Cano v. Walker
297 Neb. 580
| Neb. | 2017Background
- Plaintiff Eric Cano sued co-makers Michael Walker and Billy Claborn on a joint-and-several promissory note; the district court entered summary judgment for Cano for $387,433.20.
- Unknown to Walker, Cano and Claborn executed a November 11, 2013 stipulation: Claborn agreed to pay specified sums and provide services; upon satisfaction Cano agreed to "forthwith release Claborn completely" from the judgment.
- Cano filed a "Satisfaction" stating Claborn had satisfied the judgment but expressly that the judgment against Walker "remains unsatisfied." Cano continued collection efforts against Walker.
- Walker later moved to discharge the judgment against him, arguing Nebraska’s common-law rule that an unconditional release of one joint obligor releases all applied.
- The district court denied discharge but reduced the judgment by $40,000; Walker appealed. The Nebraska Supreme Court considered jurisdictional challenges, the stipulation and satisfaction documents, and the continued viability of the common-law rule.
Issues
| Issue | Plaintiff's Argument (Cano) | Defendant's Argument (Walker) | Held |
|---|---|---|---|
| Whether the district court's order overruling Walker's motion to discharge was a final, appealable order | Order reducing judgment by $40,000 benefitted Walker and was not an appealable order | Denial of full discharge affected a substantial right and was appealable | The order was final and appealable under § 25-1902 because it affected a substantial right |
| Timeliness of appeal | Walker’s appeal was untimely | Walker filed within 30 days of the discharge order | Appeal was timely under § 25-1912 |
| Whether Nebraska’s common-law rule (release of one joint obligor releases all) remains viable | Court should abandon the rule; it is outdated and causes unfair consequences | Rule remains settled Nebraska law and should be retained | Court upheld the common-law rule and declined to abolish it; change should come from Legislature |
| Whether Cano’s stipulation and satisfaction produced an unconditional release of Claborn (thus releasing Walker) | Satisfaction reserved Walker’s liability and prevented release from operating as to Walker | Stipulation constituted an agreement to release Claborn once he performed; performance occurred, so release was unconditional and effective despite the subsequent satisfaction language | Stipulation (when performed) operated as an unconditional, voluntary release of Claborn and thus released Walker under the common-law rule; district court erred and must discharge Walker |
Key Cases Cited
- Lamb v. Gregory, 12 Neb. 506 (1882) (early Nebraska application of rule that release of one joint obligor releases all)
- Huber Mfg. Co. v. Silvers, 85 Neb. 760 (1910) (applied common-law release rule where creditor released one of three makers)
- Farmers State Bank v. Baker, 117 Neb. 29 (1927) (held release of one maker without others’ consent discharged all makers)
- Bankers Life Ins. Co. v. Ohrt, 131 Neb. 858 (1936) (discussed when a waiver or conditional statement does not constitute an unconditional release)
- Coleman v. Beck, 142 Neb. 13 (1942) (distinguished surety from joint obligor; release of obligors did not release a distinct surety)