Anderson v. Anderson
| Decision Date | 05 November 1971 |
| Docket Number | No. 1234-A,1234-A |
| Parties | Natalie M. ANDERSON v. Robert ANDERSON et al. ppeal. |
| Court | Rhode Island Supreme Court |
Natalie and Robert Anderson are husband and wife. This appeal is but another chapter in the protracted and almost continuous litigation 1 involving this couple which has continued to occupy the attention of the courts of this state ever since the wife commenced divorce proceedings against the husband in 1968. The instant proceeding involves the husband's appeal from a judgment entered in the Superior Court adjudging the wife to be the owner of fifty per cent of the assets of Windsor Builders, Inc. (hereafter called Windsor Builders) and ordering the husband in his capacity as president and treasurer of the corporation to execute and issue such stock certificates as would give his wife fifty per cent interest in the corporation.
In August 1963, during a time of comparative marital transquility, the Andersons mortgaged their East Greenwich home so that they could purchase a parcel of land in Warwick. They took title to the two-lot parcel in their joint names. The husband built a house on one of the lots. Sometime in February 1964, documents were filed in the Secretary of State's Office incorporating Windsor Builders, Inc. The incorporators were the Andersons and their accountant. The Warwick property was deeded to the new corporation. The newly-built home was sold. The corporation then built another home on the second lot and it, too, was sold.
Later, the Andersons entered into an agreement to purchase 60 acres of land located in East Greenwich. Title to the land, however, was taken in the name of Windsor Builders. The Andersons refinanced the mortgage on their residence and transferred the mortgage money to the corporation. The husband assured his wife that her interest in the property and money given to Windsor Builders would be protected since she would be made a stockholder of the new corporation. Financial difficulties began to beset the corporation. It was petitioned into receivership. It is conceded that no stock certificates were ever issued. When the wife commenced this suit, process was served upon her husband by having a copy of the summons and complaint served at his last and usual place of abode. The corporation was not served. On February 15, 1969, the husband was defaulted because of his failure to plead to or otherwise defend the pending suit. Sometime thereafter, he filed a motion to vacate the default. A Superior Court justice denied this motion and then heard the wife's testimony in support of her claim. The judgment previously referred to was entered and this appeal ensued.
Before us, the husband has abandoned any challenge of the Superior Court's refusal to remove the default or its findings as to the wife's entitlement to fifty per cent of the corporate stock. Rather, he now raises for the first time the question of whether we should dismiss his wife's suit because of her failure to join an indispensable party, to wit, Windsor Builders. Although we usually will not consider an issue not raised in the trial court, we have on our own motion considered a plaintiff's failure to join an indispensable party. Demers v. Adamson, 102 R.I. 453, 231 A.2d 484 (1967). We have also ruled that, if the circumstances so warranted, the omission of a party might be raised at the appellate level even though no such objection was made at the trial level. Koshgarian v. Hawksley, 90 R.I. 293, 157 A.2d 663 (1960). Since we have not been called upon to construe Super.R.Civ.P. 19, we believe that the case at bar presents an appropriate occasion to discuss in some detail an issue which is of substantial import to the bench and bar.
Rule 19 concerns the compulsory and noncompulsory joinder of parties. In its pertinent portions, it reads as follows:
'Rule 19. Necessary Joinder Of Parties
'(a) Necessary Joinder. Subject to the provisions of Rule 23 and of subdivision (b) of this rule, persons having a joint interest which is not also a several interest shall be made parties and be joined on the same side as plaintiffs or defendants. When a person who should join as a plaintiff refuses to do so, he may be made a defendant.
Our Rule 19 is patterned after Rule 19 of the Federal Rules of Civil Procedure as the Federal Rule read prior to its amendment in 1966. Our rule, like its federal counterpart, recognizes the difference between parties whose presence is absolutely essential, if the action is to proceed at all, and those who ought to be joined but without whom the action can continue. The first class has long been referred to, in the federal practice, as 'indispensable' and the latter group as 'necessary.' 1 Kent, R.I.Civ.Prac. § 19.2.
