DocketNumber: 7979
Judges: Stephens, Vinson, Rutledge
Filed Date: 2/11/1943
Status: Precedential
Modified Date: 11/4/2024
Plaintiffs’ suit was for damages for personal injuries incurred by Helen H. Mc-Kenna in a collision of a taxicab in which she was a passenger with an automobile operated by defendant’s employee. The taxicab was owned by Independent Taxi Owners Association and William L. Driscoll (herein designated together as Independent), and was operated by their employee. The husband’s claim is on account of medical and hospital expenses and loss of consortium and services. Defendant denied his employee was negligent. He alleged that the taxicab was driven carelessly, at excessive speed, and this was the sole cause of the injuries. A further defense was that plaintiffs had made full accord and satisfaction with Independent by a release which is claimed to bar this action. The sum paid in compromise was $3,000.
In this state of the pleadings defendant moved for summary judgment, which the court granted, relying upon Kaplowitz v. Kay, 1934, 63 App.D.C. 178, 70 F.2d 782. The plaintiffs appeal.
The release is set forth in the margin.
The sole question is whether this agreement operated to discharge the defendant. He stands on the more generally prevailing rule,
Plaintiffs say the rule is not applicable. They urge that the instrument is not a release from substantive liability but is merely a covenant not to sue. They rely upon authorities which hold that such a covenant does not effect discharge of the co-tortfeasors,
The facts in this case and in Kaplowitz v. Kay are similar in that the plaintiff in both was a passenger in an automobile which collided with another, settled with one of the wrongdoers, and then sued the remaining one. On this showing the court held the latter was discharged.
The basis and scope of the decision are ambiguous. It does not appear whether joint or independent tortfeasors were involved. The opinion does not set forth the terms of the agreement. It makes no point of any distinction between a release and a covenant not to sue or between joint and independent tortfeasors. There is language which may indicate the plaintiff accepted the amount paid as full satisfaction for the total injury.
We agree with defendant that distinction between a “release” and a “covenant not to sue” is entirely artificial. When one surrenders all means of enforcing his claim against another and does this in settlement of a dispute and threatened litigation, he effectually extinguishes the underlying right. Thereafter, if it is right at all, it is right without remedy. We know that courts of highest authority have recognized the existence of such “rights” in exceptional situations involving particularly matters of international adjustment and of governmental credit.
Other courts adhering to the distinction refuse to permit such a clause to overcome express words of release and allow escape only when the formula is limited to covenanting not to sue.
In determining the character as well as the effect of such an agreement, we are unwilling to concede so much potency to mere verbalism. The matter does not require the formalism of conveyancing. Whether words of “release” or of “covenant” are used, the effect should be the same. Wide acceptance of the distinction, notwithstanding its want of substance, and the decisions that in applying it intention should control, point the way to reexamination of the rule and its foundations.
The rule’s results are incongruous. More often than otherwise they are unjust and unintended. Wrongdoers who do not make or share in making reparation are discharged, while one willing to right the wrong and no more guilty bears the whole loss.
It is a first principle that liability in tort is several, not joint, however many participate in inflicting the wrong and whether they act separately or in conjunction.
The foundations of the rule are in confusion. By and large they come down to two reasons, which in fact are separate and independent, applicable with a single exception in different situations. Yet generally they are made to overlap in a confused admixture and indiscriminate application. Neither sustains the rule, except in the single instance to be noted.
As they are commonly stated, the reasons are; (1) that there is but a single
Logically this consequence follows from the first reason without regard to whether the settlement is in fact full reparation for the injury or is intended to be so received. It results from the assumed indivisibility and entirety of the nexus binding the wrongdoers to the injured person. Being entire the liability must exist or vanish in entirety, notwithstanding its attachment to more than one obligor. Whatever extinguishes it as to one, therefore, whether judgment, settlement or other bar, does so as to all.
Applied independently of the first reason, the second one would dictate the same result only when full satisfaction for the injury is made. The crux of discharge therefore would be whether the amount paid for the release is in fact adequate or is so accepted for this purpose. Entirety of injury, without entirety of obligation, would furnish no foundation for the discharge, except when the release is made for total reparation.
