Cano v. Walker
297 Neb. 580
| Neb. | 2017Background
- Cano obtained summary judgment against co-makers Michael Walker and Billy E. Claborn, Jr. on a joint-and-several promissory note for $387,433.20.
- Unbeknownst to Walker at the summary-judgment hearing, Cano and Claborn had executed a stipulation: Claborn would pay set amounts and provide goods; upon satisfaction, Cano would "forthwith release Claborn completely" from the judgment.
- Cano later filed a "Satisfaction" stating Claborn had satisfied the judgment, while noting the judgment against Walker "remains unsatisfied."
- Walker, after continued execution efforts by Cano, moved to discharge the judgment on the ground that Claborn's release operated to release all joint obligors.
- The district court denied Walker's motion 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 only or all co-obligors | The stipulation and subsequent satisfaction reserved Walker's liability; release applied only to Claborn | The unconditional release of Claborn operated to release Walker under Nebraska common law | Held for Walker: the stipulation, once performed, unconditionally released Claborn and thus released Walker under the common-law rule |
| Whether the qualifying language in the later-filed satisfaction prevented release of Walker | The satisfaction expressly stated Walker's judgment remained unsatisfied, so no release of Walker | The operative release occurred when the stipulation was performed; the later satisfaction's qualifying language was irrelevant | Held the stipulation controlled; the satisfaction's qualification did not avoid the release of Walker |
| Whether the district court properly reduced the judgment sua sponte by $40,000 | Cano implicitly conceded the court could correct the judgment amount | Walker argued full discharge was required under the common-law rule, not mere reduction | Court erred in denying discharge; appellate court reversed and directed discharge (district court's $40,000 reduction insufficient) |
| Whether Nebraska should abandon the common-law rule that releasing one joint obligor releases all | Cano urged abolition of the common-law rule | Walker relied on settled Nebraska precedent applying the rule | Court declined to abolish the rule, reaffirmed it as settled Nebraska law and applied it here |
Key Cases Cited
- Bankers Life Ins. Co. v. Ohrt, 131 Neb. 858 (holding unconditional release of one joint obligor may release all; court examined whether release was unconditional)
- Coleman v. Beck, 142 Neb. 13 (discussing distinctions in release law and when release affects co-obligors)
- Lamb v. Gregory, 12 Neb. 506 (early Nebraska application of rule that release of one joint obligor discharges all)
- Huber Mfg. Co. v. Silvers, 85 Neb. 760 (applied common-law rule where debtor was released "without recourse")
- Farmers State Bank v. Baker, 117 Neb. 29 (held release of one maker of joint note operated to release others)