Title: Schiffer v. United Grocers, Inc.

State: oregon

Issuer: Oregon Supreme Court

Document:

Filed:  July 15, 1999

IN THE SUPREME COURT OF THE STATE OF OREGON

DWAINE SCHIFFER and
WHITE CITY DEVELOPMENT,

								Respondents on Review,

		v.

UNITED GROCERS, INC., an
Oregon Corporation,

								Petitioner on Review.

(CC 94-2411-L-2; CA A87467; SC S43670)

	On review from the Court of Appeals.*

	Argued and submitted January 14, 1997.  Reassigned February
3, 1998.

	David J. Sweeney, of Brownstein, Rask, Arenz, Sweeney, Kerr
& Grim, Portland, argued the cause for petitioner on review. 
With him on the briefs was Paul G. Dodds.

	Charles M. Zennache, of Muhlheim Palmer Zennache & Wade,
Eugene, argued the cause for respondents on review.  With him on
the brief was R. Scott Palmer.

	Before Carson, Chief Justice, and Gillette, Van Hoomissen,
Durham, and Kulongoski, Justices.**

	KULONGOSKI, J.

	The decision of the Court of Appeals and the judgment of the
circuit court are reversed.  The case is remanded to the circuit
court for further proceedings.

	Durham, J., concurred and filed an opinion in which
Kulongoski, J., joined.

*	Appeal from Jackson County Circuit Court,

	L. L. Sawyer, Judge.

	143 Or App 276, 922 P2d 703 (1996).

**	Fadeley, J., retired January 31, 1998, and did not
participate in this decision.  Graber, J., resigned March
31, 1998, and did not participate in this decision.

		KULONGOSKI, J.

		We are asked in this case to reconsider the rule of law
in Oregon that a release of one joint and several obligor on a
promissory note releases the other joint and several obligors. 
This court recognized the "release of one releases all" rule in
the context of a joint and several obligation as a matter of
common law in Crawford v. Roberts, 8 Or 324, 325-26 (1880).(1)  For
the reasons explained below, we now agree with the overwhelming
number of jurisdictions that have abrogated, either by judicial
decision or by statute, the "release of one releases all" rule in
contract.(2)

  We hold today that the release of one joint and
several contract obligor does not release automatically the other
joint and several obligors; instead, the release must be given
effect according to the intentions of the parties to that
release.  The rule that we announce today is the same rule
applied by this court to releases in tort.  See, e.g., Cranford
v. McNiece, 252 Or 446, 452-53, 450 P2d 529 (1969) (stating
rule), citing Hicklin v. Anders, 201 Or 128, 135-36, 253 P2d 897
(1954).  The decision of the Court of Appeals is reversed.  The
judgment of the circuit court is reversed.  The case is remanded
to the circuit court for further proceedings.

		The facts of the case are uncontroverted, and we take
them from the opinion of the Court of Appeals:

	"In 1989, [Dwaine] Schiffer and John Gast located
property in White City on which to build a grocery
store.  The property was owned by John and R.J. Batzer. 
Schiffer, Gast, and the Batzers then formed a
partnership, White City Development ('White City'), for
the purpose of constructing and operating a grocery
store on the property.  In order to finance the
construction of the store, Schiffer and Gast approached
defendant [United Grocers, Inc.] with the following
proposal: Defendant would lease the property from White
City and, in turn, sublease the property to Schiffer
and Gast.  The financial strength of defendant, as
prime lessee of the property, would enable Schiffer and
Gast to secure financing for the construction of the
grocery store.

		"Under the lease between White City and defendant,
White City agreed to pay defendant $68,802, which
represented the cost of 'lease guarantee' insurance
that defendant was to purchase, by which defendant
would be indemnified if Schiffer and Gast defaulted on
the sublease.  Specifically:

			"'45.  LESSOR'S INDEBTEDNESS - LEASE
INSURANCE:  Lessor, [White City] hereby
acknowledges an indebtedness to Lessee [defendant]
in the amount of $68,802 (together with interest
thereon as evidenced by the promissory note
attached hereto and executed contemporaneously
with this lease) representing Lessee's premium for
lease guarantee insuring Lessee of the Sublessee's
[Schiffer's and Gast's] performance of all
obligations set forth under the Lessee's sublease. 
If such sum is not paid according to its terms,
Lessee has the right to assert said sum as a right
of set off against any sums due hereunder.  If the
lease is terminated prior to grant of possession,
then this note shall be null and void.'

	"On March 17, 1989, defendant and the partners of White
City (Schiffer, Gast, and the Batzers) executed the
prime lease.  On the same day, White City's partners
signed and executed a promissory note in favor of
defendant in the amount of $68,802.  That note
provided, in part:

			"'We, jointly and severally, promise to pay
to the order of [defendant], at Portland, Oregon,
the sum of SIXTY-EIGHT THOUSAND EIGHT HUNDRED TWO
AND NO/100 DOLLARS due and payable at such time as
[defendant] under a Lease Agreement dated March
17, 1989 is granted possession of the subject
property pursuant to the terms of said Lease
Agreement.'

	"Due to an oversight, defendant failed to collect, and
White City failed to remit, the $68,802 due under the
lease and promissory note; consequently, defendant
never purchased the lease guarantee insurance.

		"Schiffer and Gast operated the grocery store
until the business failed in July 1993.  Following the
failure of the store, Schiffer and Gast entered into a
'Surrender Agreement' with defendant.  That agreement
addressed Schiffer's and Gast's defaults under the
sublease and various equipment and inventory loans on
open account with defendant.  The agreement further
provided:

			"'United agrees to release * * * Gast from
all claims, demands, and causes of action arising
out of the parties' prior course of dealings and
under all open accounts, loans, security
agreements, and promissory notes with United.'

		"In July 1993, following the execution of the
surrender agreement, defendant notified White City that
the $68,802 lease insurance premium had never been paid
and requested full payment.  In September 1993,
defendant again requested payment on the promissory
note and stated that it intended to offset $68,802
against the balance of the rent it owed under the prime
lease, as contemplated by paragraph 45 of the lease set
out above.  After receiving no response, defendant
notified White City in May 1994 that it would begin to
withhold rent under the prime lease.

		"In June 1994, plaintiffs [Schiffer and White
City] brought this action seeking, inter alia, a
declaration that: (1) their joint and several
obligations under the March 17, 1989 promissory note
were extinguished by defendant's release of their co-obligor, Gast; 
and (2) consequently, defendant was not
entitled to offset amounts allegedly due and owing on
the note amounts it owed White City on the prime
lease."  

Schiffer v. United Grocers, Inc., 143 Or App 276, 278-80, 922 P2d
703 (1996) (footnote omitted).

