The instant declaratory judgment proceeding 1 was brought by Lynch’s Estate 2 to determine whether the coverage of a public liability policy issued by the defendant, Lumbermens Mutual Casualty Company, to an owner of an automobile, one Edward S. Dutcher, extended to the deceased Donald Cionci, who was driving the car at the time it was involved in an accident. The policy by its terms extended its coverage to any person operating Dutcher’s automobile with his permission at the time of the accident. The critical fact issue to be determined in the declaratory judgment action was whether the automobile was being operated by Cionci within the scope of the permission granted to him by Dutcher when it collided with a truck driven by one *804Thomas W. Smith. Smith, Cionci and John R. Lynch, who was riding with Cionci, were killed; John Landis Harris, who was also a passenger in the Cionci car, was injured.
Lynch’s estate sued Cionei’s estate in the District Court for the Eastern District of Pennsylvania in Civil Action No. 25149, seeking damages under the Pennsylvania Wrongful Death and Survival Statutes.3 The defendant insurance company refused to defend Cionci's estate on the ground that Cionci had deviated beyond the use authorized by Dutcher, viz., to drive from Bryn Mawr to Ardmore, some two miles southeast, provided he return in half an hour, whereas Cionci had instead driven some twelve miles in an opposite direction to Media. Lynch’s estate obtained a default judgment against the Cionci estate and then brought this declaratory judgment action against the insurance company. Damages allowed on the judgment were subsequently fixed at $50,000.
Smith’s estate, which had brought suit against Dutcher and the Cionci and Lynch estates, in the Common Pleas Court of Delaware County, Pennsylvania, and Harris who had sued all three in the Delaware County Court, were joined as parties in the instant declaratory judgment action on Lumbermens’ motion. Dutcher was not joined.
At the trial in the instant declaratory judgment action, the District Court ruled that Dutcher was incompetent to testify with reference to the scope of permission granted to use his car, under the Pennsylvania Dead Man’s Act, 28 P.S. § 322, as far as the Lynch and Smith estates were concerned, on the ground that his interest was adverse to that of the two estates because the coverage of the policy was limited and he had an interest in maintaining its coverage for his own protection in view of the pending actions against him in the state court. The District Court then directed verdicts in favor of the Cionci and Lynch estates since no evidence had been introduced to rebut the Pennsylvania presumption that a dead man operates a borrowed automobile within the scope of his permissive use. Dutcher was, however, permitted to testify in the Harris phase of the trial, and the jury found that Cionci had not deviated from his permitted use of the automobile.
Pursuant to the verdicts stated the District Court entered a judgment declaring that “Donald Cionci was driving the motor vehicle owned by Edward S. Dutcher and insured by the Lumbermens Mutual Casualty Company under its policy * * * with the permission of Edward S. Dutcher * * * ” and that Cionci “was an insured as defined in the policy”.
On this appeal, Lumbermens contends that the trial judge erred (1) in ruling that Dutcher was incompetent under the Pennsylvania Dead Man’s Act as a witness against the Cionci and Lynch estates and in directing verdicts in favor of the Lynch and Smith estates; (2) in its instructions on the score of deviation in the Harris phase of the trial, and (3) “that it was impossible for the jury to consider the Harris case impartially when it had been directed to find against Lumbermens in the Lynch and Cionci cases.”
We do not reach the contentions stated because in our view we are required to vacate the Judgment of the District Court and remand with directions to dismiss the instant action for these reasons :
First, there was a failure to join an indispensable party to this action, Dutcher, the named insured in Lumbermens’ policy;
Second, the District Court erred in that in the appropriate exercise of its discretion it should have denied relief without consideration of the merits in view of the fact that two pending actions in a state court, earlier referred to, in which the here absent Dutcher, as well as the Cionci, Lynch and Smith estates, and Harris, were parties, presented the *805critical mooted question as to the coverage of Lumbermens’ policy at issue in the instant declaratory judgment action.
It must immediately be noted that the issue as to whether there was a failure to join an indispensable party to the action — Dutcher—was not presented by Lumbermens to the District Court, nor did Lumbermens urge the District Court to deny relief in the appropriate exercise of its discretion for the reasons we have stated.
First, as to the indispensable party issue:
Lumbermens’ policy was one of finite limits, undisclosed in the record as a result of the District Court’s pretrial ruling.
The District Court specifically held that the circumstance that the policy was one of finite limits made Dutcher’s “interest” in the policy “'adverse” to that of the plaintiff Lynch and Smith estates. It did so, in ruling that Dutcher was “incompetent” to testify for that reason under the Pennsylvania Dead Man’s Act insofar as the two estates were concerned. What the District Court held in that context is, of course, relevant in determining whether Dutcher was an indispensable party to the action under the indispensable party doctrine.
In its Opinion discussing its “incompeteney” ruling the District Court said:
“The subject matter of this suit is the coverage of Lumbermens’ policy issued to Dutcher. Depending upon the outcome of this trial, Dutcher may have the policy all to himself or he may have to share its coverage with the Cionci Estate, thereby extending the availability of the proceeds of the policy to satisfy verdicts and judgments in favor of the two Estate plaintiffs. Sharing the coverage of a policy of insurance with finite limits with another, and thereby making that policy available to claimants against that other person is immediately worth less than having the coverage of such policy available to Dutcher alone. By the outcome in the instant case, to the extent that the two Estate plaintiffs will have the proceeds of the policy available to them in their claims against Cionci’s estate, Dutcher will lose a measure of protection. Conversely, to the extent that the proceeds of this policy are not available to the two Estate plaintiffs Dutcher will gain. * * * It is sufficient for the purpose of determining adversity [of interest] that it appears clearly that the measure of Dutcher’s protection under this policy of insurance is dependent upon the outcome of this suit. That being so, Dutcher’s interest in these proceedings is adverse to the interest of the two Estate plaintiffs, the parties who represent, on this record, the interests of the deceased persons in the matter in controversy.” (Emphasis supplied.) 218 F.Supp. 802, 805-806 (E.D.Pa.1963).
