PALESTINE CONTRACTORS, INC., Petitioner, v. Lois PERKINS et al., Respondents, 386 S.W.2d 764

GREENHILL, Justice. This is an action to recover for personal injuries suffered by Mrs. Lois Perkins when a truck belonging to Palestine Contractors, Inc., collided with her automobile. The jury convicted Palestine’s driver of several acts of negligence, each of which was a proximate cause of the collision. Herman Conoway, driver of a third vehicle and third party defendant in this suit, was convicted of one act of negligence which was a proximate cause of the collision. Judgment was rendered against Palestine Contractors for $26,500 with recovery over against Conoway for $13,250.

The Houston Court of Civil Appeals reformed the judgment for contribution to provide that Palestine recover only to the extent that it pays more than one-half of the judgment. As reformed the judgment of the trial court was affirmed. 375 S.W.2d 751; note, 43 Tex.L.Rev. 118 (1964). Sometime after the collision in question, Mrs. Perkins gave Conoway a covenant not to sue. She agreed not to sue Conoway directly or indirectly but expressly reserved the right to sue Palestine Contractors. There was no agreement to indemnify Conoway against any suit over by Palestine Contractors.

The covenant recites a ten-dollar consideration, but it was not paid. Plaintiff’s testimony was that the reason for giving the covenant was to help Cono-way retain his driver’s license which the State was threatening to suspend under the provisions of the Texas Motor Vehicle Safety-Responsibility Act. The important question to be decided is whether a covenant not to sue given to one of two negligent joint tortfeasors precludes the plaintiff from recovering more than one-half of the damages from the non-settling tortfeasor.

Palestine Contractors, in support of its contention that only one-half of the damages can be recovered against it, relies on a statement in Gattegno v. The Parisian, 53 S.W.2d 1005 (Tex.Com.App.1932), and on an

article by Hodges, Contribution and Indemnity Among Tortfeasors, 26 Texas Law Review 150 (1947). The Gattegno case and Mr. Hodges’

article will he again referred to. Judge Critz, writing for the Texas Commission of Appeals in Gattegno, said, “Therefore, if it be found that Gat-tegno and Muir are both active tort-feasors as between each other, the release having discharged Muir as to all liability to The Parisian, has at least discharged one-half its damages.” 53 S.W.2d at 1008. The Court of Civil Appeals in this case refers to this statement as dictum, a matter we shall also comment upon later. In any event we have reviewed the principle of law to determine whether or not the statement in Gattegno should be followed.

Perkins relies on a number of Texas cases which state the rule that the non-settling tortfeasor is entitled to credit on the judgment for the amount already paid for the covenant not to sue. Austin Road Co. v. Pope, 147 Tex. 430, 216 S.W.2d 563 (1949); Robertson v. Trammell, 98 Tex. 364, 83 S.W. 1098 (1904); Lottman v. Cuilla, 288 S.W. 123 (Tex.Com.App.1926); Friedman v. Martini Tile & Terrazzo Co., 298 S.W.2d 221 (Tex.Civ.App.1957, no writ); Lone Star State Life Ins. Co. v. Foster, 250 S.W.2d 949 (Tex.Civ.App.1952, wr. ref., n. r. e.); Gillette Motor Transport Co. v. Whitfield, 186 S.W.2d 90 (Tex.

Civ.App. 1945, wr. ref., w. o. m.); Eckel v. First Nat. Bank, 165 S.W.2d 776 (Tex.Civ.App.1942, wr. ref.); Watkin Music Co. v. Basham, 48 Tex.Civ.App. 505, 106 S.W. 734 (1907, no writ); El Paso & S. R. Co. v. Darr, 93 S.W. 166 (Tex.Civ.App.1906, wr. ref.). With one exception, it does not appear that the contention was ever made in the above-cited cases that plaintiff’s recovery should be limited to one-half of the damages. Without such a contention, a mere holding that credit should be allowed on the judgment does not necessarily conflict with the theory that the judgment should be reduced by one-half.

The one exception mentioned involved co-makers of notes rather than joint tort-feasors. The notes were given for the purchase of a piano. After default of several installment payments, the plaintiff repossessed the piano from one co-maker and gave her a covenant not to sue. The plaintiff then sued the other co-maker alone for the full amount of the notes. The defendant co-maker argued that his liability was only one-half of the value of the notes. The Court of Civil Appeals held that he was liable for the full amount but had a right of contribution against the settling co-maker.