		Plaintiffs moved for summary judgment on the theory
that defendant's release of Gast from his obligation to defendant
had, as a matter of law, concomitantly discharged Schiffer's and
the Batzers' joint and several obligations to defendant.  The
circuit court, relying on Crawford, granted plaintiffs' motion. 
Defendant appealed.  The Court of Appeals affirmed, also relying
on Crawford.  Schiffer, 143 Or App at 278.  We allowed review to
determine the continuing validity of the rule that the release of
one joint and several obligor on a promissory note releases
automatically the other joint and several obligors.

		The promissory note that underlies the present action
could be deemed to be a negotiable instrument.  Before proceeding
further, therefore, we must answer the threshold question whether
the common law of contract or the applicable version of Article 3
of the Uniform Commercial Code (UCC), former ORS chapter 73,
(3)
controls the outcome of this case.  As explained below, we
conclude that the common law of contract controls this case
because the promissory note in question is not a negotiable
instrument under the version of the UCC in effect when the note
was made.  

		To be a negotiable instrument subject to former ORS
chapter 73, a note calling for the payment of money, such as the
one under consideration here, had to be payable either on demand
or at a definite time.  Former ORS 73.1040(1).
(4)  Former ORS
73.1080 provided the applicable definition of "on demand":

		"Instruments payable on demand include those
payable at sight or on presentation and those in which
no time for payment is stated."

We conclude that the promissory note here is not payable on
demand.  The note, on its face, is not payable at sight or on
presentation.  The note designates the time for payment as "due
and payable at such time as [defendant] under a Lease Agreement
dated March 17, 1989 is granted possession of the subject
property."   

		Former ORS 73.1090 defined "payable at a definite
time":

		"(1) An instrument is payable at a definite time
if by its terms it is payable:

		"(a) On or before a stated date or at a fixed
period after a stated date; or

		"(b) At a fixed period after sight; or

		"(c) At a definite time subject to any
acceleration; or

		"(d) At a definite time subject to extension at
the option of the holder, or to extension to a further
definite time at the option of the maker or acceptor or
automatically upon or after a specified act or event.

		"(2) An instrument which by its terms is otherwise
payable only upon an act or event uncertain as to time
of occurrence is not payable at a definite time even
though the act or event has occurred." 

None of the conditions in former ORS 73.1090(1)(a) to (d) applied
to the promissory note.  Therefore, the note is not "payable at a
definite time."  Moreover, under former ORS 73.1090(2), the note
did not become "payable at a definite time" after the grant of
possession of the property.  Because the promissory note is
neither payable on demand nor payable at a definite time, it is
not a negotiable instrument under former ORS 73.1040(1).  Because
former ORS chapter 73 does not apply, the common law of contract
controls the outcome of this case.

		The issue before us is the continuing validity of the
common-law rule that the release of one joint and several obligor
on a promissory note releases automatically the other joint and
several obligors.  We approach that issue by first discussing the
common-law origins of the "release of one releases all" rule and
the theoretical bases used historically to justify that rule.  We
then discuss the Crawford decision, in which this court
recognized the "release of one releases all" rule in contract in
the context of a joint and several obligation, and one other
Oregon case, State v. Cummings, 205 Or 500, 288 P2d 1036 (1955),
in which this court, in dicta, spoke with approval of the
"release of one releases all" rule.  We then briefly examine the
theories advanced in support of and in opposition to the "release
of one releases all" rule in contract.  Finally, we state our own
analysis that we believe dictates a different rule as to the
effect of a release in contract given to a joint and several co-obligor. 
 See Heino v. Harper, 306 Or 347, 351, 759 P2d 253
(1988) (discussing analytical factors).

		The rule that the release of one co-obligor releases
all co-obligors, at least for some specific types of obligations,
has been part of the common law since the early 17th century.  In
Cocke v. Jennor, Hob 66, 80 Eng Rep 214, 214-15 (KB 1614), the
court ruled that a release of one joint tortfeasor in an action
for trespass released the other joint tortfeasors, reasoning that
a release "is as good a satisfaction in law, as a satisfaction in
deed," and that a plaintiff could have only one satisfaction,
whether on a debt or in an action for trespass.  Under this
approach, a release operates as a satisfaction at law of a debt
or obligation, as if the debt or obligation had in fact been paid
in full.  Consequently, a release of one contract co-obligor
forecloses all other options for recovery, including maintaining
actions against the remaining co-obligors.  As the Montana
Supreme Court observed eight years before this court's decision
in Crawford, "this seems to be the language of the books since
before the time of Lord Coke."  Collier v. Field, 1 Mont 612, 619
(1872).

		Commentators have pointed out that, on its face, that
justification for the "release of one releases all" rule is
unsound:

	"For when a claim is liquidated, a release may be given
for less than the full amount, and there is
consequently less than complete satisfaction.  If the
claim is unliquidated, the settlement is most often
below the claimant's evaluation, and it cannot be known
whether there has been complete satisfaction until
there has been a determination by court or jury of its
value.  Consequently, it would appear that if amounts
paid in settlement to one obligor are credited upon the
claim and suit permitted against one or more co-obligors 
only for the balance, there is no possibility
of more than one satisfaction."

Harold C. Havighurst, The Effect of a Settlement With 
One Co-Obligor Upon the Obligations of the Others, 45 Cornell L Q 1, 4
(1959) (hereinafter Havighurst).

		In addition to the "one satisfaction" justification for
the rule that a "release of one releases all," three other
theories in support of the rule historically have been advanced: 
(1) the construction of the instrument against the releasor; (2)
the difficulties presented by the right of contribution; and (3)
the unitary character of a joint obligation.  Havighurst at 3. 
We address those three theories each in turn.

		Lord Coke noted that a release by deed given to one of
two joint trespassers released the other as well.  Lord Coke
justified this rule on the theory that the deed of the injured
party "shall be taken most strongly against himself," i.e., that
a deed is to be construed against the grantor.  Ibid., citing
Lord Coke, Commentary upon Littleton, § 376.  Whether this theory
was accepted widely in Lord Coke's time as sufficient theoretical
support for the "release of one releases all" rule is not clear. 
However, as Havighurst notes:

	"[A]lthough a few modern cases refer to the passage
[discussed above], there is little disposition to
accept this as the rationale.  The release is no longer
looked upon as a deed but as an informal contract, and
there is no principle of construction applicable to
contracts which requires an interpretation operating
most strongly against the releasor.  There is, to be
sure, a principle of contract law under which an
instrument is construed against the party responsible
for its drafting, but since releases are usually
drafted by releasees, if this principle is applied, it
would more often than not require the opposite result. 
Coke's reason therefore is of no service today."  

Havighurst at 3-4 (footnotes omitted).  We agree.

