McDonald v. Goddard Grocery Company

• Decision Date: 23 November 1914
• Citation: 171 S.W. 650,184 Mo.App. 432
• Parties: JOHN J. McDONALD, Respondent, v. GODDARD GROCERY COMPANY, Appellant
• Court: Kansas Court of Appeals

171 S.W. 650

184 Mo.App. 432

JOHN J. McDONALD, Respondent, v. GODDARD GROCERY COMPANY, Appellant

Court of Appeals of Missouri, Kansas City

November 23, 1914

Appeal from Adair Circuit Court.--Hon. Nat. M. Shelton, Judge.

Judgment reversed and cause remanded.

Eugene S. Wilson, John Brennan, Jr., and Higbee & Mills for appellant.

Thos F. Gatts for respondent.

OPINION

ELLISON, P. J.

--Plaintiff's action is for the malicious prosecution of a bankruptcy proceeding against plaintiff by the several defendants herein. The judgment in the trial court was for the plaintiff.

The action was begun in 1910. Before it was tried, on the 2nd of October, 1912, plaintiff accepted $ 50 from two of the defendants (Youle and Bozarth) in consideration of which he agreed to dismiss the action as to them, but reserved the right to continue to prosecute as to the others. The agreement was put in writing and is as follows: "It is hereby stipulated and agreed that so far as the defendants J W. Youle and J. R. Bozarth are concerned, this cause shall be dismissed as to them and the same will not be further prosecuted as against the said J. W. Youle and J. R. Bozarth, and that the further prosecution of this case shall be against the defendants Goddard Grocery Company and J. Schotten. The plaintiff only hereby agrees to dismiss this action as to J. W. Youle and J. R. Bozarth and agrees not to further prosecute as to them, reserving the right to further prosecute this case against the Goddard Grocery Co. and said J. Schotten and not acknowledging, which has not been paid, any satisfaction in this cause of action against any of the defendants herein, but simply covenants not to further prosecute this action against J. W. Youle and J. R. Bozarth at any time. This agreement is made in consideration of the sum of fifty dollars ($ 50) paid by J. W. Youle and J. R. Bozarth."

The remaining defendants insist that as plaintiff's claim is based on a joint wrong, this paper is a release of a part of the wrongdoers and therefore, in legal effect, became the release of all. The trial court refused to take that view, and adopted that of plaintiff to the effect that the paper was merely a covenant not to sue those defendants, leaving the cause of action intact against the others.

A wrong jointly committed by several makes each liable for the entire injury, for which there is but one satisfaction; and therefore a release of one is a release of all. And where a sum is received from one or more of several wrongdoers, not in full satisfaction, but in consideration of the injured party agreeing not to sue, it is not a release at all; it is merely a covenant not to sue those paying. By so doing he does not release any of them, but only his remedy against those with whom he covenants. He may still successfully sue all, leaving the right to those with whom he made the covenant to sue him thereon: Lacy v. Kinnaston, Holt, 178. That case is several times reported: 1 Lord Raymond, 688, 2 Salk. 573 and 3 Salk. 298; 12 Mod. 548, and is adopted by Lord KENYON in Dean v. Newhall, 8 T. R. 168. If one covenants with a single wrongdoer not to sue, this is in effect his discharge, for if he then sues him he can turn around and sue the covenantor in damages on the covenant in identical amount and therefore, so as to avoid circuity of action, the covenant not to sue a single wrongdoer is a discharge of the action, since there is nothing left against any other person. But not so where there are others left to whom the cause of action applies. The rule is illustrated in this way in 3 Salk. 298, supra: Where W. R. enters into an obligation to H. S. who covenants never to sue W. R.; if afterwards he does sue upon it, W. R., to avoid circuity of action, may plead the covenant in bar to the action, for H. S. by his covenant has deprived himself of all remedy he can have upon the bond; "but if W. R. and R. W. were jointly and severally bound in a bond to H. S., who covenants never to sue W. R. upon that bond, this is no release or defeasance of the bond, neither can it be pleaded in bar if an action should be brought on it, because it doth not discharge the right, but only the remedy against W. R., for he still hath a right of action against R. W., the other obligor; therefore, if he (the obligee) should bring an action of debt upon this bond against W. R., he is put to his action of covenant against the obligee, which would not lie if this covenant was a release, because a release to one obligee is a release to both."

