Appeal by plaintiffs from the Superior Court of Cook county;
the Hon. JOHN E. PAVLIK, Judge, presiding. Heard in the second
division of this court for the first district at the December
term, 1952. Judgment reversed and cause remanded. Opinion filed
November 10, 1953. Rehearing denied December 1, 1953. Released
for publication December 1, 1953.
MR. PRESIDING JUSTICE SCHWARTZ DELIVERED THE OPINION OF THE COURT.
Rehearing denied December 1, 1953
Plaintiffs appeal from a judgment on a verdict of not guilty in a suit under the Dram Shop Act (Ill. Rev. Stat. 1951, ch. 43, par. 135 [Jones Ill. Stats. Ann. 68.042]). They seek to recover for injuries sustained August 16, 1948 as the result of a collision between the automobile in which they were riding and an automobile driven by one Earl MacNevin. Defendants are owners of establishments selling intoxicating liquors, and, it is charged, sold liquor to MacNevin, causing his intoxication and the resulting collision. The trial resulted in a verdict of not guilty and the court entered judgment thereon.
The principal assignment of error urged by plaintiffs is the introduction in evidence of a covenant not to sue given by plaintiffs to MacNevin, in consideration of substantial payments made to plaintiffs by him. The trial court permitted examination of witnesses as to these payments and instructed the jury "that a person is entitled to only one satisfaction for the same injuries sustained in any accident," and that if the jury believed the moneys paid the various plaintiffs by MacNevin fully compensated plaintiffs for the injuries and damages sustained in this accident, plaintiffs would have no right to recover additional sums in this case. The principal question presented for review is the propriety of this instruction; that is, whether payments made for a covenant not to sue may be applied in reduction of damages recoverable.
Illinois has been cited as a jurisdiction on both sides of the question, 104 A.L.R. 932, 941. The shifting course of the Illinois law on this subject is fully reviewed in Aldridge v. Morris, 337 Ill. App. 369 (May 1949) and there the court laid down the following principle, p. 380:
". . . where plaintiff receives a payment for a covenant not to sue from one against whom tort liability could lie, such payment, made before or after judgment, may be deducted from the damages recoverable from persons whose tort liability arises out of the same circumstances, irrespective of whether the covenantee is made a party to the suit."
It should be noted that the court did not use the phrase "joint tort-feasors," but made the principle applicable to "persons whose tort liability arises out of the same circumstances." This, the court said, was in accordance with the weight of authority and consistent with the rule promulgated in Restatement of Torts, Sec. 885. The court excepted from the operation of the principle payments made by an employer to an employee, and limited the principle to cases in which the covenantee's liability is predicated on tort. Cases in which payment is made pursuant to a contractual obligation or by an employer in settlement of a compensation liability would not come within the rationale of the Aldridge case. Petition for leave to appeal was denied by the Supreme Court and later, in the case of New York, C. & St. L.R. Co. v. American Transit Lines, Inc., 408 Ill. 336 (1951), the Supreme Court referred to the decision in Aldridge v. Morris as a well-reasoned case "which case we very carefully considered on petition for leave to appeal and after such consideration denied it."
In the case just cited, New York, C. & St. L.R. Co. v. American Transit Lines, after the jury had returned a verdict of $17,800, the court, on petition of defendant, reduced the verdict by $2,000 paid for a covenant not to sue by two other defendants who had been dismissed out of the case. The Appellate Court for the Third District affirmed the trial court and thereupon plaintiff appealed to the Supreme Court. The Supreme Court held (p. 342) "that where an injury has been received by the negligence or willfulness of two or more joint tort-feasors and suit is brought against one or more of them to recover damages, any amounts received by plaintiff for execution of a covenant not to sue some one or other of the joint tort-feasors are to be applied in reduction of the damages recoverable from those remaining in the suit." The court reversed the judgment in that case because of an error in the instructions with respect to damages, but sustained the action of the trial court in allowing the remittitur upon petition after verdict.