		Although adherence to the "release of one releases all"
rule certainly avoids any difficulties presented by the non-released 
obligor's right of contribution, at least one
commentator has noted that the "release of one releases all" rule
"has been applied with perhaps the greatest rigor * * * in
jurisdictions where there is no right of contribution." 
Havighurst at 6.  Given that context, any difficulties presented
by the right of contribution must be regarded as an insufficient
theoretical justification for the "release of one releases all"
rule.

		Historically, the "release of one releases all" rule
was not applied uniformly to all types of obligations in all
jurisdictions.  Some jurisdictions applied the rule only to joint
obligations,(5) and some applied the rule to joint and several
obligations as well as to joint obligations.(6)

		At common law, a joint obligation was treated as a
single obligation of all the obligors together and the individual
obligation of no one of those co-obligors.  Samuel Williston and
Walter H. E. Yaeger, 2 A Treatise on the Law of Contracts, § 327
(3d ed 1959 and Supp 1988).  Because there was only one
obligation, there could be only one action for breach of that
obligation:  an action in which all the joint obligors were
joined as defendants.  Id.  In contrast, joint and several
obligations at common law involved a joint obligation of all the
co-obligors together and, in addition, a separate obligation on
the part of each individual obligor.  The creditor thus had the
option of suing each obligor individually; joinder of all the 
co-obligors was not necessary.  Id. at § 328.  See also Anderson v.
Stayton State Bank, 82 Or 357, 373-74, 159 P 1033 (1916) (noting
the differences between joint obligations and obligations that
are joint and several).

		The "unitary" nature of the joint obligation at common
law frequently was held up as a theoretical justification for the
rule that a "release of one releases all."  Havighurst derides
this "unitary obligation" theory as an "intellectual figment,"
and asserts that it provides no support for the "release of one
releases all" rule in the context of either joint, or joint and
several, obligations.  Havighurst at 7.  We need not go so far. 
Given the well-understood differences at common law between joint
obligations and obligations that are joint and several, we cannot
conclude that a joint and several obligation is "unitary" in
nature.  Whatever assistance is rendered in support of the
"release of one releases all" rule by the unitary nature of a
joint obligation, that theory is not helpful in the context of a
release of a joint and several obligation because a joint and
several obligation is not unitary in nature and the promisee thus
can elect to maintain separate actions against the non-released
co-obligors.  As Havighurst correctly concludes,

	"[the 'unitary obligation' rationale for the 'release
of one releases all' rule] appears to have proper
application only to obligors who are jointly bound as
distinguished from those who are bound jointly and
severally."  

Havighurst at 6.  It follows that the unitary obligation
rationale, like the other theoretical rationales advanced in
support of the "release of one releases all" rule, must be
abandoned as unhelpful in the context of a joint and several
obligation.		That conclusion accords with the conclusions of others
who have commented on the "release of one releases all" rule. 
The "release of one releases all" rule in contract has been
criticized as being anomalous and unjust, Restatement (Second) of
Contracts, § 294 comment a (1981), and as lacking a sound
theoretical basis.  Havighurst at 1-2.  Professor Corbin notes
that many jurisdictions regard the "release of one releases all"
rule as an unfair "trap."  Arthur Linton Corbin, 4 Corbin on
Contracts, § 931 (1951 and 1998 Supp).  Professor Williston
points out that a "technically satisfactory" reason for the
"release of one releases all" rule is "not easy to find." 
Williston and Jaeger, 2 A Treatise on the Law of Contracts, §
334.

		In Crawford, Roberts and Freeland executed a promissory
note in favor of Crawford, under the terms of which they agreed
to be held jointly and severally liable in the event of default.(7) 
8 Or at 324.  Crawford later released Freeland from all liability
on the note and then brought an action on the note against
Roberts.  Id. at 324-25.  In that action, Roberts contended that
Crawford's release of Freeland automatically discharged Roberts'
liability under the note.  Id.  This court agreed:

	"The facts alleged in the second separate answer we
think are sufficient to constitute a defense to this
action, and that the demurrer to said defense was
properly overruled by the court.  It is a well-settled
rule of elementary law that 'a release of one joint
maker by the holder * * * will discharge all the joint
parties, for such a release is a complete bar to any
joint suit, and no separate suit can be maintained in
such case.'  Story on Promissory Notes, § 425 [(5th ed
1859)]; Chitty on Bills, 314 [(12th ed 1854)]."  

Id. at 325-26.

		The Crawford court relied heavily on the theory that
there could be only one action against co-obligors on a joint
debt.  That reliance is clear when one considers the full text of
section 425 of Story's treatise on promissory notes, cited in
Crawford:

	"A release of one joint maker [of a promissory note]  
* * * by the holder will discharge all the joint
parties; for such a release is a complete bar to any
joint suit, and no separate suit can be maintained in
such a case."  

J. Story, Commentaries on the Law of Promissory Notes, § 425 (5th
ed 1859).  The Crawford court also relied heavily on the "one
satisfaction" theory, as is demonstrated by examination of the
passage from Chitty's treatise on bills of exchange cited in
Crawford:

	"In general, a release to one of several joint and
several debtors or parties to a bill or note operates
as a release of the whole, for the debt is thereby in
law discharged." 

J. Chitty, A Practical Treatise on Bills of Exchange, 314 (12th
ed 1854) (emphasis in original).  The Crawford opinion offered no
additional or alternative theoretical justifications to support
the "release of one releases all" rule in contract in the context
of a joint and several obligation.

		The Crawford decision also failed to consider and
address a then-current movement toward making some allowance for
consideration of the intent of the parties to a release when
determining the effect of that release.  For example, some
English cases involving releases to co-debtors, decided well
before Crawford, gave effect to a reservation of rights in the
particular release involved.  See, e.g., Solly v. Forbes, 2 Brod
& B 38 (1820) (giving effect to reservation of rights against
non-released co-obligor); Thompson v. Lack, 3 CB 540 (1846)
(same).  This consideration of the intent of the parties to a
release had been adopted in the United States as well.  See,
e.g., Benjamin v. McConnell, 9 Ill 536, 544 (1847) (release of
one joint debtor, absent an express reservation of rights against
other co-obligors, is a release of all).

		As noted, this court has considered the "release of one
releases all" rule in contract on one other occasion, again
speaking with approval of the rule.  In Cummings, Mrs. Burrell
loaned Charles and Marjorie Cummings, husband and wife, the sum
of $5,000.  Mr. and Mrs. Cummings executed an acknowledgment of
the debt, and Burrell then wrote across the text of the
acknowledgment the words "void in the event of my death." 
Burrell died before the loan was repaid, and her estate brought
an action against Mr. and Mrs. Cummings seeking repayment of the
loan.  This court held that Burrell granted a valid conditional
release and that her death extinguished the Cummings' obligation. 
Crawford, 205 Or at 534.  In dicta, the court noted, in response
to the trial court's finding that Burrell had forgiven Mrs.
Cummings' debt, that the "release of one releases all" rule would
have resulted in the release of Mr. Cummings as well.  Id. at
528.  The court gave no justification or theoretical basis for
that statement.

