Ramsey v. Camp , 254 N.C. 443 ( 1961 )

119 S.E.2d 209 (1961) 254 N.C. 443

LeRoy RAMSEY, Plaintiff,
v.
Jess Willard CAMP and Billy Lee Camp, Original Defendants, and
Jerry O. Wilson, Additional Defendant.

No. 162.

Supreme Court of North Carolina.

April 12, 1961.

Childers & Fowler, Gastonia, for plaintiff.

Mullen, Holland & Cooke, Gastonia, Craighill, Rendleman & Kennedy, Charlotte, for defendants.

DENNY, Justice.

It appears from the record that prior to the trial of this case the attorneys for the additional defendant Wilson informed the court that their client had procured from the plaintiff a covenant not to sue. Counsel further expressed the view that no further recovery could be had against Wilson. No formal motion, however, was made in respect thereto. The court refused to allow the motion made after verdict by the attorneys for the defendants Camp, to credit the sum of $1,000 on the judgment, which sum had been paid to plaintiff by the additional defendant Wilson pursuant to the terms of the covenant not to sue, because the existence of the "covenant not to sue in this case was not raised in the pleadings, and the jury was given no opportunity to consider the matter, as was done in the case of Holland v. Southern Public Utilities Company, reported in 208 N.C. at 289 [180 S.E. 592]."

It is generally conceded that where there are joint tort-feasors there can be but one recovery, and a settlement with one is a release of the other. Sircey v. Hans Rees' Sons, 155 N.C. 296, 71 S.E. 310; Slade v. Sherrod, 175 N.C. 346, 95 S.E. 557; Scott v. Bryan, 210 N.C. 478, 187 S.E. 756; King v. Powell, 220 N.C. 511, 17 S.E.2d 659. But, where the injured party settles with one of the joint tort-feasors and does not give a release but, instead, merely a covenant not to sue, the remaining joint tort-feasors are not released. Even so, if the injured party proceeds against the remaining joint tortfeasors and obtains a judgment against them, such remaining joint tort-feasors are entitled to have the amount paid for the covenant not to sue credited on said judgment. Brown v. Norfolk Southern R., 208 N.C. 423, 181 S.E. 279; Holland v. Southern Public Utilities Co., 208 N.C. 289, 180 S.E. 592; Slade v. Sherrod, supra; Mason v. Stephens, 168 N.C. 370, 84 S.E. 527; G.S. § 1-242; 76 C.J.S. Release § 50 (c), page 691 et seq.; 45 Am.Jur., Release, section 4, page 676 et seq. See Annotation—Crediting Sum Received from Cotort-Feasor, 104 A.L.R. 932, where the authorities supporting the above view are collected from thirty jurisdictions, including North Carolina.

An examination of the authorities tends to show that it is permissible to plead a covenant not to sue, as was done in Holland v. Southern Public Utilities Co., supra. But, such procedure is not the only way by which other joint tort-feasors may obtain credit for the amount paid for a covenant not to sue. Moreover, some courts hold that the introduction of a covenant not to sue is prejudicial to the plaintiff. In the case of DeLude v. Rimek, 351 Ill.App. 466, 115 N.E.2d 561, 565, the Court said: "It is well understood by lawyers and judges experienced in such matters that in a case where evidence is offered of the payment of a substantial sum for a covenant not to sue, the jury considers it evidence that the covenantee is the party responsible for the injury, and that defendant or defendants should be exculpated. Hence, there is always an effort on the part of the defense to put the covenant before the jury and to make the most of it during the course of the trial. In the instant case, time and again, and with far more repetition than was necessary to preserve their record, defendants stressed their objections to evidence of damages, on the ground that the covenantee had paid such damages." The Court then held: "While the amount paid under a covenant not to sue should be deducted from the total damages sustained, we hold it is the function of the jury to find the plaintiff's total damages, and the function of the judge, upon application of the defendant after verdict, to find the amount by which such verdict should be reduced by virtue of any covenant made by the plaintiff with another concerned in the commission of the tort."