It has been settled for more than a century and a half that a party is indispensable when his rights may be affected and that a court “cannot proceed to a final decision of the cause” until he is made a party. Russell v. Clark’s Executors, 7 Cranch 69, 98, 3 L.Ed. 271 (1812).
The indispensable party doctrine is not procedural. It declares substantive law and accords a substantive right to a person to be joined as a party to an action when his interests or rights may be affected by its outcome. The indispensable party doctrine is beyond the reach of, and not affected by, Rule 19 of the Federal Rules of Civil Procedure, since the Rules, as later developed, cannot “abridge, enlarge or modify any substantive right”. 28 U.S.C.A. § 2072 (emphasis supplied).
Time and again, in cases later discussed, federal courts have held that Rule 19 does not apply to the indispensable party doctrine. Indeed,, as subsequently developed, Rule 19 specifically excludes from its sweep “indispensable parties”, and Rule 12(b) in terms provides for dismissal of an action for “failure to join an indispensable party”.
*806There is no precedent which affords nourishment to a contention that the indispensable party doctrine is nothing more than a procedural rule within the ambit of Rule 19.
It is true that several text writers have summarily treated the indispensable party doctrine as a procedural rule without considering whether it attains the proportion of substantive law. The existence of the threshold question as to whether the indispensable party doctrine is one of substantive law was, however, recently noted by Howard P. Fink, Research Associate, Yale Law School, in his article on “Indispensable Parties and the Proposed Amendment to Federal Rule 19.” 4
Exhaustive research has failed t.o yield a case in which the precise issue as to whether the indispensable party doctrine is one of substantive law has been raised or decided. However, Chief Judge Aid-rich of the First Circuit in a recent case 5 noted “the view that what are indispensable parties is a matter of substance, not of procedure.” (Emphasis supplied.)
Our view that the indispensable party doctrine is substantive law, according a substantive right to an absent party to be joined when his interests may be “affected by the decree”, is premised on Russell v. Clark’s Executors, supra, and the cases which declared the doctrine to be a “settled rule of equity jurisprudence”, and the absence of an affected party as “fatal error”, which must be recognized sua sponte by a trial court.
In Mallow v. Hinde, 12 Wheat. 193, 6 L.Ed. 599 (1827), which distinguished and limited to its facts, Elmendorf v. Taylor, 10 Wheat. 152, 6 L.Ed. 289 (1825), the Court in holding absent parties indispensable, said at page 198:
“In this case, the complainants have no rights separable from, and independent of, the rights of persons not made parties. The rights of those not before the court lie at the very foundation of the claim of right by the plaintiffs, and a final decision cannot be made between the parties litigant without directly affecting and prejudicing the rights of others not made parties.” (Emphasis supplied)
“We do not put this case upon the ground of jurisdiction, but upon a much broader ground. * * * We put it on the ground that no court can adjudicate directly upon a person’s right, without the party being either actually or constructively before the Court.” (Emphasis supplied.)
In 1853, in Northern Indiana Railroad Company v. Michigan Central Railroad Company, 15 How. 233, 246, 14 L.Ed. 674, the Court, upon its finding that “It is impossible to grant the relief prayed, without deeply affecting the New Albany Company [which had not been joined],” declared:
“ * * * in a case like the present, where a court cannot but see that the interest of the New Albany Company must be vitally affected, if the relief prayed by the complainants be given, the court must refuse to exercise jurisdiction in the case, or become the instrument of injustice.” (Emphasis supplied.)
In 1854, this classic definition of an indispensable party was enunciated in the landmark case of Shields v. Barrow, 17 How. 130, at page 139, 15 L.Ed. 158:
“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.” (Emphasis supplied.) 6
*807In 1870, it was ruled, in Hoe v. Wilson, 9 Wall. 501, 19 L.Ed. 762, that a court must sua sponte invoke the indispensable party issue even though it was not raised by a party.
There the Court said, at page 504:
“No relief can be given in the case before us which will not seriously and permanently affect their rights and interests. According to the settled rules of equity jurisprudence, the case cannot proceed without their presence before the court. The objection was not taken by the defendant, but the court should, sua sponte, have caused the bill to be properly amended, or have dismissed it, if the amendment were not made.” (Emphasis supplied.)
In 1874, the indispensable party doctrine was admirably epitomized in Williams v. Bankhead, 19 Wall. 563, 22 L.Ed. 184, in this statement (p. 571):
“Where a person will be directly affected by a decree, he is an indispensable party. * * * ”
In the oft-quoted State of Washington v. United States, 87 F.2d 421 (9 Cir. 1936), there was enunciated what has now become landmark criteria in testing whether a party is indispensable, after it has been determined that he is interested.
The four-fold criteria there stated, at pages 427, 428, follows:
“(1) Is the interest of the absent party distinct and severable?
