Summary
finding a general release defeats “not only ... controversies and causes of action between the releaser and releasees which had, by that time, actually ripened into litigation, but ... all such issues which might then have been adjudicated as a result of pre-existent controversies, ... even though no such litigation had then been instigated”
Summary of this case from Yassan v. J.P. Morgan Chase & Co.Opinion
Argued October 1, 1956
Decided November 30, 1956
Appeal from the Appellate Division of the Supreme Court in the First Judicial Department, MATTHEW M. LEVY, J.
Sidney I. Liebowitz and David W. Silverman for appellant.
H. Howard Ostrin, Herman E. Cooper, Lewis Krasner and Eugene N. Sosnoff for respondents.
Plaintiff commenced this action on May 26, 1952 seeking to redress his allegedly wrongful expulsion from membership in the National Maritime Union in May, 1949. The defendants named are said union (hereinafter called N.M.U.) and various officers thereof who are sued as individuals as well. Plaintiff's prayer for relief seeks, among other things, a declaration that said expulsion was null and void, his reinstatement to union membership and damages for loss of earnings.
Defendants' answer contains an affirmative defense of a general release in writing as well as general denials. Their motion for summary judgment followed, and in support thereof affidavits were submitted by defendant Stone, treasurer of N.M.U., and by defendants' attorney, the former affiant also attaching a copy of the release in question.
From the papers before the court, it appeared that plaintiff was expelled at a membership meeting of the union on May 31, 1949, and appeals ultimately reaching the national convention of the N.M.U. resulted in upholding the expulsion on September 18, 1949. Thereafter and on or about April 4, 1950, plaintiff brought suit against defendant Stone to recover wages ($90 per week) plus vacation and severance pay (a total of $495) for the two-week period of July 12-28, 1948, allegedly antedating plaintiff's expulsion. After issue was joined in the Municipal Court by an answer containing a counterclaim for a greater sum ($722.98), the parties' respective attorneys commenced negotiations resulting in an offer by plaintiff to deliver a release limited to the pending Municipal Court action in return for a proposed settlement. Said offer was rejected by defendant who insisted that only a general release disposing of "any and all claims this plaintiff could possibly have had" would be acceptable. After what plaintiff admits were "protracted negotiations", he finally agreed to defendants' demand, and in or about February, 1952 — only a few months before he commenced the instant action — delivered the usual form general release which was prepared in typewriting by his attorney, and executed and acknowledged by plaintiff. By way of exchange, defendant union executed and delivered to plaintiff a similar release surrendering its claim along with the monetary consideration of $225 mentioned in the release executed by plaintiff.
Plaintiff's answering affidavit on this motion admits that the aforesaid release executed by him runs to both defendant Stone and N.M.U., but points out that his instant suit is brought against other named defendants "both in their individual capacities and as officers of the defendant, National Maritime Union", and summary judgment should not have been granted against those others not party to the release. Moreover, it is claimed the motion for summary judgment must fail as to all defendants because triable issues are presented. Those alleged issues are said to be whether the parties intended to settle only the pending Municipal Court action or whether plaintiff also intended the release to affect the instant dispute "involving different issues and different defendants".
Nowhere does plaintiff deny that defendants' counsel demanded a general release and rejected the proffered limited one. In fact, there is somewhat more than an implied admission thereof in plaintiff's own affidavit, when he states "they demanded a general release" and speaks of their "farsightedness". However, plaintiff urges that a trial is necessary, notwithstanding the fact that the release expressly provides that it "may not be changed orally".
Special Term agreed with plaintiff, but the Appellate Division reversed and granted summary judgment dismissing plaintiff's complaint. We think the Appellate Division was correct.
