Garfield Gas Gathering Co. v. Indiana-Ohio Pipe Co.

DOYLE, District Judge. The defendants herein have moved to bring in third party defendants W. W. Carter and W. W. Carter, Jr., doing business as Carter and Carter. These individuals reside in San Antonio, Texas. The grounds for the motion are that the Carters guaranteed in writing the performance by the plaintiff of the contract and are thus liable to defendants and are susceptible to the assertion of claims by defendants by way of counterclaim. In general, the action by plaintiff seeks a rescission of a contract to furnish a large quantity of pipe which was to have been used by plaintiff in constructing a gas transportation line. The complaint alleges that plaintiff was induced by false representations to enter into the contract and that upon delivery discovered that the pipe differed substantially in character and quality from the pipe which the defendants represented that they had available. The counterclaim seeks recovery based upon affirmance of the contract, demands specific performance, and claims special damages. Carter and Carter guaranteed plaintiff’s performance in these terms: “For valuable consideration, the receipt and sufficiency of which are hereby expressly acknowledged, and for the purpose of inducing Indiana-Ohio Pipe Co. to enter into the above contract with Garfield Gas Gathering Company, we, W. W. Carter and W. W. Carter, Jr., dba Carter & Carter (A102 Petroleum Center, San Antonio, Texas) a general partnership, do hereby guarantee the performance of the above [9] contract by Garfield Gas Gathering Company. “s/ W. W. Carter “W. W. Carter “s/ W. W. Carter, Jr. “W. W. Carter, Jr.” Defendants contend that the parties in question are “required” within the meaning of Rule 13(h) F.R.Civ.P., which authorizes the Court to bring in parties other than those in the original action, “if jurisdiction of them can be obtained and their joinder will not deprive the court of jurisdiction of the action.” The Carters are admittedly residents of Texas and thus their presence would not deprive the Court of jurisdiction of the action. Even if they were residents of Colorado, it would appear that the claims asserted against them by defendants are ancillary to the principal law suit so that their being added would not defeat the Court’s jurisdiction. It would not appear, however, that the counterclaim is a compulsory one or that the parties are indispensable. Indeed, it is doubtful whether defendants would contend that the Carters are indispensable because this would demand dismissal of defendants’ counterclaim against the plaintiff. See 3 Moore’s Federal Practice, 102. In any event, it is unnecessary to decide whether the claims asserted can be classified as “required” because the controlling issue appears to be whether jurisdiction “can be obtained.” In asserting that jurisdiction over the parties can be obtained, defendants point out that Carter and Carter own numerous gas wells within the district—-in Garfield County, Colorado, and that they are frequently present in Colorado on business matters. Defendants also rely on the likelihood of the Carters’ coming to Colorado to testify on behalf of plaintiff inasmuch as they have important information, as shown by their depositions (which were taken in San Antonio, Texas). The ultimate question involves, therefore, consideration of that part of Rule 13(h) which provides, “if jurisdiction of them can be obtained.” Does this mean, if jurisdiction can be obtained possibly? Or, does it mean, can jurisdiction be obtained in the normal course of events? Or, are they subject to the service of process ? To say that these parties may possibly subject themselves to the court’s jurisdiction at some future time is not equivalent to, and does not satisfy the requirement that “jurisdiction of them can be obtained.” The rule assumes that the parties are subject to process within the district. It is helpful to read Rule 19(b) F.R.Civ.P. in connnection with 13(h) because it treats the issue of acquisition of jurisdiction over persons much more specifically than does Rule 13(h). It provides as follows: “(b) Effect of Failure to Join. When persons who are not indispensable, but who ought to be parties if complete relief is to be accorded between those already parties, have not been made parties and are subject to the jurisdiction of the court as to both service of process and venue and can be made parties without depriving the court of jurisdiction of the parties before it, the court shall order them summoned to appear in the action. The court in its discretion may proceed in the action without making such persons parties, if its jurisdiction over them as to either service of process or venue can be acquired only by their consent or voluntary appearance or if, though they are subject to its jurisdiction, their joinder would deprive the court of jurisdiction of the parties before it; but the judgment rendered therein does not affect the rights or liabilities of absent persons.” This clearly expresses the viewpoint that persons are not subject to the court's jurisdiction where process can be served on them only as a result of their volun [10] tary appearance or consent. In the instant case jurisdiction can not possibly be obtained unless the Carters voluntarily appear within the district or in court .as witnesses. If they were served while appearing as witnesses the question of their immunity would then arise. This issue is not now before the court. If the defendants’ motion were to be granted the court would be giving Rule 13(h) a construction having jurisdictional significance. See Lesnik v. Public Industrials Corporation, 144 F.2d 968, (2 Cir., 1944). Lesnik v. Public Industrials Corporation, 51 F.Supp. 989, (S.D.N.Y., 1943), which is relied on by defendants, is distinguishable. There it appeared that even though the prospective parties resided outside New York, they were subject to process because they had businesses in New York City. The distinction is demonstrated by the following recital which appears in the opinion (51 F.Supp. 993): “ * * * The affidavits in support of the motion demonstrate that it will not be difficult for the nonresident third-party defendants to be served in this State and District because two of them are in business in the Borough of Manhattan, New York City, and the third is frequently present here on business matters at the office of the Iiightstown Rug Company, of which he is president. Thus the requirements of Rule 13(h) can be satisfied.” In the case at bar the acquisition of personal jurisdiction over these prospective parties is not probable as it was in the Lesnik case and the likelihood of such acquisition can be graded no higher than “possible.” Being of the opinion, therefore, that defendants have failed to demonstrate that the demands of Rule 13(h) have been satisfied, the Court must conclude that the motion is insufficient and that the same should be and it is hereby denied.