442 F.2d 394 (5th Cir. 1971)
Plaintiff brought suit against defendant, seeking damages as a result of defendant's failure to issue shares to plaintiff which plaintiff had allegedly acquired under an agreement with third party. Prior to trial, the district court determined that the third party was indispensable under Fed. R. Civ. P. 19, and it dismissed the action because the presence of the third party violated the requirements of complete diversity.
- On appeal, the court determined that the third party had an interest in the case, because his presence was critical to the determination of important issues in the litigation.
- The absence of third party would have potentially exposed defendant to the risk of multiple, inconsistent obligations.
- Applying factors under Fed. R. Civ. P. 19(b), as well as the "equity and good conscience test", the court determined that it was proper for the district court to find third party indispensable and to dismiss the action.
Judgment dismissing plaintiff's action was affirmed, because the existence of an indispensable party who would have destroyed complete diversity rendered dismissal of the action appropriate.
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