Osterhoudt v. Board of Supervisors

Andrews, J. There is a defect of parties fatal to the judgment. The action was brought under the provisions of chapter 161 of the Laws of 1872, as amended by chapter 526 of the Laws of 1879, by the plaintiffs, as tax payers of the town of Kingston, against the board of supervisors of Ulster county *243 and the town auditors of the town, to vacate certain audits of town accounts, made by the bbard of town auditors at its annual meeting in November, 1879, in favor of a- large number of individuals, amounting in the aggregate to the sum of $17,-120.09, and to restrain the board of supervisors from levying upon the town a tax for their payment, on the ground that such audits were “ illegal, inequitable, unjust, false and fraudulent.” The judgment grants the relief demanded in the complaint, and vacates the audits and restrains the supervisors from levying a tax for their payment. The individuals in whose favor the audits were made were not made parties in the first instance, nor were they brought in at any stage of the action. The only defendants are the board of supervisors and the town auditors. The question of defect of parties was not raised by demurrer or answer. The point, however, was taken at the commencement of the trial and was overruled. The defendants, by omitting to take the objection by demurrer or answer, are “ deemed to have waived it.” (Code of Civ. Pro., § 499.) But the rule which prevailed in courts of equity, that the court would not proceed to a decree until all necessary parties were before the court, has been preserved by the Code. Section 452 provides: “The court may determine the controversy, as between the parties before it, where it can do so without prejudice to the rights of others or by saving their rights; but where a complete determination of the controversy cannot be had without the presence of other parties, the court must direct them to be brought in.” Construing sections 452 and 499 together, their meaning is that a defendant, by omitting to take the objection that there is a defect of parties by demurrer or answer, waives on his part any objection to the granting of relief on that ground, but when the granting of relief against him would prejudice the rights of others, and their rights cannot be saved by the judgment and the controversy cannot be completely determined without their presence, the court must direct them to be made parties before proceeding to judgment. When a defendant is sued alone upon a joint contract, if he omits to set up the non-joinder of his co-contractor *244 by demurrer or answer, judgment may pass against him alone, because judgment against one joint-contractor will not prejudice the other, but may relieve him from liability. The other branch of the rule would be illustrated by an equitable action brought for the cancellation of a mortgage, executed to two persons as mortgagees, in which only one of the mortgagees was made defendant. The court could not proceed to a decree for the plaintiff without the presence of the other mortgagee. The distinction is between those who are necessary parties and those who are proper parties merely. When persons who are necessary parties are not joined, the court will not proceed until they are brought in. It will "not render a fruitless judgment, nor will it undertake to decide a single right in the absence of persons who are entitled to be heard in respect to it, and who may be prejudiced by the decision. It was the practice in chancery to 'permit the objection for defect of parties to be taken by demurrer or answer, or at the hearing. (Story’s Eq. Pl., § 75 ; Van Epps v. Van Deusen, 4 Paige, 64.) Under the Code the court is bound to take the objection when a proper case is presented. It seems very plain that the persons in whose favor the audits were made were necessary parties. The judgment vacates the audits and restrains their collection in the usual course. They are necessarily prejudiced. Indeed they are parties primarily interested. They are deprived of the benefit of the adjudication of the board of audit, and if they should undertake to compel the board of supervisors to levy a tax for the payment of the claims, they would be met by the judgment in this case vacating the audits and restraining the collection. Their rights, and such rights as the defendants have, depend upon a single controversy, whether the claims were legal charges against the town and were legally audited by the town board. ¡Neither the town auditors, nor the board of supervisors, represented the claimants in any legal sense. Their interests are not identical, and the doctrine of virtual representation is not applicable. The enumeration in the act of 1872, of “ the officers, agents, commissioners, or other persons, acting for or in behalf of any *245 county, town, or municipal corporation,” as the persons against whom an action may be brought, does not dispense with the necessity of joining all other persons who will be directly affected by the judgment and are necessary parties to a complete determination of the controversy. The action is, we think, fatally defective on this ground, and without passing upon the merits, the judgment should he reversed, but without costs in this court. All concur. Judgment reversed.