Maynard v. Durham & Southern Railway Co.

365 U.S. 160, 81 S. Ct. 561, 5 L. Ed. 2d 486, 1961 U.S. LEXIS 1686

• Court: Supreme Court of the United States
• Decided: February 20, 1961
• Docket: 183
• Status: Published

Opinions

Mr. Justice Douglas

delivered the opinion of the Court.

Petitioner, an employee of respondent, sued in a North Carolina court for damages under the Federal Employers' Liability Act, 45 U. S. C. § 51. As a defense, respondent tendered a release signed by petitioner and moved for a nonsuit. The motion was allowed after all the evidence was in, and the Supreme Court of North Carolina affirmed, one judge dissenting. 251 N. C. 783, 112 S. E. 2d 249.

We said in Dice v. Akron, C. & Y. R. Co., 342 U. S. 359, 361, that the “validity of releases under the Federal Employers’ Liability Act raises a federal question to be determined by federal rather than state law.” While that case dealt with a release challenged on the ground of fraud, the rule it announced also governs releases challenged for lack of consideration. For releases obtained by fraud or for no consideration could equally defeat the federal rights created by this Act of Congress. It was because of our doubts that the decision below squared with that rule that we brought the case here on certiorari. 363 U. S. 839.

Petitioner was injured August 22, 1955, and came back to work on September 12, 1955. On September 17 he signed the release in question. There is conflicting evidence as to what happened at that time. According to petitioner he went into the office of Mr. McAllister, General Manager, and asked for his pay check; Mr. McAllister “gave me a paper, told me to sign that, and I signed it” ; petitioner did not read the paper; he signed it “because every check that we ever got from the railroad we had to sign for it”; he signed thinking he was signing for his pay check; he thought the railroad owed him $144.60 for labor, the amount he received; he “never received anything from the railroad as a result of the injury.” Petitioner also testified that some six months after he received the $144.60, he was asked to sign a release for his injuries and refused. As- to the paper he signed on September 17, petitioner further testified that Mr. McAllister “didn’t make me any false representations. The only thing he did do there, he just didn’t explain the paper to me. He didn’t make any deceitful suggestions to me. He didn’t make any fraudulent suggestions to me.” Petitioner also testified, “The $Í44.60 that I received there from Mr. McAllister was not for injuries. That was my pay check.”

On the other side there was testimony by a former employee, who was petitioner’s witness, that it was the policy of the company not to pay wages for the time a person was “off from work” unless he signed a release and that policy applied when an employee did not work because of an injury. This witness also testified that in a conversation he and petitioner had with Mr. McAllister,

* McAllister told petitioner he would have to sign a release before he could get back pay. Moreover, Mr. McAllister testified that petitioner stated “that he would like to settle up with the company, that he was broke and needed some money”; that McAllister told petitioner “that he knew if we settled up with him it would be necessary for him to sign a release”; that petitioner said he was “willing to sign a release” and that that was “the purpose of his visit”; that he, McAllister, explained to petitioner what was in the release and that if he signed it he would be paid “for his time lost”; that McAllister did not promise “any future payments” if petitioner signed the release “except that possibly we would take care of his doctor’s bills if he had any.”

In addition petitioner testified that while he did not know it was the railroad’s policy to pay an injured employee for time lost only upon signing a release, “This wasn’t the kind of thing that I would sign for my regular pay check. I didn’t know what it was. I just did not give it no thought.”

We find no evidence sufficient for a jury that respondent obtained the release by fraud, duress, or undue influence. We conclude, however, that there was a jury question as to whether the release was given for a consideration.

We think the correct rule concerning the adequacy of consideration for a release of claims under the Act was stated in Burns v. Northern Pac. R. Co., 134 F. 2d 766, 770. “In order that there may be consideration, there must be mutual concessions. A release is not supported by sufficient consideration unless something of value is received to which the creditor had no previous right.” If, in other words, an employee receives wages to which he had an absolute right, the fact that the amount is called consideration for a release does not make the release valid. See Hogue v. National Automotive Parts Assn., 87 F. Supp. 816, 821.

On this record there is a genuine issue of fact concerning the presence of consideration for the release. Petitioner claimed that what he received was his pay check, rightfully owing. Against that was evidence that no back wages were due and that an amount equal to back wages was paid for the release. It is not for the judges to resolve the conflict and to conclude that one side or the other was right. The issue of fact that is presented is one on which fair-minded jurors might honestly differ. Cf. Rogers v. Missouri Pacific R. Co., 352 U. S. 500, 510.

Reversed.

The witness, who was Chairman of the local union at the time of the accident, could not remember whether this meeting took place before or after September 17, 1955 (the date of the release), although he was sure it took place after August 22, 1955. Petitioner testified this meeting took place after September 17.