Powers v. Temple

• Citation: 250 S.C. 149,156 S.E.2d 759
• Decision Date: 09 August 1967
• Docket Number: No. 18690,18690
• Court: South Carolina Supreme Court
• Parties: Sallie Turner POWERS, Appellant, v. Harry R. TEMPLE, Respondent.

Page 759

156 S.E.2d 759

250 S.C. 149

Sallie Turner POWERS, Appellant, v. Harry R. TEMPLE, Respondent.

No. 18690.

Supreme Court of South Carolina.

Aug. 9, 1967.

James W. Alford, Whaley & McCutchen, Fulmer, Barnes, Berry & Austin, Columbia, for appellant.

Turner, Padget, Graham & Laney, Columbia, for respondent.

BUSSEY, Justice.

In this action plaintiff-appellant seeks to recover damages for serious personal injuries sustained by her on November 29, 1961, while she was riding as a guest in an automobile owned and operated by the defendant, which collided with the rear end of a vehicle being driven by Mrs. Mazzie Nichols on U.S. 76 some twenty miles east of the City of Columbia. The appeal is from an order of the trial judge denying a motion for a new trial, following a verdict for the defendant.

The answer of the defendant pled a general denial, sole negligence and willfulness on the part of Mrs. Nichols, and contributory negligence and willfulness on the part of the plaintiff. Subsequent to the defendant's answer, plaintiff, in consideration of the payment of $6,500, executed a covenant not to sue in favor of Mrs. Nichols, and the defendant moved to amend his answer by alleging, inter alia, the execution of the aforesaid covenant, which motion was granted over the opposition of the plaintiff. In the course of the trial evidence was adduced as to the execution of the covenant and the amount thereof. The jury was instructed that in the event it found for the plaintiff, it should find the total amount of damages to which she was entitled and then deduct therefrom the amount of the covenant.

The exceptions of the appellant are fourteen in number, raising the issues asserted as grounds for a new trial. We shall first deal with those exceptions which impute error in connection with the aforesaid covenant. Plaintiff contends that the court should not have allowed the defendant to amend his answer and set up the covenant as a defense. Additionally, she contends that the covenant was a matter for the court alone and that such should not have been submitted to the jury. Plaintiff concedes that the defendant was entitled to have the proceeds of the covenant credited on any judgment against him, and the entire argument concerns the manner in which the court should have gone about according such credit to the defendant.

While this question has not yet received the attention of this court, there is a rather complete annotation in 94 A.L.R.2d, commencing at page 348, dealing with the subject. A review of this annotation and authorities therein cited shows that the rule is almost universally followed that one tort feasor is entitled to credit for the amount paid by another tort feasor for a covenant not to sue. There is considerable conflict, however, as to the proper manner of allowing such credit, that is, whether the credit should be allowed by the jury in assessing the injured party's damages, or by the court. We are convinced from a study of these authorities that the sounder and preferable method, at least where there are no fact questions concerning the covenant for the determination of the jury, is for evidence thereabout to be excluded from the consideration of the jury, and for credit to be given by the court.

It does not follow, however, that there was error on the part of the trial judge in the instant case. While plaintiff now concedes that the defendant was entitled to credit for the amount paid for the covenant, the record does not disclose that she did so concede on the trial or at the time that defendant sought to amend his answer. If plaintiff wanted the matter handled by the court, rather than the jury, she should have offered to so stipulate and disclosed to the court all circumstances appertaining thereto. Instead, plaintiff sought to avoid the credit being given. Under the circumstances, there was no error on the part of the trial judge in allowing the amendment and submitting the issue to the jury. As pointed out by the trial judge, although styled an amended answer, the portion thereof setting up the covenant not to sue was actually a supplemental pleading and its allowance was governed by Sec. 10--610 of the Code which provides 'The plaintiff and defendant, respectively, may be allowed on motion to make a supplemental complaint, answer or reply alleging facts material to the case occurring after the former complaint, answer or reply, or of which the party was ignorant when his former pleading was made * * *.'

