Court Opinion

ID: 3437071
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:09:29.370672+00
Date Added: 2024-06-11T13:56:46.049990
License: Public Domain

Motion is now made for decree in this court pursuant to opinion filed, reported in 206 Iowa 577, where the facts and conclusions of the court thereon may be found. For present purposes, it is sufficient to say that O'Meara  Son were contractors for the construction of drainage improvements. The Southern Surety Company was the surety on their bonds. The contractors, in the prosecution of the work, incurred numerous obligations, for which claims for liens were filed with the county auditor. The contractors borrowed money of the National Bank of Bloomfield, to secure which they assigned to the bank their interest in the contract price. The contractors failed to perform their contract, and the work was taken over by the surety, the Southern Surety Company. Assignment of the contract price for the security of the surety company was made to it, antedating, in fact, that to the Bloomfield bank. The Bloomfield bank, however, claimed priority, for want of notice of the previous assignment to the surety company. Numerous suits against the contractors to recover on these various debts incurred by them and to subject to the satisfaction thereof the funds of the drainage district which were liable for the contract price of the work were brought. These were all consolidated into one suit, tried and determined as such in the district court, and appealed to and determined by this court. The issue between the Southern Surety Company and the Bloomfield bank was one of priority. The issues with the claimants for liens were whether the claims were lienable. The district court, as between the surety company and the Bloomfield bank, gave priority to the Bloomfield bank. On the issues with the claimants for liens, the district court (so far as we are at present concerned) held that the debts to the lien claimants were lienable, and gave the claimants liens on the funds. These liens, of course, took priority over both assignments of the fund, both over that to the surety company and that to the Bloomfield bank. The surety company appealed. The bank did not appeal. This court held, as between the Southern Surety Company and the Bloomfield bank, that the assignment to the Southern Surety Company had priority over *Page 89 
that to the bank. As to the lien claimants, this court held that the debts to them were not lienable. This worked a reversal; and the question now is whether the reversal of the decision in the lower court that debts to claimants were lienable, and that claimants, therefore, were, to the extent of their claims, entitled to the fund in question, inures to the benefit of the Bloomfield bank, inasmuch as it did not appeal. Stated otherwise, Is the judgment in the district court establishing subcontractors' liens still in force and operative as to the Bloomfield bank, notwithstanding the adjudication on the appeal that the claimants had no lien upon, and therefore no interest in, the fund?
The case is in equity. So far as we are now concerned, the subject-matter of the litigation is the fund. The fund was brought into the jurisdiction of the district court, for the purpose of determining the property rights of the various claimants in it. The end sought was a determination of the conflicting claims to property rights and interests in these particular funds. That was the subject of the litigation. This general statement should be modified to this extent: As between the surety company and the bank, the question involved was one of priority. Their property rights in the funds, subject to the asserted superior rights of lien claimants and subject to the determination of priority as between them, are not questioned. Both of them denied, however, the alleged property rights of the lien claimants, and contested them. This contest was not waged on grounds applicable to the bank and the surety company severally, but upon the common ground that the lien claimants had no title. The funds in the first instance belonged to the contractors. All claimants were under the necessity of deraigning title from the contractors. The bank and the surety company had assignments from the contractors. They, therefore, prima facie had title. The lien claimants were under the necessity of proving the incurring of the debts by the contractors to them, the nature of the debts, for what incurred, and that the indebtedness was of the kind that entitled claimants to a lien upon the funds against the owners. Here but one ultimate question was involved. Did the claimants have a lien upon the fund? That question was not personal to the surety company or to the bank. The surety company and the bank (barring the result of the determination of priority between them) had identically the same interest in the *Page 90 
same question; they had identically the same property right in hostility to the lien claimant. If the claimants had no lien, they were the owners of the fund, and the only question remaining was that of priority between them. The decree of the trial court (barring the question of priority between them) affected them equally and inseparably upon the identical question involved, upon identical rights claimed, and on identical interests. It could not possibly be held by the lower court that, on the issues involved, the claims were lienable as to the surety company and not lienable as to the bank, or vice versa. The claims were either lienable or not lienable as an entirety, as a simple right of property, regardless of the nature of interests of any other claimants to the property. The decree establishing their claims as liens was single and entire. It was founded upon their assertion of a property right good as against the world.
