Adams v. Kennard , 122 Or. 84 ( 1927 )

Motion to dismiss denied July 15, 1924. ON MOTION TO DISMISS APPEAL. (227 P. 738.) A brief history of this litigation is as follows: The defendant, Kennard, was in partnership with Truman L. Adams, later deceased, during the lifetime of the latter. Adams left a will appointing Kennard and George W. Bates, Jr., as executors thereof. After leaving some property to his widow he devised to Kennard and Bates the remainder of his estate in trust for the benefit of his two children, empowering the trustees to continue the business in which the deceased was engaged at the time of his death, or to close out the same and pay the proceeds to the plaintiffs. The complaint charges that the defendants, Kennard, Bates and Raffety, the latter being the attorney for Bates, fraudulently conspired and by false and fraudulent representations persuaded the appraisers to value the firm property at $15,000, when in fact it was worth $41,291.55, all for the purpose of enabling the defendant Kennard to purchase the interest of the estate at less than its actual value. By appropriate allegations, the complaint narrates the carrying out of this scheme even to the final account of the executors and the allowance thereof with the result that, in fraud of the plaintiffs, Kennard obtained for $7,500 property of almost thrice that value to the damage of the plaintiffs. The object of the suit was to set aside the final account and the sale of the property to Kennard and compel the defendant executors to account to the plaintiffs for the property thus unlawfully obtained. Each defendant answered separately, justifying his own acts and without seeking any affirmative relief against any one. After issue joined, the court heard the case on the testimony and made the following decree, omitting formal particulars:

"IT IS ORDERED, ADJUDGED AND DECREED that the complaint be dismissed as to the defendant, Harry L. Raffety, without costs to either the said defendant or plaintiffs.

"IT IS ORDERED, ADJUDGED AND DECREED that the complaint be dismissed as to the defendant, Geo. W. Bates, Jr., and that the said Geo. W. Bates, Jr., recover from and of the plaintiffs herein his costs and disbursements to be taxed.

"IT IS ORDERED, ADJUDGED AND DECREED that the defendant, William Kennard, has received for and on behalf of the plaintiffs herein personal property and money in trust for the plaintiffs herein arising from the business and sale of the Kennard Adams department store, for which the said Kennard has not fully accounted to plaintiffs; and the final report of the defendants, Geo. W. Bates, Jr., and William Kennard, as executors of the estate of Truman L. Adams, deceased, purporting to account for the moneys and property so received, be, and the same is hereby set aside and annulled.

"AND IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the plaintiffs, Roy Adams and Mabel P. Adams, by her guardian, Theresa H. Johnson, have and recover judgment from and against the defendant, William Kennard, for the sum of fourteen thousand forty-eight dollars and eight cents ($14,048.08) and their costs and disbursements to be taxed at $41.00."

In due time thereafter, Kennard served a notice of appeal on the plaintiffs but not on either of his codefendants. After the title of the cause and address to the plaintiffs and their attorneys, the notice reads thus:

"You and each of you are hereby notified that William Kennard, one of the defendants in the above-entitled suit, does hereby appeal to the Supreme Court of the State of Oregon, from the final decree made and entered in said suit on the 1st day of June, 1923, in favor of plaintiffs and against said defendant, William Kennard, and the said defendant, William Kennard, does hereby appeal to said Supreme Court from the whole and every part of said decree made and entered in the above-entitled court and cause."

Upon the lodgment in this court of the transcript, the plaintiffs moved to dismiss the appeal of Kennard because the notice of appeal was not served upon his codefendants. This motion was sustained and the appeal dismissed in an opinion written by Mr. Justice COSHOW, reported ante, p. 87 (222 P. 1092). A rehearing was granted and the motion was urged before the full court.

One question to be determined is the scope of the appeal. The notice informs the plaintiffs that Kennard appeals "from the final decree made and entered in said suit on the first day of June, 1923, in favor of plaintiffs and against said defendant William Kennard." He manifests no concern about any part of the decree except that which affects him. It is true that the final clause of the notice reads that Kennard "does hereby appeal to said Supreme Court from the whole and every part of said decree made and entered in the above-entitled court and cause." The words, "said decree" refer to and identify what goes before in that notice, namely, the decree in favor of plaintiffs and against said defendant, William Kennard. The concluding clause in the notice cannot rightfully be applied to any other decree than that one entered against Kennard and in favor of the plaintiffs. Comparing the notice of appeal with the entire pronouncement of the court in its final determination of the suit, it is plain that Kennard appealed from only a part thereof. Only a portion of the whole journal entry in the record of the court in this suit on that date of June 1, 1923, will coincide with the description thereof contained in the notice of appeal. It cannot be applied to the parts dismissing the suit as to Raffety and Bates. As to the plaintiffs, there were three decrees; two against them and one in their favor. Kennard was concerned only as to the latter. The interests of his codefendants were not involved either in its maintenance or its overthrow. Each defendant having defended separately by separate answers and having been visited with separate decrees, their interests are completely divorced and thenceforward neither is in any way concerned about what becomes of either of his codefendants. Neither defendant is adverse to the other as to the appeal because neither can be affected by the result of any appeal either of the others might inaugurate.

