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Lawskills.com Georgia Caselaw
MANN v. EPSTEIN et al.
47457.
Action on contract. Floyd Superior Court. Before Judge Scoggin.
DEEN, Judge.
An interlocutory order making an agreement between party litigants the judgment of court in which a suit is pending in another state, where the agreement simply provides that the debts of a partnership, to be ascertained in the future, are to be paid pro rata by the former partners, will not sustain a plea of res judicata in an action in this state seeking to compel the defendant to pay in his share after the amount has been ascertained.
The plaintiff and defendants in this case were partners in a business venture in Texas. A disagreement between them was followed by a lawsuit in the District Court of Nueces County, Texas, in which certain of the parties sought a liquidation of the business, injunction, accounting and receivership. During the pendency of the litigation a settlement agreement dated December 3, 1970, was entered into between all parties, designating Mann, the plaintiff appellant here, as liquidating agent, and containing the following pertinent provisions:
"In the event there remain partnership debts after all assets of the partnership have been paid out, the liquidating agents shall total such debts and thereafter, by Certified Mail, Return Receipt Requested, notify each of the Partners, parties to this agreement, and demand payment by said Partners proportionately as their interests appear therein. Payment shall be made, and each of the parties hereto agree that such payment by each of them, shall be paid to the liquidating agents within ten (10) days from receipt of such notice. In the event that any of the Partners fail to pay his pro rata and proportionate part of said indebtness within the stipulated time, the liquidating agents shall forthwith obtain a judgment in favor of those Partners who paid within such period their pro rata share of the indebtedness against that Partner or those Partners who fail to so pay in the amount of that Partner's share of the indebtedness so unpaid. Each of the parties hereto hereby agree to the jurisdiction of the Court, and hereby consent individually and for and on behalf of their heirs, administrators and assigns to the entry of such judgment. Each of the Parties hereto further hereby agree that in the event a judgment shall be entered as herein described such may be enforced within or without the State of Texas. Upon application of any of the parties hereto to said cause, said agreement may be entered as the order of said Court, and the parties hereto in such event to be bound by the terms thereof."
Thereupon the court entered up what was designated an "Interlocutory Judgment" as follows:
"Be It Remembered that on this the 29th day of March, 1972, came on for consideration the Motion of Berney Seal to cause the Settlement Agreement made by and between the parties hereto, dated the 3rd day of December, 1970, and filed among the papers of this cause, to be entered as the Order of this Court; and the Court having determined that proper notice has been made to all parties, that a copy of the Application filed herein by the said Berney Seal has been delivered to the attorneys of record for each of said parties, and came Berney Seal, by and through his attorney, Charles R. Porter, Jr., and the Court having heard the argument and authorities of counsel as presented and having considered the content of said Settlement Agreement, the Court hereby finds that same is in fact the agreement of the parties hereto, fully and fairly settles all the issues in this cause;
"It Is, Therefore, Accordingly Ordered, Adjudged and Decreed that the Settlement Agreement by and between the parties hereto now be, and the same is hereby, entered as the Interlocutory Order of this Court, subject to the performance by said parties of the terms and provisions of same, and that upon a showing to this Court that all of said acts and undertakings have been performed, the same shall be and become the Judgment of this Court. It is further, Ordered, Adjudged and Decreed that said Agreement is hereby incorporated in this Judgment, and that the terms and provisions thereof are hereby made the Judgment of this Court, all as though fully set out herein. Signed and Entered This 29th day of March, 1972. Vernon D. Harville, Judge Presiding."
No further proceedings are shown in the Texas court. Meanwhile, on March 1, 1971, Mann filed a complaint in the Superior Court of Floyd County, Georgia, in which he set up the 1970 settlement agreement, alleged that it had been determined that the business venture had incurred a large deficit of which the pro rata share per partner was $4,228.78; that plaintiff had paid in his share but the defendants refused to comply with their agreement although properly notified and called upon to do so; prayed that a judgment in this amount be entered against the individual defendants and alleged that "unless the plaintiff receives the relief hereinafter prayed for he will be subject to individual liability as a partner to the total deficit of funds which the defendant partners refuse to pay, that is, the sum of $12,686.33."
The parties by stipulation agreed that the record in the Texas case, the interlocutory judgment therein, and the agreement between the partners constitute all of the evidence introduced before the trial judge on the defendants' motion to dismiss under a plea of res judicata. These motions were sustained by the trial court, the action was dismissed, and plaintiff appeals.
The agreement made the judgment of the Texas court in the litigation pending there requires that, should any partner fail to pay his pro rata share of liabilities as determined by the liquidating agent, a judgment for such proportionate share shall be obtained by the agent against the defaulting partner. The court in its order which incorporated the agreement found that the agreement settles all the issues raised in the Texas lawsuit, but further provides that "upon a showing to this court that all of said acts and undertakings have been performed, the same shall become the judgment of this court." As we construe the self-designated interlocutory order, it gives court sanction to contract commitments between the parties to be carried out in the future. The commitment of the defendant was not carried out according to the allegations of the complaint. Under both the judgment and the contract the plaintiff therefore has a right to collect the pro rata share. But the Texas judgment does not find any specific amount against the defendant, and is obviously not such a judgment as may be enforced "without the State of Texas" by execution, garnishment, attachment, or any of the other means commonly used in Georgia to collect money judgments. This places the defendant in a better position than he would otherwise be, since it allows him to contest the amount of the assessment. "The judgment sought to be set up as res adjudicata must be the result of an actual and fair trial of the issues." Mo. State Life Ins. Co. v. Lovelace, 1 Ga. App. 446 (2) (58 SE 93); Atlantic C. L. R. Co. v. Tifton Produce Co., 56 Ga. App. 776, 779 (194 SE 72).
Does the Texas interlocutory order purport to take exclu- sive jurisdiction of the enforcement of collection of pro rata liabilities? We do not so construe it. The agreement gives consent to being entered as an order of court in the prior case, and states that in such event the parties are to be bound by its terms. The order itself is entered subject to performance by the parties of their contractual obligations. Therefore, in seeking to enforce the contractual obligation the plaintiff is also in effect attempting to carry out the provisions of the order. Appellee cites Grayson v. Grayson, 217 Ga. 133 (121 SE2d 34) and other cases holding that where parties to a judicial proceeding enter into an agreement settling the issues involved they will not thereafter be heard to question the validity of the agreement. Here the validity of the agreement is not sought to be questioned but enforced. The agreement contained a consent clause to its becoming a part of the Texas judgment to be enforced within or without the State of Texas, and the judgment so entered was prospective in that it required the parties to do certain acts as set out in the agreement. The Georgia suit seeks to implement both documents by requiring the defendant to do what he agreed to do in the contract, which is what the Texas court also stipulates as a condition precedent to a final judgment in that cause.
It was error to sustain the plea of res judicata.
Judgment reversed. Eberhardt, P. J., and Clark, J., concur.
Wall, Parker & Campbell, Alford Wall, for appellees.
Harl C. Duffey, Jr., for appellant.
SUBMITTED SEPTEMBER 14, 1972 DECIDED -- SEPTEMBER 25, 1972.
Friday May 22 14:54 EDT


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