Preas v. Phebus

• Decision Date: 24 March 1952
• Docket Number: No. 4339.,4339.
• Citation: 195 F.2d 61
• Parties: PREAS v. PHEBUS et al.
• Court: U.S. Court of Appeals — Tenth Circuit

195 F.2d 61 (1952)

PREAS v. PHEBUS et al.

No. 4339.

United States Court of Appeals Tenth Circuit.

February 26, 1952.

Rehearing Denied March 24, 1952.

D. A. Skeen, Salt Lake City, Utah (Wood R. Worsley, Salt Lake City, Utah, on the brief), for appellant.

Edward F. Richards, Salt Lake City, Utah (Harley W. Gustin, Salt Lake City, Utah, Carvel Mattsson, Richfield, Utah, and Oliver W. Steadman, Cody, Wyo., on the brief), for appellees.

Before BRATTON, HUXMAN and MURRAH, United States Circuit Judges.

HUXMAN, Circuit Judge.

W. N. Preas instituted this action in the State Court of Utah May 16, 1950, against Ray Phebus, Paul Stock, Joe T. Juhan, Weber Oil Company and Equity Oil Company. Plaintiff, Preas, and defendant, Equity Oil Company, are both citizens of the State of Utah. All the remaining defendants are citizens of states other than Utah.

The complaint alleged that Preas was the owner of a particular 1/3 of 1% with an additional 2/3 of 1% of the value of all oil produced from certain real estate, described in the complaint; that beginning in 1948 oil in which plaintiff had an interest was, in an amount unknown to him, produced and sold from the premises by defendant, Equity Oil Company, herein called Equity; that all the defendants claimed an interest in this oil. Preas prayed for an accounting against Equity as to the oil which he claimed had been wrongfully converted and that his title be quieted to the interest in question against all of the other defendants.

By June 20, 1950, all the defendants had been served with summons. On June 8, 1950, defendant, Ray Phebus, filed an answer in the case. On June 8, 1950, defendant, Equity Oil Company served interrogatories on Preas. Answers to these interrogatories were served on Equity September 2, 1950, and on September 20, 1950, Phebus, Stock, Juhan and Weber Oil Company served notice of the filing of the petition of removal to the Federal court. After the removal of the case to the Federal court a timely motion to remand was filed. This was overruled and the cause was tried on the merits to the court. Judgment was entered for defendants and this appeal followed.

On appeal, it is contended that the trial court erred in refusing to remand and also that its judgment on the merits is erroneous. It is conceded that the complaint in the state court on its face showed a joint cause of action against all defendants and that based on the allegations thereof the cause was not removable. But the contention is made that, when the complaint is considered together with the answers to the interrogatories, it clearly appears that Equity had no interest in the controversy; that it was a mere nominal party and not a proper or necessary party to the action. From this it is argued that since interrogatories made this apparent the cause was removable by the non-resident defendants. With this we cannot agree.

In view of the conclusions we have reached with respect to whether the complaint, even when considered together with the interrogatories, stated a separate and independent cause of action against the defendants, other than Equity, it is not necessary to explore or to decide whether interrogatories may be employed, as attempted here, to establish removability. It has been held consistently that removability is determined from a consideration of the complaint alone. This principle has been restated by the Supreme Court in the late case of American Fire & Casualty Co. v. Finn, 341 U.S. 6, 14, 71 S.Ct. 534, 540, 95 L.Ed. 702, where the court said: "In making this determination we look to the plaintiff's pleading, which controls." Of course, if there is bad faith or collusion in joining a resident defendant for the sole purpose of preventing removal, that may be shown by any means available. That was the case in Pueblo Trading Co. v. Reclamation Dist. No. 1500, D.C., 4 F.R.D. 471, and Frederick Hart & Co. v. Recordgraph Corporation, D.C., 7 F.R.D. 43, relied upon by appellees, where interrogatories were employed. But here no contention of collusion or bad faith is or could, under the facts revealed, be made. 28 U.S.C.A. § 1441 (c) provides that "Whenever a separate and independent claim or cause of action, which would be removable if sued upon alone, is joined with one or more otherwise non-removable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters not otherwise within its original jurisdiction."

It is not necessary to set out in detail the underlying facts upon which appellant relied to establish his claim. It is sufficient to say that he originally assigned the interest in question to appellees, Stock and Phebus, in an instrument in which they agreed to cause a well to be drilled by a designated agent and, upon failure on their part so to do, to reconvey the royalty interest to appellant. The well was not drilled, according to the terms of the contract. Instead of reconveying the interest, it passed by mesne conveyance from Stock and Phebus to Equity, which in turn assigned it to all the remaining appellees under an operating agreement, by which Equity undertook to operate the leasehold estate for them.

Appellant's cause of action is based upon the contention that failure to strictly...