Tino v. Stout

The opinion of the court was delivered by

Gaulkin, S. J. A. D.

On December 29, 1954 plaintiffs recovered a judgment of $8,174.95 and costs against Stout and the Longs for injuries arising out of an accident. The Longs were not insured. In March 1955 Stout’s insurance company paid plaintiffs $5,083.14, the full amount of its policy and the costs. Plaintiffs were unable to find Stout to collect anything more from him. Long earned a meager salary, madequate even, to support Ms wife and children. When pressed by plaintiffs, the Longs threatened to g'o into bankruptcy. Finally, in 1960 plaintiffs accepted $750 from the Longs in settlement and gave them a warrant for satisfaction of the judgment “insofar as the said Frances Long and Jack Long are concerned,” but only reducing “the amount of said Judgment to * * * $2,424.95 insofar as the same affects the said Robert F. Stout.”

In 1964 plaintiffs located Stout and made demand upon him for the balance of the judgment. Stout countered with a motion to mark the judgment satisfied in full as against Mm because the warrant given the Longs had automatically discharged him from half the face of the judgment and his carrier had paid more than the remaining half. The trial judge granted the motion. We affirm.

Plaintiff Anna Tino was injured when the Stout and Long cars collided and one mounted the sidewalk on which she was walking. The Long car was driven by Mrs. Long as Mr. Long’s agent. Plaintiffs concede that if they had given the Longs a release before judgment, Stout would be entitled to credit for half the damages assessed by the jury, but they contend that after judgment is recovered against joint tortfeasors the rule is different; that then a plaintiff may release one for a small amount if he chooses and collect the balance of the judgment from the others, the argument being that the paying tortfeasors still have their remedy over against the nonpaying one for contribution because plaintiff’s release to the latter cannot affect the rights of the tortfeasors inter sese. We disagree. We hold that an absolute release from a plaintiff to one tortfeasor discharges him from liability to the others for contribution for sums thereafter paid by the latter beyond their shares. From this it follows that such a release -or warrant for satisfaction to one automatically gives the others the benefit of a pro rata reduction. See Oliver v. Russo, 29 N. J. 418 (1959); Judson v. Peoples Bank & Trust Co., 25 N. J. 17 (1957). Cf. Breen v. Peck, 28 N. J. 351, 366 (1958); McKenna v. Austin, 77 U. S. App. D. C. 228, 134 F. 2d 659, 148 A. L. R. 1253 (D. C. Cir. 1943).

It is plain from the language of the warrant given to the Longs that plaintiffs did. not intend to benefit Stout. However, neither did the plaintiffs in Oliver v. Russo, supra, when they gave one tortfeasor the covenant not to sue which was held to discharge the other pro rata. On the other hand, it is equally plain that when the Longs paid $750 for the warrant they expected to be free of all further liability, whether to plaintiffs or to Stout. In short, either the plaintiffs or the Longs were mistaken as to the legal effect of the warrant.

It has been pointed out that our Joint Tortfeasors Contribution Act is different from the uniform act and the acts of other states. Theobald v. Angelos, 44 N. J. 228, 238 (1965). We think our act, as construed in the reported cases, compels the conclusion which we have reached. Eurthermore, we think that conclusion is the better one in terms of utility. “There is a strong policy in favor of settlements. A contribution law should provide the maximum room for settlements with a minimum of unfairness.” Ibid., at p. 237. An uninsured and impecunious tortfeasor would rarely settle for less than his pro rata share of the judgment unless he knew he was protected from claims by joint tortfeasors as to subsequent payments made by the latter. Otherwise there would be little reason for the impecunious joint tortfeasor to raise money to settle for less than his proportion of the judgment.

In short, it seems to us that the conclusion we have reached leaves the decision in the plaintiff’s hands, where it should be. If A will not settle for less than his pro rata share of the judgment without complete discharge of his liability to all parties, the plaintiff may pursue the usual remedies open to a judgment creditor. If plaintiff chooses not to do so, or those remedies prove fruitless, then he must weigh his chances of recovering more from B than B’s pro rata share and decide whether for the money offered by A he should give credit upon the judgment for A’s pro rata share.

The judgment is affirmed. No costs.