Elling v. Travers

⁵⁹⁹ Offutt, J., delivered the opinion of the Court. Anna Elling, one of the appellants, was, on October 31st, 1930, injured as the1 result of a collision at the intersection of Franklin and Cathedral Streets in the City of Baltimore between a taxicab owned by the Yellow Taxicab Company, in which she. and her husband were passengers, and an automobile owned by one Hansel Travers and operated by George Travers. Shortly after the accident, she and her husband Alfred Elling, the other appellant, employed Arthur E. Hamm, Jr., an attorney at law, to enforce their claims for damages, for the very severe injuries which Mrs. Elling had suffered, against such persons as might be liable therefor. At the time of the accident, Hansel Travers was insured by the New Amsterdam Casualty Company against liability for damages caused by the operation of his automobile, and, shortly after the appellants had employed Hamm, he was approached by Henry Mitnick, claim agent for the insurance company and also an attorney at law, and as a result of negotiations between them the Ellings executed a covenant not to sue the Traverses and received from the insurance company one hundred dollars therefor.

Subsequently, the Ellings docketed suit in the Court of Common Pleas of Baltimore City against the Yellow Taxicab Company, the wife to recover for her own loss and injury and the husband for the loss of her services. To those actions the defendant pleaded in each case the general issue and a special plea setting up the alleged settlement with Hansel and George Travers and the New Amsterdam Insurance Company as a bar. Demurrers to those special pleas were overruled, and the appellants then filed their bill of complaint in the Circuit Court Ho. 2 of Baltimore City, in which, as amended, they prayed that their agreement or covenant not to sue be set aside on the ground that its execution was either induced by fraud or by an innocent though erroneous statement by counsel for the insurance company of its legal meaning and effect. A demurrer to that amended bill of complaint was sustained and the bill dismissed.

This appeal is from that decree. ⁶⁰⁰ In addition to the facts referred to above, the bill states others which for brevity will be given in narrative form. Both Mitnick and Hamm are practicing lawyers, and both apparently held themselves out to their respective clients as qualified to represent in that capacity persons interested in casualty litigation, and, whatever may be said of laymen, they at least should be presumed to have known the law with which they undertook to deal. Under those circumstances Mitnick “proposed” to Hamm that, “inasmuch” as the collision was occasioned by the negligence of the Yellow Taxicab Company, “and there was no fault on the part of the said Hansel or George Travers,” Hamm’s clients, the appellants in this case, execute and deliver to' the Traverses an agreement not to sue them or make any demand on them for the injuries or losses they had sustained as a result of the collision. The agreement thus proposed was in effect a covenant not to sue and was so' designated.

In reply to that “proposal,” Hamm asked Mitnick what effect such an agreement would have on the right of the Ellings to- recover against the taxicab company, and Mitnick answered that it would have no effect upon said rights, but that their claims could be prosecuted against it as though the agreement had never been made, and added that he knew that as a fact from his experience in many similar cases. Hamm then said to Mitnick that, if the execution of the agreement would not affect his clients’ rights against the taxicab company, he would advise them to execute it, for in his opinion the cab company was at fault in the case. Thereupon “the said Mitnick again reiterating his said statements and representations in substance as hereinbefore alleged, offered to pay the small or nominal sum of one hundred dollars ($100.00) to your orators for said agreement, which said sum your orators’ attorney, relying upon the truth and correctness of said statements and representations hereinbefore alleged to have been made to him by said Mitnick, and upon which statements and representations he was induced to rely by ⁶⁰¹ the said Mitnick, who well knew that your orators’ attorney did rely upon the truth thereof, accepted as a nominal consideration for said agreement or ‘covenant not to sue,’ it being understood by the said Mitnick and your orators’ attorney that your orators’ rights against the said cab company would in no manner be affected and that inasmuch as the said cab company was at fault it should be required to- compensate your orators in damages for the injuries and losses they suffered and sustained as a result of the said collision. “That the said Mitnick prepared, or had prepared, said agreement or ‘covenant not to sue’ the said Travers, brought the same to the offices of your orators’ attorney, who relying upon the truth of said statements and representations made to him by the said Mitnick, and placing faith and confidence in him, obtained the execution of said agreements by your orators in duplicate on or about Hovember 22nd, 1930, and shortly thereafter delivered said agreement in duplicate at the offices of the New Amsterdam Casualty Company in the City of Baltimore, and obtained a cheek of said Company in the sum of One Hundred Dollars ($100.00).” The Tilings were unable to effect a settlement with the cab company, and on December 2nd, 1930, severally brought suits against it as stated above. In each of those cases an amended special plea was filed, which were so much alike that the plea in the wife’s case may, for the purposes of this case, be treated as identical with the plea in the husband’s case.

