Opinion ID: 2232378
Heading Depth: 1
Heading Rank: 1

Heading: stipulations to dismiss

Text: It is hereby irrevocably stipulated and agreed by and between the parties hereto that this cause may be dismissed with prejudice to the rights of the plaintiffs to rein-state said cause, and without costs, all costs having been paid. Dated April 17, 1942. (S) Concannon Dillon Snook & Arthur Attorneys for Plaintiffs (S) Sidley, McPherson, Austin & Bunyan Attorneys for Defendant, Robert S. Butler (S) Peabody Westbrook Watson & Stephenson Attorneys for Defendant, Butler Building, Inc. a corporation. In accordance with the stipulation of settlement and dismissal the United States District Judge on October 19, 1942, entered the following order: on stipulation cause dismissed with prejudice and without costs. Igoe The next matter to consider is whether the dismissal of a case with prejudice based on a settlement agreement has the same force and effect as to res judicata as a trial of a case and the decision of a court after trial. The question has been decided in many decisions, and has been considered in Am.Jur.; Burns v. Fincke, 90 U.S.App.D.C. 381, 197 F.2d 165; Cleveland v. Higgins, 2 Cir., 148 F.2d 722; United States v. Parker, 120 U.S. 89, 93, 7 S.Ct. 454, 30 L.Ed. 601; American Trading & Storage Co. v. Gottstein, 123 Iowa 267, 98 N.W. 770; In re Ramsey's Estate, 240 Iowa 50, 35 N.W.2d 651; Lawlor v. National Screen Service Corp., 3 Cir., 211 F.2d 934; Conner v. Cornell, 10 Cir., 32 F.2d 581; People v. Sterling, 357 Ill. 354, 192 N.E. 229; 17 Am.Jur., 176, Dismissal, Section 106; Hancock National Bank v. Farnum, 176 U.S. 640, 20 S.Ct. 506, 44 L.Ed. 619; City of Chariton v. J. C. Blunk Construction Company et al., supra. This court has spoken on the subject in the very recent case of City of Chariton v. J. C. Blunk Construction Company et al., supra: Nor are we prepared to agree that a consent judgment is not an adjudication against the parties. We quote from 30A Am.Jur., Judgments, Sec. 150, pages 256, 257: `And notwithstanding flat statements to the contrary in some of the cases, which, however, in their actual holding fail to bear out these statements, it is well settled, as a general proposition, that a judgment or decree, though entered by consent or agreement of the parties, is res adjudicata to the same extent as if entered after contest.' Freeman on Judgments, (5th Ed.), Vol. 3, Sec. 1350, says: `Such a judgment has substantially the same effect as any other judgment rendered in ordinary course, and is entitled to the same presumptions. As we have elsewhere seen, it is equally conclusive as to matters adjudicated , is not subject to collateral attack upon jurisdictional grounds, and is entitled to full faith and credit on a sister state.' (Italics supplied) The plaintiff cannot avoid the bar of adjudication by claiming the first judgment was by consent. In Burns v. Fincke, supra, plaintiff brought suit alleging breach of contract and defendant counterclaimed. The parties then entered into a stipulation of dismissal in which the plaintiff directed the Clerk of Court to dismiss with prejudice his complaint, and the defendant directed the Clerk of Court to dismiss with prejudice his counterclaim. Afterwards plaintiff filed a second action and defendant asserted that the prior action was res judicata. The court said:    Since the stipulation provides for dismissal with prejudice, the first action is res judicata of the matters covered by the cause of action and counterclaim therein.    The item of $14,000 for which the present action was instituted was a part of the disputed matters included in the compromise agreement of November 24, 1947. It was merged in the action on that agreement. When that action was dismissed with prejudice, res judicata which attached to its subject matter attached to its component parts. In the case of American Trading & Storage Co. v. Gottstein, supra, (Iowa) the facts concerned an attempt to enforce in an Iowa court a judgment and decree obtained in an Illinois court. The defendant Gottstein sought to avoid a personal judgment entered against him in an Illinois court, alleging that in the Illinois action there was a first complaint which did not seek a personal judgment, and a final decree was entered on the first complaint, and that thereafter the