
    Mary Ann Roye and others vs. The Charleston Savings Institution.
    Parties— Creditor's Bill — Pleading—Practice.
    Wliere a bill is filed by depositors of ail incorporated savings institution, on behalf of themselves and all other depositors, against the corporation alone, alleging that the corporation had failed, and praying that its affairs be wound up, other depositors, who are opposed to the winding up, have the right to be heard ; and, if the plaintiffs’ neglect to procure and publish the usual order for depositors to come in and establish their demands, they may, even after a decree for the transfer of the assets into Court, intervene by petition in tbe cause, and compel the plaintiffs to make them, or a sufficient number to represent them all, parties defendants, with leave to plead, answer or demur by a certain d.iy, and that other proceedings in the mean time be stayed.
    BEFORE JOHNSON, OH., AT CHARLESTON, OCTOBER, 18G7.
    This case will be understood from tbe statements of tbe Circuit decree, and tbe opinion of the Court of Appeals.
    Tbe Circuit decree is as follows:
    Johnson, Ci-i. A bill was filed on the 29th day of March, 1867, in which it is stated that the Charleston Savings Institution was incorporated for the purpose of receiving on deposit, from any person or persons disposed to enjoy the advantages of the Institution, all sums of money that might be offered for that purpose; and that the deposits were to be used for the purposes and according to the directions of the charter; and that the income and profits arising from the same, should be applied and divided among the persons making the deposits, or their legaL representatives, after making such reasonable deduction as might be necessary for expenses, in proportion to the sums deposited, and to the length of time during which they might remain in the Institution. And that the principal of such deposits should he paid to each depositor, at such times and under such regulations as the corporation should prescribe.
    It is also stated that the Institution did, for many yéars, carry on prosperously the business of a savings institution, but that owing to the various alleged losses during the late war they had for nearly two years suspended business, and had refused to receive any further sums of money on deposit, and to pay on demand either the principal or interest due to their depositors, or in any manner to discharge the duties imposed by their charter.
    It is also stated that the complainants are severally depositors of the amounts specified, and that they sue on their own behalf, and that of all other depositors and creditors.
    The bill prays that an account be taken, under the directions of this Court, of the amounts due to the complainants, and to all others by the Institution, and that all the depositors and creditors, except the complainants, may be summoned and notified, by the order of this Court, to come forward and establish their claims; and that an account be taken of the assets of the Institution, that the same may be administered by the Court and applied to the payment of the depositors; that a receiver may be appointed to take charge of the affairs of the Institution, and that an injunction may be issued to restrain them from disposing of the real estate, and from collecting and disposing of their assets.
    The defendants in their answer admit that at the close of the late war, from causes over which they had no control, they were unable to pay their depositors, and that they resolved to receive no more deposits. They also admit that they have no hope of resuming a solvent condition, and that their utmost hopes at any time, since their suspension, has been to pay their depositors, who are their only creditors, about fifty per centum of their claims. And they submit that the affairs of the Institution can be more economically and successfully arranged by the trustees, with such orders and directions as the Court shall from time to time make, than in any other way; and that there is no equity by which the management of the Institution can be taken out of their hands.
    On the 8th August, 1867, after a good deal of deliberation and consultation among the parties, an order was made by the consent of the solicitors representing the complainants, the defendants and a large number of the depositors, whose names do not appear on the record, and without objection from any source, which is as follows, to wit: “ The bill, and answers, and report of Master Tupper having been read and considered, and the solicitors of the complainants and defendants having been heard, it is ordered and decreed, that the Trustees of the Charleston Savings Institution transfer and deliver over to Mr. Tupper, one of the Masters of this Court, all the assets and securities enumerated in the schedule filed with the answer, and which now remain in their possession and under their control, and any money they may have received since the coming in of their answer, and that they do convey the lot of land in Meeting street, and any other real estate belonging to the said Charleston Savings Institution, under the seal of the corporation, to two or more persons to be named by tbe said Master, to be held for the use of such person or persons as may become the purchaser or purchasers thereof, for such purposes and estates as the said James Tupper, or bis successor in office, under tbe sanction of this Court, shall declare, touching the same, and thereupon the Trustees and officers of said Institution be discharged from all further liability and account.
    
