Ryckman v. Manerud

• Decision Date: 09 December 1913
• Citation: 68 Or. 350,136 P. 826
• Parties: RYCKMAN v. MANERUD et al. [d]
• Court: Oregon Supreme Court

136 P. 826

68 Or. 350

RYCKMAN v. MANERUD et al. ^[d]

Supreme Court of Oregon

December 9, 1913

Department 1.

Appeal from Circuit Court, Lane County; J.W. Hamilton, Judge.

Suit by Carl S. Ryckman against Sam Manerud and others. From a decree for plaintiff and certain defendants, defendants Sam Manerud Edward Quinn, and the First National Bank of Eugene appeal. Reversed, and suit dismissed.

This is a suit in equity in the nature of a creditor's bill to subject to the payment of a debt due the plaintiff the assets of the defendants Quinn and Manerud as partners and as individuals, etc. The court below rendered a decree in favor of the plaintiff and certain of the defendants and against Manerud and Quinn.

John C Jenkins, of Portland, for appellants Manerud & Quinn.

John C Jenkins, of Portland, in pro. per.

Woodcock & Smith, of Eugene, for appellant First Nat. Bank of Eugene.

H.E Slattery and O.H. Foster, both of Eugene (Foster & Hamilton, of Eugene, on the brief), for respondent Ryckman.

RAMSEY J.

On February 18, 1909, Sam Manerud, one of the defendants, entered into a contract with the city of Eugene, by the terms of which said Manerud agreed to construct for said city a power canal. On or about April 23, 1909, the said Sam Manerud and the defendant Edward Quinn made and entered into a contract between themselves, whereby they formed a partnership and assumed as partners the contract referred to, supra, for the construction of said power canal for said city. On the 29th day of April, 1909, the defendant Manerud and the plaintiff entered into a written contract whereby Sam Manerud sublet to the plaintiff the construction of about 1 3/4 of a mile of said power canal. This contract was entered into about six days after Manerud and Quinn had formed said partnership. Quinn was not a party to said contract, but he signed it as an attesting witness. The plaintiff performed most of his part of said contract for the construction of said portion of said power canal, and the firm of Manerud & Quinn paid him therefor in checks, signed by said firm, sums aggregating more than $6,000. The plaintiff claims that when he entered into said contract with Sam Manerud for the construction of part of said canal, as stated, supra, he did not have any knowledge of the fact that Manerud & Quinn had formed said partnership. On November 11, 1909, the plaintiff alleges that there was owing to him from Manerud & Quinn, for work on said canal, a balance of $5,002.75 after crediting said payments on said work. The plaintiff avers that said sum was due to him from Sam Manerud and Edward Quinn as partners and as individuals. On October 19, 1910, the plaintiff commenced an action against the defendant Sam Manerud for the recovery, from him, of said sum of $5,002.75 in the circuit court of Lane county. Edward Quinn was not made a party to said action, although the plaintiff knew at that time and long prior thereto that he was a partner of the plaintiff, and that the firm of Manerud & Quinn were constructing said canal, and that they had paid him more than $6,000 on his claim for work on said canal. That on November 11, 1910, while said action was pending, a stipulation was signed which is set out below, by authority of which a judgment was rendered in said action in favor of Carl B. Ryckman, the plaintiff, and against Sam Manerud for $4,500 on March 4, 1911. This judgment was not rendered against Quinn or Manerud & Quinn.

The plaintiff on March 10, 1911, caused an execution to issue on said judgment against Manerud, but said execution was thereafter returned without anything having been made thereon.

On motion of the plaintiff, the circuit court entered an order that Manerud appear before said circuit court of Lane county and be examined under oath concerning his property, and on May 8, 1911, he appeared and was examined, and upon said examination said court found that Manerud had no property, excepting an interest in the judgment rendered in said circuit court on the 22d day of December, 1910, against the city of Eugene and in favor of Said Sam Manerud and Edward Quinn, as partners, for the sum of $6,525.90 and costs. It seems that Sam Manerud was insolvent at all times after February 11, 1910.