There can be no doubt that, under the uncontroverted facts submitted here, the release cannot be avoided by plaintiff nor its effect limited by him to the then pending Municipal Court action. The terms contained therein were deliberately bargained for and agreed to in broad, all-inclusive language. They were the result of no mere inadvertence, accident, mutual mistake or fraud but, on the contrary, followed deliberate, prolonged negotiation between the parties ( Unexcelled Laundry System v. Esemann, 273 N.Y. 555; Kirchner v. New Home Sewing Mach. Co., 135 N.Y. 182; cf. Goldsmith v. National Container Corp., 287 N.Y. 438; Farrington v. Harlem Sav. Bank, 280 N.Y. 1, 4; see Senwald Holding Corp. v. Rosoff Subway Constr. Co., 269 N.Y. 211, 213-214, 218; Pimpinello v. Swift Co., 253 N.Y. 159; see, also, Porter v. Commercial Cas. Ins. Co., 292 N.Y. 176, 181-182, 183). Plaintiff, whose own attorney prepared the release, must therefore be deemed to have assented to and to have freely entered into this agreement. As the general rule applicable here was stated in even broader language per KELLOGG, J., in the leading, oft-cited Pimpinello case ( supra, p. 162): "Ordinarily, the signer of a deed or other instrument expressive of a jural act, is conclusively bound thereby. That his mind never gave assent to the terms expressed is not material [citing Wigmore on Evidence, § 2415]". (See, also, Raleigh Associates v. Henry, 302 N.Y. 467, 473.)
Said release is clearly effective to relieve defendants Stone and N.M.U. from the liability sought in the instant action. By its terms it applies to "all manner of action * * * causes of action, suits, * * * controversies, * * * claims and demands whatsoever" which plaintiff "ever had, now has or which his heirs, executors, or administrators, hereafter can, shall or may have for, upon or by reason of any matter, cause or thing whatsoever * * * to the day of the date of these presents". Such words of general release are clearly operative not only as to all controversies and causes of action between the releasor and releasees which had, by that time, actually ripened into litigation, but to all such issues which might then have been adjudicated as a result of pre-existent controversies, including his expulsion from the union (cf. Simon v. Simon, 274 App. Div. 447, 450), even though no such litigation had then been instigated (see Kirchner v. New Home Sewing Mach. Co., supra, pp. 187-189) — and notwithstanding plaintiff's intent to commence a further suit for redress of his prior expulsion (see Porter v. Commercial Cas. Ins. Co., supra, pp. 183-184, and cases there cited). Having released the union from any claim for wrongful expulsion, there can no longer be any duty, continuing or otherwise, to reinstate him.
Under the foregoing principles, it is clear that since the unreformed general release in question, with its express prohibition against any oral change, postdated the circumstances giving rise to both the then pending Municipal Court action and the expulsion here complained of, it clearly operates to defeat the instant action as against defendants Stone and N.M.U., the admitted releasees named therein.
The other defendants in the present suit must also be deemed to have been released. It is well established that the release of one joint tort-feasor releases all of them, absent a reservation to the contrary. "The law does not permit a double satisfaction for a single injury" ( Milks v. McIver, 264 N.Y. 267, 270-271; McNamara v. Eastman Kodak Co., 232 N.Y. 18, 21). Plaintiff's instant suit, however he may embellish it, speaks fundamentally in tort for the purpose of redressing allegedly wrongful conduct by the named defendants acting in concert through their officerships in the N.M.U., whereby plaintiff was allegedly injured.
A parallel is to be found in the case of Leonard v. Gottlieb ( 278 App. Div. 786, motion for leave to appeal denied 303 N.Y. 1014). In denying leave there, we agreed that a release executed and delivered by the plaintiff in that action to but one of two defendants, who had conspired to defraud him of his part interest in a corporation and had induced him to sell his stock to one of them, was equally operative as to the other defendant even though plaintiff was unaware of the latter's role in the conspiracy when he released the first defendant.
The instant case is, if anything, much stronger. Here, after a limited release was refused, plaintiff had prepared and executed a general release to two of the defendants, without any reservations as to the others, on February 21, 1952, two years and some months after he knew (1) that he was expelled at a membership meeting of the N.M.U. on May 31, 1949; (2) that he had completely exhausted his remedies within the union by his appeal to the national convention, which upheld the expulsion on September 18, 1949; (3) that "each and every member of the [union] directly or indirectly ratified and approved" the expulsion, and (4) that all of the individual defendants participated in the acts complained of. The roles of these defendants in his expulsion were allegedly enacted solely through their offices in the collective association, which association plaintiff expressly released. This clearly distinguishes the case from Simon v. Simon ( 274 App. Div. 447, 450, supra), where title to the articles involved was not in question and there was no existing dispute. How, then, can it be said that his claim of unlawful expulsion arose after February 21, 1952 the date of his release?
