Case Name: ROY ADAMS et al. v. WILLIAM KENNARD et al.
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1927-02-19
Citations: 122 Or. 84
Docket Number: 
Parties: ROY ADAMS et al. v. WILLIAM KENNARD et al.
Judges: 
Reporter: Oregon Reports
Volume: 122
Pages: 84–113

Head Matter:
Submitted on motion to dismiss January 29,
dismissed February 19,
rehearing denied March 25,
motion for reconsideration allowed April 15,
motion to dismiss denied and appeal reinstated July 15,
respondents’ petition for rehearing denied September 23,
respondents’ motion for reconsideration denied September 30, 1924,
argued January 26,
modified March 15,
rehearing denied June 21,
motion to modify denied July 6, 1927.
ROY ADAMS et al. v. WILLIAM KENNARD et al.
(222 Pac. 1092; 227 Pac. 738; 253 Pac. 1048.)
For the motion, Messrs. Manning & Harvey.
Contra, Messrs. Dey, Hampson & Nelson.

Opinion:
COSHOW, J.
This cause is before us ou 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. Baffety,, 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 Baffety, 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. Baffety, aré necessary parties in this court. It is well settled in this state that any party whose interests 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.
The appellant, Kennard, appealed from the entire decree. The language in the notice of appeal does 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 concluding language in the notice of appeal is as follows:
"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 case."
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 Pac. 222); State v. Richardson, 48 Or. 309, 314 (85 Pac. 225, 8 L. R. A. (N. S.) 362); Kenworthy v. Slooman, 62 Or. 604, 607 (125 Pac. 273).
In State v. Richardson, 48 Or. 309, 314 (85 Pac. 225, 8 L. R. A. (N. S.) 362), this court, speaking through Mr. Justice Moore, used this language:
"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 Pac. 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.
While ordinarily in appeals from a decree this court will try the issues anew, yet it has the power to set aside the decree of the Circuit Court and remand the cause for further proceedings. If that should he 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 of First Nat. Bank v. Halliday, 98 Or. 649 (193 Pac. 1029), is controlling. The facts in that case were similar to the facts in this case on principle. The' notice of appeal is very similar to the notice of appeal in the instant case. In the case of First Nat. Bank v. Halliday, supra, only one of the two defendants appealed. The notice was served on the plaintiff as in the instant case. Mr. Justice Burnett employed this language in announcing the decision of this court:
"The conclusion is that there is a possibility that her interest will be affected by a modificaton of the decree according to the contention of the appealing son. She is therefore an adverse party within the meaning of the precedent cited, and the notice of appeal should have been served upon her as such."
In the instant case the defendants, Bates and Raffety, are undoubtedly interested in maintaining the decree as rendered. The respondents cannot get any more favorable decree than the decree rendered in the Circuit Court. A reversal of the decree and remanding the suit for further proceedings would not be more favorable to respondents than the decree appealed from. The appellant has brought here the entire decree and if this court should find that competent evidence had been rejected, or for any cause that a complete trial of the issues had not been had, and should conclude that equity re quired the case to be remanded, it has the power to reverse the decree of the Circuit Court and remand the cause. Bates and Baffety 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 Baffety were proper parties to the suit. They are not bronght 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.
Messrs. Manning & Harvey, for the motion.
Messrs. Dey, Hampson & Nelson, contra.
The appeal will have to be dismissed, because this court is without jurisdiction to hear and determine the suit. Dismissed. Beheading Denied.
Motion to dismiss denied July 15, 1924.
On Motion to Dismiss Appeal.
(227 Pac. 738.)
BURNETT, J.
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 Baffety, 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 Degreed that the complaint be dismissed as to the defendant, Harry L. Baffety, 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, Boy 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 Pac. 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 Pac. 94); Crumbly v. Crumbly, 94 Or. 617 (186 Pac. 423); Johnson v. Prineville, 100 Or. 105 (196 Pac. 817).
It thus appears that Bates and Baffety 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 Baffety 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 Pac. 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 Pac. 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 Pac. 456, 38 Pac. 190, 42 Pac. 997), the court had before it a suit to foreclose material-men'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 Pac. 51, 152 Pac. 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 Pac. 685, 163 Pac. 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 dis-allowance 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 bim 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.