      
      “ And it is further ordered that the said Master do proceed to collect the moneys due on the securities so transferred to him, and to hold the same, subject to the future order of this Court.
    “And it is further ordered, that the said Master do report a scheme for the settlement of the affairs of the said Institution, having first published, in two or more of the daily gazettes of the city, notice of a reference to be held for that purpose, at least twenty days after the date and publication of the said notice, at- which reference the depositors may be represented.”
    Master Tupper prepared and filed the following report, to wit:
    “Pursuant to this order, notice of the above reference was given for the. time prescribed, in the daily papers of this city. In response to this notice, the Master was attended, on the 21st and 25th days of the present month, by a large number of depositors in person or by their solicitors. At those meetings two schemes for winding up the affairs of the Institution were submitted. One was presented on behalf of the plaintiffs, and of others who advocate the sale of the entire assets of the Institution and a distribution of the proceeds of sale among the depositors.
    “ The other was presented by a large class of depositors, who oppose a. sale of the entire assets, and claim that such portion of the securities as they may be found jointly entitled to, should be assigned to them in kind. Some of the details of these two schemes prevent my adopting either of them as a whole; but I am happy to acknowledge my indebtedness to both of them, and to the able arguments by which they have been sustained, before me, for the following plan, which may meet the desire expressed by all, that the most ‘ simple, speedy, and economical ’ mode of settlement should be adopted by the Court:
    
