McNamara v. . Eastman Kodak Co. , 232 N.Y. 18 ( 1921 )

The defendant was erecting a sixteen-story office building in the city of Rochester in August of 1912. The husband of the plaintiff, one Edward B. McNamara, was working as a riveter for John L. Mullen who had the contract for the steel work. McNamara was working on the roof of the building which was over the sixteenth floor and being ordered by his foreman to place some boards on the beams on the sixteenth floor so as to protect men below from falling rivets, he attempted to lift one of these boards and fell through the unprotected opening or well to the floors below and was killed. The action is brought against the Eastman Kodak Company, the owner of the building, for its failure to comply with the Labor Law (Cons. Laws, ch. 31), section 20. This says the contractors for the iron or steel work of buildings in the course of construction or the owners of such building shall thoroughly plank over the entire tier of beams.

Mullen, who would be equally liable with the owner, has not been sued as he is a non-resident and could only be reached by attachment of property in this state. It is claimed by the defendant here that the statute does not apply as the work at the sixteenth floor had been finished and beams were being removed. There are two answers to this. Work on the sixteenth floor was not finished as the rivets were being driven in by compressed air and the floor had never been covered with boards as there were only forty or fifty boards lying around loose and the place at which McNamara fell had never been covered. Second, we passed upon the evidence in this case in McNamara v. Eastman KodakCompany (220 N.Y. 180), and held contrary to the courts below that the evidence was sufficient to present a question of fact to the jury as to whether the defendant had complied with the Labor Law. The evidence now is not materially different than it was before, nor is it claimed to be by the appellant here.

Another question, however, has arisen in this case not before presented.

Mullen, the contractor, and the Kodak Company, the owner, were joint tort feasors. A release of one without reserving rights as to the other would probably release both. The plaintiff has given a general release to Mullen without reserving any rights as to the Kodak Company and the defendant Kodak Company has set up the Mullen release by supplemental answer. The release was given or obtained under the following circumstances:

In August of 1915 the state of litigation was this. The complaint had been dismissed on a trial before Judge SUTHERLAND and the Appellate Division had affirmed the ruling. The case was in this court, where as above stated in February of 1917 the dismissal was reversed. Mullen, the employer of the deceased, was not a party to this litigation although no doubt he felt some responsibility for the action. On April 13, 1915, Mrs. McNamara wrote to Mr. Mullen a letter. Therein she states her deplorable condition after the loss of her husband, the hard work by which she had to pull out a living for herself and daughter and among other things says: "I understand now that you had made him (Lawyer Dwyer) an offer to settle of which I did not know of at the time. As I am a poor woman and have nothing only what I can earn in a day, I feel as if you could settle with me with [without] a lawyer or suit. * * * I thought instead of giving it to lawyers you could settle with me. Of course you must understand it was pretty hard for me to be left alone and have to give up a strong young husband."

This letter was never answered. In response thereto, however, one McWade on August 25, 1915, called upon the widow at her home in Rochester and said in substance that Mr. Mullen had received the plaintiff's letter and was willing to make a gift to her of $300. He also said Mullen was not liable for the accident to the deceased and two years had outlawed the claim if he were, but that he was willing to make a gift. When Mrs. McNamara spoke of her lawyer (Mr. Dwyer), McWade said it was unnecessary to see him as this was a gift of money from Mullen and the litigation against the Kodak Company had ended; that her case had finally been dismissed. McWade did not represent Mullen but was an adjuster for a casualty company.

McWade went to Lawyer Bechtold's office in Rochester which was in the same building with Dwyer, the attorney for the plaintiff. McWade told Bechtold that Mullen was to make a gift to the plaintiff of $300 and said that she was represented by Cleveland attorneys. This, of course, was known to McWade to be a lie. Bechtold testifies that McWade told him nothing about any pending litigation in the state of New York. McWade, himself, swears that "Some one raised the question of the suit against the Kodak Company and then I believe that I stated that this case was concluded, had been settled; that a higher court had passed on it and that it was over." The question was asked of him: "Did you say to her, in words or substance, that you were paying this money to her practically as a gift? Answer. Well, I will have to answer this, yes."

