Source: https://oregon.lexroll.com/adams-et-al-v-kennard-et-al-122-or-84-1924/
Timestamp: 2019-04-23 16:25:38+00:00

Document:
ROY ADAMS ET AL. v. WILLIAM KENNARD ET AL.
From Multnomah: GEORGE ROSSMAN, Judge.
For the motion, Messrs. Manning Harvey.
Contra, Messrs. Dey, Hampson Nelson.
See 26 R.C.L. 1326. For authorities discussing the question as to effect of new trial on verdict and judgment of former trial, see note in 44L.R.A. (N.S.) 346.
This cause is before us on a motion to dismiss an appeal. The plaintiffs instituted a suit against William Kennard and George W. Bates, Jr., who were the executors and trustees under the will of Truman L. Adams, deceased, and Harry L. Raffety, as agent and attorney for the said George W. Bates. The three defendants answered separately appearing by different attorneys. The suit is for an accounting and damages based upon an alleged fraudulent sale of the property of the estate by the defendants to said William Kennard. A decree was rendered in favor of the plaintiffs against the defendant, William Kennard, who appeals. The decree dismissed the complaint as against the other defendants, Bates and Raffety, and awarded a judgment for costs in favor of Bates against the plaintiffs. The appellant, William Kennard, served a notice of appeal upon the plaintiffs only. Plaintiffs moved to dismiss because the defendants, George W. Bates and Harry L. Raffety, are necessary parties in this court. It is well settled in this state that any party whose interest might be adversely affected by the decree entered in this court is a necessary party to the appeal.
“Upon an appeal, the appellate court may affirm, reverse, or modify the judgment or decree appealed from, in the respect mentioned in the notice, and not otherwise, as to any or all of the parties joining in the appeal, and may include in such decision any or all of the parties not joining in the appeal except a codefendant of the appellant against whom a several judgment or decree might have been given in the court below; and may, if necessary and proper, order a new trial.” Section 557, Or. L.
not admit of any controversy. There was only one decree entered. The appellant, with commendable zeal, contends inasmuch as the appeal was directed to the plaintiffs and refers to the appeal as being against appellant, that the appeal is therefore from only so much of the decree as is against the appellant. However, he does not find his appeal to that part of the decree which is adverse to his client but appeals from the decree and the whole thereof.
The defendants, George W. Bates, Jr., and Harry L. Raffety, were codefendants of the appellant. A separate decree not only might have been given in the court below against them, but in this case a separate decree was actually rendered in their favor. The notice of appeal is as much from the parts of the decree dismissing the complaint as to Bates and Raffety as it is to the part of the decree against the appellant. The notice of appeal reads: “From the whole and every part of said decree.” This court has the power upon the appeal “to affirm, reverse or modify the judgment or decree appealed from, * * and may, if necessary and proper, order a new trial.” Powell v. Dayton, S. G.R.R. Co., 13 Or. 445, 446 (11 P. 222); State v. Richardson, 48 Or. 309, 314 (85 P. 225, 8 L.R.A. (N.S.) 362); Kenworthy v Slooman, 62 Or. 604, 607 (125 P. 273).
“When, on appeal from a decree in equity, the cause is sent back because the complaint is considered insufficient or the evidence inadequate to support a material averment, no final decree is rendered in this court, except to set aside the decree of the court below and to require further proceedings to be had therein. The rule, therefore, as promulgated in Powell v Dayton S. G.R. Ry. Co., 13 Or. 446 (11 P. 222), applies only to suits in equity.
Under the authority in Powell v. Dayton S. G.R. Ry. Co., this court has the power to reverse the decree of the court below and remand the case.
“The granting of a new trial wipes out the previous adjudication, and the case proceeds de novo, and must be conducted, as far as practicable, as if there had been no previous trial. Unless limited to particular issues or parties, a new trial reopens all the issues in the case, although some of the issues were found in favor of the party asking for the new trial, and the court will not ordinarily restrict the new trial to the issues found against such party, without the consent of the adverse party.” 20 R.C.L. 317, § 101.
