sue the Pennsylvania Railroad Company, executed by the original plaintiff?
The Pennsylvania Railroad Company argues that Atlantic States Gas Company's right to contribution is affected by the covenant not to sue in the sense that the right cannot arise in the instant case. The railroad says that under the law of Pennsylvania, a covenant not to sue executed in favor of one joint tort-feasor works a release of other joint tort-feasors. Therefore, says the railroad, the original plaintiff cannot recover from Atlantic States Gas Company; and since there can be no recovery from Atlantic States Gas Company, there can be no basis for the latter to demand contribution from the Pennsylvania Railroad Company.
In Smith v. Roydhouse, Arey & Co., 244 Pa. 474, 90 A. 919, the Supreme Court of Pennsylvania held that a covenant not to sue one of two joint tort-feasors was a bar to any subsequent recovery from the other tort-feasor for claims arising out of the same cause of action. The Court, relying on an earlier decision, Peterson v. Wiggins, 230 Pa. 631, 79 A. 767, said, 244 Pa. at page 479, 90 A. at page 920: 'The act that operated as a bar to the subsequent action (against the other tort-feasor) was * * * the settlement and extinguishment of the cause of action by receiving money from one charged with the negligence which occasioned the injury for which compensation was claimed.'
The Smith case has been called with approval at least four times by the Supreme Court of Pennsylvania: Conway v. Pottsville Union Traction Co., 253 Pa. 211, 97 A. 1058; Mason v. C. Lewis Lavine, Inc., 302 Pa. 472, 153 A. 754; Thompson v. Fox, 326 Pa. 209, 192 A. 107, 112 A.L.R. 550; Union of Russian Societies of St. Michael & St. George, Inc. v. Koss, 348 Pa. 574, 36 A.2d 433. It is interesting to note that each of these four cases involved a release of, rather than a covenant not to sue, one of the joint tort-feasors. I think that this very fact makes it clear that the Supreme Court of Pennsylvania recognizes no difference in the effect to be given these two instruments, insofar as recovery from other joint tort-feasors is concerned. It seems that the legal effect follows, not from the name which is given by the parties to the particular instrument which is executed by the injured party, but from the principle underlying the rule. As the Supreme Court said in Thompson v. Fox, supra, 326 Pa. at page 213, 192 A. at page 109:
'Nor is it material whether the tort-feasors involved committed a joint tort or concurrent or successive torts, because the principle which underlies the rule is that the injured person is given a legal remedy only to obtain compensation for the damage done to him, and when that compensation has been received from any of the wrongdoers, his right to further remedy is at an end.'
I think that under the foregoing Pennsylvania authorities the conclusion is inescapable that, in the instant case, the third-party complaint fails to state a claim upon which relief may be granted against the Pennsylvania Railroad Company, because if it be true, as Atlantic States Gas Company alleges, that the Pennsylvania Railroad Company and Atlantic States Gas Company are joint tort-feasors, then the covenant not to sue the Pennsylvania Railroad Company executed by the original plaintiff would also bar recovery by him from Atlantic States Gas Company, and therefore the latter would have no basis for a demand for contribution from the Pennsylvania Railroad Company. Accordingly, I will dismiss the third-party complaint as to the Pennsylvania Railroad Company.
I pass now to a consideration of the motion of Taylor , the other third-party complaint. Taylor, as I have previously stated, is the driver of the automobile in which the original plaintiff was riding at the time of the accident, at which time, the third-party complaint alleges, Taylor was acting in the course of his employment with the Pennsylvania Railroad Company.
Assuming that at the time of the accident Taylor was in fact acting within the scope of his employment, and, therefore, the Pennsylvania Railroad Company would be subject to vicarious liability to the original plaintiff for the damages he sustained, then the third-party complaint should be dismissed as to Taylor for the same reason that it must be dismissed as to the Pennsylvania Railroad Company.
Suppose, however, that at the trial of the case, it be established that at the time of the accident, Taylor was in fact not acting within the scope of his employment, but was acting under circumstances which would not fasten vicarious liability upon his employer? In that event, a covenant not to sue executed in favor of the Pennsylvania Railroad Company by the original plaintiff would not preclude his recovering from Atlantic States Gas Company, and consequently would not foreclose the possibility of the latter's obtaining contribution from Taylor, because under the law of Pennsylvania, a release given to a party who is not liable for the injuries does not bar an action against the tort-feasor who is liable. Koller v. Pennsylvania R. Co., 351 Pa. 60, 40 A.2d 89; Masters v. Philadelphia Transportation Co., 160 Pa.Super. 178, 50 A.2d 532.
However, in the instant case, the original plaintiff, in the covenant not to sue, agreed that he would not sue 'The Pennsylvania Railroad Company * * * or any of its officers, servants, or employees * * * .' It appears that Taylor was, at the time of the accident, and still is, an employee the Pennsylvania Railroad Company. Regardless of whether or not he was acting within the scope of his employment at the time of the accident, he was nevertheless an employee of the railroad. See Restatement of Agency, § 228, Comment a. Therefore, the covenant not to sue was also executed in favor of Taylor by the original plaintiff.
It is true that Taylor did not furnish the consideration for the covenant not to sue. However, the original plaintiff received the money which he did in consideration of his agreeing not to sue the Pennsylvania Railroad Company's employees, as well as the railroad itself. That being so, I can see no logic or reason for holding that, simply because the money did not come from Taylor's pocket, the original plaintiff has not received the one satisfaction which the law allows him for any injury which he may have sustained as a result of Taylor's negligence.
My conclusion is that the covenant not to sue executed by the original plaintiff bars recovery by the latter from Atlantic States Gas Company, in the event that Taylor and Atlantic States Gas Company are joint tort-feasors. Therefore, since the third-party complaint is predicated upon a right of contribution in favor of Atlantic States Gas Company against Taylor, the third-party complaint as to Taylor must be dismissed.
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