Brandstein v. Ironbound Transp. Co.

• Decision Date: 04 May 1934
• Docket Number: No. 62.,62.
• Citation: 172 A. 580
• Parties: BRANDSTEIN et al. v. IRONBOUND TRANSP. CO.
• Court: New Jersey Supreme Court

172 A. 580

BRANDSTEIN et al.

v. IRONBOUND TRANSP. CO.

No. 62.

Court of Errors and Appeals of New Jersey.

May 4, 1934.

Syllabus by the Court.

In an action against one of two joint tort-feasors, evidence of payment of a sum of money to plaintiff by the other joint tortfeasor in consideration of the execution of a covenant not to sue such tort-feasor is admissible in mitigation of damages.

The CHIEF JUSTICE dissenting.

Appeal from Supreme Court.

Action by Elizabeth Brandstein and another against the Ironbound Transportation Company. From a judgment (168 A. 400, 11 N. J. Misc. 843), affirming a judgment for plaintiffs, defendant appeals.

Judgment reversed, and venire de novo ordered.

Maurice J. McKeown and William H. Speer, both of Newark, for appellant.

Elias G. Willman, of Newark, for respondents.

DONGES, Justice.

This appeal brings up a judgment of the Supreme Court affirming a judgment of the First district court of the city of Newark. Plaintiff Elizabeth Brandstein was a passenger in a bus of Public Service Co-ordinated Transport when that bus and a bus. of appellant, Ironbound Transportation Company, collided. Suit was brought against the Ironbound Transportation Company, and upon the trial the following question was propounded to Mrs. Brandstein: "And did you receive compensation from the Public Service as the result of the accident?" An objection was interposed by counsel for the plaintiffs, and the trial court sustained the objection. Counsel for the appellant excepted to this ruling in the following language: "I take exception, on the ground that the plaintiff has received a substantial sum of money from the Public Service in consideration for signing a covenant not to sue, and I wish to introduce the amount of the consideration into evidence for the purpose of mitigating the damages as against the defendant herein, on the theory that the plaintiff is not entitled to be doubly compensated for one injury."

The Supreme Court affirmed on the authority of Fast v. Pecan, 165 A. 281, 11 N. J. Misc. 253, & Supreme Court decision, which seems to be the only case in point in this state; this court apparently never having passed on the question.

In Fast v. Pecan the case was decided upon another ground. The Supreme Court, in sustaining the refusal of the trial court to permit testimony of the receipt of money in consideration of the execution by the plaintiff of a covenant not to sue, said:

"The appellant's first point is that the defendant-appellant should have been permitted to introduce testimony that the plaintiff had, for a consideration, executed a covenant not to sue the codefendant, Edward Melbourne, and testimony as to the amount of such consideration, 'for the purpose of mitigating damages as to the defendant, Max Pecan, in the event that the jury decided that the damages sustained by the plaintiff were the proximate result of the negligence of the defendant, Max Pecan, in the control and operation of his automobile.'

"We find no fault with the ruling. Certainly, if the jury found the damages sustained were the proximate result of the negligence of Pecan, he was not entitled to contribution from another. It may be of interest to note that in Public Service v. Matteucci, 105 N. J. Law, 114, 143 A. 221, it was held that, whenever the damages are the product of the contributory misfeasance of more than one person, while an action will lie against each of the wrongdoers or against both, neither one can claim contribution from the other so as to distribute the loss equally among themselves; the reason being that the law will not undertake to adjust the burdens of misconduct."

It is settled that, while a person injured may sue one or some or all of the persons liable for the trespass, he can have but one satisfaction for the injury. We are not dealing with the questions of satisfaction of plaintiffs' claims by a tort-feasor, or of release of one tort-feasor. It is settled in this state that a covenant not to sue one person does not release others liable to the injured party. Bowne v. Mt. Holly National Bank, 45 N. J. Law, 360. The question presented here is as to the right of a joint tort-feasor to have a payment in consideration of the execution of a covenant not to sue another joint tortfeasor applied to reduce pro tanto the recovery against the tort-feasor sued.

It must be conceded that the authorities upon this subject are not harmonious. The weight of authority and the authorities which we regard as declaring the sound rule hold that, when suit is brought against one joint wrongdoer, the amount received for the execution of a covenant not to sue another joint wrongdoer is to be credited on any liability which may be found to exist against the one sued.