      “ 1. That in order to ascertain the amount due to each depositor, the Master cause all the deposits made' between the 1st January, 1862, and the 15th day of March, 1865, to be scaled according to the tables in his office, fixing the value of Confederate notes in gold; and that all other deposits be taken as they stood upon the books of the Institution on the 19th day of April, 1865.
    “ 2. That the Master sell at auction, after the usual notice, the real estate for one-fourth cash, and the balance in one, two, and three years ; and the personal assets, (except such as may be partitioned in kind under the next paragraph,) on or after the first Tuesday in December next, for cash.
    “ 3. That the depositors represented at the reference held on the 21st and 25th instant, who desires a partition in kind, may designate, on or before the 15th day of November next, one or more persons as Trustees, to whom- shall be assigned on or before the first Tuesday in December next, and subject to such trusts as may be declared, the proportion of each species of security held by the Institution as the aggregate as ascertained to be due to the said depositors, considered as a unit, would entitle them to, out of the whole securities, upon a ratable division of the same.
    “4. That the Master, after providing for an equitable division of the costs and expenses between the two classes of depositors, do pay to the Trustees, provided for in paragraph three, the proportion of the net proceeds of the sales of the real estate to which the depositors represented by the said trustees may be jointly entitled, and that he distribute the fund arising from the balance of the proceeds of sales of the real estate, and from the net sale of the personal assets, among the other depositors, and to pay to each the sum to which he may be found to be entitled upon a pro rata proportionment of the said fund among the said depositors, according to the amounts ascertained to be due to them respectively under this scheme, October 28, 1867.”
    Soon after the filing of the above report a motion was made before me to file a petition in the cause, by a large number of the depositors whose deposits in the aggregate amount to $550,000. In their petition it is stated that they “ are advised that they stand in the same right in regard to the said Institution as the complainants ” and “that they have good right to be parties to any proceeding in this Court for the winding up of the affairs of the said Institution, either as complainants or defendants; that they have had no such opportunity hitherto, unless they united with the complainants, thereby accepting and professing the facts and views expressed in the bill, and uniting in the prayer thereof. This they could not do, because they differed very widely from the complainants in reference to the mode of settlement. And some of the depositors, they respectfully submit, should have been made parties defendant to the said call, to afford those who might differ from the complainants some opportunity for recording their views of their rights and interests in the pleadings in the cause; that orders have been passed already in the cause without their assent and without an opportunity for them to object, by which they must be bound, and their interests, as they understand them, injuriously affected unless they or some of them, in behalf of themselves and the rest, be allowed to become parties thereto.”
    And the prayer of the petitioners is that an order be made in the cause requiring the complainants to make six of the depositors therein designated, parties defendant, in behalf of themselves and of all the petitioners, and of all others who may choose to come in under the petition, with leave, notwithstanding the orders heretofore made in the cause, to plead, answer or demur to the bill by a certain day, in the order to be mentioned, and that, in the meantime, no further proceedings be had in the cause, and that none of the orders heretofore made be carried into execution.
    From the statements made at the bar it appeared that the claims of all the depositors amounted to about $2,400,000, and that there were three thousand eight hundred depositors whose claims had not been paid.
    ' The application was simply to file a petition, but in the argument of that question the merits of the petition was so thoroughly considered that the real question before the Court is, shall the prayer of the petition be granted ?
    In point of form, is there any objection to the bill ? Are all necessary parties before the Court? Or should all the depositors by name have been made parties either as complainants or defendants ?
    The general rule in this Court is “ that all persons materially interested in the subject matter, ought to be made parties to the suit, either as plaintiffs or defendants, however numerous they may be, in order that complete justice may be done, and that multiplicity of suits may be prevented.” But to this rule there are many exceptions, which are as old and as well founded as the rule itself. One of these exceptions is, that where the parties are so numerous, that it would almost amount to a denial of justice to require them to be brought before the Court, and there is a community of interests between them, a few may sue in their own names for the benefit of all. (Wallworth vs. Holt, 4 M. & C. 619 ; Story’s Eq. Plead. 74-113 ; Hiohings vs. Cosgrove, 4 Buss. 577; Johnson vs. tí. W. R. R. B. 3 Strob. Eq. 329.) In this case the parties are numerous, and there can be no question about the community of interests between the complainants and the other depositors. The petition states that “ they stand in the same right in regard to the said institution as the complainants,” and that the difference between them is only as to “ the mode of settlement.” But it is insisted that the depositors are 
      cestui que trusts and not creditors, and that the same rule does not apply that does in bills filed by creditors. But in all the cases referred to, in support of this position, there is that want of identity of interest, which is essential to support the exception to the general rule, and it is on that ground alone the decisions stand. My opinion is, that, in matter of form, no objection against the bill can be sustained.
    Sometimes this Court does, for the purpose of protecting the rights of all parties interested in the subject matter, order some of the quasi complainants to be made defendants. (Richardson vs. Larpout, 2 Younge & 0. 514.) But in that case, the interests of all the parties were not identical, as they are in this.
    The Court is always anxious to protect the rights and interests of parties brought before it in this way, and they are permitted to enjoy the privileges, not only of complainants, but many of those'enjoyed by the defendants, as, for instance, in filing cross bills and not being bound by the allegation of the bill, &c. But if the practice was sanctioned in such cases as that now under consideration, I would be very reluctant to grant the prayer of the petitioners, because I have been unable to see any benefits that could accrue to the petitioners by being permitted to record “ their views of their rights and interests in the pleadings in the cause.” And if granted in this instance, other depositors might hereafter become dissatisfied with some of the- proceedings in the cause, and make similar applications which might produce great and unnecessary delay in winding up the affairs of the Institution.
    The motion to file the petition is refused.
    The petitioners appealed on the grounds:
    1. Because it is respectfully submitted, his Honor erred in assuming that the interests of the complainants and petitioners were identical, whereas their interests are diverse, contrarient and conflicting, while their rights are the same, and entitle them to be heard in their own behalf.
    2. Because equity cannot be administered in this cause without a full hearing of the merits of the differences between the complainants and the petitioners, one of which is about the execution of .the decretal order, made in this cause on the 8th August, 1867, whereby it is contemplated to discharge the common trustees against the will of the petitioners. .
    3. Because his Honor erred in supposing that the bill in this case was a proper bill for administering a trust, or calling trustees to account, whereas, it was a creditor’s bill, and unsuited to the present case, and cannot be sustained or proceeded in after it is made apparent that there are conflicting interests among the cestui que trusts, until some of the parties representing the interest opposed to that of the complainants are made parties to the cause.
    Story’s Eq. PI. Sec. 207; McBride vs. Lindsay, 9 Hare, (41 Eng. Ch.) 574; Holland vs. BaJcer, 3 Hare, (25 Eng. Ch.) 68 ; Taylor vs. Salmon, 4 Mil. & Cr. 142; Richardson vs. Hastings, 7 Beav. 330 and 331; Note 7, 4 Mil. & Cr. 640-1.
    4.That the Court of Equity cannot proceed to final judgment in a cause where it is made manifest at any time during its progress, that other parties having equal rights and a different view of their interests, cannot come in with full liberty to assert their own views of those rights and interests in the manner in which the cause is presented; and this is the condition of the petitioners, who cannot come in as complainants in this cause. . .
    
