Opinion · Ohlaw Ohio
SLOAN v. OIL CO., 177 Ohio St. 149 (1964)
203 N.E.2d 237
- Type
- Opinion
- Court
- Ohlaw Ohio
- Jurisdiction
- Ohlaw
- Date
- 1964-12-23
- Topic
- general
SLOAN v. OIL CO., 177 Ohio St. 149 (1964) 203 N.E.2d 237 SLOAN, APPELLEE v. THE STANDARD OIL CO., APPELLANT. No. 38186Supreme Court of Ohio. Decided December 23, 1964.
Citator
UpLaw has not yet analyzed SLOAN v. OIL CO., 177 Ohio St. 149 (1964). The absence of a flag is not a finding that it is good law.
SLOAN v. OIL CO.,177 Ohio St. 149(1964)
203 N.E.2d 237
SLOAN, APPELLEE v. THE STANDARD OIL CO., APPELLANT.
No. 38186
Supreme Court of Ohio.
Decided December 23, 1964.
1. A release may be avoided where the releasor can establish by clear and convincing evidence that it was executed by mutual mistake, as between himself and the releasee, of a past or present fact material to the release, as where there was a mutual mistake as to the existence of any injury of the releasor, unless it appears further that the partiesintendedthat claims for all injuries, whether known or unknown at the time of the execution of the release, be relinquished. (O'Donnelv.Langdon,170 Ohio St. 528, overruled.)
2. Whether the parties to a release actually intended to discharge all liability is a question of fact for the trier of the facts.
3. The terms of a release cannot circumvent the powers of equity to correct mistakes.
James C. Sloan, appellee herein, filed a petition in the Court of Common Pleas of Marion County, alleging two causes of action. The first cause of action seeks to cancel a release executed between plaintiff and defendant, The Standard Oil Company, appellant herein, as the result of an automobile-truck collision between plaintiff and an employee of defendant, acting within the scope of his employment. The second cause of action seeks to recover damages for personal injuries alleged to have been sustained as a result of the collision. Plaintiff, while stopped at a trafficway intersection, was struck in the rear of his automobile by a pick-up truck driven by such employee of defendant.
Judgment on the first cause of action heard by the court was entered for the plaintiff, holding that a mutual mistake ofPage 150a material fact existed between the parties to the release at the time of its execution, and that, therefore, the release was invalid and not a bar to plaintiff's second cause of action. The terms of the release are as follows:
"Know all men by these presents, that we, the undersigned, for and in consideration of the sum of twenty and 19/100 dollars ($20.19) to us in hand paid by The Standard Oil Company, an Ohio corporation, the receipt of which is acknowledged, have released and discharged, and by these presents do hereby forever release and discharge the said The Standard Oil Company, its successors and assigns, for any from any and all liability, claims, demands, controversies, damages, actions and causes of actions on account of personal injuries and any and all other loss and damage of every kind and nature occasioned to the undersigned by or resulting from an accident which occurred on or about the 27th day of January 1957, whereinmy 1950 Mercury automobile wasdamaged when involved in an accident with Standard Oil Companytruck No. 5960 on E. Church Street, Marion, Ohio,fn*and of and from all liability, claims, demands, controversies, damages, actions, and cause of action whatsoever, either in law or equity, which the undersigned, their heirs, executors, administrators, successors and assigns, have or may have, now or hereafter by reason of or in any wise incident to or resulting from the accident hereinbefore mentioned.
"As inducement to the payment of the sum aforesaid the undersigned declare that they fully understand the terms of this settlement, and that they voluntarily accept said sum for the purpose of making full and final compromise, adjustment and settlement of all loss, damages and injuries hereinbefore mentioned or referred to, and that the payment of said sum for this release is not an admission of liability by the payor, but the payor expressly denies liability.
"It is expressly understood and agreed that said sum hereinbefore stated is the sole consideration for this release, and that the consideration stated therein is contractual and notPage 151merely recital, and that all agreements and understandings between the parties in reference thereto are embodied herein.
"In witness whereof, we hereunto set our hands this 4th day of March 1957.
"[Sig.] James C. Sloan.
"In presence of:
"[Sig.] Mary Ellen North
"[Sig.] F.E. Arthur."
The second cause of action was tried by a jury, resulting in a judgment for the plaintiff, damages being assessed at $8,500.
Upon appeal to the Court of Appeals for Marion County, the judgment of the trial court on the two causes of action was affirmed.
The cause is now before this court upon the allowance of a motion of defendant to certify the record.
Defendant places great emphasis on the case ofO'Donnelv.Langdon(1960),170 Ohio St. 528. Research indicates that this court has had little occasion to consider the legal principles applicable to releases for personal injuries, despite the fact that an overwhelming number of sister states have been so concerned. It is the opinion of this court that an analysis of this area of the law is needed in Ohio. As a consequence, theO'Donneldecision is hereby overruled.
Can equity grant relief where parties executed a release while operating under a mistake of fact? Equity from its inception has had jurisdiction to concern itself with mistakes. 3 Pomeroy, Equity Jurisprudence, 281, Section 838. The equitable remedy of cancellation or rescission of contracts and otherPage 152instruments has long been available as a method of granting relief from the consequences of any mistake of fact which is a material element of the transaction. Restatement, Contracts, Section 502; Restatement, Torts, Section 900; 37 Ohio Jurisprudence (2d), 82, Mistake, Accident or Surprise, Section 4.
