Cano v. Walker
297 Neb. 580
Neb.2017Background
- Eric Cano obtained summary judgment (Nov. 20, 2013) against co-makers Michael Walker and Billy E. Claborn, Jr. on a joint-and-several promissory note for $387,433.20.
- On Nov. 11, 2013 (unknown to Walker), Cano and Claborn entered a stipulation: Claborn would pay specified amounts and provide services; upon performance Cano would "forthwith release Claborn completely" from the judgment.
- Cano later filed a Satisfaction stating Claborn had "satisfied the Judgment against him" and that the judgment "against Walker remains unsatisfied." Cano continued collection efforts against Walker.
- Walker moved to discharge the judgment, arguing Nebraska common law holds an unconditional release of one joint obligor releases all co-obligors; the district court denied discharge but reduced the judgment by $40,000.
- Walker timely appealed; the Nebraska Supreme Court considered whether the stipulation/satisfaction amounted to an unconditional release of Claborn and thus discharged Walker under the common-law rule.
Issues
| Issue | Plaintiff's Argument (Cano) | Defendant's Argument (Walker) | Held |
|---|---|---|---|
| Whether the district court's denial of Walker's discharge order was a final, appealable order | Cano: Denial was not appealable or appeal was untimely | Walker: Denial affected a substantial right and appeal was timely | Appeal is timely and the denial was a final, appealable order |
| Whether the stipulation constituted an unconditional release of Claborn | Cano: Stipulation only stayed execution while payments were executory; satisfaction reserved Walker's liability | Walker: Stipulation promised a complete release upon performance, so release was unconditional once performed | Stipulation was plain and unambiguous; once performed it operated as an unconditional release of Claborn |
| Whether the later Satisfaction's language reserving Walker's liability defeats the release effect | Cano: Satisfaction explicitly preserved Walker's obligation | Walker: Operative release was the earlier stipulation; satisfaction's qualifying language is irrelevant once stipulation was performed | The stipulation controlled; the satisfaction's reservation did not negate the prior unconditional release once performed |
| Whether Nebraska should abandon the common-law rule that a release of one joint obligor releases all | Cano: Urged abolition of the rule | Walker: Argued rule remains controlling precedent | Court declined to abolish rule; upheld continued viability and applied it to discharge Walker |
Key Cases Cited
- Bankers Life Ins. Co. v. Ohrt, 131 Neb. 858, 270 N.W. 497 (1936) (articulates that unconditional release of one joint maker releases all)
- Lamb v. Gregory, 12 Neb. 506, 11 N.W. 755 (1882) (early Nebraska application of the rule that release of one joint obligor discharges all)
- Huber Mfg. Co. v. Silvers, 85 Neb. 760, 124 N.W. 148 (1910) (applied common-law rule where release language was unqualified)
- Farmers State Bank v. Baker, 117 Neb. 29, 219 N.W. 580 (1928) (held release of one maker of joint notes releases others absent consent)
- Coleman v. Beck, 142 Neb. 13, 5 N.W.2d 104 (1942) (distinguishes surety/assumption context from joint obligor releases)
Conclusion: The Nebraska Supreme Court reversed and remanded with directions to discharge the judgment against Walker because Claborn’s fulfilled stipulation operated as an unconditional release that—under Nebraska common law—released Walker as well.