Cano v. Walker
297 Neb. 580
Neb.2017Background
- Eric Cano obtained summary judgment (joint and several) against co-makers Michael Walker and Billy E. Claborn Jr. on a promissory note for $387,433.20.
- Cano and Claborn executed a stipulation (without Walker’s knowledge) where Claborn agreed to pay specified sums and provide services; upon satisfaction, Cano would "forthwith release Claborn completely" from the judgment.
- Cano filed a post-judgment “Satisfaction” reciting that Claborn had satisfied the judgment, but stating the judgment against Walker remained unsatisfied.
- Walker later asserted the common-law rule that an unconditional release of one joint obligor releases all co-obligors and moved to discharge the judgment against him.
- The district court denied discharge but reduced the judgment by $40,000; Walker appealed. The Nebraska Supreme Court reviewed whether the stipulation/satisfaction operated as an unconditional release of Claborn and thus of Walker.
Issues
| Issue | Plaintiff's Argument (Cano) | Defendant's Argument (Walker) | Held |
|---|---|---|---|
| Whether the stipulation releasing Claborn unconditionally released Walker | Stipulation only suspended enforcement against Claborn while payments were executory; release language depended on performance and did not release Walker | Stipulation, once performed, unconditionally released Claborn and therefore (under common law) released Walker | Held: The stipulation’s plain terms created an unconditional release upon performance, which operated to release Walker |
| Whether the later-filed satisfaction (qualifying Walker) prevented release of Walker | The satisfaction expressly stated Walker remained unsatisfied, preserving Walker’s liability | Satisfaction is irrelevant because the operative release was the performed stipulation; once performed the release took effect | Held: Satisfaction’s qualifying language was irrelevant; the performed stipulation controlled |
| Applicability/continuing viability of common-law rule that release of one joint obligor releases all | Cano urged abandoning the rule as outdated | Walker urged retention and application of the rule to these facts | Held: Court reaffirmed and applied the common-law rule in Nebraska; declined to abolish it |
| Whether the district court erred in denying discharge of Walker | Cano argued no final discharge was warranted; court’s partial reduction benefited Walker | Walker argued he should be fully discharged because Claborn was released | Held: District court erred; judgment against Walker must be discharged; reversed and remanded with directions to discharge |
Key Cases Cited
- Bankers Life Ins. Co. v. Ohrt, 131 Neb. 858, 270 N.W. 497 (Neb. 1936) (announces the rule that unconditional release of one joint obligor releases all)
- Coleman v. Beck, 142 Neb. 13, 5 N.W.2d 104 (Neb. 1942) (applies common-law release rule and contrasts surety situations)
- Lamb v. Gregory, 12 Neb. 506, 11 N.W. 755 (Neb. 1882) (early application of the rule that release of one joint obligor discharges all)
- Huber Mfg. Co. v. Silvers, 85 Neb. 760, 124 N.W. 148 (Neb. 1910) (applies the rule where release language was "without recourse")
- Farmers State Bank v. Baker, 117 Neb. 29, 219 N.W. 580 (Neb. 1928) (holds release of one joint maker operates to release others even when not intended)