Case Title: STATE ON RELATION OF DRUM v DIST

Citation: 

Docket Number: 

State: montana

Court: Montana Supreme Court

Date: 1976-04-18T00:00:00Z

Document:
No. 13196 I N T H E SUPREME C O U R T O F T H E STATE O F M O N T A N A 1976 T H E STATE O F M O N T A N A on t h e Relation of David G. Drum and Dorothy G, Drum, P e t i t i o n e r , T H E DISTRICT C O U R T O F THE THIRTEENTH JUDICIAL DISTRICT O F T H E STATE O F M O N T A N A , I N AND F O R T H E COUNTY O F Y E T , T , O W S T O N E , and ROBERT H. WILSON, Presiding Judge Thereof, and FIRST N A T I O N A T , BANK AND TRUST C O M P A N Y , of B i l l i n g s , Montana,, ORIGINAL PROCEEDING : Counsel of Record: For P e t i t i o n e r : Hutton, Sheehy and Cromley, B i l l i n g s , Montana John C. Sheehy argued, B i l l i n g s , Montana For Respondents: Hibbs, Sweeney and Colberg, B i l l i n g s , Montana William T. Wagner argued and Hugh Sweeney appeared, B i l l i n g s , Montana Submitted: February 5, 1976 Decided : APR 1 g 1976 ;;p~ 12 1 9 7 6 Filed : M r . J u s t i c e Frank I. Haswell d e l i v e r e d t h e Opinion of t h e Court. The o r i g i n a l opinion i n t h i s cause w a s rendered on December 30, 1975 and appeared i n 32 St.Rep. 1297. W e granted rehearing on January 15, 1976, and rehearing was held on Feb- ruary 5, 1976. The o r i g i n a l opinion is now withdrawn and t h i s opinion s u b s t i t u t e d . This case involved an a p p l i c a t i o n by r e l a t o r s f o r a w r i t of supervisory c o n t r o l t o compel d i s m i s s a l of a c i v i l a c t i o n a g a i n s t them unless Chase Manhattan Bank of New York C i t y w a s joined as a p a r t y p l a i n t i f f , The F i r s t National Bank and T r u s t Company, B i l l i n g s , Montana, sued r e l a t o r s David G. Drum and Dorothy G. Drum, h i s wife, t o c o l l e c t a balance i n excess of $1,000,000 a l l e g e d l y owed on t e n promissory notes. Relators moved t o dismiss t h e a c t i o n on t h e ground it w a s n o t prosecuted i n t h e name of t h e r e a l p a r t y i n i n t e r e s t and f o r f a i l u r e t o j o i n an indispensable p a r t y p l a i n t i f f . The foundation of t h i s motion was r e l a t o r s ' claim t h a t F i r s t National's e n t i r e i n t e r e s t i n s i x of t h e claims sued upon had been t r a n s f e r r e d t o Chase Manhattan Bank p r i o r t o t h e commencement of t h e a c t i o n , and p a r t of F i r s t N a t i o n a l ' s i n t e r e s t i n t h e four remaining claims had been so t r a n s f e r r e d . The d i s t r i c t c o u r t , Yellowstone County, Hon. Robert H. Wilson, d i s t r i c t judge, denied r e l a t o r s ' motion t o dismiss by order dated September 23, 1975. The s a l i e n t f a c t s forming t h e b a s i s of t h i s l i t i g a t i o n can be gleaned from t h e pleadings, attached e x h i b i t s , t h e deposi- t i o n of Lee W. Johnson, and t h e a f f i d a v i t s of r e l a t o r David G. Drum, and r e l a t o r s ' a t t o r n e y . These r e v e a l extensive transac- t i o n s r e l a t i n g generally t o financing c a t t l e operations and in- volving r e l a t o r s , t h r e e corporations c o n t r o l l e d by r e l a t o r David G. Drum, F i r s t National, and Chase. I n May 1972, Chase n o t i f i e d r e l a t o r David G . Drum by l e t t e r t h a t it would extend t o him personally "through t h e v e h i c l e of a loan p a r t i c i p a t i o n with The F i r s t National Bank of B i l l i n g s a $2,000,000 share i n a l i n e of c r e d i t t o t a l i n g $2,225,000. Among o t h e r conditions, r e l a t o r Dorothy G. Drum w a s required t o execute a loan guarantee, which she d i d . Per- sonnel from Chase went t o B i l l i n g s and f i n a l i z e d a w r i t t e n loan agreement between r e l a t o r David G. Drum and F i r s t National. A t t h e t i m e t h e loan agreement w a s executed, t h e maximum lend- ing c a p a c i t y of F i r s t National t o a s i n g l e borrower w a s approx- imately $750,000. Pursuant t o t h e loan agreement, r e l a t o r David G. Drum borrowed money under t h e l i n e of c r e d i t extended. A s he borrowed various sums from time t o t i m e , he would execute promissory notes payable t o F i r s t National i n t h e amount advanced. F i r s t National, i n t u r n , would execute a p a r t i c i p a t i o n agreement o r c e r t i f i c a t e wherein it sold t o Chase a p a r t i c i p a t i n g i n t e r e s t i n each loan so made, adhering as c l o s e l y as p o s s i b l e t o t h e agreed 90% share of Chase i n a l l outstanding loans. The p a r t i c i p a t i o n agreement provided, among o t h e r t h i n g s , t h a t Chase could d i r e c t F i r s t National t o enforce t h e o b l i g a t i o n s of Drum under t h e notes. The loan p a r t i c i p a t i o n device was a l l e g e d l y u t i l i z e d by Chase i n preference t o a d i r e c t loan t o Drum because of more favorable i n t e r e s t charges a v a i l a b l e under t h e laws of Montana ( 1 0 % ) than was permitted under t h e laws of New York (8-1/2%). O n May 2 , 1975, a t t h e request of Chase, F i r s t National f i l e d an a c t i o n a g a i n s t r e l a t o r s t o c o l l e c t t h e balance of p r i n c i p a l owing, i n t e r e s t , a t t o r n e y f e e s , and c o s t s on t e n prom- i s s o r y notes representing loans under t h e foregoing arrangement. The t o t a l p r i n c i p a l indebtedness and p a r t i c i p a t i o n a l l e g e d on each note was: F i r s t Note 1 2 3 4 5 6 7 8 9 1 0 T o t a l s C h a s e $ z o o . 0 0 806,704.20 1 , 0 0 0 . 0 0 72,450.00 500.00 2,795.20 1 2 , 4 6 0 . 3 1 1 , 0 0 0 . 0 0 1 6 2 , 0 0 0 . 0 0 6 , 9 6 6 . 0 1 N a t i o n a l $ 28,520.72 T o t a l $ 28,720.52 8 2 0 , 9 1 8 . 9 1 6,205.47 7 2 , 4 5 0 . 0 0 500.00 2 , 7 9 5 . 2 0 1 2 , 4 6 0 . 3 1 3 , 0 0 0 . 0 0 1 6 2 , 0 0 0 . 0 0 6 , 9 6 6 . 0 1 T h i s s u i t w a s f i l e d as C a u s e N o . 66792, i n t h e d i s t r i c t c o u r t o f Y e l l o w s t o n e County. F i r s t N a t i o n a l w a s t h e sole p l a i n - t i f f . D e f e n d a n t s w e r e D a v i d G. Drum a n d D o r o t h y G. Drum. C h a s e was n o t a p a r t y i n t h i s a c t i o n . R e l a t o r s also alleged i n t h e records before t h i s C o u r t t h a t C h a s e e x t e n d e d a $ 1 5 , 0 0 0 , 0 0 0 l i n e of credit t o t h r e e corpor- a t i o n s c o n t r o l l e d b y relator D a v i d G. Drum u n d e r a s i m i l a r partici- p a t i o n o p e r a t i o n . T h e l o a n a g r e e m e n t w a s b e t w e e n F i r s t N a t i o n a l o n t h e o n e h a n d , a n d t h e t h r e e c o r p o r a t i o n s o n t h e o t h e x : Montana B e e f I n d u s t r i e s , I n c . i n w h i c h Drum owns 92% of t h e o u t s t a n d i n g c a p i t a l s t o c k ; T-Bone F e e d e r s , I n c . , i n w h i c h Montana Beef I n d u s - tries, owns a l l the o u t s t a n d i n g c a p i t a l s t o c k ; a n d Feeder S u p p l y C o r p o r a t i o n i n w h i c h Drum owns a l l t h e o u t s t a n d i n g c a p i t a l s t o c k . A s F i r s t N a t i o n a l made the l o a n s f r o m t i m e t o t i m e , it s e c u r e d p r o m i s s o r y n o t e s f r o m t h e b o r r o w e r s a n d t r a n s f e r r e d p a r t i c i p a t i n g i n t e r e s t s t o Chase. The three c o r p o r a t i o n s f i l e d s u i t a g a i n s t F i r s t National a n d C h a s e u n d e r C a u s e N o . 67125 i n t h e district c o u r t of Yellow- s t o n e County. T h i s action w a s b a s e d o n t h e a l l e g e d c o l l e c t i o n o f u s u r i o u s i n t e r e s t b y means o f a scheme a l l e g e d l y i n i t i a t e d by C h a s e t o b o o k "phony l o a n s " t o cover t h e excess of i n t e r e s t c h a r g e s . C h a s e s u b s e q u e n t l y s e c u r e d its d i s m i s s a l f r o m t h i s s u i t o n t h e g r o u n d t h a t it c a n b e s u e d o n l y i n a New York c o u r t u n d e r t h e p r o v i s i o n s of t h e N a t i o n a l B a n k i n g A c t , 1 2 U.S.C. B 94. Following dismissal of Chase i n Cause No. 67125, re- l a t o r s f i l e d t h r e e counterclaims a g a i n s t F i r s t National i n i t s a c t i o n a g a i n s t them on t h e t e n promissory notes (Cause No. 66792). The f i r s t counterclaim seeks a t t o r n e y f e e s f o r r e l a t o r s i n defending themselves t o t h e e x t e n t of Chase's i n t e r e s t i n t h e t e n promissory n o t e s based upon t h e p r i n c i p l e of mutuality. The second counterclaim by r e l a t o r David G. Drum seeks t h e sum of $346,842.35 representing surplus funds from t h e s a l e of a building t o Coors Brewery which Drum a l l e g e s was wrongfully exacted from him and applied t o an a l l e g e d usurious loan indebted- ness of Feeder Supply Corporation. According t o him t h i s cor- poration i s wholly owned by him and w a s formed t o provide s t o r a g e f a c i l i t i e s f o r g r a i n ; he p u t $200,000 of h i s personal funds i n t o t h i s corporation t o provide t h e required e q u i t y f o r a loan of $680,000 from Chase and F i r s t National t o c o n s t r u c t t h e building. Chase made a d i r e c t loan t o Feeder Supply Corporation of $618,000 and F i r s t National made a d i r e c t loan t o t h i s corporation of $61,200 each taking s e p a r a t e s e c u r i t y instruments. About two years later Drum negotiated a sale of t h e building t o Coors Brewery f o r $875,000 and o f f e r e d t o pay t h e t o t a l mortgage indebtedness i n exchange f o r a r e l e a s e . F i r s t National and Chase declined, according t o Drum, and when t h e s a l e was consummated they applied t h e surplus, over Drum's p r o t e s t and o b j e c t i o n , t o a l l e g e d usurious loan indebtedness of Feeder Supply Corporation under t h e $15,000,000 l i n e of c r e d i t extended t o t h e t h r e e corporations, described heretofore. The t h i r d counterclaim by r e l a t o r David G. Drum seeks $279,500 i n feed b i l l s expended by Feeder Supply Corporation when F i r s t National refused t o pay them a s agreed under t h e terms of t h e loan agreement between F i r s t National and t h e t h r e e corpor- a t i o n s extending t h e $15,000,000 l i n e of c r e d i t . I n t h e meantime, r e l a t o r s ' motion f o r dismissal of Cause No. 66792 w a s pending. The motion f o r dismissal w a s i n two p a r t s : (1) A motion f o r o u t r i g h t dismissal of s i x of t h e claims evidenced by promissory notes on t h e ground t h a t a l l i n t e r e s t of F i r s t National t h e r e i n had been t r a n s f e r r e d t o Chase p r i o r t o commencement of t h e action. ( 2 ) A motion f o r dismissal of t h e remaining four claims evidenced by promissory notes unless Chase was made a p a r t y plain- tiff on t h e ground t h a t p a r t of F i r s t National's i n t e r e s t t h e r e i n had been t r a n s f e r r e d t o Chase p r i o r t o commencement of t h e action. Following d e n i a l of t h e i r motion f o r dismissal, r e l a t o r s applied t o t h i s Court f o r a w r i t of supervisory c o n t r o l seeking a judgment of dismissal unless Chase was joined a s a p a r t y plain- t i f f . The essence of r e l a t o r s ' contentions is t h a t Chase is an indispensable p a r t y under Rule 1 9 ( b ) , M.R.Civ.P. and i n e q u i t y and good conscience t h e a c t i o n should not proceed i n its absence among t h e p a r t i e s now before t h e Court. Relators claim t h a t as a p r a c t i c a l matter Chase i s using F i r s t National a s a " f r o n t " t o c o l l e c t debts of which Chase is more than 95% owner; t h a t i n so doing Chase is i n s u l a t i n g i t s e l f i n t h e c o u r t s of Montana from r e l a t o r s ' j u s t and v a l i d defenses and counterclaims a g a i n s t Chase. Relators point o u t t h a t Chase i s hiding behind 1 2 U.S.C. S 94 i n r e s i s t i n g claims a g a i n s t it i n t h e c o u r t s of Montana. They contend t h a t Chase's goal i s t o secure judgment a g a i n s t r e l a t o r s and execute on t h e i r property before r e l a t o r s can secure judgment a g a i n s t Chase i n t h e c o u r t s of New York. Respondents, on t h e other hand, contend t h a t Chase is not an indispensable p a r t y t o t h i s s u i t by F i r s t National a g a i n s t t h e Drums t o c o l l e c t t h e t e n promissory notes because of t h e nature of t h e r e l a t i o n s h i p between t h e Drums, F i r s t National and Chase i n t h e loan t r a n s a c t i o n s evidenced by t h e t e n promissory notes. They p o i n t o u t t h a t Chase is n e i t h e r t h e owner, holder, o r payee of any of t h e notes o r t h e s e c u r i t y , and accordingly complete r e l i e f can be accomplished between F i r s t National and t h e D r u m s without prejudice t o t h e r i g h t s o r l i a b i l i t i e s of those a g a i n s t e i t h e r . Respondents argue t h a t n e i t h e r Rule 19, M.R.Civ.P., nor r e c e n t d e c i s i o n s of t h i s Court r e q u i r e t h a t Chase be made a p a r t y , and i n any event Chase cannot be sued i n t h e c o u r t s of Montana under 12 U.S.C. B 94 of t h e National Banking A c t . O n t h i s b a s i s respondents conclude t h a t Chase cannot be made a p a r t y t o t h i s a c t i o n and t h a t t h e a c t i o n should proceed between F i r s t National and t h e Drums without d i s m i s s a l . W e conclude t h a t t h e nature of t h e loan t r a n s a c t i o n s t h a t u n d e r l i e t h e t e n promissory notes does not g i v e rise t o r e c i p r o c a l r i g h t s and l i a b i l i t i e s t h e r e i n between t h e D r u m s and Chase. The loan agreement e s t a b l i s h e s t h e r i g h t s and l i a b i l i t i e s between t h e p a r t i e s t o it, v i z . F i r s t National and t h e Drums. The p a r t i c i p a - t i o n agreement o r c e r t i f i c a t e e s t a b l i s h e s t h e r i g h t s and l i a b i l i t i e s between t h e p a r t i e s t o it, v i z . F i r s t National and Chase. Neither e s t a b l i s h e s any c o n t r a c t u a l r e l a t i o n s h i p , r i g h t s o r l i a b i l i t i e s between t h e D r u m s and Chase. The nature of t h e r e l a t i o n s h i p i s simply a borrower--lead-- p a r t i c i p a n t arrangement between D r u m , F i r s t National and Chase r e s p e c t i v e l y , which i s described i n d e t a i l i n t h e a r t i c l e "The Developing Law of P a r t i c i p a t i o n Agreements", The Business Lawyer, April 1968, pp. 689-696. I n t h e i n s t a n t c a s e Chase i s n e i t h e r a p a r t y t o t h e loan agreement nor an owner, holder o r payee of any of t h e notes. The e n t i r e loan t r a n s a c t i o n i s between Drum and F i r s t National. F i r s t National is t h e owner, holder and payee of t h e notes and t h e s o l e secured p a r t y i n t h e c o l l a t e r a l . Chase's only involvement is i n t h e p a r t i c i p a t i o n agree- ment. Such agreement is simply a shared loan where t h e "lead", F i r s t National, sold a share of t h e loan t o t h e " p a r t i c i p a n t " , Chase. The r e l a t i o n s h i p between t h e two is governed by t h e t e r m s of t h e p a r t i c i p a t i o n agreement o r c e r t i f i c a t e . Here F i r s t Nation- a l is t h e s o l e owner, holder and payee of t h e notes and has f u l l dominion over t h e security. Drum owes F i r s t National t h e f u l l amount of t h e loan a s evidenced by t h e notes, and F i r s t National, i n t u r n , owes t h e p a r t i c i p a n t its share as evidenced by t h e par- t i c i p a t i o n c e r t i f i c a t e . Drum cannot challenge t h e amount of F i r s t National's claim on t h e ground t h a t some portion of it i s ultimately payable t o Chase under t h e t e r m s of t h e p a r t i c i p a t i o n agreement. It is no concern of Drum what F i r s t National does with t h e proceeds of t h e repaid loan. This r e l a t i o n s h i p is n o t changed by t h e circumstances of t h e i n s t a n t case where Chase may have been t h e primary mover, arranger o r i n s t i g a t o r of t h e loan; d r a f t e d and approved t h e loan documents; held a major share of t h e "action"; and "called t h e tune". The nature of t h e t r a n s a c t i o n and r e l a t i o n s h i p of t h e p a r t i e s is governed by t h e loan documents, p r i n c i p a l l y t h e loan agreement between D r u m and F i r s t National and t h e p a r t i c i p a t i o n agreement between F i r s t National and Chase. Relators' contention t h a t Chase i s an indispensable p a r t y under Rule 1 9 ( b ) , M.R.Civ.P., and t h a t t h e a c t i o n should not pro- ceed i n i t s absence is not tenable. Rule 1 9 ( b ) , provides: " ( b ) DETERMINATION BY COURT O F WHENEVER JOINDER NOT FEASIBLE. I f a person as described i n sub- d i v i s i o n (a) (1) - ( 2 ) hereof cannot be made a party, t h e c o u r t s h a l l determine whether i n equity and good conscience t h e a c t i o n should proceed among the p a r t i e s before it, o r should be dismissed, t h e absent person being thus regarded a s indis- pensable. The f a c t o r s t o be considered by t h e c o u r t include: f i r s t , t o what e x t e n t a judgment rendered i n t h e person's absence might be preju- d i c i a l t o him o r those already p a r t i e s ; second, t h e extent t o which, by p r o t e c t i v e provisions i n t h e judgment, by t h e shaping of r e l i e f , o r other measures, t h e prejudice can be lessened o r avoided; t h i r d , whether a judgment rendered i n t h e person's absence w i l l be adequate; fourth, whether t h e p l a i n t i f f w i l l have an adequate remedy i f t h e a c t i o n i s dismissed f o r nonjoinder." I n t h e f i r s t place, i n our view, Rule 1 9 ( b ) is not applicable t o t h i s case. It a p p l i e s only t o "a person as described i n subdivision ( a ) (1) - ( 2 ) hereof. " The p e r t i n e n t p a r t of Rule 1 9 ( a ) describing such person provides: " ( a ) PERSONS TO BE J O I N E D IF FEASIBLE. A person who i s subject t o service of process s h a l l be joined as a p a r t y i n t h e a c t i o n i f (1) i n h i s absence complete r e l i e f cannot be accorded among those already p a r t i e s , o r (2) he claims an i n t e r e s t r e l a t i n g t o t h e subject of t h e a c t i o n and i s so s i t u a t e d t h a t t h e d i s p o s i t i o n of t h e a c t i o n i n h i s absence may (i) a s a p r a c t i c a l matter impair o r impede h i s a b i l i t y t o p r o t e c t t h a t i n t e r e s t o r (ii) leave any of t h e persons already p a r t i e s subject t o a s u b s t a n t i a l r i s k of incurring double, multiple, o r otherwise inconsistent o b l i g a t i o n s by reason of h i s claimed i n t e r e s t . * * *" Here complete r e l i e f can be accorded F i r s t National and t h e Drums without Chase being made a party. F i r s t National can adjudicate its claims f o r c o l l e c t i o n of t h e notes. Chase i s n o t a r e a l p a r t y i n i n t e r e s t because t h e holder of t h e notes is e n t i t l e d t o sue i n i t s own name, s e c t i o n 87A-3-301, R.C.M. 1947, and a d d i t i o n a l l y F i r s t National is t h e owner and s o l e payee on t h e notes. The Drums can adjudicate any defenses o r claims in- volving t h e notes a g a i n s t F i r s t National. Any i n t e r e s t of Chase r e l a t i n g t o t h e notes w i l l not i n Chase's absence impair o r im- pede i t s a b i l i t y t o p r o t e c t t h a t i n t e r e s t , because it can look t o F i r s t National f o r r e l i e f under t h e terms of its p a r t i c i p a t i o n agreement. Judgment i n t h e present case would not s u b j e c t t h e Drums t o t h e r i s k of multiple o r otherwise i n c o n s i s t e n t o b l i g a t i o n s as t h e r i g h t s and l i a b i l i t i e s of t h e Drums under t h e notes would be f i n a l l y concluded. Accordingly, Chase is not "a person a s described i n subdivision (a) ( 1 ) - ( 2 ) " of Rule 1 9 ( a ) so Rule 1 9 ( b ) i s inapplicable. - 9 - Assuming, arguendo, t h a t Rule 1 9 ( b ) d i d apply, we would a l s o reach a r e s u l t denying joinder of Chase. E s s e n t i a l l y t h e Drums seek t o expand t h e scope of t h i s a c t i o n beyond t h e t e n promissory notes sued upon, so they can press claims i n t h e Montana c o u r t s a g a i n s t Chase d i r e c t l y a r i s i n g o u t of unrelated loan transactions with corporations t h a t David G. Drum controls. A t t h e o u t s e t it is c l e a r t h a t Chase cannot be sued i n t h e c o u r t s of Montana under t h e provisions of t h e National Bank- ing Act. The relevant s t a t u t e , 12 U.S.C. § 94, provides: "Actions and proceedings a g a i n s t any associa- t i o n under t h i s chapter may be had i n any d i s t r i c t o r T e r r i t o r i a l c o u r t of t h e United S t a t e s held within t h e d i s t r i c t i n which such association may be established, o r i n any S t a t e , county, o r municipal c o u r t i n t h e county o r c i t y i n which s a i d a s s o c i a t i o n is located hav- ing j u r i s d i c t i o n i n s i m i l a r cases." This s t a t u t e is mandatory and not permissive. Kader v. F i r s t National Bank of F o r t Myers (1975), 387 F.Supp. 535; Northside Iron & Metal Co., Inc. v. Dobson & Johnson, Inc. (1973), 480 F.2d 798. It even prevents joinder i n t h e same a c t i o n of national banks located i n d i f f e r e n t states o r d i s t r i c t s who w e r e sued f o r damages based on a c i v i l conspiracy t o defraud. Mercantile National Bank a t Dallas v. Langdeau (1963), 371 U.S. 555, 83 S.Ct. 520, 9 L ed 2d 523. Chase simply cannot be sued i n t h e c o u r t s of Montana, absent consent o r waiver. While w e a r e not i n sympathy with t h i s l e g i s l a t i o n , we a r e compelled t o follow it. Finding themselves i n t h i s position, t h e Drums seek t o compel joinder of Chase on pain of dismissal of t h i s action. Where do t h e e q u i t i e s l i e ? Admittedly, it would be advantageous t o Drums t o g e t Chase before t h e Montana c o u r t i n t h i s a c t i o n and press t h e i r alleged counterclaims a g a i n s t Chase d i r e c t l y . But where w i l l t h a t leave F i r s t National i f t h e a c t i o n i s dismissed f o r nonjoinder? It w i l l be l e f t with no remedy i n t h e c o u r t s of i t s own s t a t e t o c o l l e c t t h e money it loaned t o t h e Drums. Drums, on t h e o t h e r hand, can assert any v a l i d defense o r counter- claim they may have on t h e notes as r e a d i l y a g a i n s t F i r s t National a s they can a g a i n s t Chase i n t h e i n s t a n t a c t i o n . I n our view t h e balance of e q u i t i e s lies with F i r s t National and t h e Drums' contention t h a t under Rule 1 9 ( b ) , M.R.Civ.P., Chase should be made a p a r t y o r t h e a c t i o n dismissed, cannot be sustained. Nor do t h i s Court's r e c e n t d e c i s i o n s i n S t a t e ex rel. Slovak v. D i s t r i c t Court, 166 Mont. 485, 534 P.2d 850, 32 S t . Rep. 4 2 0 , and S t a t e ex r e l . Nawd's TV and Appliance Inc. v. D i s t r i c t Court, Mont . , 543 P.2d 1336, 32 St.Rep. 1222, r e q u i r e joinder of Chase. These c a s e s involve subrogated in- s u r e r s who stand i n t h e shoes of t h e i r insureds and can sue t h e defendant d i r e c t l y . Here Chase does not stand i n F i r s t National's shoes with t h e r i g h t t o sue Drums d i r e c t l y , b u t must look t o F i r s t National f o r r e l i e f under t h e t e r m s of t h e p a r t i c i p a t i o n agreement. For t h e foregoing reasons, w e hold t h e d i s t r i c t c o u r t ' s order of September 23, 1975, w a s c o r r e c t . This a p p l i c a t i o n f o r supervisory c o n t r o l is dismissed. ad g - . ----------- ---r----- J u s t i c e