Independent School District v. State Savings Bank

213 N.W. 397 | Iowa | 1927

^* Costs paid by appellee June 7, 1927, and petition for rehearing abandoned. The appellee filed a motion to dismiss the appeal for want of service of notice by the defendant, as appellant, upon its codefendant and cross-petitioner, the American Surety Company, as required by Section 12834, Code of 1924. This motion was resisted by the appellant, on the ground that the American Surety Company was not its coparty to the judgment. The decree entered was responsive both to the prayer of the plaintiff's petition and to the prayer of the surety company's cross-petition. The decree thus entered was an adjudication as to the three parties to the litigation. The liability of the surety company was recognized as secondary. As such, it was interested in the establishment of the preference, and was entitled to require of the plaintiff that it exercise such preference. If we should reverse the decree on this appeal, one of two results must follow: Either (1) the plaintiff would lose its right of preference, as against the defendant receiver, and would be still bound to exercise such right of preference as against defendant surety company; or (2) such reversal would operate to defeat the preference as against both the plaintiff and the defendant-surety. As against the first alternative, the plaintiff would have a right to complain; as against the second, the surety company would have a right to complain. The surety company is not represented here. If the defendant, as appellant, had made the surety company a party to the appeal by serving notice thereon, then a reversal would operate injuriously upon it. In the absence of notice, a reversal will not operate less injuriously, except upon the theory that we have no jurisdiction over it and no power to affect its adjudicated rights at all.

Upon the trial below, it was stipulated into the record that there were sufficient funds in the hands of the receiver to pay in full all the preferred claims. The decree, therefore, operated to the full protection of the surety against its secondary liability. We must hold, therefore, that the failure to serve notice upon the surety company was fatal to the appeal.

The motion of appellee to dismiss is sustained. — Dismissed.

De GRAFF, ALBERT, and MORLING, JJ., concur.