Conroy v. Cover

Mr. Justice Dewisoh delivered the opinion of the court. The complaint of plaintiffs in error was dismissed without prejudice on motion of defendants after demurrer to replication was sustained. Plaintiffs bring error. [436] The following are the facts essential to our decision: Estella Conroy and S. A. Cover, brother and sister, brought this action against U. G-. Cover, their brother, to compel him to account for funds delivered to him in trust by their father and mother for the benefit of their six children, i. e., the said parties and Grace Pierce, T. W. Cover and P. O. Cover. He was charged with misappropriation of the funds by conversion to his own' use and by transfer to his wife, Yerna Cover, who was therefore made a party defendant. Grace, T. W. and P. O. refused to join as plaintiffs, and Grace, a resident of Colorado, was therefore made defendant, but the remaining brothers were omitted, as the complaint alleges, because they were beyond the jurisdiction, being residents of California. U. G. Cover is not named as trustee in the title to the cause but only as an individual. A demurrer to the complaint was overruled and the defendants answered separately. It will be necessary, however, for us to consider only the answer of U. G. Cover. He set up eight defenses. In the sixth he claimed that he, as trustee, and T. W. and P. O. Cover were indispensable parties, that the case could not go on without them, and prayed that they be made parties or the case dismissed. The plaintiffs replied and a demurrer to their replication was sustained. Thereupon the defendants moved to dismiss the case without prejudice, which motion was granted. The ultimate question before us is whether that order was right. The ground of the dismissal stated by the court was the failure to make the non-resident cestuis que trustent parties. We think it insufficient. Their rights could be saved; indeed not be interfered with (Code sec. 16; Buck v. Webb, 7 Colo. 212, 215, 3 Pac. 211; Pollard v. Lathrop, 12 Colo. 171, 175, 20 Pac. 251, 21 C. J. 299, 300), though, if they were within the jurisdiction, the court should order them brought in. Id. The spirit of the Code on this question is further shown in Code 1921, [437] § 48. The citations of the defendants in error do not reach this case; e. g., in McLean v. Farmers, etc., Co., 44 Colo. 184, 98 Pac. 16, the omitted parties were holders of water rights every one of which would be affected by the decree if it were of any effect at all. So in Dennison v. Jerome, 43 Colo. 456, 96 Pac. 166, the trust was not mature, and no relief could be granted without affecting the rights of the omitted beneficiaries; but now we have a trust for the benefit of six persons in equal shares where one can receive his share with no interference with the others, yet the proposition is that unless all are made parties and served, none can compel the payment of his share. This would be indeed “twisting the strands of precedent into a rope with which to strangle justice.” Any trustee could conspire with one cestui que trust, take the whole estate and the others could only appeal to a paralyzed court. It is a simple matter to take an accounting and give the present parties their proper shares, letting the absent ones sue later if they so desire. This is open only to the objection that defendant would be subjected to two suits which is but a rule of convenience and should not be permitted to make a court powerless. In Rumsey v. N. Y. Life Ins. Co., 59 Colo. 71, 147 Pac. 337, the plaintiff could have obtained a decree affirming the alleged change of beneficiary in the policy by a suit in Honolulu against the original beneficiary and then have brought her suit in Colorado; justice was therefore within her reach, but in the present case the plaintiffs would be helpless. The court’s reason for dismissing the complaint was therefore wrong. But defendants in error claim that U. G-. Cover should have been made a party as trustee and that the dismissal was therefore right even if the reason for it was wrong; his request to be made a party as trustee, however, we think required .the court to make him such or at least forbade the court to dismiss the cause for that reason. It would have been unreasonable for the [438] court to dismiss the cause for a defect or failure which it had been asked to correct. It ought to correct. Such an objection can be corrected with a word and should be. Code 1921, §§81 and 84; Deutsch v. Baxter, 9 Colo. App. 58, 47 Pac. 405. A plea of such a defect is neither in bar nor abatement, the party should be brought in. Pierce v. Conners, 20 Colo. 178, 184, 37 Pac. 721. All objections as to parties except those noted above were waived by answering over. It is claimed that the complaint states no cause of action against U. G. Cover personally, but since it charges him with conversion of funds it justifies a judgment in personam and so states a cause of action against him. The objection is made that the court, without the trustee as a defendant, had no jurisdiction of the subject matter of the case. We do not think so. Jurisdiction of the subject matter is conferred by law (Davis v. Davis, 70 Colo. 37, 38, 197 Pac. 241), and exists even before the suit is begun. It is not affected by the omission of a party. For example, the Denver county court has jurisdiction of any action on a promissory note for $1,000. The payee sues the maker. Who would say that the court has no jurisdiction of the subject matter until the maker is served, though he be out of the state or a non-resident? The judgment of the district court is reversed with directions to deny the motion to dismiss and proceed not inconsistently with this opinion. Mr. Chief Justice Allen not participating.