Case Name: LANE v. WENTWORTH
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1913-07-08
Citations: 69 Or. 242
Docket Number: 
Parties: LANE v. WENTWORTH.
Judges: Mr. Chief Justice McBride, Mr. Justice Moore and Mr. Justice Ramsey concur.
Reporter: Oregon Reports
Volume: 69
Pages: 242–259

Head Matter:
Motion to dismiss appeal, decided July 8, 1913.
Argued January 29, decided February 10, 1914.
LANE v. WENTWORTH.
(133 Pac. 348; 138 Pac. 468.)
. Appeal and Error — Notice of Appeal — Service of Notice.
1. Under subdivision 1, Section 550, L. O. L., requiring a notice of appeal to be served on all adverse parties, and the original notice, with proof of service thereon, to be filed with the clerk of the court from which the appeal is taken, a notice of appeal by the defendant, which is served upon the plaintiffs, gives no jurisdiction as to a codefendant.
Appeal and Error — Notice of Appeal — Admission of Service.
2. An admission of service of notice of appeal on M., not indorsed upon or attached to the notice as required by subdivision 1, Section 550, L. O. L., is insufficient to confer jurisdiction on the party admitting service, he not being an adverse party within the meaning of subdivision 1 of said section.
Appeal and Error — Notice of Appeal — Necessity—Copartners.
3. Where a deeree required one defendant to account to the plaintiff for corporate stock received by him from a eodefendant who had held it in trust for the plaintiff, and expressly provided that the codefendant should be liable only if recovery could not be had from the holder of the stock, the eodefendant was not an adverse party upon whom notice of appeal from the decree must be served as required by subdivision 1, Section 550, L. O. L.
ON THE MERITS.
Trusts — Trust Property Transferred to Third Person.
4. Where plaintiff was the owner of stock in a corporation, and on reorganization it was agreed that the stockholders in the old corporation should receive an equal number of shares in the new, which agreement was carried out as to all the stockholders except plaintiff, defendant, who, while he had notice of plaintiff’s rights, received from the trustee who held the stock for plaintiff a number of shares in excess of that claimed by plaintiff in compensation for his influence in selling bonds of the corporation, held the shares in trust, and will be required to transfer them, to plaintiff.
Release — Construction and Operation — Liabilities Included.
5. Where plaintiff had a judgment against a corporation and an action pending against its successor on reorganization, his receipt to the successor in full payment of these matters, stating that it is in full of all demands against the successor or any stockholder therein, excepting a trustee who had held stock for plaintiff, reciting that it did not waive any right to proceed against the trustee, did not release defendant, to whom the stock had been transferred secretly, without plaintiff’s knowledge, from his liability to transfer the stoek to plaintiff.
From Multnomah.; Henry E. McGinn, Judge.
Department 1. Statement by Mr. Justice Burnett.
I. W. Lane began this suit in the first instance against H. C. Mahon, claiming that, in the organization of a corporation by these two and others, it was agreed that for the purpose of financing the institution all the stock should be subscribed by and in the name of Mahon, with authority to hypothecate the same, but always subject to the condition and trust that the plaintiff should have 6,500 shares par value of the stock, which should be transferred to him by Mahon on demand. The stock was pledged to the First National Bank of Eugene to secure money advanced for the business of the corporation. This, however, had been paid, and about that time it was determined to reorganize the corporation, and to that end what was known as the Coast Range Lumber Company was formed and took over the holdings of the original corporation. The capital stock was increased, and the plaintiff alleged that in the new concern, as in the old, all the shares were subscribed by and in the name of Mahon, subject to the same trust and agreement as before mentioned. Issues were formed on this complaint, and at the trial it was discovered that, instead of Mahon holding the stock at the time, he had transferred it all to the defendant Gr. K. Went-worth, who was not at that time a partner to the suit. The hearing was suspended and on leave granted, an amended complaint was filed, making both Mahon and Wentworth defendants, in which the history of the transaction, as before indicated, was given; and it was alleged that Mahon had transferred all the stock of the corporation standing in his name to Wentworth, who took the same with knowledge of, and subject to, the agreement before described. The prayer was that the defendants be required to account to plaintiff for 6,500 shares of the capital stock of the new corpora tion; that the defendant Wentworth be ordered to transfer the same to plaintiff, failing in which that the plaintiff have judgment against both defendants for the value of the stock and for further relief.
Wentworth answered this complaint traversing it in material particulars, and the trial was completed, resulting in a decree to the effect that Wentworth, within ten days from the date of the decree, transfer to the plaintiff 6,500 shares of the capital stock of the new company, and upon his failure to do so, that the plaintiff recover from Wentworth the sum of $65,000, the reasonable value of the shares, together with costs; and further, that in case Wentworth failed to comply with the decree and the plaintiff could not enforce the collection of his judgment against him, either wholly or in part, Mahon should perform what was required of Wentworth, and finally that no execution should issue upon the property of Mahon until an execution had first been issued against the property of Wentworth and a return made thereon that it was unsatisfied. From this decree Wentworth appealed, serving his notice upon Lane, filing it some time in the month of December, 1912, having indorsed thereon proof of service upon Lane, together with an undertaking on appeal. Afterward, in January, 1913, there was filed in the Circuit Court a paper containing title of cause, after which follows this language :
“Copy of notice of appeal and undertaking on appeal in the above-entitled matter on the part of defendant G. K. Wentworth is hereby acknowledged and service thereof admitted at Portland, Oregon, this 13th day of January, 1913.