		From the foregoing discussion, the briefs of the
parties, and our own research, it is possible to set out the
competing arguments advanced for and against the "release of one
releases all" rule in contract.  We do so here in outline form to
facilitate further analysis.

A.	Factors Favoring Retention of the "Release of One Releases
All" Rule in Contract

	1.	The unitary nature of a joint obligation;

	2.	The limitation of the claimant to one satisfaction;

	3.	The construction of an instrument of release against
the releasor;

	4.	The difficulties presented by the right of
contribution, where such right exists; and 

	5.	The argument that the rule should be changed, if at
all, only by the legislature.

B.	Factors Favoring Abrogation of the "Release of One Releases
All" Rule in Contract

	1.	The rule is not founded on a substantively correct
theoretical basis;

	2.	The rule is at odds with Oregon rules for contract
interpretation;

	3.	The rule is at odds with Oregon rules for releases in
tort; and

	4.	The great majority of other United States jurisdictions
have, either by judicial decision or by statute,
abrogated the "release of one releases all" rule in
contract.

		As this court stated in G.L. v. Kaiser Foundation
Hospitals, Inc., 306 Or 54, 757 P2d 1347 (1988), 

	"[o]rdinarily this court reconsiders a nonstatutory
rule or doctrine upon one of three premises: (1) that
an earlier case was inadequately considered or wrong
when it was decided, see, e.g., Winn v. Gilroy, 296 Or
718, 681 P2d 776 (1984) (reconsidering parental
immunity); (2) that surrounding statutory law or
regulations have altered some essential legal element
assumed in the earlier case, see, e.g., Dahl v. BMW,
[304 Or 558, 567, 748 P2d 77 (1988)] (enactment of
comparative fault statutes supports re-examination of
prior case holding that failure to wear a safety belt
is not a proper defense); Norwest v. Presbyterian
Intercommunity Hosp., 293 Or 543, 562-67, 652 P2d 318
(1982) (wrongful death law did not alter liability to
child if parent survives injury); or (3) that the
earlier rule was grounded in and tailored to specific
factual conditions, and that some essential factual
assumptions of the rule have changed.  Without some
such premise, the court has no grounds to reverse a
well-established rule besides judicial fashion or
personal policy preference, which are not sufficient
grounds for such a change, see Norwest, 293 Or at 553."

G.L., 306 Or at 59.  Based on the foregoing discussion, we
conclude here that Crawford was "inadequately considered or
wrong" when it was decided.  G.L., 306 Or at 59.  Specifically,
the Crawford court did not give adequate consideration to the
distinctions between joint obligations and joint and several
obligations and, because it did not do so, it failed to consider
fully the various theories on which the "release of one releases
all" rule supposedly is founded, the strengths and weaknesses of
those theoretical bases with regard to joint obligations and
those that are joint and several, and the different approaches
across jurisdictions as to the application of the "release of one
releases all" rule at the time that Crawford was decided.  In
short, the rule was neither as "well-settled" nor as "elementary"
as the Crawford court apparently believed.  Accordingly, the
"release of one releases all" rule is ripe for reexamination by
this court.  Heino, 306 Or at 375.

		As we have demonstrated above, the theoretical
justifications for the "release of one releases all" rule that
this court applied in Crawford and upon which plaintiffs here
rely provide insufficient support for retaining that rule in the
context of a joint and several obligation.  The "unitary nature
of the obligation" rationale is technically deficient because it
fails to recognize the well-understood distinctions between a
joint obligation, which could be understood as unitary in nature,
and a joint and several obligation, which is not unitary.  The
"one satisfaction" rationale is unsound because it fails to
account for releases given in exchange for less than a complete
satisfaction of a claim.  The rationale based on construction of
the releasing instrument against the releasing party finds no
support in modern rules of contract construction, and probably
more strongly supports abrogation of the "release of one releases
all" rule rather than adherence to it.  Last, the rationale for
the "release of one releases all" rule based on the difficulties
presented by the right of contribution, where it exists, cannot
serve as the sole theoretical basis for the rule because it fails
to explain the use of the rule in jurisdictions or contexts in
which the right of contribution is not available.  

		On full consideration of the competing arguments, some
of which were not advanced in Crawford, we today hold that the
release of one joint and several contract obligor does not
release automatically the other joint and several obligors. 
Instead, the release must be given effect according to the
intentions of the parties to that release.  See Cranford, 252 Or
at 452-53 (stating rule in tort context), citing Hicklin, 201 Or
at 135-36.

		The rule we adopt today offers several advantages.

It explicitly recognizes that a release is a contract, in accord
with this court's holding in Lindgren v. Berg, 307 Or 659, 665,
772 P2d 1336 (1989) ("release is a contract in which one or more
parties agree to abandon a claim or right").  The new rule thus
harmonizes the rule for interpretation of a release of a joint
and several contract obligor with Oregon's rules for
interpretation of contracts generally.  See, e.g., Hoffman
Construction Co. v. Fred S. James & Co., 313 Or 464, 469, 836 P2d
703 (1992) (primary and governing rule of contract construction
is to ascertain the intention of the contracting parties).  The
rule we adopt today also harmonizes the rule for interpretation
of a release of a joint and several contract obligor with the
Oregon rule that the intent of the parties to the release governs
the interpretation of a release of one joint tortfeasor. 
Cranford, 252 Or at 452-53.  In our view, there is no logical
reason that those rules should differ.

		It is argued here, as noted above, that if the "release
of one releases all" rule is to be changed or abolished, that
action should be taken by the legislature rather than by this
court.  We affirm our statement in Heino v. Harper, 306 Or at
378, that, where we have competence to act, we should not hide
from our responsibilities with regard to judge-made law just
because we share those responsibilities with the legislature.

		The decision of the Court of Appeals and the judgment
of the circuit court are reversed.  The case is remanded to the
circuit court for further proceedings.

APPENDIX

		The "release of one releases all" rule in contract
enjoys the following status in the United States:

A.	Jurisdictions abrogating by judicial decision the "release
of one releases all" rule in contract:

1.	Illinois:  Grundy County Nat. Bank v. Olsen, 178 Ill App 3d
1003, 1009, 534 NE2d 196, 200 (1989) (noting general rule
that a "release of one joint obligor releases all others
unless a contrary intent appears from the face of the
instrument").

2.	Indiana:  Gates v. Fauvre, 74 Ind App 382, 397, 119 NE 155,
160 (1918) (intent of the parties must govern in construing
a release, and is to be gathered from the instrument if in
writing, and from the circumstances where release relied
upon arises otherwise).

