Treadway v. Russell

CLAY, Commissioner. This suit was brought by the contractors on a street construction project in Corbin to have declared a street improvement lien, in the amount of approximately $2,000 with penalty and interest, against the property of defendants Arnold. The basis of plaintiffs’ claim was that the Arnolds fraudulently conveyed a narrow, valueless strip of their four acre tract abutting Mitchell Street to avoid the street assessment. The Chancellor entered judgment for the defendants. There was very substantial evidence in support of plaintiffs’ claim, and on the merits we are inclined to the view that they were entitled to judgment. However, we may not grant plaintiffs the relief sought because of the absence of an indispensable party. On December 27, 1949, defendants Arnold conveyed a 240 foot strip of land fronting on Mitchell Street to one Monroe Li-ford. This was at a time when the possible improvement of Mitchell Street was imminent. About a year later Liford conveyed this strip to defendant Russell. Plaintiffs made Russell a party defendant but did not join Monroe Liford. A necessary objective of this suit is to cancel the deed from defendants Arnold to Liford. Obviously Liford is an indispensable party to this litigation. See Clay, CR 19.01, Comment 2; Buckner v. Clay, 306 Ky. 194, 206 S.W.2d 827; 39 Am.Jur., Parties, Sections 35, 36. As a defense, this objection could have been raised under CR 12.02, but it is not waived. CR 12.08. The defect is more than a defense, because even by default, no [246] proper judgment could be entered for plaintiffs cancelling the deed to Liford when Li ford was not a party to the suit. In Flynn v. Brooks, 70 App.D.C. 243, 105 F.2d 766, a similar question was presented in a suit to cancel the assignment of an insurance policy. It was there held that it was the duty of the appellate court, even where the point had not been raised in the court below, to reverse and remand the case where an indispensable party was not joined. See Faulkner v. Terrell, Ky., 287 S.W.2d 409. The motion for appeal is sustained, and the judgment is reversed with directions to permit the joining of indispensable parties and for further appropriate proceedings.