Great Northern Ry. Co. v. Fowler
136 F. 118
9th Cir.
1905
Check Treatment
GILBERT, Circuit Judge,

after stating the case as above, delivered the opinion of the court.

The evidence in the case convinced the trial court, as it convinces us, that the settlement was made under a mutual mistake of both parties thereto as to the nature and extent of the appellee’s injuries. The appellee, in making the settlement, acted wholly upon the advice of the agent and surgeon of the appellant. The agent called on him for the purpose of procuring a settlement, and informed him that thé com*121pany was willing to pay him, in full discharge of all demands for the injuries received, his nurse’s and doctor’s bills, together with his regular wages as brakeman for the time during which he would be incapacitated to work. The appellant’s surgeon made an apparently cursory examination of the appellee’s injuries, and found that they consisted of a wound of the scalp, a contusion of the shoulder, and nothing more, and expressed his opinion that the appellee would be ready to go to work again in two weeks. The appellee consulted no other physician as to the extent or probable duration of his injury. He was a sick man at the time when he made the settlement. He accepted the statement and opinion of the appellant’s surgeon, and, on the basis of it, received $195, and signed the discharge. We entertain no doubt that such a release, executed under a mutual mistake of fact so induced by the appellant, should be set aside. It is true that where there is no misrepresentation or fraud on the part of the releasee, a releasor cannot subsequently avoid his release on the ground that his injuries were more serious than he thought them to be, even though his opinion at the time of making the settlement may have been based upon that of a physician employed by the releasee to examine and report on the extent of his injuries. Such was the case of Nelson v. Minneapolis Street Ry. Co., 61 Minn. 168, 63 N. W. 486, cited by the appellant herein. In that case the settlement was made on the opinion of the releasor induced by the opinion of the releasee’s physicians that the injuries were not of a permanent character. The court said:

“The facts proved constituted no ground for a rescission of the contract of settlement and release. These physicians were not sent to settle plaintiff’s claim or to advise her. The extent of their authority was to ascertain the nature of her injuries, and report the result to the defendant for its information. Any statements they may have made in response to plaintiff’s inquiries as to the extent of her injuries were wholly outside of the scope of their agency.”

But it is equally true that a mutual mistake of- fact or an innocent misrepresentation of the facts of the releasor’s injury, made by the releasee’s physician, may be effective to avoid a release induced thereby.

A case directly in point is Lumley v. Wabash R. Co., 76 Fed. 66, 22 C. C. A. 60, decided by the Circuit Court of Appeals for the Sixth Circuit. In that case the complainant signed a release reciting that he had received a severe contused and lacerated wound on his forehead, right side, fracture of right arm between wrist and elbow, and various injuries and contusions, both internal and external. The release was from all actions, suits, claims, etc., arising from injuries so received, and any, every, and all results thereafter flowing therefrom. The gravamen of the bill of complaint was that the complainant had received an injury to his shoulder by breaking or dislocating, which permanently disabled him, and that, at the time of the examination made by the chief surgeon of the railway company, he had called the latter’s attention to the pain in his shoulder, but was informed by the surgeon that the pain was purely sympathetic and was attributable to his fractured arm. The evidence was that this unknown and unsuspected injury was the principal injury sustained. The court said:

“If this surgeon honestly supposed the shoulder pain to be sympathetic, either because his examination had been superficial, or because he had made *122none, 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 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, of enumerated. The subsequent discovery by one giving such a release that he was worse hurt than he had supposed would not, in and of itself, he 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 eases of release affecting property rights, both in courts of law and equity.”

In Houston & T. C. R. Co. v. Brown (Tex. Civ. App.) 69 S. W. 651, a release of damages for a broken arm was made by a railroad employe in reliance upon the statement of a physician acting for the railroad company, made for the purpose of inducing the execution of the same, that the bones of the arm had knitted together, and that the arm would be as good as ever. It was held that the release was not binding upon the employé, even though the statement of the physician was made in good faith. The court said:

“We cannot agree with the contention of appellant that it may escape liability on the ground that the representations and statements made by Stewart was a mere expression of opinion. It was more than an opinion. It was the statement of a fact. * * * It Is true, this statement may have been predicated upon his opinion as a medical expert, but the opinion is based upon facts of which he possessed knowledge. The fact that the statement made by Stewart was not intentionally false does not affect the right of the appellee to have the release set aside, if he was misled by the statement, and executed the release, believing the statement was true. In such a case, innocent misrepresentations may as well be the basis of relief as where such statements are intentionally false.”