That case is similar to the one before us in that no consideration was paid for the covenant not to sue. Watkin Music Co. v. Basham, 106 S.W. 734 (1907), an opinion of a Court of Civil Appeals which did not reach this Court. In one other case, cited by Perkins, the contention was made by the non-settling defendant that plaintiff’s recovery should be for only one-half of the verdict because of plaintiff’s settlement with the other tort-feasor. Skyline Cab Co. v. Bradley, 325 S.W.2d 176 (Tex.Civ.App.1959, wr. ref., n. r. e.). In that case the plaintiff had sued both tortfeasors but dismissed one, Mrs.

Foster, with whom plaintiff had settled. She still remained in the suit, however, by reason of the non-settling tort-feasor’s third-party action to recover for damages to his cab. There was no prayer for contribution. The jury found both tort-feasors guilty of negligence proximately causing the collision. The Court of Civil Appeals at Houston held: “[It is] clear that appellants are not in position- to insist that the release discharged one-half of the damages awarded, since appellants made no effort to retain Mrs.

Foster [the settling tortfeasor] in the suit and failed to plead over against her and wholly failed to ask for contribution. In these particulars the instant case is distinguishable from the case of Gattegno v. The Parisian * * * relied on by appellants.” 325 S.W.2d at 183. Without again reviewing the wisdom of the distinction made in the Skyline Cab case, we can state that it is distinguishable from the case at bar wherein there is an action for contribution. It is undisputed that a plaintiff may sue one of several joint tortfeasors and collect the full damages from him. Landers v.

East Texas Salt Water Disposal Co., 151 Tex. 251, 248 S.W.2d 731 (1952). It is also undisputed that had Perkins sued Palestine Contractors without agreeing not to sue Conoway, Palestine Contractors would have had to pay the total damages. It could in turn sue Conoway for contribution, either in the same or in a subsequent suit. Here, however, Palestine Contractors contends that Perkins can recover only one-half of the damages against it since Perkins gave up her right to sue Conoway indirectly. There are three possible solutions to the problem posed by this case:

(1) In order to protect the settling tortfeasor from a subsequent suit that destroys the finality of his settlement, and in order to allow the plaintiff a full recovery, we could (but for the Texas Contribution statute) deny the defendant a right to contribution. This is the view of the Uniform Contribution Among Tort-feasors Act § 4(b) (1955), which will be discussed later. However, this result would be clearly contrary to

Article 2212, Vernon’s Annotated Civil Texas Statutes, which gives to a defendant who has paid more than his share of the damages a substantive right to a proportionate recovery against the other solvent defendants, who in turn retain a right of recovery of a judgment against the insolvent defendants. A plaintiff cannot cut off from a defendant not a party to the settlement the right to contribution by an agreement with a third party.

(2) The rule applied by the Court of Civil Appeals allows the plaintiff to recover from the non-settling defendant the full damages less a credit for the amount of the previous settlement. The non-settling defendant is then allowed to get contribution from the settling tortfeasor, notwithstanding the settlement and regardless of the plaintiff’s covenant not to sue indirect2y the latter.

Under this rule, the tortfeasor who settled is not only faced with the expense of litigation but also with a judgment which, when added to his settlement, raises his loss to what it would have been had he not attempted to settle with the plaintiff. He loses the benefit of the covenant not to sue under which he thought he had bought his peace unless he can recover his loss from the plaintiff in a circuitous action for breach of covenant.

Whether plaintiff’s suit against the non-settling defendant for more than half of the damages is an indirect suit against the settling tortfeasor is a matter of dispute between the parties. On the one hand the covenant expressly declared that Palestine would be looked to for damages. It is argued that the parties to that instrument must have known that Palestine Contractors would sue Conoway for contribution. On the other hand, the intention of the parties was to release Conoway from the danger of liability so that he might retain his driver’s license.

This intent would fail if he remained liable for contribution; therefore, it is argued, the parties must have contemplated that Perkins recover only one-half of the damages so that Palestine Contractors would have no right of contribution against Conoway.