“(2) In the absence of such party, can the court render justice between the parties before it?
“(3) Will the decree made, in the absence of such party, have no injurious effect on the interest of such absent party?
“(4) Will the final determination, in the absence of such party, be consistent with equity and good conscience?
“If, after the court determines that an absent party is interested in the controversy, it finds that all of the four questions outlined above are answered in the affirmative with respect to the absent party’s interest, then such absent party is a necessary party. However, if any one of the four questions is answered in the negative, then the absent party is indispensable.” (Emphasis supplied.)
It is important to note, that in its discussion of the indispensable party question, the Court said, at pages 427, 428:
“In cases where there is error in nonjoinder of parties, either necessary or indispensable, the courts have fallen into common error by designating the error as ‘jurisdictional’. The defect is not, properly speaking, a jurisdictional one * * *.
“[T]he nonjoinder of an indispensable party is fatal error, and the court cannot proceed to a decree in the absence of such indispensable party, notwithstanding the fact that the joinder would oust the court of jurisdiction. Neither the statute [Act of March 3, 1911, ch. 231 § 50, 36 Stat. 1101] nor the equity rule [Rule 39 of the Equity Rules of 1912, 28 U.S.C.A. following section 723], * * * permit the court to proceed in the absence of an indispensable party.” (Emphasis supplied.)
The indispensable party doctrine as declared in Shields and State of Washington was applied in Commonwealth Trust Company of Pittsburg v. Smith, 266 U.S. 152, 45 S.Ct. 26, 69 L.Ed. 219 (1924) and Niles-Bement-Pond Company v. Iron Moulders’ Union Local No. 68, 254 U.S. 77, 41 S.Ct. 39, 65 L.Ed. 145 (1920).
This court has time and again likewise done so.
In Samuel Goldwyn, Inc. v. United Artists Corporation, 113 F.2d 703 *808(1940), we held that an absent party is indispensable if his interest is “joint” with that of either plaintiff or defendant, and that the doctrine applies to declaratory judgment actions.
In Baird v. Peoples Bank & Trust Co. of Westfield, 120 F.2d 1001, 136 A.L.R. 693 (1941), we specifically held, citing Shields and State of Washington, that an absent party is indispensable, “if the decree will have an injurious effect upon his interest.” We there affirmed the District Court’s dismissal of a complaint in an action brought by life tenants insofar as it related to the corpus of a trust fund, for failure to join remaindermen who were found to be indispensable parties.
In United States v. Washington Institute of Technology, Inc., 138 F.2d 25 (1943), in affirming the District Court’s dismissal of an action for nonjoinder of an indispensable party, we ruled that the requirement in Rule 19(a) that those who have a “joint interest” must be joined referred to parties who were “indispensable” prior to the Rule.
In doing so we said at pages 25-26: “Rule 19(a) of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c, requires that those having ‘a joint interest shall be made parties * * *.’ This means those who were indispensable parties prior to the rules. 2 Moore’s Federal Practice (1938) § 19.02. As described in the leading case upon the matter, they were persons who had such an interest that any final decree rendered had to affect that interest. Shields v. Barrow, 1854, 17 How. 130, 15 L.Ed. 158.” (Emphasis supplied.)
In Chidester v. City of Newark, 162 F.2d 598 (1947), we again declared (p. 600):
“ * * * indispensable parties under Rule 19 are those who were indispensable prior to the rules; they have such an interest in the controversy that a final decree cannot be made without either affecting their interests or leaving the controversy in such a condition that a final determination may be wholly inconsistent with equity and good conscience.” (Emphasis supplied.)
And, in Hook v. Hook & Ackerman, 187 F.2d 52 (1951), we stated in note 7, page 60:
“Rule 19(a) uses the term ‘joint interest’, stating that those having such an interest ‘must’ be joined. This provision applies to parties who were indispensable under the previous practice.” (Emphasis supplied.)
The courts of appeals in other circuits have in recent years attested to the continuing unimpaired vitality of the indispensable party doctrine as declared in Shields and the Supreme Court cases which preceded and followed it.
In 1964, the First Circuit, in Stevens v. Loomis, 334 F.2d 775, declared (p. 777): “where the interests of the absent party are inextricably tied in to the cause” he is a “true indispensable party” and “A court cannot proceed in the absence of an indispensable party.”7 (Emphasis supplied.)
Again, in 1964, the Fifth Circuit, in Hilton v. Atlantic Refining Company, 327 F.2d 217, in citing and applying Shields and Mallow v. Hinde, supra, declared (p. 218):
“An indispensable party is one whose relationship to the matter in controversy in a suit in equity is such that no effective decree can be entered without affecting his rights.” (Emphasis supplied.)
In 1961, the Ninth Circuit, in Stumpf v. Fidelity Gas Co., 294 F.2d 886, in holding that absent parties were not there indispensable because, inter alia, the judgment sought in the action “would have no injurious effect upon the interest of any absent party”, applied the criteria for testing whether an absent party is indispensable which had been laid *809down in State of Washington v. United States, supra. (Emphasis supplied.)
