Court Opinion

ID: 9680566
Source: CourtListenerOpinion
Date Created: 2023-08-24 07:33:58.253556+00
Date Added: 2024-06-11T18:17:29.357164
License: Public Domain

SMITH, Justice
(dissenting).
I respectfully dissent. The Texas Contribution Act dealing with joint tortfeasors who are co-defendants was not enacted so that one joint tortfeasor could profit by his own wrong, or to put it another way, so that a tortfeasor could deprive a plaintiff of one-half of his judgment.
The Court has chosen to follow the case of Gattegno v. The Parisian, 53 S.W.2d 1005 (Tex.Com.App.1932), and an article by Hodges, Contribution and Indemnity Among Tortfeasors, 26 Texas Law Review 150, thereby completely ignoring the intention of the Legislature when it adopted Article 2212, The Texas Contribution Act. That Act reads as follows:
“Any person against whom, with one or more others, a judgment is rendered in any suit on an action arising out of, or based on tort, except in causes wherein the right of contribution or of indemnity, or of recovery, over, by and between the defendants is given by statute or exists under the common law, shall, upon payment of said judgment, have a right of action against his co-defendant or co-defendants and may recover from each a sum equal to the proportion of all of the defendants named in said judgment rendered to the whole amount of said judgment. If any of said persons co-defendant be insolvent, then recovery may be had in proportion as such defendant or defendants are not insolvent; and the right of recovery over against such insolvent defendant or defendants in judgment shall exist in favor of each *775defendant in judgment in proportion as he has been caused to pay by reason of such insolvency.” [Emphasis added.]
It should be noted that this act provides for contribution upon payment of the judgment, the tortfeasor then has a right of action against his co-defendant or co-defendants and may recover from each a sum equal to the proportion of all the defendants named in said judgment rendered to the whole amount of said judgment. If one defendant is insolvent, the burden of contribution is then between other joint tort-feasors who are not insolvent.
The Texas Act requires that the injured party receive or be paid his full satisfaction of the judgment before any joint tortfeasor is entitled to contribution from another tortfeasor.
The italicized portion set forth above is the only method available in Texas under the provisions of Article 2212, supra. I say this with due deference to the opinion of Professor Hodges and the statements contained in Gattegno. If there is to be any contribution among joint tortfeasors, the judgment must be paid, and the rule of pro tanto satisfaction is applied. If plaintiff has received any settlement, then that amount is deducted from the amount the jury determines to be full satisfaction, and judgment is rendered for the balance. The pro tanto rule has been adopted in Texas as the method to follow in determining the amount that will give full satisfaction to the injured plaintiff. No money was paid to plaintiffs for the covenant not to sue. When this rule is applied there is no question but that plaintiffs are entitled to judgment against Palestine Contractors in the amount of $26,500.
Under the settlement practice in Texas, where a substantial sum of money is involved for settlement purposes with one joint tortfeasor, an indemnity agreement is usually included in the covenant not to sue. This Court points out in the present case that Palestine Contractors desires to reach the same result without such indemnity agreement where plaintiffs covenanted not to sue the settling defendant, directly or indirectly.
It is my position that no right of contribution exists until Palestine Contractors pays the full damages found by the jury in the amount of $26,500. A joint tortfeasor has no right to any contribution until the judgment has been paid, and Palestine Contractors cannot have any contribution from a joint tortfeasor until the judgment is paid. The Gattegno case violates the principal rule of pro tanto satisfaction, when its effect is to reduce the judgment in the proportionate amount of settlement received by the injured plaintiff.
In the present case a third party defendant was brought into this case by virtue of the suit filed against Palestine. Palestine knew Conoway was insolvent so there was no statutory provision for Palestine to obtain contribution from him. This principle was announced in Lottman v. Cuilla (Tex.Com.App.1926), 288 S.W. 123, and reiterated in Bradshaw v. Baylor University, 126 Tex. 99, 84 S.W.2d 703 (1935).
