Rice v. Tarver , 4 Ga. 571 ( 1848 )

By the Court.

Nisbet, J.

delivering the opinion.

By referring to the facts of this case, it will he seen that, upon motion, the Circuit Judge dismissed the complainant’s bill, as to two of the defendants, to-wit: those residing in the county of Jones and in the county of Houston. It was conceded, in the argument, that the bill was dismissed, as to them, because the Court had not jurisdiction over them, in the county of Twiggs, where the litigation was conducted. The question made, is whether the defendants, residing respectively in the county of Jones, and the county of Houston, could, in a suit in Chancery, be required to answer in the county of Twiggs, where another ofthe defendants, II. II. Tarver, resided.

[1.] In Gilbert vs. Thomas, et al. 3 Kelly, 578, this Court determined, that Equity cases are not embraced in that clause of the Constitution which requires defendants, in all civil cases, to be sued in the counties where they reside. There is, therefore, no constitutional objection to the jurisdiction claimed over the defendants resident in the counties of Jones and Houston. I shall not attempt to review or strengthen the argument upon this point, deeming such attempt wholly useless. Our confidence in the correctness of the decision in Gilbert vs. Thomas, has been confirmed by the argument of this cause. A contrary decision would restrict within narrow limits, the jurisdiction of Chancery, and greatly abridge the beneficent utility of that branch of the Judiciary. Upon sufficient reason, upon authority and upon all expediency, we are satisfied that the Constitution received its true exposition in that case.

But because Equity causes are not within ihe limitations of the Constitution, it does not follow that a complainant in Equity has a rambling commission, (to use the language of the counsel for the defendant in error,) to bring his suit in any county in the State, where he may choose to locate it. Nor does it follow, that where the suit is properly located, the complainant may draw defendants out of their own counties necessarily and universally, to answer in the county where the suit is brought.

[2.] We hold that the inception of the suit in Equity, must be, according to the spirit of our Constitution and laws, and according to the usage of our Courts of Chancery from the beginning, iii some one county where the Court has jurisdiction. By reason of the residence of a defendant, or on some other account, the Court must have jurisdiction where the litigation is pending. The first matter of inquiry, will he, whether the Court had jurisdiction of this suit in the county of Twiggs. If it had, then occurs the main question, whether in Twiggs the Court had jurisdiction over the non-resident defendants. If it had not, it is manifest that those non-resident defendants could not he called to answer there. It is not made a question, directly, in this writ of error, whether the Court had jurisdiction over the Bank of Columbus, another defendant to the suit in Twiggs. It will he necessary, notwithstanding, in order to a fair discussion of the points made, to inquire into that also.

First, then, was this bill properly brought, in the county of Twiggs ? The bill is brought by the Receiver of the Ranh of Macon, and charges that that Bank, being insolvent, fraudulently assigned to the Bank of Columbus, which claimed to be a creditor, a schedule of notes, amounting to some twenty or thirty thous- and dollars. Among these notes, one was made by Watson, Wimberly & Co., (the defendants who resided in the county of Houston,) and indorsed by H. H. Tarver; and one other made by John Martin, who resided in the county of Jones — that the title to these notes is in the Bank of Macon or the Receiver — that the Bank of Columbus had collected a considerable amount from the schedule of notes so transferred — that upon the notes made by the defendants, Watson, Wimberly Co., and indorsed by H. IT. Tarver — and upon that made by the defendant, Martin, suits had been instituted by the Bank of Columbus in the counties respectively, of Twiggs, Jones and Houston, and were now pending ; that the effects thus fraudulently transferred, rightfully belong to the Receiver, for distribution, rateably, among the bill holders of the Bank of Macon ; and that by the contract of transfer between that Bank and the Bank of Columbus, what remained of the transferred effects, after paying the debt due the latter institution, was to be returned to the former, and that after paying that debt, there remained a large balance. The bill prays that the suits in' Twiggs, Jones and Houston be enjoined; that the defendants thereto, be enjoined from paying their notes to the Bank of Columbus; that it be decreed to pay to the complainant its collections upon the transferred notes ; that the transfer itself be annulled, and for general relief.

