Killian v. Maiden Chair Co., 202 N.C. 23 (1931)

Dec. 23, 1931 · Supreme Court of North Carolina
202 N.C. 23


(Filed 23 December, 1931.)

1. Judgments P a — Judgment may be rendered out of term and out of district upon consent of parties.

Ordinarily a judgment cannot be entered by a Superior Court judge out of term and out of the district wherein the cause is pending when not falling within certain exceptions where the judgment may be entered nunc pro tunc, but this rule does not apply when the parties to the action appear at the time of the rendition of the judgment and consent that the judge consider the matter and enter the judgment.

*24S. Appeal and Error J c — Judge’s finding that parties consented to rendition of judgment out of term and county is conclusive.

While it is the better practice for the consent that judgment be rendered out of term or out of the county in which the action was pending to be put in writing, it is not essential that this be done, and where the judgment excepted to states as a fact that such consent was in fact given, it is conclusive upon the parties in the absence of collusion or fraud.

3. Ax>peal and Error J b — Held: court’s refusal, in his discretion, to- allow plaintiff to file exceptions or set up plea is not reviewable.

Where the receiver of a corporation has paid under the order of the court certain sums to one of the creditors without objection by the plaintiff, the refusal of the trial court in his discretion to permit the plaintiff to later file exceptions to the orders under which the payments were made or let him set up a plea attacking the validity of the contract under which the claim was filed, is conclusive and not reviewable on appeal. The principle upon which a party may not take a voluntary nonsuit where a counterclaim has been filed does not arise under the facts of this case.

4. Judgments E e — Judgment in this case held not objectionable as being conditional.

Where a party to an action consents to the abandonment of a right he has therein set up, and this is done and the judgment accordingly rendered, the judgment is not .objectionable as being a conditional judgment when it .is final and requires no future act to be done or condition to be performed by any of the parties.

Civil actiok, before Clement, J., at Chambers, Moeksville, N. 0., 1 September, 1931. From Catawba.

On or about 17 July, 1929, the plaintiff, a stockholder of defendant, instituted an action against the defendant alleging that it was in imminent danger of insolvency. -The complaint alleged that the indebtedness amounted to approximately $385,500. It was further alleged that the defendant had notes receivable worth about $200,000, “on which the Merchants Transfer and Storage Company of Washington, D. O., has a lien to the amount of about $186,000,” etc. There was a prayer for the appointment of a receiver. On 22 July, 1929, C. B. Brady was duly ap-, pointed receiver of defendant and directed in his discretion “to run and operate the factory plant owned by defendant company and to employ all such assistants, superintendents, clerks and laborers, as may be necessary to properly operate said furniture plant until further orders of this court.” The record discloses that the order appointing a permanent receiver was consented to by attorneys for the plaintiff and the defendant. On 14 November, 1929, the receiver filed a petition in the cause stating “that on or about 25 February, 1927, the Maiden Chair Company executed an assignment to the Merchants Transfer and Storage Company, a Delaware corporation, of Washington, D. C., agreeing to *25assign to and did assign to the Merchants Transfer and Storage Company from time to time its accounts receivable for value, . . . and that there was about $211,000 of these accounts held by the Merchants Transfer and Storage Company as aforesaid. . . . That by the terms of said contract between the Maiden Chair Company and the Merchants Transfer and Storage Company the Maiden Chair Company was to collect the accounts from its debtors from time to time and remit the full collection to the Merchants Transfer and Storage Company; . . . that up to this time he has collected approximately $70,605.82, and your receiver has paid to the Merchants Transfer and Storage Company from said collections the sum of $28,298.04, and that your receiver still has on hand in a bank in New York and the Citizens Bank at Con-over, N. C., the sum of $42,307.78, and he is still collecting on said accounts from time to time. That some question has arisen as to whether or not your receiver should have paid the amount aforesaid to the Merchants Transfer and Storage Company, as set out, and pay the amount now on hand to it, and pay the amounts as collected from time to time, until the said Merchants Transfer and Storage Company is paid in full, without an order of the court.” On the same day, to wit, 14 November, 1929, Judge Harding'considered the petition and entered an order approving the action of the receiver in paying to the Merchants Transfer and Storage Company the said sum of $28,298.04, and further directed the receiver to pay the balance in his hands then due said Merchants Transfer and Storage Company under and by virtue of the terms of the contract referred to in the petition of the receiver.

The receiver made reports from time to time ánd these reports were approved by the court and certain allowances were made by orders duly entered. On 1 December, 1930, the Merchants Transfer and Storage Company filed a petition after notice, setting out the contract existing between it and the defendant, and alleging that the receiver had in his hands the sum of $2,656.64, which had been demanded by the petitioner, but that the receiver had declined to pay the same and requesting an order directing the receiver to pay said sum to the petitioner. The receiver filed an answer to the petition of the Merchants. Transfer and Storage Company, setting out that ho had incurred certain expense in collecting accounts for the Merchants Transfer and Storage Company and suggesting that these expenses should be paid out of said fund.

