Knight v. Vincennes Bridge Co., 172 N.C. 393 (1916)

Nov. 9, 1916 · Supreme Court of North Carolina

172 N.C. 393

W. M. KNIGHT v. VINCENNES BRIDGE COMPANY.

(Filed 9 November, 1916.)

1. Eelease — Contracts—Consideration—Fraud.

A receipt given by one who claims damages for a personal injury alleged to have been caused by the negligence of another, for a valuable consideration, and which in legal effect is a release not under seal, is a complete defense in his action to recover such damages, when it has not been procured by fraud and undue influence.

2. Same — Evidence—Burden of Proof.

The parties to a release from liability arising from a personal injury alleged negligently to have been inflicted may agree upon the consideration to be paid, and when the execution of the paper for the considera-' tion is shown by the defendant in the action to recover damages, the burden is then on the plaintiff, where fraud is alleged, to prove the fraud or inadequacy of consideration, etc., when they are relied upon. The distinction.between a consideration which will support a contract affecting only the parties and such as will affect creditors, etc., pointed out by Allen, J.

3. Eelease — Contracts — Consideration —■ Evidence — Inadequacy — Fraud— Trials — Questions for Jury.

The matter of inadequacy of consideration paid for a release from liability is one to be considered and passed upon by the jury, with other evidence of fraud relied on to set it aside; and while gross inadequacy may alone be sufficient upon this issue, it may not, as a matter of law, be declared to avoid the instrument.

4. Instructions — Expression of Opinion — Statutes.

In an action to recover damages for a personal injury, -Where a release is set up in defense, which the plaintiff attacks for fraud, involving the question of gross inadequacy of consideration, and there is evidence tending to show that defendant paid the plaintiff $7, and also $10 to his doctors, a charge which confines the inquiry before the jury to a consideration of $7 is an expression of opinion on the evidence forbidden by the statute.

Crvn, action- tried before Webb, J., at March Term, 1916, of Foe-syth.

This is an action to recover damages, caused, as the plaintiff alleges, by the negligence of the defendant.

The defendant denies negligence, and pleads a release as a defense.

The evidence of the plaintiff tended to prove that he was in the employment of the defendant company as a laborer at a wage of $2.50 per day, and when injured was engaged in helping in the construction of a steel bridge over the Yadkin River in Forsyth County. The bridge consisted of eight spans. On the day the plaintiff began working for the defendant, the defendant was building a scaffold on nine poles, 25 or 30 feet long, resting on soft ground or made earth, a good distance from the river, at thei fifth or sixth span beginning on the Forsyth side of the river. There were stringers on top of the poles and steel on top of that. The scaffold rested on four poles and on the scaffold were floor beams weighing 1,100 pounds each, about sixteen eye-beams weighing 300 pounds each, a lot of flooring and planks 6 inches wide and 3 inches thick, some heavy green timber, a concrete mixer made of steel, cast iron, and tin, weighing about 3,000 pounds. They were also hauling rock on the scaffold with a little dump cart, and four or five men were on the bridge when it fell. The plaintiff, together with a colaborer, one Charley Sheets, who was killed in the fall, were moving the concrete mixer at the time the scaffold gave way. The false work sank into the earth, the poles went down far enough to break the span, throwing the plaintiff and others down on the frozen ground near the creek about 100 feet or more from the edge of the river. The plaintiff’s shoulder, as he fell, struck against some timber as he fell between two pine poles, one of the 300-pound beams fell upon him, striking his foot, and driving it into the frozen ground. Plaintiff remained in this condition until help arrived, and the timbers and beam were pulled o;ff of him. Plaintiff’s side was cut and a hole was cut in his head. Plaintiff was 35 years old and his regular occupation was that of a steel worker, for which he had been receiving from 56% to 62% cents per hour, but was working for the defendant company at the rate of $2.50 per day until he could secure work as a steel worker. Asa result of the injuries sustained by the fall of the scaffolding the plaintiff lost time, bas been, laid off from work a number of times, suffers from bis injured leg, suffers pains in bis bead, and gets dizzy when be goes up bigb on buildings when engaged in steel work, and shortly after tbe injury be tried to- pass a. railroad examination, but could not pass tbe examination on account of bis eyes, altbougb be bad passed..such an examination prior to tbe injury.

