Foster v. Kaneohe Ranch Co.

OPINION OF THE COURT BY E. P. DOLE, ESQ. Tbis is a bill in equity brought by Mary E. Foster and others, members of a native hui, to set aside and declare void a certain lease of about five thousand acres of land for the term of twenty-five years, purporting to have been made by the hui to the defendant corporation. Briefly stated the bill alleges, among other things, that the pretended lease was neyer authorized or ratified at any legal meeting, or by any legal vote of the hui, and that the person who assumed to execute it in behalf of the hui was not an officer thereof; all of which the defendant denies. The evidence shows that the plaintiffs are a minority of the hui, and that a majority of the members, many of whom live close by and within the jurisdiction of the court, have not been made parties to the [364] action. At the close of the plaintiffs’ evidence, the defendant moved to dismiss the bill on account of said non-joinder, which motion was overruled and the defendant’s exception thereto was duly taken and allowed. We sustain the defendant’s objection. We cannot adjudicate the validity of the lease without giving those whom we deem indispensable parties to the suit an opportunity to be heard in so far as is practicable either as plaintiffs or as defendants. The hui is an unincorporated association consisting of about seventy individuals. They own the land not as joint tenants, but broadly speaking as tenants in common. Burrows v. Paaluhi, 4 Haw. 48; Mahoe v. Puka, Ib. 485; Lui v. Kaleikini, 10 Haw. 391. The hui, a peculiar native institution, also has, pursuant to its rules and customs, certain powers as an association, which do not belong to its members individually as tenants in common. Among these powers is that of binding all its members at a regularly called and duly attended meeting, to a lease of their land, by a vote not unanimous. This power, analogous to that of partnership and not incident to tenancy in common, has been recognized in principle by this Court. Burrows v. Paaluhi, 4 Haw. 464; Mahoe v. Puka, Ib. 485. If the peculiar Hawaiian organization known as a hui were a landed partnership pure and simple, it is beyond question that a minority of the partners would not be permitted in a court of equity to attack a business transaction of the partnership purporting to be the act of the majority, in which all had the same kind of pecuniary interest, without giving all, so far at least as possible or practicable, an opportunity to be heard. Again, if this hui were a corporation, an artificial person instead of an aggregation of natural persons, could they as individual stockholders, in a court of equity attack a lease purporting to have been given by it and under which it received rents and profits without making the lessor, as well as the lessee, a party to the suit? We think that the same principle of equity and natural jus [365] tice-applies to this case. What purports to be a lease is either a lease or not a lease. If it is a lease it is the act of the hui, and equally binds all members of the hui, whether they favored it or opposed it. If it is not a lease, it binds no one. If it is a lease each member of the hui is entitled to his pro rata share of the rents. If it is not a lease each member of the hui is entitled to the use of his pro rata share of the land as a tenant in common, subject to the regulations of the hui. It often happens that those who would be proper parties to a suit in equity are not indispensable to an adjudication of the rights involved and, upon a showing that it is impracticable to make them parties, the court proceeds without them. There has been no attempt to make such a showing in this case. Neither have some sued for themselves and all having the same interest. It appears from the evidence that many members of the hui who were not made parties might easily have been served with process. We think that all members of the hui, upon 'whom it was practicable to serve process should have been made parties to this suit and, if any were not served, that a good excuse should have been alleged or shown. The validity of the lease is in question, and all persons who are virtually parties to it as members of the hui, who will be entitled to their share of the rent if it is sustained, and to their share in the land if it is set aside, should have an opportunity to be heard, if such opportunity is reasonably possible. Furthermore, we think that the defendant it entitled to have the remaining members of the hui, or at least the hui itself, through its officers, made parties to this suit. Its alleged lease purports to be from the hui in its collective capacity. If it is valid the defendant must pay rent to the hui in its collective capacity. It cannot apportion it among the members. If the lease is void the defendant is relieved from paying rent and must vacate the land. How then, in justice to the defendant, is it possible to make a decree which shall determine the rights of only those before the court, which shall [366] declare the lease void as to certain members of the hui, and except as to them, leave it intact? Kinney, Ballou & McGlanahan for plaintiffs. O. Brovm and L. A. Dickey for defendant. Young v. Bilderback, 3 N. J. Eq. 206; Harding v. Hardy, 11 Wheaton 103; Magoon v. Afong, 10 Haw. 340. The appeal is sustained and the bill remanded to the Circuit Court, with permission to amend on payment of costs.