Likewise, in Schumacher v. Rosenthal, 7 Cir., 226 F.2d 946, the sum of $5,000 was paid by the insurance carrier of one of defendant's salesmen and a covenant not to sue was given to the salesman by the plaintiff. In the trial against the defendant the existence of a covenant not to sue was not disclosed. A verdict of $12,000 was obtained against the defendant. After verdict, the defendant filed a motion to credit the judgment in the sum of $5,000, the amount paid for the covenant not to sue. The motion was allowed and the Circuit Court held "* * * the District Judge correctly allowed defendant's motion." New York, C. & St. L. R. Co. v. American Transit Lines, 408 Ill. 336, 97 N.E.2d 264; Aldridge v. Morris, 337 Ill. App. 369, 86 N.E.2d 143; Brown v. Norfolk Southern R. Co., supra.

In the last cited case the plaintiffs instituted an action against D. B. Archbell, Norfolk Southern R. Co., C. F. Garner and C. C. Fry, alleging an unlawful conspiracy in restraint of trade. The action was nonsuited at the September Term 1929, Moore Superior Court, and reversed on appeal. Lewis v. Archbell, 199 N.C. 205, 154 S.E. 11.

Thereafter, on 15 September 1931, the plaintiffs came into court and took a voluntary nonsuit as to D. B. Archbell and Norfolk Southern R. Co., agreeing in open court not to sue said defendants "for any matter or thing growing out of or alleged in the complaint in this cause."

The cause came on for trial against the defendants C. C. Fry and C. F. Garner at the September Term 1933, Moore Superior Court, and resulted in a verdict and judgment for plaintiffs. The jury fixed the damages at $600 and judgment was rendered for treble this amount as provided in C.S. § 2574, now G.S. § 75-16. On appeal, the judgment was affirmed. Lewis v. Frye, 207 N.C. 852, 175 S.E. 717.

A motion to credit judgment with partial payment was filed by the defendants on 29 December 1934, while execution was in the hands of the sheriff. Motion denied, but reversed on appeal.

Stacy, C. J., speaking for the Court, said: "His honor was evidently of the opinion that the failure to bring the matter to the attention of the court at the time of trial, as was done in Holland v. Southern Public Utilities Co., 208 N.C. 289, 180 S.E. 592, deprived movants of their right to have the judgment * * * credited with the amount paid plaintiffs by their codefendants for the covenant not to sue. * * *

"It is provided by C.S. § 620 (G.S. § 1-242), that payments made upon docketed judgments and not entered of record may be credited upon motion and hearing. True, the amount received by plaintiffs for the covenant not to sue some of the defendants was not strictly within the terms of this statute, nevertheless it would seem to be within its spirit. The payment inured to the benefit of the movants. * *

"That movants are not entirely out by their laches—the execution being still in the hands of the sheriff—is supported, in tendency at least, by what was said, and the authorities cited, in Williams v. Dunn, 158 N.C. 399, 74 S.E. 99." [208 N.C. 423, 181 S.E. 279.]

Furthermore, the fact that one who procures a covenant not to sue is found by the jury not to be a joint tort-feasor, does not defeat the right of those who were found liable for injuries and damages upon which the covenant not to sue was bottomed, to have the amount paid for the covenant not to sue credited on the judgment against them. Holland v. Southern Public Utilities Co., supra; Gelsmine v. Vignale, 11 N.J.Super. 481, 78 A.2d 602.

In light of the decisions and authorities cited herein, we hold that the defendants Camp are entitled to have the amount paid to the plaintiff by Jerry O. Wilson for the covenant not to sue credited on the judgment entered below in this cause. In our opinion, this view is not only supported by our decisions, but also upon the broad principle that no plaintiff should be permitted to recover twice for the same injury. Holland v. Southern Public Utilities Co., supra; Sircey v. Rees, supra.

The ruling of the court below on defendants' motion for credit on the judgment of the amount paid for the covenant not to sue is reversed, and the cause remanded to the end that the credit requested may be entered on the judgment in this cause.

Error and remanded.