This action is instituted to recover damages for loss occasioned by a fire alleged to have been caused by the servant or agent of the defendant.
Motion was made to dismiss the complaint on the ground that plaintiffs executed and delivered a general release to the Home Owners' Loan Corporation which relieved defendant of any liability.
The parties agreed that the motion be decided by the court on stipulation of facts as to whether or not the action is barred by the execution and delivery of the general release.
The stipulated facts disclose that the plaintiffs were tenants on the first floor of premises which were owned by the Home Owners' Loan Corporation and managed by the defendant under a management-broker's agreement. On February 15, 1943, a fire occurred in the premises and certain personal property of the plaintiffs was damaged. The fire resulted from the use of a blow torch by one Rutkowski, while he was in the process of thawing certain pipes in the basement of the premises. It appears that the flame of the blow torch came too close to certain inflammable materials and to the ceiling of the basement.
In the "stipulation of fact" the parties differ as to the status of Rutkowski, the plaintiffs contending that Rutkowski was employed to thaw the pipes by the defendant, while the defendant maintains that Rutkowski was not its agent or servant, but was a volunteer. However, in deciding this motion the court must take the view most favorable to the plaintiffs and assume that Rutkowski was defendant's servant and that his negligence, which is imputed to defendant, caused the loss. Therefore, Rutkowski and the defendant may be treated as one.
On December 17, 1943, plaintiffs instituted suit in the New Jersey Supreme Court against the Home Owners' Loan Corporation, alleging that the latter was the owner of the premises and that it, through its agent or servant, negligently caused a fire to start in the basement, which fire damaged the personal property of plaintiffs. Thereafter, the Home Owners'
Loan Corporation had the case removed to the United States District Court and filed an answer denying liability. The matter was compromised and, in consideration of $275 paid by the Home Owners' Loan Corporation, plaintiffs executed and delivered to the Home Owners' Loan Corporation a general release. Thereafter, plaintiffs commenced the present suit against defendant.
The question for determination is whether or not a general release given by an injured party to a principal or employer is a bar to a suit against the agent or servant.
It is well established in this State that, in a case involving a joint tort, if the party injured accepts satisfaction from one of such tortfeasors, he cannot sue the other. Moss v. Cherdak , 114 N.J.L. 332 (E. & A. 1935). This principle of law is founded on a sound principle of justice; there can be but one satisfaction. Spurr v. North Hudson County Railroad Co. , 56 N.J.L. 346 (Sup. Ct. 1894); Rogers v. Cox , 66 N.J.L. 432 (Sup. Ct. 1901). In the present case, although the defendant and the Home Owners' Loan Corporation were not joint tortfeasors, the same rule applies, since the liability of the master is based on the imputed negligence of the servant and there is but one injury as in the case of a joint tort. In the case of United States Fidelity and Guaranty Co. v. Goetze , 108 N.J. Eq. 210 (Ch. 1931), Vice-Chancellor Backes held that a general release given to the master may be pleaded in bar in a suit against the servant. In 35 American Jurisprudence , § 535, we find the statement:
"According to the great weight of authority, where both master and servant are liable to a third party for a tort of the servant, a valid release of either master or servant from liability for the tort operates to release the other, although in some of the cases it is conceded that the master and servant are not, strictly speaking, 'joint tort-feasors,' in view of the fact that the master's only liability rests upon the doctrine of respondeat superior."
If the rule were otherwise, the plaintiffs, who have settled with the Home Owners' Loan Corporation, could later recover from defendant who then ...