Such is the holding in Sloan v. Herrick (1877) 49 Vt. 327; Knapp v. Roche (1884) 94 N. Y. 329; Finley v. Plante et al. (1932) 52 R. I. 325, 160 A. 865; Balick v. Philadelphia Dairy Products Co., Inc. (Superior Court of Del. 1932) 162 A. 776; and many other cases.

In O'Neil v. National Oil Co., 231 Mass. 20, 120 N. E. 107, 110, it was said: "The defendant asked the court to instruct the jury, 'If the jury find there is any liability on the part of the defendant, they must consider the payment of $1500 by Converse in mitigation of damages.' The request was refused. While the jury must have found that this money was not received from Converse to release or discharge him from liability, and it was received from him in consideration of the plaintiff's covenant not to sue him for the personal injury she had received, the $1500 should be applied in reduction of her damages. She was entitled to maintain an action against each or all who contributed to her injury, although she was entitled to but one satisfaction. Her cause of action was not extinguished by the receipt of the money. It was, however, a partial satisfaction of her claim; and she cannot receive, for the same wrong, remuneration in excess of her actual damage. It would be unjust for a plaintiff to retain money received from one of several tort feasors under a covenant not to sue him for the injury, and to recover from the other tort feasor full satisfaction for the same injury. In a joint contract obligation where money is received from one debtor under a contract never to sue him, the payment made in consideration of the agreement is a payment on account of the debt, and to that extent is a discharge of the debt as to all the debtors. See 25 H. L. R. 203, 218. The same principle applies to an action sounding in tort. In Dwy v. Connecticut Co., 89 Conn. 74, 79, 92 A. 883, L. R. A. 1915E, 800 [Ann. Oas. 1918D, 270], the agreement of the plaintiff with one tort feasor was construed as a covenant not to sue him; but evidence was admitted of the amount paid by him in reduction of damages in the action against the other tort feasor. This rule was followed in Bloss v. Plymale, 3 W. Va. 393, 409, 100 Am. Dec. 752; Snow v. Chandler, 10 N. H. 92, 95, 34 Am. Dec. 140; Chamberlin v. Murphy, 41 Vt. 110, 118. The same ruling was made in the trial court in Rice v. Reed, [1900] 1 Q. B. 54, 58. It was assumed in the court of appeal that this ruling was correct, and apparently this course was followed in Duck v. Mayen [1892] 2 Q. B. 511. See, also, Heyer v. Carr, 6 R. I. 45; Chicago v. Babcock, 143 Ill. 358, 32 N. E 271; Miller v. Beck & Co., 108 Iowa, 575, 578, 79 N. W. 344; Ellis v. Esson, 50 Wis. 138, 154, 6 N. W. 518, 36 Am. Rep. 830; Pogel v. Meilke, 60 Wis. 248, 18 N. W. 927; Miller v. Fenton, 11 Paige (N. Y.) 18."

To the same effect is Bogdahn v. Pascagoula Street Railway & Power Co., 118 Miss. 668, 79 So. 844, 845. This was an action by the representatives of an employee of a telephone company against the defendant power company for negligence in maintaining a high-tension wire near a telephone pole, resulting in the death of the workman while working on the pole. Evidence was admitted that the telephone company had paid $7,500 for a covenant not to sue it, and the jury was instructed that they should allow a credit in this suit against the damages found to be due the plaintiffs. The jury found a verdict of no cause of action, and plaintiffs appealed. The court said:

"In other words, if the jury believed that the $7,500 paid to appellants by the telephone company was sufficient to compensate appellants in full for all damages for the death of the deceased, then the verdict of the jury should have been for the defendant, even though they believed that appellee was liable as a joint tort-feasor; thereby finding that the amount due appellants as damages for the death was no more than $7,500, the amount already paid appellants by the joint tort-feasor, Cumberland Telephone & Telegraph Company. * * *

"The payment of the $7,500 and the covenant not to sue entered into between appellants and the joint tort-feasor, Cumberland Telephone & Telegraph Company, amounted to a surrender of appellants' right of action against the telephone company for damages; however, this was only a release from suit of the telephone company, one of the joint tortfeasors, but it was not a release of the other tort-feasor, appellee, except pro tanto.

"This court has held that there is no release of joint...