Upon the case made by the bill, H. H. Tarver, resident in the county of Twiggs, was a debtor to the complainant. The transfer carried the legal title of the note, upon which he was indor-ser, to the Bank of Columbus, as also the possession. I cannot see why, these things being so, it was not competent for the Receiver to sue Tarver in the county of his residence, for the purpose of asserting its equitable interest in that note, and by setting aside the transfer, enforce its collection. For such a purpose, Chancery had jurisdiction in that county. Again, the Bank of Columbus had sued Tarver at Law, upon the note in that county. To enforce the rights of the complainant, an injunction of that pending suit was necessary, and was accordingly prayed.

The jurisdiction attached in the county of Twiggs, where the Columbus Bank had instituted suit, by way of injunction, not alone upon that Bank, to restrain its farther prosecution of that suit, but also, by way of injunction upon the defendant, Tarver, to restrain him from paying the debt. By the fraudulent transfer of the notes to the Columbus Bank, it had acquired an unconsei-entious advantage over the Bank of Macon, and its creditors. The bill charges that the transfer was made by a person purporting to act as President'of the Macon Bank, without authority so to act. To make that fraudulent transfer available, the suit was brought against Tarter. This fraud was not examinable at Law, by the Bank of Macon. She was no party to the suit at Law, and could not become a party. To assert her rights — to assert the Receiver’s rights in behalf of her creditors, it was necessary to invoke the aid of a Court of Chancery, to investigate the alleged fraud, and until that could be done, to enjoin the parties in the suit at Law. The injunction process would be returnable in the county where the litigation was pending; it would spring out of that litigation, and operate on the parties in the forum, where the suit was brought. The Court, in the county of Twiggs, acquiring jurisdiction by way of injunction, would retain it for relief. 1 Daniel’s Ch. Practice, 263, 4. Anderson vs. Lewis, 1 Bro. 429. Eden on Injunctions, 14, 15, 78.

If, upon these views, the suit in Chancery was primarily well brought in the county of Twiggs, there can be no doubt that the Columbus Bank, was not only a proper, but a necessary party. Her title to the effects transferred, was directly assailed by the bill. She is charged with procuring a fraudulent transfer, and the main object of the bill was to set aside that transfer. Not only so, but a decree is prayed that she refund to the complainant, a large sum of money charged to have been collected on the transferred notes. She is materially interested in the subject-matter of the suit. The Court could not decree against her, as to the Tarver note, without her being before it. She was entitled, upon the most familiar principles of Equity, to be heard upon her title. The bill would have been demurrable, if she had not been made a party. She was interested against the complainant’s demand. Where an individual is in the actual enjoyment of the subject-matter of the suit, or has an interest in it, either in possession or in expectancy, which is likely either to be defeated or diminished by the plaintiff’s claim, in such a case, he has an immediate interest in resisting the demand, and is a necessary party. 1 Daniel’s Ch. Practice, 338, 339. 2 Calvert, 285.

I assume, with a view to what remains to be said, that the subject-matter of the suit is cognizable in a Court of Chancery; that the jurisdiction of that Court in Georgia, is co-terminous with the State, in a case properly made for its exercise : that, in this case, the Court had jurisdiction in the county of Twiggs, so far as the defendant, H. H, Tarver, and the Bank of Colupibus are concerned. The suit being properly brought in that county, had the Court there jurisdiction over the defendants resident in Jones and Houston 1 The question of jurisdiction, as to those defendants, depends upon those rules in Equity, which regulate the join-der of parties. The question is not alone whether they were necessary parties. But were they, upon any well established rule of Equity, properly made parties 1 I apprehend the question of jurisdiction does not depend alone, upon the necessity of their being parties. So far as the Tarver note is concerned, it might be conceded that they were not necessary parties. Without them the Court could have decreed as to all the questions in issue between the complainant, the Bank of Macon, and PL PI. Tarver. Let this be so; then I say that is not conclusive against the jurisdiction. If, on other accounts, it was according to the usages of Courts of Chancery in England, and the law regulating the making of parties, competent to join these defendants and bring them before the Court; in that event, the Court had jurisdiction. For there be’ngin Georgia no constitutional limitation as to residence, the jurisdiction of Chancery here pervading the whole State, I apprehend the question is, after all, a question of rightful or wrongful joinder of parties.

