Restifo v. McDonald

Opinion by

Mr. Justice Roberts,

Joseph Y. Restifo (erroneously named “John” in this appeal) and his wife Eleanor instituted an action of trespass on behalf of themselves and their minor children against the Estate of William McDonald, appellant, for personal injuries and property damages sustained in an automobile accident on August 20, 1963. McDonald’s administratrix filed an answer and new matter joining the co-plaintiff, Eleanor Restifo, appellee, as an additional defendant with respect to the claims of her minor children on the theory that she was solely liable to the plaintiffs or liable for contribution.¹ 2In her reply, the appellee pleaded a written release given her by McDonald in return for $450. The court below sustained appellee’s motion for judgment on the pleadings and this appeal followed.

In support of her position, Mrs. Restifo relies principally upon Polley v. Atlantic Refining Co., 417 Pa. 549, 207 A. 2d 900 (1965),² where this Court on the authority of Killian v. Catanese, 375 Pa. 593, 101 A. 2d 379 (1954), held that when A obtains a general release from B, B cannot join A as an additional defendant in a subsequent suit, arising out of the same cause of action, instituted against B by C.³ We agree with Mrs. Restifo that unless, as requested by the appellant, these cases are overruled, the judgment of the trial court must be affirmed.

The release in the instant case, which was almost identical with the releases involved in Polley v. Atlantic Refining Co., supra, and Rimpa v. Bell, 413 Pa. 274, 196 A. 2d 738 (1964), stated:

“Know All Men by These Presents, that I, William McDonald, 6411 North 21st Street, Philadelphia, Pa., for the sole consideration of Four Hundred fifty and no/100 ($450.00) dollars to me in hand paid by Joseph Y. Restiro and Eleanor Restifo, of 6600 Ardleigh Street, Philadelphia, 19, Pa., the receipt whereof is hereby acknowledged, have released and discharged and by these presents, do for myself, my heirs, executors, administrators, successors and assigns release and forever discharge Joseph V. Restifo and Eleanor Restifo of and from all claims, demands, damages, actions, causes of action, or suits at law or in equity, of whatsoever kind or nature for or because of any matter or thing done, omitted or suffered to be done by said Joseph Y. Restifo and Eleanor Restifo prior to and including the date hereof, and particularly on account of all injuries both to person or property resulting, or to result, from an accident which occurred on or about the 20th day of August, 1963 at or about 6:30 P.M. at or near the intersection of Briar Road and Washington Lane, Philadelphia, Pa.”

Conceivably, as the Court did in the Killian-Polley line of cases, one could read this document as encompassing the right to seek contribution. However, our considered re-evaluation compels the conclusion that not only was the rationale of these cases unsound but that they are also incompatible with the rules of construction governing releases. Therefore, to the extent that these cases are inconsistent with this opinion they are hereby overruled.

A long line of Pennsylvania cases has held that a release covers only those matters which may be fairly said to have been within the contemplation of the parties when the release was given, See, e.g., Wenger v. Ziegler, 424 Pa. 268, 226 A. 2d 653 (1967); Brill’s Estate, 337 Pa. 525, 12 A. 2d 50 (1940); Flaccus v. Wood, 260 Pa. 161, 103 Atl. 549 (1918); Shepley v. Lytle, 6 Watts 500 (1837); General Mills, Inc. v. Snavely, 203 Pa. Superior Ct. 162, 199 A. 2d 540 (1964); Cockcroft v. Metropolitan Life Ins. Co., 125 Pa. Superior Ct. 293, 189 Atl. 687 (1937). Accordingly, the general words of the release will not be construed so as to bar the enforcement of a claim which has not accrued at the date of the release. See Henry Shenh Co. v. Erie, 352 Pa. 481, 43 A. 2d 99 (1945); Zurich General Acc. & Liab. Ins. Co. v. Klein, 181 Pa. Superior Ct. 48, 55-56, 121 A. 2d 893, 896 (1956).