At 13 Tex.Jur.2d Sec. 26, p. 712, it is said:
“The judgment in an action for contribution must be several, not joint, and should provide for contribution from all the solvent obligors. * * *
“Where contribution among joint tortfeasors is dependent on the right conferred by statute, the judgment should make contribution conditional on full payment of the judgment in favor of the injured party in the principal action.” [Emphasis added.]
It was a settled principle of law prior to the enactment of Article 2212, supra, that one joint tortfeasor against whom a recovery was had could not compel others, who were equally at fault with him in the commission of the tort, to contribute to *776the satisfaction of the judgment rendered against him. When Article 2212, supra, was enacted, it was to give relief among themselves to joint tortfeasors who are co-defendants. The statute did not concern the rights of the injured plaintiff who retained all the rights given to an injured person under the common law. An injured plaintiff could sue all joint tortfeasors or elect to sue only one. It did not require a covenant not to sue from the other joint tortfeasors. The joint tortfeasor who was sued could not implead the other joint tortfeasors as now can be done under the provisions of Article 2212.
In this case, plaintiffs exercised their common law right to sue one joint tortfea-sor, which they had a right to do in the exercise of their common law rights without reference to giving the insolvent other joint tortfeasor a covenant not to sue. After Palestine Contractors was sued, it exercised a right to implead the other joint tortfeasor under Article 2212, supra, and in so doing it brought in a joint tort-feasor (Conoway), who was insolvent. The impleaded joint tortfeasor was one from whom Palestine Contractors could not enforce contribution under the plain terms of Article 2212. The exact status of Palestine Contractors, under Article 2212, supra, was the same as if it were a sole defendant insofar as securing any contribution for the damages which would fully compensate plaintiffs for the injuries sustained as found by the jury and for which Palestine Contractors was solely liable to them under Article 2212, supra. Although, at the time Palestine Contractors impleaded the insolvent joint tortfeasor Conoway it knew he was insolvent, there was nothing plaintiffs could do to prevent Palestine Contractors from bringing him into this suit. The contribution statute does not say such an insolvent joint tortfeasor cannot be brought into the cause, but there can be no contribution from him, and the burden for payment of damages is spread evenly among the remaining joint tort-feasors. In this case, of course, Palestine Contractors is the only other joint tort-feasor. Palestine Contractors claims and this Court has agreed that it is entitled to a fifty per cent (50%) reduction of the damages — a right it never had under Article 2212, supra, with or without the covenant not to sue. The effect of this is to shift the burden of contribution to plaintiffs. There is nothing just or fair in shifting the burden of contribution from a joint tortfeasor where it rightfully belongs to an innocent plaintiff, who, under the law, is, and should be, entitled to full compensation for injuries sustained by reason of the wrong committed by the tortfeasors. Such an unreasonable and unjust result should not receive the approval of the Texas courts. There is no reason why the result reached in this case should be the law of Texas. In fact, it has never been declared the law of Texas until the decision in this case was announced.
I reiterate that the plaintiffs were powerless to prevent the insolvent joint tort-feasor from being brought into the cause, yet the covenant not to sue joint tort-feasor Conoway has been interpreted by this Court in such manner as to put Palestine Contractors in a better position than it was under the contribution law because under it Palestine Contractors never had any right of contribution from the insolvent joint tortfeasor Conoway.
In my judgment the Gattegno case, supra, is certainly distinguishable from the case at bar because there the evidence showed Muir was a solvent joint tortfeasor, who could have been found liable and subject to contribution with the other joint tort-feasor. In Gattegno, therefore, the intent of the parties was plainly expressed that Muir should be released from all liability. It is one thing to give effect to the expressed intent of the parties, as in Gattegno. It is another and a totally different thing to give an instrument an effect which is contrary to the expressed intent of the parties, which is what the Court has done in the case at bar. It further appears the release in Gattegno was equivalent to an *777indemnity on the part of plaintiff in favor of Muir. In this construction it is further distinguishable from the present case. Moreover, such must be the explanation why the Bench and Bar have not heretofore considered the case authoritative where a plaintiff has executed a covenant not to sue. There have been too many cases decided in the appellate courts, including the Supreme Court in the Bradshaw case, supra, upholding a covenant not to sue one joint tortfeasor in the nearly thirty years elapsing from the time the Gattegno case was handed down.
