Court Opinion

ID: 6884668
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:25:04.210764+00
Date Added: 2024-06-11T16:05:40.929742
License: Public Domain

WOODROUGH, Circuit Judge
(dissenting) .
It seems to me that the federal court should have remanded this case to the state court from whence it came. The plaintiffs are the owners of oil lands from which defendant Crosbie extracts the oil under a lease which reserves to the landowners one-eighth of the oil produced and saved from the premises. Over a course of years the non-resident defendant Crosbie *603has delivered the oil produced from the lands to the resident defendant Cross, assuming to account to plaintiffs for their royalty, and the plaintiffs claim that Crosbie and Cross entered into a conspiracy to cheat the plaintiffs out of the full value of their one-eighth royalty part of the proceeds. That by cooperation, one helping the other, defendants succeeded in concealing from plaintiffs the true amounts realized from the oil produced from the land and so deceived plaintiffs into accepting less than their rightful share. Plaintiffs sought disclosure of the books and records of both defendants for accounting and a joint and several judgment against them both for the amount lawfully due.
The removal to the federal court has been sustained on the ground that there was a separable controversy between plaintiffs and Crosbie to which Cross was not a party. The complaint plaintiffs filed in the state court contained twenty paragraphs. It was discursive and by piecing together some of its parts and disconnecting other parts, quite a number of separable controversies have been drawn out of it. In Crosbie’s petition for removal it was alleged “that the primary and fundamental controversy is for an accounting by the defendant Henry H. Cross Company.” In Crosbie’s brief three entirely different separable controversies between plaintiffs and itself are drawn from the complaint and argued at length. This court finds a separable controversy in that the complaint charges Crosbie with a breach of contract in failing to account to plaintiffs for the correct proceeds of oil sold on their behalf.
On the argument at the bar Crosbie’s counsel frankly conceded that the plaintiffs had tried to plead a joint cause of action against both defendants and there is no claim that there was any sham or fraudulent joinder. That being so, I would indulge every fair intendment to sustain the pleading as a whole in accord with its intention, and going at it in that way, it seems reasonably clear to me that the plaintiffs charged and relied for their recovery on more than a mere failure of Crosbie to account for the correct proceeds of oil sold on plaintiffs’ behalf. They relied rather on the joint action of both defendants cooperating to accomplish a concealment of the facts concerning the disposition of the oil production and consummation of actionable deceit whereby plaintiffs were defrauded of their full royalty rights. Therefore it seems to me the case is not analogous to Hamilton v. Empire Gas & Fuel Co., 8 Cir., 297 F. 422. There owners of oil land charged their lessee, a nonresident corporation, among other things, with a wrongful failure to drill offset wells, in violation of the implied obligation of the lease contract. They, made the company’s resident employees parties defendant and claimed that the action was for joint tort. This court found upon close reasoning that the cause of action stated against the company for damages on account of the company’s failure to perform its contractual obligation to drill offset wells presented a separable controversy to which the company’s employees were not parties, and that controversy was cognizable in the federal court.
But the picture here is that as the plaintiffs’ oil comes out of the wells it flows into the hands of two parties. Neither is a servant of the other or of the plaintiffs, but both know the plaintiffs’ rights. The physical possession of the oil afforded opportunity to dispose of it and an obligation to account for the correct proceeds or true value of it is an obligation that the law imposes on any one who has the property of another in his possession and sells it. For breach of that obligation the law affords a choice of remedies. In Arkansas where two or more conspire to cheat the owner out of the value or proceeds they commit a joint tort and are subject to a joint action. Wilson v. Davis, 138 Ark. 111, 211 S.W. 152. The plaintiffs here have chosen to bring such a joint action against these defendants in the state court and it seems to me that their pleading of the background of contract, fiduciary relations and duty to account, which explains the opportunity for the conspiracy, is not inconsistent with the charge of joint tort as the actionable wrong. The basis for federal jurisdiction found in the contract seems to me elusory in view of the identical but joint liability to account that may be attributed to the conspiracy. I venture to dissent for that reason rather than from conviction that lack of such jurisdiction has been demonstrated. We have in the briefs a hundred and twenty-five pages of scholarly analyses and syntheses of the clauses of the complaint and able arguments from which it would seem that a hair may divide our jurisdiction from the want of it.
*604One thing that stands out uncontrovertible is that on the face of the complaint the plaintiffs had a right to maintain a joint action against the two parties who they say stood at the mouth of the oil well and cooperated to defraud them out of the proceeds of the oil, and that the plaintiffs in good faith attempted to state that joint action in. their complaint and to recover on it. I think the federal court may well go back -to that clear ground after considering all the arguments, and taking its stand upon it, decline the jurisdiction.