Burns v. Fincke

• Decision Date: 24 April 1952
• Docket Number: No. 11027.,11027.
• Citation: 197 F.2d 165,90 US App. DC 381
• Parties: BURNS et al. v. FINCKE et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

90 US App. DC 381, 197 F.2d 165 (1952)

BURNS et al. v. FINCKE et al.

No. 11027.

United States Court of Appeals District of Columbia Circuit.

Argued January 3, 1952.

Decided April 24, 1952.

Mr. Stanley Suydam, Washington, D. C., for appellants.

Mr. O. R. McGuire, Washington, D. C., for appellees.

Before CLARK, PROCTOR and FAHY, Circuit Judges.

FAHY, Circuit Judge.

Appellant Burns, a plaintiff below, and appellee Fincke, a defendant, were partners engaged in the business of buying and selling new and used aircraft, aircraft engines, parts and accessories. The partnership was terminated. Thereafter, on November 24, 1947, a written contract was executed to effect a settlement of disputed accounts between them. Fincke paid Burns $1,000 pursuant to one of the provisions in this contract.

On February 2, 1948, Burns sued Fincke to recover for breach of the remaining provisions of this settlement contract and also for specific performance. The complaint alleged, inter alia, that Burns and Fincke after termination of their partnership had contracted to settle their differences and that Fincke had failed and refused to carry out his part of the contract. Judgment for $22,300, with interest and costs, as well as specific performance, was prayed. Fincke counterclaimed for $1,000, the amount he had paid under the terms of the settlement contract, alleging that the contract grew out of Burns' fraud.

The parties then agreed that each would file a praecipe disposing, respectively, of his claim and counterclaim. Burns paid $1,000 in settlement of the counterclaim and filed a praecipe in the District Court directing the clerk to dismiss with prejudice his complaint. Fincke filed a praecipe directing the clerk to dismiss with prejudice his counterclaim.

The present action was subsequently filed. In it plaintiffs¹ allege that defendants converted to their use certain property of Burns on or about December 31, 1946. Judgment for $14,000, with interest and costs, is demanded. Defendants assert that the prior action is res judicata.² Plaintiffs counter that the dismissal of the prior action and of the counterclaim constituted a rescission of the settlement agreement of November 24, 1947, as a consequence of which the parties are in the same position as if no settlement agreement had been executed, leaving plaintiffs free to sue on their original claim. It is stipulated that the item of $14,000 for which judgment is sought in the present action constituted a component part of the settlement agreement of November 24, 1947.

The praecipes, filed with the clerk of the District Court in the first suit, are to be construed as constituting a stipulation within the meaning of Rule 41(a), Fed. Rules Civ. Proc. 28 U.S.C.A.³ Since the stipulation provides for dismissal with prejudice, the first action is res judicata of the matters covered by the cause of action and counterclaim therein. Cleveland v. Higgins, 2 Cir., 1945, 148 F.2d 722, certiorari denied, 1945, 326 U.S. 722, 66 S.Ct. 27, 90 L.Ed. 428.

The item of $14,000 for which the present action was instituted was a part of the disputed matters included in the compromise agreement of November 24, 1947. It was merged in the action on that agreement. When that action was dismissed with prejudice, res judicata which attached to its subject matter...