Palestine Contractors has no right of contribution under the Texas Contribution Act from anyone, and, in particular, contribution from plaintiffs. Palestine Contractors has no right to complain of the reformation of the judgment by the Court of Civil Appeals that required Palestine Contractors to pay the judgment before it was entitled to seek contribution. The Court of Civil Appeals ruled in accordance with the holding of this Court in Strakos v. Gehring, 360 S.W.2d 787 (1962), and in accordance with the provisions of Article 2212, supra. In this case plaintiffs are entitled to the whole loaf, $26,500.00, rather than a one-half loaf, $13,250.00.
I agree with the Court that the outcome of this particular case is important. However, I disagree with the result reached. Should the decision of this case stand, the use of the covenant not to sue is meaningless in cases to protect an injured plaintiff where there are joint tortfeasors, because the injured plaintiff is the person making a contribution to the wrongdoer rather than securing full satisfaction for the injury despite the fact the Texas Contribution law provides only for contribution between co-defendants. The result of this decision is a judicial change of public policy from one encouraging settlement of lawsuits. This change is not justified from any standpoint.
The use of a covenant not to sue with ' reservation to sue another joint tortfeasor has been a part of the Texas jurisprudence even prior to the decision in Robertson v. Trammell, 98 Tex. 364, 83 S.W. 1098 (1904), and has been used consistently as evidenced by the many cases found in the law books. Moreover, a covenant not toi sue has been used to work out settlements between plaintiffs and defendants that could not have been otherwise worked out. The injured plaintiff, without fear of losing the right for full compensation could then proceed to suit with the non-settling joint tortfeasor. But now the public policy, as announced by this Court in the case at bar, is that the right of contribution among all joint tortfeasors is paramount to the prior public policy of encouraging settlements. The inference seems to be that under the prior rule, if there was a settlement, it was by collusion between the settling parties.
There is no provision in Article 2212, supra, which permits a percentage reduction of damages before payment of the damages which a jury has awarded to an injured plaintiff. The act contains no provision for contribution between joint tortfeasors as a class.
The Baylor University case, supra, stands for the proposition that a defendant joint tortfeasor may implead a joint tortfeasor into the case so long as it does not delay or inconvenience plaintiff. Palestine Contractors did just that. Since plaintiff could not stop Palestine Contractors, under the law, from the impleading of Conoway into the case, it could not be said there was a breach of covenant either directly or indirectly, Conoway got into the case at bar by reason of the direct action on the part of Palestine Contractors, which presently appears to have been a profitable mové, because as a non-settling tortfeasor who had not paid to the injured plaintiff a thin dime, it has now secured what is the equivalent of $13,250 from the injured plaintiff. I feel that the law as declared by this Court in Riley v. Industrial Finance Service Co., 157 Tex. 306, 302 S.W.2d 652, 655 (1957), adequately protects Palestine Contractors, in that it eliminates any possi*778bility of unjust enrichment or double recovery. In Riley, this Court said:
“The rule of law in this state is that a plaintiff having- been injured by the same set of circumstances sustains but one injury and may receive but one satisfaction for such injury, although more than one person may contribute to such injury. Hunt v. Ziegler, Tex. Civ.App.1925, 271 S.W. 936, 938(4, 5), affirmed Tex.Com.App., 280 S.W. 546; Bradshaw v. Baylor University, 1935, 126 Tex. 99, 84 S.W.2d 703.