“George A. Pipes, “Attorney for H. C. Mahon.”
The plaintiff now moves to dismiss the appeal of Wentworth “for the reason that this court has not ac quired jurisdiction because no valid or legal service of notice of appeal was ever made or filed with.respect to the defendant H. C. Mahon. ’ ’
Motion Overruled.
Mr. A. E. Clark and Mr. Fred L. Everson, for the motion.
Messrs. Coovert & Mannix and Messrs. Stapleton & Sleight, contra.

Opinion:
Mr. Justice Burnett
delivered the opinion of the court.
It is essential to the validity of an appeal that the notice be served on all adverse parties and the original be filed with proof of service indorsed thereon with the clerk of the court in which the judgment, appeal, or order from which the appeal is taken is entered: Section 550, subd. 1, L. O. L. It has often been decided by this court that compliance with this section is jurisdictional. It follows that no jurisdiction was obtained over Mahon by the service of the notice of appeal on Lane, and filing the same in the Circuit Court, having indorsed thereon only the proof of service on Lane.
This is not cured by the subsequent filing of a separate paper indicating admission of service; the same not being indorsed upon or attached to the notice of appeal. It is essential, then, to determine whether Mahon is an adverse party. It has constantly been determined by this court that, although parties are both plaintiffs or both defendants, yet if an appeal' would unfavorably affect the rights of .one of them, as determined by the decree appealed from, he is an adverse party as respects his coplaintiff or codefendant, and that the jurisdiction of this court depends upon service of the notice upon all such parties: The Victorian, 24 Or. 121 (32 Pac. 1040, 41 Am. St. Rep. 838); Moody v. Miller, 24 Or. 179 (33 Pac. 402); Osborn v. Logus, 28 Or. 302 (37 Pac. 456, 38 Pac. 190, 42 Pac. 997); Stutter v. Baker County, 30 Or. 294 (47 Pac. 705); Conrad v. Pacific Packing Co., 34 Or. 341-343 (49 Pac. 659, 52 Pac. 1134, 57 Pac. 1021); Cooper Mfg. Co. v. Delahunt, 36 Or. 403, 404 ( 51 Pac. 649, 60 Pac. 1); Hafer v. Medford etc. R. R. Co., 60 Or. 356 (117 Pac. 1122, 119 Pac. 337).
We note, however, that, by the terms of the decree appealed from, Wentworth is made liable to the plaintiff antecedently to Mahon; that by the terms of the decision the liability of Mahon is secondary to that of Wentworth; and that only in event of Went-worth's failure to comply with the judicial settlement is the plaintiff entitled to look to Mahon for satisfaction. Under such conditions the liability of Mahon cannot rise above or be greater than that of Went-worth. If the accountability of Wentworth is extinguished, that of Mahon, as defined by this decree, will also be obliterated. If on the appeal the decree were reversed as to Wentworth, the situation resulting would not be one in which Wentworth would have failed to comply with the decree against him, and it is only in the event of such a lapse on the part of Wentworth that the plaintiff is entitled to look to Mahon by virtue of the decree.
It having been alleged in the complaint that Mahon had transferred all the shares of stock to Wentworth, the court could not rightly direct Mahon to perform the impossible act of transferring- the same shares to the plaintiff. Under the allegations of the complaint, if any transfer of stock is to be made, it must be made by Wentworth. Without intending this to be a decision of the principal questions involved, it is suffi cient for the purposes of this motion to say that in no event can the situation be made worse for Mahon than it already is, and a possible modification or reversal of the decree could not but operate in his favor. Consequently, as between himself and Wentworth, Mahon is not an adverse party, and it was not necessary to serve upon him the notice of appeal.
Department 1. Statement by Mr. Justice Ramsey.
This is a suit in equity by I. W. Lane for a decree requiring the defendant, Gr. K. Wentworth, to transfer to the plaintiff 6,500 shares of the capital stock of the Coast Range Lumber Company, or, if he fails or refuses to do so, for a decree against him for the value thereof, etc. The court below rendered a decree in favor of the plaintiff. The defendant Gr. BÁ Went-worth appeals. H. C. Mahon does not appeal. The facts appear in the opinion of the court.
Affirmed.
For appellant there was a brief over the names of Messrs. Coovert é Mannix and Messrs. Stapleton S Sleight, with an oral argument by Mr. R. Sleight.
For respondent there was a brief over the names of Mr. A. E. Clark and Mr. Fred L. Everson, with an oral argument by Mr. Clark.
The motion to dismiss the appeal is overruled.
Motion Overruled.
Mr. Chief Justice McBride, Mr. Justice Moore and Mr. Justice Ramsey concur.