Pipkorn v. Village of Brown Deer

• Decision Date: 08 March 1960
• Citation: 101 N.W.2d 623,9 Wis.2d 571
• Parties: John B. PIPKORN et al., Respondents, v. VILLAGE OF BROWN DEER, a municipal corporation, et al., Appellants.
• Court: Wisconsin Supreme Court

Page 623

101 N.W.2d 623

9 Wis.2d 571

John B. PIPKORN et al., Respondents, v. VILLAGE OF BROWN DEER, a municipal corporation, et al., Appellants.

Supreme Court of Wisconsin.

March 8, 1960.

Harold H. Fuhrman, Milwaukee, Wickert & Fuhrman, John Ellegard, Milwaukee, of counsel, for appellants.

Demet & Demet, Milwaukee, for respondents.

HALLOWS, Justice.

The only question before us is whether the defendant Sontag can be designated to represent the other beneficiaries of the water trust who are similarly situated so as to constitute this a class action. When Green Knoll subdivision was laid out, a water trust was created for the benefit of the lot owners. They became beneficiaries of the trust and the owners of fractional shares thereof, entitled to use water from the system for domestic purposes. The trust declaration provided the trust could be terminated by a transfer of the assets by the trustee upon the approval of the owners of the majority of the lots connected to the system. It is alleged an illegal meeting conducted in an arbitrary manner was held and, in conformity with the improper and illegal vote of purported lot owners, an illegal transfer was made of the water system by the defendant Sontag to Brown Deer, which thereupon transferred the management of the water trust to its village water commission. It was also alleged the plaintiffs' interest in the water trust was thereby confiscated and the defendant Schroedel prevented from maintaining the trust. The plaintiffs claim they and Schroedel are entitled to possession of the water trust and the defendant Brown Deer and its water commission are illegally withholding possession of the assets. The gist of the action its for ejectment to recover possession.

All of the beneficiaries of the water trust do not constitute one class. There is a difference of opinion and the dividing line between the two factions is whether the water trust was legally terminated and the assets validly transferred to the defendant Brown Deer. Each of these classes of litigants has a separate common interest in the outcome of the litigation and in the basic question in litigation. No issue is made that the plaintiffs represent a class. The precise question is whether defendant Sontag can be sued as representing those beneficiaries of the water trust who voted or want their interest terminated in the water trust and its assets transferred to Brown Deer.

Some confusion arises in the briefs because the appellants approached the problem from the standpoint of the original complaint and argue the amended complaint is not in accordance with the trial court's order sustaining the demurrer. The appellants strenuously contend that under that order all the beneficiaries of the water trust must be named plaintiffs or defendants. The trial court did not so interpret its first order. The amended complaint was sustained on the ground that it properly pleaded a class suit on the part of defendants and therefore there was no defect of parties defendant. The arguments based on the nature of the original complaint and the order thereon have no application to the question before us.

The question is whether the amended complaint pleads a class suit on the part of the defendants within sec. 260.12, Stats. ¹

Before the adoption of the code by Wisconsin, the provision for class or representative suits was added by New York in 1849 in order to avoid any misapprehension that the adoption of the first part of the statute relating to joinder of necessary parties plaintiff and defendant would reject the old equity or chancery practice and make it clear such equity practice was applicable to both equitable suits and actions at law. Day v. Buckingham, 1894, 87 Wis. 215, 58 N.W. 254. The Day case was the first decision to cite this part of the statute after its adoption and to point out that the section presented two distinct alternative situations--one when the question is one of common general interest of many persons; the other when the parties are very numerous and it may be impracticable be bring them before the court. In the first situation where the question involved is one of common or general interest a representative suit may be brought by one for the benefit of all who have such a common or general interest without complying with the second alternative of showing that the parties are either numerous or that it would be impracticable to bring them before the court. This interpretation was reiterated in George v. Benjamin, 1898, 100 Wis. 622, 76 N.W. 619, and Hawarden v. Youghiogheny & Lehigh Coal Co., 1901, 111 Wis. 545, 87 N.W. 472, 55 L.R.A. 828. However, in the cases before the code, such distinction was not made and the equity practice required a showing of impracticability of bringing in all the parties, as well as a common or general interest. Putnam v. Sweet, 1849, 2 Pin. 302; Coleman v. White, 1861, 14 Wis. 700; Board of Supervisors of Iowa County v. Mineral Point R. Co., 1869, 24 Wis. 93.

It has been urged that the federal rules on representative suits express the traditional equity rule and the Wisconsin variation should be modified. See Federal Rules of Civil Procedure, 31 Marquette Law Review 80, Comments, The Representative Suit in Wisconsin.

However, the amended complaint alleges both a common interest and the impracticability of bringing all the defendants into the suit as named defendants and satisfies both alternatives, if true. While class suits are more frequently brought by plaintiffs, the doctrine of class representation applies to defendants; 39 Am.Jur., Parties p. 919, sec. 45, and sec. 260.12, Stats., expressly so provide. The appellants contend that since the beneficiaries of the trust will be directly affected they must be named defendants. The appellants misconceive the purpose of a class suit. The old equity rule that one who will be directly affected by a decree is a necessary party was subject to an exception in those cases where the parties are so numerous that compliance with the rule would be impossible or inconvenient. Board of Supervisors of Douglas County v. Walbridge, 1875, 38 Wis. 179. The representative or class suit arose in equity out of necessity. It was devised to simplify litigation, to make more convenient the administration of justice both for the parties and the court, and to avoid a multiplicity of suits in those cases where the rights and liabilities of many persons similarly affected or interested could be fairly determined in the action.

The doctrine of class representation required the party suing or defending for the class to have a right or interest in common with the persons represented and to fairly represent the interest or right involved so that it may be fairly and honestly tried. 39 Am.Jur., Parties, pp. 921, 922, secs. 47, 48. Is Sontag such a representative? The complaint alleges Sontag was the temporary trustee at the alleged illegal meeting and transferred the assets to Brown Deer pursuant to an alleged illegal vote. Those beneficiaries who voted for the transfer and those who are in favor of the transfer constitute a class with Sontag on the question of whether or not the transfer was legal. Their property rights in the water system and their interest in water service by Brown Deer are similar and common. Sontag is in a better position than any other beneficiary of that class to represent its members and to justify his action in transferring the water system. He is the logical person to represent the class and because of his similar interest and the active part he took in the transfer, we conclude that the class will be fairly represented by him.

This is not a case where Sontag is designated to represent all the beneficiaries of the trust as a class when there exists in...