Court Opinion

ID: 9863253
Source: CourtListenerOpinion
Date Created: 2023-09-25 03:18:38.076321+00
Date Added: 2024-06-11T11:39:31.391065
License: Public Domain

CLAUDE WILLIAMS, Justice.
Petroleum Anchor Equipment, Inc. sued William D. Tyra and wife, Dorothy B. Tyra, seeking equitable relief by way of injunction and cancellation of two written instruments described as assignments of Application for Letters Patent. The Application for Letters Patent related to an invention described as a screw type earth anchor and pipeline saddle, a device utilized in anchoring pipelines laid in marshy terrain. Plaintiff corporation alleged that on January 8, 1963 the defendant William D. Tyra, Sr. entered into a conspiracy with one W. A. Moss and Luther S. Fite to deprive plaintiff of its ownership of said invention and Application for Letters Patent thereon; that in the furtherance of said conspiracy on said date Moss, being the president of plaintiff corporation, prepared false resolutions purporting to have been passed by the stockholders and board of directors of plaintiff corporation giving Moss full au*875thority to sell property belonging to the corporation, and that subsequent thereto on February 14, 1963 Moss, in furtherance of said conspiracy prepared a written assignment of the Application for Letters Patent and delivered the same to Fite. It was then alleged that on March 4, 1963 Fite, in furtherance of said conspiracy, executed an assignment of said Application for Letters Patent to defendant William D. Tyra, Sr. Plaintiff asked that defendants be enjoined from transferring the Application for Letters Patent and that the two assignments be declared null and void. The defendants answered, denying the conspiracy allegations and setting forth various special defenses. By trial amendment, plaintiff abandoned the conspiracy allegation against William D. Tyra, Sr. and alleged that the conspiracy was entirely between Moss and Fite. In addition thereto plaintiff’s counsel advised the court that it would not seek to introduce any evidence of conspiracy involving Tyra, and none was offered.
During the trial of the case Moss testified that, as president of plaintiff corporation, and acting on authority of the resolution of the board of directors and stockholders of plaintiff corporation, he transferred the Application for Letters Patent to Fite. Fite testified that he then sold and assigned the Application for Letters Patent to Tyra for a consideration of $800 cash, together with the cancellation of an indebtedness of $2,200, or the total of $3,000.
Based upon the answers of the jury to the special issues submitted the court rendered judgment against plaintiff thereby decreeing title and ownership of the Application for Letters Patent to vest in defendants. Plaintiff appeals.
We are immediately confronted with a fundamental question of jurisdiction and although the same is not raised by either party to this appeal we are bound to take notice thereof. The record reveals on its face that Luther S. Fite, who is alleged to have been a co-conspirator as well as an assignee and assignor of the Applications for Letters Patent, is not named as a party to this litigation. It is our opinion that Fite was a necessary and indispensable party to this case. “In accordance with the rules concerning parties generally, all persons in whose favor or against whom a recovery may be had in a suit for cancellation, however insignificant the recovery may be, and all persons who are interested in the subject matter of the suit or the relief granted therein, and whose rights may be affected by the decree, must be made parties to the suit.” 10 Tex.Jur.2d, Cancellation of Instruments, § 65, p. 414, and cases cited therein. The courts of Texas have settled the proposition that the absence of a necessary party in a suit for cancellation is fundamental and jurisdictional to the extent that it requires consideration by the appellate court. 10 Tex.Jur.2d, Cancellation of Instruments, § 65, p. 416.
In the case of Merritt et al. v. Ryno, Civ.App., 268 S.W.2d 546, a very similar situation was presented in a case to cancel written instruments. In that case the wife of one of the grantors in one of the written instruments involved and sought to be can-celled was not made a party defendant nor plaintiff. The Court of Civil Appeals at Waco took notice of the fact that there was a lack of necessary and indispensable parties. The court reiterated the rule established by our Supreme Court in Sharpe v. Landowners Oil Ass’n, Tex.Comm.App., 127 Tex. 147, 92 S.W.2d 435, wherein it was said:
“It is settled beyond all question in this state that in a suit to cancel a written instrument all persons whose rights, interests, or relations with or through the subject-matter of the suit will be affected by the cancellation are necessary parties. [Citing cases] The absence of a necessary party in a suit for cancellation is fundamental and jurisdictional to such extent that it must be considered by this court.”
*876The rule announced by our Supreme Court in the Sharpe case, supra, is supported by such authorities as Barmore v. Darragh, Civ.App., 227 S.W. 522; Rogers Nat’l Bank of Jefferson v. Pewitt, Civ.App., 231 S.W.2d 487, wr. ref.; Hunt v. McWilliams, 218 Ark. 922, 240 S.W.2d 865; Royal Petroleum Corp. v. McCallum, 134 Tex. 543, 135 S.W.2d 958; Matthews v. Landowners Oil Ass’n, Civ.App., 204 S.W.2d 647; Hutchins v. Birdsong, Civ.App., 258 S.W.2d 218.
That Fite has an interest and that his interest will be affected by the cancellation of the two instruments here involved is revealed on the face of this record a number of times. He is the “middle man”, so to speak, between appellant corporation and appellees, Tyra and wife. He is alleged to be a co-conspirator whose acts resulted in injury to the appellant corporation by virtue of which it demands cancellation of both instruments to which he is a party. He is the potential owner of the patent in question in the event Tyra’s rights fail. He has a right to defend his title as well as that of the Tyras. Tyra paid Fite a valuable consideration for the assignment and had a right to protect himself in the event of a recovery by appellant. Fite being a necessary and indispensable party we must take notice of this fact and decline to proceed further.
Because of the fact that this cause will have to be retried, we refrain from any discussion of the various points of error and cross-points of error presented by both appellant and appellees.
The judgment of the trial court is reversed and the cause remanded.
Reversed and remanded.