A general statement of the rule applicable to releases and personal injuries, as followed in other jurisdictions, is as follows:
"A release may be avoided where the releasor can show that it was executed by mutual mistake, as between himself and the releasee, of a past or present fact, material to the release * * * as where there was a mutual mistake as to the nature, extent, or degree of gravity of the releasor's injury, unless it further appears that partiesintendedthat claims for all injuries, whether known or unknown at the time of the execution of the release, be relinquished." (Emphasis added.) 76 Corpus Juris Secundum, 645, Release, Section 25.
The most comprehensive analysis of this area of law to date is found in annotation, 71 A.L.R. (2d), 82, 90 (1960). Therein some 29 states are listed which have adopted the above-quoted rule or a facsimile thereof.
Because rescission or cancellation of the release is sought, the spirit of equity is given great emphasis in the application of the above rule. It is required that the release must be fairly and knowingly made. Annotation, 71 A.L.R. (2d), 82, 89. Each case is said to depend on its own facts.Dentonv.Utley,350 Mich. 332,86 N.W.2d 537. It is apparent that the strict terms of the release are not, in many instances, controlling, the releasee cannot circumvent the powers of equity to correct mistakes.Dentonv.Utley, supra.
As stated inCaseyv.Proctor(1963),59 Cal.2d 97,378 P.2d 579:
"The essence of the rule is that the wording of the release is not conclusive; it is a question of fact whether the parties to a release actually intended to discharge such liability."
The dispositive inquiry in each case is what did the parties intend? If the facts indicate that the parties intended that all claims for all injuries would be relinquished, the release is not subject to rescission or cancellation in a court of equity.Page 153
Certain factors have been judicially recognized as aids whereby the intent of the parties at the time the release was executed may be determined. Stated favorably to the party seeking rescission or cancellation, these factors are: The absence of bargaining and negotiating leading to settlement; the releasee is clearly liable; absence of discussion concerning personal injuries; the contention that the injuries were in fact unknown at the time the release was executed is reasonable; an inadequate amount of consideration received compared with the risk of the existence of unknown injuries (seeCaseyv.Proctor, supra, and authorities cited therein); haste by the releasee in securing the release (annotation, 71 A.L.R. [2d], 82, 169 [1960]); and the terms of the release exclude the injuries alleged (annotation, 71 A.L.R. [2d], 82, 156 [1960]).
Because intent is a question of fact, it is necessary in each case to examine all the circumstances surrounding the execution of the release.
In the instant case, plaintiff's automobile, while stopped at a trafficway intersection, was struck in the rear by a truck driven by an employee of the defendant. Plaintiff testified that he experienced a sudden jerk of the head backwards and a sensation of pain during this jerk, and that a soreness existed in his neck and shoulders for a week to ten days following the accident. Plaintiff and the driver examined the damage to the two vehicles, and the driver advised plaintiff to send a bill for any damage to defendant. Plaintiff returned home after completing his business and took some medication to ward off a headache. The day after the accident, the defendant informed plaintiff to have the damage repaired and to forward the bill. Defendant's office manager, Floyd Arthur, testified that he had no knowledge of any injury to plaintiff other than the stiffness in the neck, as related to Arthur by the employee-driver. Plaintiff expended $20.19 to repair his car and forwarded the bill to defendant. Plaintiff telephoned defendant some time in February, inquiring when defendant was going to pay the bill. On March 4, 1962, Arthur brought a check for $20.19 drawn upon defendant's account and a general release to plaintiff's place of employment. Plaintiff admits reading and signing the release and the acceptance of defendant's check. Approximately sixPage 154months after the accident, plaintiff felt a tingling sensation in the fingers of his left hand. This sensation grew progressively worse, and plaintiff, some 12 months after the accident, was operated on for a ruptured cervical disc..
Upon this statement of facts, the trial court found:
"* * * at the time this document, designated a release, was prepared, submitted and signed, there existed a mutual mistake of material fact, namely, that plaintiff had [not] sustained personal injuries as a result of this collision and that but for such mistake of a material fact this document would not have been prepared and submitted by defendant and would not have been signed by plaintiff.
"* * *
"The court * * * finds that at no time were the damages of plaintiff for personal injuries considered by the parties or comprehended as within the terms of the document designated a release * * *."
This court reaches the same conclusion. Applying the previously stated factors to determine the intent of the parties, it is evident that there was no negotiation prior to settlement and no discussion of personal injuries, the amount of consideration given was the exact amount of property damage, and neither party was aware as to the nature, extent, or degree of gravity of the releasor's injury.
Therefore, this court finds that the parties were mutually mistaken as to a material fact. There is clear and convincing evidence to support this conclusion, and the judgment of the Court of Appeals is affirmed.Judgment affirmed.
TAFT, C.J., ZIMMERMAN, MATTHIAS, O'NEILL, GRIFFITH and GIBSON, JJ., concur.Page 155
- Italicized portion is typewritten, whereas the other portion of the release, with the exception of the amount and date, is in printed form. ↩