(3) The rule expressed in the Gattegno case and explained in Professor Hodges’

article would allow the plaintiff to recover only one-half of the damages found by the jury. This rule would give the settlement finality because the non-settling defendant would have no right of contribution since be is not required to pay more than half of the judgment. Circuity of action would be avoided because the settling tortfeasor would have no occasion to sue the plaintiff to recoup his loss. The unattractive feature of this rule is that the plaintiff will not receive the full compensation to which the jury found him entitled.

His total recovery under this method will be as near to total compensation as is the settlement to ■one-half of the damages. In other words any loss would be due to the plaintiff’s own action in settling with one joint tortfeasor in an arm’s length transaction. Plaintiff argues that this result would discourage settlements, especially with those against whom there is a weak case of liability. They contend that the law should permit plaintiff to make relatively small settlements with such parties without thereby substantially reducing his claim against the non-settling tortfeasor.

However, as defendant points out, this argument cuts both ways. A defendants’ motivation to compromise rather than defend the claim would be lessened because he “cannot count on his adjustment with the injured person .as ending the matter but must apprehend a suit at the hands of his co-tortfeasors.” Judson v. Peoples Bank and Trust Co., 17 H.J. 67, 110 A.2d 24, at 36 (1954). Plaintiff counters with the suggestion, .and the Court of Civil Appeals agreed, that if the settling tortfeasor wants protection, he should have an indemnity agreement included in the covenant not to sue. See Panhandle Gravel Co. v.

Wilson, 248 S.W. 2d 779 (Tex.Civ.App.1952, wr. ref., n. r. e.). But an indemnity agreement only makes more clear what Palestine Contractors contends should be the result without such an agreement where plaintiff covenants not to sue the settling defendant, directly or indirectly. While the outcome of this particular case is important, we have attempted to review the authorities in order to determine the view to be followed not only in this case but in those which will follow.

Because of this consideration, or reconsideration, the arguments and authorities are set out in more detail than is ordinarily desirable in an opinion. The rules among the various states on contribution between joint negligent tort-feasors are strikingly divergent, particularly where there has been a settlement with one tortf'easor. Legal scholars likewise have been unable to agree among themselves on a solution satisfactory to all.

Almost half the states have attempted to bring order out of chaos by permitting and regulating contribution among tortfeasors through legislation. 1 Harper & James, The Law of Torts, 719, § 10.2 (1956). Eight states, not including Texas, have adopted the Uniform Contribution Among Tortfeasors Act. As adopted in 1939 by seven states and Hawaii, the Act reached substantially the same solution as set out by the Court of Civil Appeals in this case.

Section 4 and

Section 5 of that Act read: “§ 4. Release; Effect on Injured Person’s Claim. — A release by the injured person of one joint tortfeasor, whether before or after judgment, does not discharge the other tortfeasors unless the release so provides; but reduces the claim against the other tort-feasors in the amount of the consideration paid for the release, or in any amount or proportion by which the release provides that the total claim shall be reduced, if greater than the consideration paid.” [9 Uniform Laws Annotated 233, 242] “§ 5.

Release; Effect on Right of Contribution. — A release by the injured person of one joint tortfeasor does not relieve him from liability to make contribution to another joint tortfeasor unless the release is given before the right of the other tortfeasor to secure a money judgment for contribution has accrued, and provides for a reduction, to the extent of the pro rata share of the released tortfeasor, of the injured person’s damages recoverable against all the other tortfeasors.” [9 U.L.A. 233, 245] The illustration in the Commissioners’ note following

Section 4 is similar in many respects to the facts of our case: “Suppose P is hurt, apparently by the concurrent negligence of A and B. He wishes to pursue his remedy against B but wants to let A off lightly. For $100 paid he releases A and then sues B. The jury might fix P’s damages and the court might then deduct $100 from the amount of the verdict before entering judgment. Thus, on a verdict for P against B of $2,000, the court would enter judgment for $1,900.

Although this could be handled by introducing evidence before the jury of a payment of $100 and by letting the jury take that into account in fixing P’s damages, this method would be less satisfactory than the solution suggested in the previous sentence. “Under each alternative of the second clause of this Section, A, the tort-feasor to whom a release is given should be credited in any contribution proceedings against him, with the amount by which the injured person’s, P’s, claim is reduced in accordance with the Section.