As, however, it is in accordance with all the analogies of our law, that parties should not be drawn out of their own counties» to answer in a Court of Justice. I do not hesitate to say, that it is the duty of the Courts to see to it, that they are only so drawn, in cases of obvious necessity, or of manifest expediency — such necessity or expediency, of course never transcending, however they might fall short of settled rules, as to the making of parties. The rule for making parties, is sometimes a rule of necessity. Cases do occur, where a Chancellor cannot decree at all, because of the uonjoinder of parties; and'the bill will be dismissed, unless either as plaintiff or defendant, they are brought before the Court. But it is founded mainly in convenience. Hence, the making of parties is left very much to the discretion of the Court; yet, that discretion has reference to certain general principles of Chancery administration.

[3.] There is, in fact, no rule upon this subject, of universal application. Who are proper parties, has always been, and must ever be, a perplexing question. This question is itself, a title in the law, upon which great learning has been expended, without the ascertainment of a rule by which every case may be determined. Indeed, approximating as near as may be to such a rule, the Courts and commentators have been compelled to leave each recurring case to be determined, somewhat, by its own facts and circumstances. The rules found in the elementary books, and drawn by different writers, from the adjudicated cases, vary somewhat from each other. Courts of Equity, according to Mr, Calvert, adopt two leading principles for the determination of the proper parties to a suit, to-wit: First, The rights of no man shall be decided in a Court of Justice, unless he, himself, be present. Second, When a decision is made upon a particular subject-matter, it shall provide for the rights of all persons whose interests are immediately connected with it. Calvert, 1,2, 3. There is, unquestionably, another principle drawn from these two, upon which the rule rests ; that is, the avoidance of a multiplicity of suits, and the prevention of future litigation. Equity delights in the completeness and conclusiveness of her justice. She will not administer it by halves, and she abhois a multiplicity of suits. She surveys the whole field of litigation, which is opened by the case — inquires after, and brings before her, all who have interests to be affected, or rights to be protected, if it be practicable to bring them before her, and shapes her decrees so, thatjustice, in one hearing, may be meted out to all. On the other hand, she will not encumber her records, and harrass parties with litigation and costs, by constraining the appearance of those who have no interests in the subject-matter, and who have not such a connection with it, as may make their appearance necessary, in order to avoid after litigation. These three principles, upon which the party rule is based, are thus summarily expressed by Lord Redes-dale — “ It is the constant aim of a Court of Equity to do complete justice, by deciding upon and settling the rights of all persons interested in . the subject of the suit, to make the performance of the order of the Court, perfectly safe to those who are compelled to obey it, and to prevent future litigation.” Mit. PL 164. The same eminent authority lays down the rule in the following words : “ All persons materially interested in the subject, ought, generally, to be parties to the suit, plaintiffs or defendants, however numerous they may be, so that the Court may be enabled to do complete justice, by deciding upon and settling the rights of all persons interested, and that the orders of the Court may be safely executed by those who may be compelled to obey them,- and future litigation may be prevented.” Mit. PI. 164.

