Kropidlowski v. Pfister & Vogel Leather Co.

135 N.W. 839, 149 Wis. 421, 1912 Wisc. LEXIS 157

• Court: Wisconsin Supreme Court
• Decided: April 23, 1912
• Status: Published

Opinion

BaeNes, J.

The appellant maintains that the instrument set forth in the statement of facts is a release under seal of one of two joint wrongdoers, and that the legal effect of the document is to release and discharge both. The respondent contends that the so-called release should be construed as a covenant not to sue the Herman Zohrlaut Leather Company, and not as a technical release, and that, so construed, it does not bar a recovery from the appellant for the difference between the amount of damages sustained and the sum already paid by the Zohrlaut Company. The question is an interesting one, and it may be fairly said at the outset that, while the decided cases preponderate in favor of the contention of the appellant, the reasoning which supports them seems to be technical, artificial, and unsatisfactory.

The general rule that a release of one joint wrongdoer releases all is elementary. The same is true where the party who is wronged receives a valuable consideration from one of two or more joint wrongdoers as an accord and satisfaction of the whole injury. While the cases may differ to some extent as to the reason for the rule stated, most courts base it on the assumption that the injured party has received full satisfaction, or what is in law equivalent to full satisfaction, for the damages sustained, and that recovery should not go beyond this.

The alleged release here involved recites that the sums paid were not received “as an accord and satisfaction for the whole injury suffered, but only as part satisfaction thereof,” and ■clearly indicates an intention on the part of the respondent to reserve the right to collect the balance of his damages from the other wrongdoer.

The appellant contends that this portion of the document is contrary to the terms of the grant and should be rejected as mere surplusage, and that inasmuch as one of the wrongdoers was released there is a conclusive presumption of law that there was full compensation for the injury and the cause of action is wholly extinguished. Judge Cooley states the rule to. be that the release of one joint tortfeasor releases all, “although the release expressly stipulates that the other defendants shall not be released.” 1 Cooley, Torts (3d ed.) 235, 236, and cases cited in note 81. The author continues: “And this rule is held to apply even though the one released was. not in fact liable.” Page 236 and cases cited in note 82. Additional cases to the proposition covered by the first of the above quotations will be found in a note to Abb v. N. P. R. Co. (28 Wash. 428, 68 Pac. 954) 58 L. R. A. 297, and furthex-citations will be found in the comprehensive notes to the late case of McBride v. Scott, 132 Mich. 176, 93 N. W. 243, as. reported in 1 Am. & Eng. Ann. Cas. 62, 63.

Some of our own cases bear upon the subject under discussion, but do not cover the precise point involved. Ellis v. Esson, 50 Wis. 138, 147, 6 N. W. 518, is a leading case on. the proposition that where there is partial satisfaction by one of two or more joint wrongdoers, coupled with a covenant not. to sue the party mahing the payment, and the right is reserved to prosecute the other wrongdoer for the unpaid balance of the demand, there is only a satisfaction pro tanto and there is neither a release nor an accord and satisfaction of the entire damage, and recovery of the unpaid portion of the damage may be had from the other wrongdoers. The opinion also states that all the authorities hold that a technical release of one of two or more joint wrongdoers, under seal, discharges, them all and is a bar to an action against any or all of them. The general doctrine of this case is approved in Pogel v. Meilke, 60 Wis. 248, 250, 18 N. W. 927, and again in Bishop v. McGillis, 82 Wis. 120, 126, 51 N. W. 1075, where it is said:

“Tbe plaintiff might also agree for a consideration not to sne one, and conld still maintain an action or actions against the others, unless he had executed a technical discharge under seal, or received some consideration as an accord and satisfaction of the whole injury.”

None of these cases deal with a situation where the alleged instrument of release showed on its face that it was given in partial satisfaction only of the claim, and neither do they help us in determining whether such a document is in fact a release or something else. The doctrine of Ellis v. Esson had some support in the boohs when the case was decided, and it may now be said that it is the general rule.

A fair construction of the instrument involved in this case is that the respondent intended to absolve the Zohrlaut Company from further liability in consideration of the partial satisfaction by that company of the damages claimed and that respondent intended to collect the remainder of the damages from the appellant. This the latter claims cannot be done because a release of one was a release of all. If a release implies full satisfaction, then it is apparent that no such satisfaction was received and that to call the instrument a full release is a misnomer.