In the meantime a creditors’ committee of defendant filed an answer to the petition of the Merchants Transfer and Storage Company, alleging that as the receiver had spent most of his time and energy in collecting accounts for said petitioner that the result was that the creditors who had received nothing on their claims were bearing the financial burden *26of collections for tbe benefit of petitioner. Tbe creditors’ committee thereupon asked that tbe court appoint a referee to take and state an account between all tbe parties. Tbe cause was beard by Judge Clement in January, 1931, and after considering tbe merits of tbe question presented, appointed a referee. Tbe creditors’ committee thereafter filed an amendment to tbe petition of tbe Merchants Transfer and Storage Company attacking tbe contract between tbe defendant company and tbe petitioner Storage Company, and alleging that tbe Storage Company was securing a preference which was unlawful, and praying that tbe court direct a receiver “to proceed forthwith by whatever process be may be advised and recover from tbe petitioner, Merchants Transfer and Storage Company, said amount to be ascertained before tbe referee and constituting tbe entire amount paid by tbe receiver to said petitioner.”

Thereupon on 8 July, 1931, tbe plaintiff Killian filed a supplemental petition alleging that tbe receiver bad no right to pay any funds to tbe Storage Company, and that tbe action of tbe receiver in paying money under order of court to tbe Storage, Company was wrongful and unlawful. It was further alleged that tbe Storage Company bad charged more than six per cent, and that tbe transactions between tbe Storage Company and tbe defendant, Chair Company, were usurious. Whereupon, tbe plaintiff prayed an order directing tbe receiver to file an itemized statement of his accounts and of all sums disbursed to tbe Storage Company, and to set aside tbe orders made from time to time by tbe judge of tbe Superior Court directing and approving payments theretofore made to tbe Storage Company. On 16 July, 1931, tbe attorney for tbe Storage Company served notice on tbe attorneys for tbe receiver and of tbe creditors’ committee and of plaintiff Killian that be would file a motion for permission to withdraw tbe petition theretofore filed by tbe Storage Company, such motion to be beard before bis Honor, Judge Clement, at Chambers, in Bakersville on 28 July, 1931. On 18 July, 1931, tbe plaintiff filed certain exceptions denying that be had consented to tbe appointment of a receiver or that be bad authorized any one to act in bis behalf, and also^ attacking tbe motion made by tbe receiver and excepting to all orders made by tbe court.

Tbe cause came on for bearing before Clement, J., at Wilkesboro, on 12 August, 1931. Tbe pertinent portions of tbe judgment rendered are as follows: “This cause coming on to be beard, by consent of tbe parties, at Chambers, in tbe courthouse in Wilkesboro, N. C., on 12 August, 1931, . . . upon tbe motion heretofore filed in this cause by tbe Merchants Transfer and Storage Company, a corporation, for an order requiring tbe receiver of tbe defendant to pay to it certain money in tbe sum of $2,821.35. . . . And upon tbe motion of tbe said Mer-*27cbants Transfer and Storage Company to be allowed -to withdraw its said motion and to strike ont its appearance in this canse. . . . And coming on, further, to be heard upon the motion herein filed by a committee of creditors of the Maiden Chair Company, and upon the motion of plaintiff, E. B. Killian, to be allowed to file exceptions to orders and reports of the receiver, . . . and further, to file a plea of usury on behalf of said plaintiffs against the said Merchants Transfer and Storage Company. . . . After hearing the argument of counsel, the court finds that the plaintiff, E. B. Killian, is and was, at all times, the plaintiff in this action, and that he instituted this action on 20 July, 1929, and that the said plaintiff consented to the judgment and order of Harding, J., entered by consent on 2 July, 1929, . . . and that at a hearing on 12 August, 1931, at "Wilkesboro, N. 0., the said plaintiff, E. B. Killian, appeared through his counsel and made the foregoing motions as above recited. . . . After hearing the same the court announced that it was of the opinion that the plaintiff, E. B. Killian, was a party and approved all the proceedings in this cause, and having knowledge of the same, that the court was without power now to allow him to except to said orders, and that said plaintiff had, in fact, consented to the order and judgment appointing C. E. Brady receiver of defendant, and the court declined in its discretion to grant the motion made on behalf of plaintiff, E. B. Killian. The court is further of the opinion that the creditors had not been diligent and had not presented their objections prior to the disbursement of funds by the receiver-pursuant to orders hereinbefore entered, and that such creditors were not entitled, in their own right, to set up a plea of usury. . . . The court is further of the opinion upon the conditional offer made by counsel for the Merchants Transfer and Storage Company to waive its claim to the said fund in the sum of $2,821.35 in case it is allowed to withdraw its motion and strike out its appearance herein, and the said motions having been allowed, that the said fund in the sum of $2,821.35 in the hands of said receiver and collected from said accounts shall he hereafter distributed as such to creditors, in the distribution of which the Merchants Transfer and Storage Company is not to participate. . . . This order is entered at Mocksville, N. C., at Chambers, on 1 September, 1931, all parties having agreed that the court should enter its final order on said motions at said time and place.”