3.	Iowa:  Community S. D. of Postville v. Gordon N. Peterson,
Inc., 176 NW2d 169, 175 (Iowa 1970) (court overrules prior
common-law holding that release of one releases all; adopts
rule that looks to the intent of the parties).

4.	Maryland:  Shriver v. Carlin & Fulton Co., 155 Md 51, 141 A
434, 440 (1928) (intent of parties to an instrument of
release dictates the effect thereof); Hartford v. Scarlett
Harbor, 109 Md App 217, 290-91, 674 A2d 106 (1996), aff'd,
346 Md 122, 695 A2d 153 (1997) (principal rule governing the
interpretation of a release, as with other contracts, is to
effect the intention of the parties).

5.	New Jersey:  Roseville Trust Co. v. Mott, 85 NJEq 297, 96 A
402, 403 (NJ Ch 1915) (giving effect to a reservation of
rights in release to one obligor).

6.	North Carolina:  Smith v. Richards, 129 NC 267, 40 SE 5, 6
(1901) (release of one judgment debtor released other
debtors only to extent of their "aliquot parts" of the
debt).

7.	Oklahoma:  Wade v. Tapp, 285 P2d 377, 379 (Okla 1955)
(giving effect to express reservation of rights in release). 

8.	Pennsylvania:  Joseph Melnick Building & Loan Ass'n v.
Melnick, 361 Pa 328, 64 A2d 773, 777 (1949) (giving effect
to express reservation of rights in release).

9.	Texas:  J.M. Hollis Const. Co. v. Paul Durham Co., 641 SW2d
354, 359 (Tex Ct App 1982) (release of one joint and several
obligor does not serve to release another).

10.	Washington:  United Pacific Insurance Company v. Lundstrom,
77 Wash 2d 162, 459 P2d 930, 934 (1969) (release of one
joint and several contract debtor does not release others;
intent of parties controls in construing release).

B.	Jurisdictions abrogating by statute the "release of one
releases all" rule in contract:

1.	Alabama:	Ala Code § 12-21-109 (1975 and Supp 1998)
(releases "must have effect according to their terms and the
intentions of the parties thereto"); Alabama Farm Bureau
Ins. Co. v. Hunt, 519 So 2d 480, 482 (Ala 1987) (intention
of parties controls construction of release).

2.	California:  Cal Civil Code § 1543 (West 1982 and Supp 1999)
("release of one of two or more joint debtors does not
extinguish the obligations of any of the others, unless they
are mere guarantors; nor does it affect their right to
contribution"); Williams v. Reed, 113 Cal App 2d 195, 248
P2d 147, 152-53 (1952).

3.	Colorado:  Colo Rev Stat §§ 13-50-102, 103 (1998) (release
of one or more joint debtors "shall be taken and held to be
a payment in the indebtedness of the full proportionate
share of the debtor so released," and unreleased joint
debtor's share proportionately reduced); Smith v. Weindrop,
833 P2d 856, 858 (Colo Ct App 1992) (release of one joint
debtor "does not affect the liability of remaining joint
debtor, except as to the balance of the obligation").

4.	Connecticut:  Conn Gen Stat Ann § 52-142 (West 1991 and Supp
1999) ("discharge to one of several joint debtors,
purporting to discharge him only, shall not affect the claim
of the creditor against the other joint debtors").

5.	Florida:  Fla Stat Ann ch 46.015(1) (West 1994 and Supp
1999) (release of joint and several obligor shall not
release or discharge the liability of any other person who
may be liable for the balance of the claim); Stephen Bodzo
Realty v. Willits Intern., 428 So 2d 225, 227 (Fla 1983)
(court overrules prior common-law rule that release of one
joint and several obligor releases all).

6.	Hawaii:  Haw Rev Stat §§ 483-1 to 483-6 (1993 and Supp 1998)
(adopting, with amendments, the Uniform Joint Obligations
Act, under which a creditor may release a joint, or joint
and several, obligor and reserve fully all rights against
other obligors; where the creditor fails to reserve
expressly such rights, creditor may still pursue the non-released 
obligor, but the non-released obligor is entitled
by the statute to certain reductions of the debt).

7.	Kansas:  Kan Stat Ann § 16-105 (1995 and Supp 1998) (release
of one co-obligor does not release other co-obligors jointly
or severally liable, "beyond the proper proportion of the
debt or demand for which the person released was liable");
Bazine State Bank v. Pawnee Prod. Serv., 245 Kan 490, 781
P2d 1077, 1083 (1989), cert den, 495 US 932 (1990) ("when
two or more debtors are jointly and severally liable on an
obligation, the release of one of the debtors discharges the
obligation of the other debtor only to the extent of the
consideration paid for said release").

8.	Louisiana:  La Civ Code Ann art 1803 (West 1987 and Supp
1999) ("remission of debt by the obligee in favor of one
obligor, or a transaction or compromise between the obligee
and one obligor, benefits the other solidary obligors in the
amount of the portion of that obligor;" other obligors not
released or discharged from liability).  Commentary to the
Code indicates that this article replaces La Civ Code Art
2203 (1870), which reproduced Article 1285 of the Code
Napoleon (one who remits of a debt in favor of one solidary
obligor without an express reservation of rights against the
other co-obligors is deemed to have forfeited the entire
obligation).

9.	Maine:  Me Rev Stat Ann tit 14 §§ 11-17 (West 1980 and Supp
1998) (adopting, with amendments, Uniform Joint Obligations
Act).

10.	Michigan:  Mich Comp Laws §§ 449.153 to 449.155 (1989 and
Supp 1998) (settlement or compromise with one joint debtor
does not discharge other joint debtors or preclude the
creditor from pursuing claim against the other joint
debtors).

11.	Minnesota:  Minn Stat Ann § 548.21 (West 1988 and Supp 1999)
("A creditor who has a debt, demand, or judgment against a
copartnership, or several joint obligors, promisors, or
debtors, may discharge one or more of such copartners,
obligors, promisors, or debtors, without impairing the
creditor's right to recover the residue of the debt or
demand against the others, or preventing the enforcement of
the proportionate share of any undischarged under such
judgment.  The discharge shall have the effect of a payment
by the party discharged of the party's equal share of the
debt, according to the number of debtors, aside from
sureties.").

12.	Mississippi:  Miss Code Ann § 85-5-1 (1991 and Supp 1998)
("In all cases of joint or joint and several indebtedness,
the creditor may settle or compromise with and release any
one or more of such debtors; and the settlement or release
shall not affect the right or remedy of the creditor against
the other debtors for the amount remaining due and unpaid,
and shall not operate to release any of the others of the
said debtors."). 	 

