Opinion
November 5, 1958 —
December 2, 1958.
APPEAL from an order of the county court of Green county: MARSHALL L. PETERSON, Judge. Affirmed.
For the appellants there was a brief by Dougherty, Ryan Campbell, and oral argument by James E. Brennan, all of Janesville.
For the respondent there was a brief by Regez Johnson of Monroe, and oral argument by Herbert T. Johnson.
Action by the plaintiff Ohio Casualty Insurance Company against the defendants Gordon T. Nauth and Horace Mann Mutual Casualty Company (Nauth's insurance carrier) for contribution to recover one half the amount paid by the plaintiff in making a compromise settlement of certain claims of a husband and wife arising out of personal injuries sustained by the claimant wife in an automobile collision.
On March 31, 1956, an automobile owned and operated by Gordon T. Nauth collided with an automobile owned and driven by Alfred Moen at a rural intersection in Green county. At that time one Elna Nauth, Gordon's mother, was riding in the Nauth automobile and sustained personal injuries as the result of the collision. Both automobiles were damaged.
On April 17, 1956, the plaintiff, being the public-liability insurer of Moen, entered into a settlement of the defendant Gordon Nauth's claims for damages arising out of the accident by the terms of which the plaintiff paid Nauth the sum of $450, and in return therefor Nauth executed and delivered to the plaintiff a release in which he released and discharged Moen and the plaintiff from any and all actions, claims, and demands on account of damages sustained by him in said collision. The release contained no reservation by the plaintiff of any right to later assert any claim against Nauth arising out of the accident.
On or about November 6, 1956, the plaintiff entered into a compromise settlement of the claims of Elna T. Nauth and her husband, Fred O. Nauth, arising out of the accident, by the terms of which the plaintiff paid Mr. and Mrs. Nauth the sum of $2,855.10 and in return therefor Mr. and Mrs. Nauth executed and delivered to the plaintiff a release in which they released the said Alfred Moen, the plaintiff, and the defendants from all claims for damages arising out of the collision.
In its answer the defendants set up as an affirmative defense the prior settlement with the defendant, Nauth, claiming that this estopped the plaintiff from prosecuting the present action.
The defendants moved for summary judgment dismissing the complaint. This motion was denied by order entered February 7, 1958. From such order the defendants have appealed.
In Wm. H. Heinemann Creameries v. Milwaukee Automobile Ins. Co. (1955), 270 Wis. 443, 452a, 71 N.W.2d 395, 72 N.W.2d 102, this court held:
". . . where A and B are parties to an accident, and B makes a compromise settlement of A's claim for his damages arising from such accident, B is estopped from later asserting a claim for his own damages arising from such accident against A, unless the right to later assert such claim was expressly reserved by B at the time of concluding the compromise settlement."
The rationale of such holding was that the parties, in entering into such a settlement, will be presumed to have intended a complete accord and satisfaction of their respective claims against each other arising out of the accident. Such presumption is grounded upon public policy in order to avoid needless litigation.
The defendants in this appeal seek to have the rule of the Heinemann Creameries Case extended to apply to a claim for contribution grounded upon the settlement of the claims of third parties arising out of the accident. However, the right of contribution is founded upon principles of equity and natural justice. Wait v. Pierce (1926), 191 Wis. 202, 225, 209 N.W. 475, 210 N.W. 822.
At the time the plaintiff Insurance Company made settlement of the defendant Gordon T. Nauth's claim, the plaintiff possessed no cause of action for contribution. The cause of action for contribution did not accrue until approximately six months later when the plaintiff settled the claims of Nauth's mother and father. To extend the rule of the Heinemann Creameries Case so as to include a claim for contribution under these facts would work a denial of the principles of equity and natural justice. This is because if such rule of the Heinemann Creameries Case were to be invoked to bar the instant claim for contribution, then the whim of the injured third party in selecting which joint tort-feasor, or his insurer, against whom to assert such third party's claim for damages, would determine where the burden of payment of such claim would ultimately fall.
It is our considered judgment that the rule of the Heinemann Creameries Case should not be construed to bar a claim of contribution which arises after the settlement of one of the two joint tort-feasor's claim for damages by the other tort-feasor, or his insurance carrier.
By the Court. — Order affirmed.
BROWN, J., took no part.