Lexington & Big Sandy Railroad v. Goodman

Peabody, J. —The plaintiffs, in their complaint, state that some time prior to the commencement°of this suit, they deposited with the defendants Goodman, Bates & Whiton, composing the firm of H. H. Goodman & Co., in the city of New York, securities of several kinds, to the amount of nearly a million of dollars, for sale, for their (plaintiffs’) account. The securities thus deposited are said to have been all of them for sale; and as to some of them, H. H. Goodman & Co. were also authorized to hypothecate them as collateral security for loans they might be able to procure for plaintiffs, while, as to others, they were only authorized to sell. For loans they were also allowed to give the notes of plaintiffs, endorsed by Apperson; and to this end plaintiffs left with them notes or papers signed in blank by plaintiffs, endorsed by Apperson, to enable them to fill up notes therein as they should be able to use them from time to time. [494] The authority given by plaintiffs to H. H. Goodman & Co. was in writing, and is set forth in the complaint. The complaint then proceeds to state different transfers of said securities to ten separate defendants, and states, in one way and another, the different contracts under which they were sold, pledged, or otherwise conveyed to each of the ten parties defendant, stating the case of each of the defendants separately. As to each of them, it states a contract void as against plaintiffs, and then proceeds to pray for final relief against each defendant, that the securities held by him be adjudged to be surrendered to the plaintiffs, and then asks the temporary relief of an injunction restraining the disposal or transfer of them during the pendency of this suit. To this complaint the defendant Ackerman demurs, substantially on the ground of a misjoinder of actions, urging that he should not be united with the other defendants in the suit, but should be sued alone, if at all; and the question presented by this demurrer, I am to decide. In the original transaction between plaintiffs and Goodman & Co.,-lying at the foundation of this matter, the defendants have interests somewhat in common; at least, they would seem to have a common interest in it, for on that contract depends the authority of the latter to dispose of the securities in question. It may be said that even by that contract the agents received different authority as to the different classes of securities, so that the holders ■ of one class of them would not be interested in the part which relates to the others, and hence that the interest is not common to them, even in this respect, although the authority as to all the securities was embraced < in the one single wilting; and it would, no doubt, be true to a very considerable extent, upon the theory of the plaintiff, which is, that, by that paper, certain powers are conferred as to some classes of the securities, different from those given to others. But assuming that the defendants, all of them, deriving their title through this instrument as a common source of authority to the agent, have, therefore, a similar, if not a joint, interest in it, is there such a community of interest in the defendants that they are properly united in one suit? For, unless there is [495] some connection between the causes of action, so intimate, that they may be said, in some sense, to be united, they are not properly joined. If all the defendants were united in interest as to each of the several causes of action, that would be a good’ reason with which to justify the union of them in one suit; but the union of interest must extend to all the defendants, and that interest of them all must extend to all the causes of action ; for it is certain and very plain that in a suit against five defendants it would not ordinarily be proper to state, as one of the causes of action, a cause against only three of them, even though other causes, embraced in the same pleading, should relate to all the defendants. In other words, a person is not properly made defendant in a suit for a cause of action in which he has no interest, and as to which no relief is sought against him. Section 167 of the Code, in the last clause of it, requires that where several causes of action are united in one suit, “ they must affect all the parties to the action.” How is Ackerman, the demurrant, interested in the claim against Hurray, for instance ? The transactions of the several defendants with the agents of plaintiffs are separate and distinct. Ho two of the parties appear to have bought, or contracted for, or received the securities jointly, except, perhaps, in one or two instances, where the two composed a- firm; and Ackerman’s is not one of these cases. The agents of plaintiffs had their securities for sale, and at different times sold or disposed of parcels of them to several purchasers. What interest has one of these purchasers in the transaction with another, or in the judgment that shall be pronounced upholding or invalidating the claim of that other ? It neither adds to nor diminishes his rights, nor affects them in any manner, that I perceive. If the defendants were holding by virtue of some common act—if their title were the same—if some one act or transaction were the foundation of the claim against them all, there would be more ground for saying that they had such a community of interest as to make one interested in the case of the other; though even in that case the necessity for the connection might not be very apparent. If, on the contrary, their claims conflicted, and all the parties had, or, from the statement of the case, might have conflicting claims to the same securities, or each might have an interest in invalidating the securities held [496] by another, .the necessity for joining them as defendants would be quite apparent. This was, to some extent, the case in the great Hew Haven Railroad suit—sometimes called the Omnibus suit. In that case, there was a limit by law to the amount of stock which the company could issue, and it was apparent that any claimant of stock might, under some aspect, be interested in defeating or postponing the claim of another; so that by excluding that, he might, if he could, bring his own within the limit prescribed by thé charter. There seemed to be a reason, and even a necessity, for uniting all as defendants there. In this case there is no such excuse for uniting the defendants, and the fact that they all received the securities from the same person, while the contracts under which they received them were distinct and independent, does not seem to me to afford any good reason for uniting them all in a suit against each to recover back the securities held by him. Here the agent had these securities for sale. He borrowed money on one from A., who had notice that the agent had no authority to pledge it; he borrowed of B., on a pledge of it at a rate usurious, and which invalidates the security; to 0. he passed one as security for an antecedent debt of his own. Is there any good reason to justify a pleader in making 0. a defendant jointly with A., in a suit respecting the security of A. alone? Eor, unless there is in the case of each defendant that which justifies the joining of the other defendants in the suit, if it related to the security of the one defendant alone, there is not sufficient 'cause for joining them as they are joined. How, if this suit were brought to recover the securities from Mr. Murray alone, what necessity would there be for joining the other defendants in it? And so, if the suit were to recover from Mr. Ackerman alone what is claimed against him in this complaint, what propriety would there be in joining the other defendants ? Have they any interest in Mr. Ackerman’s case ? Hone whatever, that I can perceive. The causes of action are separate and distinct against each defendant. Heither has any legal interest in that against the other; and instead of the causes of action affecting “ all the parties to the action,” each affects only the party who holds the security to which it relates. The causes of action are stated separately in the complaint, as [497] they should be, and there is no joint liability of any one with the party demurring. He is not, in any legal manner, according to the complaint, interested in that or any of the other defendants, nor is any one of the other defendants interested in the controversy between him and the plaintiffs. Suppose that the several lots of securities were each of them a house wrongfully and illegally conveyed by the agents, and this suit was brought to rescind the conveyances and recover them back; and suppose that one of the houses was in Fourteenth-street, and one on Bowling-Green, and the others were in as many different streets in this city; and suppose the authority under which the agent sold all of them, was, as in tins case, contained in one single instrument, and was the same as to all,— would there be any doubt that the causes of action and the defendants were improperly united in one suit? The two cases seem to me to be entirely similar in principle. The foundation of the action as to each defendant, is the transaction by which he gets the particular securities he holds. The contract thus separately made with each, is the contract sought to be rescinded as to him, and the recision is sought in each case only as to and against the single defendant with whom it was made. The particular matter in litigation, as to each, is peculiar to his own case, and no one subject or cause of action is common, or of joint interest to them all. See Brinckerhoff a. Brown, 6 Johns. Ch. R., 156, and the numerous cases there cited, which seem to me conclusive of the principle bf this case. Judgment must go for defendants, with liberty to plaintiff to amend, so as to separate him from all the defendants except Goodman & Co.,—who, as trustees, may properly be united in a suit against each of the other defendants, at the option of the plaintiff (2 Paige, 278),—on the usual terms.