Diamond Bank v. Van Meter

108 P. 1042, 18 Idaho 243, 1910 Ida. LEXIS 17

• Court: Idaho Supreme Court
• Decided: May 20, 1910
• Status: Published

Opinion

STEWART, J.-

This is an action to foreclose a real estate mortgage. The complaint alleges that on July 1, 1906, at the city of Twin Falls, state of Idaho, R. H. Holtzman and J ohn N. Claar made their certain promissory note dated on that date for the sum of $2,800, payable to the order of Lon Warden on or before fifteen months after date; that to secure the payment of said note said Holtzman and Claar on July 2, 1906, executed and delivered to Warden -a mortgage on certain real property situated in the then county of Cassia, now county of Twin Falls, state of Idaho; that such mortgage was acknowledged and recorded as provided by law in Cassia county, and afterward transcribed into the records of what is now Twin Falls county; that on August 13, 1906, and before the maturity of such note, for valuable consideration and in due course of business Warden sold, assigned, indorsed and delivered said note to the plaintiff; that at the time of the sale and assignment of such note the mortgage was also-delivered to plaintiff, who is now alleged to be the legal owner and holder thereof; that on August 4, 1906, Holtzman and Claar sold and conveyed the mortgaged premises to Job K. Hart subject to said mortgage, and said Job K. Hart covenanted and agreed to assume and pay the said note and mortgage as part of the consideration and purchase price of' said premises; that Job K. Hart and wife bn May 28, 1907, sold and conveyed the mortgaged premises to Lu Van Meter, and the said Lu Van Meter covenanted and agreed, as part of the consideration for said conveyance and as part of the purchase price of said premises, to assume and pay said note- and mortgage; that Baker A. Van Meter is the husband of Lu Van Meter.

Service was made upon the defendants and they all defaulted except the defendants, Lu Van Meter and husband, who filed an answer, which in substance admitted that the plaintiff was-a foreign corporation, and denied that at the time the note was transferred to plaintiff -and at the time this action was commenced it was not doing business in the state of Idaho, and denied that the.plaintiff is in the state of Idaho for the sole purpose of bringing this action. The answer admits the conveyance of the mortgaged property as alleged and denies that either Hart or the defendant, Lu Van Meter, assumed or agreed to pay tbe mortgage. Tbe answer then alleges payment of tbe mortgage by Lu Van Meter through process of garnishment. The cause was tried to the court and a decree rendered which, among other things, adjudges:

“It is hereby ordered, adjudged and decreed that the plaintiff, the Diamond Bank, a corporation organized and existing under the laws of the state of Missouri, do have and recover from the defendants, R. H. Holtzman, John N. Claar, Job K. Hart, and Lu Yan Meter, the sum of $1882.50, principal, interest and attorney’s fees, and costs of court.

“It is ordered, adjudged and decreed, that all and singular the mortgaged premises mentioned in the said complaint and hereinafter described, or so much thereof as may be sufficient to raise the amount due to plaintiff for the principal and interest, attorney’s fees and costs of this suit, and expenses of sale, and which may be sold separately without material injury to the parties interested, be sold at public auction by the sheriff of the county of Twin Falls in the manner prescribed by law and according to the course and practice of the court.That the defendants and all persons claiming, or to claim, from or under them, and all persons having liens subsequent to said mortgage by judgment or decree upon the land described in said mortgage, and their personal representatives, and all persons having any lien or claim by or under such subsequent judgment or decree, and their heirs oí personal representatives, and all persons claiming to have acquired any estate or interest in said premises subsequent to the filing of said notice of the pendency of this action with the recorder, as aforesaid, be forever barred and foreclosed.

