McArthur v. Thompson

• Citation: 299 N.W. 519,140 Neb. 408
• Decision Date: 01 August 1941
• Docket Number: 31165
• Parties: JOHN MCARTHUR, APPELLANT, v. FRANK C. THOMPSON, APPELLEE
• Court: Supreme Court of Nebraska

299 N.W. 519

140 Neb. 408

JOHN MCARTHUR, APPELLANT, v. FRANK C. THOMPSON, APPELLEE

No. 31165

Supreme Court of Nebraska

August 1, 1941

APPEAL from the district court for Lancaster county: JEFFERSON H BROADY, JUDGE. Reversed.

REVERSED.

Syllabus by the Court.

1. " When a decree or judgment is made by consent of the parties, the court does not inquire into the merits or the equities of the case. The only questions to be determined by it are whether the parties are capable of binding themselves by consent, and whether they have actually done so. These two facts appearing, the court orders the judgment or decree to be entered." 14 Standard Ency. of Procedure, 919.

2. A judgment by consent constitutes the agreement of the parties and is simply made a matter of record by the court at their request. Although purporting to be, it is not, strictly speaking, the act of a court, but rather the act of the parties to the suit. This feature imposes some restrictions upon the right to amend, and upon the right to appeal from such a judgment. It is not a judgment upon the merits.

3. A " consent judgment" is treated as an agreement of the parties, and given greater force than an ordinary judgment, and the court is ordinarily without power to open or modify the same over the objection of one of the parties thereto.

Appeal from District Court, Lancaster County; Broady, Judge.

Suit by John McArthur against Frank C. Thompson for dissolution of a partnership, accounting, and sale by a receiver of partnership property. From an adverse order, plaintiff appeals.

Reversed.

In suit for dissolution of partnership, accounting, and sale by receiver of partnership property, wherein supplemental decree was entered in strict accordance with agreement of parties, vacating provision in former decree for sale and directing receiver to transfer property to plaintiff, court erred in modifying such consent decree, over two months after its entry, so as to require receiver to pay to defendant certain sum due partnership where plaintiff objected to modification.

Walker & McArthur, for appellant.

Max Kier, contra.

Heard before SIMMONS, C. J., ROSE, EBERLY, PAINE, MESSMORE and YEAGER, JJ. SIMMONS, C. J., and YEAGER, J., concur in the result.

OPINION

PAINE, J.

In an equity suit for the dissolution of a partnership, an accounting of partnership transactions, and for the sale by receiver of the three restaurants owned by the partnership, the plaintiff and defendant by agreement arrived at a settlement, and the court entered a supplemental decree in accordance therewith.

More than two months after the entry of this final decree, upon motion of the defendant alone, and over the objections of the plaintiff, the trial court entered an order amending such supplemental decree, which had been entered by consent of all parties. Plaintiff's motion for a new trial being overruled, he appeals from the order of the court modifying, amending, and changing the supplemental decree over plaintiff's objection.

It will be necessary, in order to have a clear understanding of the matter in dispute, that we present very briefly the facts leading up to the matter which is now contested.

John McArthur, plaintiff, and Frank C. Thompson, defendant, were equal partners in the ownership of three prosperous restaurants in Lincoln, each called Hotel D'Hamburger, occupying three separate locations. They had a sharp disagreement, in which there were claims made against each other, and charges of shortages, and of excessive withdrawals from the assets of the partnership, and suit was filed for an accounting, and finally a receiver was appointed, and a long and bitter trial resulted.

It is set out in the findings and decree of the court, dated April 10, 1940, that there were many disputes and differences between the partners, one being as to the form and manner of bookkeeping, and the court finds that McArthur's drawings from the firm are $ 3,483.89 in cash and a shortage of $ 196.38, or a total of $ 3,680.27, which should be charged against McArthur.

McArthur had agreed to pay the defendant $ 6,000 for a one-half interest in the business, of which he paid $ 3,000 in cash, and gave a demand note for the balance of $ 3,000, with interest at 4 per cent., which with interest makes a total charge against McArthur of $ 5,189.77, during the period of McArthur's operation, from September 9, 1937, to March 31, 1938. From April 1, 1938, to May 19, 1938, neither partner was in sole charge.

