Milliken v. Transcontinental Oil Co.

• Decision Date: 23 February 1928
• Docket Number: No. 1774.,1774.
• Citation: 55 F. Supp. 381
• Parties: MILLIKEN v. TRANSCONTINENTAL OIL CO. et al.
• Court: U.S. District Court — District of Wyoming

55 F. Supp. 381

MILLIKEN v. TRANSCONTINENTAL OIL CO. et al.

No. 1774.

District Court, D. Wyoming.

February 23, 1928.

Dillon, Ellery & Spencer, of Cheyenne, Wyo., for plaintiff.

John R. Smith and F. E. Gregg, both of Denver, Colo., for defendant Transcontinental Oil Co.

KENNEDY, District Judge.

The above-entitled cause is before the court at the present time upon a motion to remand. The facts necessary to a consideration of the points involved are substantially as follows: That on the 26th of July, 1927, the plaintiff filed his petition in this cause in the District Court of the Second Judicial District in and for the County of Carbon in the State of Wyoming; that by the allegations of said petition it is set forth that the defendant company is a corporation organized under the laws of the State of Delaware and by virtue of the laws of the State of Wyoming is doing business in the State of Wyoming; that the plaintiff is a civil and mining engineer by profession, being familiar with geological structures and formations in the Rocky Mountain region; that the plaintiff in his professional capacity had at divers times prior to the 20th day of May, 1921, been employed by the defendant corporation to study and investigate geological structures; that prior to said date likewise the defendant Meyer was engaged in acquiring oil and gas leases in the Rocky Mountain region and was generally familiar with the oil business and the oil lands in such territory; that prior to said date the plaintiff and the defendant Meyer had been associated in obtaining and acquiring oil and gas leases, all of which was known to the defendant corporation; that on or about the date mentioned, the plaintiff and defendants entered into a joint adventure agreement whereby it was understood and agreed that the plaintiff and the defendant Meyer would continue their investigations and attempts to make discoveries of oil and gas structures and to secure and acquire them for the defendant corporation with the understanding that in any such ventures which should turn out to be profitable plaintiff and Meyer would receive out of the profits accruing to the defendant corporation a share of 17½ per cent each; that from said examinations and investigations discoveries were subsequently made which the defendant corporation took charge of, and concerning one of these structures the plaintiff was induced to sign a contract under the representation of the two defendants that he was receiving an equal share with the defendant Meyer which was less, however, than the general contract called for; that plaintiff afterwards discovered that the two defendants had entered into an agreement by which the defendant Meyer received a much larger portion of the profits accruing from one of the enterprises jointly discovered by plaintiff and defendant Meyer, thereby defrauding plaintiff of his rights in the premises; that the plaintiff did not discover the alleged fraudulent acts on the part of the defendants until a short time before the action was instituted; that the prayer of the petition is for the setting aside of the agreement entered into between plaintiff and the defendant corporation and that the two defendants be required to account to the plaintiff in all matters concerning which plaintiff claims an interest in the joint adventures, together with other equitable relief; that on the same day said petition was filed a summons was issued which was thereafter returned by the sheriff of said county of Carbon showing, that after due and diligent search the defendants had not been found in Carbon county; that thereafter and on the 2nd day of August an alias summons was issued against the defendant corporation which thereafter and on the 8th day of August was served upon the designated agent of said corporation for service of process in the State of Wyoming; that on the 27th day of August and within the time allowed by statute, the defendant corporation filed its petition for removal to this court with the proper bond and notice, which was followed by an order of removal by the State District Judge on the 25th day of August, 1927; that by the terms of said petition it is set forth that the plaintiff is a citizen and resident of the State of Colorado, that the defendant Meyer is a citizen of the State of Wyoming and that the defendant corporation is a citizen of the State of Delaware; that the matter in controversy, exclusive of interest and costs, exceeds the sum of $3,000; that the action is one of a civil nature for an accounting on an alleged profit contract; that the controversy between plaintiff and the defendant Transcontinental Oil Company is a separable one and that the joinder of the defendant Meyer is fraudulent and made for the purpose of defeating removal, which allegation is followed by certain averments of facts upon which said claim of fraudulent joinder is founded; that such allegation of facts summarized is to the effect that the same action was once before commenced in the State court and removed to this court and upon petition to remand, which was denied, the suit was dismissed by plaintiff without prejudice, the defendant Meyer not then being a party, but that said suit was to all intents and purposes the same suit as the present one; that in the suit which is here presented the defendant Meyer should be aligned as a party with the plaintiff; that the record discloses that the defendant Meyer has never been served with a summons nor was an alias summons issued in the State court against him, nor was any proceeding taken in the State court to effect a constructive service; that by the motion to remand on behalf of plaintiff it is set forth that no separable controversy within the contemplation of the act of Congress authorizing removal of causes exists; that there is no requisite diversity of citizenship and that the record fails to show that the defendant corporation was at the time of filing the petition for removal a nonresident of the State of Wyoming; that in answer to the petition for removal the plaintiff under oath denies the fraudulent joinder of defendant Meyer and alleges that the original action was dismissed because counsel for plaintiff upon making a more careful investigation found that Meyer was a party to said joint adventure agreement and had conspired with the defendant corporation to defraud plaintiff of his rights in the premises; and that at the hearing upon this motion to remand the petition in the original suit was offered in evidence by the defendant corporation and counsel for the plaintiff offered testimony tending to sustain the allegations of his answer to the petition for removal to the effect that the reason for making the defendant Meyer a party to the suit was that facts were discovered after a more complete investigation of the circumstances surrounding the transaction involved.

As this court understands the contention of counsel on behalf of the defendant corporation, in its attempt to sustain the jurisdiction of this court upon removal, three points are involved:

First, that the evidence is sufficient to sustain a finding of this court that there was a fraudulent joinder of the defendant Meyer for the sole purpose of defeating the jurisdiction of this court upon removal. With this contention the court cannot agree. While the fact that the plaintiff had previously filed a suit not involving the defendant Meyer in the...