Source: https://supreme.justia.com/cases/federal/us/86/94/
Timestamp: 2019-04-20 00:47:21+00:00

Document:
A. and B., executors in South Carolina, and authorized by their testator to sell all his real and personal estate and to pay the proceeds to the testator's sons, sold the lands to C. on mortgage. C. wishing to pay the mortgage, A. received the amount of it from him in notes of the so-called "Confederate states," surrendered the instrument and entered satisfaction upon it. C. sold the property (whether with warranty or without did not appear) to D. E. & Co., a mercantile firm composed of the said D. and E. and three other persons, including F., the deed, however, being made to D. and E. individually upon such uses as they should appoint, and until they did appoint to the use of the whole five partners according to their interests in the firm. F. afterwards retired from the firm, transferring, in consideration of a sum of money to be paid, his interest in the firm to his remaining partners; and D. and E., in order to secure the payment to F. of the sum of money, appointing the land to the use of him, F.
The executors sold the personal estate also to C., who had bought the real, this sale of the personal being on credit, and X. becoming C.'s surety to the executors for payment of the price.
In August, 1866 -- the notes of the "Confederate states" being now wholly worthless -- the sons of the testator (or rather their mother, to whom they had transferred all their interests in their father's estate) filed a bill (charging fraud and conspiracy) against the executors (A. and B.), against D. (one of the trustees to whom C. had conveyed in trust for the firm), and against X. (the surety of C. in the matter of the personal property), nobody else being brought in, to charge the executors with all moneys received by them, to reinstate and establish the mortgage given by C., and to hold $. liable as surety in the matter of the price of the personal property.
Held that the bill could not be sustained, that C. (the purchaser from the executors), and E. (the co-trustee with D.), were indispensable parties, and that if it was intended to conclude F. (in case he did not get his money from his partners) from proceeding on the mortgage given to him to secure its payment and raising anew the question of the validity of the sale of the real estate to C., and of that by him to D. and E., he was to be made a party also.
William Carson, of South Carolina, died in August, 1856, somewhat indebted, but possessed of considerable real and personal estate, including a plantation called Dean Hall, and leaving a widow, Caroline, and two minor sons, William and James. By his will, he appointed two persons, named Robertson and Blacklock, his executors and directed all his estate to be sold by them on such terms as they should deem judicious, and the proceeds, after payment of his debts, to be divided into three parts, all "to be held in trust" by his executors; the interest of one-third to be paid to his widow, and the interest of the other two to be devoted to the support of his sons till they came of age, and the principal to be then paid to them.
"to such uses as they or the survivors of them should appoint and until such appointment to the use of the said Hyatt, Hazelton, McGann, McBurney, and Gillespie, partners, trading as Hyatt, McBurney & Co., according to their respective interests in the partnership."
Hyatt, some time after, by deed, bearing date 8 May, 1863, released his interest in the plantation, and on the last-named day, Hyatt retiring from the partnership, McBurney and Gillespie appointed the plantation to his use to secure a bond of the remaining partners to him for $40,000, given for the purchase of his interest in the partnership. Hyatt was and now is a citizen of New York. Gillespie so also, apparently. Hazelton was domiciled at Liverpool, England, and McGann then, as now, was a citizen of South Carolina. Ball, the purchaser, was a citizen of New Jersey.
The executors, at the time they sold the plantation to Ball, sold to him also certain personal property. This was sold on credit, and one W. J. Ball became jointly bound with the said E. N. Ball, and as his surety for the payment of the price of it.
And as respected W. J. Ball, to make him respond as surety for the debt of E. N. Ball, incurred in the purchase of the personal property.
1st. Matter of form. That Hyatt, Hazelton, Gillespie, McGann, and Elias Nonus Ball were indispensable parties to the bill; the answer of W. J. Ball alleging in addition, and in regard to the sale of the personal property bought by E. N. Ball, that he, the respondent, was but a surety, and that the said E. N. Ball was the principal debtor, and the person alone acquainted with the facts of the case.
value, and which was received on deposit in all the banks of South Carolina at the time; that in fact the payments were made in checks on the Bank of South Carolina. It alleged further that with this same money received, the executors had paid off the debts of their testator.
"it would be a positive wrong for the circuit court to turn from its doors a suitor in another state, seeking a remedy against citizens in this state, and thus deny to her, upon a doubtful question in reference to parties, a right secured to her by the Constitution,"
and that the court would "strain a point in favor of the constitutional right of citizens of the several states to sue the citizens of other states in the courts of the United States."