“It is also the general rule that a valid release of one or more joint tort-feasors by the injured party will release all other tort-feasors contributing to the wrong unless the language of the release is such as to show the intention of the parties thereto that the tort-feasors not parties to the release are not discharged, but that the injured party is reserving his cause of action as to such unreleased wrongdoers. Restatement of the Law, Torts, vol. 4, p. 460, 462, Sec. 885; City of Coleman v. Kenley, Tex. Civ.App. 1943, 168 S.W.2d 926, wr. ref. w. o. m.; Eckel v. First Nat. Bank of Fort Worth, Tex.Civ.App.1942, 165 S.W .2d 776, 779, ref.; Harper and James, The Law of Torts, p. 708, Sec. 10.1 ; Young v. Anderson, 33 Idaho 522, 196 P. 193, 50 A.L.R. 1056, 1072; 148 A.L.R. 1270, 1281; 36 Tex.Jur. 823, et seq.”
Is this Court now overruling all of the previous law that involves a covenant not to sue? If so, on what ground? It has heretofore been pointed out there is no contribution under Article 2212, supra, except among joint tortfeasors and then only after payment of judgment. The rule establishing the amount paid by one joint tortfeasor in consideration of a covenant not to sue is a pro tanto satisfaction of judgment, and is the one that was adopted in Baylor University v. Bradshaw, (Austin Tex.Civ.App., 1932) 52 S.W.2d 1094, and the manner of application applied in Bradshaw v. Baylor University, supra. It is thusly stated in an annotation on the subject, 104 A.L.R. 931, 932 as follows:
“ * * * it has, accordingly, been held that the amount paid by one tort-feasor to an injured person in consideration of a covenant not to sue (or a release not effective as a full release of the other tort-feasor) is to be regarded as a satisfaction pro tanto as to another or other tort-feasors liable for the same injury or wrong, so as to reduce the amount of damages recoverable from such other tort-feasor or tort-feasors.” [Emphasis added.]
In Bradshaw v. Baylor University, supra, Bradshaw was paid $6,500 for a covenant not to sue by the railroad company. When Bradshaw brought suit against Baylor University, it resulted in the jury awarding Bradshaw $6,500 damages, which would compensate him down to the date of trial. This was the exact amount he had been paid by the railroad company. In considering the narrow question, this Court said:
“ * * * What right has Bradshaw, who has been fully compensated for his injuries, to recover further damages ? The only answer which accords with justice and the authorities is that he has none. The jury found that $6,500, if paid at the date of trial, would compensate him for the injuries sustained. He had theretofore been paid that exact amount. It is a rule of general acceptation that an injured party is entitled to but one satisfaction for the injuries sustained by him. That rule is in no sense modified by the circumstance that more than one wrongdoer contributed to bring about his injuries.” [Emphasis added.]
The jury in that case had found both Baylor and the railroad company guilty of active negligence.
In the present case, there was no money paid for the covenant not to sue by Cono-*779way. In the exercise of plaintiffs’ rights under the common law to bring suit against Palestine Contractors, that reservation in the covenant not to sue is equivalent to no consideration because it was a right conferred by law. The delivery of the covenant not to sue Conoway had no consideration because such a right not to sue all joint tortfeasors is again a right to bring suit without all joint tortfeasors under the common law. The covenant not to sue specifically provided it was not a release. Article 2212, supra, speaks only of joint tortfeasors, and the law confers on joint tortfeasors the right of contribution between themselves if the joint tortfeasors are of the class of tortfeasors who are entitled to contribution. Since Conoway was not of a class of joint tortfeasors from whom Palestine Contractors had any right to receive contribution, it was not sufficient to merely show Conoway was a joint tort-feasor, proof must also be made that Cono-way was solvent. The proof in this case shows Conoway was insolvent. Thus, there is no consideration which supports any right of Palestine Contractors for contribution.
If it had been the intention of plaintiffs to release Conoway of all damages, it could have been plainly stated in the covenant not to sue as was done in the Gatteg-no case, where it was plainly stated: “ * * Earnest does release and discharge the said John T. Muir from any claims or causes of action * * * growing out of the erection and completion of said partition.” The only proof Conoway had to give to the Department of Public Safety was the covenant not to sue Conoway executed by plaintiffs. The covenant not to sue is clearly one showing plaintiffs were looking only to Palestine Contractors for full compensation for the damages suffered by plaintiffs by reason of the collision. If it had been intended to give Conoway a full release, there would have been no difficulty in putting such release into the covenant not to sue. There is absolutely no consideration flowing to plaintiffs by reason of the covenant not to sue. As a matter of law, Palestine Contractors has no right of contribution from anyone in the present case.
