Manekofsky v. Guide Realty, Inc. , 116 R.I. 668 ( 1976 )

360 A.2d 567 (1976)

Julius MANEKOFSKY et al.
v.
GUIDE REALTY, INC., et al.

No. 75-19-Appeal.

Supreme Court of Rhode Island.

July 19, 1976.

Samuel A. Olevson, Providence, for plaintiffs.

Melvin A. Chernick, Providence, for defendants.

OPINION

DORIS, Justice.

This is an appeal from a Superior Court order and judgment entered pursuant to Rule 54(b) granting the motion of Sidney L. Rabinowitz, administrator c. t. a. of the estate of Camillo Rosenbach (sometimes referred to as administrator), that he be dropped as an involuntary plaintiff named as a party defendant in a suit seeking to recover on a promissory note secured by a mortgage on real estate. After a hearing on May 30, 1974, an order was entered by a Superior Court justice removing defendant Rabinowitz from the suit and striking his pleadings from the record. The plaintiff, Olevson, filed a notice of appeal to this court on June 11, 1974. Final judgment was entered in Superior Court on July 1, 1974.

The question before us represents only a small part of a complicated suit in which claims, counterclaims and cross-claims were made by all parties. The suit is based on a series of real estate transactions entered into by plaintiffs and defendants other than Rabinowitz.

The transactions involved were as follows:

1. A second mortgage loan by Olevson in his capacity as conservator of the estate of Camillo Rosenbach to Manekofsky, with three lots of land owned by Manekof sky and his wife as security for the loan,

2. The creation of Guide Realty, Inc., by Manekofsky and Weiss with themselves as sole stockholders,

3. Transfer of title of the three mortgaged lots to Guide Realty, Inc. by Manekofsky,

4. Sale of Manekofsky's stock in Guide Realty, Inc., to Weiss,

5. Default by Weiss on second mortgage payments,

6. Foreclosure by Rabinowitz as administrator of estate of Camillo Rosenbach,

7. Purchase by Weiss of the three mortgaged lots of land at foreclosure sale,

8. Suit by Manekofsky and Olevson against Weiss and the three defendant corporations seeking to recover the deficiency due under the second mortgage.

Rabinowitz was not originally a party to the suit but was brought in by Olevson and Manekofsky as an involuntary plaintiff and named as a defendant in plaintiffs' amended complaint of October 13, 1971, in which they demand judgment for the amount of the mortgage note in favor of Rabinowitz as administrator c. t. a. of the estate of Camillo Rosenbach. Weiss filed a counterclaim alleging that Manekofsky had fraudulently represented to him that the three lots of land were unemcumbered except for the first mortgages, and Rabinowitz moved in Probate Court to have Olevson's account as conservator of the estate of Camillo Rosenbach disallowed in regard to the three mortgaged lots alleging a violation of G.L.1956 (1969 Reenactment) § 33-15-35. Rabinowitz in Superior Court moved to have himself removed from the case as an improper party and it is the order and judgment granting that motion that is the basis of the appeal before this court.

The plaintiffs argue that deceased Rosenbach was the third-party beneficiary of a contract between Manekofsky and Weiss in which the latter promised to pay Manekofsky's debt to Olevson, conservator of the estate of Rosenbach, and that upon Rosenbach's death his administrator Rabinowitz became the third-party beneficiary.

The plaintiffs contend that Super.R.Civ. P. 19 is not altogether clear and admit that it is arguable that the administrator c. t. a. cannot be joined under Rule 19(a) which was done, but can be summoned in under Rule 19(b) which was not done. They urge, however, that the administrator c. t. a. belongs in the case in some capacity, and once having been brought in under Rule 19, he should be kept in the case. They argue as a matter of policy that it is preferable to resolve the rights and interests of all parties in a single case rather than in a series of cases. They assert that although not an indispensable party that the administrator is at least a necessary party. Savoia Films S.A.I. v. Vanguard Films, Inc., 10 F.R.D. 64, 66 (S.D.N.Y.1950), and as such should not have been dropped as an improper party.

The administrator maintains that the mortgage loan was unlawful under § 33-15-35, that his recourse is against the conservator, plaintiff Olevson, or his bonding company and that he has moved to disallow the conservator's account in the Probate Court. He argues that he is neither an indispensable party nor a necessary one, and that he is neither obligated to participate nor desirous of participating in the present case.

When Rabinowitz moved to be dropped from the suit as an improper party it became the duty of the trial justice to determine whether he was either an indispensable or necessary party under Super.R. Civ.P. 19 thereby requiring his continued presence as a party in the suit.

Rule 19 recognizes the difference between parties whose presence is absolutely essential, if the action is to proceed at all, and those who ought to be joined but without whom the action can continue. The first class has long been referred to, in the federal practice, as "indispensable" and the latter group as "necessary". Anderson v. Anderson, 109 R.I. 204, 208, 283 A.2d 265, 267 (1971); 1 Kent, R.I.Civ.Prac. § 19.2 at 176-78 (1969).

It is clear that the outcome of the suit between the plaintiff, Manekofsky, and his former partner, the defendant Weiss, would be unaffected by the presence or absence of Rabinowitz as a party to the suit. It is equally clear that the administrator's remedy against the conservator would be unaffected by the outcome of the instant suit. Thus it is apparent that administrator Rabinowitz cannot be considered either an indispensable or a necessary party who should be joined under Super.R. Civ.P. 19. The trial justice did not abuse his discretion in determining that there was no need to retain the administrator Rabinowitz as a party and acting under the authority of Super.R.Civ.P. 21 properly dropped him from the suit.

The plaintiffs' appeal is denied and dismissed and the judgment appealed from is affirmed.