On the merits, it decreed that the surrender of the bonds of E. N. Ball by Robertson, the executor, and the satisfaction of the mortgage of Dean Hall, were done in breach of his duty as trustee, and were null and void; that the obligations were not discharged; that the mortgage of Dean Hall was a valid and subsisting mortgage, and that the complainant was entitled to the bonds and to enforce the mortgage as a security for the same. And after finding a certain sum due as principal of the mortgage, it decided that if the debt and interest were not paid by a day named, the plantation should be sold by the marshal under foreclosure.
answer, or demur, to the complainant's bill at a certain day therein to be designated, which order shall be served on such absent defendant, if practicable, wherever found, or, where such personal service is not practicable, such order shall be published in such manner as the court shall direct, and in case such absent defendant shall not appear, plead, answer, or demur, within the time so limited, . . . it shall be lawful for the court to entertain jurisdiction, and proceed to the hearing and adjudication of such suit in the same manner as if such absent defendant had been served with process within the said district,"
We have not found it necessary to come to any conclusion as to the merits of the case. Aside from that subject, there is an insuperable difficulty arising from the want of parties. A brief statement will be sufficient to show the foundation upon which this objection rests.
presence of Elias N. Ball was necessary in both aspects of the case.
The bill charges fraud and conspiracy, and that he was a party to them. It denies that the mortgage was paid, alleges that the bonds are still in force, avers that the release was a nullity, and seeks to enforce the mortgage.
If these allegations are maintained, the whole amount of the debt will be rehabilitated against him. He is entitled to an opportunity to repel these imputations and to protect himself if he can do so. His vendees are entitled to his aid. His defense is their defense. It does not appear whether his deed to McBurney and Gillespie contains the usual covenants of title. If so, he would be liable over to his grantees in the event of the mortgage being enforced. This would be an additional reason for his being a party when the case is disposed of.
The complainant has the option to make him a party or to proceed without him and take the hazard of the consequences.
The statute of South Carolina referred to by the counsel for the appellee, does not affect the case.
The Act of Congress of June 1, 1872, was passed several years after this bill was filed. The thirteenth section has, therefore, no application to the question of parties in this litigation.
irremediable difficulty as to jurisdiction, however diversified the residence of those necessary to be made defendants.
This record is in a singularly defective and confused condition. The allegations in the bill lack clearness and precision. This has perhaps arisen from the want of full and accurate information until the coming in of the answers. There are important averments on both sides unsupported by evidence. Important papers are referred to, but copies are not given, and there is no proof of their contents. There are many matters of detail of no moment to the rights of the parties which should be expunged. If there were no defect of parties, we should have great difficulty in disposing of the case upon the pleadings and proofs before us. If the case shall be brought here again, these objections, it is to be hoped, will in the meantime be obviated.
Decree reversed and the cause remanded, with directions to proceed in conformity to this opinion.
2 American Law Times Reports 116.
17 Stat. at Large 198.
Garrett v. Puckett, 15 Ind. 485; Whitney v. McKinney, 7 Johnson's Chancery 147.
Story's Equity Pleadings § 169; Madox v. Jackson, 3 Atkyns 406; Angerstein v. Clark, 2 Dickens 738; Cockburn v. Thompson, 16 Vesey 326; Bland v. Winter, 1 Simons & Stuart 246.
Calvert on Parties 179; Milroy v. Stockwell, 1 Carter 35; Haines v. Beach, 3 Johnson's Chancery 459; Worthington v. Lee, 2 Bland 682; Ducker v. Belt, 3 Maryland Chancery 13; Hallock v. Smith, 4 Johnson's Chancery 649; Bigelow v. Bush, 6 Paige 343; Drury v. Clark, 16 Howard's Practice Reports 424.
Watson v. Spence, 20 Wendell 260; Story's Equity Pleading 192, 197; Barber on Parties 463, 491; Shaw v. Hoadley, 8 Blackford 165; Betts v. Starr, 5 Conn. 551.
Haines v. Beach, 3 Johnson's Chancery 459; Ensworth v. Lambert, 4 id. 605; Judson v. Emanuel, 1 Ala.N.S. 598; Brainard v. Cooper, 10 N.Y. 356; Story's Equity Pleadings § 192.

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