That plea was in the following form: “That prior to the institution of this suit, to wit, on or about Hovember 10th, 1930, this plaintiff, and her husband, made claim against the above named defendant, and also Hansel Travel's for the same tort as the result of injuries sustained by the plaintiff, as a result of a collision between a taxicab of the above-named defendant and an automobile belonging to the said Hansel Travers (the claim of the husband being for loss of services, etc.) ; that thereafter, to wit, on Hovember 22nd, 1930, this ⁶⁰² plaintiff and her husband settled their claims against the .said Hansel Travels for the sum of one hundred dollars, which said sum was paid to them on ¡November 26th, 1930; then subsequently thereto, to wit, December 2nd, 1930, this plaintiff filed the above cause of action to recover damages for the same tort which this plaintiff and her husband had, as hereinbefore recited, accepted the sum of one hundred dollars in settlement thereof from the said Hansel Travers; that the aforesaid settlement of the plaintiff’s claim with the said Hansel Travers constitutes a bar to her recovery in this ease.” After alleging that demurrers to those pleas were overruled, the appellants conclude their bill by stating that: “Your orators, or their said attorney, did not intend by their said agreement to release or exonerate the said cab company from liability to them for damages growing out of said collision, and the said Mitnick has subsequently stated to your orators’ attorney that he did not intend to effect the release or exoneration of said cab company in obtaining said agreement, and that he did not know that said agreement would bring about that result.1 “That is if the said Mitnick did not intend to effect the release or exoneration of said cab company, then his said representations were falsely and deceitfully made to your orators’ attorney and the obtaining of said agreement from your orators is a gross and palpable fraud. “That your oratrix, Anna Elling, is the mother of several children; that as a result of said collision, she was most seriously injured, she having sustained a broken neck, which has totally incapacitated her ever since the happening of said collision and which injury is permanent, necessitating the wearing of a steel brace to hold her head in place, and causing her to suffer great and excruciating pain and mental anguish and to live in constant fear and apprehension of death. “That the sum of one hundred dollars ($100.00) does not adequately compensate your orators for the ⁶⁰³ damages they have sustained, but on.the contrary is a mere pitance compared to what they are entitled to receive as reasonable indemnity for the wrong suffered by them, and that unless said agreement is annulled and rescinded they will be greatly damaged and injured. “That your orators have heretofore, through their said attorney, and since the discovery of the falsity of said statements and representations, offered to return said sum of one hundred dollars ($100.00) to the blew Amsterdam Casualty Company and have demanded of said company that said agreement or ‘covenant not to sue’ be annulled, and the interested parties restored to their respective rights existing prior to the execution and delivery of said agreement or ‘covenant not to sue’; hut the said casualty company has refused the return of said sum of one hundred dollars ($100.00) and refused to annul said agreement. “That your orators tender unto the said defendants in this honorable court the sum of one hundred dol- • lars ($100.00) in cash herewith, which said sum represents the amount paid by the said casualty company to them as aforesaid.” The bill does not state whether the suits in the Court of Common Pleas have been terminated or are still pending, whether the accident in which Mrs. Elling was injured was occasioned by the negligence of the Traverses or of the taxicab company, or of all of them, it does not state the language, terms and contents of the agreement which it seeks to destroy, no copy of that agreement is filed with the bill, nor any explanation given for that omission. A good bill of complaint should state fully, candidly, and frankly every material fact affecting the complainant’s right to the relief prayed (Miller’s Equity Proc., sec. 92); it should state facts as such, and not mere conclusions from facts which it fails to disclose (Lamm v. Burrell, 69 Md. 274 , 14 A. 682 ; Fletcher’s Eq. Pl. & Pr., sec. 72); and it should enable the court to determine from an inspection of it, without resort ⁶⁰⁴ ing to conjecture or • specification, whether the complainant would be entitled to the relief prayed if its allegations are true. The bill in this case as drawn fails to meet those requirements, and states no facts sufficient to entitle the complainant to relief in equity.

Appellants’ contention in this court is that as a result of misrepresentations which they argue were material, they were wrongfully induced to execute an instrument and consummate a transaction which they later discovered deprived them of valuable legal rights