KINCHLOE v. RETAIL CREDIT CO

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District Court of Appeal, First District, Division 1, California.

KINCHLOE v. RETAIL CREDIT CO., Inc., et al. (two cases).a1

FINK v. SAME.

Civ. 9384.

Decided: December 21, 1934

Byrne, Lamson & Jordan, of San Francisco, and Lucius Powers, Jr., of Fresno, for appellants. Francis V. Keesling and Garton D. Keyston, both of San Francisco, for respondent Retail Credit Co., Inc. Harry G. McKannay, of San Francisco, for respondent Philip Adams.

Three actions were brought against defendants Retail Credit Company, Inc., a corporation, and Philip Adams. The plaintiffs were, respectively, Newton Kinchloe, Newton M. Kinchloe, Jr., and Philo Fink. The motion of defendants for judgment on the pleadings in each case was granted and judgments entered accordingly. Each plaintiff has appealed, and the parties have stipulated that inasmuch as the same question is involved in each case, the three actions may be consolidated for the purposes of appeal; that a transcript in the case of Newton Kincheloe only need be filed in this court; and that each of said appeals may be determined upon said transcript.

It appears that the plaintiffs herein were occupants of an automobile operated by one N. Lindsay South (also referred to in the pleadings as N. Lindsey South) at a time when the same collided with an automobile alleged in the complaint to have been then owned and operated by the defendants. In their answers the respondents pleaded as a defense that each appellant had settled with and accepted satisfaction from said N. Lindsay South and his insurance carrier, Universal Automobile Insurance Company. Attached to the answers are copies of a document alleged to have been executed by each appellant, one of which copies reads as follows: “Covenant not to sue. Whereas, on or about April 13th, 1932, the undersigned, N. N. Kinchloe, of the County of Fresno, State of California, was riding in an automobile owned and driven by N. Lindsey South, and, Whereas, the said automobile was involved in an accident with an automobile driven by Philip Adams, and owned by Philip Adams &/or Retail Credit Company &/or John Doe, which said accident happened and occurred at on Highway between Tulare and Tipton, State of California, and, Whereas, the undersigned sustained certain injuries on or about his body and has suffered disability from said injuries, and, Whereas, the said N. Lindsey South and the Universal Automobile Insurance Company, desire from the undersigned an agreement and covenant not to sue them or either of them. Now, therefore, for and in consideration of the sum of $130.00, one hundred thirty dollars, the undersigned, hereby promise and agree that he will not sue or litigate any claim, or claims, of any nature or description against N. Lindsey South and the Universal Automobile Insurance Company, or either of them, for or on account of any injuries or damages which I now have, or may hereafter have, or have had on account of the injuries sustained in the accident above mentioned, and I do hereby covenant and agree to hold said N. Lindsey South and Universal Automobile Insurance Company and each of them, and all of them harmless from any liability, claims, demands, costs, charges, and expense incident to any claim or claims, arising out of said accident, or the injuries sustained by me therein. It is further agreed, that the undersigned does not in any manner or respect waive or relinquish any claim, or claims, against any other persons, firms, or corporations, than are herein specifically named, and it is further understood by me that said N. Lindsey South and the Universal Automobile Insurance Company do, and neither of them does, in any manner, or to any extent, admit any liability or responsibility for the above accident, or the consequences thereof, and that the execution of this document shall not be in any manner construed contrary to the provisions of this paragraph as herein specified. In witness whereof, I have hereunto set my hand this 17th day of August, 1932. (Signed) N. N. Kinchloe. Witness to signature: Notary certificate attached. Lucius Powers, Jr.”