Lord Hardwick says, “ The general rule is, that if you draw the jurisdiction out of a Court of Law, you must have all persons parties, before this Court, who will be necessary to make the determination complete, and to quiet the question.” Poore vs. Clarke, 2 Atk. 515. Lord Thurlow says, “ All persons having an apparent right, must be brought into Court, before the Court will do anything which may affect their rights.” 1 Vern. 29. Sir William Grant says, “As far as it is possible, the Court endeavors to make a complete decree, that shall embrace the whole subject, and determine upon :he rights of all parties interested in the estate.” Pack vs. Clinton, 12 V. 58. Lord Eldon adopts Lord Redesdale’s rule, substantially as follows : “ The strict rule is, that all persons materially interested in the subject of the suit, however numerous, ought to be made parties, that there may be a complete decree between all parties having material interests.” 16 V. 325, Cockburn vs. Thompson. Such are the views of five of the greatest of the British Chancery lawyers upon this subject, all substantially agreeing, yet not with perfect identity. The rule, as quoted from Lord Redesdale, is fullest' and most satisfactory, and has been very generally adopted in England and in this country. Interest is the grand criterion — immediate interest in the subject of the suit; yet, not the only one. "What constitutes interest, has always been, and must ever be, dependent upon the case. In the United States, Lord Redesdale’s rule has received, very generally, the approval of the Courts. Story’s Eq. Pl. Sec. 72. Cooper’s Eq. Pl. 33, 34, 125. Hitchcock vs. Scribner, 3 John. Cas. 311, 215, 317, 319, Ivy vs. Wirts, 1 Wash. C. C. R. 517. Caldwell vs. Tagart, 4 Peters, 199. Wendell vs. Van Rensaleer, 1 Johns. Ch. R. 349. Hoxic vs. Carr, 1 Sumn. 172. Whiting vs. Bank of the United Peters 13 Peters, 6 to 24, Hopkins vs. Page, 2 Brock. 20. Christie vs. Herrick, 1 Barbour, 260, 261. 2 Paige, IQ, Hallett vs. Hallett. As the rule is one of convenience, it may be relaxed when it is extremely difficult or impossible to bring the parties before the Couit. Adair vs. The New River Company, 11 Vesey, 429. Cockburn vs. Thompson, 16 Vesey, 321. Wiser vs. Blachley, 1 John. Ch. R. 438, 439. 2 Paige R. 18. Story’s Eq. Pl. Sect. 78.

After a review of the authorities, Mr. Calvert comes to the conclusion, that the interest muse he in the object of the suit. A distinction which Mr. Story seems to think worthy of consideration, but which does not appear to me to vary materially the rule, as usually stated, since an interest on the subject must involve an interest in the object, and an interest in the object must grow out of an interest in the subject. 1 Calvert on Parties, 11. Story’s Eq. PI. Sect. 72, 76, Í87.

In the argument of this cause, stress was laid upon the fact that the Columbus Bank was the chief party in interest. And it was claimed that in consequence of her great interest in the subject, she ought to have been sued in the county of her location. Her paramount interest is conceded, and if the joinder of parties depend on the amount of interest, she was improperly called to answer in the county of Twiggs. But it does not. Nor does the fact that she was the party defendant, principally interested, require that the proceeding in Equity should have been primarily in the county of her location. I have already endeavored to show that the bill was well brought in Twiggs, and that she was properly made a party there. That the bill might have been brought in the county of Muscogee against the Bank of Co-lumbm, is clear. But if it had been, the question of jurisdiction as to the defendants resident in Jones and Houston, would have been precisely the same as it is now. If these defendants could not be joined in Twiggs, they could not be joined in Muscogee. Their relation to the case in either event would be the same. They, for the same reason that they object to the jurisdiction in Twiggs, would have objected to the jurisdiction in Muscogee. Neither the primary location of the jurisdiction, nor the right of the ■ complainant to call the defendants in Jones and Houston, to answer, depends upon the relative amount of interest held in the subject of the suit, by the different parties. This Court, of course, cannot notice those reasons of policy which it was stated in argument, induced the complainant to make Twiggs the theatre of this litigation. If the law gives to him an election in this regard, we care not to know the reasons which controlled his choice.

