Cox v Pearl Investment
S. Ct CO [1969]
Author:- Sam Biers

Satisfaction and Release

Relevant Facts: Mr and Mrs Cox sought recovery for injuries Mrs sustained when she fell on property owned by Df Pearl.  IT was shown that the tenant Goodwill had previously paid the Pl $2500 in consideration of Pl’s execution of a document entitled 'covenant not to proceed with suit' which reserved the Pl’s ‘right to sue any other person or persons against whom they may have or assert any claim on account of damages arising out of the **accident.”  The trial ct gave no deference to the additional phrase and ruled that it was a release against all tort feasors.

Legal Issue(s): Whether the document, entitled 'covenant not to proceed with suit', which provided that injured party reserved the right to sue any other person or persons against whom they may have or may assert any claim on account of damages arising out of the described accident, was a bar to action against joint tort-feasor?

Court’s Holding: NO

Procedure: Tr Ct entered Summary for Df; Pls appealed; S. Ct CO Reversed and remanded.

Law or Rule(s): The release of one joint tort feasor is a release of all.

Court Rationale: The intent of the parties to a contract should always be given effect unless it be in violation of the law or public policy.  Where a K has the effect of releasing one tortfeasor but reserves the right to sue others who may be liable, it should not in law be treated otherwise. It is evident that the compensation paid to the Pl was not intended to be full compensation for his injuries , and the agreement signed by him was intended to preserve the liability of those who were not parties, many cts construe the agreement as a covenant not to sue and not a technical release. SEE RESTATEMENT. “A release will be construed as a covenant not to sue where the right to proceed against the remaining tortfeasors is expressly reserved.

Plaintiff’s Argument: The language of the release reserved the right to sue any other party involved.

Defendant’s Argument: Df was expressly released by prior satisfaction of joint tortfeasor’s payment to the Pls.