The appellant relies on Chicago & N. W. Ry. Co. v. Wilcox, 116 Fed. 913, 54 C. C. A. 147. The plaintiff in that case had suffered a fracture of the femur. Her physician was also the physician of the railway company. She was told that it was a bad break, and was advised by the physician of the railway company that she would be incapacitated for at least a year; that the injury would be slow to repair, if it did repair, and that there was no certainty of her ever entirely recovering; and that such an injury resulted generally in permanent disability. When she talked of making a settlement, he advised her that the better plan would be to wait until she saw the extent of her injury. Disregarding this advice, she made a settlement with the railway company; and subsequently, finding that her injury was greater than she had supposed, she brought suit to set aside the settlement. The court, in the course, of its opinion, said:

“But compromises and releases are not voidable on this account, for the reason that the parties to them know the uncertainty of these future events. *123and, by the very fact of settlement before they develop, agree to take the chances of their effects. Their mistakes relative to the future duration of the disabilities and the future effects of the personal injuries that form the subject of their contracts are mistakes of belief, not of fact, and form no basis for the avoidance of their contracts. Such was the mistake under which the complainant labored. It was a mistake in the opinion of the doctor and in the belief of his patient with reference to unknowable future events. It was not a mistake of a past or of a present fact, and it presents no ground for a rescission of this release.”

The difference between that case and the present case is apparent and is vital. In the Wilcox Case there was no mistake as to the nature of the injury. Mrs. Wilcox was not assured by the railway company’s physician that she would be well within a year, or that she would ever recover. On the contrary, she was advised to await future developments before making a settlement. Her belief that she would recover, and the opinion of her physician that she might recover within a year, were matters of mere conjecture and opinion. In the present case there was a clear mistake of fact as to the nature of the injury. The appellant’s physician believed, and so informed the appellee, that the injury to his head was a scalp wound, whereas it was a far more serious injury — an injury to the skull, causing necrosis of the bone, necessitating a surgical operation, and producing traumatic neurosis, effects that could not have resulted from a mere wound of the scalp.

All the decisions cited by the appellant are believed to be in harmony with the views we have above expressed. It is unnecessary to consider them all in detail. In Currier v. Bilger (Pa.) 24 Atl. 168, the court said:

“There was no mutual mistake of the parties as to any material fact. The only fact in the case was that the plaintiff’s horse had been gored by the defendant’s bull. As to this there was no mistake. Each party was fully informed.”

"In Kowalke v. Milwaukee Electric Railway & Lighting Co. (Wis.) 79 N. W. 762, 74 Am. St. Rep. 877, the plaintiff was injured by jumping from a car. She had her own physician, and was also examined by the railway company’s physician. There was no mistake as to the injuries she received. The mistake was as to her pregnancy at the time. She informed the physicians that she was not pregnant, and refused to submit to an examination. The court said:

“Where a party enters into a contract, ignorant of a fact, but meaning to waive all inquiry into it, or waives an investigation after his attention has been called to it, he is not in mistake, in the legal sense.”

In Seeley v. Citizens’ Traction Co. (Pa.) 36 Atl. 229, the plaintiff, on her own motion, made the settlement; being ignorant of the character and extent of her injuries, but not relying on any statement of the defendant or examination by the defendant’s physician. In Homuth v. Metropolitan St. Ry. Co. (Mo. Sup.) 31 S. W. 903, the plaintiff’s wife was injured on the defendant’s railroad track. The defendant’s physician called on her, and, in answer to her question, said he thought her foot would be well in 14 days. Her own doctor, who was present, expressed a similar opinion, and settlement was effected on that understanding. Here it is clear that there was no mistake of fact, but a mistake of opinion, and that presumably the plaintiff relied on the opin*124ion of her own physician. The case most nearly approaching in its facts the case at bar is Houston & T. C. R. Co. v. McCarty (Tex. Sup.) 60 S. W. 429, 53 L. R. A. 507, 86 Am. St. Rep. 854. In that case the appellee was hurt in a wreck upon a railroad. It was supposed that his only injury was a dislocation of the ankle. He made a settlement of his claim against the railway company in full of all injuries. No other injuries were considered by the parties to the settlement, and the appellee relied upon no examination or opinion of the appellant’s physician. The court said:

“Neither the appellant’s agents nor appellee knew or suspected injury to another part of appellee’s person, and appellee exercised reasonable care to ascertain if he was otherwise injured.”

It transpired that he had suffered severe internal injuries. The court sustained the release, and distinguished the case from Lumley v. Wabash R. Co., supra. The facts that the appellee in the McCarty Case exercised reasonable care to ascertain if he was otherwise injured, and that he relied upon no statement or examination of the appellant’s physician, are sufficient to distinguish it from the present case.

The decree of the Circuit Court is affirmed.