As it is usually applied, however, the second premise is merely a confused reflection of the first. From entirety of injury entirety of obligation is assumed to exist, the two being identified. When this is not done, the same end results from assuming, contrary to the evident and often the incontrovertible fact, that the claimant intended to accept the settlement as satisfaction for the entire injury rather than merely for the liability of the person released.
One may wonder how the idea of joint liability obtained a beachhead in the law of torts, more that it consolidated this position. The explanation may be in a transfer of conceptions of liability from relations in property and contract. Joint obligations have their roots in the old soil of joint estates. Through them, and tenancy in common, the common law broke out from its accustomed one-man mold.
This pattern set the sage for transfer of the metaphysics of estates to the law of obligations independent of property. With the emergence of contract came an accretion of ideas of joint right and liability from the law of property.
Entirety and survivorship of right remain useful conceptions, both as incidental to ownership of property and independently of it. Applied to obligations, however, they have proved inconvenient in the separate applications. Until Mansfield’s time
But the foundation did not take with it all of the superstructure. Vestigial corollaries of the old law remain. Entirety of obligation was the basis for requiring joinder to secure enforcement and for unitary discharge by judgment or release. That obligations should remain joint for compromise so long after they have become several for suit is a survival strange enough in contract.
It is more so in tort. Tortfeasors come severally into court, however many may be brought in together. It has not been otherwise in the common law. Whether they act independently or in concert, the nexus of liability between them and the person their acts combine to injure is not and has not been entire. Each is bound to him separately and for the full injury. The rule of joint discharge therefore has never had true foundation for tortfeasors in the conception of unitary obligation.
Nor has it basis ordinarily without that in the fact of single injury. It is no defense for wrongdoers that others aided in causing the harm. Each is responsible for the whole. But that does not mean the injured person may have more than full satisfaction, except as Ipunitive damages. He has no right to make profit from his harm because several share in causing it. Accordingly when one makes full reparation for all the loss,'the others are discharged from liability to the injured person, though not, under our recent ruling in George’s Radio, Inc., v. Capital Transit Co., 1942, 75 U.S.App.D.C. 187, 126 F.2d 219, from liability to each other for contribution. Where contribution cannot be had between “joint” tortfeasors, they are relieved from further liability of any kind. The second premise therefore supplies a basis for the rule, but does this only when the facts support its application, that is, when the settlement is a complete indemnity.
The difficulty is in how it shall be determined whether full indemnity has been received. This will vary with circumstances. Facts and intentions, rather than presumptions from the mere fact of settlement, should control. When damage to property is measurable with fair accuracy and has reasonable relation to the damage shown, the amount paid may be conclusive. With personal and other injuries less readily reduced to cash value, the difficulty may be greater. Ordinarily the claimant will not secure complete indemnity from one or less than all, unless the others are judgment proof. Such a settlement usually would not be advantageous to the settling wrongdoer. The presumption of fact therefore generally would be against full satisfaction and discharge. It would seem conclusive when rights against those not released are reserved explicitly or intention otherwise appears to keep these claims alive. Whether the settlement is made and accepted as full satisfaction or merely as the best obtainable compromise for the settler’s liability is the crucial issue, and ordinarily one of fact. If however the agreement’s terms leave no room for doubt, the decision should be made' as a matter of law.
In summary, there is no support for the rule of unitary discharge in the notion of entirety of obligation among joint tortfeasors. There is foundation in singleness of the injury, when complete indemnity has been made. We adhere to the rule in that circumstance. We repudiate
What has been said is sufficient to dispose of this appeal. There is however one other factor which has bearing on the issues now here and which will be presented directly in the cause, if the further proceedings result in a judgment for the plaintiffs. This relates to allowance of credit for the amount Independent has paid and the manner in which the credit should be made.
Plaintiffs concede that credit should be allowed and this is implicit in what we have said.
