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Breen v. Peck

Decided: December 1, 1958.

JOHN J. BREEN, PLAINTIFF-RESPONDENT,
v.
HARRY G. PECK, DEFENDANT-APPELLANT



For affirmance -- Chief Justice Weintraub, and Justices Heher, Wachenfeld, Burling, Jacobs, Francis and Proctor. For reversal -- None. The opinion of the court was delivered by Jacobs, J. Heher, J. (concurring in affirmance). Heher, J., concurring in result.

Jacobs

The Appellate Division, in an opinion by Judge Clapp reported at 48 N.J. Super. 160 (1957), reversed the action of the Bergen County Court which had granted the defendant's motion for summary judgment and had dismissed the plaintiff's complaint. We certified on the plaintiff's application under R.R. 1:10-2. See 26 N.J. 306 (1958).

In March 1952 Norman Levine authorized the plaintiff John J. Breen, a real estate broker trading as Bankers Realty Co., to obtain a purchaser for his home at 1032 Eastlawn Drive, Teaneck, New Jersey. The plaintiff advertised the property for sale and obtained prospective purchasers, including the defendant Harry G. Peck. Under date of March 24, 1952 the defendant submitted an offer of $30,000 which Levine rejected as unsatisfactory. In May 1953 Levine and the defendant arranged between themselves for the sale of the property for $29,000 and in July 1953 the property was conveyed by Levine to the defendant. Thereafter the plaintiff sued Levine for brokerage commission of $1,450 representing 5% of the purchase price of $29,000. After extensive litigation (Breen v. Levine, 32 N.J. Super. 525 (App. Div. 1954)) the plaintiff and Levine settled their controversy; Levine paid $900 to the plaintiff, who in March 1956 executed a general release under seal which discharged "Norman Levine, his heirs, executors, administrators and assigns" from all claims and particularly from any claim by the plaintiff growing out of the sale of the property at 1032 Eastlawn Drive or for any real estate commissions. The plaintiff seemingly acknowledges that the release was intended to free Levine from whatever claims the

plaintiff may have had against him, and in any event no further recovery of any kind is being sought by the plaintiff against Levine.

In 1957 the plaintiff filed his complaint in the Bergen County Court in which he sought compensatory and punitive damages from the defendant Peck. In his first count he alleged that the defendant had maliciously interfered with his right to earn a brokerage commission by representing to the plaintiff that he was no longer interested in the property, by dealing directly with Levine, by inducing Levine to drop the plaintiff as a broker, and by enticing Levine from the plaintiff as a client. The plaintiff also alleged in his first count that the defendant's wrongful acts were performed with the intent of defeating the plaintiff's right to his brokerage agreement with Levine and that, as the result of his wrongful acts, the defendant was enabled to purchase the property at a reduced price. In his second count the plaintiff alleged that the defendant had unlawfully conspired with Levine to secure title to the property by inducing Levine to drop the plaintiff as a broker and by representing to Levine that if the plaintiff was dropped as a broker and if the conveyance to the defendant was delayed for a period of more than one year, the plaintiff would lose his right to a brokerage commission. The adequacy of the complaint was not attacked by the defendant and it may be viewed as charging tortious interference with the plaintiff's contractual relations or with his prospective economic advantages, in the first count by the defendant individually and in the second count by the defendant and Levine jointly. See Louis Schlesinger Co. v. Rice, 4 N.J. 169 (1950); Louis Kamm, Inc. v. Flink, 113 N.J.L. 582 (E. & A. 1934); Sustick v. Slatina, 48 N.J. Super. 134 (App. Div. 1957); Geo. H. Beckmann, Inc. v. Charles H. Reid & Sons, Inc., 44 N.J. Super. 159 (App. Div. 1957); McCue v. Deppert, 21 N.J. Super. 591 (App. Div. 1952). Cf. Goldman v. Feinberg, 130 Conn. 671, 37 A. 2 d 355 (Sup. Ct. Err. 1944); Hornstein v. Podwitz, 254 N.Y. 443, 173 N.E. 674, 84 A.L.R. 1 (Ct. App. 1930); Luke v. Du Prec, 158 Ga. 590,

