Cumberland Pipe Line Company v. Raider

Opinion of the Court by Chief Justice Logan Reversing. Appellee instituted suit against the appellant alleging that he was the owner of a 1/28 interest in a certain tract of land in Lee county, and that he was the owner of on undivided 1/224 royalty interest in all the oil produced from the tract of land. It is alleged in the petition that his title to the interest in the land is shown by a judgment entered in the Lee circuit court in a case wherein George H. Ambrose and appellee were plaintiffs against one James Raider, defendant, and that the judgment was entered in May, 1923; that at the time of the entry of the judgment, and for several years prior thereto, appellant had been taking oil from the land, including the interest that plaintiff had in the oil. He alleged a demand for payment and a failure to pay. Appellant filed an answer and a cross-petition against A. W. T. Davis, in which it denied that appellee owned any interest in the land, o.r the oil which had been taken from the land, but the answer admits that appellant had received the oil from the property as a common. carrier. As a further defense, and for cross-petition against Davis, ’ it ’ was alleged that Albert Raider conveyed all his royalty'interest in the oil produced from the land to one James' Raider, who, prior to the suit of George PI. Ambrose and Albert Raider against James Raider, sold and conveyed the interest which he had obtained from Albert Raider to A. W. T. Davis, and that, at the time of the action by appellee and Ambrose against James Raider, he did not own any interest in the oil *345 royalty, and tbat he made no defense to tbe action, and tbat Davis was not a party to tbe action, and tbat bis rights were not litigated therein. It was alleged tbat Davis was a necessary party to this action. It was alleged tbat Davis bad presented to tbe appellant tbe conveyance from James ■ Eaider to ■ him, and bad demanded delivery of tbe oil covered by the deed to him, and tbat be was at tbe time claiming to be tbe owner thereof, and that appellant could not pay tbe proceeds of tbe oil, if sold, to Albert Eaider until tbe controversy over the title between Davis and Albert Eaider should be determined. A reply was filed in which it was denied tbat Davis bad any interest in tbe subject-matter of tbe controversy. Proof was taken, and appellee testified tbat be executed no deed of conveyance to James Eaider, and tbat tbe deed was executed without bis authority or knowledge, or without the authority or knowledge of bis wife. It was shown by tbe proof tbat Davis knew of the pendency of tbe first action as well as' of this action, and tbat be made no defense, although be bad been fully advised as to tbe pendency of tbe action. It is not established by tbe rcord that Davis was brought before tbe court in either action, but, on tbe other band, tbe record shows to tbe contrary. Tbe appellant introduced tbe notary public who took tbe acknowledgment of appellee and bis wife to tbe deed to James Eaider, as is shown by tbe deed, and be testified that tbe deed was executed,' signed, and acknowledged by appellee and bis wife. Tbe chancellor adjudged tbat Eaider was the owner of an undivided 1/224 royalty interest in all tbe oil produced, and to be produced, from tbe boundary of land described in tbe petition, and appellant was directed to sell the oil and turn the proceeds over to appellee, less a certain percentage adjudged to belong to bis attorney. The question first confronting us is whether, under tbe provisions of section 28 of tbe Civil Code of Practice, Davis was a necessary party to this action. It has been held tbat, where an action cannot be decided without injuriously affecting tbe rights of those not parties to tbe suit, they should be made parties. Town of Beaver Dam v. Vinson, 223 Ky. 490, 3 S. W. (2d) 1090; Com. v. Farmers’ Stats Bank, 225 Ky. 759, 10 S. W. (2d) 274; White v. Walker, 226 Ky. 326, 10 S. W. (2d) 1071; Mart’s Ex’r v. Potts, 227 Ky. 125, 12 S. W. (2d) 278; Central Ken *346 tucky Natural Gas Co. v. Stevens, 134 Ky. 306, 120 S. W. 282. Davis was a necessary party to this action. At the time of the cancellation of the deed claimed to have been executed by appellee and his wife . to James Eaider, Davis had a.deed of record which had been executed to him by James Eaider. Eaider made no defense. He was not interested. The cancellation of the deed did not affect him. When it was made known to the court, as it was by the answer and cross-petition in this case, that Davis was claiming an interest in the subject of the controversy, he should have been made a party to the action and brought before the court. The rights of the parties should not be determined in this court, or in the circuit court, without his having an opportunity to be heard. Appellant could be relieved of any further interest in the litigation by paying the proceeds of the oil into court, and the controverted question would then be one between appellee and Davis. We determine no question but that Davis was a necessary party to the action. Judgment reversed and cause remanded for proceeding consistent with this opinion.