We do not find the fancied obstacles forbidding or persuasive. The problem is to blend the themes of compromise and contribution, maintaining the essential integrity of each as far as possible. It is not incapable of solution. We need not determine the matter now decisively, since neither the question of credit nor one of contribution is immediately before us. But to refute the contention that these considerations dictate continued adherence to Kaplowitz v. Kay, we may suggest the obvious possible solutions.
We agree, for the reasons already stated, that the settlement should be final, both to forestall further recovery by the injured person and to preclude contribution. So long as the judgment is for less than twice the amount of the settlement, there is no real difficulty. In that case the wrongdoer who settles will pay more than half the total sum due the claimant. By settling with the injured person he does not surrender his right of contribution and the settlement should not give the other wrongdoer an advantage. Consequently he should recover from the latter the amount necessary to equalize their payments.
When however the judgment exceeds twice the settlement, contribution operates in favor of the defendant. If the settlement is given finality, as we think should be done, there are at least two possible solutions. One would require the defendant to pay the full amount of the judgment after deducting the sum paid in compromise. This would deprive him of a portion of his right of contribution, amounting to the sum necessary to equalize his payment with the settling wrongdoer’s. Modifying the right of contribution to this extent might be justified as a sort of penalty for refusing to settle and for causing the plaintiff the additional expense and delay involved in litigation. The effect might be salutary further to encourage settlements and discourage litigation.
This would result in cutting down somewhat the total amount of the claimant’s recovery. But the reduction would be a direct result of his own act in accepting less than half of the total recoverable damages in settlement with the compromising wrongdoer. From his viewpoint acceptance of such a fractional loss would be incomparably preferable to the entire loss of right against the wrongdoers who do not settle which follows from application of the rule of Kaplowitz v.; Kay. It is difficult to understand the logic which characterizes such a partial scaling down of the recovery as unjust and at the same time gives approval to the total annihilation of recovery the rule of that case brings about.
We need not discuss the matters of credit and contribution further. What we have said is not for the purpose of deciding these questions in advance of presentation or of foreclosing other possible solutions.
The majority are not unmindful of the force of stare decisis. But it is not a doctrine of mortmain. It does not exclude room for growth in the law, nor does it require adherence to a highly technical rule which, at its inception, was at war with the elementary nature of the substantive liability to which it was applied; which has been maintained by lip service, while being chipped away in its substantive effect through multiplying though equally artificial distinctions; and which has found hold in our own law by only a single and a highly ambiguous decision.
To apply Kaplowitz v. Kay in the facts of this case would not be to apply stare decisis. Here the wrongdoers acted independently, not jointly; there was express reservation of rights against the wrongdoers not released; and, consequently, it affirmatively appears that the settlement was not made or accepted as full satisfaction for the whole injury. None of these things can be said with certainty to be true of Kaplowitz v. Kay. To assume that all of them were involved and therefore the rule of the case applies here is an expansion of its doctrine, not a following of the beaten path.
But in our opinion the rule had no sound basis for application, whatever may have been the facts to which it was applied. We think it is anomalous, for the reasons which have been stated, is unjust in its consequences, and should be laid to rest.
Accordingly the judgment is reversed and the cause is remanded to the District Court for further proceedings.
Reversed and remanded.
“Know All Men By These Presents That the undersigned in consideration of the sum of Three Thousand ($3,000.00) Dollars to us in hand paid by Independent Taxi Owners Association, Inc., a body corporate, and William L. Driscoll, receipt whereof is hereby acknowledged at and before the signing and sealing of these presents, do hereby covenant and agree to and with said Independent Taxi Owners Association and William L. Driscoll that the undersigned will not commence, maintain or prosecute any action at law, or otherwise, against said Independent Taxi Owners Association and William L. Driscoll by reason of, or arising out of, the certain accident- * * or on account of any injuries, losses, or expenses sustained by the undersigned or either of them, or upon any other cause of action growing out of or in anywise connected with the collision aforesaid, and these presents may be pleaded as a defense to any action or other proceeding which may bo brought, instituted or taken by the undersigned, or either of them, against said Independent Taxi Owners Association and William L. Driscoll, in breach of this covenant. This instrument is not maintained as, and shall not be deemed a release of any cause of action that the undersigned may have against Theodore Austin and Hezekiah Austin but is intended to be and is a complete discharge of any and all liability on behalf of said Independent Taxi Owners Association and William L. Driscoll, or either or both of them of any and all claims of the undersigned growing out of or in anywise connected with the aforesaid collision.”