Thus, if the release mentions no amount or proportion by which P’s claim against B is reduced, but A paid P $100 for his release, then if the jury awards P $2,000 damages against B, P should get judgment for only $1,900. Then in B’s action against A for contribution, if A does not dispute the amount of P’s recovery against B, or, if he disputes it, is unsuccessful in getting that amount lowered as the basis of the claim for contribution, B should be allowed to recover $900 from A as contribution. The explanation is that the ‘common liability’ is for $2,000, of which A has already paid $100.

In contribution proceedings between two tortfeasors where no apportionment of fault takes place and where the damages of the injured person are $2,000, the paying tortfeasor should be able to shift one-half of the burden, or $1,000, to the non-paying tortfeasor.

But if the non-paying tortfeasor had already paid $100 to the injured person, thereby lowering the other tortfeasor’s liability by that amount, he should have credit for the payment in contribution proceedings.” [9 U.L.A. 242-243] The Restatement, Torts [first series] which was adopted the same year (Volume 4, 1939) as the Uniform Contribution Act, reaches approximately the same result as the Uniform Act, though it is not as specific. The comments under

Section 885 are in part as follows: “The giving of a discharge, whether in the form of a covenant not to sue or of a release where rights are preserved against another tortfeasor, does not affect any right of contribution or indemnity of such other tort-feasor if subsequently he pays the amount of the claim against him or, in cases of contribution, pays more than his proportionate share.” [Ch. 44, Comment on Subsection 2 of § 885, p. 463] “ * * * If it is agreed that the payment is to satisfy the payor’s proportion of the total claim, the claim against the others is diminished in that proportion, if this is greater than the amount paid; if the proportion is less than the amount paid, the claim against the others is diminished by the amount paid, irrespective of the agreement.” [Ch. 44, Comment on Subsection 3 of § 885, p. 463] The experience of the Uniform Contribution Act, even among the eight states which adopted it, was not satisfactory.

The Act was redrafted in 1955. The Commissioners’ Prefatory Notes, Uniform Contribution Among Tortfeasors Act, Pocket Part for use during 1964, p. 112, says that most of the eight states which adopted the Act “have made important changes in the Act which have defeated the whole idea of uniformity; and in anything like its original form it is in effect only in Arkansas, Hawaii, and South Dakota.”

Section 4 and

Section 5 of the original act are now replaced by a new

Section 4 which reads: “§ 4. [Release or Covenant Not to Sue], — When a release or a covenant not to sue or not to enforce judgment is given in good faith to one of two or more persons liable in tort for the same injury or the same wrongful death: “(

a) It does not discharge any of the other tortfeasors from liability for the injury or wrongful death unless its terms so provide; but it reduces the claim against the others to the extent of any amount stipulated by the release or the covenant, or in the amount of the consideration paid for it, whichever is the greater; and, “(

b) It discharges the tortfeasor to whom it is given from all liability for contribution to any other tortfeasor.” [Emphasis added.] [Uniform Contribution Among Tortfeasor Act, § 4, Pocket Part p. 118.] The explanation under the new

section reveals the discontent with the old section. The Commissioners’ Note reads in part: “* * * Reports from the state [s] where the Act is adopted appear to agree that it has accomplished nothing in preventing collusion. In most three-party cases two parties join hands against the third, and this occurs even when the case goes to trial against both defendants. ‘Gentlemen’s agreements’ are still made among lawyers, and the formal release is not at all essential to them. If the plaintiff wishes to discriminate as to the defendants, the 1939 provision does not prevent him from doing so. “The effect of

Section 5 of the 1939 Act has been to discourage settlements in joint tort cases, by making it impossible for one tortfeasor alone to take a release and close the file. Plaintiff’s attorneys are said to refuse to accept any release which contains the provision reducing the damages ‘to the extent of the pro rata share of the released tort-feasor,’ because they have no way of knowing what they are giving up. The ‘pro rata share’ cannot be determined in advance of judgment against the other tortfeasors.

In many cases their chief reason for settling with one rather than another is that they hope to get more from the party with whom they do not settle. A provision for reduction in a fixed amount will not protect the settling tortfeasor from contribution. No defendant wants to settle when he remains open to contribution in an uncertain amount, to be determined on the basis of a judgment against another in a suit to which he will not be a party. Some reports go so far as to say that the 1939 Act has made independent settlements impossible.

