Estes v. SHELL OIL COMPANY

• Decision Date: 05 July 1956
• Docket Number: No. 15952.,15952.
• Citation: 234 F.2d 847
• Parties: Lige ESTES, Appellant, v. SHELL OIL COMPANY, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

234 F.2d 847 (1956)

Lige ESTES, Appellant, v. SHELL OIL COMPANY, Appellee.

No. 15952.

United States Court of Appeals Fifth Circuit.

June 8, 1956.

Rehearing Denied July 5, 1956.

I. H. Spears, Pasadena, Cal., for appellant.

W. G. Winters, Jr., R. H. Whilden, Houston, Tex., for appellee, Shell Oil Co.

Before TUTTLE, CAMERON and JONES, Circuit Judges.

CAMERON, Circuit Judge.

This appeal presents the question whether the Court below committed reversible error in dismissing for want of indispensable parties a civil action brought by plaintiff for an accounting and a money judgment against defendant for the value of oil wrongfully taken from land in which plaintiff owned an interest. Jurisdiction was invoked on the ground of diversity of citizenship¹ between plaintiff, Lige Estes, a citizen of Texas, and defendant, Shell Oil Company, a citizen of Delaware. Defendant moved to dismiss the complaint because of the alleged absence of indispensable parties assertedly owning both leasehold and royalty interests in the land claimed by plaintiff whose presence, if they should be brought in, would destroy diversity jurisdiction. With its motion defendant filed and served affidavits and copies of mineral conveyances allegedly establishing these interests. The Court below granted said motion and dismissed the complaint and plaintiff appeals.

The complaint, which calls itself "Complaint for Damages, Accounting, and Injunction", alleges that plaintiff was and is the owner of an undivided interest in the land described, that defendant has entered upon said land and produced and is still producing oil and gas in paying quantities and has been so producing for more than twenty years, and has marketed said products for money and has refused to account to plaintiff for his portion thereof or to pay him any part of said money, all without obtaining from plaintiff any conveyance to his portion of the land and the oil, gas and minerals therein; that the defendant has wrongfully converted said petroleum products to its own use, profit and benefit, withholding all of the emoluments therefrom from the plaintiff, and that it will continue to do so unless enjoined by court order. Plaintiff demands an accounting from the defendant together with a money judgment for the amount found to be due, which plaintiff indicates to be more than $250,000, and for injunctive relief as auxiliary thereto.²

The motion and the supporting conveyances and affidavits assert and tend to establish that, in 1930, Abe Holt and wife, Mary Holt, Hollis Mayfield and wife, Nicey Mayfield, and Tom Bean executed an oil, gas and mineral lease to one W. P. Chandler, who promptly assigned the rights thus acquired to Shell Petroleum Corporation; that Shell Petroleum Corporation, in September, 1932, assigned said lease to certain individuals, reserving, however, a well in the northwest ten acres of the lands described and an overriding royalty in the petroleum products produced from the residue thereof; and that these assigned rights are presently owned by three citizens of Texas. The motion further sets out that, through Shell Petroleum Corporation and the three named individuals who are citizens of Texas, a large number of persons have become royalty owners in the lands sued on. Those persons are named and their addresses given, and therefrom it appears that a great many reside in Texas, some in California, some in Louisiana and others in other states.

The motion further avers that defendant, Shell Oil Company, has become the owner of all of the rights of Shell Petroleum Corporation in the mineral interests acquired and held by it. Neither the motion nor any of its exhibits show who is actually operating said leases or producing the oil therefrom or who has conducted said operations during the twenty year period mentioned in the complaint; nor is the categorical statement in the complaint that the defendant has been for twenty years, and still is, producing and marketing oil, gas and other minerals from said lands contradicted.³

Neither the motion nor the supporting documents show the character or extent of the ownership of Chandler's lessors, but the complaint and the affidavits filed on behalf of plaintiff give a fair indication of the persons in the chain of title through whom the Chandler lease came.⁴

The ruling of the Court below on the motion to dismiss was necessarily based upon the allegations of the complaint and the affidavits and other proofs adduced in contradiction or support thereof.⁵ It is clear that, based thereon, there was no showing which would warrant the Court in dismissing plaintiff's action for want of indispensable parties. The granting of the motion by the Court below comes, in our opinion, under the direct condemnation of the decisions of this Court in Hudson v. Newell, 5 Cir., 1949, 172 F.2d 848, and Mackintosh v. Marks' Estate, 5 Cir., 1955, 225 F.2d 211, and the cases therein mentioned.