Tbe defendant introduced evidence in rebuttal, and among other things a receipt acknowledging tbe payment of $7 in full of tbe plaintiff’s claim for damages.

It also introduced evidence tending to prove that it was not negligent, and that tbe injuries of tbe plaintiff were less serious than, be contended; that be was not under tbe influence of whiskey when be executed tbe receipt or release; that be bad then quit tbe employment of tbe defendant; that there was no fraud, and that it paid tbe doctor’s bill of $10 for tbe plaintiff in addition to tbe $7 acknowledged to have been paid.

Tbe plaintiff, in reply, offered evidence tending to prove that be was-drinking at tbe time tbe receipt was signed; that be bad gone to the-agents of tbe defendant for a settlement for bis labor; that tbe money paid him was for labor; and that be thought be was signing a pay-roll.. He also relied on inadequacy of consideration as evidence of fraud.

His Honor charged tbe jury, among other things, as follows: “In passing upon that second issue, tbe court charges you that upon the-question of whether or not tbe consideration set forth in tbe paper-writing was an adequate consideration, tbe burden of that is on the-defendant company to satisfy you by tbe greater weight of tbe evidence that tbe consideration was an adequate consideration.” Defendant excepted.

“If you find from this testimony, by tbe greater weight, that the-plaintiff was injured, and if you find by tbe greater weight of the-testimony that be was injured in tbe way and manner be says be was. injured, and find that be suffered greatly in tbe way and manner which be says he suffered; if you find that to be tbe fact, then you will ask yourselves tbe question, ‘Was $7 in payment of that injury an adequate consideration, or was it inadequate consideration, or was it so gross that it would shock tbe sense of tbe ordinary man,' shock bis conscience, and make him say that really tbe defendant company paid nothing?’’ If it did so, tbe law says that’s-a fraud, and you may consider these matters in passing upon that question- — that issue as to ’fraud.” Defendant excepted.

Tbe jury returned tbe following verdict:

1. Did tbe plaintiff execute tbe paper-writing as alleged by tbe defendant in its answer? Answer: “Yes.”

2. If said paper-writing was executed and delivered as alleged in the answer, was the same procured by fraud or undue influence of the defendant, as alleged by the plaintiff? Answer: “Yes.”

3. Vas there a valuable consideration paid by the defendant to the plaintiff in consideration of the execution of the said paper-writing? Answer: “No.”

4. Vas the plaintiff injured by the negligence of the defendant, as • alleged in the complaint? Answer: “Yes.”

5. "What damage has plaintiff sustained? Answer: “$200.”

Judgment was entered upon the verdict in favor of the plaintiff, and the defendant appealed.

Wallace, & Walls and Ilolton & Holton for plaintiff.

Manly, Hendren & Womble for defendant.

AlleN, J.

The receipt introduced by the defendant, which is in legal effect a release not under seal, is a complete defense and bar to the’cause of action of the plaintiff, if supported by a valuable consideration, and.not procured by fraud and undue influence.

The burden was, in the first instance, on the defendant to prove a valuable consideration (King v. R. R., 157 N. C., 52), and this it did when it proved the execution of the receipt by the plaintiff, acknowledging the payment to him of $7 in full of his claim for damages, because, in the absence of fraud, undue influence, or oppression, parties capable of contracting have the same right to agree upon the consideration as upon any other term of the contract, and “the value of all things contracted for is measured by the appetites of the contractors.” 6 R. C. L., 678.

Vhen the defendant proved the execution of the receipt, with the acknowledgment of the payment of $7, it established its defense, nothing else appearing, and the burden was then on the plaintiff to attack the receipt or release by proving fraud; and if he relied on inadequacy of consideration, gross or otherwise, as a circumstance on the issue of fraud, he assumed the burden of proving this circumstance.

