Cano v. Walker
297 Neb. 580
| Neb. | 2017Background
- Eric Cano obtained summary judgment on a joint-and-several promissory note against Michael Walker and Billy E. Claborn, Jr., for $387,433.20.
- Before the summary judgment was entered, Cano and Claborn executed a stipulation: Claborn would pay specified amounts and provide certain goods; upon satisfaction, Cano would release Claborn completely from the judgment.
- Cano filed a later "Satisfaction" stating Claborn had satisfied the judgment, while noting the judgment against Walker remained unsatisfied; Cano continued collection efforts against Walker.
- Walker moved to discharge the judgment, arguing that the unconditional release of one joint obligor releases all co-obligors under Nebraska common law.
- The district court denied discharge but reduced the judgment by $40,000; Walker appealed. The Nebraska Supreme Court reviewed whether the release of Claborn unconditionally released Walker.
Issues
| Issue | Plaintiff's Argument (Cano) | Defendant's Argument (Walker) | Held |
|---|---|---|---|
| Whether the stipulation/satisfaction unconditionally released Claborn so as to release Walker | Stipulation and later satisfaction reserved Walker’s liability; satisfaction qualified to leave Walker exposed | Stipulation granted an unconditional release upon performance; release of one joint obligor releases all | The stipulation, once performed, operated as an unconditional release of Claborn and thus released Walker under the common-law rule |
| Whether the filing denying discharge was a final, appealable order | Denial was favorable (reduced judgment) so did not affect a substantial right | Denial deprived Walker of full relief (discharge) and affected a substantial right | Order overruling motion to discharge affected a substantial right and was appealable |
| Whether the satisfaction language ("remains unsatisfied" as to Walker) prevented release effect | The qualifying language limited the satisfaction to Claborn only | Operative release occurred in the stipulation once performed; the later satisfaction’s qualifier was irrelevant | The stipulation’s unconditional release controlled; the satisfaction’s language did not defeat the release effect |
| Whether Nebraska should abandon the common-law rule that release of one joint obligor releases all | Argues the rule should be abolished (policy/modernity) | Stare decisis and predictability support retaining the rule; parties can draft around it | Court declined to abolish the rule and reaffirmed its continued application in Nebraska |
Key Cases Cited
- Bankers Life Ins. Co. v. Ohrt, 131 Neb. 858, 270 N.W. 497 (Neb. 1936) (recognizes that unconditional release of one joint obligor releases all; examines whether release was unconditional)
- Coleman v. Beck, 142 Neb. 13, 5 N.W.2d 104 (Neb. 1942) (distinguishes surety from joint obligor; release of obligors did not release a surety)
- Lamb v. Gregory, 12 Neb. 506, 11 N.W. 755 (Neb. 1882) (early application of 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 common-law rule where release was "without recourse")
- Farmers State Bank v. Baker, 117 Neb. 29, 219 N.W. 580 (Neb. 1928) (holds release of one of several makers on a note operates as release of all)