Hyde v. Shapiro

• Decision Date: 16 March 1984
• Docket Number: 83-234,Nos. 83-196,s. 83-196
• Citation: 346 N.W.2d 241,216 Neb. 785
• Parties: Robert W. HYDE et al., Appellees, v. Irving SHAPIRO et al., Appellants, Harry D. Nicola, Appellee.
• Court: Nebraska Supreme Court

Page 241

346 N.W.2d 241

216 Neb. 785

Robert W. HYDE et al., Appellees, v. Irving SHAPIRO et al., Appellants Harry D. Nicola, Appellee.

Nos. 83-196, 83-234.

Supreme Court of Nebraska.

March 16, 1984.

Syllabus by the Court

1. Contracts: Consideration. A valuable consideration to support a contract need not be one translatable into dollars and cents; it is sufficient if it consists of the performance, or promise thereof, which the promisor treats and considers of value to him.

2. Contracts: Consideration. There is a sufficient consideration for a promise if there is any benefit to the promisor or any detriment to the promisee. A benefit need not necessarily accrue to the promisor if a detriment to the promisee is present, and there is a consideration if the promisee does anything legal which he is not bound to do or refrains from doing anything which he has a right to do, whether or not there is any actual loss or detriment to him or actual benefit to the promisor.

3. Courts: Judgments. The provisions of Neb.Rev.Stat. § 25-2002 (Reissue 1979) apply only to a modification of a judgment entered at a subsequent term. The law is clear that during the term the trial court has the inherent power to modify its judgment and no petition or summons is required.

4. Courts: Judgments. Our law is clear that, absent an abuse of discretion, a court has the inherent power to vacate or modify its own judgment at any time during the term at which those judgments are pronounced and such power exists entirely independent of any statute.

Jim Zimmerman of Atkins, Ferguson, Zimmerman, Carney & Law, Scottsbluff, for appellant Shapiro.

Robert M. Brenner of Brenner & Meister Law Office, Gering, for appellant Vickery.

Robert W. Mullin of Van Steenberg, Brower, Chaloupka, Mullin & Holyoke, Scottsbluff, for appellees Hyde et al.

KRIVOSHA, C.J., CAPORALE and GRANT, JJ., CAMP, District Judge, and COLWELL, District Judge, Retired.

KRIVOSHA, Chief Justice.

Irving Shapiro and Harry Vickery appeal from a judgment entered by the district court for Scotts Bluff County, Nebraska, in favor of the appellees, Robert W. Hyde, William S. Whitehead, John C. Hawkins, Jr., Donn C. Raymond, and Jerome A. Fuhrman. The judgment was entered against Harry D. Nicola as well, but Nicola has not appealed and is not involved in this matter. We believe that the action of the trial court was correct and should be affirmed.

The suit involved in this appeal was in the form of a declaratory judgment action asking the court to determine the enforceability of a contribution agreement signed by Shapiro and Vickery. The appellants, Shapiro and Vickery, maintain that the trial court erred in entering a judgment against them and in favor of the appellees because of a failure of consideration. The record discloses that all of the parties to this action were business associates in a restaurant enterprise known as Grampy's. The business entity consisted of a partnership known as Grampy's of Scottsbluff and a corporation known as Grampy's International, Inc. The partnership, which was created on February 5, 1973, consisted originally of appellees Hyde, Whitehead, Hawkins, and Raymond, but neither of the appellants. The corporation, which was formed on February 23, 1973, consisted of the appellees and appellant Vickery as original shareholders. Appellant Shapiro became a stockholder at a later time. On April 2, 1973, the partnership assigned to the corporation a licensing agreement and the exclusive right to do business under the trade name "Grampy's." In return for the assignment the partnership was to receive from the corporation a royalty of .0075 percent on all gross sales generated by any owned or franchised Grampy's restaurant. The royalties were to be distributed to the partners at least every 3 months. By at least June of 1979 the corporation encountered some financial difficulties and required additional funds. Shapiro and Vickery offered to provide certain of this additional funding, provided that they were made members of the partnership, as well as being stockholders in the corporation, thereby entitling them to a share of the royalties. The existing partners agreed to create a new partnership consisting of all of the former partners plus Shapiro and Vickery, provided that the new partners agreed to sign a certain contribution agreement. The books of the old partnership were to be closed and adjusted showing the new interests. All assets of the old partnership, except the royalties accrued prior to August 1, 1979, were to be shared among the newly formed group. In all other respects the original partnership agreement executed on February 5, 1973, was to remain in effect.

Both the partnership agreement and the contribution agreement made it clear that the consideration for the new partnership was an agreement by Shapiro and Vickery to sign the contribution agreement. The language of the amended partnership agreement specifically provided in part as follows: "WHEREAS, it is the desire of all parties to this Agreement to reorganize the partnership for purposes of admitting new partners on the sole consideration that they sign and execute a Contribution Agreement...." (Emphasis supplied.) And, likewise, the contribution agreement stated in part: "[I]t is the intention of all of the undersigned to become equal partners ... in the above-referred Partnership, which has been amended ... to include the undersigned as equal partners, solely upon the consideration that each of the undersigned will execute this Contribution Agreement indemnifying the partners or stockholders who have signed prior guaranty agreements securing ... the Corporation." (Emphasis supplied.)

Shapiro and Vickery now maintain that they are not bound by the contribution agreement because there has been a total failure of consideration because the partnership failed and, as a result, they did not receive the royalties which they expected to receive. That is, they maintain that the sole consideration for signing the contribution agreement was the promise that they would receive royalties and, not having received them, they are entitled to be relieved of any obligation under the contribution agreement. Just as the trial court did not accept that argument, neither do we.

There is no question that there was adequate consideration for the execution of the contribution agreement in the first instance. While the consideration may not have proved ultimately to be of benefit to Shapiro and Vickery, this is not significant. The distinction between whether there was sufficient consideration and its value to Shapiro and Vickery becomes relevant as we review the case. In the case of Omaha Nat. Bank v. Goddard Realty, Inc., 210 Neb. 604, 609-10, 316 N.W.2d 306, 309-10 (1982), we set out the rules with respect to consideration, saying: "There appears to be no precise statement as to what constitutes consideration for an agreement other than the general declaration that in order for there to be consideration for an agreement there must be a benefit to one of the parties or a detriment to the other. See, Commuter Developments & Investments, Inc. v. Gramlich, 203 Neb. 569, 279 N.W.2d 394 (1979); Dorland v. Dorland, 175 Neb. 233, 121 N.W.2d 28 (1963). What that benefit/detriment must be or how valuable it must be varies from case to case. It is clear, however, that even 'a peppercorn' may be sufficient. In Asmus v. Longenecker, 131 Neb. 608, 269 N.W. 117 (1936), we said: ' "A valuable consideration to support a contract need not be one translatable into dollars and cents; it is sufficient if it consists of the performance, or promise thereof, which the promisor treats and considers a value to him." ... "A valuable consideration may consist either in some right, interest, profit, or benefit accruing to one party, or...