Case Title: Cranford v. McNiece

Citation: 450 P.2d 529

Docket Number: 

State: oregon

Court: Oregon Supreme Court

Date: 1969-02-13T00:00:00Z

Document:
450 P.2d 529 (1969)
Randy CRANFORD, a Minor, by Roy O. Young, His Guardian Ad Litem, Appellant,
v.
Martha McNiece, Defendant, Duane L. Sampson, Respondent.
Roy O. Young, Administrator of the Estate of Janice Cranford, Deceased, Appellant,
v.
Martha McNiece, Defendant, Duane L. Sampson, Respondent.
Artus A. Cranford, Appellant,
v.
Martha McNiece, Defendant, Duane L. Sampson, Respondent.

Supreme Court of Oregon, In Banc.
Argued and Submitted December 2, 1968.
Decided February 13, 1969.
Randolph Slocum, Roseburg, argued the cause for appellants. With him on the briefs was D.R. Dimick, Roseburg.
Eldon F. Caley, Roseburg, argued the cause for respondent. With him on the brief were Long, Neuner, Dole & Caley, Roseburg.
Before PERRY, C.J., and McALLISTER, SLOAN, O'CONNELL, GOODWIN, DENECKE and HOLMAN, JJ.
DENECKE, Justice.
The issue in these three consolidated cases is whether documents entitled "Covenant Not to Sue" bar plaintiffs from maintaining actions against Sampson. The trial court held that these documents did bar plaintiffs, and they appeal.
Two of the plaintiffs were injured and Janice Cranford was killed in an automobile collision between cars driven by one McNiece and Sampson. An action was commenced naming both McNiece and Sampson as defendants. During the first part of 1966 the plaintiffs entered orders of involuntary nonsuit as to the defendant McNiece. Subsequently, each plaintiff executed a document evidencing a settlement with McNiece. The documents are all legally *530 similar. The one executed by the plaintiff Roy Young, administrator, is as follows:
*531 The other documents are, as noted, similar, with each plaintiff inserting his name in the document he executed. The name of defendant Sampson does not appear in any of the documents.
Thereafter, plaintiffs filed amended complaints alleging payments by McNiece and seeking judgments only against Sampson. Sampson filed amended answers setting forth the above-quoted document and alleging that the plaintiffs were thereby barred from maintaining the actions against Sampson. Plaintiffs filed motions to strike and demurred to such defense and Sampson in turn filed motions to dismiss on the ground that Sampson had been released. The trial court overruled the plaintiffs' demurrers, granted the motion to dismiss and entered judgments of dismissal.
The original rule was that a release of one tortfeasor releases all others. The evolution of this rule is an excellent example of the history of a rule of law based on sterile and questionable logic, rather than reality. After an initial adherence to this rigid rule, courts continued to announce their adherence to the rule but created new legal concepts to achieve more just results. Finally, many courts expressly rejected the original rule and applied the usual law of contracts.
The original rule and the reasoning used in formulating it were recognized in Stires v. Sherwood, 75 Or. 108, 112, 145 P. 645, 647 (1915):
We took cognizance in that case that there were numerous decisions from other jurisdictions which seemingly adhered to the original rule but which developed distinguishing concepts to reach results in conformance with the intention of the parties.
In Keadle v. Padden, 143 Or. 350, 361-366, 20 P.2d 403, 22 P.2d 892 (1933), this court applied one of these distinctions or exceptions to the original rule and held that the joint tortfeasor was not released. In that case an injured employee, the plaintiff, on July 1, 1930, signed a document which appeared to be a release of his employer, Varney Air Lines, from any liability for injuries to plaintiff. The defendant Padden, who was being sued for malpractice in the treatment of plaintiff for the injury he received while working for Varney, claimed that this release also released him. Plaintiff was permitted to introduce into evidence another document executed by him on April 1, 1931, purporting to show "the real understanding between him [plaintiff] and the Varney Air Lines." 143 Or. at 363, 22 P.2d 892. This later document did not use the word "release" but stated that plaintiff "does hereby covenant and agree * * * that said Floyd Keadle [plaintiff] will not commence, bring or maintain any action at law * * * against said Varney" for his injuries. 143 Or. at 364, 22 P.2d 892. The document also specifically excepted the defendant Padden from plaintiff's promise not to sue Varney.
