Cano v. Walker
297 Neb. 580
| Neb. | 2017Background
- Eric Cano sued Michael Walker and Billy E. Claborn Jr. on a joint-and-several promissory note; summary judgment for Cano entered for $387,433.20.
- Cano and Claborn executed a November 11, 2013 stipulation: Claborn would pay specified sums and provide goods; upon satisfaction Cano would "forthwith release Claborn completely" from the judgment.
- Cano did not disclose the stipulation at the summary judgment hearing; afterward Claborn performed the stipulation terms and Cano filed a Satisfaction stating Claborn had satisfied the judgment (while noting Walker’s judgment remained unsatisfied).
- Walker later argued the release of Claborn operated to release him as well under Nebraska’s common-law rule for joint obligors; the district court denied Walker’s motion to discharge but reduced the judgment by $40,000.
- Walker appealed; the Nebraska Supreme Court considered whether the stipulation/satisfaction constituted an unconditional release of Claborn that, without Walker’s consent, released Walker too.
Issues
| Issue | Plaintiff's Argument (Cano) | Defendant's Argument (Walker) | Held |
|---|---|---|---|
| Whether the stipulation/satisfaction released only Claborn or all co-obligors | Stipulation and subsequent satisfaction were limited or qualified; satisfaction expressly stated Walker’s judgment remained unsatisfied | The stipulation unambiguously released Claborn once performed, and under Nebraska common law the unconditional release of one joint obligor releases all | The stipulation, once performed, operated as an unconditional release of Claborn; under Nebraska law that release discharged Walker as well |
| Whether the satisfaction filed by Cano could be read to preserve Walker’s liability | The satisfaction’s language reserved Walker’s liability and thus prevented release of Walker | The operative release occurred in the stipulation when performed; the later satisfaction’s qualifying language was irrelevant to the already-effective release | The court relied on the stipulation as the effective release and deemed the satisfaction’s reservation immaterial |
| Whether the district court’s order overruling discharge was a final, appealable order | The order was not final or appeal timely challenged | Walker sought discharge by timely appeal from the post-judgment order overruling his motion | The order overruling discharge affected a substantial right and was a final, timely appealable order |
| Whether Nebraska should abandon the common-law rule that releasing one co-obligor releases all | Cano urged abolition of the rule as outdated and against modern practice | Walker relied on long-settled Nebraska precedent applying the rule (with "voluntary" and "unconditional" qualifiers) | The Court declined to abolish the rule, reaffirmed it, and applied it here |
Key Cases Cited
- Bankers Life Ins. Co. v. Ohrt, 131 Neb. 858 (holding unconditional release of one joint maker operates as release of all) (Neb. 1936)
- Coleman v. Beck, 142 Neb. 13 (distinguishing surety/assumption from joint obligors for release effect) (Neb. 1942)
- Lamb v. Gregory, 12 Neb. 506 (early application of rule that release of one joint debtor releases all) (Neb. 1882)
- Huber Mfg. Co. v. Silvers, 85 Neb. 760 (applying common-law rule where release language was "released without recourse") (Neb. 1910)
- Farmers State Bank v. Baker, 117 Neb. 29 (release of one maker held to release all despite complex transactions) (Neb. 1928)