Rubens v. Ellis

• Citation: 202 F.2d 415
• Decision Date: 27 February 1953
• Docket Number: No. 13855.,13855.
• Parties: RUBENS v. ELLIS et al.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

202 F.2d 415 (1953)

RUBENS v. ELLIS et al.

No. 13855.

United States Court of Appeals Fifth Circuit.

February 27, 1953.

Frank S. Rubens, Phoenix, Ariz., for appellant.

W. C. Peticolas, El Paso, Tex. (Andress, Lipscomb & Peticolas, El Paso, Tex., of counsel) for appellees.

Before HOLMES, RUSSELL and STRUM, Circuit Judges.

STRUM, Circuit Judge.

This suit was instituted August 13, 1951, in the United States District Court for the Western District of Texas, by the appellant Frank S. Rubens, a citizen of Arizona, against appellees John R. Ellis, Edgar E. Carson, and their respective wives, citizens of Texas, seeking a money judgment and other relief to which plaintiff claims he is entitled under the contracts hereinafter mentioned. The trial judge dismissed the complaint, apparently because he considered the plaintiff precluded by a judgment previously rendered by the United States District Court for New Mexico in another suit, to which this plaintiff was a party, in which the same matters were in issue and adjudicated against him. This appeal is from that order.

In substance, the present complaint alleges that the defendants, Ellis and Carson, and their wives, owned certain oil and gas leases on public lands in New Mexico; that plaintiff Rubens and his wife separately owned other like leases; that on September 17, 1949, these parties entered into pooling agreements by which Ellis and Carson, and their wives, agreed to assign to Rubens certain of said leases in order that Rubens could sell these leases, along with his own, to other persons. Rubens agreed to promote the drilling of a test well on one of the tracts, the expense of which would be paid initially by Rubens and ultimately deducted from the proceeds of the sales of said pooled leases, and that at the end of one year the net profits of the venture, and any unmarketed leases, would be equally divided between the parties. Pursuant to said pooling agreement Ellis and Carson, and their wives, assigned to Rubens 10,071.52 acres of oil and gas leases.

Rubens alleges that he performed his obligations under the contract; that he drilled a test well to a depth of 1098 feet at a cost of $15,776.49, and arranged for another party, one Frederick, to sink the well to the maximum contract depth of 3000 feet; that he, Rubens, had incurred additional obligations of $3,860.16 in promoting the joint venture, for which he is entitled to reimbursement, but that the defendants, Ellis and Carson, refuse to reimburse him for said expense or to otherwise perform their agreement under the contracts, and that by filing a lis pendens notice against the lands upon which the well was being drilled, they prevented further performance of the drilling contract. Rubens seeks a money judgment against Ellis and Carson covering the sums expended by him, and other alternative relief.

The prior New Mexico suit was instituted by John R. Ellis and wife, citizens of Texas, against Frank S. Rubens and wife, and Paul G. Frederick, citizens of Arizona, Frederick being joined as the purported assignee of Rubens. Diversity jurisdiction clearly existed in the New Mexico court. The complaint in that suit alleged substantially the same facts as in the present suit, but the plaintiffs in that suit, Ellis and wife, charged that Rubens had wholly failed to comply with his obligations under the contract above mentioned, so that the plaintiffs in the New Mexico suit were entitled to a rescission of the drilling contract and a re-assignment of the oil and gas leases assigned by Ellis and Carson to Rubens. This complaint also alleges that the Ellises had previously acquired the interests of the Carsons, so that the Carsons were not made parties plaintiff. The complaint further alleged that Rubens' purported assignment of his leases to Frederick was without consideration, and colorable only.

Rubens answered the New Mexico complaint, denying many of its allegations. He also filed a counterclaim setting up substantially the same matters and seeking substantially the same relief sought by him here. Rubens, and his purported assignee Frederick, also moved to dismiss the New Mexico complaint on the ground that the Carsons were indispensable but absent parties to that suit.

The New Mexico court considered these motions and denied them. That court also heard and considered the merits of the controversy, finding in favor of the Ellises, and that Rubens had breached the drilling contract as alleged, further finding that the Carsons had in fact transferred their interests in the leases to the Ellises on June 15, 1950, so that the Carsons were not necessary parties. Whereupon the New Mexico court, on June 8, 1951, entered final judgment on the merits, rescinding the drilling contract, cancelling the attempted assignment of the drilling...