Johnson v. Johnson

• Decision Date: 06 June 1906
• Citation: 132 Iowa 457,107 N.W. 802
• Parties: JOHNSON ET AL. v. JOHNSON ET AL. (MCCREIGHT, INTERVENER).
• Court: Iowa Supreme Court

132 Iowa 457

107 N.W. 802

JOHNSON ET AL.

v.JOHNSON ET AL. (MCCREIGHT, INTERVENER).

Supreme Court of Iowa.

June 6, 1906.

Appeal from District Court, Webster County; J. R. Whitaker, Judge.

Action in equity for the dissolution of a partnership and for an accounting. A. H. McCreight came into the action by filing a petition of intervention. The defendants first moved to strike such petition, and, this being overruled, they filed demurrer, and this in turn was overruled. Defendants elected to stand on their motion and demurrer, and, judgment having been entered, they appeal. Affirmed.Kenyon & O'Connor, for appellants.

Mitchell & Hackler, for appellee.

BISHOP, J.

A somewhat lengthy statement seems indispensable to an understanding of the situation. The plaintiffs, R. H. and Andrew F. Johnson, and the defendants, D. G. and Wm. Johnson, were partners doing business near Ft. Dodge as manufacturers and dealers in brick, tile, etc., under the name of “Johnson Bros. Clay Works.” Personal differences arising out of the conduct of the business led to the commencement of this action on October 25, 1903, for a dissolution of the partnership, an accounting, and final settlement. The defendants appeared and answered, among other things admitting the existence of insuperable differences, and praying substantially as did the plaintiffs. By consent of all parties one Newton was appointed a receiver of the property of the partnership, and, having qualified, he went into possession. On February 12, 1904, the court entered an order directing the receiver to sell the assets of the partnership, except a leasehold interest held by it and respecting which a controversy was pending as between the partnership and its lessor; further, that he ascertain the facts as to the indebtedness of the partnership, taking such evidence as might be necessary, and, after making sale of the property, that he pay off and cancel such indebtedness. No sale, however, was made pursuant to such order. On April 12, 1904, the intervener, McCreight, filed his petition in said action, setting up the fact that he was a creditor of the partnership and stating the character and amount of his claim. The prayer of his petition was that the receiver be ordered to pay such claim. It is conceded that no notice of the filing of this petition was served either upon the principal parties or the receiver. So, too, it does not appear that the attention of the court was called thereto in any way until long after, and under the circumstances presently to be stated.

On April 13, 1904, there was filed in said action a stipulation for settlement as between the principal parties. Among the provisions thereof those material to be considered are these: The defendants “shall and do hereby purchase of the plaintiffs all their interest in and to the partnership property and assets,” and shall pay all obligations of the partnership. The plant shall be turned over at once to defendants, they to have full control and management, except as to the duties of James Flaherty, which are specified to be as follows: Said Flaherty “shall be, and is hereby, appointed an assistant receiver,” and it shall be his duty to collect all moneys coming through the operation of the plant, and after paying expenses of operation he shall pay 50 per cent. of the balance upon the indebtedness of the partnership; each creditor to receive his proportionate share thereof, and the remaining 50 per cent. to be paid to plaintiffs. It is then provided that the receiver, Newton, shall make his final report, turn over the property to Flaherty, and be discharged. And it declares that the partnership “is hereby dissolved and settled as specified in this stipulation.” On February 22, 1905, the intervener, McCreight, served notice upon all parties, plaintiffs and defendants, and the receiver, Flaherty, of his petition of intervention, and later he amended his petition, setting up that his claim had been filed with Newton, as receiver, who had listed the same with the other claims and reported the same to the court. He then calls attention to the stipulation for settlement filed, to the appointment of Flaherty, and points out that the latter is acting under such stipulation. The allegation follows that payments have been made from time to time upon claims of creditors filed, but that nothing has...