The following is a copy of the stipulation executed on November 11, 1910, and filed in the above-named circuit court in the action of Carl B. Ryckman v. Sam Manerud, omitting the name of the court and the title of the cause: "It is hereby stipulated and agreed by and between the above-named plaintiff, Carl B. Ryckman, and the above-named defendant, Sam Manerud, and Edward Quinn, that the said Sam Manerud and Edward Quinn may pay to said plaintiff, on or before the last day of the present November term of the above-entitled court, the sum of one thousand dollars ($1,000) cash and deliver to said plaintiff their promissory note for the sum of three thousand five hundred dollars due on or before six months from the date thereof, secured to the satisfaction of plaintiff, or said plaintiff may, on the last day of said term, take judgment against said defendant in said action for the said sum of four thousand five hundred dollars ($4,500); and the court shall be authorized to enter judgment accordingly without trial. In case said sum of one thousand dollars ($1,000) is paid and the said note and security given as above provided, said action shall be dismissed. Dated November 11, 1910." Said stipulation was signed by Carl B. Ryckman, Sam Manerud, and Edward Quinn and assented to by Holmquist & Nelson, attorneys for the plaintiff, and John C. Jenkins, attorney for the defendant Sam Manerud.

It will be noticed that the partnership of Manerud & Quinn is not referred to in said stipulation and that it does net bind Quinn to do anything, and it does not oblige Manerud to do anything excepting to permit judgment to be entered against him for $4,500. It makes no provision for paying the judgment, and the judgment was to be entered against Manerud only. The respondent places much stress on the foregoing stipulation and the judgment entered in accordance therewith.

On December 22, 1910, the firm of Manerud & Quinn recovered a judgment against the said city of Eugene for the sum of $6,525.90 as the balance due them for the construction of said power canal, and said judgment was affirmed by this court after this suit was begun. Said judgment is the only asset of said firm of Manerud & Quinn.

The plaintiff alleges in the complaint that, when the stipulation set out, supra, was executed, it was mutually agreed, for the benefit of said partnership and of the plaintiff, and by and between Sam Manerud and Edward Quinn, that the said Manerud should have sufficient of the said partnership assets to secure him on the payment of said sum of $4,500 to the plaintiff, Ryckman, and that a portion of the assets of the firm was assigned to him for that purpose; that he should have a lien upon said assets for said sum; that said sum was set aside for that purpose; and that Manerud should be allowed for that sum on a final accounting for said firm, etc. But there was a failure to prove said allegations, and the written stipulation set out, supra, contains all that the parties agreed upon at that time.

Sam Manerud and Edward Quinn refused to pay the plaintiff anything out of said judgment against the city of Eugene and gave to the First National Bank of Eugene, and other persons, whom they owed, partial assignments of said judgment, and John C. Jenkins, defendant, claims a lien on said judgment for one-third thereof and for $650 for attorney's fees under a contract with said firm. The judgment obtained by the firm of Manerud & Quinn against said city of Eugene, as stated, supra, was in part based on work that the plaintiff had done on said canal under his said contract and for which he obtained said judgment of $4,500 against Sam Manerud, as stated, supra. The plaintiff has not obtained any judgment against the firm of Manerud & Quinn or against Quinn; nor has he commenced any action at law against said firm or against said Quinn. The only judgment that he has obtained is an individual judgment against Manerud only.

The complaint prays inter alia that the assets of Edward Quinn and of the firm of Manerud & Quinn be marshaled and that the other creditors be required to exhaust the individual assets of Edward Quinn; that the judgment of the plaintiff be decreed to be a first lien on the partnership assets of Manerud & Quinn; that said sum of $4,500, alleged to have been assigned to Sam Manerud for the benefit of the plaintiff, be decreed to be the property of the plaintiff; that the plaintiff be subrogated to the rights of Manerud in the partnership estate, etc.

The defendants Manerud, Quinn, and Jenkins answered the complaint, denying parts thereof, and setting up new matter and, among other things, they pleaded that the plaintiff, with full knowledge that Manerud and Quinn were partners, and of the ownership by said firm of the contract for the construction of said canal, and of the subletting by Manerud, for the benefit of said firm, of the construction of said portion of said canal to the plaintiff, and of all the facts connected with such construction, commenced the action referred to, supra, against Sam Manerud individually to recover the said sum of money due the plaintiff for his said work and by so doing elected to hold said Manerud individually upon said contract of subletting and to release said copartnership and the defendant Quinn from all liability on said contract of subletting, and that the plaintiff is now estopped to allege any liability upon said copartnership under said contract and is estopped by the judgment obtained in said action from now alleging...