From the foregoing judgment the plaintiff, Killian, appealed.

W. H. Childs and W. II. Dennis for plaintiff.

W. A. Self for receiver.

M. H. Yount, Osmer L. Henry and Varser, Lawrence & McIntyre for Transfer and Storage Company.

*28Brogdekt, J.

Tbe questions of law presented by the appeal are :

1. Has a Superior Court judge power to make an order in receivership proceedings outside of the county of the judicial district in'which the cause is pending?

2. Has a Superior Court judge power to iiermit a party to withdraw a petition in a receivership proceeding?

The plaintiff contends that the order made in this cause on 1 September, 1931, was invalid by reason of the fact that the judge entered the order out of the judicial district in which the action was pending and out of the county in which the suit had originally been instituted. This contention, however, must be interpreted in the light of the facts found by the judge at the time the order was entered. He finds as a fact that the motions and exceptions were submitted to him in Wilkesboro on 12 August, 1931, “by consent of the parties.” He further finds as a fact that the judgment rendered at Mocksville on 1 September, 1931, was upon the agreement of all parties “that the court should enter its final order on said motions, at said time and place.” Ordinarily a judgment cannot be entered out of term and out of the district unless such judgment falls within that class of decrees which may be made nunc pro iunc. However, this principle does not apply where the parties are present in court either in person or by attorney and consent that a hearing may be had and a judgment rendered. This idea was thus expressed in Hemphill v. Moore, 104 N. C., 379, 10 S. E., 313: “It is in case of motions and proceedings in an action out of term-time that a special notice to the adverse party must generally be given. But, in such cases, if the opposing party should appear, by himself or his counsel, he would, ordinarily, have been deemed to have taken actual notice and to have waived formal notice.” Indeed, in Bisanar v. Suttlemyre, 193 N. C., 711, 138 S. E., 1, express sanction was given to a judgment signed by an emergency judge out of term and out of district when it appeared that all the parties had fully consented to such procedure. In order to avoid misunderstanding between counsel for opposing parties, it is perhaps advisable that such consent should be given in writing. Nevertheless, a writing is not essential to the validity of the judgment or order in the absence of a denial that consent was given. Moreover, when the judge finds as a fact that consent was actually given, whether in writing or not, and this finding is set out in the judgment, it is binding upon the parties in the absence of fraud or collusion. Westhall v. Hoyle, 141 N. C., 337, 53 S. E., 863; Henry v. Hilliard, 120 N. C., 479, 27 S. E., 130.

The second question of law becomes immaterial upon the facts found by the judge and set forth in the order for the reason that the judge *29in bis discretion declined to permit tbe plaintiff to file exceptions or to set np a plea attacking tbe validity of tbe contract between tbe defendant and tbe Storage Company. Hence there was nothing before tbe court in tbe nature of a counterclaim, or equity, which tbe plaintiff bad a right to have determined in tbe action. Tbe judge found as a fact that tbe plaintiff bad full notice of all tbe orders in tbe receivership proceedings and bad fully consented to such orders, and that tbe larger portion of tbe fund which was tbe subject of tbe controversy, bad been disbursed by tbe receiver under proper order of tbe court. A party is not permitted to withdraw or take a nonsuit or bow himself out of court when bis adversary has set up a counterclaim or claim of an equitable nature involving rights which have attached and which be is entitled to have determined in tbe action. But this principle is not applicable to tbe facts appearing in tbe record. R. R. v. R. R., 148 N. C., 59, 61 S. E., 683.

A further contention is made to tbe effect that when tbe judge permitted tbe Storage Company to withdraw its petition upon the understanding that said Storage Company would abandon any and all claim tó tbe sum of $2,821.35 in tbe bands of tbe receiver that such judgment was a conditional judgment and prohibited by law. McIntosh on North Carolina Practice and Procedure, page 731, writes: “A conditional judgment is one whose force depends upon tbe performance or nonperformance of certain acts to be done in tbe future-by one of .the parties, as where a judgment was given, for tbe plaintiff, to be stricken out if tbe defendant filed a bond within a certain time, and this was held to be void. But where tbe judgment is definite and certain, and a condition is added which may operate to carry tbe judgment into effect, it is not conditional; as in a judgment for foreclosure tbe property is to be sold if tbe judgment is not paid within a certain time, or that tbe judgment may be satisfied by giving secured notes by a certain time. Where tbe parties agree that a certain judgment may be entered upon failure to comply with a certain condition, and it is so entered- after failure, it is not a conditional judgment.” 'The judgment in tbe case at bar contemplated no future act to be performed by any of tbe parties. It waived its claim to tbe fund in open court and was thereupon permitted to withdraw, leaving tbe fund to tbe exclusive control of tbe court.