Cano v. Walker
297 Neb. 580
| Neb. | 2017Background
- Eric Cano obtained summary judgment (Nov. 20, 2013) against co-makers Michael Walker and Billy E. Claborn Jr. on a joint-and-several promissory note for $387,433.20.
- Unbeknownst to Walker, Cano and Claborn entered a Nov. 11, 2013 stipulation: Claborn would pay specified sums and provide services; upon fulfillment Cano would release Claborn "completely" and not execute against him.
- Cano filed a later "Satisfaction" stating Claborn had satisfied the judgment, while expressly noting the judgment against Walker "remains unsatisfied."
- Walker argued the unconditional release of Claborn operated to release him as a co-obligor under Nebraska common law for joint obligors.
- The district court denied Walker’s motion to discharge but reduced the judgment by $40,000; Walker timely appealed.
Issues
| Issue | Plaintiff's Argument (Cano) | Defendant's Argument (Walker) | Held |
|---|---|---|---|
| Whether the stipulation/satisfaction released Claborn unconditionally such that Walker was also released | Stipulation/satisfaction did not release Walker; satisfaction expressly reserved Walker’s liability | The stipulation and subsequent satisfaction constituted an unconditional release of Claborn, which by common law releases all joint obligors | Stipulation was an unconditional release upon performance; release of Claborn operated to release Walker; judgment discharge required |
| Whether the satisfaction language reserving Walker prevented operation of the common-law rule | Satisfaction’s qualifying language preserved Walker’s liability and limited the release | The operative release was the stipulation; once performed, release was effective despite later qualifying recital | Qualifying recital in the filed satisfaction was irrelevant because the stipulation’s unconditional release became effective on performance |
| Whether the district court’s order overruling discharge was a final, appealable order and appeal timely | (Jurisdictional challenge) Argued appeal was untimely or not from a final order | Appeal was filed within 30 days of the order denying discharge | Order denying discharge affected a substantial right; Walker’s appeal was timely |
| Whether Nebraska should abandon the common-law rule that release of one joint obligor releases all | Cano urged abolition of the rule | Walker relied on long-standing Nebraska precedent applying the rule | Court retained the rule under stare decisis; any change should be legislative |
Key Cases Cited
- Lamb v. Gregory, 12 Neb. 506, 11 N.W. 755 (1882) (earliest Nebraska application of the rule that release of one joint obligor discharges all)
- Huber Mfg. Co. v. Silvers, 85 Neb. 760, 124 N.W. 148 (1910) (applied common-law rule where release was expressed "without recourse")
- Farmers State Bank v. Baker, 117 Neb. 29, 219 N.W. 580 (1928) (held release of one maker operated to release all, despite complex arrangements)
- Bankers Life Ins. Co. v. Ohrt, 131 Neb. 858, 270 N.W. 497 (1936) (stated rule: unconditional release of one maker of joint and several note releases all)
- Coleman v. Beck, 142 Neb. 13, 5 N.W.2d 104 (1942) (distinguished release of joint obligors from situations involving sureties or assumed obligations)