It was found by the court that from May 19, 1938, to August 28, 1939, was Thompson's period of operation, and that the total drawings of Thompson were $ 4,199.97, and one-half of the unidentified drawings of $ 433.70, and a cash shortage of $ 1,738.81 charged against Thompson, showing a total amount charged to Thompson of $ 6,372.48. Adding this to unsigned tapes of sales not included of $ 1,868.11, and advancements of $ 1,378.90, plus one-half of the unidentified drawings of $ 437.55, makes the total charged to Thompson's account of $ 10,057.04. Deducting the total amount with interest charged to McArthur, of $ 5,977.32, leaves a difference of $ 4,079.72, of which Thompson owes McArthur one-half, or $ 2,039.86.

The court further found the bill of $ 3,000 of John C. Shepard for making the audit is far too high, and allows him but $ 1,700, and allows the receiver, H. D. Lunsford, $ 900, and Frank Barrett for services to the receiver, $ 300, and directs the receiver to sell all partnership property at public auction within 30 days and report his proceeds into court.

This is a very inadequate summary of the decree of April 10, 1940, which is more than ten pages in length.

On April 13, 1940, there was filed an application by the plaintiff and defendant, setting out that they had agreed upon terms of settlement, and asking the court to modify the decree of April 10, 1940, and to order the receiver to deliver to the plaintiff all of the assets in his hands, and that no judicial sale be made, and that the receiver and his bondsmen be discharged, and on said 13th day of April, 1940, a supplemental decree was entered, modifying the decree of April 10, the same being a consent decree, entered by agreement of the parties, and finding that the defendant has sold his entire interest in the three Hotel D'Hamburger restaurants to plaintiff, who has paid the defendant the agreed consideration, and the receiver is to deliver to plaintiff all partnership assets, this supplemental decree concluding all matters between the parties.

Thereafter it was discovered that the Beatrice Creamery Company owed the partnership the sum of $ 346.24, the same being for rebates on ice cream not paid to the receiver. On June 20, 1940, the defendant filed a motion in the district court, asking that the court amend the final supplemental decree entered April 13, 1940, to provide that the defendant shall now receive $ 173.12, being one-half of the rebates due from the Beatrice Creamery Company.

The defendant attached to said motion, as exhibit A, a stipulation, which was the full agreement entered into by the parties on April 11, 1940, which resulted in the consent decree of April 13, 1940, being entered.

It appears there was one paragraph therein which read as follows: "It is further stipulated and agreed that if there are any rebates, refunds, cash discounts, or other moneys owing from any parties to the partnership not having been previously obtained by the receiver, one-half of said sum, if any, shall be paid to the defendant Frank C. Thompson."

No mention whatever had been made of this written agreement in the final supplemental decree of April 13, 1940, and it was in no way made a part of the consent decree, and exhibit A, containing it, was not attached to said final decree, which was entered upon the joint motion of plaintiff and defendant.

On June 21, 1940, the plaintiff filed objections to the defendant's motion, and charging that the stipulation set out in the defendant's motion just filed is not a part of the records in this case, and the relief based thereon cannot be obtained by motion; that the stipulation, exhibit A, annexed to defendant's motion, was secured by fraud of the defendant, as appears from affidavits offered in support hereof; that the issues with respect to said fraud are the subject-matter of a separate lawsuit presently to be filed, as shown by affidavits tendered herewith; that the court is without jurisdiction to determine the rights of plaintiff and defendant to the funds now in the hands of a third party and not a party to this action.

It is further charged that the motion of the defendant represents an attempt by the defendant to take advantage, by summary process, of a fraud perpetrated by him upon the plaintiff, upon the receiver appointed by the court, and upon the accountant appointed by the court to audit the partnership affairs, and upon the court itself, as shown by affidavits of said receiver, accountant, and plaintiff, wherefore plaintiff prays that the motion of the defendant be overruled at defendant's costs.

In support of this motion, there are attached many affidavits the one of George A. Kurk showing that prior to May 12, 1938, no rebate was allowed to Hotel D'Hamburger for ice cream, but that on May 12, 1938, Frank C. Thompson agreed with affiant that he would purchase all of the ice cream from the Beatrice Creamery Company; that the price to be paid should be $ 1.10 a gallon, and that 20 cents would be refunded on each gallon so purchased, and pursuant to such oral agreement there was paid to Frank C. Thompson ice cream rebates listed in the affidavit by months, and amounting to the following sums: For the months of May to December, 1938, $ 224.65;...