The cause was removed to this court. The district court lost jurisdiction, and by appeal the case was brought here. While here, and up to the time of the entry of the decree which the parties elected to have entered here, the cause is pending exclusively in this court, and this court alone has jurisdiction.Dunton v. McCook, 120 Iowa 444; Shors v. Shors, 133 Iowa 22. The judgment on the question of the existence or nonexistence of property right of the lien claimant in the fund is necessarily entire. It is inconceivable that the same judgment may find that the claimant did have and did not have a property right in the fund for the single, identical thing or cause involved. It is conceivable that some question such as one of notice, estoppel, or waiver might have been involved that would apply with varying force to various adverse claimants, but no such question was involved. There were not, as to this matter, distinct and separate or several judgments, founded on several or distinct rights or claims of different parties. We repeat: The thing involved was the claimants' asserted property right in the fund, good as against the world. Our judgment is that the claimants have not a property right. They are here asserting liens. We hold that they have not liens. In that condition, the judgment is entire. The reversal must be total. The claimant, having failed against one, on grounds common to all, fails against all. The reversal inures to the benefit of those who do not appeal, as well as to the benefit of those who do appeal. Cavender v. Heirsof Smith, 5 *Page 91 
Iowa (Clarke) 157; Byington v. Stone, 51 Iowa 317, 320; Kennan v.Smith, 115 Wis. 463 (91 N.W. 986); Altman v. Hofeller, 152 N.Y. 498
(46 N.E. 961, 964); Shelley's Estate, 288 Pa. St. 11 (135 A. 740); Merrifield v. Western Cottage P.  O. Co., 238 Ill. 526
(87 N.E. 379); In re Accounting of Union Trust Co., 219 N.Y. 537
(114 N.E. 1048); Kremer v. Haynie, 67 Tex. 450 (3 S.W. 676);Buell Planing Mill Corp. v. Bullard (Tex. Civ. App.), 189 S.W. 776; Closner  Sprague v. Acker (Tex. Civ. App.), 200 S.W. 421;Reeves v. McCracken, 103 Tex. 416 (128 S.W. 895); Buskirk v.Musick, 100 W. Va. 247 (130 S.E. 435); St. John v. AndrewsInstitute for Girls, 192 N.Y. 382 (85 N.E. 143); 3 Corpus Juris 1007, 1260; 4 Corpus Juris 1114, 1182, 1184, 1206; Brown v.Minneapolis, St. P.  S.S.M.R. Co., 46 N.D. 582 (180 N.W. 792);Morrison v. Stoner, 7 Iowa 492; Tate v. Goode, 135 Ga. 738
(70 S.E. 571, 33 L.R.A. [N.S.] 310). It may be said, as applied to this case, that the decree rendered in this court establishes the status of the claims in question as nonlienable claims. InMorrison v. Stoner, 7 Iowa 492, it is said:
"By the common law, when the makers of a joint contract were sued, the plaintiff must obtain judgment against all, or against none. The spirit of this rule still pervades the law to a greater or less extent. Thus, if one defendant pleads a defense which goes to the substance of the contract, it must, of course, inure to the benefit of the others. So, if his defense is to a part of the contract, but wholly destroys that portion as a payment of part. There may be cases where the plaintiff may take judgment against one for the whole of the contract. * * * But in the case at bar, both contractors are in court. If the one pleads a matter which goes to the validity of the contract, or which is a defense for both, in its nature, on the whole or a part, and succeeds, the books hold that the other, even though in default, takes the benefit of it. * * * The judgment, if against both, must be joint. It would be absurd to render judgment against one for one amount, and against the other for another amount, just as it would if one pleaded payment of part."
Of course, this case is not one of joint liability; but the rationale of the rule, it seems to me, is that the final adjudication of the status or condition of things litigated, whether the final *Page 92 
adjudication is in the trial or appellate court, determines, for all the purposes of the action and of all the rights and interests there litigated, such status or condition, regardless of the position of the parties in the pleadings or in the proceedings.
In 2 Ruling Case Law 269 it is said:
"Under the rule established by the practice and decisions of some courts, however, it is held that while, in those cases where the parties appealing and those not appealing stand upon the same ground, and their rights are involved in the same question, and equally affected by the same decree or judgment, the appellate court will consider the whole case, and settle the rights of the parties not appealing, as well as of those who bring up their case by appeal, yet, where the parties stand upon distinct and unconnected grounds, where their rights are separate and not equally affected by the same decree or judgment, then the appeal will not bring up for adjudication the rights or claims of the others."
