Weber v. Wittmer Co.

• Decision Date: 22 November 1935
• Docket Number: No. 1991.,1991.
• Citation: 12 F. Supp. 884
• Parties: WEBER et al. v. WITTMER CO. et al.
• Court: U.S. District Court — Western District of New York

12 F. Supp. 884

WEBER et al. v. WITTMER CO. et al.

No. 1991.

District Court, W. D. New York.

November 22, 1935.

Andrews, Andrews & McBride and Alanson R. Fredericks, both of Syracuse, N. Y., for plaintiffs.

Truesdale, Clarke, Sheehy & Taylor and Paul Taylor, both of Rochester, N. Y., for defendants.

RIPPEY, District Judge.

This action was brought in the Supreme Court of the state of New York in and for Steuben county for the purpose of having declared fraudulent and void a certain oil and gas lease and to compel an accounting on the part of the defendants for the value of the minerals and the gas removed by them from the property covered by the lease. The case was removed to this court upon petition of the defendants. The complaint on its face sets forth the residences of the various individual parties to the action, but does not set forth a diversity of citizenship nor the amount involved so as to bring the case within the jurisdiction of the federal court. An answer was interposed in the state court. There is nothing in the answer to supply the defects. The petition states that the amount in controversy, exclusive of interest and costs, is in excess of $3,000. There is no allegation of diversity of citizenship. It is upon that ground that plaintiffs move to remand the case.

Upon the hearing of the motion, the defendants moved to be permitted to amend the petition for removal by setting forth the diversity of citizenship. They are not seeking to bring in any facts arising subsequent to the commencement of the action or to change the situation as it existed at the time the action was commenced. The motion to amend the petition to show diversity of citizenship should be granted (28 U.S.C.A. § 399). Amendment of the petition for removal on any ground requested other than in the matter of citizenship cannot be granted.

On the question of severability, the plaintiffs had a right to claim against the defendants jointly, and the question must be settled on the complaint as it existed at the time the petition for removal was filed. Chicago, B. & Q. R. Co. v. Willard, 220 U. S. 413, 31 S.Ct. 460, 55 L.Ed. 521.

In any event, answer has been filed and the time to petition for removal has expired and the defendants are now too late in raising the question. Kraut v. Worthington Pump & Machinery Corporation (D. C.) 1 F.Supp. 307.

Upon allowance of the amendment on the question of diversity of citizenship, all parties plaintiff reside in and are citizens of the state of New York, except the plaintiff Irving P. Clancy, who resides in and is a citizen of the state of Pennsylvania. The Wittmer Company, corporate defendant, is a citizen of the state of Delaware, and the other individual defendants are residents and citizens of the state of Pennsylvania. On the face of the papers there is not such a diversity of citizenship as authorizes the court to assume jurisdiction, providing Clancy is a proper and necessary party plaintiff in the action.

The lease, dated July 8, 1930, which is sought to be set aside, was executed by Lester E. Rice and May Rice, the owners in fee of the real property in question, and Louis Weber and Bessie Weber, who held a contract of purchase and sale of the premises and were in possession thereof, as lessors, to Henry N. Wittmer, George Wittmer, Jr., Thomas Wittmer, R. H. Smith, and F. C. Klussman, doing business under the assumed name of Wittmer Oil & Gas Properties, lessees. The lessors were named in the group of plaintiffs, and the lessees as defendants. By the terms of the lease, the Wittmer Oil & Gas Properties acquired the exclusive right to drill and produce and remove petroleum and natural gas from the premises of the aforesaid plaintiffs in Steuben County, New York, for a period of ten years and so long thereafter as oil or gas should be produced from the land leased and royalties paid, with the right to lay pipe lines, use water, oil, and gas and necessary machinery upon said property leased, in consideration of the delivery to the lessors in pipe line of one-eighth of all petroleum produced and saved from the premises, and if gas were found thereon, and marketed therefrom, to pay therefor at the rate of $200 per annum in quarterly installments for the product of each well while the same was being used off the premises and marketed or made into gasoline or other products, the lessors reserving 200,000 cubic feet of gas per annum for domestic purposes. The lease also provides that it shall become void unless operations for a well are commenced on the premises within twelve months from July 8, 1930, unless the lessees should thereafter pay at the rate of $11.88 per quarter year in advance until operations for a well were commenced. Seventy-one dollars and eighty-eight cents has been paid on account of the extensions and tendered back. The complaint alleges that the lease was assigned by the lessees to the Wittmer Company, that the lessees were officers of the corporation and the corporation took the assignment with full knowledge of the fraud.

The action is one for rescission of the contract on the ground of fraud. It is too well settled to require citation of authorities that one induced by fraud to enter into a contract may upon discovery of the fraud either affirm the contract and sue for damages or repudiate the contract and tender back what he has received under it and recover what he has parted with, even in the hands of third persons, unless they are purchasers for value without notice of the fraud; the adoption of either remedy excludes the other (13 C.J. 653). Plaintiffs have elected to rescind.

The complaint alleges that on May 16, 1933, the aforesaid lessors conveyed to E. E. Bogart, a citizen of New York state who was named as a party plaintiff in this action, an undivided one-half interest in all of the oil...