Bonde v. Stern , 73 N.D. 273 ( 1944 )

This is an action brought by some 30 named plaintiffs "for themselves and for all others similarly interested" to recover several separate and individual judgments against the defendants. The complaint sets forth the execution of a trust deed on certain real property for the purpose of securing 90 negotiable bonds all of which were sold to individuals but only 18 were paid. The defendants who executed the bonds and trust deed defaulted. The defendants and the trustee under the trust deed then entered into an agreement, a copy of which is attached to the complaint as a part thereof whereby it was agreed that the property should be foreclosed upon and certain payments made and things done by the defendants for the benefit of the plaintiffs. This agreement provided:

"It is further specifically understood and agreed that this agreement shall not be construed to release first parties, their heirs, legatees, executors or administrators from their joint and several personal obligations to second party as trustee, or its successor in trust, and the owners of the bonds now outstanding under the Trust Deed of July 20, 1928, their heirs or assigns, and that if there is any breach of this agreement by first parties, or of the new mortgage and trust deed to be given as herein provided, second party, as trustee, or its successor in trust, or any individual bondholder, his heirs or assigns, shall be privileged to thereupon proceed personally against first parties, or any of them, their administrators, or executors, as though this agreement had not been made."

The complaint then alleges that the defendants breached the agreement and refused to perform their obligations thereunder and that the bonds numbered 19 to 90 inclusive in the amount of $500 each are past due and:

"That the owners of Bonds 19 to 90, (except Nos. 37, 41, 54, 80, 89 and 90) are thirty-nine or more in number and are scattered over the United States and it is impracticable to bring them all into court, that each bond holder's interest is identical and common except that some own more than one bond, so this action is brought upon the direction and sanction of the bond holders committee by the plaintiffs named, for their benefit and for the benefit of all the bond holders, and each offers, upon payment of the bond or bonds owned by them, with interest, or any judgment herein rendered for such principal and interest to assign or convey their interest in the real property now owned by Alan Williamson, Trustee."

The question before us is whether the plaintiffs may properly join in this action, the causes of action pleaded.

Section 7403, N.D. Comp. Laws 1913 provides:

"All persons having an interest in the subject of the action and in obtaining the relief demanded may be joined as plaintiffs except as otherwise provided in this chapter."

In Pomeroy's Code Remedies, § 200, we find this statutory provision discussed in the following language:

"Persons having an interest in the subject of the action, and in obtaining the relief demanded, may be joined as plaintiffs in all actions, whatever be their nature, although the rights of such persons are legally several, and although at the common law they would be required to institute separate actions; or, in other words, the plain import of the legislation — its language not being confined to any class of suits — is to enlarge the number of cases in which persons may be joined as co-plaintiffs, and to place legal actions in this respect upon exactly the same footing as those which are equitable in their nature."

From both our statute and the quotation from Pomeroy it appears that in order for two or more plaintiffs to join in an action two things are required. All persons thus joined must have (1) an interest in the subject matter of the action (2) an interest in the relief demanded. If both elements are present, the plaintiffs may join although their rights are legally several.

"But, to justify joining parties as plaintiffs in an action, there must be some community of interest in the particular claim pressed for adjudication, and some common benefit or advantage in the relief sought. As observed in Martin v. Davis, 82 Ind. 38: ``To entitle two or more persons to join as plaintiffs, it is not sufficient that they each have a cause of action arising out of the same transaction or matter, if the relief sought by each be distinct and unconnected. The plaintiffs must have a common interest in the subject of the action and in the relief. Each must be interested in the relief sought by the other.'" Miller v. Hawkeye Gold Dredging Co. 156 Iowa 557, 137 N.W. 507. See also Bates, Pleading, Practice Parties Forms, 4th ed § 64.

The majority opinion takes the view that the pleading of the agreement made between the defendants and the trustee, which all bondholders approved, constitutes the subject of the action or at least an important part thereof and being common to all of the plaintiffs, is sufficient ground for sustaining a joinder. With this conclusion, I am unable to agree. The basis of this action as pleaded in the complaint is the bonds held by the individual plaintiffs. The agreement from which we have quoted specifically provides that in event of its breach the bondholders would be privileged to proceed personally against the defendants as though the agreement had not been made. It is the evident theory of the complaint that since the agreement was breached the plaintiffs were proceeding in accordance with that provision. This construction is borne out by the relief sought which is an individual judgment in favor of each plaintiff named and also in favor of each of the other bondholders upon their becoming active plaintiffs in the suit before judgment or upon later application. No common relief is sought. The relief demanded springs from the bonds and not the agreement and being individual in its nature the plaintiffs do not qualify in either of the two respects required by § 7403, supra. They do not have a common interest in either the subject of the action or in the relief demanded.

The demurrer does not present a question of misjoinder of parties plaintiff. Olson v. Shirley, 12 N.D. 106, 96 N.W. 297; Bruffarts v. Ober, 48 N.D. 997, 188 N.W. 174. However, the foregoing discussion bears upon the application of § 7466, N.D. Comp. Laws 1913 to the complaint involved in this case. This section provides that:

"The plaintiff may unite in the same complaint several causes of action, whether they are such as have been heretofore denominated legal or equitable, or both, where they all arise out of:

1. The same transaction, or transactions connected with the same subject of action; or

2. Contract, express or implied; or ". . . But the causes ofaction so united must all belong to one of these classes and, except in actions for the foreclosure of mortgages, must affectall the parties to the action, and not require different places of trial, and must be separately stated."

The causes of action that may be joined under the statute must not only fall within the several specific categories therein set forth but each cause of action must affect all of the parties. In this case each cause of action affects one plaintiff and both defendants but does not affect the other plaintiffs named or unnamed.

"The general rule requiring that all causes joined affect all the parties is applicable under the code practice. It is a prerequisite, even in the code states, to the joinder of causes of action that all causes should affect all parties to the action, both parties defendant and parties plaintiff. In fact, most of the codes in terms require, that the different causes of action united, except as otherwise provided, ``must affect all the parties to the action.' Under such provisions, causes of action against the same defendant which affect the several plaintiffs separately and distinctly, even though they may have arisen out of the same transaction or relate to the same subject-matter, cannot be joined." 1 Am Jur 466, Actions, § 79.

This court has construed the Code of Civil Procedure with prodigious though meritorious liberality. In carrying out that policy we must endeavor to keep the judicial house in order. To that end the legislature has wisely enjoined that except in actions for foreclosure of mortgages, causes of action to be joined must affect all of the parties to the action. The complaint violates that injunction. The demurrer should have been sustained.