Plaintiff, as an employee of the American Red Cross, was entitled to Workmen's Compensation benefits. The order of the trial judge reflects that on the back of the original complaint there appeared a statement, 'that the action was brought by and with the consent of The Travelers Insurance Company to the extent of its interest as the Workmen's Compensation insurer of the plaintiff's employer pursuant to Code Sec. 72--124.' The complete trial record is not before us, but apparently Workmen's Compensation was first brought to the attention of the jury when counsel for the defendant unsuccessfully sought to elicit evidence as to the amount of benefits drawn by the plaintiff. Thereafter, plaintiff sought to show that the proceeds of the covenant not to sue, in the amount of $6,500, were paid to the carrier and that plaintiff, of course, received no part thereof. This evidence was excluded on the basis of Code Sec. 72--127, which is applicable to a third party action such as this. Said section is as follows:

'The amount of compensation paid by the employer or the amount of compensation to which the injured employee or his dependents are entitled shall not be admissible as evidence in any action brought to recover damages.'

The judge reasoned that to allow the excluded evidence would have shown that at least $6,500 in compensation benefits was paid and, accordingly, such would have been in violation of the aforesaid section. While the language of the Code section is perfectly plain, this court has had no prior occasion to consider the intent and purpose thereof. The section, however, has been considered by the Fourth Circuit Court of Appeals, in the case of Blue Ridge Rural Electric Cooperative v. Byrd, 264 F.2d 689 (1959). In that case it was held that in a third party action the district judge correctly withheld from the jury the fact that the plaintiff had received any benefits under the Workmen's Compensation Law of South Carolina. We quote the following pertinent language from the opinion,

'We, too, think the record ought to show Bouligny to be a use-plaintiff, but we still think this interest is not now relevant to the jury issue. Therefore, the evidence should be admitted before the trial judge only, without disclosure to the jury, unless controverted or unless some other basis for its admission develops in the trial, such as its pertinency to credibility of witnesses, or otherwise, as in Sprinkle v. Davis, 4 Cir., 111 F.2d 925, 931, 128 A.L.R. 1101. In the last event, the amount of the compensation must be kept from the jury, irrelevance or limited relevance of the compensation award to a present recovery should be explained to them, and the purpose of the evidence strictly confined in argument as well as sharply circumscribed in the charge. Cf. 1952 Code, § 72--127.'

The Supreme Court of North Carolina has on more than one occasion had opportunity to consider the purpose and intent of the section of its Workmen's Compensation Law which is quite similar to our Code Section 72--127. In Lovette v. Floyd, 236 N.C. 663, 73 S.E.2d 886, it was held that the statute clearly contemplated that an action against a third party must be tried on its merits as an action in tort, and that any verdict of the jury adverse to the third party was to declare the full amount of damages suffered by the employee on account of his injury, notwithstanding any award or payment of compensation to him under the provision of the Workmen's Compensation Act. See also Spivey v. Babcock & Wilcox Company, 264 N.C. 387, 141 S.E.2d 808.

Section 72--124 authorizes the carrier to bring a third party action in the name of the employee, and we think that the primary purpose and intent of Sec. 72--127 was to prevent a third party, such as the defendant here, from injecting Workmen's Compensation into a case, and the amount of compensation involved, for the sole purpose of attempting to reduce the amount of any recovery.

We are in accord with the principles enunciated in the above quotation from the opinion in the Blue Ridge case. In apparent compliance with such, the statement relative to the compensation carrier was inserted on the back of the complaint for the purpose of showing to the court that plaintiff was a use-plaintiff. Such fact could have well been made a matter of record otherwise, but had the defendant not injected the issue of Workmen's Compensation into the case, the trial judge could and should have deleted such statement before handing the complaint to the jury. The defendant, however, having brought the matter of Workmen's Compensation to the attention of the jury, we think that in fairness and to avoid any prejudice to the plaintiff, the trial judge should have allowed plaintiff to show that the compensation carrier, rather than plaintiff, received the proceeds of the covenant no to sue. We do not hold, however, that such failure on his part, standing alone, constituted reversible error.

The defendant was allowed, over objection by the plaintiff, to bring out from her on cross-examination, that her salary in the amount of $400 per month had been paid to her by her employer for a period of eleven months during her period of disability. Such, we think, was clearly error on the part of the trial judge. While admittedly there is some authority for this ruling of the trial judge, the great weight of authority is to the contrary. There is a comprehensive annotation of the subject in 7 A.L.R.3d...