Palmer v. Stevens

| Mass. | Nov 15, 1868

Foster, J.

The question raised by the plea to this bill in equity is, whether Kingsley, Spofford and Wildman ought to be made parties defendant in the cause. The plea alleges that they are all of Philadelphia; but that the sale of the co-partnership property, which the bill aims partially to set aside, was made to them and Paran Stevens, the defendant, jointly. The general principle of equity is, that all persons materially interested in the subject of the suit should be made parties, either as plaintiffs or defendants, in order that all should be brought before the court whose presence is necessary to ena ble it to do complete justice. Where any are absent from the iurisdiction, who, if within it, would be necessary parties defendant, their presence will ordinarily be dispensed with, provided an equitable and effectual decree can be made against those who have been served with process.

The former English practice was, to charge in the bill the fact of the absence from the realm of any who otherwise ought to have been joined as defendants, and to pray that they might be 'served with process if they came within the jurisdiction. Under the modern English system this strictness is not required, and it seems to be sufficient if the excuse for not making the absent persons parties defendant appears on the face of the bill. 1 Dan. Ch. Pract. 175. In Towle v. Pierce, 12 Met. 329, which was a bill in equity to settle partnership accounts, a demurrer for the nonjoinder of copartners without the jurisdiction was overruled, where their absence was alleged, and the bill further averred that they had received their full share of the partnership effects. No doubt, in that case, the partners not joined must have been, if within the Commonwealth. In Pingree v. Coffin, 12 Gray, 288, 304, the earlier English rule was stated to be well settled, namely, that necessary parties to a bill must be inserted, though nonresidents, that they may be made answerable if they come within the jurisdiction ; and it was said that the omission to make them parties would be good ground of demurrer. But the point was not in that case decided. Nor do we feel called upon now to determine which practice is the more regular; because we are satisfied that the objection is a merely formal one, which should be taken by demurrer, specially pointing out the defect; and that a plea for want of parties defendant ought not to be allowed, where it appears upon the bill that the parties not joined as defendants are beyond the jurisdiction.' Certainly there can be no ground for contending that, if one of a number, who have jointly committed a fraud, is brought before a court of equity, relief against him is to be denied to the injured party because the others, equally guilty, cannot be made amenable to the process of the court.

But in the present instance the plea must be adjudged bad upon more general considerations, affecting the merits of the controversy. The bill is brought for a settlement of the affairs of a copartnership of which the deceased, whom the plaintiff represents, and the defendant were the only members. As incidental thereto, it charges a fraud alleged to have been committed by Paran Stevens upon his nephew, and asks to have the sale of the partnership property set aside, so far as the agreed price is concerned. There is no allegation that Kingsley, Spofford and Wildman were in any respect implicated in the fraud, or aware that any had been committed. If it be true that one was practised by Paran Stevens alone, then no such decree as the bill prays for ought to be made against the others, if they were before the court. The party alone guilty should be alone responsible. The fiduciary relation between Paran Stevens and his nephew and copartner might render the measure of his duty, in their dealings, very different from any that the law would impose on the other three purchasers, in a transaction with one who was a stranger to them. The case may be shortly stated thus: One partner fraudulently induces his associate to sell the firm property, at an inadequate price, to himself, and others who do not participate in the fraud. Payment is made to the retiring member in the notes of the incoming members of the new firm. If they are innocent, and the old copartner alone has been guilty of a fraud, they are not necessary parties to a bill brought to settle all the affairs of the old firm, and, as incidental to such an adjustment, to set aside the sale so far as the price has been fixed by agreement, and to charge the defendant partner with the fair value of the property.

Plea adjudged bad; defendant to answer the bill.