Opinion
No. 890.
April 16, 1934.
Appeal from the United States District Court for the Eastern District of Oklahoma; Colin Neblett, Judge.
Action by E.S. Colbert against the Republic Supply Company and another. Judgment for plaintiff, and the named defendant appeals.
Judgment reversed, and cause remanded, with instructions.
Jas. S. Twyford, of Oklahoma City, Okla. (Solon W. Smith, of Oklahoma City, Okla., on the brief), for appellant.
Toby Morris and Dudley B. Madden, both of Walters, Okla. (Walter Hubbell, of Walters, Okla., on the brief), for appellee.
Before LEWIS, PHILLIPS, and McDERMOTT, Circuit Judges.
E.S. Colbert brought this action against the Republic Supply Company and W.B. Lyle. In the second amended petition Colbert alleged that he and Lyle were partners, doing business under the firm name of Colbert Lyle, and that he was unable to obtain the consent of Lyle to prosecute this action. We set out the other material allegations in note 1.
The defendants demurred to the second amended petition. The second ground of the demurrer was that the cause of action, if any pleaded, was in favor of the partnership of Colbert Lyle, and that Lyle was an indispensable party plaintiff. The third ground of the demurrer was that the alleged cause of action was barred by paragraph 3, § 185, C.O.S. 1921. The demurrer was overruled.
The Republic Company then filed an answer in which it reiterated the several grounds stated in the demurrer, and alleged that the sale of the mortgaged property made by it was with the authority and consent of Colbert Lyle, and in accordance with the laws of the state of Texas, where the sale took place.
Lyle filed an answer in which he set up that the sale made by the Republic Company was known to and acquiesced in by him as a member of the firm of Colbert Lyle.
Thereafter the cause came on for trial before Judge Colin Neblett, sitting in the Eastern District of Oklahoma by assignment of the Senior Circuit Judge. Judge Neblett correctly held that he was bound by the ruling on the demurrer; and overruled the motion for a directed verdict and submitted the case to the jury. The jury returned a verdict in favor of Colbert for $2,560.85. Judgment was entered thereon, and the Republic Company has appealed.
An obligation owing to a partnership is joint. Ingham Lumber Co. v. Ingersoll Co., 93 Ark. 447, 125 S.W. 139, 20 Ann. Cas. 1102. At common law all of the partners must be joined as parties plaintiff in an action to enforce such an obligation. Ingham v. Ingersoll, supra. The common law rule however has been changed by section 220, C.O.S. 1921, which reads as follows:
"Of the parties to the action, those who are united in interest must be joined as plaintiffs or defendants; but if the consent of one who should have been joined as plaintiff cannot be obtained, he may be made a defendant, the reason being stated in the petition."
This statute authorized Colbert to make Lyle a party defendant, when he refused to join as a party plaintiff. See Walters v. Tulsa Rig, R. M. Co., 113 Okla. 293, 241 P. 1095; Stinchcomb v. Patteson, 66 Okla. 80, 167 P. 619; Snodgrass v. Snodgrass, 107 Okla. 140, 231 P. 237, 243, 52 A.L.R. 1213; Modern Law of Partnership, Rowley, vol. II, § 796.
If the cause of action set up in the second amended petition was for conversion, it was barred by paragraph 3, § 185, C.O.S. 1921, and the demurrer and motion for a directed verdict should have been sustained.
It will be noted that while the second amended petition set up an alleged contract of novation, it seeks no recovery for breach thereof. The allegations with respect to that contract are by way of inducement only.
The second amended petition alleged the value of the mortgaged property; that the Republic Company wrongfully and without right treated such property as its own and permitted Carey Mitchell to use such mortgaged property from December 12, 1928, until December 20, 1930, and on the latter date wrongfully and without right undertook to sell such mortgaged property to Carey Mitchell for $30,000. It further alleged:
"That by reason of said wrongful assertion of right to sell and dispose of said property * * * by further reason of it having undertaken to and made disposition of said properties to * * * Carey Mitchell, for use for more than two years * * * and by further reason of it having sold at private sale all said property * * * to * * * Carey Mitchell, said * * * Republic * * * Company became and is indebted to * * * Colbert Lyle in the sum of $35,000.00."
It further alleged that Colbert Lyle was entitled to a credit of $35,000.00 on its indebtedness to the Republic Company, not under such contract of novation, but "for said property by said Republic * * * Company so wrongfully and without right by it taken and used as aforesaid."
The prayer of the petition is for the recovery of the value of the mortgaged property on December 12, 1928, the date of the alleged conversion, less the amount due by the partnership to the Republic Company on that date.
The second amended petition alleged no damages for breach of the contract of novation, and no damages for the alleged wrongful act of the Republic Company in inducing Carey Mitchell to abandon the contract of novation, and it sought no recovery of any such damages. It alleged and sought recovery of damages only for the alleged wrongful disposition and sale of such mortgaged property by the Republic Company.
Furthermore, the uncontroverted evidence established that the contract of novation was subject to the express condition that Carey Mitchell should secure certain drilling contracts; that Colbert had knowledge that it was subject to that express condition; that Carey Mitchell did not secure such drilling contracts; and that the novation contract never became binding upon Carey Mitchell.
We therefore conclude that the overruling of the demurrer and denial of the motion for a directed verdict was error.
The judgment is reversed and the cause remanded with instructions to sustain the demurrer to the second amended petition.