The record discloses the fact, that H H. Tarver, the defendant in Twiggs county, is indorser upon the note made by Watson, Wimberly <$- Co., the Houston defendants. It is upon this in-dorsement that the Bank of Columbus sued him at law in Twiggs, and it is upon this indorsement that the Receiver’s bill seeks to make him liable. So far, therefore, as Watson, Wimberly Co., the Houston defendants, are concerned, there cannot be a doubt but that they were properly made parties. In cases of joint obligations or bonds, all the obligors and obligees are required to be made parties. In relation to joint obligors, there are exceptions which stand upon special grounds. Story’s Eq. Pleadings, Sect. 169. 16 Vesey, 326. 3 Atk. 406. Edwards on Parties, 99, 102. Calvert on Parties, Section 14, Ch. 3, Page 235,239.

The rule has been carried so far as to declare, that where the obligation is several as well as joint, all the obligors, principals as well as sureties, must be joined, to avoid circuity of action ; because they are entitled to contribution, and because they are entitled to the assistance of each other in taking the' account of what remains due on the bond. An indorser is certainly, upon these principles, entitled to have his principal made a party. The principal is liable over to him, and circuity of action must be avoided. Upon this ground alone, if there were none other, the decision of the Court was erroneous as to the Plouston defendants. Maddox vs. Jackson, 3 Atk. 406. Angerstein vs. Clarke, 2 Dick. 738. 3 Swanst. 147 note. Cockburn vs. Thompson, 16 Vesey, 326. Bland vs. Winter, 1 Sim. & Stc. 246. Story’s Eq. Pl. Sect. 169, Ch. 4. 1 Daniels’ Ch. Prac. 361, 362. Freeman’s R. 127.

The object of this bill, which stands in advance of all others, is to set aside the transfer, and to assert the interest of the Bank of Macon in the notes embraced in it. That transfer embraced all the notes. By it the title at law passed to the Bank of Columbus, to them all, and all the defendants became thereby, until it is annulled, debtors to the Bank of Columbus. Their liability, although separate and distinct, was transferred to the Bank of Columbus by one and the same instrument, and if revoked, it ought to be revoked by one and the same decree. Until that decree is had, the title of that institution remains good. Until enjoined, her suits at law against these non-resident defendants, could be rightfully pressed even to judgment and collection. And until enjoined from so doing, they are at liberty to pay their indebtedness to her ; for, aside from the proceedings in Court, the record shows no notice to them that her title was fraudulent. Because, therefore, of all these things, it seems to me that the complainant was entitled to the process of the Court returnable in Twiggs county, to enjoin the suits at law, and to enjoin them from making settlements with the Bank of Columbus. The transfer sought to be annulled, embracing the debts of all the defendants, so connected them with the complainant, as to make it necessary to a decree which would cover the equity of his case, that they should all appear before the Court. Complete justice could not be otherwise done to him. A decree which would not bind any parties but Tarver and the Bank of Columbus, would be, according to the facts of this case, but half justice to the complainant. And Equity will not deal out justice by halves.

In Whaley vs. Dawson, 2 Sch. & Lef. 367, Lord Redesdale decided, that where there was a general right claimed by the bill and covering the whole case, a demurrer would not be allowed, although the defendants had sepai'ate and distinct rights. In the case of the Mayor of York vs. Pilkington, 1 Atk. 282, a bill to quiet the plaintiff in a right of fishery, was supported on demurrer against several defendants claiming distinct rights, and although there was no privity between them and the plaintiff, yet he' had a general right of sole and separate fishery extending to all of them. Such a case was held necessary for the sake of peace, and to prevent a multiplicity of suits. Upon the same ground the bill in Whaley vs. Dawson, was sustained. In the case before me, the plaintiff has a general right, to wit: the right to annul the assignment of all the debts of the defendants, and to be reinstated in his position as the creditor of them all. He sets forth a title in Equity to the entire schedule of notes, and asks a decree for account against all the parties on them. The rights of the defendants as debtors, are separate and distinct; yet are they not bound together by the one act of assignment, and thus tied as it were, to the plaintiff?