“The effect of granting a new trial is to set aside both the verdict and the judgment, without any specific mention of either. It places the case exactly in the position it occupied before there had been a trial, and the party stands as if he had never been tried. When granted in general terms it operates as a new trial as to all the parties, reopens all the issues in the cause, and amendments to the pleadings may be permitted.” 20 R.C.L. 313, § 97.
remand the cause for further proceedings. If that should be done in this suit it might place all the parties in the same position in which they were at the commencement of the trial in the Circuit Court. The defendants, George W. Bates, Jr., and Harry L. Raffety, are interested therefore in maintaining the decree as it now is, and are necessarily adverse parties to the appellant in this appeal.
the case to be remanded, it has the power to reverse the decree of the Circuit Court and remand the cause. Bates and Raffety should, therefore, have been served with the notice of appeal. The court is without jurisdiction to hear the appeal on the notice as given and served. If appellant had desired to limit the consideration of this court to the particular portion of the decree against the appellant, he should have given notice to that effect. Bates and Raffety were proper parties to the suit. They are not brought into this court. This court is precluded under Section 557, Or. L., from including them in any decision we might render. This court, therefore, might be prevented from rendering such a decree as we may determine equitable and just. We are thus limited by the notice of appeal under Section 557, Or. L. That limitation prevents jurisdiction of this court from attaching.
The appeal will have to be dismissed because this court is without jurisdiction to hear and determine the suit.
Motion to dismiss denied July 15, 1924. ON MOTION TO DISMISS APPEAL. (227 P. 738.) Messrs. Manning Harvey, for the motion.
Messrs. Dey, Hampson Nelson, contra.
“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.
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.
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.
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.
(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.
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.
(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 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.
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.
either by way of argument or authority, was advanced on the petition for rehearing or at the oral argument made at the rehearing. The address of the notice of appeal is to the plaintiffs. The decree is described as being in favor of the plaintiffs and against the appellant Kennard. These two parts of the notice, however, do not describe the scope of the appeal. They simply identify the decree appealed from. In that respect the notice is sufficient if it contains the title of the cause, the names of the parties and notifies the adverse party or his attorney that an appeal is taken from the decree to the Supreme or Circuit Court as the case may be.
reverse a decree and remand the case: Section 557, Or. L.
This court has frequently exercised its authority to reverse a decree in equity and remand the case: Anderson v. Burgess, 110 Or. 265 (223 P. 244), and cases cited in the original opinion on the motion to dismiss in the instant case.
If the process of conferring jurisdiction of this court was not statutory and that process was left to the rules of this court so that the court could exercise some discretion, every doubt should be resolved in favor of the appellant because it is more satisfactory to decide every case upon its merits than upon procedure. It is regrettable that almost 50 per cent of the decisions of this court are based upon questions of procedure; but the procedure in this court is fixed by statute. The jurisdiction of this court depends upon compliance with the statutory enactments.
It is contended that the intention of the appellant was to appeal from the part of the decree only adverse to him. But the intent of the appellant must be gathered from the notice of appeal. The language as stated above is certain, definite and unambiguous. The appeal is from the whole of the decree and every part thereof.
In the instant case the codefendants of the appellant were not granted a nonsuit. The case was fully and finally adjudicated as to them unless reversed by this court. The plaintiffs could not begin another suit against them on the same cause of suit. This difference is so wide that it eliminates the Colby v. City of Portland case above as an authority. The only distinction between the instant case and the case of First National Bank v Halliday, 98 Or. 649 (193 P. 1029), is this: In that case the defendants not served might have been injured by a modification of the decree. In the instant case a reversal of the decree would result to the injury of the defendants not served. A reversal of the decree would not be more favorable to the plaintiffs, but would be detrimental alike to the plaintiffs and the defendants not served. The codefendants of appellant are interested in the affirmance of the decree appealed from.
of the decree appealed from as are the plaintiffs. His codefendants are not brought into this court. For these reasons and the reasons assigned in the original opinion on this motion, the motion to dismiss the appeal should be granted.
For appellant there was a brief over the names of Messrs. Raffety Pickett and Messrs. Dey, Hampson Nelson, with an oral argument by Mr. Roscoe C. Nelson.
For respondents there was a brief over the name of Messrs. Manning Harvey.
equal owners of the department store in question. Appraisers were appointed in regular course when the will was probated and they appraised the partnership property at a net value of $15,000. In substance, the complaint alleges that the defendants procured the appraisers to be appointed and to make the appraisement of $15,000, which was averred to be far below the actual value of the partnership estate, fraudulently and in pursuance to a conspiracy to secure a low valuation for the purpose of enabling the defendant Kennard to buy the partnership estate at less than its true value.