In 1960, the indispensable party doctrine was applied, in a situation strikingly analogous in critical respects to that prevailing here, in United States v. Fried, 183 F.Supp. 371 (E.D.N.Y.).8 Fried was insured under eight life insurance policies of the New York Life Insurance Company. The United States, which had an income tax lien against Fried, brought an action against him and the insurance company seeking a judgment directing the insurer to pay to the government the cash surrender value of three of the policies and the disability benefits due Fried under the five other policies. One llene Fried was the named beneficiary in the eight policies. Fried had reserved in the policies the right to receive their cash surrender value and to change his beneficiary. The District Court, nevertheless, held that the beneficiary was an indispensable party under Shields, stating at page 373:
“The granting of the Government’s prayer for relief will either diminish or completely extinguish her rights as beneficiary. It is apparent, therefore, that the case at bar is governed by the rule of Shields v. Barrow, supra, and that the beneficiary is an indispensable party to this action.” 9 (Emphasis supplied.)
It must also be noted that it has been held (1) “there is a complete identity of interest as between the insurance carrier and [the insured]” under an automobile liability insurance policy of the type involved in the instant case, Fireman’s Fund Insurance Company v. Dunlap, 317 F.2d 443, 446 (4 Cir. 1963); and (2) since “The interests of the insurer and insured are identical” their “interests” are “joint”: State Farm Mut. Automobile Ins. Co. v. Hugee, 115 F.2d 298, 302, 132 A.L.R. 188 (4 Cir. 1940).
What has been said establishes that under settled law, it was mandatory upon the District Court not to proceed to a decree in this action in view of the fact that its finding as to the action’s potential drastic effect upon Dutcher made him an indispensable party.
The distilled essence of the cases discussed is that one whose interests or rights will be adversely affected by the outcome of an action has a substantive right to be joined as a party, and that the right forecloses a trial court from proceeding “to a final decision of the cause” until he is joined as a party.
“Equitable principles”, standing alone, cannot be recruited to thwart or avoid the impact of the indispensable party doctrine where “a decree will have an injurious effect upon the interest” of an absent party. Equitable considerations are an element of the criteria to be applied in determining whether a party is indispensable but they are not operative where the element of “injurious effect on the interest of such absent party” is present. State of Washington v. United States, supra.
A declaratory judgment proceeding cannot be viewed as an action “equitable in nature”. It was settled by Aetna Life Insurance Company of Hartford, Conn. v. Haworth, 300 U.S. 227, 240-241, 57 S.Ct. 461, 463-464, 81 L.Ed. 617 (1937) that “the operation of the Declaratory Judgment Act is procedural only” and that the Act was designed to afford “an immediate and definitive determination of the legal rights of the parties.” (Emphasis supplied.)
The ‘‘procedural limitations” of the Declaratory Judgment Act were re-asserted in Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 672, 70 S.Ct. 876, 94 L.Ed. 1194 (1950).
The cases cited in support of the view that (1) a declaratory judgment proceeding “is equitable in nature”, and (2) “equitable principles” prevail in the determination of the fact whether an ab*810sent party is “indispensable”, afford neither support nor nourishment to that view.
Neither A. L. Mechling Barge Lines, Inc. v. United States, 368 U.S. 324, 82 S.Ct. 337, 7 L.Ed.2d 317 (1961), nor Brillhart v. Excess Insurance Company, 316 U.S. 491, 62 S.Ct. 1173, 86 L.Ed. 1620 (1961), cited in support of the first point, even remotely suggest that declaratory judgment proceedings are “equitable in nature.”
Three other cases, subsequently discussed, cited in support of the second point are inapposite on their facts. First and foremost, all three were actions in equity and not declaratory judgment proceedings; second, in two, equitable relief was granted on express findings that such relief would not “injuriously affect the interest” of an absent party, and in the third, relief was denied for the reason that absent parties were “indispensable” because their interests would be affected.
In Payne v. Hook, 7 Wall. 425, 19 L.Ed. 260 (1868) it was merely held that an heir could sue the administrator of her brother’s estate for alleged misconduct without joining other heirs since the trial court could have proceeded to a decree “without injury” to the absent heirs, because “the controversy is not with them, but with the administrator and his sureties”, and further, the absent heirs would in fact reap the benefits of the action.
There is nothing in Payne which justifies its citation as a flexible and imaginative adaptation of remedies in disregard of the indispensable party doctrine, or as a “relaxation” of that doctrine.
Nor does Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 84 S.Ct. 923, 11 L.Ed.2d 804 (1964). justify its citation as an instance of a “relaxation” of the indispensable party doctrine. There, the Supreme Court only held that it would not grant a motion to be formally joined as a party to a pending appeal because the movant “has been permitted as amicus to brief and argue its position before this Court”, and “In these circumstances we are not persuaded that the admission of C.A.V. [the movant] as a party is necessary at this stage to safeguard any claim either that it has already presented or that it may present in the future course of this litigation”. (Emphasis supplied.)
Similarly, in Waterman v. Canal-Louisiana Bank & Trust Company, 215 U.S. 33, 30 S.Ct. 10, 54 L.Ed. 80 (1909) where a bill in equity sought to determine the interest of an heir in an alleged lapsed legacy and the consequent increase in the residuary estate, it was held that an absent nonresident heir could not be regarded as an indispensable party whose absence would defeat the jurisdiction of a court in equity, because the decree sought could be entered “without prejudice to the rights” of the absent heir.
In so holding the Court said (p. 49, 30 S.Ct. p. 14):
“The relation of an indispensable party to the suit must be such that no decree can be entered in the case which will do justice between the parties actually before the court without injuriously affecting the rights of such absent party.