In the afternoon of the 25th of August, the widow called at the Rochester Hotel and signed a paper in which she agreed to give a full and proper release. Later, on September 3, the plaintiff was called down to Bechtold's office where she went with her sister and a little child. The plaintiff is partially deaf. On this third day of September was signed a petition for letters of administration apparently acknowledged by her. She signed a bond. She signed a petition for leave to settle the action, and swore to it and on the 9th day of September, 1915, after the order of the surrogate authorizing settlement, signed the release. The papers signed on September 3, the plaintiff swore positively were not read to her but were presented by McWade in Bechtold's office who told her where to sign her name and that the purpose was to obtain a receipt for Mr. Mullen to keep his books straight. According to the testimony of the plaintiff, she never knew she was signing a release of any claim or releasing the Kodak Company or affecting in any way her rights against the Kodak Company. She supposed she was signing a receipt. A few excerpts from the plaintiff's testimony on this point. "He said he was a representative of Mr. Mullen and Mr. Mullen had sent him to me, that after two years had elapsed my case against Mullen was outlawed, and that he was offering me $300 as a charitable gift. He said as this was a gift of charity from Mr. Mullen that it would not be necessary to consult with Mr. Dwyer. He said I would have to come down to Mr. Bechtold's office in order to sign a paper which would give a receipt on Mr. Mullen's books that he had delivered me this $300 in charity.

"Nothing was said about settling any claim or signing a release, and papers were not read. Q. What did you believe Exhibit 31 was? A. A receipt." Exhibit 31 is the release in question.

Mr. McWade was present when she signed the other papers. She says she did not swear to anything. All the papers were signed in Mr. Bechtold's office and she did not read them nor swear to them.

"Q. Did you believe the statement made to you by Mr. McWade to which you testified that the execution of these papers and the acceptance of this $300 would not in any manner affect your claim for damages for the death of your husband?

"A. Yes (folio 1292), I took the charitable gift thinking as his representative assured me, it would in no way affect my case against the company." (Folio 1310.)

The sum and substance of it all is that a runner for a casualty company got Mrs. McNamara to sign papers releasing her claim against Mullen upon the representation that it was a charitable gift and not a settlement of any claim; that it in no way affected her rights against the Kodak Company; that her case against the Kodak Company had been finally dismissed anyhow and that she could get nothing from it and that the papers she was signing were simply receipts or papers in the nature of a receipt for Mullen's books.

It is a noteworthy fact that none of the witnesses who took the acknowledgments or were present at the signing of the papers remembered anything about the transaction. On this evidence, I think a question was presented for the jury as to whether the plaintiff was overreached or defrauded in signing the release.

If I were left to decide this case as a juror or according to the weight of testimony I probably would decide against the plaintiff. My judgment would be to hold her with knowledge of the contents of all these papers which she apparently signed and acknowledged and yet I know that my feeling in this direction should not affect my judgment in passing upon the question as to whether there be any evidence to overcome such a conclusion. It may be and it frequently has happened that fraud and deception are perpetrated by negligence runners on the poor and uneducated and that they are easily led to sign papers in the sight of money without knowing the contents. The question here is whether there is any evidence of fraud and deceit. I have stated it above and conclude that in my judgment there is some evidence justifying a jury in finding that the plaintiff thought she was accepting $300 as a gift and simply signed a receipt and did not sign a release, knowing it to be such and that, therefore, she never released her claim against the defendant here.

The judge's charge has been criticised by the appellant in his points, but in my estimation it is very fair. There are two aspects of this case. The principal one is this: If the plaintiff thought she was signing a receipt and not a release and was tricked into this belief it was not necessary for her to tender back the $300 paid.

This was the principal evidence of the case as I have indicated above.

On the other hand, if the plaintiff knew that she was signing a release, but was deceived into doing it by false representation as to the facts or results, it would be necessary for her to tender back the $300. This has usually been done in a pleading where the plaintiff has sought to get rid of a release. It is not necessary to resort to an action in equity. The plaintiff in this case by an amended reply to the supplemental answer offered to repay the money. On the trial the plaintiff's attorney offered to repay the money but to whom should the plaintiff repay the money? The defendant here is seeking to take advantage of a rule of law which is rapidly going into the discard. (Columbia Law Review, May, 1921, note, p. 491.) The money was not paid by the defendant but by a casualty company for a person in Pennsylvania named Mullen. He was not a party to the action and money could not be paid into court for his benefit. It could not be paid to the defendant here as it was not its money. No order of the court could in any way affect or touch the rights of Mullen. The plaintiff, therefore, under this second rule of law requiring a tender did everything she could when she offered to pay back the money and her lawyer wrote a letter to Mr. Mullen offering to pay it back.

Mullen refused to take the money and I think there is much in the point that tender has been waived under the circumstances.

Referring to McWade's statement that the Kodak Company case was over, the judge said: "That was a statement of fact. If that was a false statement of a material fact and she relied on it and was deceived by it and was thereby induced to execute this release which she would not have done if that statement of fact had not been made to her, in short, if she was defrauded by a false representation, etc. * * * then it would not preclude her from prosecuting her action against the Kodak Company."