The Hudson case involved directly the main question here presented. Plaintiffs there sought the cancellation of various written instruments, a declaration that they owned title to the lands involved, and that the terms of a state court judgment did not prevent the maintenance of the civil action there brought; but they also demanded an accounting with and a money judgment against Gulf Refining Company which was producing and marketing the oil from the lands involved. A large number of claimants to title to the lands and mineral interests involved were sued along with Gulf, but a small number whose presence would have destroyed diversity jurisdiction were omitted. Gulf and the defendants before the Court insisted that no decree could be entered which would not affect the interests of the absent parties in several respects, among them being that, if Gulf was required to pay the Hudsons for oil produced from the lands, the rights of the absent parties to receive payment of their pro rata interests would be affected, and also that Gulf was entitled to be protected against double payment.

This Court held otherwise. It held that the District Court wrongfully dismissed the Hudsons' suit and that jurisdiction ought to have been retained to grant such relief as the facts would justify, including "partial relief, resulting only in personal judgments * * *."⁶ The fact that, in the Hudson case, a lease had been given by plaintiffs to Gulf and that here plaintiff is claiming that Shell converted the oil without a lease from him does not weaken or affect the binding force of the Hudson decision. Here, as in Hudson, plaintiff is required to establish good title to the interest claimed, and here, as there, a money judgment is sought only as against the defendant properly before the Court.

This Court, in the Hudson case, had before it a much stronger argument for bringing in the absent parties because the complaint showed on its face that the Hudsons were claiming title as against the parties who were absent. On the other hand, nothing in this record reflects that plaintiff will be brought into collision with any of those named as alleged indispensable parties. None of those parties claim to be owners of any of the fractional interest of Adella Bean, through whom, alone, plaintiff claims.

These principles are reasserted in the Mackintosh case where the right of plaintiffs to relief in the absence of the parties not before the court was not as clear or direct as here. The point on which that case was decided was that a money judgment was demanded against the defendants properly in court and that relief of that character, at least, could be granted "without directly affecting persons who are not parties to the suit." 225 F.2d 213. The basis of the holding in that case, 225 F.2d at page 215, is epitomized in this language quoted from the opinion: "The power of a court of equity so to mold its decree as to do complete justice between the parties without adversely affecting those not before the court is exceedingly broad and elastic. We hold that the district court erred in requiring all persons having or claiming any interest in the lands to be made parties, and in dismissing the suit upon plaintiffs' failure to join those whose joinder would have defeated the jurisdiction of the court. Instead, the court should retain jurisdiction and limit any relief granted to such as can be given without prejudice to the absent parties."⁷

The incorrectness of defendant's position appears clearly when reference is had to the cases relied upon by it to sustain the action of the Court below.⁸ Vincent, Miller and Keegan all were suits seeking directly to cancel, establish or affect directly title to lands or interests therein. The same is true of Baten, as this language taken from the opinion, 198 F.2d 630, will demonstrate: "As plaintiffs below, they sued said corporation to `annul' conveyances by the corporation of its mineral interests in the circumstances and for the purposes hereinafter stated. * * * In the body of the complaint, but not in the prayers for relief, there is an incidental request for a declaratory judgment `fixing the rights and status of' these attorneys in relation to their representation of appellee, and to determine `what is a reasonable and competent compensation' for them. There is no specific prayer for a judgment quod recuperet for these fees."

The situation here is entirely different from that involved in those cases. No mention is made either in the body of the complaint or in the prayer of cancellation, reformation or other action with respect to any written instrument or any muniment of title. The sole prayer is for a money judgment and for injunctive relief as auxiliary thereto. It is plain that this decision is governed by the Hudson case and those referred to in it, and not by the cases listed in Note 8, supra, all of which are easily differentiable. These decisions are all consistent and the results harmonious and any failure to perceive this...