“And it is further ordered, adjudged and decreed, that if the moneys arising from the said sale shall be insufficient to pay the amount so found due to the plaintiff, as above stated, with interest and costs, and expenses of sale, as aforesaid, the sheriff specify the amount of such deficiency and balance due to the plaintiff in his return of said sale, and that on the coming in and filing of said return, the clerk of this court docket a judgment for such balance against the defendants, R. H. Holtzman, John N. Claar, Job K. Hart, and Ln Van Meter, and that the said defendants pay to the said plaintiff the amount of said deficiency and judgment with interest thereon at the rate of seven (7%) per cent per annum, from the date of last-mentioned return and judgment and that the plaintiff have execution therefor. ’ ’

From this judgment the defendant, Lu Van Meter, appeals. The notice of appeal was served upon the plaintiff and was not served on the defendants, Holtzman, Claar or Hart. The respondents move to dismiss the appeal upon the ground that notice of appeal was not served upon the defendants, Holtz-man, Claar and Hart, they being adverse parties. Rev. Codes, sec. 4808, provides: “An appeal is taken by filing with the clerk of the court in which the judgment or order appealed from is entered, a notice stating the appeal from the same, or some specific part thereof, and serving a similar notice on the adverse party, or his attorney.” If Holtzman, Claar or Hart were adverse parties to appellant, then this appeal must be dismissed. “Adverse parties,” as used in this statute, has been variously defined. Such definitions, however, have been based apparently on the particular facts of each particular case.

In Aulbach v. Dahler, 4 Ida. 522, 43 Pac. 192, this court said: “Adverse parties on whom notice of appeal must be served are such parties as the reversal of judgment would affect.” In Titiman v. Alamance Min. Co., 9 Ida. 240, 74 Pac. 529, this court refers to Aulbach v. Dahler and said: “The term ‘adverse party’ as used in that section was construed by this court in Aulbach v. Dahler, supra, to mean every party whose interest in the subject matter would be affected by a modification or reversal of the judgment or order appealed from, irrespective of whether he is a plaintiff, defendant or intervener. ’ ’ And the court cites Jones v. Quantrell et al., 2 Ida. 153, 9 Pac. 418; Coffin v. Edgington, 2 Ida. 627, 23 Pac. 80; Lydon v. Godard, 5 Ida. 607, 51 Pac. 459; Lewiston Nat. Bank v. Tefft, 6 Ida. 104, 53 Pac. 271. The court then refers to the case of Senter v. De Bernal, 38 Cal. 637, as the leading case in California, construing a section of the California code identical with sec. 4808 of the Rev. Codes of this state, and quotes from that ease as follows: “Every party whose interest in the subject matter of the appeal is adverse to or will be affected by the reversal or modification of the judgment or order from which the appeal has been taken is, we think, an adverse party within the meaning of these provisions of the code, irrespective of the question whether he appears upon the face of the record in the attitude of plaintiff or defendant or intervenor.”

In the Titiman v. Alamance Min. Co. opinion the court further refers to Aulbach v. Dahler, and says that it construes the term “adverse party,” and holds that as separate judgments were -entered .against the defendants on whom the notice of appeal was mot served, they could not be affected by a modification or reversal of the judgment entered against the appellant (defendant), and announces this to be the general rule announced in other Idaho.eases passing upon this question. In the case of Nelson Bennett Co. v. Twin Falls etc. Co., 13 Ida. 767, 92 Pac. 980, this court again reviews this question and says: “The statute intends that, a notice of appeal should be served upon -all parties who have an interest in conflict with a reversal of the judgment, or whose rights would be adversely affected by a reversal of such judgment.” That is, if a reversal of the judgment could affect or change the liability of a party to- the judgment upon a retrial of said cause to his injury, then such party is an adverse party and must be served with the notice of appeal.

