Prudential Loan Co. v. Smith , 150 Or. 27 ( 1935 )

Petition for rehearing denied April 9, 1935 ON PETITION FOR REHEARING (42 P.2d 919) In a petition for rehearing, appealing defendant contends that this court erred in dismissing his appeal.

One position he assumes is that the decree of the circuit court is void and that there can be no parties to an invalid or void judgment, there can be neither judgment creditors nor judgment debtors in such a case.

There are two defects in this argument. One is that, primafacie, the decree in the case at bar is a valid decree. By its order overruling defendant's motion to vacate it on the ground that it is void, the circuit court in effect declared that the decree is a valid decree. For the purpose of determining whether plaintiff Joseph was an adverse party, we are confronted with a decree wherein the extent and character of his trusteeship is determined, we are also met with appealing defendant's contention that such decree is void, and we have the record of the learned circuit court, impliedly at least, holding that said decree is not void. At best, all we have indicating that said decree is void is appealing defendant's contention to that effect.

The other defect in appealing defendant's argument is that there are parties to the cause and necessarily they are parties to the record of the decree whether such decree be valid, voidable or void. The trial court can not divest a party to a cause of his relationship as a party thereto either by a valid or a voidable or a void decree. The trial court merely declares the rights, duties and liabilities of the parties, or mayhap, in some instances, it may indicate that a given party has neither right, remedy, duty nor liability therein.

The first question affecting the proper disposition of a cause by the appellate court is whether the appellate court has acquired the right to speak (jurisdiction) concerning the course taken by the trial court. It has no such right unless all the parties, who have appeared in the trial court, and who are adverse to appellant, have been served with a notice of appeal, or have accepted service thereof.

Plaintiff Joseph appeared in the trial court by complaint and reply. The record discloses that he was a grantee in a deed conveying certain property, and it is alleged in the complaint that said decree was intended and agreed by the parties therein to be and to operate simply as a mortgage of said premises and as security for the payment of the debt alleged to be held, when the complaint was filed by plaintiff Prudential Loan Company. The decree declared said deed to be a mortgage, securing the payment not only of the Prudential Loan Company's debt, but also of four other debts. A sale upon execution was had and all of the property so alleged to have been held in trust by plaintiff Joseph was sold and an order confirming such sale was entered.

It is obvious that an order, directing the vacation and cancellation of said decree on the ground that it is, and ever since its rendition has been, utterly void, would place upon Mr. Joseph's representative or successor the burden or duty of establishing the nature and character of the trust. Whether further duties and liabilities would ensue on the part of Mr. Joseph's successor or representative would depend upon the ultimate result herein. It is entirely within the realm of possibility that an accounting could be required. If, upon a new trial, the court should find that the only claim secured by the deed in suit is that of the Prudential Loan Company, and it should be shown that the premises conveyed are of greater value than the amount of that claim, the grantor in said deed, namely, appealing defendant, would be entitled to an accounting from the successor or representative of Joseph for the overplus remaining after the satisfaction of said Prudential Loan Company's claim, or appealing defendant might possibly require a transfer to said defendant of a portion of the mortgaged property.

Another position assumed by appealing defendant is that we should have heard his appeal from the part of the decree declaring that the claim of the Hibernia Commercial and Savings Bank constituted a first lien on the trust property in suit. He contends that plaintiff Joseph was not concerned with this part of the decree. What we have just said applies with equal potency when we consider the result of holding that part of the decree void. If, upon a new trial of the issues with respect to that claim, it should be determined that the same was unfounded or had become unenforceable, the value of the trust estate would be augmented and the liability of the successor or representative of Mr. Joseph increased. Increasing the value of the trust estate adversely affects the trustee by augmenting the amount for which he may be held accountable.

Defendant well says that, as the record now stands, Joseph's trusteeship is completely closed and all trust relationships completely extinguished. It follows that any order, judgment or decree which has the effect of reestablishing such relationship and of giving the right to the trustor to form new issues and demand further relief from the successor or representative of the deceased trustee would constitute a result adverse and prejudicial to such successor or representative. That being so, said successor or representative is a necessary and adverse party to this appeal.

Defendant refers to subdivision five of the opinion of this court in the case of May v. Roberts, 133 Or. 643, 653 (286 P. 546). There, this court approved the action of the circuit court in setting aside a fraudulent and fictitious judgment on the ground that a court could set aside its own judgment on its own motion for lack of jurisdiction to enter the judgment in the first instance. It does not approve the principle that, without having first obtained jurisdiction on appeal, an appellate court may expunge or vacate or even modify a decree or judgment of the trial court.

In the case of Finch et al. v. Pacific Reduction Etc. Co.,113 Or. 670 (234 P. 296), also cited by defendant, this court reiterated the rule that a court of original jurisdiction may grant relief from a judgment which is void for want of service of process.

The case of Western Pattern Mfg. Co., v. American Metal ShoeCo., 175 Wis. 493 (185 N.W. 535, 20 A.L.R. 264), also cited by defendant, announces the same rule.

In none of these cases is the question of the jurisdiction of the appellate court involved.

The motion for rehearing is denied.