VICTOR F. WHITTLESEA, DBA WHITTLESEA CHECKER TAXI, AND ORVILLE RAY FRY, APPELLANTS, v. WALTER CLAUDE FARMER, RESPONDENT.
No. 5997
Supreme Court of Nevada
May 8, 1970
469 P.2d 57
Alex. A. Garroway, of Reno, for Appellants.
Springer & Newton, of Reno, for Respondent.
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
1. The Uniform Joint Obligations Act includes tort actions (
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,
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.
ZENOFF, J., concurring:
I concur in the result but I prefer that the subject of releases and partial releases be approached in a manner that appears to me to be more realistic than that applied by the majority. Concededly, distinctions have been applied that still represent the law, but current discussions on the subject leave the impression, with me at least, that the Joint Obligations Act will be applied instead of distinguished. I would write the opinion as follows:
Walter Farmer was injured while riding as a passenger in a Whittlesea taxi driven by Orville Fry. The cab collided with an automobile operated by Floyd Lamb. Lamb was employed by the Nevada Bank of Commerce who leased the automobile
In a settlement before trial Farmer executed a document entitled, “COVENANT NOT TO EXECUTE,” with Lamb and the bank. For $10,000 Farmer agreed that he would not seek to enforce any judgment that he might obtain from the trial against Lamb or the Nevada Bank of Commerce. A jury awarded a verdict of $13,000 but credited the $10,000 already paid by Lamb and the bank against the judgment, leaving $3,000. Whittlesea and Fry appeal, claiming principally that under
1. What is the purpose of the Joint Obligations Act but to retain liability against one while releasing another in order to escape the harsh common-law rule that allows unfair escape in many situations? Drawing fine distinctions between various covenants or agreements is a toe-dance around the rule and is wasted effort when the import of the statute can be given effect simply by stating that the documents are within the statute but that the intention of the parties shall prevail.
Otherwise, as the majority does in this case, stress is placed upon the importance of labels. “Words of release are not used,” states the majority in distinguishing the covenant not to execute, yet even Land v. United States, 231 F.Supp. 883 (N.D. Okla. 1964), cited by the majority, relates that the end result of the document is to release. Thus, I draw my conclusion it is the purpose that counts, not the name tag. See also So. Pac. Co. v. Raish, 205 F.2d 389, 393-94 (9th Cir. 1953); Stephenson v. Duriron Co., 292 F.Supp. 66, 86-87 (S.C. Ohio 1968).
We are in disagreement only on the path we take to reach the same result. Release-type instruments should be declared as within the Joint Obligations statute, and that the legal effect of those instruments which are executed in connection with an incident or transaction should be construed so as to carry out the intention of the parties. This intention is to be sought in the language of the instrument when read in the light of the circumstances surrounding the transaction. McCullough v. Orcutt, 145 N.E.2d 109, 116 (Ill.App. 1957); Pellett v. Sonotone Corp., 160 P.2d 783, 787 (Cal. 1945). The only relevant inquiry equally applicable to all cases in which there has been a discharge in any form is whether there has in fact been full satisfaction. Young v. State, 455 P.2d 889 (Alaska 1969); Prosser, Torts § 46, pp. 270-273 (3rd Ed. 1964); 63 Col.L. Rev. 1142, 1148 (1963). The “express reservation” in this case should be determined in accordance with those guidelines.
2. Appellant labels the “COVENANT NOT TO EXECUTE” a complete release of all parties because it contained no reservation of rights to proceed against appellants, although its effect was to release Lamb and his employer, the
The “express” reservation is ascertained from the intention of the parties. Hicklin v. Anders, 253 P.2d 897 (Ore. 1953); Black v. Martin, 292 P. 577, 580-82 (Mont. 1930). The courts today reject the common-law rule and refuse to allow tort-feasors to escape liability even though another joint tort-feasor has settled with the injured unless the injured‘s intention to release all parties or persons is manifest. Were it otherwise, wrongdoers who do not make or share in making reparation are discharged while one willing to right the wrong and no more guilty bears the whole loss. McKenna v. Austin, 134 F.2d 659 (D.C. Cir. 1943), cited in Hansen v. Collett, 79 Nev. 159, 380 P.2d 301 (1963).
When a release or covenant contains express language reserving rights against a specific person any discussion is obviated as to whether or not the plaintiff intended to “release” all tort-feasors not parties to it. However, when this is not present the very fact that the plaintiff brought suit is evidence that he did not intend the settlement to be full satisfaction for the injury. McKenna v. Austin, supra, at 663.
In the present case it would appear from the language of the “COVENANT NOT TO EXECUTE” that the plaintiff never intended to release all parties since he agreed only not to “execute” any judgment he might obtain against Lamb or Nevada Bank of Commerce.2 He intended to get a judgment and he intended to execute the judgment. He merely covenanted not to execute it against Lamb or Nevada Bank of Commerce.
The purpose of the statute is best served by relying upon the statute, not in avoiding it. Such a statute is enacted to prevent the harshness of the common-law rule, not to defeat the intentions of the parties and work as a trap for the unwary. Model Joint Obligations Act, 9B U.L.A., at 353 (1966). When a person is liable for an injury, he should not escape his responsibility on the tenuous ground of lack of proper
The words “contribution” and “judgment” connote further action after the settlement. By the release of Lamb and the bank the action remaining could only be against Whittlesea and the cab driver. Contribution contemplates reservation of action against somebody. It seems clear that Farmer intended to proceed against the remaining parties to the lawsuit. Whittlesea, a tort-feasor, cannot complain for he gets the benefit of the settlement because he is liable only for the balance of the award after the $10,000 is credited.3
3. Although released from any further liability, Lamb‘s counsel appeared and participated in the trial. The appellant‘s objection does not state how or in what manner Lamb‘s participation prejudiced Whittlesea to such extent as to constitute reversible error. So long as Lamb continued as a party in the lawsuit, and it must be remembered that the covenant did not dismiss him as a party, he had a right to appear to protect whatever interests he thought might remain. In the absence of a showing of prejudice the objection is without merit.
Affirmed.