Mackintosh v. MARKS'ESTATE, 15483.

• Decision Date: 28 September 1955
• Docket Number: No. 15483.,15483.
• Citation: 225 F.2d 211
• Parties: R. D. MACKINTOSH et al., Appellants, v. ESTATE of Henry M. MARKS et al., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

225 F.2d 211 (1955)

R. D. MACKINTOSH et al., Appellants, v. ESTATE of Henry M. MARKS et al., Appellees.

No. 15483.

United States Court of Appeals Fifth Circuit.

August 26, 1955.

Rehearing Denied September 28, 1955.

Samuel J. Tennant, Jr., New Orleans, La., Dhu Thompson, Monroe, La., for appellants.

George M. Snellings, Jr., Allen B. Guthrie, Geo. Gunby, Monroe, La., W. Dan Files, Bastrop, La., E. Leland Richardson, Baton Rouge, La., Harry B. Kelleher, Thomas F. Jordan, New Orleans, La., for appellees.

Jerome S. Hafter, Greenville, Miss., and Wood H. Thompson, Monroe, La., for Estate of Henry M. Marks, appellees.

Before HUTCHESON, Chief Judge, and RIVES and TUTTLE, Circuit Judges.

RIVES, Circuit Judge.

A troublesome question concerning indispensable parties must be decided on this appeal. Jurisdiction was based solely on diversity of citizenship. The requisite diversity existed between the parties to the original complaint, but the district court, 15 F.R.D. 332, dismissed the suit for failure of the plaintiffs to comply with the court's order that they join additional parties, whose joinder would have defeated the jurisdiction of the court.

The case made by the complaint is briefly as follows. On July 1, 1930, a deed vested an absolute or fee simple title to the "Gum Ridge Plantation" consisting of 260 acres of land in Tensas Parish, Louisiana, in the plaintiffs or their ancestors in title by blood or affinity, who continued to be the owners thereof certainly until June 26, 1940. At that time, so it was alleged, a scheme to defraud, devised and confected by Henry M. Marks and The California Company, was carried into execution. The scheme contemplated that the agents and employees of The California Company would represent to the "owners" that their title to the property was fatally defective, but that if they, the "owners" of the property, would convey it to Henry M. Marks, he would re-convey to them a one-half interest in the minerals, and that The California Company would then take a joint mineral lease from the "owners" and from "Marks" and would pay the "owners" one-half of the rentals and one-sixteenth of any production from the property. The "owners" at that time lived more than five hundred miles away from the property. Actually, Marks had no title whatever to the property nor was he in possession thereof, but it was a part of the scheme that by using an employee and representative of The California Company, a major oil company, the "owners" would be lulled into a belief that the statements made to them were true.

"On June 26, 1940 the representatives and employees of the defendant, The California Company, called upon the `owners' with two documents, one being a contract, grant, agreement and act of compromise<sup>1</sup> and the other an oil, gas and mineral lease and by making the false representations which were a part of the contemplated scheme and which representations were to the effect that Henry M. Marks had a title to the property and that the title of Henry M. Marks was superior to any title which the `owners' had, they induced the `owners' to sign both the act of compromise and the mineral lease".

In consideration of legal services rendered in connection with the transaction, Marks made transfers to defendants Dale, Wade, and Watson of certain individual interests in both the real estate and in the reserved minerals. The suit sought to set aside and annul both the compromise agreement and the mineral lease, and further also the transfers from Marks to Dale, Wade, and Watson.

The defendants moved for summary judgment on the ground of non-joinder of indispensable parties, and absence of jurisdiction if such parties were joined. On submission of the motions, it was established that there were numerous other transferees and assignees of undivided mineral and royalty interests in the property whose joinder and arrayal on either side would defeat the jurisdiction of the court.

The plaintiffs, appellants, in their motion for new trial or amendment of judgment in the district court, and in brief here, abandon their efforts to cancel the mineral lease.² As to the compromise agreement, however, and the transfers to Dale, Wade, and Watson, they insist that the court can properly render judgment either for or against each of the defendants without directly affecting persons who are not parties to the suit.³ For reasons to be stated, we agree.

After praying for cancellation of the compromise agreement and of the lease, and the return of the properties, the prayer of the complaint continued, "that in the event that it is impossible for any of the defendants to return the interest which was conveyed to them, your complainants demand the value of the said interest. That in addition thereto that your complainants demand reasonable attorney fees and exemplary damages in the amount of $100,000.00."

Plaintiffs are entitled to any relief which the facts justify even though that relief has not been asked and that theory has not been advanced in the pleadings. This Court had said that before the adoption of the Federal Rules of Civil Procedure, 28 U.S.C.A., Young & Vann Supply Co. v. Gulf, F. & A. Ry. Co., 5 Cir., 1925, 5 F.2d 421, 423; Edenborn v. Wigton, 5 Cir., 1934, 74 F.2d 374, 376; and so had the Supreme Court of the United States, Lockhart v. Leeds, 195 U.S. 427, 437, 25 S.Ct. 76, 49 L.Ed. 263; Bemis Bros. Bag Co. v. United States, 289 U.S. 28, 34, 53 S.Ct. 454, 77 L.Ed. 1011. Rule 54(c), F.R.C.P., has expanded that idea measurably:

"* * * every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in his pleadings."

In brief, appellant argues, and soundly so we think, that:

"There are two * * * reasons why the royalty owners are not indispensable parties.

"The first reason is that the rights of the royalty owners would continue to exist irrespective of the outcome of the present suit. The royalty owners who deraign their title from the appellants are protected under their warranty of title, both express and implied. As to the royalty owners who deraign their title from the appellees suffice it to say that no attempt has been made by the appellants to in any way affect their title, but, on the contrary appellants have asked for a money judgment against the defendants for the value of such royalty interests as defendants may not be able to re-convey to appellants.

"The second and more compelling reason why the royalty owners rights might not be affected regardless of the outcome of the suit is that their titles are protected by the Public Registry Act. This Act which was Act No. 7 of the Second Extra-ordinary Session for the year 1950 and which became Louisiana Revised Statute 9:2721-2723 is as follows:

* * * * *

"Since the royalty owners have acquired their various interests on the strength of the public records of which the quitclaim agreement was a part, neither appellants nor appellees could ever be heard to question the titles of these royalty owners. The title of these royalty owners are indefeasible and regardless of what judgment might be rendered in the instant case their title cannot be affected.

"We have concluded that the lease may not be set aside except with the joinder of all of the royalty interests but the cancellation of the quitclaim deed presents an entirely different situation than does the cancellation of the mineral lease. In the cancellation of the mineral lease each of the various royalty owners are affected. As was said in the case of Calcote v. Texas Pacific Coal & Oil Co., 5 Cir., 1946, 157 F.2d 216, 167 A.L.R. 413, the cancellation of the present lease would destroy their vested interest in praesenti, whereas as a declaration of its invalidity would either destroy absolutely their vested interest in virtuo or postpone the enjoyment of it indefinitely.

"The cancellation of the quitclaim and

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