I submit that all disputed fact issues have been found in favor of plaintiffs by a presumed finding in favor of plaintiffs when the judgment rendered by the trial court awarded plaintiffs judgment against Palestine Contractors in the amount of $26,500 and in favor of Palestine Contractors against Conoway for one-half of that amount. Palestine Contractors is required under Article 2212, supra, to pay the sum of the judgment to plaintiffs before Palestine Contractors has any right to contribution. Contribution was not involved in the Gattegno case. There two joint tortfeasors were parties defendant in that suit, and Muir had a release from the plaintiff; so, when the jury found the damages, the plaintiff had there released fifty per cent of the damages to Muir, if he was found guilty of active negligence. But if Muir was guilty of passive negligence, any money paid to plaintiff would be deducted from the judgment so that plaintiff could not receive a total amount that exceeded the sum the jury awarded for full compensation. If Muir was guilty of only passive negligence, the defendants were not in pari delicto, so there could be no contribution between the two joint tort-feasors.
Palestine Contractors had a fair trial and the financial responsibility of Conoway was a matter of proper proof. Palestine Contractors should be relegated to seek contribution from Conoway only after the judgment in full has been paid to plaintiffs. Plaintiffs did not agree to indemnify Con-oway under the covenant not to sue him. Palestine Contractors brought Conoway into this suit. Plaintiffs have not breached the covenant not to sue. Palestine Contractors is in the position of the wrongdoer, and certainly is not permitted, under the law, to profit from its wrong. But that is exactly what happened when this Cqurt reduced the judgment by fifty per cent and *780thus deprived plaintiffs of full satisfaction to which they are entitled under the law.
I have been unable to find any Texas case which supports the line of reasoning in the Gattegno case. As a matter of fact, I believe Gattegno was repudiated by the Court of Civil Appeals and this Court in the Bradshaw case.
Chief Justice McClendon, for the Court of Civil Appeals in the Bradshaw case, said in regard to Article 2212:
“ * * * modifies the rule against contribution among joint tort-feasors, but to a very limited extent. This article manifests great care in its wording, and evidences a thorough familiarity of its authors with the subject dealt with. By express language its operation is limited to cases in which a judgment has been rendered against tzvo or more joint tort-feasors, among whom no right of indemnity or contribution otherwise exists, and one of them has discharged the judgment. The right of contribution is expressly limited to codefendants, regardless of whether others, not sued, might also be liable. The caption of the original act (Laws 1917, p. 360, c. 152), of unusual brevity and marked clarity and precision, carries the same limitation. It reads: ‘An Act granting the right of contribution among defendants in judgment in cases arising out of tort and declaring an emergency.’
“ ‘ * * * There is no reason to hold thé Legislature meant to exclude from the benefits of the statute those cases where, as here, the plaintiff did not elect to sue all the tort-feasors; but every consideration impels us to hold that the defendant sued may, and should be allowed to, bring in other wrongdoers, provided he does so in such way as not to delay or otherwise prejudice the plaintiff’s case.’
“ * * * To hold that the statute ■entirely abrogates the common-law rule against contribution among joint tort-feasors appears to the writer as ‘a clear instance of unwarranted interference with legislative prerogative’ (Speer on Law of Special Issues, p. 419), and this, not in a matter of mere court proce-ure, but upon a subject of substantive law dealing with an immemorially recognized principle of public policy. The decision, if limited to the exact question before the court, would extend the right of a defendant beyond the express limitations of the statute, no further than to authorize the impleading of one joint tort-feasor by a defendant joint tort-feasor, where this may be done without delay or inconvenience to plaintiff; and we would be loath to give the opinion further authoritative effect.” [Emphasis added.]