The rule contended for by the appellant originated with the English courts and at a time when an instrument under seal was surrounded by a strong odor of sanctity. These courts seem to have abandoned the rule and to have substituted therefor a more logical and humane one by which the whole intention of the parties is. carried out. To avoid the effect of one firmly established fiction they adopted another and construed documents such as the one before us as covenants not to sue instead of releases. Price v. Barker, 4 El. & Bl. 760; Selly v. Forbes, 2 Brod. & Bing. 38 (6 Eng. C. L. 11); Thompson v. Lack, 3 C. B. (54 Eng. C. L.) 540; Payler v. Homersham, 4 M. & S. 423; Bateson v. Gosling, L. R. 7 C. P. 9. Some of these cases involved releases from joint and several contract obligations, but the rule is the same in tort actions, as will appear from Duck v. Mayeu, [1892] 2 Q. B. 511, 513. The Vermont court has held that the release of one joint tortfeasor in part satisfaction for the tort, when the release states that the sum paid is received in partial satisfaction only, does not release the other tortfeasors as to the unsatisfied portion of the damages. Sloan v. Herrick, 49 Vt. 327. Decisions from the New York courts can be found on both sides of the question, but the final word as expressed in Gilbert v. Finch, 173 N. Y. 455, 66 N. E. 133, is that an instrument which is in form a release of one joint tortfeasor, and which recites that it is given in partial satisfaction only of the damages and that the releasor intends to pursue his remedy against the other tortfeasors for the balance of the compensation to which he is entitled, will be held to be merely a covenant not to sue and will not defeat the right of action against those who are not released. The authorities are reviewed in this case, and the court in substance says that the conclusion reached is not only in conflict with the majority of the decisions of other courts, but is also in conflict with a number of decisions of the New York courts. There are other cases to the effect that an instrument such as we are considering should be treated as a covenant not to sue. Parmelee v. Lawrence, 44 Ill. 405, 412, 413; Edens v. Fletcher, 79 Kan. 139, 98 Pac. 784; Berry v. Gillis, 17 N. H. 9; El Paso & S. R. Co. v. Darr (Tex. Civ. App.) 93 S. W. 166, 169; McCrillis v. Hawes, 38 Me. 566; 1 Parsons, Contracts (9th ed.) 28. Referring to the general rule that a release of one joint tortfeasor releases all, it is said in 34 Cyc. 1087:

“The logical and legal soundness of this rule, however harsh its application may be in the particular case, is undoubted, provided tbe sealed instrument is once construed to be a release, but to escape tbe application of tbis principle where it would work injustice and defeat tbe evident intention of tbe parties, tbe modern tendency of tbe courts is to construe, if possible, sucb instruments as covenants not to sue, wbicb accordingly do not release tbe co-obligors.”

Wbat bas been stated as tbe general rule seems to be not only illogical but arbitrary, as applied to sucb a document as tbe one before us. It entirely overrides tbe manifest intention of tbe party wbo executes tbe release. Contrary to tbe general rule applicable to tbe construction of writings, it gives an effect to tbe instrument wbicb is at variance with tbe meaning of tbe words used. All joint tortfeasors are severally liable for tbe entire damage inflicted. Tbe respondent bere might pursue tbe appellant and collect bis entire damages from it, if be were able to establish a legal liability. Since a settlement was made with one joint tortfeasor, it may well result in a benefit to tbe appellant instead of an injury, because there bas been partial compensation and tbe sum paid as sucb compensation cannot be again recovered. There are some cases wbicb recognize tbe right of contribution between wrongdoers. 1 Cooley, Torts (3d ed.) 254 et seq. But if tbis case should be brought within tbe principle of tbe decisions there cited tbe respondent’s cause of action would still remain, and at most tbe right of contribution could only áffect tbe amount of recovery. We do not think that a construction of tbe so-called release should be adopted wbicb would operate to defeat tbe intention of tbe parties instead of effectuating that intent. Neither do we think that wbat is at best manifestly intended to be a partial release should be held to be a complete one because tbe word “release,” wbicb bas a technical meaning in tbe law, happens to be used. If a release implies full satis-^ faction, then it is apparent that there bas not been full satisfaction, and consequently there, bas been no release in the technical sense, and that the intention of the parties will be best carried ont by treating the agreement as a covenant not y to sne. It follows that the order of the circuit court was right.

By the Court.-Order affirmed.