“If the court can do justice to the parties before it without injuring absent persons, it will do so, and shape its relief in such a manner as to preserve the rights of the persons not before the court. * * *
“ * * * while Davis [the absent heir] is a necessary party, in the sense that he has an interest in the controversy, his interest is not that of an indispensable party, without whose presence a court of equity cannot do justice between the parties before it, and whose interest must be so affected by any decree to be rendered as to oust the jurisdiction of the court”. (Emphasis supplied.)
In Roos v. Texas Co., 23 F.2d 171 (2 Cir. 1927), cert. den. 277 U.S. 587, 48 S.Ct. 434, 72 L.Ed. 1001 (1928), also *811cited, the Court affirmed the District Court’s dismissal of a bill in equity which sought an accounting, on the ground of absence of indispensable parties whose interests would be affected by the outcome of the action.
In doing so, Judge Learned Hand, speaking for the Court, said (p. 173):
“ * * * the case appears to us to be one where the rights of the beneficiaries [in proceeds of a lease] are so entangled with one another that it is practically impossible in the decree to protect those who are absent. They are indispensable to any dealing with the case at all.” (Emphasis supplied.)
There is nothing in Judge Hand’s opinion which affords an iota of support for the view that he considered the feasibility of fashioning a decree adequate to preserve an attorneys’ lien so that the suit might proceed notwithstanding their absence as parties. The fact of the matter is that Judge Hand rejected the notion that a decree could be entered impounding proceeds of the lease, on the ground that such action would be “in substance a denial of any relief at all.”
As in Roos v. Texas Co., supra, the instant case is “one where the rights” asserted by those seeking recourse to the benefits of Dutcher’s policy, and Dutch-er’s rights to the protection accorded to him by the policy, “are so entangled with one another that it is practically impossible in the decree to protect those who are absent [Dutcher]” and he is, accordingly, ‘‘indispensable to any dealing with the case at all.” (Emphasis supplied.)
Coming now to the minority’s view that the indispensable party doctrine is nothing more than a “procedural rule”, within the ambit of Rule 19 of the Federal Rules:
It must immediately be observed, on this score, that the minority has failed to note that Rule 12(b) (7) provides in explicit terms that a claim must be dismissed for “failure to join an indispensable party”10, and that Rule 19, in terms, relates only to “necessary parties” and specifically excludes from its sweep “indispensable parties.” 11
Rules 12 and 19 preserve rights accorded by the indispensable party doctrine. They afford no basis for the view that Rule 19 may be resorted to in determining whether there has been a failure to join an indispensable party.
It was squarely held in Calcote v. Texas Pac. Coal & Oil Co., 157 F.2d 216, 167 A.L.R. 413, (5 Cir. 1946), cert. den. 329 U.S. 782, 67 S.Ct. 205, 91 L.Ed. 671 that Rule 19 does not apply to indispensable parties.
It was there said (p. 219):
“Section 50 of the Judicial Code [Act of March 3, 1911, c. 2317] and rule 19(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 732c, do not apply to indispensable parties, who must be made parties to the suit even though this will defeat federal jurisdiction”. (Emphasis supplied.)
Further, the Court in denying a petition for rehearing said (p. 225):
“ * * * eVery indispensable party must be brought into court, actually or constructively, or the suit will be dismissed if a substantial claim is stated in the complaint. It is axiomatic that indispensable parties cannot be dispensed with in diversity cases even though their presence will defeat federal jurisdiction.”
*812The Court's citation, in Calcóte in note 3 page 225, of Dobie on Federal Procedure is of critical relevance in view of the fact that Judge Dobie therein specifically declared that both Section 50 of the Judicial Code and Equity Rule 39, predecessor of Rule 19 of the Federal Rules, “do not apply to indispensable parties.”
At pages 217-218 of his admirable treatise, Judge Dobie said:
“An indispensable party is one without whom the suit cannot proceed, one in whose absence the court could not enter a decree. His relation to the suit is so direct and vital that without him no adequate decree could be entered, determining the rights of other parties. Even in his absence, any decree would affect his interest. It is therefore clear that such parties must of necessity be before the court. Accordingly, section 50 of the Judicial Code (28 USCA §111) and equity rule 39 do not apply to indispensable parties, who must be parties to the suit, even though this will defeat the federal jurisdiction. There can be no dispensing with indispensable parties. “Thus if A, B, and C each separately claim all of an entire fund, they are all indispensable parties to a suit concerning the disposition of the fund; for an award of any part of the fund to one is necessarily a decision, as to this part, against the other two.” (Emphasis supplied.)
In Young v. Powell, 179 F.2d 147 (5 Cir. 1950), cert. den. 339 U.S. 948, 70 S.Ct. 804, 94 L.Ed. 1362, it was held that Rule 19 requires dismissal of an action where an indispensable party has not been joined.
The view that Rule 19 sets the standard by which the existence of an indispensable party may be determined was specifically rejected in Stumpf v. Fidelity Gas Co., 294 F.2d 886 (9 Cir. 1961).
There the Court said (p. 890):
“This brings us to the question whether the omitted parties here are indispensable within the meaning of that term and as defined in the adjudicated cases. It is not sufficient for a defendant to demonstrate that these persons would be ‘proper’ or ‘necessary’ parties within the meaning of Rule 19, F.R.Civ.P., 28 U.S.C.A. Those rules were not intended to and did not effect any alteration in the standards by which the existence of an indispensable party may be determined.” (Emphasis supplied.)
