Davis v. Swedish-American National Bank

80 N.W. 953, 78 Minn. 408, 1899 Minn. LEXIS 853
CourtSupreme Court of Minnesota
DecidedNovember 28, 1899
DocketNos. 11,918—(211)
StatusPublished
Cited by27 cases

This text of 80 N.W. 953 (Davis v. Swedish-American National Bank) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Davis v. Swedish-American National Bank, 80 N.W. 953, 78 Minn. 408, 1899 Minn. LEXIS 853 (Mich. 1899).

Opinion

Upon the motion to dismiss the appeals, the following opinion was filed November 28, 1899:

CANTY, J.

1. Skoll made an assignment for the benefit of his creditors under the insolvency law of 1881. The appellant Davis is the assignee. He filed his final account, and on the hearing of the same the court refused to allow him compensation for his services, or for the services of his attorneys, and he appeals from the order disallowing all of the same.

Three of the creditors of Skoll appeared at said hearing, objected to the allowance of any such compensation, and opposed such allowance. The notice of appeal was served on those three creditors, but not on any of the other creditors. There were in all 41 creditors who had filed claims, but none of them, except said three, appeared at said hearing or opposed such allowance. Said three creditors now move this court to dismiss the appeal because the notice of appeal was not served on the other creditors, of whom sixteen are not residents of this state; but the claims of five of these have been assigned to a resident of this state, and the claims of six of the others were filed through attorneys residing in this state.

In our opinion, every one of the creditors who did not appear at the hearing has a direct interest in having the order of the court below sustained; and we cannot hold that, as appellant contends, those other creditors are not adversary parties. But it does not follow from this that all of the creditors who filed claims must be served with notice of the appeal.

As a general rule, the great majority of the creditors who file claims in such a proceeding do not desire to be put to the trouble, annoyance, and expense of taking part in the various contests which may arise in the course of the administration of the insolvent estate, or to be mulcted with the costs which might be taxed against them on account of the unsuccessful efforts of the other creditors in such [411]*411contests, and for these reasons remain passive, allowing their claims so filed to abide the event of the contests which the other creditors conduct on behalf of all of the creditors. Of course, if the creditors who so conduct the contest are successful, they are, as a general rule, entitled to be reimbursed for their reasonable expenses out of the common fund so sayed or recovered. But, if the creditors who would thus remain passive must be served with notice of appeal, they are liable for the costs of the appeal if unsuccessful, and, when served, cannot safely permit their rights on the appeal to go by default, but must employ counsel, prepare and print briefs, and take part in the argument.

The creditors who file claims in such a proceeding are generally quite numerous, and it is often impracticable to serve notice of appeal on all of them who have filed their claims, and have thereby become parties to the proceeding. These claims are usually filed in the most informal manner, and without notice to any one interested, except the assignee. A large portion of them are, as a general rule, sent in by mail by nonresident creditors or attorneys; and there is no one in the state, representing such creditors, on whom notice of appeal could be served. Usually the claims are being filed from day to day during the whole, or nearly the whole, of the time during which the estate is being administered. When the court by its order limits the time within which to file releases, and that time has expired, it is usually the case that a number of the creditors who filed claims fail to file releases, and are barred from participating in the estate. Again, it often happens that some of these creditors are afterwards permitted to file releases and participate. Under these circumstances, it would often be' difficult to determine oh whom to serve the notice of appeal. If the appellant failed to serve on all, he would fail in his appeal; and, if he 'Served on some on whom he should not serve, he would be liable to pay them the costs of the dismissal of the appeal as to them. Then, it is often difficult, and even impracticable, to determine on whom notice of appeal should be served, if it must be served on all of the creditors who have filed claims, and who may be entitled to participate in the distribution of the assets. The proceeding is not one which is conducted either according to the common law or equity practice. [412]*412There are no regular pleadings, and the names of the parties are not formally stated in the title, or in any other part of the record.

We are of the opinion that, under all of these circumstances, it is a case for the application of the doctrine that where the persons or parties are numerous, have a common interest, and it is difficult to ascertain them definitely, the action or proceeding may be brought by a few on behalf of all, or against a few so situated that they may represent all. Story, in discussing the exceptions to the rule that all the parties in interest should be made parties to a'bill in equity, says: .

“The most usual cases arranging themselves under this head of exceptions are, (1) where the question is one of a common or general interest, and one or more sue, or defend for the benefit of the whole; * * * (3) where the parties are very numerous, and although they have, or may have, separate, distinct interests; yet it is impracticable to bring them all before the court.” Story, Eq. PL § 97. See also sections 96, 98, 99,103,104,116,120.

We must presume that all of the 41 creditors who filed their claims had notice of the hearing in the court below. Only three of these creditors appeared and opposed the application of the assignee, and it must be held that by failing to appear the other creditors impliedly consented that those who did appear and oppose the application might do so on behalf of all. Under these circumstances, it was sufficient to serve the notice of appeal on those who did so appear and oppose the application.

The result arrived at is not in conflict with Lambert v. Scandinavian-American Bank, 66 Minn. 185, 68 N. W. 834. In that case the insolvents made an application to the court, under Laws 1895, c. 67, for a discharge from the debts of their various creditors who had filed claims in the assignment proceeding. There were a number of these creditors who resided in the state, and on whom the notice of hearing was served, but they failed to appear at the hearing. The court denied the application as to them also, and the insolvents appealed, but failed to serve the notice of appeal on these creditors. This court rightfully held that, as to them, the order appealed from could not be reviewed. Their interests were wholly separate and distinct from those of the other creditors on whom the [413]*413notice of appeal was served, and tbe latter creditors did not represent tbe former. In that case the creditors were not so exceedingly numerous, and the difficulties of serving the notice of appeal on them so very great, that the third rule quoted above from Story should be applied.

The motion to dismiss the appeal is denied.

2. The attorneys for the assignee also appeal from that part of the order denying their claim for compensation. Said three creditors move to dismiss this appeal on the ground that the attorneys were not parties to the proceeding in the district court, and are not entitled to prosecute such an appeal. In our opinion, the point is well taken.

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Bluebook (online)
80 N.W. 953, 78 Minn. 408, 1899 Minn. LEXIS 853, Counsel Stack Legal Research, https://law.counselstack.com/opinion/davis-v-swedish-american-national-bank-minn-1899.