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 $387,433.20 against both.
- Unbeknownst to Walker, Cano and Claborn executed a stipulation: Claborn would pay specified sums and provide services, and upon satisfaction Cano would "forthwith release Claborn completely" from the judgment.
- After Claborn performed the stipulation, Cano filed a “Satisfaction” stating Claborn had satisfied the judgment but that the judgment against Walker "remains unsatisfied."
- Walker later moved to discharge the judgment, asserting Nebraska’s common-law rule that an unconditional release of one joint obligor releases all.
- The district court denied discharge but reduced the judgment by $40,000. Walker appealed; the Nebraska Supreme Court considered whether the stipulation/satisfaction was an unconditional release that discharged Walker.
Issues
| Issue | Plaintiff's Argument (Cano) | Defendant's Argument (Walker) | Held |
|---|---|---|---|
| Did the stipulation/satisfaction unconditionally release Claborn so as to release Walker under the common-law rule? | The satisfaction expressly reserved Walker’s liability; release applied only to Claborn. | The stipulation created an unconditional release upon performance and thus, under settled Nebraska law, released Walker as a co-obligor. | Held: The stipulation (and completed performance) operated as an unconditional release of Claborn; under Nebraska common law that released Walker. |
| Was Walker’s appeal timely and from a final, appealable order? | Cano argued the appeal was untimely and not from a final order. | Walker filed within 30 days of the district court’s order overruling his discharge motion. | Held: Appeal was timely and the order denying discharge affected a substantial right and was final and appealable. |
| Could the district court reduce the judgment by $40,000 while denying discharge? | Cano pointed to the court’s reduction as favorable to Walker and argued no substantial right was affected. | Walker sought full discharge. | Held: The court erred by denying discharge; the reduction did not cure the error because the unconditional release discharged Walker entirely. |
| Should Nebraska abandon the common-law rule that release of one joint obligor releases all? | Cano urged abolition of the rule. | Walker relied on existing precedent preserving the rule. | Held: Court declined to abolish the rule, citing stare decisis and predictability; left any change to the Legislature. |
Key Cases Cited
- Lamb v. Gregory, 12 Neb. 506 (1882) (early Nebraska application that release of one joint obligor discharges all)
- Bankers Life Ins. Co. v. Ohrt, 131 Neb. 858 (1936) (stated rule that unconditional release of one maker of a joint note operates as release of all)
- Coleman v. Beck, 142 Neb. 13 (1942) (distinguishing joint obligors and sureties for release effect)
- Huber Mfg. Co. v. Silvers, 85 Neb. 760 (1910) (applied common-law rule where one maker was released "without recourse")
- Farmers State Bank v. Baker, 117 Neb. 29 (1928) (applied release-of-one rule in a multi-maker notes context)