Smith v. Falke

• Decision Date: 24 July 1985
• Docket Number: No. 54848,54848
• Citation: 474 So.2d 1044
• Parties: Mrs. Mary SMITH v. Daniel J. FALKE, et al.
• Court: Mississippi Supreme Court

Page 1044

474 So.2d 1044

Mrs. Mary SMITH v. Daniel J. FALKE, et al.

No. 54848.

Supreme Court of Mississippi.

July 24, 1985.

Rehearing Denied Sept. 11, 1985.

Thomas E. Vaughn, Hopkins, Logan, Vaughn & Anderson, Gulfport, for appellant.

Harry R. Allen, Billy W. Hood, Bryan, Nelson, Allen, Schroeder & Cobb, Gulfport, for appellees.

Before WALKER, P.J., and PRATHER and SULLIVAN, JJ.

PRATHER, Justice, for the Court

A general release of one joint tort-feasor gives rise to a parol evidence question in this personal injury action in the Harrison County Circuit Court. Mary Smith, plaintiff, charged Daniel J. Falke and Guy Gunter, minor drivers of the two vehicles following her car, with negligent driving. Mary Smith executed a release to Guy Gunter and his parents which contained language releasing "all others whatsoever" from liability in the accident. The trial court sustained the defendant Falke's motion to dismiss and overruled the plaintiff's motion for voluntary non-suit after taking the dismissal motion under advisement. From this adverse ruling, Smith appeals.

The appellant Smith assigns as error the trial court's ruling:

(1) In sustaining the motion to dismiss:

(a) In not permitting parol evidence to establish the intent of appellant in executing the release; and

(b) In holding the Gunter release also released Falke;

(c) In not holding the release was a mutual mistake from which the appellant is entitled to a reformation, or relief, as all parties considered it a covenant not to sue or a restricted release.

(2) In not granting the plaintiff a voluntary non-suit.

I.

On December 7, 1978 while appellant Mary Smith's vehicle was stopped in traffic, it was struck from behind. Immediately following her vehicle was a car driven by appellee Daniel J. Falke and following the Falke vehicle was a third car driven by Guy Gunter.

Smith filed suit on April 22, 1980 against both drivers, Gunter and Falke, and their parents, but agreed to release Guy Gunter and parents upon payment of their maximum liability insurance coverage of $10,000. A check in the amount of $10,000 from Gunter was received by Smith's attorney and negotiated on about March 16, 1982.

Although the record reflects that all parties thought that a release was executed by Smith at the time the check was negotiated, the original release was not found. The insurance company sent a new release to Smith's attorney's office for execution. On September 21, 1982, an associate attorney, employed in Smith's attorney's office witnessed Mrs. Mary Smith's signature, assuming that the release was a duplicate releasing only Guy R. Gunter.

Using the September 21, 1982 release as a bar to recovery against them, the defendant Daniel Falke and his parents filed a motion to dismiss in the present lawsuit. The undisputed proof was that Smith and the insurance company only intended release of Guy Gunter and his parents. However, the trial court's order recited that it found the release of September 21, 1985 to be clear and unambiguous, not subject to parol evidence and would not consider evidence other than the release itself.

After hearing argument on the above motion to dismiss, and taking the matter under advisement overnight, the plaintiff Smith moved for a voluntary non-suit before the court announced its decision. However, the trial court denied the motion for non-suit as being untimely made.

II.

A.

The principle question assigned here is whether the trial court erred in dismissing the appellant's suit against one tort-feasor upon the general release of a joint tort-feasor "and all other persons." The controlling statute on this question is Miss.Code Ann. Sec. 85-5-1, which in pertinent part states:

In all cases of joint or joint and several indebtedness, the creditor may settle or compromise with and release any one or more of such debtors; and the settlement or release shall not affect the right or remedy of the creditor against the other debtors for the amount remaining due and unpaid, and shall not operate to release any of the others of the said debtors;

The majority of jurisdictions permit the release of one tort-feasor without the release of others when that is the intention of the parties. Mississippi jurisprudence follows the majority rule that for a release of one joint tort-feasor to release other joint tort-feasors, the satisfaction received by injured party must be intended to be and must be accepted as full and total compensation for damages sustained. Medley v. Webb, 288 So.2d 846 (Miss.1974); Employers Mutual Casualty Co. v. Meggs, 229 So.2d 823 (Miss.1969); Burt v. Duckworth, 206 So.2d 850 (Miss.1968); Lee v. Wiley Buntin Adjuster, Inc., 204 So.2d 479 (Miss.1967); Weldon v. Lehmann, 224 Miss. 600, 84 So.2d 796 (1956); See 66 Am. Jur.2d Release, Sec. 37. A recognized treatise of Professor William L. Prosser, sets forth the rationale of both rules above in stating:

The only desirable rule would seem to be that a plaintiff should never be compelled to surrender his cause of action against any wrongdoer unless he has intentionally done so, or unless he has received such full compensation that he is no longer entitled to maintain it.... The requirement that an express reservation of rights against other tortfeasors be asserted in the release itself seems unfortunate, when releases frequently are signed by plaintiffs ignorant of the law and without legal advice. If it is clear that the satisfaction received was understood to be only partial, it should not discharge the claim against the second tortfeasor....

Prosser, Law of Torts, Sec. 301 (4th.Ed. 1971). (Emphasis added).

In the instant case presumably two releases were executed. The first release, if executed when the check was negotiated, was lost. Upon request of the insurance company, a second release was executed some six months later. It was presumed to be identical to the first. However, the second release discharged Guy R. Gunter "and all others whatsoever" from liability of the accident of December 7, 1978. Mrs. Smith denied that she intended to release Falke or that she had full satisfaction of her damage.

B.

To show her intent and partial satisfaction, Mrs. Smith offered parol evidence. However, the court did not consider it.

The Mississippi parol evidence rule provides that when the language of a contract is clear and unambiguous, parol testimony is inadmissible to contradict the written language. See, Valley Mills Division of Merchants Co. v. Southeastern Hatcheries of Mississippi, Inc., 245 Miss. 71, 145 So.2d 698 (1962).

In Byrd v. Rees, 251 Miss. 876, 171 So.2d 864 (1965), this Court set forth the same rule above but allowed extrinsic evidence to clear up an ambiguity and explain the language: "the plan of the operation heretofore in effect." There the Court stated:

The parol evidence rule does not preclude the reception of parol evidence with reference to a matter evidenced by the writing, where such evidence relates to a matter in pais, or is of such a character that it does not tend to vary or contradict the written instrument.

Id. 171 So.2d at 867.

In the case sub judice, appellant argues that Daniel J. Falke, a stranger to the release contract between Gunter and Smith, should not benefit from its terms. Thus the issue before this Court is whether the Court should compel a construction of the settlement instrument that was not intended by any of the parties to the instrument to benefit a wrongdoer who was a stranger to the instrument and paid no consideration for it.

This Court has adopted the general rule that the parol evidence rule applies only to controversies between parties to the agreement. National Cash Register Co. v. Webb, 194 Miss. 626, 11 So.2d 205 (1942). And while National Cash Register dealt with a contract in general and not a release instrument, the effect would be the same, and Mississippi would appear to have adopted the majority rule stated by A.L.R. Annot., 13 A.L.R. 3rd 313 (1967) at Sec. 2(b), which states:

The rule that the parol evidence rule does not...