Hafer v. Medford & C. L. R. Co., 117 P. 1122

Hafer v. Medford & C. L. R. Co.

117 P. 1122 | Or. | 1911

Lead Opinion

Opinion by

Mr. Chief Justice Eakin.

1, 2. The rule is that every party to a litigation who is interested in sustaining the judgment or decree appealed *357from is an adverse party, and must be served with notice: Moody v. Miller, 24 Or. 179 (33 Pac. 402). A party to a judgment must be one who was made a party at the commencement of the case, or brought in thereafter by order of the court, or became a party in some manner recognized by law: Medynski v. Theiss, 36 Or. 397, 399 (59 Pac. 871); Inman v. Sprague, 30 Or. 321 (47 Pac. 826). At least Hafer, plaintiff in the case, who appeared and protested against the allowance of the claim of Davis, is an adverse party. He is directly interested in sustaining the appeal, and therefore must be served with notice thereof. Whether the other stockholders' who appeared at the hearing of this proceeding are parties, within the decisions last above cited, need not now be decided. The only person served was the receiver, who is not a party to the suit nor interested in the subject of the litigation, other than as an officer of the court, and interested in protecting the creditors and stockholders. Therefore the notice was not served on any adverse party.

The motion to dismiss is allowed. Dismissed.

Rehearing

Decided December 19, 1911.

On Petition for Rehearing.

1119 Pac. 337.]

Opinion by

Mr. Chief Justice Eakin.

3. This is a petition by defendant A. A. Davis for a rehearing upon the motion to dismiss the appeal, urging that the court is in error in holding that Hafer, the plaintiff, who was not served with a notice of the appeal, is an adverse party in the decree or order from which the appeal is taken. Hafer brought this suit as a stockholder, who, with certain others, have paid par value for their stock in the sum total of $21,000, and alleges irregularity in the organization and management of the company, showing a state of facts that indicate that it is *358insolvent, asks for a receiver to take charge of the property of the company to enforce the payment of stock subscription, and that the company be dissolved, alleging that Davis is one of the delinquent stockholders, who has presented to the court a claim for $21,753 against the corporation for payment from the assets in the custody of the court, which, if allowed, will diminish the amount for distribution among the stockholders. The appeal is from the order of the court disallowing the claim of Davis.

This is not a separate proceeding against the receiver, as contended by counsel, but is against the fund involved in the suit. Counsel says in his brief that no objection was ever made to the claim of Davis by any person. This is error. The supplemental abstract shows that Hafer and other stockholders filed written protests and appearances in the proceeding for the purpose of contesting the claim. The claim was contested before the court in which Hafer and these stockholders were recognized by the court and conducted the defense.' It is stated in Fagan & Osgood v. Boyle Ice Mach. Co., 65 Tex. 324, 330:

“Who may attend before the master is determined upon the most enlightened and liberal principles of abstract justice. If the fund being administered is not sufficient to pay all, each creditor or distributee is directly interested in the justice of every demand of a degree equal to, or greater than, his own. * * Every creditor whose claim has been recognized or established in any of the modes pointed out by the decree becomes a quasi party, and may resist, before the master, the allowance of any claim of a dignity equal tó, or greater than, his own. If not satisfied with the action of the master, he may, upon leave as of course, except to the master’s report. * *’’

The proceeding in the case before us is not a proceeding against the receiver, but is a claim by a defendant in the suit against the fund, the distribution of which is the ultimate purpose of the suit, and, if there is a *359party in the suit who is an adverse party to the-claim it is plaintiff. The receiver is a trustee for all the parties, including Davis and Hafer (High, Receivers, 208), and although the creditors cannot compromise the claim without the receiver’s consent, as stated by some of the authorities, he cannot prevent the party, or even one who is not a party if he is a creditor or distributee and has the consent of the court, from contesting claims, the allowance of which will prejudice their rights. This rule is generally recognized [High, Receivers, 208; Medynski v. Theiss, 36 Or. 397 (59 Pac. 871); Thompson v. Huron Lbr. Co., 4 Wash. 600, 607 (30 Pac. 741: 31 Pac. 25)], and is the only just and equitable one. In such a proceeding a claim is presented to the court, and it must determine whether it shall be allowed (34 Cyc. 341); and it is not necessary that a formal issue be presented when the claim is presented to the court for allowance in the original suit. 17 Ency. Pl. & Pr. 794.

The rehearing is denied.

Appeal Dismissed: Rehearing Dented.