Cady v. Mitchell, 208 Pa. Superior Ct. 16, 220 A. 2d 373 (1966), is a recent illustration of the rule mandating strict construction of a release so as to avoid the ever present possibility that the releasor may be overreached. Cf. Wenger v. Ziegler, supra; Henry Shenk Co. v. Erie, supra; compare Linda Coal & Supply Co. v. Tasa Coal Co., 416 Pa. 97, 100, 204 A. 2d 451, 453 (1964). In Cady, plaintiffs had given the defendant a general release for all claims arising out of an automobile accident, including “all unknown, unforeseen, unanticipated, and unsuspected injuries.” The release was signed nine days after the accident; the consideration for it being the lowest estimate received by the plaintiffs for the repair of their automobile. At the time the release was executed neither party suspected that Mrs. Cady had suffered any bodily injury; indeed defendant’s insurance adjuster testified that he had included Mrs. Cady in the release only as an extra precaution. Subsequently, Mrs. Cady developed symptoms which indicated that she had sustained bodily injuries in the accident. Although viewing the release as prima facie evidence of payment and settlement, nevertheless, the Superior Court, speaking through Judge Montgomery, sustained, without dissent, the jury’s action in voiding the release. The court held, in accord with the rule in a majority of sister jurisdictions,⁴ that since neither party contemplated personal injuries on the part of Mrs. Cady, the release could not be construed to cover them: “The circumstances, including the details as to when, where and how the releases were secured, and the inadequacy of the consideration, [Avere] all matters reflecting on the meeting of the minds of the parties and collectively support the jury’s action.” 208 Pa. Superior Ct. at 21, 220 A. 2d at 375.⁵

In a similar vein it would be illogical to assume that, with respect to the right of contribution, there was a meeting of the minds in the instant ease. The releasing party, unless he is a lawyer, is unlikely to be cognizant of this potential right, a right which in any event does not accrue until after an action has been instituted against the releasor by a third party.⁶ (It is worth noting that if the additional defendant were sued by the third party, he could seek contribution from the joint tortfeasor.⁷) Instead the releasing party is most apt to regard the release as a contract which constitutes the successful settlement of his claim against the releasee.

Perhaps the most troublesome aspect of the Killian-Polley cases is that they actually encourage fraud and deception. For example, consider the following hypothetical: P, a close friend of D-2 and a passenger in his car, is injured through the joint negligence of D-2 and D-l. In the same automobile accident D-l’s car is slightly damaged. If P waits until D-2, or his insurance company, buys a release from D-l before instituting a lawsuit, he may be able to obtain full recovery from D-l and keep D-2’s friendship. In some instances D-2 might even purchase P’s patience; at least in many cases, such as the instant one, P and D-2 are apt to have a common interest so that these tactics will work to their mutual benefit.⁸

Our opinion in this case, of course, does not prevent the parties from contracting for the release of the right to seek contribution in the event of a lawsuit by a third party, for “it is well settled that where the terms of a release and the facts and circumstances existing at the time of its execution indicate the parties had in mind a general settlement of accounts, the release will be given effect according to its terms.” Brill’s Estate, 337 Pa. 525, 528, 12 A. 2d 50, 52 (1940). All we hold is that in the circumstances of the instant case such a contract must show that a release of the right to seek contribution was bargained for and within the parties’ contemplation. Properly construed the release involved in the instant litigation merely prohibits recovery on an action which originates with the releasor.

Judgment reversed and record remanded for proceedings not inconsistent with this opinion.

1 Pennsylvania’s intrafamily immunity doctrine would prevent plaintiffs from obtaining- a judgment against Mrs. Restifo; nevertheless, she would remain liable to the appellant for contribution if she were found to be a joint tortfeasor. See Puller v. Puller, 380 Pa. 219, 110 A. 2d 175 (1955); Fisher v. Diehl, 156 Pa. Superior Ct. 476, 40 A. 2d 912 (1945); see generally, Note, 52 Cornell L.Q. 407 (1967).

The writer of this opinion has expressed his own disagreement with the intrafamily immunity doctrine in Daly v. Buterbaugh, 416 Pa. 523 537, 207 A. 2d 412, 418 (1964) (dissenting opinion).

2 Only three members of the Court joined the Polley opinion; two members concurred in the result and two dissented.

3 See also Rimpa v. Bell, 413 Pa. 274, 196 A. 2d 738 (1964); Moyer v. Independent Oil Co., Inc., 401 Pa. 335, 164 A. 2d 552 (1960); Mayer v. Knopf, 396 Pa. 312, 152 A. 2d 482 (1959). But see, Kent v. Fair, 392 Pa. 272, 140 A. 2d 445 (1958); Davis v. Miller, 385 Pa. 348, 123 A. 2d 422 (1956). Killian itself is critically reviewed in 27 Temple L.Q. 515 (1954).

4 208 Pa. Superior Ct. at 19-20, 220 A. 2d at 374-75; see Annot., 71 A.L.R. 2d 82 (1960).

5 For an approving comment on tibe court’s approach in Cady, see 28 U. Pitt. L. Rev. 109 (1966).

6 See cases cited supra, p. 9.

7 Uniform Contribution Among Tortfeasors Act, Act of July 19, 1951, P. L. 1130, 12 P.S. §2082 et seq. (Supp. 1966).

8 If the releasor is insured, his insurance company, which is not a party to the release, will under the Killian-Polley cases be denied its right of subrogation against the joint tortfeasor.