In the face of plaintiff's admissions in his pleading and opposing affidavit, his argument as to the operation and effect of the general release lacks any foundation whatsoever. It is clear that plaintiff's admissions were made deliberately — to avoid the dismissal of his complaint under our decision in Martin v. Curran ( 303 N.Y. 276). He cannot have it both ways for the purpose of strategy. When he says that the membership approved the expulsion, we have the right to take his word. If they did, the release operates in favor of all these defendants, and the motion for summary judgment in their favor was properly granted.
Although it is argued that defendants bought their freedom from liability at a modest price — the surrender of defendants' claim for $722.98 plus $225 in cash — it was a bargain to which plaintiff freely and with full knowledge agreed and by which he must now be deemed bound. Otherwise, general releases are not worth the paper they are written on. There is no triable issue here.
The judgment appealed from should be affirmed, with costs.
This is not a case for summary judgment, as it seems to me, dismissing the complaint without a trial. Plaintiff claims to have been expelled wrongfully from membership in the National Maritime Union of America. He is suing both for reinstatement of his membership and for damages which he claims to have sustained by reason of his expulsion. His action is against the union alone insofar as the complaint asks for reinstatement, and against the union and its officers to the extent that money damages are sought. The complaint has been dismissed under rule 113 upon motion by the defendants on the basis of an alleged release which is general in its terms, and has been held to bar whatever right plaintiff may have to the resumption of his membership as well as to recover damages. The effect of the summary judgment which has been entered is to prevent plaintiff's reinstatement permanently, regardless of whether he was unlawfully expelled. This may well have the effect of preventing him perpetually from engaging in his regular occupation.
The document which is fraught with these formidable consequences recites that the consideration paid for it was $225. The record indicates that the occasion for its delivery was a suit for $495 begun by plaintiff in the Municipal Court to recover that amount from the union by way of salary, vacation and severance pay. Before settling that claim on payment of $225, the union insisted upon receiving a general release. This release contains no recital of the Municipal Court action, consequently the rule has not been applied that general words are limited under certain circumstances by the recital of a particular claim, obligation or controversy ( Mitchell v. Mitchell, 170 App. Div. 452, 456; Haskell v. Miller, 221 App. Div. 48). Special Term considered that, even so, "Whether a release is to be treated as including all possible claims depends upon the purpose for which the release is given" ( Simon v. Simon, 274 App. Div. 447, 449). The Appellate Division by a divided court reversed and dismissed the complaint on the basis that where a release is general in its terms and there is no limitation by way of recital or otherwise, the instrument itself is the only competent evidence of the agreement of the parties and, if the words fairly import a general discharge, their effect may not be limited so as to exclude a demand simply upon proof that at the time of its execution this particular claim or demand was not discussed ( Kirchner v. New Home Sewing Mach. Co., 135 N.Y. 182). The correctness of that general rule is readily conceded. Its limits were reached, however, in Simon v. Simon ( supra), where, as in the present case, there was no recital of any particular disputed claim in the release, yet this was held not to prevent a wife from recovering possession of her bracelet and earrings from her husband. The release had been given in connection with the discharge of the husband from any claim of the wife that she had an interest in his copartnership. Without departing from the Kirchner rule, it seems to me that there is at the least a triable issue concerning whether the release in this instance was given for the purpose of precluding an action by plaintiff for reinstatement in the National Maritime Union. It is true that before the union would settle the action in the Municipal Court, it insisted upon the delivery of a general release; nevertheless, even if this release had been intended to discharge any claim for damages which plaintiff might make against the union arising from his expulsion, that is a far cry from the equitable relief which plaintiff asks in this action of being reinstated as a member of the union.
Regardless of whether the Simon case ( supra) was correctly decided, this release discloses on its face that it was not intended to operate so as to discharge demands or causes of action thereafter arising. That accords with the general rule that "A release ordinarily operates on the matters expressed therein which are already in existence at the time of the giving of the release. Accordingly, demands originating at the time a release is given or subsequently, and demands subsequently maturing or accruing, are not as a rule discharged by the release unless expressly embraced therein or falling within the fair import of the terms employed." (76 C.J.S., Release, § 53, p. 699.) This statement conforms to the law of New York State ( Farnham v. Farnham, 204 App. Div. 573; Celmer v. Feinborough Homes, 253 App. Div. 832; Matter of Quick, 147 Misc. 28, 35, per WINGATE, S.).