We held: "[T]he settlement made by the plaintiff and his employer is nothing more than a covenant not to sue and would not operate as a release of defendant." 143 Or. at 366, 22 P.2d  at 893. Stires v. Sherwood, supra, 75 Or. 108, 145 P. 645, is quoted in support of the holding.
In McKay v. Pacific Bldg. Materials Co., 156 Or. 578, 589, 68 P.2d 127, 132 (1937), the document was phrased in terms of a covenant not to sue and expressly reserved the right to bring an action against another alleged tortfeasor. We stated: "The authorities are in conflict as to the effect of such an agreement as the one above set out; but this court has recognized the rule which construes such an agreement as a covenant not to sue."
Our latest decision on this issue is Hicklin v. Anders, 201 Or. 128, 253 P.2d 897, 269 P.2d 521 (1954). The document was similar to that construed in McKay v. Pacific Bldg. Materials Co., supra, 156 *532 Or. 578, 68 P.2d 127, and the McKay decision was held to be controlling.
The court, however, was not satisfied with continuing to recite the old discredited rule and then distinguishing the case before it because the document was a covenant not to sue or because the document reserved the right to sue defendant. Instead, we expressly adopted the principle that the intention of the parties to the document will determine whether it releases tort-feasors not parties to the document.
This conclusion is in accord with Breen v. Peck, 28 N.J. 351, 361, 146 A.2d 665, 73 A.L.R.2d 390 (1958), and Gronquist v. Olson, 242 Minn. 119, 64 N.W.2d 159 (1954), and other cases discussed at 73 A.L.R.2d 403, 425 (1960).
In the application of this modern principle, the document of compromise ordinarily will be only one of the pieces of evidence of the intent of the parties, not the sole evidence.[1]
The parol evidence rule is not applicable. "* * * [P]arol evidence can be used to vary or contradict a contract when the litigation is between a party to the contract and a stranger thereto. * * * [Citations]. This is true even where the evidence is offered by the party to the contract. * * *." Carolina Casualty Ins. Co. v. Oregon Auto. Ins. Co., 242 Or. 407, 413, 408 P.2d 198, 201 (1966).
Therefore, parol evidence of the plaintiff's intentions can be introduced when the plaintiff has executed an agreement releasing or covenanting not to sue one tortfeasor.
*533 Inasmuch as our decision is that the instrument is not conclusive of the intention of the plaintiff on the question of whether or not he intended to thereby release defendant and accept the payment by McNiece as full satisfaction for his claim the trial court erred in deciding the issue on the pleadings and entering judgments of dismissal against plaintiffs.
Reversed and remanded.
[1]  In cases in which the court held that the instrument did not bar the plaintiff, such as Hicklin v. Anders, supra, 201 Or. 128, 253 P.2d 897, 269 P.2d 521, and McKay v. Pacific Bldg. Materials Co., supra, 156 Or. 578, 68 P.2d 127, the defendant had to rest his case on the instrument alone; other evidence was not offered to show that the plaintiff intended to release the defendant.
[2]  When the Restatement of Torts was written the American Law Institute believed the prevailing law was to the contrary. 4 Restatement, Torts § 885, 462, comment d:

"* * * If, however, there is language in the release which manifests that the releasor intended to preserve his rights against the others, effect is given to this manifestation. If such a manifestation does not appear upon the document containing the release, a rule analogous to the parol evidence rule prevents giving effect to the intention of the parties that the other tortfeasor shall not be discharged. * * *."