Cano v. Walker
297 Neb. 580
| Neb. | 2017Background
- Plaintiff Eric Cano obtained summary judgment (joint and several) against co-obligors Michael Walker and Billy Claborn on a promissory note for $387,433.20.
- Cano and Claborn entered a stipulation (without Walker's knowledge): Claborn would pay specified sums and perform certain services, and upon satisfaction Cano would "forthwith release Claborn completely" from the judgment.
- Cano filed a satisfaction stating Claborn had satisfied the judgment but that the judgment "remains unsatisfied" as to Walker; Cano continued collection efforts against Walker.
- Walker later moved to discharge the judgment, arguing Nebraska’s common-law rule releases all joint obligors when one is unconditionally released.
- The district court denied discharge but reduced the judgment by $40,000; Walker appealed and the Nebraska Supreme Court reversed, ordering discharge.
Issues
| Issue | Plaintiff's Argument (Cano) | Defendant's Argument (Walker) | Held |
|---|---|---|---|
| Whether the stipulation/satisfaction released only Claborn or also Walker | The satisfaction expressly reserved Walker’s liability; the stipulation was executory and did not unconditionally release Walker | The stipulation (once performed) and resulting satisfaction were unconditional releases of Claborn and thus release Walker under the common-law rule | The stipulation’s plain language created an unconditional release upon performance; release of Claborn operated to release Walker, so discharge was required |
| Whether the order denying discharge was a final, appealable order | The denial plus $40,000 reduction was beneficial to Walker and not appealable | The denial of full discharge affected a substantial right and was appealable | The denial affected a substantial right and was a final, appealable order |
| Whether the satisfaction document’s qualifying language prevented release of Walker | The satisfaction’s reservation of Walker’s liability controls and prevents a full release of joint obligors | The operative release was the completed stipulation; the later qualifying language in the satisfaction is irrelevant to the fact of release | The stipulation, once performed, operated as the unconditional release; the satisfaction’s wording did not negate that effect |
| Whether Nebraska should abolish the common-law rule that a release of one joint obligor releases all | Cano urged abolition of the rule as outdated | Walker urged adherence to settled Nebraska precedent applying the rule with qualifiers (voluntary, unconditional) | Court declined to abolish rule; applied stare decisis and existing doctrine requiring a voluntary, unconditional release to release all co-obligors |
Key Cases Cited
- Lamb v. Gregory, 12 Neb. 506, 11 N.W. 755 (1882) (early Nebraska application: release of one joint obligor discharges all)
- Huber Mfg. Co. v. Silvers, 85 Neb. 760, 124 N.W. 148 (1910) (release "without recourse" of one joint maker held to discharge all)
- Farmers State Bank v. Baker, 117 Neb. 29, 219 N.W. 580 (1928) (release of one maker of joint notes operated to release all)
- Bankers Life Ins. Co. v. Ohrt, 131 Neb. 858, 270 N.W. 497 (1936) (recognizing that waiver or conditional statements may avoid the rule)
- Coleman v. Beck, 142 Neb. 13, 5 N.W.2d 104 (1942) (distinguishing surety/assumption contexts from joint obligors)