Illinois court was without jurisdiction to render a subsequent decree wherein personal judgment was entered. The Iowa Supreme Court turned to the law of Illinois and that if the decree of the Illinois court was rendered in accordance with the normal usage and practice in Illinois courts, the decree was binding in a sister state of Iowa. Where a judgment dismissing an action `with prejudice' is rendered upon a stipulation of the parties, it operates as a bar to another action upon the same cause. In re Ramsey's Estate, supra. Ever since the decision of Justice Cardozo in United States v. Swift & Company, 286 U.S. 106, 52 S.Ct. 460, 76 L.Ed. 999, there has been no question in the federal courts but that a consent decree is an adjudication. The court said: The result    is whether the decree has been entered after litigation or by consent    we reject the argument for the intervenors that a decree entered upon consent is to be treated as a contract and not as a judicial act. In Lawlor v. National Screen Service Corp., supra, the court said:    It should be noted at the outset that our problem here is not affected by the fact that dismissal of the 1942 action was by stipulation instead of the result of a trial on the facts and the law. A consent judgment or, like the one present, one which is a `dismissal with prejudice' has the same effect as a bar as if the case had gone to trial and the judgment rendered thereafter.    It is, of course, true that the 1943 judgment dismissing the previous suit with prejudice bars a later suit on the same cause of action. The Illinois courts have in general supported the same proposition. In O'Connell v. Chicago Terminal Railroad Co., 184 Ill. 308, 56 N.E. 355, the court stated: It makes no difference whether the decree in the Martin case [Martin v. People, 23 Ill. 342] was a consent decree or not. Even if entered by consent of the village, it is binding upon those who are in privity with the village. The case of Hubert and Margaret in the United States District Court for the Northern District of Illinois is clearly res judicata as to the cause of action and claim in the estate of Robert S. Butler in the case at bar. In this case Margaret alleges res judicata is not effective because Robert was guilty of fraud in connection with the Illinois case in that he failed to tell Hubert and Margaret about the written documents of December 2, 1929, and May 18, 1932. Both parties engage in lengthy discussion as to fraud in connection with a decree and as to the fact that in order to vitiate a decree the fraud must be external fraud and not internal fraud. We have supported this theory of law in many cases. Mahoney v. Insurance Co., 133 Iowa 570, 110 N.W. 1041, 9 L.R.A.,N.S., 490; Edgerly v. Sherman, Iowa, 107 N.W.2d 72; Scheel v. Superior Mfg. Co., 249 Iowa 873, 89 N.W.2d 377; Reimers v. McElree, 238 Iowa 791, 28 N.W.2d 569. This theory of law and this discussion does not apply to the case at bar. In order to constitute fraud against Margaret, the silence of Robert must have been prejudicial to her. It was not prejudicial to her because she knew about the writing of December 2, 1929, from her conversation with Sarah Butler a week before the transfer. See conversation between Hubert, Margaret and Sarah as shown in Division II. There was no prejudice to her as to the agreement of May 18, 1932 because neither she nor Hubert were mentioned in the agreement. Margaret's counsel drew implications from the agreement, but implications do not establish trusts. IV. We will now consider the action and claim of Edward Earle Butler. Some general and often repeated pronouncements as to trusts should first be considered. Neither a statement by the settlor, nor a formal written declaration is essential to establish a trust. The facts and circumstances surrounding the transaction, statement of intentions by one of settlors, conduct and actions of the parties, especially the donee, written statements of Robert of December 2, 1929, and March 18, 1932, all taken together establish the existence of a trust relationship. Hardy v. Daum, 219 Iowa 982, 259 N.W. 561; Neilly v. Hennessy, 208 Iowa 1338, 220 N.W. 47; Pap v. Pap, 247 Iowa 371, 73 N.W.2d 742; Heiden v. Cremin, 8 Cir., 66 F.2d 943, 91 A.L.R. 247; Wyse v. Puchner, 260 Wis. 365, 51 N.W.2d 38; Jaiser v. Milligan (U.S. D.C., Neb.) 120 F.Supp. 599; Restatement of Trusts, 2d Ed. Vol. 11, Sec. 24. In Wyse v. Puchner, 260 Wis. 365, 51 N.W.2d 38, the court, relying upon letters written by decedent to her attorney and to the plaintiff, concluded decedent held certain money in trust for plaintiff, and stated: In the case of In re Brown's Will, 1930, 252 N.Y. 366, 169 N.E. 612, 614, it was said: `While a transfer of the property to a trustee for the purposes of the settlement may be the surest way to create a trust, yet the same result will be accomplished if the owner declares that he himself holds the property in trust for the person designated and this trust may be created either in writing or, if relating to personal property, by parol. The declaration need not be made to the beneficiary, nor the writing given to him; in fact, his ignorance of the trust is immaterial.   ' That this doctrine has generally been followed appears from the following cases and authorities: Martin v. Funk, 75 N.Y. 134, 138; Ulmer v. Fulton, 129 Ohio St. 323, 195 N.E. 557, 97 A.L.R. 1170; Faulds v. Dillon, 231 Mich. 509, 204 N.W. 733, 737; Perry on Trusts and Trustees, 7th ed. vol. 1, p. 112, sec. 96; 65 C.J. p. 278, sec. 61. `Whether a trust has been perfectly created is largely a question of fact in each case, and the court in determining the fact will give efficacy to the situation and relation of the parties, the nature and situation of the property, and the purposes and objects which the settlor had in view.' Perry on Trusts and Trustees, 7th ed., vol. 1, p. 124. In McDiarmid v. McDiarmid, 368 Ill. 638, 15 N.E.2d 493 the court said: In support of their contention that they have proved an express trust appellees rely on our holdings in Kingsbury v. Burnside, 58 Ill. 310, 11 Am.Rep. 67, and many other decisions, including Whetsler v. Sprague [224 Ill. 461, 79 N.E. 667], supra. These decisions hold that the statute of frauds has been complied with if the trustee makes a memorandum or writing showing that the property is held in trust. The details and terms of the trust may be established aliunde and even by parol evidence. Thus, it is held, after an exhaustive review of the authorities in the Kingsbury case, that in order to establish an express trust and to meet the requirements of the statute of frauds, it is not necessary that it be established by a formal declaration of the trust but it is sufficient if it be proved by letters or other memoranda. The writing need not be an instrument expressly framed for the purpose of acknowledging the trust. It is sufficient if the recognition or admission of the trust be incidentally made in the course of correspondence, and almost any memorandum will suffice. The letter or memorandum need not be addressed to the cestui que trust and may be written after title has been acquired by the trustee. The letters contained in the record before us satisfy the requirements of the statute and are supported by the receipts, many of which were also written by John R. Mc-Diarmid, and show that he was paying his brothers and sisters their part of the proceeds of the sale of the land, title to which he held for them. He again wrote that it would be necessary to hold the land for a better price after Fogarty had surrendered possession. (Emphasis supplied) In Holmes v. Holmes, 65 Wash. 572, 118 P. 733, 734, the court said: The important and decisive question in the case is, Can an express trust be proven by a writing signed by the trustee? We think the question must receive an affirmative answer. In volume 3, Pomeroy's Eq.Jur. (3d Ed.) § 1007, this view is announced in the following language: `The written evidence of the trust which will satisfy the statute may come from the grantor (the one who intends that a trust shall be created for a certain beneficiary) or from the trustee (the grantee to whom the land is conveyed for the purposes of the trust), but not from the cestui que trust.   When the trust is not created in and by the instrument of conveyance, it may be sufficiently declared and evidenced by the trustee to whom the land is conveyed, or who becomes holder of the legal title; and this may be done by a writing executed simultaneously with or subsequent to the conveyance, and such writing may be of a most informal nature.' Restatement of the Law of Trusts, 2d Ed., Section 24, provides: