Knopf v. Chicago Real Estate Board

Mr. Justice Boggs delivered the opinion of the court: It is a general rule of equity so familiar that the citation of authorities in its support is wholly unnecessary, that all persons, natural or artificial, who have any substantial legal or beneficial interest in the subject matter of the litigation, or who will be materially affected by the decree which may be rendered, are to be made parties to the suit. The rule is inflexible, yielding only when the allegations of the bill disclose a state of case so extraordinary and exceptional in character as that it is practically impossible to make all parties in interest parties to the bill, and further, that others are made parties who have the same interest as have those not broug'ht in, and are equally certain to bring forward the entire merits of the controversy as would the absent persons. The sole question presented to the court by the allegations of the bill in the case at bar was as to the right and power of the South Park Commissioners to demand and receive from the complainants in the bill, and other tax-payers within the jurisdiction of the commissioners, the taxes sought to be declared illegal by the bill. The determination of that question was of vital importance to the South Park Commissioners, who were not made parties, and of no concern to the county clerk, who was made the sole defendant, except in so far as it might serve to guide him in the discharge of the duty of preparing the books for the use of the tax collectors. The only necessity for bringing the clerk into the case was to preserve existing conditions until the real parties in interest could be heard by the court and their rights determined. These commissioners are a body politic and corporate, invested with limited taxing power, having a home and exercising functions in the same county in which the court was being held. The relief sought was a decree that the commissioners were without lawful power or right to cause the taxes in question to be levied. No other question was involved, and no other party than the commissioners was interested as defendant in its decision. Their presence in the case as parties was essential to the rendition of a final decree. (High on Injunctions, secs. 576, 577; Hays v. Hill, 17 Kan. 360; Atkins v. Billings, 72 Ill. 597; Berry v. Berry Heirs, 3 Mon. 263; Bunney case, 2 Bland, 99; Lefferts v. Supervisors, 21 Wis. 638; Gilmore v. Fox, 10 Kan. 509; Abrams v. Vollbam, 54 Tex. 226; State v. Anderson, 5 Kan. 90; Anderson v. McKay, 30 Tex. 186; Moreland v. Barnham, 44 id. 275; Allen v. Turner, 11 Gray, 436; Caldwell v. Prundle, 11 W. Va. 307; Sams v. King, 40 Conn. 212; Carpenter v. Graham, 59 Mo. 247.) Yet the court refused to permit them to appear and be heard, but proceeded to enter a decree declaring they had no lawful right to levy the taxes in question, and deprived them, by a perpetual injunction against the clerk, of the only means provided by law for the collection of such taxes. In this we conceive the court fell into error. We need not pause to answer the suggestion that this holding will make it necessary that the State and each taxing body shall be made parties defendant in every bill brought to enjoin the extension or collection of taxes. It is sufficient to say, the circumstances of this case demand the commissioners be made parties defendant to the cause and that the ruling' is confined to this case. That the South Park Commissioners were necessary parties to the suit appeared affirmatively from the allegations of the bill. Their privilege to appear and defend against the assault upon their rights, interest and powers was not in any degree dependent upon the action or non-action of the defendant, the county clerk. It was a substantial subsisting right resting in the commissioners to be made defendants to the bill, and the fact that the demurrer which was presented by the clerk did not specifically raise the point could have no effect to destroy thé right. The court, of its own motion, should have taken notice of the omission, without regard to the character of the demurrer. Herrington v. Hubbard, 1 Scam. 569. It is insisted that the application of the commissioners to be allowed to defend against- the bill came too late, and for that reason was properly refused. They were not parties to the proceeding and were under no obligation to appear at any time. The application came in ample time to enable the court to avoid the error of entering a decree without having jurisdiction of the person of a necessary party. We conceive it to be the duty of the chancellor, if it appears at any time or any stag'e of the proceedings that a final decree cannot be entered in the case without materially affecting the interest of some one who is not a party to the suit, to stay further action until the absent party is brought within the jurisdiction of the court. Nor is it necessary in such state of case the chancellor should await action on the part of either the complainant or defendant to the bill or the absent party, but should of his own motion, whenever it comes to his knowledge that a necessary party has been omitted from the bill, require the omission to be corrected before proceeding" with the case. This is proper practice, not only during" the time of the pendency of the proceeding in the trial court, but also during its pendency in a court of review. We have repeatedly ruled that where the rigilts of parties not before the court are so intimately connected with the subject matter of the controversy that a final decree cannot be m,ade without materially affecting their rights and interests, the objection that there is a lack of proper parties may be taken at the hearing, or in a court of review on appeal or on error. Spear v. Campbell, 4 Scam. 424; Prentice v. Kimball, 19 id. 320; Lynch v. Rotan, 39 id. 14; Allen v. Woodruff, 96 id. 11; Farmers’ Nat. Bank v. Sperling, 113 id. 273. It was error for the court to proceed to final decree without having jurisdiction of the South Park Commissioners, and as the questions sought to be presented in this court by the record are such only as materially affect the rights and powers of the commissioners, it is manifest we should not assume to consider and determine such questions. The decree must be reversed and the cause remanded for further proceedings in conformity with the views here expressed. „ 7 , , 7 Reversed and remanded.