Cano v. Walker
297 Neb. 580
| Neb. | 2017Background
- Cano sued Walker and Claborn on a joint-and-several promissory note and obtained summary judgment for the full amount ($387,433.20) against both defendants.
- Unknown to Walker, Cano and Claborn executed a November 11, 2013 stipulation: Claborn would pay specified sums and provide services; Cano agreed not to execute against Claborn and promised to release Claborn "completely" upon satisfaction of the terms.
- Cano filed the stipulated satisfaction after Claborn performed, but the satisfaction recited that the judgment against Walker "remains unsatisfied."
- Walker later argued the common-law rule that an unconditional release of one joint obligor releases all, moved to discharge the judgment, and the district court denied discharge but reduced the judgment by $40,000.
- Walker appealed; the Nebraska Supreme Court reviewed whether the stipulation/satisfaction constituted an unconditional release that operated to discharge Walker as a co-obligor.
Issues
| Issue | Plaintiff's Argument (Cano) | Defendant's Argument (Walker) | Held |
|---|---|---|---|
| Whether the district court's order overruling motion to discharge was a final, appealable order | Order was beneficial (reduced judgment) and not a final adverse order | Order denied requested discharge and thus affected a substantial right | Court held the order was final and appealable |
| Whether the stipulation constituted an unconditional release of Claborn | Stipulation merely stayed execution and the later satisfaction reserved Walker's liability | Stipulation promised complete release of Claborn upon performance, so release was unconditional and effective when performed | Court held the stipulation unambiguously created an unconditional release once performed |
| Whether the later filed satisfaction (which referenced Walker remained unsatisfied) prevented the release from operating against Walker | The satisfaction’s language reserved Walker’s liability, so no release of Walker | The operative release occurred in the stipulation when performed; the satisfaction’s qualifying language was irrelevant | Court held the stipulation governed and the satisfaction’s reservation did not prevent the common-law rule from applying |
| 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 century of Nebraska precedent applying the rule | Court declined to abolish the rule, applying stare decisis and retaining the common-law rule |
Key Cases Cited
- Bankers Life Ins. Co. v. Ohrt, 131 Neb. 858 (1936) (announces rule that unconditional release of one joint obligor operates to release all)
- Coleman v. Beck, 142 Neb. 13 (1942) (applies and discusses limits of release rule)
- Lamb v. Gregory, 12 Neb. 506 (1882) (early application of the common-law rule releasing co-obligors)
- Huber Mfg. Co. v. Silvers, 85 Neb. 760 (1910) (applies rule where release language was "without recourse")
- Farmers State Bank v. Baker, 117 Neb. 29 (1928) (applies release-of-one-releases-all rule)
- 3’s Lounge v. Tierney, 16 Neb. App. 64 (2007) (discusses Nebraska authorities on release of joint obligors)
Bottom line
The Nebraska Supreme Court reversed: the stipulation between Cano and Claborn—once performed—operated as an unconditional release of Claborn and, under Nebraska's settled common-law rule, discharged Walker as a co-obligor; the district court erred in denying discharge and the judgment was to be discharged as to Walker.