President, Directors & Co. of the Michigan State Bank v. Gardner

Thomas, J. This is a bill in equity, to which one of the defendants has filed a general demurrer, on the ground that De Wolf, who is made a party defendant, should have been made a party plaintiff. The general doctrine in relation to parties in equity is often stated to be that all persons interested in the subject matter of the suit should be made plaintiffs or, defendants. This statement is too broad. It would be more accurate to say, persons interested in the object of the suit must be made parties; that is, persons who are parties to the interest involved in the issue, and who must necessarily be affected by the decree. Mitf. Eq. PI (1st Amer. ed.) 32, 133. 1 Dan. Ch. Pract. 240, 241 8p note. Story Eq. PL § 72. The precise question here is, whether De Wolf must be made a party plaintiff. It is said, he must be a party plaintiff, because his interest is of the same kind and nature as that of the Michigan State Bank. Now it is settled in the case of De Wolf v. Gardner, that the legal title to this property is in the bank. It is averred in the bill, and must be taken to be true on demurrer, that the interest of the plaintiffs in the property covers its entire value and the whole proceeds in the hands of the defendants. Such being the fact, De Wolf has no interest or right to enforce against the defendants, over and beyond that of the plaintiffs. Upon the facts stated in the bill, the entire property is in the plaintiffs. But De Wolf may have an interest in the property, opposed to and in conflict with that claimed by the bank. He may deny the validity of the claim of the bank, in whole or in part; or insist that the proceeds of the flour in the hands of Gardner & Co. exceed his indebtedness to the plaintiffs. It may therefore well be that against De Wolf, as well as the other defendants, the plaintiffs would seek a decree that would conclude De Wolf, 1st, as to the validity of the transfer set forth in the bill; 2dly, fixing the amount of the indebtedness of De Wolf to the plaintiffs on the drafts; 3dly, fixing the amount of the proceeds of the flour in the hands of Gardner & Co.; 4thly, directing the application of the proceeds of the flour to the payment cf such [309] indebtedness; or, 5thly, if a balance were found in the hands of Gardner & Co. directing the plaintiff to receive and pay over the ;ame to De Wolf. On all these questions, the interest of De Wolf is adverse to that of the plaintiffs, and he must be put in a situation in which he may contest and try them. It seems to us, therefore, that De Wolf is well made a party defendant, and that the rights of all parties to the interest involved in the issue may be settled by appropriate decrees in a suit in which he is so made defendant. Demurrer overruled.