13.	Missouri:  Mo Rev Stat § 431.150 (Vernon 1992 and Supp 1998)
("It shall be lawful for every creditor of two or more
debtors, joint or several, to compound with any and every
one or more of his debtors for such sum as he may see fit,
and to release him or them from all further liability to him
for such indebtedess, without impairing his right to demand
and collect the balance of such indebtedess from the other
debtor or debtors thereof, and not so released; provided,
that no such release shall impair the right of any debtor of
such indebtedness, not so released, to have contribution
from his codebtors, as is by law now secured to him.");
Gunter v. Bono, 914 SW2d 437, 439 (Mo Ct App 1996) ("where
two or more parties are jointly liable on a contractual
obligation, and one party settles with the creditor so as to
be released, the creditor may still be able to proceed
against the other jointly liable party").

14.	Montana:  Mont Code Ann § 28-1-1603 (1997) ("release of one
of two or more joint debtors does not extinguish the
obligation of any of the others unless they are mere
guarantors, nor does it affect their rights to
contribution"); Sunbird Aviation, Inc. v. Anderson, 200 Mont
438, 651 P2d 622, 626 (1982) (adopting rule of construction
based on intent of the parties to the release).

15.	Nevada:  Nev Rev Stat Ann §§ 101.010 to 101.090 (Michie 1994
and Supp 1997) (adopting, with amendments, Uniform Joint
Obligations Act).

16.	New York:  NY Gen Oblig Law §§ 15-101 to 15-110 (McKinney
1989 and Supp 1999) (adopting, with amendments, Uniform
Joint Obligations Act).

17.	North Dakota:  ND Cent Code § 9-13-03 (1987 and Supp 1997)
("release of one of two or more joint debtors does not
extinguish the obligations of any of the others unless they
are mere guarantors").

18.	Ohio:  Ohio Rev Code Ann §§ 1779.09 to 1779.11 (Anderson
1997 and Supp 1998) (a compromise with one joint debtor does
not preclude creditor from pursuing claim against other
joint debtors).

19.	Rhode Island:  RI Gen Laws §§ 7-12-4 to 7-12-10 (1992 and
Supp 1998) (a compromise with one joint debtor shall not be
construed so as to discharge the other joint debtors, nor to
impair the right of the creditor to proceed against the
other joint debtors).

20:	South Carolina:  SC Code Ann §§ 32-9-10 to 32-9-30 (Law Co-op 1991 and Supp 1998) ("Any joint debtor may make a
separate composition with his creditor as prescribed in this
section.  Such composition shall discharge the debtor making
it and him only," and such composition shall not impair the
creditor's rights against the other joint debtors, unless
such intent appears affirmatively upon the face of the
instrument.).

21.	South Dakota:  SD Codified Laws Ann § 20-7-12 (1995 and Supp
1998) ("release of one of two or more joint debtors does not
extinguish the obligations of any of the others, unless they
are mere guarantors; nor does it affect their right to
contribution").

22.	Tennessee:  Tenn Code Ann § 24-7-106 (1980 and Supp 1998)
(releases are to be given the effect intended by the
parties); Kreutzmann v. Bauman, 609 SW2d 736, 737-39 (Tenn
1980) (the statute, which is confined to contract actions,
"changed the old technical rule of common law, whereby
release of one co-obligor released automatically another co-obligor").

23.	Utah:  Utah Code Ann §§ 15-4-1 to 15-4-7 (1996 and Supp
1998) (adopting, with amendments, Uniform Joint Obligations
Act).

24.	Vermont:  Vt Stat Ann tit 12 § 5054 (1973 and Supp 1998)
("creditor having a debt or demand against a partnership or
several joint obligors or promisors, may discharge one or
more of such partners, obligors or promisors, without
impairing his right against the others as to the residue of
his debt or demand").

25.	Virginia:  Va Code Ann § 11-10 (Michie 1993 and Supp 1998)
("creditor may compound or compromise with any joint
contractor or co-obligor, and release him from all liability
on his contract or obligation, without impairing the
contract or obligation as to the other joint contractors or
co-obligors"); First & Merchants National Bank v. Bank of
Waverly, 170 Va 496, 197 SE 462, 465 (1938) (noting that
legislature, by statute, changed common-law "release of one
releases all" rule; statute held to not apply to tort
actions).

26.	Wisconsin:  Wis Stat Ann § 113.01 to 113.11 (West 1997 and
Supp 1998) (adopting, with amendments, Uniform Joint
Obligations Act).

27.	District of Columbia:  DC Code Ann § 16-2106 (1997 and 1998
Supp) ("Any one of several joint debtors when their debt is
overdue, may make a separate composition or compromise with
their creditors, with the same effect as is provided in the
case of parties by chapter 3 of Title 41 [discharge of
obligation of one partner does not discharge other partners,
nor does it impair creditor's rights against those not
discharged, DC Code Ann §§ 41-301 to 41-304 (1998)].").

C.	Jurisdictions retaining the "release of one releases all"
rule in contract:

1.	Arkansas:  Tancred v. First Nat. Bank of Ft. Smith, 124 Ark
154, 187 SW 160, 162 (1916); but see Ark Code Ann § 16-61-204 (1987 and Supp 1997) (release of one joint tortfeasor
does not release others, unless release so provides).

2.	Georgia:  Ga Code Ann § 13-4-80 (1982 and Supp 1998) ("When
a creditor releases another who is bound jointly with * * *
a debtor * * * a release results by operation of law."). 
But see Georgia R.R. Bank & Trust Co. v. Griffith, 176 Ga
App 198, 335 SE2d 417, 419-20 (1985) (the "[l]aw of this
State does not allow a plaintiff fully to settle with
(release) one joint obligor and agree not to enforce a
judgment against him, while reserving a right to pursue
others," but   judgment creditor's release of one obligor
did not release the other obligor, where creditor did not
receive full satisfaction; court construes the agreement as
a covenant not to enforce the judgment); Weems v. Freeman,
234 Ga 575, 216 SE2d 774, 775 (1975) ("where the right to
sue [other joint tortfeasors] has been reserved and the
plaintiff has not received full satisfaction, the agreement
will be construed to be a covenant not to sue because of the
manifest intent of the parties").

3.	Kentucky:  Lewis v. Browning, 4 SW2d 734, 735 (Ky 1928)
("valid release of one joint obligor in a writing without
the consent of the other or others will likewise release
them"); but see Ky Rev Stat Ann § 411.182(4) (Baldwin 1998)
("release, covenant not to sue, or similar agreement entered
into by a claimant and a person liable, shall discharge that
person from all liability for contribution, but it shall not
be considered to discharge any other persons liable upon the
same claim unless it so provides").  