Many of the complaints come from plaintiff’s attorneys, who say that they can no longer settle cases with one tortfeasor. Such reports have reached other states, and have been responsible for a considerable part of the opposition to the 1939 Act. The New York Law Revision Commission has introduced a number of bills for contribution acts, and this objection has been the chief factor in defeating them. “It seems more important not to discourage settlements than to make an attempt of doubtful effectiveness to prevent discrimination by plaintiffs, or collusion in the suit.

Accordingly the subsection provides that the release in good faith discharges the tortfeasor outright from all liability for contribution. This is consistent with

Section 1(

d) above, which provides that the settling tortfeasor has himself no right of contribution against another unless he has assumed the full responsibility to the claimant.” [Uniform Contribution Among Tortfeasors Act, § 4, Commissioners’ Notes, Pocket Part for use during 1964, pp. 118— 119] Prosser, in the 1964 edition of his Law of Torts, summarizes the experience of the courts and the Uniform Contribution Act by stating the following at page 277: “The effect of a settlement with the plaintiff by the contribution defendant, in which he received a release or a covenant not to sue, has perhaps given more difficulty than any other problem.

The usual holding has been that the defendant so relieved of liability is not released from contribution. There has been much dissatisfaction with this because it becomes impossible for a defendant to settle the case, take a release, and close the file, since the potential liability for contribution is still open. On the other hand, the proposed solution of a pro rata reduction of the amount remaining due discourages plaintiffs from accepting smaller settlements from one defendant. In either case both parties complain.

For these reasons the current Uniform Act has gone the whole length of holding that the release discharges the one to whom it is given from all liability for contribution.” It must be agreed that the solution of the 1955 revision of the Uniform Contribution Among Tortfeasors Act has much to recommend it. But since it holds that the non-settling defendant cannot have contribution from the settling defendant, it runs counter to our Contribution Statute,

Article 2212. That statute gives the right of contribution. Insofar as the Uniform Act protects the settling defendant, it is in harmony with the language of the Gat-tegno case. Francis H. Bohlen, for many years the professor of torts at Harvard and Pennsylvania Law Schools, an author of casebooks and treatises on torts, considers the problem of “Contribution and Indemnity Between Tortfeasors” in a two-part

article in Volumes 21 and 22 of the Cornell Law Quarterly. On this particular subject, he says: “If the injured man settles for a sum which, upon suit against the unreleased tortfeasor, is seen to be less than the proportion of the loss which the released tortfeasor should bear, the injured man who has consented to the settlement should bear the loss of this disparity. He should recover no more from the unreleased defendant than such proportion as the latter would have had to pay had the other delinquent been brought into the action as co-defendant.

Thus, if A, the original plaintiff, settles with B, one of the persons liable for his injury, for the sum of one thousand dollars, and in a subsequent action against the other defendant his damages are assessed at ten thousand dollars, A’s recovery should be limited to five thousand dollars. A and not C should bear the loss entailed by the inadequate settlement which he has made with B.” 21 Cornell Law Quarterly 567 (1936).

Professor Hodges of The- University of Texas School of Law, writing in 26 Texas Law Review 150 (1947) on Contribution and Indemnity Among Tortfeasors, says at p. 171: “ * * * As pointed out in the preceding section, a tortfeasor who has settled with an injured party may then proceed against the non-settling tort-feasor for contribution or indemnity.

Where the plaintiff is proceeding against the non-settling tortfeasor and contribution is otherwise in order, the defendant may assert h'is claim to contribution. * * * If the amount paid under the settlement is less than one-half of the amount of damage, the plaintiff may recover from the non-settling defendant only one-half of the amount set as damages, because plaintiff has accepted the settlement in satisfaction of the settling tortfeasor’s liability, and when it is determined that he was equally liable then the liability has been satisfied to the extent of one-half. [Here the Gattegno case is cited in a footnote.] “Thus if tortfeasor A has paid $6,500 to the plaintiff and in the latter’s suit against B the damage is determined to be * * * $13,000, recovery would be $6,500; damage $20,000, recovery $10,000; damage $30,000, recovery $15,000.” A casenote on the opinion of the Court of Civil Appeals in this particular case appears to adhere to Professor Hodges’ view. 43 Texas L.Rev. 118 (Nov. 1964).