When Federal Rule 19 was first promulgated in 1937, it was said to be nothing more than a reaffirmation of the past equity practice as it related to the necessary joinder of parties. Wesson v. Crain, 165 F.2d 6 (8th Cir. 1948). It is fitting, therefore, that we review briefly the development of the doctrine of joinder as it has evolved in the courts of equity. Up until the eighteenth century, equity required the joinder of all interested parties but recognizing that practical difficulties and obstacles often made this impossible or impractical, it relaxed its requirement of complete adjudication of a controversy. The chancellor felt that doing an incomplete job in the pending litigation would often be better than doing no job at all. Equity's attitude began to change in the late 1700's because of the then current sentiment of 'doing perfect justice' and 'making complete decrees.' The concept of the 'complete decree' represented a change from the earlier flexible and more practical approach to the joinder problem. Hazard, Indispensable Party: The Historical Origin Of A Procedural Phantom, 61 Colum.L.Rev. 1254 (1961); Kaplan, Continuing Work Of The Civil Committee: 1966 Amendments Of The Federal Rules of Civil Procedure (I), 81 Harv.L.Rev. 356 (1967). In Professor Hazard's view, equity's reluctance to render a decree which did not completely dispose of a controversy gave rise to the indispensable party concept.
The classic distinction between indispensable and necessary parties was drawn in the mid-nineteenth century in the oft-cited case of Shields v. Barrow, 17 How. 130, 15 L.Ed. 158 (1854). Indispensable parties were defined as:
'Persons who not only have an interest in the controversy, but an interest of such a nature that a final decree cannot be made without either affecting that interest, or leaving the controversy in such a condition that its final termination may be wholly inconsistent with equity and good conscience.' Id. at 139, 15 L.Ed. at 160.
While necessary parties were described as:
'Persons having an interest in the controversy, and who ought to be made parties, in order that the court may act on that rule which requires it to decide on, and finally determine the entire controversy, and do complete justice, by adjusting all the rights involved in it. * * * but if their interests are separable from those of the parties before the court, so that the court can proceed to a decree, and do complete and final justice, without affecting other persons not before the court, the latter are not indispensable parties.' Id. at 139, 15 L.Ed. at 160.
Another legal scholar has formulated the Shields v. Barrow definitions as follows:
'* * * if the court can proceed to a meaningful decree without affecting the interest of the absent person, that absent person is at most a 'necessary' party; if the circumstances are such that the court cannot so proceed, then the absent on is an 'indispensable' party.' Reed, Compulsory Joinder of Parties in Civil Actions, 55 Mich.L.Rev. 327 at 343.
While this formulation demonstrates the flexibility shown earlier in equity, this particular quality was soon eradicated as courts seized upon words as 'separable' and 'without affecting that interest' with the result a test was fashioned whereby the concept of 'severability' became the dominant factor in determining the indispensability of the absentee. In every instance the severability test remained all important, notwithstanding the adoption of the original Rule 19. This was due to the presence in the Rule of the terms 'indispensable' and 'joint interest.' As pointed out by the Advisory Committee on Rules, the use of these terms '* * * directed attention to the technical or abstract character of the rights or obligations of the persons whose joinder was in question, and correspondingly distracted attention from the pragmatic considerations which should be controlling.' See Amendments to Rules of Civil Procedure, Advisory Committee's Note, 39 F.R.D. 69 at 90 (1966).
Illustrative of judicial fixation for determining an absentee's status by the severability or nonseverability of his interest can be seen by a glance at Newland v. Edgar, 362 F.2d 911 (9th Cir. 1966). There the court employed what it described as a 'workable test' whereby the 'indispensable could be distinguished from the 'necessary' party. It lists the following four criteria:
(1) Is the interest of the absent party distinct and severable?
(2) In the...
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Town of Scituate v. EFC Construction Co., C.A. No. PC 04 0912 (RI 3/3/2005)
..."complete relief." Courts have historically distinguished between indispensable parties and necessary parties. Anderson v. Anderson, 109 R.I. 204, 209-10, 283 A.2d 265, 268 (1971) (citing Shields v. Barrow, 58 U.S. 130, 15 L.Ed. 158 (1854)). The Rhode Island Supreme Court stated though it c......