In equity, a final decree cannot be pronounced until all parties
in interest are brought before the court.
Where a bill was filed for a perpetual injunction on judgments
obtained on certain bills of exchange drawn by the plaintiff and
negotiated to the defendant, and which had subsequently passed from
the latter into the hands of third persons, by whom the judgments
were obtained.
held that the injunction could not be
decreed until their answers had come in, although the bill stated,
and the defendant admitted, that he had paid the judgments and was
then the only person interested in them, because such statement and
admission might be made by collusion.
Carter Beverley, being indebted to the appellant, Horace
Marshall, assigned to him several bills of exchange, amounting in
the aggregate to �900 sterling, which had been drawn by the
respondent, Peter R. Beverley, on Bird Beverley, of London, in
favor of the said Carter Beverley. These bills were severally
transferred for valuable consideration by the appellant to Luke
Tiernan & Co., Stewart Montgomery & Co., Jesse Eichelberger
& Co., and Cornelius and John Comegys, and having been
forwarded by them to London for payment, were protested for
nonacceptance and nonpayment, and so returned. Suits were
instituted by these parties against Peter R. Beverley, on which he
confessed judgments. Having been taken in execution
Page 18 U. S. 314
and imprisoned, he gave bond for the prison bounds, which he
broke. A second series of suits were brought on the prison bounds
bonds, after judgments on which he filed the present bill against
Horace Marshall, Carter Beverley, Luke Tiernan & Co., Stewart
Montgomery & Co., Jesse Eichelberger & Co., Cornelius and
John Comegys, and John Brown, charging usury in the transactions
between Carter Beverley and Horace Marshall and a fraudulent sale
of certain slaves of Carter Beverley, on which Horace Marshall
retained a collateral security for his debt, and charging also that
although the suits were in the name of Luke Tiernan and others (to
whom the bills and been transferred), they were, in fact for the
complainant's benefit, he having paid to his endorser what was due
on those bills. On these grounds, a perpetual injunction was prayed
for and awarded. The appellant, by his answer, admitted the last
allegation but denied the usury and insisted that the sales of
Carter Beverley's negroes had been made in strict conformity with
the deed of trust under which they were sold. None of the other
defendants answered the bill.
MR. JUSTICE LIVINGSTON delivered the opinion of the Court.
This is an appeal from a decree in equity of the Circuit Court
for the District of Virginia,
Page 18 U. S. 315
to which the following objections have been made:
1st. That there is a defect of parties. Although all the persons
in interest are made defendants to the bill, yet none of them had
appeared to it except the appellant, on whose answer and the proofs
in the cause the decree was made.
2d. Another objection is that there was competent relief at law
against the usurious contract stated in the bill; but as no defense
of this kind was there set up, a court of chancery ought not to
have interfered, especially after judgment had been obtained on the
bills, and even on the prison bounds bonds, which were taken on the
execution which had issued on those judgments.
3d. It is also contended that there was no usury in any of the
contracts between the appellant and Carter Beverley, and that the
sale of the negroes under the deed of trust was fair and in strict
pursuance of the authority vested in the trustee.
4th and lastly. Admitting the usury and a fraud in the sale, it
is insisted that the respondent, being an entire stranger to these
transactions, had no right to call the appellant to account or to
any relief as against him.
The Court has had under its consideration all these objections,
but will now give its opinion only on the first of them. We are all
satisfied that when this decree was pronounced, the case was not
prepared for a final hearing. The bills, which had been drawn by P.
R. Beverley, having passed by Marshall into the hands of third
persons, who had
Page 18 U. S. 316
obtained judgments on them, and it being a principal object of
the suit to enjoin further proceedings on them, the parties in
whose favor they were rendered ought not only to have been made
defendants, but a perpetual injunction ought not to have been
decreed until their answers were filed. It was not enough in their
absence that the complainant should state and the defendant admit
that the latter had paid these judgments and was now the only
person interested in them. This might be done by collusion, and
although that may not be the case here, it is not the course of a
court of equity to make a decree which is to operate directly upon
the parties in interest, as the perpetual injunction does here,
without affording them an opportunity of being heard. For this
error, the decree must be reversed and the cause remanded for
further proceedings.
Decree reversed.
DECREE. This cause came on to be heard on the transcript of the
record of the Circuit Court for the District of Virginia and was
argued by counsel. On consideration whereof it is the opinion of
this Court that the said circuit court erred in perpetually
enjoining the proceedings on the judgments obtained against the
respondent, Peter R. Beverley, and the appellant, Horace Marshall,
because the bills of exchange, which had been drawn by the said
Peter R. Beverley had passed into the hands of third persons by
whom the said judgments had been obtained, and before the answers
of such creditors, who had been made defendants to said bill of
complaint, had come
Page 18 U. S. 317
in. It is therefore DECREED and ORDERED that the decree of the
said circuit court in this case be and the same is hereby reversed
and annulled. And it is further ordered that the said cause be
remanded to the said circuit court for further proceedings to be
had therein according to law.