This rule, coming to us from early times, is recognized with practical unanimity today. Why should an injured party not be allowed to receive a portion of his compensation for an injury from some of the wrongdoers, without discharging the others? There is no more hindrance to freedom of contract in this than in any other instance. The parties to such a contract knew that if the covenant not to sue was violated the covenantees could have their action for the breach, in which they would recover the damages flowing from such breach. The other wrongdoers had no cause to complain, for in fact it was a relief to them, since, as there can be but one satisfaction, whatever was paid by the covenantees lessened their liability that much.

But now, since the statute (Sec. 5431, R. S. 1909) allows contribution after judgment between wrongdoers, it may be said the others have an interest in seeing that no injustice is done them by a settlement with a part at a less sum than would have been their contributory share had they been defendants in the judgment. The answer to this is, that the injured party now has a right to omit any wrongdoer from the action. The wrongdoers sued have no right to demand that all be included in the action, so as to increase the contributors to the payment of the judgment, and thereby lessen their burden. If, therefore, the injured party may let a part of the wrongdoers go free and hold the others for his full injury, why should he not be allowed to receive part compensation for his injury from one or more, of the wrongdoers without discharging the others, especially when he does not increase, but lessens, the burden of such others.

So there being no legal disability upon the right to deal with a part without releasing the others, and there being no wrong done to those not released, there would seem not to be a semblance of reason in the statement that a covenant not to sue a part will operate as a release of all, when that was not intended.

The cases above cited from the English courts have been consistently followed to the present time with the exception, so far as we have seen, of Nicholson v. Revill, 4 A. & E. 675, and that was overruled in Thompson v. Lack, 3 C. B. 540, and other cases. In Duck v. Mayeu, 2 L. R. Q. B. Div. (1892) 511, the court recognizes as "clear law, that a release granted to one joint tort-feasor, or to one joint debtor, operates as a discharge of the other joint tort-feasor, or the other joint debtor, the reason being that the cause of action, which is one and indivisible, having been released, all persons otherwise liable thereto are consequently released." But the court continues: "We have found no case in which it has been held that a covenant not to sue releases a joint tort-feasor; and in our judgment the principle upon which it has been held that such a covenant does not release a joint debtor applies to the case of a joint tort-feasor." (Italics ours.) The court then goes on to state that the character of the instrument is determined by the intention which it discloses.

In this country the same rule has been stated in nearly all the States. It is put in these words in Mason v. Jouett, 2 Dana 107: "A covenant never to sue a sole obligor, will, to avoid circuity, be deemed a release of the obligation. But a similar covenant with one of several joint obligors, should not be construed as a release of even the covenantee; because such an interpretation would frustrate the intention of the parties and operate unjustly; for, if one of the joint obligors be released, no suit could be maintained against the others; and the inconvenience and circuity incident to a suit on the covenant for a breach of it would be far less unjust, and would be much more consistent with the intentions of the parties, than the constructive exoneration of all the joint obligors. In such a case, therefore, such a covenant will not be deemed a release." Again the rule is affirmed in Illinois: Chicago v. Babcock, 143 Ill. 358, 32 N.E. 271 and in C. & A. Ry. Co. v. Averill, 224 Ill. 516. In the latter case it is said at page 522, that "The legal effect of a covenant not to sue is not the same as that of a release. A covenant not to sue a sole tort-feasor is considered in law a discharge and a bar to an action against him, but the rule is otherwise where there are two or more tort-feasors and the covenant is with one of them not to sue him. In such case the covenant does not operate as a release of either the covenantee or the other tort-feasor, but the former must resort to his suit for breach of the covenant and the latter cannot invoke the covenant as a bar to an action against him."

In Gilbert v. Finch, 173 N.Y. 455, 66 N.E. 133, there is found a clear statement of the rule with a full review of the authorities. It is stated as page 463, that "In England the modern authorities appear to be quite uniform upon the question. They are to the effect that, as between joint debtors and joint tort-feasors, a release given to one releases all, but if the instrument contains a reservation of a right to sue the other joint debtor or tort-feasors, it is not a release, but in effect is a covenant not to sue the person released, and a covenant not...