4.	Massachusetts:  Eastern Elec. v. Taylor Woodrow Blitman
Const., 11 Mass App 192, 414 NE2d 1023, 1029-30 (1981)
(noting general rule that the voluntary discharge or release
of one joint obligor discharges other joint obligors, but in
dictum calling for placement of limits on the application of
that common-law rule); see also Mass Gen Laws Ann ch 231B, §
4 (1986 and Supp 1998) (release or covenant not to sue or
not to enforce judgment given in good faith to one of two or
more persons liable in tort for the same injury shall not
discharge any of the other tortfeasors from liability for
the injury unless its terms so provide, but shall reduce the
claim against the other tortfeasors 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; release shall discharge the tortfeasor to whom it
is given from all liability for contribution to any other
tortfeasor).

5.	New Mexico:  Wood v. Eminger, 44 NM 636, 107 P2d 557, 560
(1940) (release of one codebtor releases the other
codebtors); Sunwest Bank of Farmington v. Kennedy, 109 NM
400, 785 P2d 740, 741 (1990) (stating that "release of one
releases all" is general rule regarding release of a co-obligor).

6.	West Virginia:  Rutherford v. Rutherford, 55 W Va 56, 47 SE
240, 241-42 (1904) (release of one of two joint contractors
releases both); but see W Va Code § 55-7-12 (1966 and Supp
1998) (release to one or more joint tortfeasors shall not
inure to the benefit of another such tortfeasor, and shall
be no bar to an action or suit against such other joint
tortfeasor for the same cause of action to which the release
relates).

7.	Wyoming:  McCord-Brady Co. v. Mills, 8 Wyo 258, 56 P 1003,
1006 (1898) (citing in dictum "release of one releases all"
rule); but see Wyo Stat § 1-1-119 (1977 and Supp 1998)
(release given in good faith to one of two or more persons
liable in tort for the same injury or the same wrongful
death does not discharge any of the other tortfeasors from
liability, unless the terms of the release so provide).

D.	No authorities found regarding "release of one releases all"
rule in contract:

1.	Alaska:  But see Alaska Stat § 09.17.080 (1998)
(establishing that liability in tort among persons
responsible for the same injury is several only); Young v.
State, 455 P2d 889, 893 (Alaska 1969) (abrogating "release
of one releases all" rule in tort).

2.	Arizona:  But see Ariz Rev Stat Ann § 12-2504 (1994 and Supp
1998) (release or covenant not to sue given in good faith to
one of two or more joint tortfeasors does not discharge any
of the other joint tortfeasors from liability unless its
terms so provide; the released tortfeasor is discharged from
all liability for contribution)

3.	Delaware:  But see Del Code Ann tit 6 § 2701 (1993 and Supp
1998) (establishing default position of joint and several
liability for joint creditors).

4.	Idaho:  But see Idaho Code § 6-805 (1998) (release of one
joint tortfeasor does not release others unless the release
so provides); Tuttle v. Wayment Farms, Inc., 131 Idaho 105,
952 P2d 1241 (1998) (applying statute).

5.	Nebraska:  But see Neb Rev Stat § 25-21,185.11 (1995 and
Supp 1998) (release, covenant not to sue, or similar
agreement entered into by a claimant and one joint
tortfeasor shall not discharge other persons liable upon the
same claim, unless the agreement so provides); Scheideler v.
Elias, 209 Neb 601, 309 NW2d 67, 73-74 (1981) (release of
one joint tortfeasor does not discharge others, unless it is
so agreed).

6.	New Hampshire:  But see NH Rev Stat Ann § 507:7-h (1997 and
Supp 1998) (release or covenant not to sue given in good
faith to one joint tortfeasor discharges that person in
accordance with its terms and from all liability for
contribution; does not discharge other joint tortfeasors
unless agreement expressly so provides, changing prior law
as stated in Masterson v. Berlin St. Ry., 139 A 753, 755 (NH
1927) (a release to one joint tortfeasor presumed to release
all, unless a contrary intent shown by the instrument)).

	Schiffer v. United Grocers, Inc.

	DURHAM, J., concurring.

	I agree with the court's disposition.  I write
separately to comment on the discussion of the premises for
reconsideration of common-law rules expressed in G.L. v. Kaiser
Foundation Hospitals, Inc., 306 Or 54, 59, 757 P2d 1347 (1988).

	In G.L., the plaintiff asked this court to impose
liability on a hospital, without proof of negligence, for an
employee's criminal assault against the plaintiff, who was a
hospital patient.  The employee was acting outside the scope of
employment at the time of the assault.  Because the parties had
framed their arguments in terms of the competing policies
supporting retention or modification of the pre-existing 
common-law rule of nonliability, the court correctly referred to earlier
cases in which it had analyzed the continuing viability of
various common-law rules.  The court purported to discern in the
cases three general premises for judicial reconsideration of a
nonstatutory rule or doctrine.  However, in describing those
premises, the court took care to use wording that would preclude
interpreting the stated premises as an exhaustive list:

		"Ordinarily this court reconsiders a nonstatutory
rule or doctrine upon one of three premises: (1) that
an earlier case was inadequately considered or wrong
when it was decided, see, e.g., Winn v. Gilroy, 296 Or
718, 681 P2d 776 (1984) (reconsidering parental
immunity); (2) that surrounding statutory law or
regulations have altered some essential legal element
assumed in the earlier case, see, e.g., Dahl v. BMW,
[304 Or 558, 567, 748 P2d 77 (1988)] (enactment of
comparative fault statutes supports re-examination of
prior case holding that failure to wear a safety belt
is not a proper defense); Norwest v. Presbyterian
Intercommunity Hosp., 293 Or 543, 562-67, 652 P2d 318
(1982) (wrongful death law did not alter liability to
child if parent survives injury); or (3) that the
earlier rule was grounded in and tailored to specific
factual conditions, and that some essential factual
assumptions of the rule have changed.  Without some
such premise, the court has no grounds to reverse a
well-established rule besides judicial fashion or
personal policy preference, which are not sufficient
grounds for such a change, see Norwest, 293 Or at 553."

G.L., 306 Or at 59 (emphasis added.)

	In fact, as the wording emphasized above indicates, the
list of premises set out in G.L. was not exhaustive.  For
example, in Noonan v. City of Portland, 161 Or 213, 239-40, 88
P2d 808 (1939), this court held that courts should not overrule
announced controlling principles of law unless they are
"manifestly wrong."  G.L. did not overrule the Noonan manifest
error criterion merely by failing to cite it.  The manifest error
criterion, as with the other premises cited in G.L., requires
more than an appeal to "judicial fashion or personal policy
preference," G.L., 306 Or at 59, but, when established, is as
legitimate a ground for reconsidering a nonstatutory rule or
doctrine as any other example cited in G.L.

