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PARTIES TO A SUIT IN EQUITY.

SECTION 3. IN GENERAL.

Parties to a suit in equity are, in general, more numerous than in a suit at law. At common law only two adverse interests can be adjudicated in the same case. While there may be an indefinite number of plaintiffs or of defendants, all the plaintiffs and all the defendants must have a joint or common interest. In a suit in equity any number of mutually adverse interests may be adjudicated in the same suit.

The result of this is, that in a suit in equity the complainant must often join as defendants, not only those parties against whom he seeks relief but also other persons having an interest in the subject matter of the suit.

SECTION 4.

CLASSIFICATION OF PARTIES.

Parties to a suit in equity are classified as indispensable, necessary and formal parties.

"Formal parties are those who have no interest in the controversy between the immediate litigants, but have an interest in the subject-matter, which may be conveniently settled in the suit, and thereby prevent further litigation. They may be parties or not at the option of the complainant. Necessary parties are those who have an interest in the controversy, but whose interests are separable from those of the parties before the court, and will not be directly affected by a decree which does complete and full

justice between them. Such persons may be made parties, if practicable, in obedience to the general rule which requires all persons to be made parties who are interested in the controversy, in order that there may be an end of litigation. Indispensable parties are those who not only have an interest in the subject-matter of the controversy, but an interest of such a nature that a final decree cannot be made without either affecting their interests, or leaving the controversy in such a condition that its final determination may be wholly inconsistent with equity and good conscience." 1

This classification originated with the Supreme Court of the United States and has become the generally recognized system of classification. The Supreme Court of the United States in discussing this subject in the case of Shields vs. Barrow,' said:

"Such being the scope of this bill and its parties, it is perfectly clear that the Circuit Court of the United States for Louisiana could not make any decree thereon. The contract of compromise was one entire subject, and from its nature could not be rescinded, so far as respected two of the parties to it, and allowed to stand as to the others. Thomas R. Shields, the principal, and four out of six, of his indorsers, being citizens of Louisiana, could not be made defendants in this suit; yet each of them was an indispensable party to a bill for rescission of the contract. Neither the Act of Congress of February 28, 1839 (5 Stat. at L., 321, Sec. 1), nor the 47th rule for the equity practice of the circuit courts of the United States enables a

1 See Fletcher on Equity Pleading,

Sec. 40.

17 Howard, 139; see, also, Minnesota vs. Northern Securities

Co., 184 U. S., 199; Ribon vs.
Chicago, R. I. & P. R. Co., 16
Wall., 563; Kendig vs. Dean.
97 U. S., 423.

circuit court to make a decree in equity, in the absence of an indispensable party, whose rights must necessarily be affected by such a decree.

"In Russell vs. Clarke's Executors, 7 Cranch, 98, this court said: "The incapacity imposed on the Circuit Court to proceed against any person residing within the United States, but not within the district for which the court may be holden, would certainly justify them in dispensing with parties merely formal. Perhaps in cases where the real merits of the cause may be determined without essentially affecting the interests of absent persons, it may be the duty of the court to decree, as between the parties before them. But, in this case, the assignees of Robert Murray & Co. are so essential to the merits of the question, and may be so much affected by the decree, that the court cannot proceed to a final decision of the cause till they are parties.'

"The court here points out three classes of parties to a bill in equity. They are: (1) Formal parties; (2) persons having an interest in the controversy, and who ought to be made parties, in order that the court may act on that rule which requires it to decide on and finally determine the entire controversy, and to complete justice by adjusting all the rights involved in it. These persons are commonly termed necessary parties, but if their interests are separable from those of the parties before the court so that the court may proceed to a decree and do complete and final justice without affecting other persons not before the court, the latter are not indispensable parties. (3) Persons, who not only have an interest in the controversy, but an interest of such a nature that a final decree cannot be made without either affecting that interest, or

Vol. VII.-14.

leaving the controversy in such a condition that its final termination may be wholly inconsistent with equity and good conscience.

"A bill to rescind a contract affords an example of this kind. For, if only a part of those interested in the contract are before the court, a decree of rescission must either destroy the rights of those who are absent, or leave the contract in full force as respects them, while it is set aside, and the contracting parties restored to their former condition, as to the others. We do not say that no case can arise in which this may be done; but it must be a case in which the rights of those before the court are completely separable from the rights of those absent, otherwise the latter are indispensable parties.

"Now it will be perceived that in Russell vs. Clarke's Executors, this court, after considering the embarrassments which attend the exercise of the equity jurisdiction of the circuit courts of the United States, advanced as far as this. They declared that formal parties may be dispensed with when they cannot be reached; that persons having rights which must be affected by a decree cannot be dispensed with; and they express a doubt concerning the other class of parties. This doubt is solved in favor of the jurisdiction in subsequent cases, but without infringing upon what was held in Russell vs. Clarke's Executors concerning the incapacity of the court to give relief when that relief necessarily involves the rights of absent persons. As to formal or unnecessary parties, see Wormley vs. Wormley, 8 Wh., 451; Carneal vs. Banks, 10 Wh., 188; Vattier vs. Hinde, 7 Pet., 266. As to the parties having a substantial interest, but not so connected with the controversy that their

joinder is indispensable, see Cameron vs. M'Roberts, 3 Wh., 591; Osborn vs. Bank of U. S., 9 Wh., 738; Harding vs. Handy, 11 Wh., 132. As to the parties having an interest which is inseparable from the interest of those before the court, and who are therefore, indispensable parties, see Cameron vs. M'Roberts, 2 Wh., 571; Mallow vs. Hinde, 12 Wh., 197.

"In Cameron vs. M'Roberts, where the citizenship of the other defendants than Cameron did not appear on the record, this court certified: 'If a joint interest vested in Cameron and the other defendants the court had no jurisdiction over the cause. If a distinct interest vested in Cameron so that substantial justice (so far as he was interested) could be done without affecting the other defendants, the jurisdiction of the court might be exercised as to him alone.' And the grounds of this distinction are explained in Mallow vs. Hinde, 12 Wh., 196-198.

"Such was the state of the laws on this subject when the Act of Congress of February 28th, 1839 (5 Stat. at L., 321), was passed and the 47th rule, for the equity practice of the Circuit Court of the United States, was made by this court.

"That

"The first section of that statute enacts: when, in any suit at law, or in equity, commenced in any court of the United States, there shall be several defendants, any one or more of whom shall not be inhabitants of, or found within the district where the suit is brought, or shall not voluntarily appear thereto, it shall be lawful for the court to entertain jurisdiction, and proceed to the trial and adjudication of such suit between the parties who may be properly before it; but the judgment or decree rendered therein shall not conclude or prejudice other parties not

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