Whittlesea v. Farmer

469 P.2d 57, 86 Nev. 347, 1970 Nev. LEXIS 517

• Court: Nevada Supreme Court
• Decided: May 8, 1970
• Docket: 5997
• Status: Published

Opinions

OPINION

By the Court,

Thompson, J.:

The central issue presented by this appeal is whether a covenant not to execute falls within the provisions of the Uniform Obligations Act. We hold that it does not.

Farmer commenced an action against Whittlesea, his employee Fry, the Nevada Bank of Commerce and its employee Lamb to recover damages for personal injuries incurred while riding as a passenger in a Whittlesea taxi driven by Fry which collided with a car driven by Lamb. Fry and Lamb were charged jointly and severally as tortfeasors. The liability of their respective employers was premised on the doctrine of respondeat superior. Before trial, the defendant Lamb and the Bank paid Farmer $10,000 in consideration for his agreement not to execute upon any judgment obtained in the pending action against them. The covenant not to execute did not contain an express reservation of rights to proceed against Fry and Whittlesea. The jury returned its verdict for $13,000 against all defendants and credited against that award the $10,000 paid by Lamb and the Bank, leaving a balance of $3,000 to be paid. Judgment was entered accordingly. Since Farmer cannot, by reason of his covenant with Lamb and the Bank, recover the unpaid balance from them, he has looked to the codefendants Fry and Whittlesea for payment thereof. The latter have appealed to this court contending that the Uniform Joint Obligations Act embraces a covenant not to execute and that the failure of Farmer to expressly reserve his rights to proceed against them automatically released them from liability. The contention is unsound.

1. The Uniform Joint Obligations Act includes tort actions (NRS 101.010) wherein it is claimed that the defendants are jointly and severally liable (NRS 101.050) to the plaintiff.¹ A release or discharge of one of the defendants without an express reservation of rights against the others discharges the others to the extent provided in NRS 101.060. Of course, such a release or discharge may expressly reserve the rights of the claimants against the others claimed to be jointly and severally liable to him.

The apparent purpose of the act is to modify the common law doctrine that a release of one joint tortfeasor releases all — • this, because but one cause of action existed against them which was surrendered when the release was executed.

The Act would apply to the case at hand if a covenant not to execute upon a judgment is the same as a release. However, it is not the same as a release. The legal effect of a covenant not to execute is similar to a covenant not to sue; the essential distinction between them being that the former is entered into after suit is commenced and before judgment, whereas the latter is made before suit is commenced. Land v. United States, 231 F.Supp. 883 (D.C. Okla. 1964). Neither covenant extinguishes the plaintiff’s cause of action, as does a release. The covenants are agreements not to enforce an existing cause of action (covenant not to sue) or to execute upon a judgment (covenant not to execute). Pellett v. Sonotone Corporation, 160 P.2d 783 (Cal. 1945). Such a covenant does not release joint tortfeasors even in the absence of any reservation of rights against them. Prosser on Torts, 3d ed, p. 271. In the event of a breach of covenant the remedy is in contract for that breach. Pellett v. Sonotone Corporation, supra. The Uniform Joint Obligations Act contemplates a document which extinguishes the plaintiff’s claim and does not embrace a covenant not to sue or not to execute, and we so rule. Since the plaintiff may have but one satisfaction for his injuries from joint tortfeasors, the amount paid for a covenant by one of them reduces by that amount the liability of the others. Pacific States Lumber Co. v. Bargar, 10 F.2d 335 (9 Cir. 1926). Accordingly, the defendants-appellants WhitÜesea and Fry are liable to the plaintiff-respondent Farmer for the $3,000 remaining unpaid upon the judgment.

2. In some cases covenants are construed to be releases because the words used suggest that result. This case does not present that problem. The covenant is clearly one not to execute upon a judgment. Words of release are not used.

Affirmed.

Collins, C. J., Batjer and Mowbray, JJ., concur.

1 In Hansen v. Collett, 79 Nev. 159, 380 P.2d 301 (1963), a tort case, the Uniform Joint Obligations Act did not apply because the case concerned separate acts of successive tortfeasors rather than the concurrent acts of joint tortfeasors.