Rule 19 does not, and cannot, effect any alteration, either by way of modification or extension, in the standards by which the existence of an indispensable party may be determined.
The Rule neither' “giveth nor taketh away” the substantive right of an absent party whose interest may be directly affected by a judgment to be joined as a party to the action. The federal statute enabling the Supreme Court to promulgate the Rules of Civil Procedure commands that “Such rules shall not abridge, enlarge or modify any substantive right.”12 (Emphasis supplied.)
The principle that rules of federal practice do not apply to indispensable parties was first declared in Shields. It was there said at 17 How. 139:
“Neither the Act of Congress of February 28, 1839, 5 Stat. at L. 321, sec. 1, nor the k7th rule for the equity practice of the circuit courts of the United States, enables a circuit court to make a decree in equity, in the absence of *813an indispensable party, whose rights must necessarily be affected by such a decree.” (Emphasis supplied.)
And at pages 141-142 it was said:
“So that, while this Act removed any difficulty as to jurisdiction, between competent parties, regularly served with process, it does not attempt to displace that principle of jurisprudence on which the court rested the case last mentioned [Mallow v. Hinde, 12 Wh. 198, 6 L.Ed. 599]. And the 47th rule is only a declaration for the government of practitioners and courts, of the effect of this Act of Congress, and of the previous decisions of the court, on the subject of that rule. Hagan v. Walker, 14 How. 36 [14 L.Ed. 312]. It remains true, notwithstanding the Act of Congress and the 47th rule, that a circuit court can make no decree affecting the rights of an absent person, and can make no decree between the parties before it, which so far involves or depends upon the rights of an absent person, that complete and final justice cannot be done between the parties to the suit without affecting those rights.” (Emphasis supplied.)
The leading case of State of Washington v. United States, supra, held to the same effect, stating at 87 F.2d 428:
“Neither the statute nor the equity rule * * * permit the court to proceed in the absence of an indispensable party.”
That rules of practice cannot “abrogate or modify the substantive law” was declared in Washington-Southern Navigation Company v. Baltimore & Philadelphia Steamboat Company, 263 U.S. 629, 44 S.Ct. 220, 68 L.Ed. 480 (1924). There, the Court was asked to construe the sweep of Rule 50 of the then new Admiralty Rules, promulgated in 1920.
Mr. Justice Brandéis, speaking for the Court, said (pp. 635-636, 44 S.Ct. p. 222) :
“The function of rules is to regulate the practice of the court and to facilitate the transaction of its business. This function embraces, among other things, the regulation of the forms, operation and effect of process; and the prescribing of forms, modes and times for proceedings. * * * But no rule of court can enlarge or restrict jurisdiction. Nor can a rule abrogate or modify the substantive law. This is true, whether the court to which the rules apply be one of law, of equity or of admiralty. It is true of rules of practice prescribed by this court for inferior tribunals, as it is of those rules which lower courts make for their own guidance under authority conferred.” (Emphasis supplied.)
The present Federal Rules of Civil Procedure, promulgated by the Supreme Court under the authority of the Act of June 19, 1934,13 and its subsequent amendments,14 are restricted in their operation to matters of pleading and procedure and they “do not modify, abridge or enlarge substantive rights.”
The Supreme Court has so held in Sibbach v. Wilson & Co., Inc., 312 U.S. 1, 61 S.Ct. 422, 89 L.Ed. 479 (1941) and United States v. Sherwood, 312 U.S. 584, 61 S.Ct. 767, 85 L.Ed. 1058 (1941).
In Sibbach the Court said at pages 7 and 8, 61 S.Ct. at page 423:
“The Rules of Civil Procedure were promulgated under the authority of the Act of June 19, 1934, which is: “‘Be it enacted * * * That the Supreme Court of the United States shall have the power to prescribe, by general rules, for the district courts of the United States and for the courts of the District of Columbia, the forms of process, writs, pleadings, and motions, and the practice and procedure in civil actions at law. Said rules shall neither abridge, enlarge, nor modify the substantive rights of any litigant. * * ■* >»
and at page 10, 61 S.Ct. at page 424:
“Hence we conclude that the Act of June 19, 1934, was purposely restricted in its operation to matters of plead*814ing and court practice and procedure. Its two provisos or caveats emphasize this restriction. The first, is that the court shall not ‘abridge, enlarge, nor modify substantive rights’, in the guise of regulating procedure.” (Emphasis supplied.)
In United States v. Sherwood, supra, the Court said (pp. 589-590, 61 S.Ct. p. 771):
“An authority conferred upon a court to make rules of procedure for the exercise of its jurisdiction is not an authority to enlarge that jurisdiction; and the Act of June 19, 1934, 48 Stat. 1064, 28 U.S.C. 723b, authorizing this Court to prescribe rules of procedure in civil actions gave it no authority to modify, abridge or enlarge the substantive rights of litigants or to enlarge or diminish the jurisdiction of federal courts.” (Emphasis supplied.)
In Perry v. Allen, 239 F.2d 107 (5 Cir. 1956), it was held that the then existing provision in Rule 25(a) (1) F.R.Civ.P. requiring substitution within two years after the death of a party “is invalid insofar as it attempts to abridge appellant’s substantive right to bring his civil action to trial on its merits, by placing a categorical and inflexible time limit upon his right to substitute the collector’s administrator.” (emphasis supplied) (p. 112).