Let us now see how far the defendants are interested in the object of this suit. They are interested in the question, as to who shall be the owners of their notes respectively. A contest is in progress between the two Banks for the ownership of their notes; each institution claiming that they shall account to it. To this contest they are not indifferent spectators. The equities subsisting between them and the Banh of Macon, may, for aught that is known to this Court, make it necessary to them, that that issue be determined in favor of the Banh of Macon. In the event, for example, it may turn out that these defendants have set-offs against that Bank, not allowable against the Banh of Columbus. Or, on the other hand, equities may have sprung up between them and the Banh of Columbus, intervening the transfer and the institution of this suit, which ought to be heard a.nd protected here; because not allowable if the decree should cast the ownership upon the Banh of Macon. Or, if in either case allowable, yet not without increased peril and inconvenience to them.

Let it be conceded that these defendants are not necessary parties, yet is it not manifestly convenient in every point of view, for them as well as for the plaintiff' that they all appear litigate with the other parties, and that by one decree all rights be settled. The rule as to parties, is founded in convenience more than in any thing else. And if, as is yielded, Chancery has a discretion as to parties, would it not subserve the ends of early and complete justice, to exercise it in this case in favor of the jurisdiction ? For myself, I entertain no doubt about it. In answer to all these things it may be said, that the plaintiff could proceed against each of these defendants severally in the counties of their residence. So he may ; but non sequitur that he must/ A comparison of the conveniences of many several suits, and one deciding all the rights of all parties, would cast the balance in favor of the one, so far as the defendants are concerned, largely in favor of one, so far as the plaintiff is concerned. The cost which would fall upon the defendants in the joint suit, respectively, would fall short cf the cost of a several suit. It is not the spirit of Chancery to turn this complainant over to a multiplicity of suits. Chancery jurisdiction is not so restricted as to patronize litigation. It is the great jurisdiction of peace and repose. The strong ground upon which these parties ought to be retained, is the- avoidance of a multiplicity of suits — a favorite object with Courts of Chancery. Ch. Kent in Brinkerhoff vs. Brown, 6 John. Ch. R. 151. The question might be pertinently put, cui bono 1 What good can grow out of a number of several suits here % What additional eecu *ity to rights — what reduction of costs — what greater convenience 1 None ! verily none. As a Chancellor, looking to the completeness, speed and convenience of the Chancery administration, and feeling the imperative obligation to avoid a multiplicity of suits, I cannot hesitate in my judgment, that as to the defendants in the counties of Jones and Houston, this bill was improperly dismissed.

[4.] Independent of these general views, the decision of the Court must be reversed upon another ground. The non-resident defendants, as to whom the hill was dismissed, not having answered, the bill was taken as confessed as to them. They do not except to the jurisdiction. The exception is taken by their co-defendant, the Bank of Columbus. Now,, the right to question the jurisdiction, is personal to the very parties over whom it is alleged the Court has no jurisdiction. Their co-defendants cannot plead it, or demur, or move to dismiss. The Court has jurisdiction in this case over the subject matter; it is over the persons of these defendants, that it is claimed it wants jurisdiction. A plea to the jurisdiction of the Court by reason of non-residence, is matter in abatement. It does not go to the merits. If sustained, the bill would be retained as to the other defendants, properly before the Court. If the jurisdiction be well founded as to them and the plaintiff, it is matter for the Court to determine, how far it will proceed to decree without the jDresence of other parties, when it comes to examine into the merits. Story’s Eq. Pl. Sects. 232, 544. 1 Story’s Reps. Harrison, Adm’r vs. Warren et al. 64. 11 Peters, S. C. Reps. 393. Let the judgment be reversed.