Exceptions to the charge are as follows (folio 1749): "Mr. Moser: I except to that portion of your Honor's charge in which you charge `If the release was procured by the exercise of fraud and deceit the release is void.'

"The Court: In reference to a material matter of fact.

"Mr. Moser: My exception is made on the ground that there is no evidence of any return or tender of the money that was paid.

"The Court: Yes."

The court, as can be seen by reading the entire charge did not attempt to explain the difference between "void" and "voidable." He says that if it were fraudulently procured it does not prevent a recovery against the defendant. This was all the judge was called upon to tell the jury. It was not his business to explain the difference in a charge between "void" and "voidable."

The plaintiff made her election in her reply in tendering back the money and she did everything to get it back that the law recognizes. It was proper for the judge, therefore, to say that if there was fraud practiced upon her, she could recover. The matter of tender was a question of law for the court where the facts were not disputed.

What can we say that the plaintiff should have done with Mullen's money? Certainly she was not to give it to the defendant or tender it to the defendant here. Mullen refused to take it and the court has no power over it. Mullen was not in court — not a party.

"Mr. Moser: I ask the Court to charge the jury that if she knew that she was executing a release in consideration of the payment of $300, she cannot recover in this case.

"The Court: Yes, if she knew it and no fraud had entered into it.

"Mr. Moser: I except to the charge as amended and also to the refusal to charge as requested.

"Mr. Moser: I ask your Honor to charge that if she knew that she was executing a release and that she received $300 in consideration of executing that release, that her cause of action is barred whether or not Mr. McWade made any false representation to her of a material fact, because there is no evidence of a return or tender to Mr. Mullen of the $300 which she received. [Declined and exception.]

"Also to charge the jury that there is no evidence in the case that the $300 that was paid to the plaintiff was ever returned or tendered to Mr. Mullen.

"The Court: Declined, in view of the tender that was made in open court.

"Mr. Moser: Excepted."

In view of what I have just said about tender, I think these requests were properly refused. How could the plaintiff pay the money back to Mullen in Pennsylvania if he would not take it. She wrote to him offering to pay it back and he refused to accept it. Here was a waiver of tender if any other kind of tender could be made. The Kodak Company was not entitled to the money and was not entitled to any tender. If it seeks the benefit of a rule of law that the release of one joint tort feasor releases the other, it must accept all the responsibilities of this gratuitous release and is entitled to no liberal construction or consideration. It paid no money and is seeking the benefit of others' deeds. Mullen has not complained about the failure of any tender. When the plaintiff offered to return the money to Mullen and he refused to accept it, offered in her pleading to pay it back and offered in open court to pay it into court, I cannot see what else the plaintiff could do to preserve her rights as against a third party like the defendant to prevent the effect of a fraudulent release.

Does a release of one joint tort feasor any longer release the other?

This point has not been argued. Section 230 of the Debtor and Creditor Law (Cons. Laws, ch. 12) reads: "A joint debtor may make a separate composition with his creditor. Such a composition discharges the debtor making it; and him only. The creditor must execute to the compounding debtor a release of the indebtedness or other instrument exonerating him therefrom."

In the third department the Appellate Division has applied this section to joint tort feasors. (Warner v. Brill, 195 App. Div. 64. ) (See Columbia Law Review for May 1921, vol. XXI, No. 5, page 491, note at bottom of page.)

In this case the release mentioned only Mullen and made no reference to the Kodak Company. The defendant relies upon the old law and authorities. (See Walsh v. N.Y.C. H.R.R.R. Co.,204 N.Y. 58, 63, 64.)

I do not go so far as to say that we should hold with the Appellate Division in the above case as the question is not argued or presented by briefs. Counsel assume the old authorities apply. Perhaps they do. But those decisions and comments show the trend of thought on this subject and naturally incline us to be liberal to the plaintiff upon this question of tender and of misrepresentation.

The order of the Surrogate's Court permitted a settlement with Mullen, not with the Kodak Company. The rule that a release of one joint debtor releases all does not apply to surrogate's orders. The order is conclusive, if at all, only as to Mullen. But is it conclusive? The authority to settle given by the surrogate is embodied in an order, not a decree. (Code of Civil Procedure, § 2548.) It may be attacked collaterally for fraud. (Pietraroia v. N.J. H.R.R. F. Co., 197 N.Y. 434;McCarthy v. Supreme Court of Foresters, 107 App. Div. 185;Ziemer v. Crucible Steel Co., 99 App. Div. 169.)

The judgment appealed from should be affirmed, with costs.

POUND, McLAUGHLIN and ANDREWS, JJ., concur with HISCOCK, Ch. J.; HOGAN, J., dissents; CRANE, J., reads dissenting opinion; CHASE, J., deceased.

Judgment reversed, etc.