If this release could have been designed to discharge the union from claims for damages by reason of the unlawful expulsion of plaintiff, in addition to the controversy regarding the salary, vacation and severance pay for which he sued in the action in the Municipal Court, that would not signify that it was intended to relieve the union from whatever duty it may have been under to reinstate him as a member. If plaintiff's expulsion was wrongful, it became the duty of the union to mitigate the resulting damage by receiving him back as a member upon demand. His expulsion, and refusal to reinstate him upon demand, are separate wrongs; at least, continuing to prevent him from exercising the rights of membership is a continuing wrong, if his contention be correct that he was wrongfully removed. The recital of $225 as the amount paid for the release makes it apparent that this is all that the parties had in mind. "Of course the mere inadequacy of the consideration is not in and of itself sufficient ground for avoiding a release by competent parties, but it is a circumstance that is entitled to weight in determining the intention of the parties to the release, and as to whether or not the releasor understood that he was releasing all claim of damages for a serious injury to his person." (45 Am.Jur., Release, § 28, pp. 692-693.)
We are obliged to assume, for the purposes of this appeal, that plaintiff's contention that he was wrongfully expelled is well founded. The only issue here is the effect of the release. This instrument possibly discharged the union from claims for the payment of damages but, if plaintiff's deprivation of membership was unlawful, as we are bound for present purposes to assume that it was, the union would still be obliged to receive him back into the fold, being under a continuing duty to reinstate him at any time upon demand. The release related only to past occurrences, happening before "the day of the date of these presents". At the time when this release was delivered, it could not be assumed that the union afterward would unlawfully refuse to take him back upon demand. Even if plaintiff relinquished money damages for a wrongful act by the union in discharging him from membership, there is nothing in this release to indicate that plaintiff gave to the union continuing license to perpetuate the wrong. If his expulsion was illegal, the union was under the same kind of continuing duty to reinstate him that rests on a municipality to pay a mandated salary. It is the same variety of continuing duty that was held to obviate the four months' limitation period prescribed by section 1286 of the Civil Practice Act in Matter of Benvenga v. La Guardia ( 182 Misc. 507, 513-514, affd. 268 App. Div. 566, affd. 294 N.Y. 526). Refusal to reinstate a union member is a similar kind of continuing wrong to that confronting the courts in cases arising under the Civil Service Law or the Education Law where there is an absolute duty (not depending upon the exercise of discretion) to reinstate a civil servant or educator who has been wrongfully discharged ( Toscano v. McGoldrick, 300 N.Y. 156, 160; Matter of Gimprich v. Board of Educ. of City of N.Y., 306 N.Y. 401). The reason on account of which the short Statute of Limitations is deemed not to apply, is that the illegal act occurs in the future, when a demand is refused for reinstatement. By the same token, this release does not operate so as to bar the remedy for a future wrong, in refusing to readmit plaintiff to membership upon his demand.
In the absence of language in this release indicating that the union was to be absolved from any duty of restoring plaintiff to membership in the future, in addition to the payment of damages for what had occurred in the past, it cannot be assumed without a trial that this instrument was intended by the parties to be accorded the scope which has been given to it by the judgment under review. To construe this release in that manner would infer that its purpose was to sanction what we must assume for present purposes was a continuing wrong, which the union was duty bound to terminate. The small consideration recited in this release is a clear indication that it was not intended to reach into the future so as to impair or destroy plaintiff's means of livelihood. The National Maritime Union, to be sure, has not been proved to have lacked sufficient basis for expelling plaintiff from membership, but this dissent is based on the circumstance that the judgment decides this point summarily and deprives plaintiff of having his day in court upon the question. Plaintiff should not be silenced by summary judgment upon the sole ground that, as matter of law, his right to pursue his usual occupation has been bartered away for $225.
The judgment of the Appellate Division should be reversed and the order of the Special Term reinstated insofar as it denies the motion for summary judgment.
DESMOND, DYE, FULD and BURKE, JJ., concur with FROESSEL, J.; VAN VOORHIS, J., dissents in an opinion in which CONWAY, Ch. J., concurs.
Judgment affirmed.