124 S.E. 13 (Sup. Ct. 1924); 1 Harper & James, Torts, §§ 6.5, 6.11 (1956); Prosser, Torts, §§ 106, 107 (2 d ed. 1955).

In support of his application for summary judgment the defendant submitted affidavits which were countered by an affidavit by the plaintiff. In examining these documents all doubts must be resolved against the moving party (see Templeton v. Borough of Glen Rock, 11 N.J. Super. 1, 4 (App. Div. 1950)) and summary judgment may be rested on the suggested total absence of tortious interference by the defendant, only if there was a clear and undisputed factual showing to that effect. See Judson v. Peoples Bank & Trust Co. of Westfield, 17 N.J. 67 (1954); 25 N.J. 17 (1957). The Appellate Division found that there was no such showing (48 N.J. Super. at page 164) and our view is in accord. The Appellate Division also found that the plaintiff's release of his claim against Levine did not bar the plaintiff's claim grounded on the sole tort alleged in the first count, and that it likewise did not bar the plaintiff's claim grounded on the joint tort alleged in the second count unless the release was so intended or the plaintiff had received full compensation or compensation intended as such. See 48 N.J. Super. at pages 164-168. The Appellate Division pointed out that such questions of intent and full compensation present factual problems which could not fairly be disposed of on the affidavits supporting and countering the defendant's application for summary judgment; accordingly it reinstated the complaint in order that the matter may proceed to trial. See Adolph Gottscho, Inc. v. American Marking Corp., 18 N.J. 467, 470 (1955), certiorari denied 350 U.S. 834, 76 S. Ct. 69, 100 L. Ed. 744 (1955); Judson v. Peoples Bank & Trust Co. of Westfield, supra, 17 N.J. at page 85. In support of his appeal from the Appellate Division's action, the defendant Peck has presented but one issue to which we will confine ourselves -- he contends that under the common-law doctrine that the release of one joint tortfeasor automatically releases all, the plaintiff's claim against him was barred in its entirety and that consequently

the trial court's grant of summary judgment in his favor was proper and should not have been set aside.

In Cocke v. Jennor, Hob. 66, 80 Eng. Rep. 214 (K.B. 1614), the plaintiff had been assaulted by Jennor and Milborne. The plaintiff released Milborne and sued Jennor. The court held that the release of Milborne released Jennor; in its eyes the release was a "satisfaction in law" even though there may have been no satisfaction or compensation in fact and no intent whatever to absolve Jennor. In Duck v. Mayeu, [1892] 2 Q.B. 511 (C.A.), the plaintiff had a joint tort claim against Wills and Mayeu. He accepted a sum from Wills in full discharge of the liability of Wills but without prejudice to the plaintiff's claim against Mayeu. The court, citing Cocke v. Jennor, supra, stated that the English law was well-settled to the effect that the release of one joint tortfeasor releases the others, "the reason being that the cause of action, which is one and indivisible, having been released, all persons otherwise liable thereto are consequently released"; but ironically, the court then proceeded to construe the instrument as a covenant not to sue and to hold that, unlike a release, such a covenant does not discharge the other tortfeasors. In Apley Estates Co. Ld. v. De Bernales, [1947] Ch. 217, the court, following Duck v. Mayeu, supra, rejected a contention that a settlement with one joint tortfeasor which reserved the plaintiff's right to proceed against the others should have the legal effect of a release rather than a covenant not to sue; in the course of his opinion Lord Justice Morton pointed out that the release rule often operated to work hardship and that he, for one, was not prepared to extend it in any way. Professor Williams of the University of London has described the reasons given by the English courts as "technical, and even fictitious." See Williams, Joint Torts and Contributory Negligence, § 11 (1951). Cf. Note, 63 L.Q. Rev. 145-146 (1947). The rule was evolved when metaphysics rather than justice was the dominant factor and obviously tends to defeat the fair expectations and intentions of the parties to the release; it may be noted that all but one of the continental

legal systems have flatly rejected it. See 11 Modern L. Rev. 230, 232 (1948).