The plaintiffs did not appeal and the time within which they could have appealed having elapsed before filing the motion to dismiss Kennard's appeal, the decree of the Circuit Court dismissing the suit as to Raffety and Bates is final beyond appeal as between the latter two and the plaintiffs. Taking the complaint as true, Raffety, Bates and Kennard were charged with a joint tort. Whatever the result, there neither was nor could be any right of contribution between the three defendants; so Kennard has no basis of attack against either of his codefendants nor does he even attempt it. The defendants not served with notice of appeal are immune from attack by any and all other parties to the suit. Kennard has not alleged anything against them; neither has he attempted any relief affecting either of them, so no harm can come to the codefendants from Kennard for the reason that he could not enforce contribution against them for the tort with which they are charged and for the further reason that he has no basis in his pleadings upon which to attack them. As to Bates and Raffety, the decree dismissing the suit as to them is final between them and the plaintiffs because it was rendered by a court having jurisdiction over the persons of the defendants and of the subject matter of the suit and that decree has never been appealed from by the plaintiffs or Bates or Raffety and the time therefor having long since elapsed, the decree is final as to them. Being thus final, it constitutes a bar in favor of Bates and Raffety and against the plaintiff as to any further litigation of the issues involved in this suit.

The situation of Bates and Raffety is one of indifference between the plaintiffs on one hand and their codefendant Kennard on the other. They are completely protected from any harm at the hands of the plaintiffs and on the part of their codefendant. It is a matter of no moment to either Bates or Raffety what may be the outcome of the litigation on the appeal of Kennard, which the plaintiffs have moved to dismiss. Because he has no right to call upon either of his codefendants to aid him in answering for the tort with which the plaintiffs charge all of them, Kennard cannot complain that the suit was dismissed as to them. He is interested solely in clearing his own skirts. As to him, they are not adverse parties but at most, only indifferent and hence were not entitled to notice of his appeal. Under the circumstances disclosed by the record, Kennard cannot work any harm or disadvantage to either of his codefendants. Neither can the plaintiffs obtain a better judgment or decree against Bates or Raffety than they had in the court below, because they have not appealed from the decree: Caro v. Wollenberg, 83 Or. 311 (163 P. 94); Crumbly v. Crumbly, 94 Or. 617 (186 P. 423);Johnson v. Prineville, 100 Or. 105 (196 P. 817).

It thus appears that Bates and Raffety are not in any danger of prejudice in this litigation, either from their codefendant or from the plaintiffs and hence, so far as the plaintiffs are concerned, they are not necessary parties to the disposition of the appeal of Kennard and were not entitled to notice thereof. It does not lie in the mouth of the plaintiffs who must be satisfied with the decree from which they have not appealed, to complain that Raffety and Bates are not brought into this court. The canon established by all our precedents and by which it is determined whether a party is adverse to the appellant is in substance this: that if on the appeal, the interests of a party could be adversely affected, he is entitled to notice of the appeal of another party, in default of which this court will not acquire jurisdiction. On the other hand, if the only possible modification of the decree would better his condition, he is not an adverse party and it is not necessary to notify him.

Some of the precedents cited by the plaintiffs are here examined.

Hamilton v. Blair, 23 Or. 64 (31 P. 197), was a suit to determine the right of some wheat depositors to bulk wheat in a defaulting warehouse. One of the tenants in common, though a party against whom a decree was rendered, was not served with notice and the appeal was dismissed for the reason that the appellate court properly might have added to his burden on appeal.

In Moody v. Miller, 24 Or. 179 (33 P. 402), the wife of a defendant in the case was interested in sustaining the decree against her husband, also a defendant, because its reversal would have made her personally liable for the entire judgment which would have been a lien on her real property. Hence the court decided that she was a necessary party in the appeal and that the notice should have been served upon her.

On the other hand, in Osborn v. Logus, 28 Or. 302, 305 (37 P. 456, 38 P. 190, 42 P. 997), the court had before it a suit to foreclose materialmen's liens. The contractors to whom the materials were furnished, though made defendants, were not served with summons and did not appear. The notice of plaintiff's appeal was not served on them. It was held that they were not affected by the decree dismissing the suit and hence, were not adverse parties.

In United States National Bank v. Shefler, 77 Or. 579 (143 P. 51, 152 P. 234), the dispute on appeal was between junior encumbrancers in a suit to foreclose a mortgage. The makers of the note secured by the senior mortgage were not served with notice of appeal. The court, speaking by Mr. Justice EAKIN, after stating the case said:

"There is no modification of the decree that can be made on the appeal which would affect them adversely and as the decree is adverse to them, they have no interest in upholding it."

In short, they were bound to pay their note in any event, no matter what the dispute between subsequent encumbrancers might be. Hence they were not interested in the dispute between those other parties, either of whom might appeal without serving notice to the makers of the note. Consequently they were not adverse parties.

In Johnson v. Paulson, 83 Or. 238 (154 P. 685, 163 P. 435), the decree was in favor of several lien claimants (by consent as to one of them) and they were to share pro rata in the distribution of the proceeds of the sale of the premises under the decree. The appeal was dismissed as to this single lien claimant for two reasons: 1. because a consent decree is not appealable; and 2. because a modification or disallowance of the other liens on appeal would not prejudice his right, but, on the other hand, would increase the fund in which he was entitled to share; therefore he was not an adverse party upon whom service was necessary.

This principle, making the possibility of a party's interest being harmed the standard on appeal, runs through all the cases cited by the plaintiffs here. If the only modification possible will be favorable to the one not served or if the situation cannot be made worse for him on appeal, it is not necessary to serve him with notice.

On the record before us where all parties had their day in court before a tribunal of competent jurisdiction, there is no reason apparent in the record and none can be pointed out indicating that any harm can befall either Bates or Raffety by any possible disposition of the appeal of Kennard. The plaintiffs cannot harm them because the final decree has become a bar to any litigation the plaintiffs might carry on upon the issues joined in the pleadings. The appellant cannot harm them because they are not interested in the result as to him and he cannot attack them because he has no basis either in the facts or the pleadings to sustain such an attack. Our former opinion was erroneous and should be withdrawn. The motion to dismiss the appeal is overruled. MOTION DENIED.