Kreutzmann v. Bauman

609 S.W.2d 736, 1980 Tenn. App. LEXIS 389
CourtCourt of Appeals of Tennessee
DecidedAugust 21, 1980
StatusPublished
Cited by7 cases

This text of 609 S.W.2d 736 (Kreutzmann v. Bauman) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kreutzmann v. Bauman, 609 S.W.2d 736, 1980 Tenn. App. LEXIS 389 (Tenn. Ct. App. 1980).

Opinion

SUMMERS, Judge.

On April 6,1970, a consent judgment was entered in the Circuit Court of Shelby County in favor of Mrs. John Kreutzmann against S. Richard Bauman and Sumner I. Levine, individually and as partners in the Dixie Hamburger Company, a partnership. The plaintiff’s claim was based on a note made by the defendants. The amount of the consent judgment was $34,663.12.

To date, the defendant Bauman has paid $8,060.00 on the judgment. On December 28,1977, in consideration of the payment to the plaintiff of $12,000.00 by defendant Levine, Mrs. Kreutzmann executed the following instrument styled “Covenant Not To Sue” in favor of Levine:

COVENANT NOT TO SUE
* * * # * *
In consideration of the sum of Twelve Thousand Dollars ($12,000.00) paid to Covenantor [Mrs. John Kreutzmann] by Covenantee [Sumner Levine], the receipt of which is hereby acknowledged, Cove-nantor covenants as follows:
1. Covenantor will never institute any action or suit at law or in equity against Covenantee, nor institute, prosecute or in any way aid in the institution or prosecution of any cause of action to enforce or to execute upon a Judgment of April 6, 1970, entered in the Circuit Court of Shel[737]*737by County, Tennessee in Civil Action No. 44619-8 T.D., against Covenantee and S. Richard Bauman as joint obligors.
2. Covenantor expressly reserves all rights of action, claims, and demands against S. Richard Bauman and any and all other persons other than Covenantee based upon or arising out of the above-mentioned Judgment. This instrument is a covenant not to sue, and not a release.
3. This Covenant shall inure to the benefit of Covenantee and his heirs, executor, and assigns. It shall bind Covenantor, her heirs, executor and assigns.
4. Covenantor agrees additionally to hold Covenantee harmless against any right of contribution that S. Richard Bau-man may have against Covenantee for any excess which might be recovered from S. Richard Bauman over and above that which has now been paid by Cove-nantee. To this end, Covenantor agrees to pay to Covenantee Fifty Percent (50%) of any recovery effected from S. Richard Bauman in excess of the total amount of payments made by Covenantee on the above-mentioned Judgment.
5. This instrument reflects the entire covenant between Covenantor and Cove-nantee, and no statements, promises or inducements made by Covenantor or any agent of Covenantor that are not contained herein shall be valid or binding.
6. Covenantor has carefully read the foregoing Covenant Not to Sue and knows the contents thereof.
IN WITNESS WHEREOF, Covenantor has executed this Covenant at Madison, Wisconsin, the day and year first above written.
/s/ Florence Kreutzmann
FLORENCE KREUTZMANN, Covenantor

Prior to the tenth anniversary of the entry of the consent judgment against Levine and Bauman, Mrs. Kreutzmann filed a complaint for scire facias to revive the judgment against both defendants.

The defendant Levine did not answer or appear. The defendant, Bauman, through his attorney, offered a copy of the above instrument captioned “Covenant Not To Sue.” At the hearing on the scire facias complaint, defendant Bauman’s attorney contended that Bauman had paid $8,060.00 on the judgment and revival of the judgment would be proper unless a defense was established, whereupon Bauman interposed the defense of release. Bauman’s attorney argued that the “Covenant Not To Sue” given by the plaintiff to defendant Levine was in fact a release to the obligor, Levine, and therefore a release to the co-obligor, Bauman.

No witnesses were offered by either party and there was no further evidence.

The trial court denied the plaintiff’s request for a revival of her consent judgment against the two defendants, holding that the “Covenant Not To Sue” operated to release Levine from any further indebtedness on the judgment and thereby also released Bauman. The plaintiff perfected an appeal to this court.

On appeal the plaintiff-appellant, Mrs. Kreutzmann, argues that the instrument in issue is a covenant not to sue and not a release.

The defendant-appellee Bauman contended that the instrument entitled “Covenant Not To Sue” was actually a release and, because it was a release, it operated to release Levine (who did not appear or plead) and therefore released Bauman (who did plead the alleged Covenant Not To Sue as a release of himself and, of necessity, on the behalf of Levine.)

In 1858, the legislature passed an act which is now T.C.A. § 24-706 and reads as follows:

Receipts and releases. — All receipts, releases, and discharges in writing, whether of a debt of record or a contract under seal, or otherwise, shall have effect according to the intention of the parties thereto. [Code 1858 § 3789; Shan., § 5570; Code 1932 § 9741] (Emphasis supplied)

T.C.A. § 24-706 changed the old technical rule of the common law, whereby the re[738]*738lease of one co-obligor automatically released another co-obligor. Williams v. Hitchings, 78 Tenn. 326 (1882); Richardson v. McLemore, 64 Tenn. 586 (1875); Miller v. Fox, 111 Tenn. 336 (1903).

Miller v. Fox, supra, mentions the case of Evans v. Pigg, 43 Tenn. 395 (1866), which held that the release of one co-obligor releases other co-obligors. In 1866, Evans, supra, wrongly ignored the 1858 Code § 3789. Miller v. Fox also cites Williams v. Hitchings, supra, an 1882 case which properly interpreted § 3789 of the Code of 1858 (now T.C.A. § 24-706) and held that the parties to an instrument releasing a contractual debt could stipulate that the release was not to affect the liability of another joint obligor.

In the instant case, the learned trial judge erred in applying Byrd v. Crowder, 166 Tenn. 215, 60 S.W.2d 171 (1932), to the case at bar. The case at bar is a case ex contractu, not ex delicto. The Tennessee statute which applies to the instant case is T.C.A. § 24-706, concerning the effect of a release of contract debts, not Tennessee statutes and case law which apply to the release of joint tortfeasors. We hold that the “debt of record” language of T.C.A. § 24-706 encompasses and applies to releases of judgment debts which are grounded on underlying debts that are contractual in nature.

T.C.A. § 24-706, covering releases of contractual debts, is the same as the old § 3789 of the Tennessee Code of 1858. T.C.A.

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Bluebook (online)
609 S.W.2d 736, 1980 Tenn. App. LEXIS 389, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kreutzmann-v-bauman-tennctapp-1980.