The Court prefaced its holding with this statement (pp. 111-112):
“It is plain that these Rules are designed to provide the machinery for the administration of justice, the modes of proceeding by which legal rights are enforced; and do not purport to deal with the law which gives or defines such rights, or their character, or the existence or boundaries of the remedies vouchsafed for the establishment of those rights. * * * ” (Emphasis supplied.)
It may be noted parenthetically that the condemned provision in Rule 25(a) (1), requiring substitution within two years after the death of a party, was deleted in 1963 by amendment.
The “procedural nature” of the Federal Rules of Civil Procedure, and their sterility with respect to matters of substantive right was noted in United States for Use and Benefit of Greenville Equip. Co. v. United States Casualty Company, 218 F.Supp. 653 (D.Del.1962). It was there said (p. 656):
“First, the suit, of course, is filed pursuant to the Federal Rules of Civil Procedure. Those Rules, as the name indicates, are of a procedural nature, leaving matters of substantive right to be otherwise determined.” (Emphasis supplied.)
These final observations are in order in concluding discussion of the indispensable party issue:
The command of the indispensable party doctrine that a “court cannot proceed to a final decision” where an absent party “may be so much affected by the decree” 15 is bare of “ifs, ands, and buts” and it has been given effect in more than three hundred cases in federal and state courts.
Coming now, and as briefly as possible, to our view that the District Court should have denied relief by way of declaratory judgment, without consideration of the merits, in the appropriate exercise of its discretion, since two pending actions in a state court, in which Dutcher and all the persons involved in the accident were parties, presented the mooted question as to the coverage of the policy.
At the time the instant declaratory judgment proceeding came to trial there had been pending for almost two years in the Common Pleas Court of Delaware County, two actions arising out of the collision between Dutcher’s car and a truck operated by Smith. In one, the Smith estate sued Dutcher and the Lynch and Cionci estates; in the other, Harris sued them. The complaint in each action alleged that Cionci was driving at the *815time of the accident with Dutcher’s permission and on his business and that Cionei was under Lynch’s “control”.
Since Cionci’s estate was admittedly insolvent, Smith’s estate and Harris, if they succeeded in obtaining verdicts against it, could only realize on their verdicts if the coverage of Dutcher’s policy extended to Cionei. And of course, any verdicts they obtained against Dutcher would also involve recourse to the protection of his policy.
The Delaware County court in trying the two actions would have been required, as was the District Court, to rule on the question as to whether the Pennsylvania Dead Man’s Rule would operate to bar Dutcher from testifying with respect to the scope of the permission which he had granted to Cionei and/or Lynch for the use of his car. The dimensions of the problem attending resolution of this question are attested to by the fact that District Judge Van Dusen, in the pre-trial stages of the instant action, held that the Dead Man’s Rule did not preclude Dutcher’s testimony while District Judge Luongo, who presided at the trial, ruled to the contrary.
It may be noted parenthetically that Dutcher, Cionei, Lynch, Smith and Harris were by coincidence all residents of Bryn Mawr, Pennsylvania, near the scene of the accident.
The considerations stated inescapably lead to the conclusion that the District Court erred in disregarding them, and in failing to dismiss the declaratory judgment action by reason of their existence. We are charged with the duty to rule on the issue as to whether the District Court abused its discretion even though it failed to recognize that the question of exercise of discretion was presented by the facts. As was said in A. L. Mechling Barge Lines, Inc. v. United States, supra, 368 U.S. at page 331, 82 S.Ct. at page 342:
“Declaratory judgment is a remedy committed to judicial discretion. Nor need this Court first have the view of a lower court before it may decide that such discretion ought not be exercised.” (Emphasis supplied.)
The Supreme Court has laid down these guide-lines with respect to a district court’s exercise of discretion in a declaratory judgment action:
“Federal courts unll not seize litigations from state courts merely because one, normally a defendant, goes to federal court to begin his federal-law defense before the state court begins the case under state law.” Public Service Commission of Utah v. Wycoff Company, Inc., 344 U.S. 237, 248, 73 S.Ct. 236, 243, 97 L.Ed. 291 (1952) (Emphasis supplied.)
******
“Where a District Court is presented with a claim such as was made here [to declare rights under an insurance policy], it should ascertain whether the questions in controversy between the parties to the federal suit, and which are not foreclosed under the applicable substantive law, can better be settled in the proceeding pending in the state court. This may entail inquiry into the scope of the pending state court proceeding and the nature of defenses open here. The federal court may have to consider whether the claims of all parties in interest can satisfactorily be adjudicated in that proceeding, whether necessary parties have been joined, whether such parties are amenable to process in that proceeding, etc.” Brillhart, Administrator v. Excess Insurance Company of America, 316 U.S. 491, 495, 62 S.Ct. 1173, 1176, 86 L.Ed. 1620 (1942) (Emphasis supplied.)
The stated guide-lines were applied in Doby v. Brown, 232 F.2d 504 (4 Cir. 1956), where the dismissal of a declaratory judgment action was affirmed. There the late Chief Judge Parker, speaking for the Court, said at page 506:
“In so far as the suit asked a declaratory judgment, and plaintiffs’ brief in this court asserts that it was instituted under the Declaratory Judgments Act, 28 U.S.C. § 2201, it is well *816setüed that the granting of declaratory relief is a matter resting in the sound discretion of the trial judge and that it ought not be exercised to try a case piecemeal or to drag into the federal courts matters properly triable before the courts of the state.” (Emphasis supplied.)