Again I contend that the rule announced by this Court speaking through Mr. Justice Griffin in the Riley case adequately protects such joint tortfeasors as Palestine Contractors. In the Riley case, 302 S.W.2d at p. 656, it was said that:
“It is the settled rule of law that any judgment rendered against one or all of the defendants must be credited with the amount of money received by plaintiffs in their settlements with other original defendants.” [Emphasis added.]
In speaking of plaintiffs’ cause of action against the joint tortfeasors, this Court in the Riley case said:
“There being but one injury for which plaintiffs can receive but one satisfaction, defendants are entitled to have credited on the judgment against them all sums paid by others also liable to plaintiffs for the damages resulting from the common acts of all tort-feas-ors.” [Emphasis added.]
In support of this holding we cited with approval the cases of Eckel v. First Nat. Bank of Fort Worth, Tex.Civ.App. (1942), 165 S.W.2d 776, 779, wr. ref.; McMullen *781v. Coleman, Tex.Civ.App. (1940), 135 S.W.2d 776, 778, no writ hist.; City of Coleman v. Kenley, Tex.Civ.App. (1943), 168 S.W.2d 926, wr. ref., w.o.m.; and City of Coleman v. Smith, Tex.Civ.App. (1943), 168 S.W.2d 936, wr. ref.
To apply Article 2212, supra, any other way would be to prevent a plaintiff from recovering his entire damages from the joint tortfeasors. This is true, because Article 2212 does not attempt to legislate as to plaintiff’s cause of action, but legislates solely as to the rights of defendants among themselves.
How this Court can take the Gattegno case and the article by the distinguished Professor Hodges as guides in solving the present case is beyond my comprehension.
I cannot believe that Professor Hodges’ article can be construed to mean that in every case where a covenant not to sue has been entered into between the plaintiff and one joint tortfeasor, the other tortfeasor is entitled to make the plaintiff pay one-half of the judgment.
Professor Hodges begins his article with an illustration which demonstrates that his article is concerned primarily with the plight of “wrongdoers” — tortfeasors—in the adjustment of their affairs.
Professor Hodges, in the beginning of his article says:
“Historically neither the common law courts nor the legislative bodies have been sympathetic with the plight of wrongdoers in the adjustment of their affairs. Prosser clearly illustrates this with his recital of the Highwayman’s case, [Everet v. Williams, Ex. (1725), 9 L.Q.Rev. 197 (1893)] where one highway robber sued another robber for an accounting of plunder obtained by a joint venture. The court dismissed the bill with costs adjudged against plaintiff’s counsel, held plaintiff’s solicitors in contempt of court, fined one 50£ deported the other, and had both plaintiff and defendant beheaded. As Prosser says: ‘In short, contribution was not allowed.’ ”
Mr. and Mrs. Perkins, plaintiffs in this case, surely should not be classed as robbers merely because they signed a covenant not to sue Conoway, and are now endeavoring to collect a judgment awarded them by a jury and a trial judge. They have not been beheaded, but they have been relieved of their wallets, that is, fifty per cent of their money judgment.
It has been argued that collusion would be easy if plaintiffs are allowed to collect their full judgment against the remaining tortfeasor or tortfeasors. There is no basis for such argument. No more so than if it were argued that tortfeasors could get together under the present decision, one of the tortfeasors settle with the plaintiff for $5,000, and thereafter, the plaintiff’s judgment against the other for $100,000 is cut in half because of the settlement and agreement not to sue.
The Court in its opinion recognizes that the Uniform Contribution Act runs counter to the Texas Contribution Statute, Article 2212, supra, but the effect of the decision is to adopt the philosophy of the Uniform Act, by allowing contribution from the plaintiff in the sum of 50% of his judgment. The Court quotes Prosser wherein it was said that there has been much dissatisfaction with the holding (in Texas) that a defendant relieved of liability by a covenant not to sue is not released from contribution. I would like to ask who is dissatisfied? Why should a tortfeasor be relieved of bringing another tortfeasor into the case, or after payment of the judgment, filing a suit against the other tortfeasor?
I would affirm the judgment of the Court of Civil Appeals.