In Hyde v. Montgomery Ward & Co., Inc., 343 Ill. App. 388 (May 1951) the Third District reaffirmed its decision in New York, C. & St. L.R. Co. v. American Transit Lines, 339 Ill. App. 282, and, referring to the decision of the Supreme Court in the same case, reenunciated the principle as applicable to cases in which "tort liability arises out of the same circumstances, irrespective of whether the covenantee is made a party to the suit or not." In the Hyde case, the covenantee had paid $4,500, and the trial court had refused to admit evidence thereof. The jury returned a verdict of $3,000. After rendition of the verdict, defendant by petition submitted the question of the payment of $4,500 by the covenantee. The case was reversed and the cause remanded for new trial because of error of the trial court in refusing to admit evidence of the payment.
[2-4] As we pointed out, the Supreme Court used the phrase, "joint tort-feasors," in giving its otherwise unqualified approval to the Aldridge case. Did they, by this phrase, intend to restrict the application of the principle to those cases in which persons jointly act together in the commission of a tort, or is it applicable to those described in the Aldridge case as "persons whose tort liability arises out of the same circumstances"? In Restatement of the Law of Torts, Sec. 885, p. 460, the principle is stated as applicable to "Payments made by one tort-feasor on account of a harm for which he and another are each liable. . . ." The word, "joint," it will be noted, is not used advisedly we think. In Andrew's Stephen's Pleading, 2nd Ed., Sec. 39, the author says:
". . . it may be observed that in general there cannot be such a thing as a joint tort, for torts are in general in their nature several. But where many persons are concerned in the commission of a tort, the plaintiff may ordinarily sue as many or as few as he chooses, and no advantage can be taken of it."
Thus, even at an early period, authorities on the subject comprehend joint tort-feasors as embracing not alone those who in concert commit an unlawful act, but those who are "concerned in the commission of a tort." Today, many actions of negligence are predicated on little or no fault, and parties have been jointly chargeable who had no relationship with each other. The Dram Shop Act is a case in point. "Joint tort-feasors," if it ever did embody the concept of joint connivance for some immoral or criminal misbehavior, no longer has that exclusive connotation. We conclude that in using the phrase "joint tort-feasors," in New York, C. & St. L.R. Co. v. American Transit Lines, supra, the Supreme Court did not mean to qualify its approval of the Aldridge case, and that the principle there announced governs the case we now have before us.
Plaintiffs argue that the Dram Shop Act gives them a cause of action wholly separate from their cause of action against MacNevin and that the covenant not to sue MacNevin should, therefore, not reduce defendants' liability. This argument is based on the premise that the Dram Shop Act imposing, as it does, liability without fault, is a punitive statute rather than a remedial one. If the Act is punitive, it is argued, plaintiffs' recovery from MacNevin should not diminish the "penalty" to be imposed on defendants. While the Dram Shop Act imposes liability without "fault," and in that respect is punitive, we are of the opinion that as the remedy provided is compensation for damages, it is in that aspect remedial. It measures recovery by "all damages sustained." It seeks to make whole the innocent victims of injuries or losses caused by intoxicated persons. In Lester v. Bugni, 316 Ill. App. 19, 29 (1942), the court said that the Dram Shop Act is remedial in character and should be liberally construed, although it recognized that there were penal elements in the statute. To the same effect is the case of Klopp v. Benevolent Protective Order of Elks, 309 Ill. App. 145, 152. In the case of Manthei v. Heimerdinger, 332 Ill. App. 335 (1947), the injured party settled with the intoxicated person and gave him a release. He then sued the tavern owner who sought to set up the release as a bar to any suit under the Dram Shop Act. The court sustained the position of the defendant saying that although the Dram Shop defendants and the intoxicated person were not joint tort-feasors, the plaintiff's injury was a single, indivisible one and the damages he sustained were inseparable. Therefore, the court said, the rule applied in this case as in the case of joint tort-feasors. The court distinguished the case of Philips v. Aretz, 215 Minn. 325, 10 N.W.2d 226, where a contrary conclusion was reached, on the ground that the Minnesota Dram Shop Act imposes a penalty on tavern owners, while the Illinois statute only seeks to provide compensation for one injured in his person or property by the tortious acts of an intoxicated person. The court further pointed out that while in some cases there might be a different measure of damages for the two separate actions, in that case the measure was the same both against the intoxicated person and the tavern owner.
In accord with these cases, we hold that insofar as it has a bearing on the points involved in the instant case, the Dram Shop Act is remedial and not punitive. The controlling principle is that where compensation is the objective of the law, recovery is limited to the damages sustained, and any payments made by MacNevin to ...