See Prosser, Torts (1941) § 109, at 1108; Harper, Torts (1933) § 302, n. 63; 1 Oooley, Torts (4th ed.1932) § 83; notes (1927) 50 A.L.R. 1057, 1060; (1930) 66 A.L.R. 206; (1936) 104 A.L.R. 846; (1940) 124 A.L.R. 1298; (1941) 134 A.L.R. 1225, 1232.
Pacific States Lumber Co. v. Bargar, 9 Cir., 1926, 1 F.2d 335, 337; Fagerberg v. Phœnix Flour Mills Co., 1937, 50 Ariz. 227, 71 P.2d 1022; Missouri Pacific R. Co. v. Hunt, 1936, 193 Ark. 175, 98 S.W.2d 74; McKay v. Pacific Bldg. Materials Co., 1937, 156 Or. 578, 68 P.2d 127.
Carey v. Bilby, 8 Cir., 1904, 129 F. 203; The Adour, D.C.D.Md.1927, 21 F.2d 858, 861; Colby v. Walker, 1934, 86 N.H. 568, 171 A. 774, 104 A.L.R. 841; Black v. Martin, 1930, 88 Mont. 256, 292 P. 577; Prosser, Torts (1941) § 109, at 1109; Harper, Torts (1933) § 302, n. 65; notes (1927) 50 A.L.R. 1057, 1072, 1081; (1930) 66 A.L.R. 206, 209; (1936) 104 A.L.R. 846, 852; (1940) 124 A.L.R. 1298, 1306, 1309.
“It is disclosed that the plaintiff asserted a claim for damages against the drivers of both cars, and that the insurance company carrying insurance for Acrouri had settled the claim of the plaintiff against Acrouri by the payment to plaintiff of $500 in full satisfaction of the claim.” 63 App.D.C. 178, 70 F.2d 782. Cf., also, the quotation from Gunther v. Lee, 1876, 45 Md. 60, 67, 24 Am. Dec. 504, set forth in the dissenting opinion herein.
Cf. Perry v. United States, 1935, 294 U.S. 330, 360, 55 S.Ct. 432, 79 L.Ed. 912, 95 A.L.R. 1335; Compania Naviera Vascongado v. S. S. Christina, [1938] A.C. 485, (1939) 39 Col.L.Rev. 510.
E. g., Carey v. Bilby, 8 Cir., 1904, 129 F. 203; Greenhalch v. Shell Oil Co., 10 Cir., 1935, 78 F.2d 942; Cowles v. Independent Elevator Co., 1937, 22 Cal.App.2d 109, 70 P.2d 711; Armieri v. St. Joseph’s Hospital, 1936, 159 Misc. 563, 288 N.Y.S. 483; Bossong v. Muhleman, 1938, 254 App.Div. 738, 3 N.Y.S.2d 992; Safety Cab Co. v. Fair, 1937, 181 Okl. 264, 74 P.2d 607; Farrell v. Kingshighway Bridge Co., Mo.App.1938, 117 S.W.2d 693.
See note 4 supra.
See note 2 supra.
Under the generally prevailing rule that contribution will not be allowed among joint tortfeasors [Prosser, Torts (1941) 1111; Harper, Torts (1933) § 303], repudiated recently in this court. George’s Radio, Inc., v. Capital Transit Co., 1942, 75 U.S.App.D.C. 187, 126 F.2d 219.
Prosser, Torts (1941) § 109; 2 Williston, Contracts (1936) § 338A.
Louisville Gas & Electric Co. v. Beaucond, 1920, 188 Ky. 725, 224 S.W. 179, 186; Blackmer v. McCabe, 1912, 86 Vt. 303, 85 A. 113; cf. Page v. United Fruit Co., 1 Cir., 1925, 3 F.2d 747, 752; Young v. Anderson, 1921, 33 Idaho 522, 196 P. 193, 50 A.L.R. 1056; Murphy v. Penniman, 1907, 105 Md. 452, 66 A. 282, 289, 121 Am.St.Rep. 583.