The Supreme Court of New Jersey was faced with a relatively similar situation and had a statute similar to ours. Without referring to the Gattegno case, Mr. Justice Brennan, now of the Supreme Court of the United States, reached the same conclusion as our Commission of Appeals. He in turn relied upon the language of Mr. Justice Rutledge in McKenna v. Austin [77 U.S.App.D.C. 228, 134 F.2d 659, 148 A.L.R. 1253] by the U. S. Court of Appeals when Justice Rutledge was on that court. Justice Brennan, in Judson v.

Peoples Bank & Trust Co., 110 A.2d 24 (1954), gave the court’s reasons : “ * * * If the injured party is required to credit only the amount received in settlement * * * he may be tempted to make collusive settlements, a mischief incident to the denial of contribution which was one of the strongest reasons for the statutory change allowing a right of contribution. Also, the settlement then lacks finality because the settler cannot count on his adjustment with the injured person as ending the matter but must apprehend a suit at the hands of his co-tortfeasors.

This would have a stifling effect upon efforts at compromise and settlement, contrary to the policy of our law which strongly favors disposition of disputes by compromise and settlement.” The Court continued: “ * * * Collusive settlements are wholly ineffective when a credit of the settler’s pro rata share is the required result of any settlement, and this helps attain one of the objectives of the contribution statute.

And, thereby the settling tortfeasor is assured of the finality of his settlement, and impairment of the public policy favoring compromise is avoided.” [110 A.2d 24, at 36] There was a second Judson case in the Supreme Court of New Jersey after Justice Brennan left. The court followed the first Judson holding; but Chief Justice Weintraub expressed a personal preference for the view of the Uniform Contribution Act as revised in 1955. But he noted that this solution must have legislative authorization and that to follow the Uniform Act would do violence to the New Jersey contribution statute [as it would to ours].

So the court was constrained to follow the first Judson decision. 25 N.J. 17, 134 A.2d 761, 770 (1957). The two New Jersey cases are reviewed in a note in 12 Rutgers Law Review 533 (1958) where it is concluded that, “ * * * it soon becomes clear that no perfect solutions present themselves, and it becomes a question of trying to select the best of several partially satisfactory remedies.

Accepting the basic premise that what is to be sought is a blending of the two divergent policies of settlement and contribution, it would seem that the court has made the best of a difficult situation.” The problem was presented recently to the Court of Appeals for the District of Columbia. That court in Martello v.

Hawley, 112 U.S.App.D.C. 129, 300 F.2d 721 (1962), reached the same result as announced in the Judson case: “Accordingly, we now hold in the factual circumstances of this case that when settlement is made with one joint tort-feasor and later a verdict is obtained against the other, and the jury finds that the settling tort-feasor should contribute, then the verdict should be credited with one-half its total amount and the defendant tort-feasor should be required to pay only the remaining balance, namely, one-half the total original verdict.

It is true that in a case like the present one, where the verdict figure is in excess of twice the settlement figure, the application of this formula will necessarily reduce the amount of the injured plaintiff’s recovery. However, the answer to objection to the formula on this account is that, by his settlement, the plaintiff has sold one-half of his claim for damages.

Anything else would be unfair to the settling tortfeasor, who has bought his peace, and unfair to the defendant tort-feasor, who should not be disadvantaged by a settlement to which he was not a party and to which he did not consent.” We now return to the language of Gattegno v. The Parisian, 53 S.W.2d 1005 (Tex.Com.App.1932). The respondent and the Court of Civil Appeals say that it is dictum and should not be followed.

The language appears in the opinion after the Commission of Appeals had determined that the judgments of the courts below should be reversed and the cause remanded to the trial court for a new trial. The Commission of Appeals conceded that the points then discussed by it had not been raised; but since the case was to be retried, it set out rules to be applied upon a retrial of the case and the results which were to follow upon the finding of certain facts. The Supreme Court approved “the holdings” of the Commission.