In Tate v. Goode, 135 Ga. 738 (33 L.R.A. [N.S.] 310, 314), it is said:
"It will be observed from the statement of facts that the grounds of the demurrer went to the right of the plaintiff to maintain his cause of action, and were common to all the defendants. The trial court was called upon to adjudicate, and did erroneously adjudicate, that the plaintiff had such title as could be asserted against all the defendants as residuary devisees under the will of the common propositus. If the trial court in the first instance had sustained the demurrer, that judgment would have inured to the benefit of all the defendants; because it is a general rule that, if one defendant pleads matter whereby it appears that the plaintiff has no cause of action against any defendant, and obtains a verdict, the plaintiff is not entitled to judgment against a defendant who has defaulted.Biggs v. Benger and Greenfield, 2 Ld. Raymond [K.B.] 1372; Marlerv. Ayliffe, Cro. Jac. [K.B.] 134; State v. Gibson, 21 Ark. 140;Bowman v. Noyes, 12 N.H. 302; Adderton v. Collier, 32 Mo. 507;Morrison v. Stoner, 7 Ia. 493. When the trial court erroneously overrules a demurrer interposed by some of the defendants, which goes to the very vitals of the plaintiff's case, and the parties excepting and those *Page 93 
not excepting stand upon the same ground, and their rights are involved in the same question, and equally affected by the same decree or judgment, the judgment of reversal will operate in favor of all the defendants. Willie v. Thomas, 22 Tex. 175;Walker v. Page, 21 Gratt. 636; Tod v. Stambaugh, 37 Ohio St. 469. The adjudication by this court was that, under the allegations of the petition, the plaintiff had no other title than that of a tenant per autre vie, — that is, for the life of the surviving devisee, A, — and was not entitled to maintain the action against the residuary devisees of the testator, whom the defendants were alleged to be. [Satterfield v. Tate],132 Ga. 256. So that the judgment of this court operates as a reversal of the decree as to all the parties to the case."
Smith v. Knight, 88 Iowa 257, cited in the majority opinion, was an action for settlement of partnership accounts. Some of the items claimed by the defendant adversely to the plaintiff were (it was alleged) not sustained by the evidence. Those items, however, did not go to the very foundation, the life, of the plaintiff's case; whereas, in the case now before us, the adjudication goes to the very existence of any right in the lien claimants against anybody. It was held that they had no right in the property; and this adjudication, from its very nature, was against the whole world.
Soodhalter v. Reliance Coal Co., 203 Iowa 688, where it is held that the appellees, by failing to appeal, are concluded by the decree establishing labor claims and fixing their character, is in harmony with my conclusion here; for there the labor claims in controversy were established in this court. This conclusion is also in harmony with the statute (Code of 1927, Section 12835):
"Coparties, refusing to join in an appeal, cannot afterwards appeal, or derive any benefit therefrom, unless from the necessity of the case, but they shall be held to have joined, and be liable for their proportion of the costs, unless they appear and object thereto."
Furthermore, the decree as entered in the trial court may reasonably be assumed to have protected the bank to its satisfaction. As it then stood, modification of it by denying the claims for liens would add nothing to its practical value. The bank *Page 94 
would not serve its interest by prosecuting an appeal. An appeal by the surety company might be taken so late as to preclude the possibility of a cross-appeal by the bank. It would be a harsh rule that would require the bank, under those circumstances, to appeal, or take the risk of losing both the existing benefit and the benefit of changes made on appeal by other parties. The bank is prejudiced, not by the judgment as rendered in the trial court, but by its disturbance on the appeal taken by the surety company. The bank's acquiescence in the judgment was in the judgment as it was rendered in the trial court, and as it would be if affirmed. Its acquiescence was not in the prejudicial elements of the judgment in the trial court, without its offsetting benefits. Its acquiescence was not in the different judgment rendered in this court, which becomes prejudicial only by denying to it the benefits of the judgment as here rendered. If a judgment which is satisfactory to one party is so disturbed on appeal by another party as to become unsatisfactory, and the party not appealing is compelled to submit to the changes which are to his prejudice, he ought, in common justice, to be entitled to the benefit of the changes which are in his favor, whether he has appealed or not.
The majority holding makes it incumbent on a party, in every case where reversal or modification in this court as to some of the other parties or of the questions involved may be final, to take a cross-appeal, though the judgment of the trial court is entirely in his favor.
EVANS, J., concurs in this dissent.