In the case of Doust v. R. M. Bell Tel. Co., 14 Ida. 677, 95 Pac. 209, this court again considered a motion to dismiss an appeal upon the alleged ground that adverse parties were not. served, and the court said:

“The transcript shows that the Telephone Co. and said Crane were sued jointly and a joint judgment was rendered against them for over $800. That being true, a reversal or modification of this judgment would adversely affect said Crane. He is- therefore an adverse party. In order to give-this- court jurisdiction of the case on appeal, it is necessary that the transcript should show that the notice of appeal has-been served on eaeb and every of tbe adverse parties, and unless tbe record shows proper service of tbe notice of appeal, tbe appeal will be dismissed on motion. (Anderson v. Knott, 1 Ida. 626; Tootle v. French, 3 Ida. 1, 25 Pac. 1091; Adams v. McPherson, 3 Ida. 718, 34 Pac. 1095; Moe v. Harger, 10 Ida. 194, 77 Pac. 645.) This court has beld in numerous cases that all parties against whom a joint judgment bas been rendered are adverse parties, and tbat tbe notice of appeal must be served upon each of them in order to give this court, jurisdiction. (Jones v. Quantrell, 2 Ida. 153, 9 Pac. 418; Coffin v. Edgington, 2 Ida. 627, 23 Pac. 80; Lydon v. Godard, 5 Ida. 607, 51 Pac. 459; Lewiston Nat. Bank v. Tefft, 6 Ida. 104, 53 Pac. 271; Titiman v. Alamance Min. Co., 9 Ida. 240, 74 Pac. 529; Baker v. Drews, 9 Ida. 276, 74 Pac. 1130; Nelson Bennett Co. v. Twin Falls Land & Water Co., 13 Ida. 767, 92 Pac. 980 [13 Ann. Gas. 17].)”

The case of Lewiston Nat. Bank v. Tefft, 6 Ida. 104, 53 Pac. 271, is very similar in principal to the case now under consideration. Tbat was an action to foreclose a mortgage executed by Albert P. Tefft and Oarrie M. Tefft. A joint, judgment was rendered against both of said defendants. From this judgment and decree Carrie M. Tefft appeals. Other parties were made defendants, some of whom appeared and others made default. Carrie M. Tefft and Mary B. Osborn, two of the defendants, appealed. A motion was made to dismiss the appeal on the ground tbat notice of appeal was not served upon Albert P. Tefft, against whom the joint judgment was rendered; and in the opinion in tbat case the court beld tbat Albert P. Tefft was an adverse party and should have been served with the notice of appeal. On rehearing the court says :

‘‘ Tbe petitioner claims tbat as Tefft bas been released from all liability under tbe judgment of foreclosure, and tbe deficiency judgment against him bad been satisfied, he was no longer interested in tbe appeal, was not an adverse party, and therefore entitled to service of tbe notice of appeal. Tbe release of the defendant Tefft from all liability under tbe judgment of foreclosure 'as well as tbe deficiency judgment. was based upon the validity of the judgment. If, upon appeal, the judgment of foreclosure was reversed, set aside, or invalidated, the consideration for the release failed, and the plaintiff’s right of action against Tefft was thereby revived, under the provisions of section 4498 of the Revised Statutes of Idaho. .... The reversal or modification of the judgment upon appeal revived the liability of the defendant Tefft upon the original contract. ’ ’

If a judgment is joint and is reversed, then the cause stands for retrial, and is in the same position as though never tried, and leaves all the parties to the suit in such position that they may urge as defenses any defense they may have. If, however, a judgment is several and grants relief against each defendant separately, then a reversal as to one defendant could not affect the judgment rendered against the other defendant. In the case at bar the judgment is joint and the same relief is granted against each of the defendants, that is, the court decrees the foreclosure and sale of the property mortgaged and directs that if sufficient is not realized from such sale to pay the judgment, then a judgment for such deficiency is directed to be entered against each of said defendants. If upon the appeal of Lu Van Meter the judgment should be reversed and upon retrial she should succeed in defeating the allegations of the complaint as to her assumption of and agreement to pay the mortgage, then of course even though the mortgage be foreclosed, a deficiency judgment could not be entered against her, and the deficiency judgment would then only stand against Holtzman, Claar and Hart, and in this respect certainly these three defendants would be adverse to the plaintiff upon this appeal and injuriously affected by such reversal. In other words, one of the issues presented by the pleadings as they now stand is whether Lu Van Meter assumed and agreed to pay the mortgage upon the property conveyed to her. Of course if she did assume and agree to pay such mortgage and the property mortgaged is insufficient to pay the judgment, and Hart pays such deficiency judgment, then under the decree as it now stands Van Meter would be liable to Hart for the amount thus paid; but if on reversal Yan Meter should be successful upon this particular defense, then Hart could not recover from Yan Meter the amount paid upon the deficiency, and to that extent would be affected, and injuriously so, by a reversal of such judgment.