      Adams’ Eq. 319 and 320 ; Haivkins vs. Hawkins, 1 Hare, 543 ; Hichings'vs. Cosgrove, 4 Buss. 562, (3 Con. Eng. Ch. 803;) Richardson vs. Larpent, 2 Y. & Col. 507, 512 to 514.
    5. That it is the practice of this Court to compel the complainants to make additional parties whenever it is shown to the Court that others have rights and interests in the subject matter of a suit before it, which practice grows out of the principles of equity itself, and it matters not how or where the Court becomes informed of this want of parties, provided its decree has not been fully executed.
    
      Jones vs. Jones, 3 Atk. Ill; Holdsworth vs. Holdsivorth, 2 Duk. 799 ; Clayton vs. Executors of Heng, 3 Des. 345; 'Holland vs. Baker, 3 Hare, 74, 75; Cockburn vs: Thompson, 16 Yes. 321, 327 ; West vs. Randall, 2 Mason, 193.
    6. Because the difference presented by the petitioners, as existing between them and the complainants, is no less than as to the discharge of common trustees, and the destruction of a chartered institution intended for their benefit and the benefit of the whole community.
    7. Because the petitioners, although numerous, offered to avoid the difficulty or impracticability of making them all parties, by offering to conform to the rule, that a few might represent many, and asked only to be represented by a limited number who could easily have been made defendants.
    
      Me Crady & Me Crady, for appellants.
    
      Porter, for corporation.
    
      Macbeth & Buist, Simons & Seigling, Whaley, Mitchell, and Clancy, for appellees.
    
      [Authorities cited for appellees, Wallworth vs. Holt, 4 M. & 0.619; Johnston vs. S. W. R. R. Ranh, 3 Strob. Eq. 329 ; Royce vs. Boyce, 3 Rich. Eq. 263.]
   The opinion of the Court was delivered by

Dunicin, 0. J.

Although the amount involved in this litigation is large, and the parties interested very numerous, the questions to be adjudicated relate rather to the general principles and practice of this Court, in the institution and carriage of causes.

The general and familiar rule, in Courts of equity, is that all persons materially interested in the subject matter, ought to he made parties to the suit, either as plaintiffs or defendants, however numerous they may be, in order, not only that complete justice may be -done, but that multiplicity of suits may be prevented. And so solicitous is the Court, not to proceed to judgment in the absence of a party interested, that it will sometimes suspend further proceedings of its own motion, until an opportunity is afforded of having such interests represented. But this general rule, as remarked by Mr. Justice Story, however useful and valuable as a practical guide, is still open to exceptions, and qualifications, and limitations, the nature, and extent, and application of which are not, and cannot, independently of judicial decision, be always clearly defined.

One of the recognized exceptions is where the parties are exceedingly numerous, and it would be impracticable to join them without almost interminable delays, and other incumbrances which would obstruct, and probably defeat the purposes of justice, (1 Story Eq. § 94.) In this class may be included a creditor’s bill. In such proceedings, according to the practice of this State, public notice is given to all creditors who may desire to make themselves parties in the cause. Upon the same principle, where there are numerous shareholders of a voluntary association, some are permitted to file a bill on behalf of themselves and others, having, a common interest. If the object (says the Commentator) were to enforce some interest common to all the shareholders, such bill would be sustained. But if the object be to dissolve the company, or subvert its articles, he doubts if, upon the authorities, the bill would be allowed, without making the other shareholders, however numerous, actual parties to the suit. lie seems to think, however, that the purposes of justice, even in such cases, would be best subserved “by allowing all persons to become parties, either by a bill on behalf of all, or by coming in and resisting the objects of the bill, under the interlocutory proceedings.” Why, he adds, “the same proceedings might not have been permitted, even to the extent of binding unrepresented interests, after due notice to the parties to appear and represent them, as is done in the ordinary cases of creditors against the estates of persons deceased, it is not very easy to state in a satisfactory manner.” Upon the rules themselves, there exists discrepancy in the authorities; but the principal difficulty is in the application to the circumstances of each particular ca,se.

This bill was filed 29th March, 1867, by the plaintiffs, “ on behalf of themselves and all others who are creditors of, and entitled to share in the assets of the Charleston Savings Institution,” against the said corporation.

They charge, among other things, that the defendants had suspended business, and had failed, and that the assets are insufficient to satisfy the just claims of the depositors and creditors of the Institution. The prayer of the bill is, among others, that the defendants may account for their transactions; that an account may be taken under the direction of the Court, of the debts due to the plaintiffs and others, and that the creditors, other than the plaintiffs, may be summoned and notified by the order of the Court to come forward, according to the course and practice of the Court, to establish the claims due by the said Institution to them, and that an account may be taken of the assets, and the same be administered by the Court, that a receiver may be appointed, and the officers of the Institution be restrained from collecting or parting with the assets, &c.