The sole question presented by the appeals here is as to the construction to be placed upon the above document. If the document be a release of N. Lindsay South and Universal Automobile Insurance Company named therein, it would also operate as a bar to an action against respondents, although not named therein. Blackburn v. McCoy (Cal. App.) 37 P.(2d) 153. The reason for the rule is set forth in Bee v. Cooper, 217 Cal. 96, 17 P. (2d) 740, 742, where the Supreme Court quotes with approval from an earlier case (Chetwood v. California Nat. Bank, 113 Cal. 414, 45 P. 704) as follows: “‘While plaintiff may sue one or all of joint tort feasors, and while he may maintain separate actions against them, and cause separate judgments to be entered in such actions, he can have but one satisfaction. Once paid for the injury he has suffered, by any one of the joint tort feasors, his right to proceed further against the others is at an end. Where several joint tort feasors have been sued in a single action, a retraxit of the cause of action in favor of one of them operates to release them all. The reason is quite obvious. By his withdrawal, plaintiff announces that he has received satisfaction for the injury complained of, and it would be unjust that he should be allowed double payment for the single wrong. It matters not either whether the payment made was in a large or in a small amount. If it be accepted in satisfaction of the cause of action against the one, it is in law, a satisfaction of the claim against them all.”’ In the same case it is held that a purported reservation of plaintiff's rights against the remaining joint tort-feasors is nugatory and of no effect, being repugnant to the legal effect and operation of the release itself. If, on the other hand, the document is merely a covenant not to sue, then the cause of action is not thereby extinguished. If the covenantor sues the covenantee and other joint tort-feasors, then the covenantee may not plead the agreement not to sue as a defense, but must resort to his suit for breach of covenant, and the other joint tort-feasors cannot invoke the covenant as a bar to the action against them. Of course, in the case of a sole tort-feasor, a covenant not to sue is considered in law a discharge and a bar to an action against such sole tort-feasor. This is to avoid circuity of action. Hawber v. Raley, 92 Cal. App. 701, 268 P. 943.

This court, in construing the document in question, must if possible ascertain and give effect to the mutual intention of the parties. Civ. Code, § 1636. The appellant here promises and agrees “that he will not sue or litigate any claim or claims” against South and his insurance carrier, and also that he will hold them “harmless from any liability, claims, demands,” etc., arising out of the accident. If appellant is obligated to hold South and his insurance carrier harmless in the particulars referred to, he certainly cannot be said to still have intact a claim or demand against these parties. This obligation to hold them harmless is inconsistent with the continued existence of his claim or demand. By his agreement to “hold harmless” he concedes he has no further claims or demand against the parties to the agreement, or in other words that he has received satisfaction for his injury and releases them from further responsibility. Having so released South and the insurance carrier, the other tort-feasors are also released. That this was the intention of the parties is made still more clear by the concluding paragraph of the document. Thereby appellant stipulates that he “does not in any manner or respect waive or relinquish any claim, or claims against any other persons, firms, or corporations, than are herein specifically named.” (Italics ours.) This language implies a reservation from that which has gone before. It forces the conclusion that it was the intention of the parties that the language which preceded it should constitute a waiver or relinquishment of appellant's claim against certain designated individuals, and that the parties intended to make it definite and certain that none other were to be released. That the agreement was not to release any other persons than those specifically named, implies that the parties intended by the preceding language to release those specifically named, and that they so construed that preceding language. If it was not the intention of the parties to release those “specifically named,” there is no purpose served by the reservation. It is said in State of Arkansas v. Blumenthal, 133 Ark. 584, 203 S. W. 36, 37, L. R. A. 1918E, 482, that “the word ‘other,’ as defined by the Century Dictionary, means a different person or thing from the one in view or under consideration or just specified; additional.”

It is our conclusion that the document in question constitutes a release, and not a mere covenant not to sue, and operates as an extinguishment of the cause of action of each of the appellants.

This case comes before the court in a somewhat unusual form. Respondents, defendants below, set up in their answers the documents relied upon by them as a bar to the actions. The defendants then moved for a judgment on the pleadings. Ordinarily on such a motion by defendants, the court looks only to the complaint. Bates v. Escondido U. H. School Dist., 133 Cal. App. 725, 24 P.(2d) 884. Respondents on October 16, 1933, each filed an amendment to the answers herein, by which amendments the copies of the agreements were first attached to or set forth in any pleading in the case. Such matter in the answer is deemed controverted by plaintiff. Section 462, Code Civ. Proc. Notwithstanding this, a motion for judgment on the pleadings was heard by the court on October 19, 1933, and the motion was granted on October 26, 1933. Sufficient time had not elapsed to warrant a conclusion that plaintiff admitted the genuineness and due execution of the instrument. Code Civ. Proc. § 448. Appellants have not challenged the authority of the trial court to render judgment on the pleadings on the state of the record, and by their appearance in response to the action and their failure to make any objection in the trial court or on appeal, they must be held to have conceded the due execution of the agreements.

The judgment in each of the actions, so consolidated, is affirmed.

HELD, Justice pro tem.

We concur: TYLER, P. J.; CASHIN, J.