Opinion
No. 36252
Decided April 20, 1960.
Release — Of all claims arising out of motor-vehicle collision — Claim that release limited to property damage — Releasor bound by full release, when.
In the absence of fraud, misrepresentation, duress or superior knowledge on the part of a releasee, or incapacity of the releasor to read and comprehend the language of a release, such releasor may not be relieved of the effect of a "full release of all claims, demands and causes of action on account of * * * injuries" resulting from a collision of motor vehicles, such request for relief being predicated on the ground that the release was intended to be limited to property damage alone.
APPEAL from the Court of Appeals for Montgomery County.
In the Court of Common Pleas the plaintiff instituted this action to recover damages for medical expenses and for injuries to his person resulting from a collision between his motorcycle and the defendant's automobile at an intersection in the city of Dayton, Ohio, on December 18, 1955.
The plaintiff's petition alleges two causes of action.
The first of these reads in part as follows:
"2. That on or about the 5th day of January, 1956, the exact date of which is unknown to plaintiff, plaintiff executed and delivered to defendant what purported to be a full release of all claims, demands and causes of action on account of such injuries sustained by plaintiff, for which defendant paid plaintiff the wholly inadequate sum of $59.60, which sum plaintiff has tendered back to defendant, but which defendant refused, and which plaintiff now tenders into court.
"3. That said amount paid to plaintiff was in payment of plaintiff's property damage suffered in a certain collision more completely described in plaintiff's second cause of action; that at the time said release was executed neither plaintiff or defendant knew that plaintiff had suffered a severe back injury, which is more completely set forth in plaintiff's second cause of action, and plaintiff and defendant did not intend that said release should in any way release the defendant from physical injuries caused plaintiff by said collision.
"Wherefore, plaintiff prays that the aforesaid release be set aside and cancelled, and that plaintiff be restored to all things which he has lost by reason of signing the same."
To the plaintiff's petition the defendant filed a demurrer on the ground that the facts alleged are insufficient to constitute a cause of action.
The Court of Common Pleas sustained the defendant's demurrer and dismissed the plaintiff's action.
On an appeal to the Court of Appeals on questions of law, the judgment of the Court of Common Pleas was reserved and the cause was remanded to that court for further proceedings.
The cause is in this court for a review by reason of the allowance of the defendant's motion to certify the record.
Messrs. Beigel Mahrt and Mr. Frederick C. O'Grady, for appellee.
Messrs. Marshall Smith, for appellant.
In the opinion of the Court of Appeals appears the following reasoning:
"Perhaps the weakest element in the present petition is the use of the word `severe' in describing the back injury. Defendant emphasizes this word as implying that plaintiff knew of an injury but did not consider it serious. But upon demurrer we must construe the pleading most favorably to the pleader. At most the word `severe' is a conclusion subject to be stricken upon motion. But even if it might be considered upon demurrer we can not base upon it a mere conjecture detrimental to the pleader.
"Defendant contends that there can be no relief for mutual mistake unless the mistake pertains to the instrument itself. The authorities do not support this narrow application."
At the threshold of this discussion it is important to observe the narrow scope of the question presented. The petition contains no allegation of fraud, misrepresentation, duress or superior knowledge on the part of the releasee, or incapacity of the releasor to read and comprehend the language of the release. Reduced to its lowest terms, the plaintiff's factual statement is that he was severely injured on December 18, 1955, that approximately two and one half weeks later he signed a "full release of all claims, demands and causes of action on account of such injuries," and that the defendant paid him a certain sum of money therefor. The plaintiff then adds that neither he nor the defendant intended to say, as they did, that the release was for "all claims, demands and causes of action on account of such injuries." Instead, the plaintiff alleges further that the release was not for all causes of action but for only part of them, namely, those for property damage — a thing they concededly did not say.
In the absence of fraud, misrepresentation, duress or superior knowledge on the part of a releasee, and in the absence of incapacity of the releasor to read and comprehend the language of a release, how far should courts go in allowing a party thereto to avoid the obvious meaning of the simple clear language he admittedly used? The plaintiff now asserts that, instead of releasing all claims, he intended to release only those for property damage. If he should be sustained in this contention, could he later be heard to claim also that he did not intend to release all claims for even property damage? If this sort of conduct is to be sanctioned by the courts, what becomes of the fundamental principles of law that courts favor the voluntary settlement of disputes, and that responsible persons are held to intend the meaning of unambiguous language to which they knowingly affix their signatures? To condone this plaintiff's conduct would seem to reduce the value of a legitimate release to the vanishing point by encouraging individuals to sign the document with the feeling that it can be nullified at will and without regard to the failure of a signer to exercise any care in his own behalf.
In 48 American Law Reports, Annotated, 1464, appears the following helpful summary of the case law on the subject of mutual mistake in the execution of releases relating to personal injury claims:
"There are numerous cases supporting the doctrine that a release of a claim for personal injuries can not 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 question in each case is whether the minds of the parties met upon the understanding that the payment and acceptance of the consideration 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. And the release will not be set aside merely because the injury proves permanent instead of temporary, the 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."
Similar subsequent annotations appear in 115 American Law Reports, Annotated, 425, and volume 117, page 1009.
Hence, it is the view of this court that, under the narrow circumstances alleged, the Court of Common Pleas was not in error in sustaining the defendant's demurrer to the plaintiff's petition. The judgment of the Court of Appeals is reversed and that of the trial court is affirmed.
Judgment reversed.
TAFT, BELL, HERBERT and PECK, JJ., concur.
ZIMMERMAN and MATTHIAS, JJ., dissent.
This case is being decided upon the demurrer to the petition. It is my view that the petition sets out facts which disclose a mutual mistake on the part of the plaintiff who signed the release and of the defendant to whom it was given as to physical injuries which plaintiff may have sustained in the collision. According to the averments of the petition, personal injuries to the plaintiff were not within the contemplation of the parties when the release was executed, and the small consideration as stated in the release was to compensate plaintiff only for the damage to his motorcycle. To my mind the petition contains allegations sufficient to entitle plaintiff to a trial to afford him the opportunity of proving his claim if he can.
The principle of law is well established that, where a release is given with reference to known injuries and it subsequently develops that a substantial injury then existed of which both parties were unaware and which was not taken into account, the release may be avoided on the ground of mutual mistake. The time when the release was executed and the amount of the consideration may, in connection with other circumstances, have a significant bearing on the question of whether the release should be avoided. 45 American Jurisprudence, 686, Section 20.
Therefore, the judgment of the Court of Appeals should be affirmed, and the cause sent back to the trial court for further proceedings.
MATTHIAS, J., concurs in the foregoing dissenting opinion.