The answer of the corporation by their officers and trustees was filed 25th May, 1867, in which they admit that the Institution was last incorporated in 1856, for fourteen years; that at the close of the late war, being satisfied that they could not pay their depositors in full, the trustees resolved to receive no more deposits, but to apply themselves to the collection of such assets as they found available ; that, for the reasons stated in their answer, it would be disastrous at present to throw the securities on the market, or make a general foreclosure of their mortgages; that it is the opinion of the trustees, and is confidently believed by a very large majority in interest and in numbers of the persons interested, that the affairs of the Institution can be more economically and successfully managed by the trustees than in any other way; and they submit to the Court, whether there is any equity set forth in the bill, upon which the management of the Institution can be taken out of the hands of the trustees.

On 25th of July, 1867, one of the Masters granted an injunction, as prayed by the bill, and also an order to account; but it does not appear that an order was at any time made or published for the depositors and other creditors of the Institution to come forward and establish their claims against the Institution according to the course and practice of this Court, and as prayed by the bill.

Under the order to account, a statement was rendered by the trustees, by which, as the Master reports, the assets, not worthless, amounted to $1,171,183.11, of some blit uncertain value, and the amount due depositors (who were the only creditors) was $2,871,041.51. This report bears date 5th August, 1867, and on 8th August an order was passed by the Chancellor that the defendants should transfer to the Master the assets and securities of the Institution, and convey to the trustees, to be named by the Master, the real estate, and that thereupon the trustees and officers should be discharged from'further liability; directed the Master' to collect the securities, and report a scheme for the settlement of the affairs of the Institution, having first published a notice for twenty- days of a reference to be held for that purpose. On 28th October, the Master reported 'his compliance with the order, and presented a scheme for ■the settlement of the affairs of the Institution. “Soon after the filing of the report, (says the Chancellor in his decree) a motion was made before me to file a petition in the cause by a large number of the depositors, whose deposits, in the aggregate, amount to $550,000.” The purpose and object of the petitioners is then stated; and, for the reasons set forth in the decree, the motion to file the petition was refused.

It is not proposed to consider the several grounds of appeal, or to discuss the general principles in such cases. It is manifest.that, although the plaintiffs and petitioners had a common interest in the assets of the Charleston Savings Institution, they differ materially as to the mode in which that interest would be promoted or subserved. . When the plaintiffs instituted their proceedings, they may well have anticipated no such diversity of opinion on the part of the other shareholders. Only the corporation were therefore made defendants. But in order to prevent surprise or injustice, and in conformity with the approved practice of the Court, the bill prayed that notice might be published for all shareholders and creditors to appear and establish their demands. The Court does all that is in its power in such cases, and although in some instances, as in Hust vs. Hust, (6 Rich. Eq. 114,) injustice is sometimes done, notwithstanding every precaution ; the administration of the law cannot be impeded because of possible individual hardship. But no such notice was ever published; and on 8th of August, 1867, the order was made which transferred the assets to the Master, and discharged the trustees. That order substantially adjudicated a material point of difference by transferring the administration of the Institution, three years prior to the expiration of the charter, from the trustees to the officers of the Court. The question is not as to, the expediency or propriety of the adjudication, but whether the petitioners were not entitled to a hearing prior to such judgment. When the bill seeks to dissolve a company, or subvert its articles, Mr. Justice Story suggests as a means of obviating the necessity of making every shareholder a party in. the bill, that, they should be called on by notice and under interlocutory proceedings, and have the opportunity to come in and resist the objects of the bill. (§ 136.) The petitioners are entitled to the judgment of the tribunal in the last resort upon the matters determined by the decretal order of 8 th August, but they cannot appeal from a decision in which they were not parties, and presented no issue.

When the scheme prepared under order 8th August, was presented to the Court, or soon afterwards, the petition was preferred asking that the petitioners might be made parties defendant in the manner therein set forth. In the opinion of this Court, the petitioners were not concluded by the previous proceedings and leave should have been granted to file the petition, and ail order according to the prayer thereof, should have been passed by the Court. It is now- so ordered and adjudged.

Wardlaw and Inglis, A. JJ., concurred.

Motion granted.  