The defendant Raffety was employed as an attorney to represent the other two defendants in the settlement of the estate and he is included in the complaint by appropriate averments as one of the joint tort-feasors engaged in bringing about the untoward result of which the plaintiffs complain. In passing, it is to be noted that the Circuit Court hearing this case dismissed the suit both as to Raffety and as to Bates. No appeal has been taken as to either of them, so the present issue is between the plaintiffs as respondents and the defendant Kennard as appellant.
It is charged that prior to the sale of the interest of the decedent in the partnership estate, the executors continued to transact the business of the partnership from the death of Adams until August 24, 1918, and it is alleged that during that time there was a profit in excess of $12,000 for the year 1917 and $18,458 in the year 1918, all of which had been retained by the defendants and converted to their own use. The complaint goes on to state, in substance, that the defendants Kennard and Bates filed their final account as executors, showing the sale of the Adams interest to Kennard for the sum of $7,500, omitting to state any account of the profits of the store during the time it was conducted, and afterward on November 3, 1918, the final account of the executors was approved and they were discharged, and thereafter Kennard and Bates, as trustees, paid to the plaintiffs herein a part of the money arising from the sale of said interest in the partnership business for $7,500, but wholly failed and refused to pay to them or account for the true value of the said interest in said partnership, as aforesaid, or to pay or account to plaintiffs for any of the net profits of said business during the time it was conducted by the said Geo. W. Bates, Jr., and William Kennard as trustees as aforesaid, to the plaintiffs’ great loss and damage. What part of the proceeds of the sale was paid to the plaintiffs is not stated.
It is averred and admitted that the plaintiff Roy Adams was a minor until November 9, 1921, and that Mabel P. Adams was under the guardianship of Theresa H. Johnson from and after September 12, 1917. The representative character of the defendants and their appointment are admitted; the making and probate of the will are likewise conceded, and the application to the court for leave to sell the interest of the decedent in the partnership property at $7,500 is avowed. It is stated that with the consent of the legatees and in pursuance to the order of the court upon citation issued to the heirs to show cause why the interest of the decedent should not be sold to the defendant at the appraised value of $7,500, that interest was sold and transferred to Kennard.
That allegation quoted from the answer of Kennard was admitted by the reply of the plaintiffs.
after the executors were appointed and the testimony discloses that it was conducted as a going concern and the form of the property was changing constantly as any other stock of merchandise would, all as authorized by the will of the decedent.
Cases have been cited to the effect that a trustee who is a part owner of the property, the other moiety of which is the subject of the trust, has the right to buy the trust estate in protection of his own interest. Those precedents are not affected by prohibitive statutes like ours, and are made to depend upon the trustee-purchaser showing the utmost good faith and open dealing with the cestui que trust and paying the full value of the property. Aside from the direct and positive inhibition of our statute, the conditions of the cited precedents in the respects mentioned are not prescribed in the instant case, at least as to value of the property.
seeking to be made whole according to a monetary standard. In other words, they desire that the matter shall be reconsidered and that a proper amount of damages shall be allowed to them as compensation, not punishment, for the misfeasance of the defendants.
With these considerations in mind, we here insert some excerpts and notes of the testimony and will then state an account between the plaintiffs and the defendant Kennard.
Here witness thought the probable loss on the lease would be somewhere around $125 or $150 a month. He further testified that none of the appraisers suggested that $26,000 should be deducted as a liability on that lease.
The plaintiffs have failed to prove that the executors induced the appraisers to undervalue the property of the partnership estate for the benefit of Kennard, or that a fraudulent scheme was worked upon the court; and there is but little evidence tending to prove that Kennard misrepresented the condition of the business to the Adams heirs or their representative.
The substantial advance in the price of merchandise was not a secret known to Mr. Kennard alone, but was common knowledge. In the matter of liquidating the Adams estate, the guardian, Geo. H. Johnson, an expert bookkeeper, a man of good sense, and who seems to have carefully deliberated upon the subject-matter, instructed his attorney that the surplus of $41,291.55, at a fair valuation, should be reduced by 40 per cent and $5,500 deducted from that result on account of liability under the lease. This is very near the figures of the appraisers.
For this net amount a decree is entered in favor of the plaintiffs and against the defendant Kennard. The decree of the Circuit Court is modified accordingly.

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