Cano v. Walker
297 Neb. 580
| Neb. | 2017Background
- Eric Cano sued co-makers Michael Walker and Billy E. Claborn Jr. on a joint-and-several promissory note and obtained summary judgment for the full claimed amount.
- Unbeknownst to Walker, Cano and Claborn executed a stipulation: Claborn would pay specified sums and provide goods; if he satisfied those terms Cano would "forthwith release Claborn completely" from the judgment.
- After Claborn performed, Cano filed a Satisfaction stating Claborn had satisfied the judgment but that the judgment against Walker "remains unsatisfied."
- Walker argued for the first time that the release of Claborn operated to release him as a co-obligor under Nebraska’s common-law rule.
- The district court denied Walker’s motion to discharge but reduced the judgment by $40,000; Walker appealed.
Issues
| Issue | Plaintiff's Argument (Cano) | Defendant's Argument (Walker) | Held |
|---|---|---|---|
| Whether the stipulation/satisfaction released Claborn unconditionally so as to release Walker under common-law rule | The satisfaction reserved Walker’s liability (language: judgment remains unsatisfied as to Walker), so release only applied to Claborn | The stipulation constituted an unconditional/voluntary release of Claborn upon performance, and under Nebraska law release of one joint obligor releases all | The stipulation (and Claborn’s performance) effected an unconditional release of Claborn; under settled Nebraska common law that released Walker — judgment must be discharged |
| Whether the appeal was from a final, appealable order | The order reducing judgment was beneficial to Walker and therefore not a final appealable order | The denial of discharge affected a substantial right and was final and appealable | The order overruling the motion to discharge affected a substantial right and the appeal was timely and proper |
| Whether the district court properly reduced the judgment by $40,000 rather than discharging Walker | Cano argued reservation language and partial satisfaction justified keeping Walker liable and permitting a partial credit | Walker argued full discharge was required by the common-law rule once Claborn was unconditionally released | Court reversed: reduction was insufficient — full discharge required under the common-law rule once release became effective |
| Whether Nebraska should abandon the common-law rule that release of one joint obligor releases all | Cano urged abolishing the rule as outdated | Walker relied on existing precedent applying the rule | Court declined to abolish the rule, citing stare decisis and predictability; left any change to the Legislature |
Key Cases Cited
- Bankers Life Ins. Co. v. Ohrt, 131 Neb. 858, 270 N.W. 497 (Neb. 1936) (states the rule that unconditional release of one joint maker releases all)
- Coleman v. Beck, 142 Neb. 13, 5 N.W.2d 104 (Neb. 1942) (applies and discusses release-of-all rule and its limits)
- Lamb v. Gregory, 12 Neb. 506, 11 N.W. 755 (Neb. 1882) (early application of the common-law rule)
- Huber Mfg. Co. v. Silvers, 85 Neb. 760, 124 N.W. 148 (Neb. 1910) (applies rule where release language was unqualified)
- Farmers State Bank v. Baker, 117 Neb. 29, 219 N.W. 580 (Neb. 1928) (applies rule despite release lacking explicit intent to release others)
Holding (one-sentence)
Nebraska Supreme Court reversed the district court and directed discharge of Walker: once Claborn satisfied the stipulation, he was unconditionally released and, under Nebraska’s settled common-law rule, the release operated to release Walker as well; the Court declined to abolish the rule.