,, upon mature consideration, held that the rule did not apply in cases where the parties had agreed upon a settlement of a part of the damages and released all right of action for the part so settled, and that such a release could not be pleaded as a bar to a suit for the other part, although that embraced in the settle [73] ment and that sued tor constituted together hut one canse of action. The case ref erred to is much in point, for the release, though intended to include only a part of the damages, was, in fact, so comprehensive as to include all the damages sustained by the plaintiff. Upon evidence that the release had been procured by fraud, the court confined it to the damage intended to be released, and permitted a recovery for the other part of the damages. The plaintiff Itad retained the money paid, and it was urged that this operated as a bar, just as the recovery of a judgment for one part of the injury would debar him. To this the court said: “But there are good reasons for lidding the contrary dooirine. Li: one sues io recover for an injury, he may well he held to indude in his action all that he is on titled to sao £or in respect to that cause of action. But if one is malting a settlement the same reasons do not apply, and if he cannot make a full settlement he may make a partial one, and thus eliminate one element from (he controversy.” As to the fact that the plaintiff had not paid back the money he had received, the court said: “Why should he pay it hack, when it represents only the sum agreed on for his compensation for that portion o£ his loss which he no longer seeks to recover for?” In this aspect of the case it is a matter of no importance whether the plaintiff paid back or offered to pay back the money he received. He did, in fact, tender it back some three years after he received it. This delay is unimportant, as the statutes of limitation have not barred his suit, and he was entitled to retain it as a satisfaction for the part of his injury he had understandingly settled. If the release had in fact been procured by fraud, he could have shown this at law, the fact that the release was under seal out of the way. Railway Co. v. Harris, 158 U. S. 326, 15 Sup. Ct. 843; Mullen v. Railroad Co., 127 Mass. 86; Phillips v. Clagett, 11 Mees. & W. 83-89; Barker v. Richardson, 1 Younge & J. 361; Averill v. Wood, 78 Mich. 342, 44 N. W. 381; Railroad v. Welch, 52 Ill. 183; Railroad Co. v. Lewis, 109 Ill. 120; Railroad Co. v. Doyle, 18 Ran. 58; Lusted v. Railroad Co., 71 Wis. 391, 36 R. W. 857; Stone v. Railroad Co., 66 Mich. 76, 33 N. W. 24; Dixon v. Railroad Co., 100 N. Y. 170, 3 N. E. 65. Many reputable authorities maintain that vhore a release is obtained by fraud it is not necessary that the money received be returned at all. That it may he credited upon the recovery is held to be sufficient. This seems to have been regarded as proper practice in Railroad Co. v. Harris, cited above. Railroad Co. v. Doyle, Railroad Co. v. Lewis, aud Mullen v. Railroad Co., all cited heretofore, are express authorities upon this point. It is, however, unnecessary to decide this question, and it is, therefore, reserved. The facts stated in this bill are such as that it should have been entertained, and the demurrers overruled, upon the ground that the case stated was such as that the release would operate as a fraud if the defendant was suffered to rely upon it as an impediment to a recovery of that part of complainant’s damage not discussed or considered, and not intended to he released. Reversed and remanded, with direction to overrule the demurrer.