Whether this sort of instruction by the Commission of Appeals to the trial court is to be described as “dictum” is debatable. In any event, it is judicial dictum, deliberately made for the purpose of being followed by the trial court. It is not simply “obiter dictum.” It is at least persuasive and should be followed unless found to be erroneous. Railroad Commission v. Aluminum Co. of America, 380 S.W.2d 599 (Tex.1963), which followed the dictum in the Normanna case; Parker v. Bailey, 15 S.W.2d 1033 (Tex.Com.App.1929); Thomas v. Meyer, 168 S.W.2d 681 (Tex.Civ.App.1943, no writ); 21 C.J.S.

Courts § 190, pp. 316, 317. While there is room for a difference of opinion, the language in the Gattegno case has substantial support from other authorities set out above, and is not without merit. While there is also merit in the holding made by the Court of Civil Appeals in this case, the Gattegno case has been on the books for over twenty years. We think the better course is to follow the Gattegno case. Accordingly, we do so. It is argued that the Gattegno rule should not apply where the settling defendant is insolvent.

The argument is based on an absence of circuity of action and does not take into account the other reasons for the rule. The argument is that a judgment for contribution against the insolvent defendant for one-half is of no practical consequence, and the insolvent settling defendant could not recover anything against the plaintiff on any breach of covenant because he has not been harmed, i. e., he has paid nothing by way of contribution. So there is no circuity of action to be avoided.

So, it is argued, the plaintiff should have his full damages from the non-settling defendant, less the amount paid by the insolvent settling defendant. While the argument of the plaintiff here invokes with some justification the sympathy of the Court, it does not establish a basis for the non-application of the Gattegno rule. . The remaining points of error by Palestine may be summarized as follows: 1. Palestine did not get a fair trial because of the combination of the settling tortfeasor and plaintiff against him, the non-settling tortfeasor.

It contends that it got “double-teamed.” In view of our disposition of the case, any error in this regard is now regarded as harmless. 2. Palestine was deprived of a fair trial because of the refusal of the trial court to excuse for cause a lady member of the jury panel. Palestine kept her off the jury by exercising a peremptory challenge as to her. There was no showing that Palestine, as a result of the trial court’s action, was required to take an objectionable person on the jury. The point is overruled. 3.

Palestine was deprived of a fair trial because of the admission of evidence of Conoway’s lack of financial responsibility. This was the plaintiff’s asserted reason for settling with him. But the defendant asserted that this injected insurance vel non into the case, the inference being that Conoway had none and Palestine did because no attempt was being made to revoke Palestine’s license. Again, in view of our holding, we regard any error in this regard as being harmless. 4. Palestine contends that there was no evidence to support the jury verdict as to future medical expenses.

We have examined the record and find there was evidence. The point is overruled. 5. Finally, Palestine complains of the jury argument of plaintiff’s counsel. No objection was made to the argument when it was made. It would unduly lengthen this opinion to set it out. It is our opinion that it did not result in an improper verdict.

The judgments of the courts below are reversed and judgment is here rendered for the plaintiff against Palestine Contractors for $13,250 with interest from the date of the judgment of the trial court. . “POR AND IN CONSIDERATION of the sum of TEN DOLLARS * * * we, the undersigned, do hereby covenant and agree not to sue, make claim, or institute any action or proceeding directly or indirectly against A. C.

CONAWAY or ROBERT LEE CONAWAY to recover damages of any kind or character. * * * “It is distinctly understood, stipulated and agreed that this instrument is not a release but is only a covenant not to sue * * * and we are not in any manner releasing any cause of action which we have against any third party or parties * * * and it is specifically understood that this agreement does not in any manner prejudice our right to recover damages against any such third party or parties, not a party to this agreement. “The parties hereto expressly recognize and agree that the aforesaid payment * * * does not compensate the undersigned for their heavy damages * * * it being the intent of the parties hereto that the undersigned shall look for satisfaction for their damages to. the Company owning and operating said truck * * *. “ ❖ * ❖ “ * * * we have grave doubts as to whether * * * Conaway * * * was. negligent and * * * we believe that the negligence on the part of the said' owner and operator of the truck was the chief if not the sole cause of the accident described above.” .

Arkansas, Delaware, Maryland, New Mexico, Pennsylvania, Rhode Island and South Dakota. Hawaii now, of course, is a state. . Atlantic Refining Co. v. Railroad Commission, 162 Tex. 274, 346 S.W.2d 801 (1961).