In the instant case the District Court did not give effect to the guide-lines established in the foregoing cases and improvidently exercised its discretion in failing to deny relief without consideration of the merits.
For that reason, and the further reason that there was a failure to join an indispensable party to this action— Dutcher, the named insured in Lumbermens’ policy — the Judgment of the District Court will be vacated and the cause remanded with directions to dismiss the action.16
. The action is premised on Section 2201 of the Declaratory Judgment Act, 28 U.S. C.A. which provides in relevant part as follows:
“In a case of actual controversy within its jurisdiction, * * * any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.” (Emphasis supplied.)
. For simplicity, the name of the representative of the Lynch Estate, namely, Provident Tradesmens Bank and Trust Company, is omitted.
. See 12 P.S. §§ 1601,1602, Wrongful Death Act, and 20 P.S. § 320.601, Survival Act.
. 74 Yale Law Journal 403, 430-431 (1965).
. Stevens v. Loomis, 334 F.2d 775, 778, Note 7 (1 Cir. 1964).
. In 1868, in applying the Shields doctrine, in Barney v. Baltimore City, 6 Wall. 280, 18 L.Ed. 825, the Court, after defining indispensable parties as those “whose interests in the subject-matter of the suit, *807and in the relief sought, are so hound up with that of the other parties, that their legal presence as parties to the proceeding is an absolute necessity, without which the court cannot proceed,” added this stricture :
“In such cases the court refuses to entertain the suit, when these parties cannot be subjected to the jurisdiction”. (Emphasis supplied.) (p. 284.)
. In Stevens it was held that the absent party was only a “necessary” party because it was not within the “classic definition of an indispensable party.”
. Aff’d on other grounds, 309 F.2d 851 (2 Cir. 1962).
. The District Court in that case ordered the dismissal oí the complaint should the government fail to join the beneficiary as a party defendant.
. Rule 12(b) provides in relevant part:
“Every defense * * * to a claim for relief in any pleading * * * shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at tlie option of the pleader be made by motion * * * (7) failure to join an indispensable party.”
. Rule 19, captioned “Necessary Joinder of Parties”, provides in relevant part, in sub-division (b) :
“Effect of Failure to Join :
“When persons who are not indispensable * *
. The enabling Act of June 19, 1934, as amended, 28 U.S.C.A. § 2072, provides in relevant part:
“The Supreme Court shall have the power to prescribe, by general rules, the forms of process, writs, pleadings, and motions, and the practice and procedure of the district courts of the United States in civil actions. “Such rules shall not abridge, enlarge or modify any substantive right and shall preserve the right of trial by jury as at common law and as declared by the Seventh Amendment to the Constitution.”
. 48 Stat. 1064, 28 Ü.S.C.A. § 723b.
. 28 U.S.C.A. § 2072.
. Russell v. Clark’s Executors, 7 Cranch 69, 98, 3 L.Ed. 271 (1812).
. This, too, must be said with respect to the minority’s view that the interests of Dutcher — the absent indispensable party —can be “protected” by fashioning a decree which would stay the execution of the District Court’s present declaratory judgment until Dutcher shall have had a full opportunity, either in the District Court or in a state court, to present any claims he may have to the protection of Lumbermens’ policy as a result of the determination of the state court actions against him:
A declaratory judgment under Section 2201 must be of a “conclusive character” and “an immediate and definitive determination of the legal rights of the parties". Aetna Life Insurance Co. of Hartford, Conn. v. Haworth, 300 U.S. 227, 241, 57 S.Ct. 461, 464, 81 L.Ed. 617 (1937). It must “settle legal rights and remove uncertainty and insecurity from legal relationships" and “[i]i should not he accorded * * * to try a controversy hy piecemeal, or to try particular issues without settling the entire controversy, or to interfere with an action which has already heen instituted." Aetna Casualty & Surety Co. v. Quarles, 92 F.2d 321, 325 (4 Cir. 1937). (Emphasis supplied.)
The suggested decree not only fails to conclusively and definitely determine and settle the legal rights of the parties to this action, and “remove uncertainty and insecurity from legal relationships”, but it specifically makes legal rights and legal relationships of the parties contingent and conditional upon events still to transpire, viz., the unpredictable future outcome (1) of the pending actions in the state court brought by the Smith estate and Harris against the Lynch and Oionci estates, and the here absent Dutcher, and (2) any further proceeding in the District Court in which Dutcher should present his claims to the protection of Lumbermens’ policy.
The suggested decree not only transgresses the permissible limits of the Declaratory Judgment Act and offends its design, but its conditional and contingent provisions are “in substance a denial of any relief at all [to the plaintiffs],” as was said by Judge Learned Hand in Roos v. Texas Co., 23 F.2d 171, 173 (2 Cir. 1927), cert. den. 277 U.S. 587, 48 S.Ct. 434, 72 L.Ed. 1001 (1928), in refusing to enter the there suggested decree.
As was well said in Doehler Metal Furniture Co. v. Warren, 76 U.S.App.D.C. 60, 129 F.2d 43, at page 46 (1942), cert. den. 317 U.S. 663, 63 S.Ct. 64, 87 L.Ed. 533:
“The giving of a declaratory judgment in this case would be in effect an unwarranted enlargement of the District Court’s jurisdiction. * * *. It is well enough to he attuned to the use of new remedial concepts, hut it is something else to increase jurisdiction beyond the other provisions of law hy a clever use of remedies.” (Emphasis supplied.)