Pursuing this inquiry further, if the appeal of Yan Meter should be sustained and the cause reversed, upon a reversal Yan Meter would be permitted to amend her answer and urge other defenses than those at present contained in her answer, and upon such defenses might succeed in defeating the foreclosure of the mortgage entirely and leave the makers of the note wholly responsible upon a personal judgment.

In the case of Jaeckel v. Pease, 6 Ida. 131, 53 Pac. 399, this court held: “The first assignment of error cannot be sustained. Under our code if, in a suit to foreclose a mortgage, a foreclosure should be denied, the plaintiff is, nevertheless, entitled to judgment for the amount of the mortgage debt shown by the pleadings and proof to be due him, against the defendants personally liable therefor.” Ve think, therefore, there can be no question but that Holtzman, Claar and Hart are adverse parties to the appellant upon this appeal, under the provisions of Rev. Codes, see. 4808, upon whom notice of appeal must be served. A safe rule to apply in determining whether a party to a judgment is adverse is, if the judgment be reversed and the cause again tried, could a judgment be entered which would injuriously affect the liability of such person by changing or increasing his liability or rights as fixed by the former judgment Í If so, then such person is an adverse party within the meaning of the statute. Applying this rule to the facts of this case, it is apparent that Holtzman, Claar and Hart are adverse parties.

Counsel for appellant, however, contends that these parties defaulted, and because of such default they were not entitled to any notice of any proceedings in the action after such default has been entered. In support of this contention he cites Rev. Codes, sec. 4892, in part as follows:

“After appearance, a defendant or his attorney is entitled to notice of all subsequent proceedings of which notice is required to be given. But where a defendant has not appeared, service of notice or papers need not be made upon him unless he is imprisoned in the action for want of bail.”

This section, however, does not modify or change the mandatory provisions of see. 4808, supra, which requires that a notice of appeal shall be served on the adverse party or his attorney. The service of the notice of appeal is jurisdictional, and this court cannot acquire jurisdiction of an adverse party upon appeal, unless it appear that such party has been served with the notice of appeal. In the case of Titiman v. Alamance Min. Co., supra, in referring to the case of Aulbach v. Dahler, 4 Ida. 522, 43 Pac. 192, this court said:

“The court in that case did not intend to, and did not, change the rule as laid down in any of the above-cited cases; while the latter part of the opinion in that case might be construed to mean that it was not necessary to serve the notice of appeal on a defaulting defendant, it was not intended to hold that it was not necessary to serve the notice of appeal on a defendant who would be affected by a modification or-reversal of the judgment even though he be in default.”

And in the case of Nelson Bennett Co. v. Twin Falls etc. Co., supra, this court said: “Where default is entered and the rights of the defendant cannot be prejudicially affected by further proceedings in the case, he is not entitled to' any notice of such further proceedings.”

It is clear, therefore, that if a reversal of the judgment would adversely or injuriously affect a party to such judgment, whether such party was in default or appeared in the-aotion, the statute requires such party to be served with notice of appeal. In this ease Holtzman, Claar and Hart not having been served with the notice of appeal, and they being adverse parties, the appeal must be dismissed. Costs awarded to. respondent.

Ailshie, J., concurs. Sullivan, C. J., concurs in conclusion.