As when the release or covenant contains an explicit reservation of rights against tortfeasors not parties to it. When this is not present, the very fact that the plaintiff brings the suit is in itself evidence that he did not intend the settlement to be full satisfaction for the injury and also that the rule of discharge has operated as a trap for him.
Cf. 1 Pollock and Maitland, History of English Haw (2d ed.1923) 407; 3 Holdsworth, History of English Law (1934) 457, 460, 463; Smith, Legal Personality (1928) 37 Yale L.J. 283, 287-89.
In Rice v. Schute, 5 Burr. 2611 (1770), it was held that advantage could he taken of nonjoinder of a partner only hy plea in abatement naming the absent one.
Outlawry was, perhaps, the earliest escape. Cf. Hall v. Lanning, 1875, 91 U. S. 160, 161, 23 L.Ed. 271; Blessing v. McLinden, 1911, 81 N.J.L. 379, 79 A. 347, 35 L.R.A.,N.S., 312.
One escape treated the return non est inventus as the equivalent of outlawry. See Tappan v. Bruen, 1809, 5 Mass. 193; Olcott v. Little, 1838, 9 N.H. 259, 32 Am.Dec. 357; Nathanson v. Spitz, 1895, 19 R.I. 70, 31 A. 690.
See 2 Willison, Contracts (1936) § 329; for discussion of cases in jurisdictions having statutes, see notes (1927) 50 A.L.R. 1057, 1079; (1930) 66 A.L.R. 206, 210; (1936) 104 A.L.R. 846, 855; (1940) 124 A.L.R. 1298, 1308; Eberhart, The Uniform Joint Obligations Act: Effect on Existing Law (1928) 13 Corn. L.Q. 640.
Cf. also Warren, Corporate Advantages Without Incorporation (1929) c. 3, pp. 141, 151-233; Crane and Magruder, Cases on Partnership (1st ed.1923) notes pp. 307, 311, 313, 316.
Adams Express Co. v. Beckwith, 1919, 100 Ohio St. 348, 126 N.E. 300; Black v. Martin, 1930, 88 Mont. 256, 292 P. 577; Young v. Anderson, 1921, 33 Idaho 522, 196 P. 193, 50 A.L.R. 1056; Farrell v. Kingshighway Bridge Co., Mo. App.1938, 117 S.W.2d 693.
It is debatable whether compromise may be desirable in this situation under modem conditions. Of. .James, Contribution Among Joint Tortfeasors: A Pragmatic Criticism (1941) 54 Harv.L.Rev. 1156, 1169; Edgerton, J., dissenting in George’s Radio, Inc., v. Capital Transit Co., 126 F.2d at page 223. But the decision in George’s Radio, Inc., v. Capital Transit Co. commits us to the view that these settlements should be encouraged.
For various methods of dealing with the matter, see the discussions in James, Contribution Among Joint Tortfeasors: A Pragmatic Criticism (1941) 54 Harv.L.Rev. 1156, 1160, n. 12; James, Replication (1941) 54 Harv.L.Rev. 1178; Gregory, Contribution Among Joint Tortfeasors: A Defense (1941) 54 Harv.L.Rev. 1170, 1172-3, ns. 2-4; Gregory, Rejoinder (1914) 54 Harv.L.Rev. 1184; Gregory, Contribution Among Tortfeasors: A Uniform Practice, 1938 Wis.L.Rev. 365, 391, 400, § 8; Larson, A Problem in Contribution: The Tortfeasor with an Individual Defense Against the Injured Party, 1940 Wis.L.Rev. 467; Legis. (1936) 24 Calif.L.Rev. 546, 702; Legis., 1938 Wis.L.Rev. 580, 586; Legis. (1941) 41 Col.L.Rev. 171, 172, n. 11; Bohlen, Book Review (1936) 45 Yale L.J. 1528, 1531.