Air-Exec, Inc. v. Two Jacks, Inc., AIR-EXE

• Decision Date: 15 September 1978
• Docket Number: INC,AIR-EXE,No. 76-1982,76-1982
• Citation: 584 F.2d 942
• Parties: , an Oklahoma Corporation, Plaintiff-Appellee, v. TWO JACKS, INC., a Tennessee Corporation, and Jack Adams, Sr., an Individual, Defendants-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 942

584 F.2d 942

AIR-EXEC, INC., an Oklahoma Corporation, Plaintiff-Appellee, v. TWO JACKS, INC., a Tennessee Corporation, and Jack Adams, Sr., an Individual, Defendants-Appellants.

No. 76-1982.

United States Court of Appeals, Tenth Circuit.

Argued and Submitted March 13, 1978.

Decided Aug. 22, 1978.

Rehearing Denied Sept. 15, 1978.

James C. Lang, Tulsa, Okl. (Brian S. Gaskill, Sneed, Lang, Trotter & Adams, Tulsa, Okl., with him on the brief), for defendants-appellants.

J. Peter Messler, Tulsa, Okl. (Phillip Breckinridge, Brown, Breckinridge & Messler, Tulsa, Okl., with him on the brief), for plaintiff-appellee.

Before SETH, Chief Judge, and McWILLIAMS and LOGAN, Circuit Judges.

LOGAN, Circuit Judge.

This is a diversity case brought by Air-Exec, Inc. against Two Jacks, Inc. and Jack Adams, Sr. (defendants or appellants) for conversion of a DC-3 airplane. A jury rendered a verdict against defendants for $60,000, and they have appealed to this Court.

The only points raised and argued here are that a Colorado partnership (Air-Exec) and a Colorado bank (Fort Carson National Bank) were indispensable parties required to be joined in the action under Fed.R.Civ.P. 19(a), and that the jury verdict did not reflect the actual decision by the jury.

The contention that the Air-Exec partnership should have been joined is based upon the fact that a security agreement giving a lien upon the airplane to Fort Carson National Bank was signed by James W. Webb and Thomas H. Collins, Jr. as partners of Air-Exec, and the title document by which plaintiff claimed title left the name of the purchaser (owner) blank. Defendants-appellants argue that after being required by this verdict to pay full value for the plane they may face a future action of the same type by the partnership or other owner. The answer to this contention with respect to joining Air-Exec, the partnership, is twofold.

First, the pretrial order contains a statement of admitted facts including the following:

b) That the plaintiff is the proper party to bring this action.

c) That the plaintiff herein through James Webb, its president, on or about the 26th day of February, 1975, did in fact purchase said aircraft from Tul-Aero, Inc., through Larry Leffingwell, president.

Unless the court modifies its pretrial order, the parties are bound by their admissions and stipulations included in the order and may not contradict its terms. 3 Moore's Federal Practice P 16.19, at 1130-1131 (2d ed. 39). Since no objections or motions to amend the pretrial order were ever made, it measures the dimensions of the lawsuit both in the trial court and on appeal. Hodgson v. Humphries, 454 F.2d 1279, 1281 (10th Cir. 1972). It is therefore inappropriate for defendants to raise upon appeal what they had previously admitted, at least inferentially, that Air-Exec was not an indispensable party.

Alternatively, we note that after overruling a motion by defendants labeled a "demurrer to the evidence" based upon the insufficiency of proof of ownership by Air-Exec, Inc. of the airplane, the court submitted the question of ownership to the jury. It gave an instruction that as one of the essential elements of the burden of proof "(t)he plaintiff must show title or ownership in itself of the property involved," and "(t)he plaintiff must prove its ownership or right of possession by a preponderance of the evidence." In rendering its verdict the jury necessarily resolved this question in favor of the plaintiff. Even though there was no direct attempt by plaintiff to prove the validity of its title, no doubt because of the pretrial order, there was in the record sufficient evidence to support the finding that Air-Exec, Inc. was the owner of the aircraft. The checks involved in the exchange by which the DC-3 was acquired were made out to Air-Exec, Inc. James W. Webb, President of Air-Exec, Inc., and also one of the partners of Air-Exec, testified that the name of the purchaser in the bill of sale was left blank because they were "about to incorporate," and he gave considerable testimony concerning payments to the Fort Carson bank and the obligation of the plaintiff to pay off that note.

Defendants-appellants claim that Air-Exec, Inc. might not pay off the loan to the Fort Carson bank, and they may be required to pay or to surrender the airplane in which the bank has a security interest. They thereby try to bring themselves within Fed.R.Civ.P. 19(a)(2)(ii), that they are "subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations." We hold their contention that the Fort Carson bank is an indispensable party is also without merit.

First, we note the bank's interest was known at the time of the pretrial order and mentioned in it. Defendants made no attempts to force it to become a party to the litigation and made no complaints about its absence until after trial. In the face of its knowledge of the bank's interest it filed no objection to the pretrial statement of admitted facts that the plaintiff is "the" proper party to bring the action. Therefore, it is...