	Some subsequent references in this court's cases to the
pertinent passage of G.L., quoted above, began to recast the
three premises listed in G.L. as a closed set that preclude
judicial reconsideration on any other basis.  For example, Heino
v. Harper, 306 Or 347, 759 P2d 253 (1988), called that passage in
G.L. "the rule concerning reconsideration of a court-created rule
or doctrine."  Heino, 306 Or at 373 (emphasis added).  However,
Heino, like G.L., also referred to the three premises as proper
subjects for judicial consideration rather than as an exclusive
list of preconditions or requirements.  Heino described the
premises cited in G.L. as "factors" and concluded that the first
G.L. "factor" -- the earlier cases were wrong when decided --
justified modification of the common-law rule of interspousal
tort immunity.  Id. at 374.  Without citing Noonan, the Heino
court also acknowledged its duty to modify a court-made rule that
was manifestly wrong:

	"The rule we consider today is judge-made.  If it is no
longer valid or appropriate, it is our responsibility
to say so."

Heino, 306 Or at 378.  Because the court concluded that an error
in the case law justified reconsideration of the common-law rule
in accordance with the first G.L. factor, the court in Heino, as
in the present case, had no occasion to decide whether the
absence of at least one of the G.L. factors would preclude such
reconsideration.

	That occasion arose in Keltner v. Washington County,
310 Or 499, 800 P2d 752 (1990), which involved the continuing
viability of the common-law rule against recovery of contract
damages for mental suffering alone.  Keltner referred to the
passage from G.L., quoted above, as stating a "rule" and a
"standard," Keltner, 310 Or at 505, although G.L. itself never
used those terms.  Keltner determined that the plaintiffs had
failed to establish the presence of any one of the three premises
described in G.L.  On the basis of that conclusion, the court
decided that it had no ground upon which to reconsider the
common-law rule.  Consequently, the court refused to address the
plaintiff's argument that the common-law rule caused injustice in
cases in which the breach was particularly likely to cause
serious emotional disturbance.  Keltner, 310 Or at 509-10.

	Keltner provoked a dissent from Justice Unis, who
argued that the court's "three premise methodology" in G.L. was
too rigid and jeopardized the appropriate judicial consideration
of the current validity of the policy premises that undergird
common-law rules or doctrines.  Justice Unis stated:

		"I would jettison this court's self-imposed rule
that precludes it from justifying rules of common law
or doctrine in terms of policy.  Abandonment of the
present decision-making methodology employed by this
court, which I advocate, does not mean that this court
should ignore the doctrines of judicial restraint and
stare decisis, which recognize the need for stability
and predictability in the development of the law.  The
self-imposed rule of judicial restraint earns this
court the dubious distinction of being the only state
in the union to limit its traditional judicial common
law-making authority so substantially."

Keltner, 310 Or at 512-13 (Unis, J., dissenting) (footnote
omitted).

	The foregoing discussion demonstrates that what began
in G.L. as an attempt by the court to summarize a nonexclusive
list of the factors that it ordinarily considers when
reconsidering a common-law rule became, in Keltner, a rule that
barred judicial consideration of the premises for a common-law
doctrine unless the party advocating for a change established the
presence of one of the G.L. criteria.  Justice Unis was correct
to criticize the court's unexplained development of such an
inflexible standard for the evaluation of common-law rules and
doctrines by Oregon courts.

	In my view, the ancient doctrine of stare decisis
should govern the court's reconsideration of common-law rules and
doctrines.  That doctrine appropriately incorporates elements of
both stability and flexibility in the judicial development of the
common law.  See State ex rel Huddleston v. Sawyer, 324 Or 597,
643, 932 P2d 1145 (1997) (Durham, J., concurring in part and
dissenting in part) (noting that the two central premises of the
doctrine of stare decisis are stability and flexibility); Noonan,
161 Or at 240 ("While the doctrine of stare decisis attaches
great weight to precedents, it does not demand that the courts
adhere to them if satisfied that they are manifestly wrong." 
(Citation omitted.)).  Applying that doctrine, this court should
evaluate the continuing validity of a common-law rule by
considering whether a proper justification supports a
modification.  Such a justification could include any of the
criteria listed in G.L., the manifest error criterion described
in Noonan, or any other appropriate justification.  As G.L.
correctly noted, "judicial fashion or personal policy preference
* * * are not sufficient grounds for such a change."  G.L., 306
Or at 59.  If the court's evaluation of a common-law rule leads
it to the conclusion that the rule deserves modification, it is
the court's responsibility to say so.  Heino, 306 Or at 378.

	I agree with the majority that Crawford v. Roberts, 8
Or 324 (1880), gave inadequate consideration to the effect of the
"release of one releases all" rule in contract cases.  That is a
proper justification supporting modification of that common-law
rule.  Accordingly, I concur.

	Kulongoski, J., joins in this concurring opinion.

1. 	Crawford addressed the "release of one releases all"
rule in the context of a joint and several obligation.  See the
discussion of Crawford below, ___ Or at ___ (slip op at 13-14). 
This case similarly addresses only the effect of a release on a
joint and several obligation.  Apparently, Oregon did not ever
adopt, either by judicial decision or by statute, the "release of
one releases all" rule in the context of a joint obligation.

2. 	For the current status of the law of releases in
contract in the other 49 states and the District of Columbia, see
the appendix to this opinion.

3. 	In 1993, well after the execution of the promissory
note under consideration here, the Oregon legislature
substantially revised ORS chapter 73 (Article 3 of the UCC,
relating to negotiable instruments).  We consider the issue under
the version of the UCC applicable at the time of the making of
that instrument.

4. 	Former ORS 73.1040(1) provided: 

		"Any writing to be a negotiable instrument * * * 
must:

		"(a) Be signed by the maker or drawer; and 

		"(b) Contain an unconditional promise or order to
pay a sum certain in money and no other promise, order,
obligation or power given by the maker or drawer except
as authorized by ORS 73.1010 to 73.8050; and

		"(c) Be payable on demand or at a definite time;
and 

		"(d) Be payable to order or to bearer."  

	(Emphasis added.) 

5. 	Illinois, for example, applied the "release of one
releases all" rule only to joint obligations.  See, e.g., Rice v.
Webster, 18 Ill 331, 332-33 (1857) (release of one joint debtor
is a release of all).

6. 	Massachusetts, among other jurisdictions, applied the
"release of one releases all" rule to joint and several
obligations as well as to joint obligations.  See, e.g., Hale v.
Spaulding, 145 Mass 482, 483, 14 NE 534, 535 (1888) (release of
one joint debtor is a release of all); Tuckerman, et al v.
Newhall, 17 Mass 580, 584 (1822) (release of one joint and
several debtor releases all).

7. 	The Crawford opinion states in dicta that a release of
one joint obligor releases all.  Commentators have recognized,
however, that the facts of that case limit the holding of that
case to joint and several contract obligations.  See, e.g.,
Charles G. Howard, The Restatement of the Law of Contracts With
Oregon Notes, 12 Or L Rev 201, 205, 207 (1932).