It follows that it was error to charge the jury that the burden was on the defendant to prove that the consideration for the release was adequate, which he did twice.

Much of the confusion in regard to consideration arises from failure to note the distinction between the consideration which will support a contract, which only affects the parties, and a purchaser for value as against creditors and purchasers.

The difference between the two is clearly stated by Ruffin, C. J., in Fullenwider v. Roberts, 20 N. C., 278. He says: “The opinion of his Honor as to tbe effect of inadequacy of price was, probably, drawn from tbe doctrine tbat an agreement cannot be set aside as between tbe parties merely for tbat cause. Rut tbe reason of tbat is tbat if one will, without imposition, distress, or undue advantage, make a bad bargain with bis.eyes open, he must stand to it. His agreement is sufficient, because bis interests alone are affected by it. Tbe cases of bis creditors, however, or persons claiming under a previous conveyance from him, admit a very different consideration. They fall, within Lord Hardwick's fourth class of cases in Chesterfield v. Jansen — tbat of a fraud and imposition on third persons, not parties to tbe agreement. To tbe complaint of such third person it cannot be replied tbat be cannot call tbe consideration petty and inadequate, because be bad assented to it. As against creditors and prior donees, tbe price must be sufficient in itself to sustain tbe deed, without tbe aid of their acceptance; for no such acceptance exists. Then it is to be inquired, What price will put tbe statute in operation, or what inadequacy will prevent its operation? We think tbat a fair and reasonable price, according to tbe common mode of dealing between buyers and sellers, was meant by tbe Legislature; and tbat at all events no case is within tbe statute in which tbe purchaser cannot with a good conscience claim to bold tbe estate upon the ground and for tbe sake of tbe price paid, and not merely upon tbe score of tbe vendor’s agreement.”

It was also error to charge tbe jury tbat if tbe consideration was “so gross tbat it would shock tbe sense of tbe ordinary man, shock bis conscience, and make him say really tbe defendant paid nothing,” tbe law would declare it a fraud.

The controlling principle etablished by our authorities is tbat inadequacy of consideration is a circumstance to1 be considered on> tbe issue of fraud, and that if.it is so gross tbat it would cause one to say that nothing was paid, it would be sufficient to be submitted! to. tbe jury without other evidence; but we have not said tbat a contract could be set aside as matter of law because of gross inadequacy.

In Perry v. Ins. Co., 137 N. C., 407, tbe following charge was approved: “If tbe award is so grossly and palpably inadequate, tbat is, so grossly and palpably small and out of proportion to the amount of actual damage as to shock tbe moral sense and conscience and to cause reasonable persons to say be got it for nothing, then tbe jury may consider this as evidence tending to show fraud and corruption or strong bias and partiality on tbe part of the arbitrators”; and tbe Court said in Leonard v. Power Co., 155 N. C., 36: “Tbe settled rule, which is applicable not only to awards but to other transactions, is tbat mereoinadequacy alone is not sufficient to set aside tbe award, but if tbe inadequacy be so gross and palpable as to shock tbe moral sense, it is sufficient evidence to be submitted to tbe jury on tbe issue relating to fraud and corruption or partiality and bias”; and in King v. R. R., 157 N. C., 65: “When due weight is given to these matters, and there is evidence that the consideration is inadequate, it is a circumstance which, in connection with other circumstances, may be submitted to the jury, and if grossly inadequate it alone is sufficient to carry the question of fraud or undue influence to the jury”; and these cases were approved in Causey v. R. R., 166 N. C., 5.

The rule amounts to this: The owner of tangible property or of a claim for damages may give it away or may sell it for less than its value, and the contract is valid in the absence of fraud, undue influence, or oppression; but if the contract is attacked as fraudulent, the inadequacy of consideration is evidence of fraud, and if gross, is alone sufficient to carry the case to the jury on the issue of fraud.

This part of the charge is also objectionable as an expression of opinion that the only consideration paid by the defendant was $7 when the defendant offered evidence tending to prove that it paid the doctor’s bill of the plaintiff, amounting to $10, in addition to the $7.

New trial.