In the United States the English release rule has been under vigorous attack for many years. In 1923 Dean Wigmore referred to it as a surviving relic which was based on false logic and, although accepted by many courts, was fortunately being repudiated in some states by judicial decisions and in others by legislative action. See Wigmore, "Release to One Joint-Tortfeasor," 17 Ill. L. Rev. 563 (1923). In his 1930 edition of Cooley on Torts, Professor Throckmorton referred to the growing tendency on the part of American courts to view with disfavor the English release rule and to replace it with the "sound and reasonable" rule that unless the parties so intended a release should not absolve strangers thereto. See Throckmorton's Cooley on Torts § 80 (1930). In 1941 Dean Prosser referred to the rule as "at best an antiquated survival of an arbitrary common law procedural concept" and suggested 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." See Prosser, Torts, 1109, 1110 (1941); Prosser, Torts, 244-245 (2 d ed. 1955). Cf. Prosser, "Joint Torts and Several Liability," 25 Calif. L. Rev. 413, 424 (1937). In 1951 Professor Corbin's work on contracts included devastating comments on the English release rule in the field of torts as well as contracts (4 Corbin, Contracts §§ 931-935 (1951)), and in 1956 Professors Harper and James joined in advocating the modern view that the legal effect of a release on strangers thereto should justly be determined by the intent of the parties to the release and the extent of the compensation paid to the releasor rather than upon outmoded concepts of ancient times. See 1 Harper & James, Torts, 711-712 (1956). See also Notes, 22 Minn. L. Rev. 692 (1938); 18 U. Cin. L. Rev. 378 (1949); 33 Notre Dame Law 291 (1958).

When A has a tort claim against both B and C, there is nothing which forbids him from dealing individually with

B or C. If B or C pays A's claim in full then A clearly has no further recourse against B or C for he has received full satisfaction and may not justly claim any more. But if B or C wants to compromise with A by giving only partial compensation there is no reason why A should not be permitted to accept it and legally discharge his claim against the partial payor while proceeding with his claim for the balance against the other tortfeasor; indeed the law affirmatively favors such compromises. See Judson v. Peoples Bank & Trust Co., supra, 25 N.J. at page 35. And if A executes a release running in favor of the partial payor alone, there is no basis, in policy or justice, for giving the release the legal effect of discharging the other wrongdoer, who paid nothing and was a total stranger to the release, unless that was the intention of the parties to the release. Even in the states which still adhere to the English release rule, sweeping recognition is given to the force of the foregoing when their courts strain, as they consistently do, to construe releasing documents as covenants not to sue rather than formal releases. See Note, " Release of (or covenant not to sue) one tort-feasor as affecting liability of others," 148 A.L.R. 1270, 1288 (1944); Note, " Release of Joint Tort-Feasors in Texas," 36 Texas L. Rev. 55 (1957).

The distinction between releases and covenants not to sue has properly been described as an artificial one which looks to form rather than substance and which tends to trap the unwary. See Gronquist v. Olson, 242 Minn. 119, 64 N.W. 2 d 159, 164 (Sup. Ct. 1954); McKenna v. Austin, 77 U.S. App. D.C. 228, 134 F.2d 659, 148 A.L.R. 1253 (D.C. Cir. 1943). In Gronquist the plaintiff sued two joint tortfeasors and obtained a verdict of $8,000. Before the entry of judgment the plaintiff entered into a stipulation with one of the defendants in which he agreed that in consideration of the transfer to him of certain property (worth between $4,000 and $5,000) he would not enter judgment against that defendant or proceed against her in any other manner. The other defendant contended that the stipulation amounted to a release which also released

him; the court rejected this contention and held that it was a covenant not to sue which did not release the other defendant although the value of the property would be credited toward payment of the claim against him. In the course of his opinion Justice Nelson expressed the view that the distinction between releases and covenants not to sue was unwarranted; that the effect should be the same whether words of covenant or release are used; and that the "just and true rule" should be that, although a plaintiff who has received full satisfaction should be barred, a plaintiff who has received only part of his damages from one of the wrongdoers should not be barred from proceeding against the others.

McKenna, supra, was a case where the plaintiff had settled with one joint tortfeasor and had sued the other for the balance of her claimed damages; the plaintiff gave the paying tortfeasor a releasing instrument which could be construed as a covenant not to sue, although the court declined to rest its decision on that distinction which it described as entirely artificial. Instead it flatly rejected the English release rule in favor of the modern view that, unless so intended by the parties, a release of one joint tortfeasor who has made partial ...


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