Beckwith v. Laing

66 S.E. 354, 66 W. Va. 246, 1909 W. Va. LEXIS 148

Opinion

Poffenbarger, Judge:

James Laing, holding a lease of certain coal lands, executed by S. Lewis Price and others, and purporting to vest an interest or mining rights in him, and desiring to sell and dispose of the same to Geo. S. Beckwith, trustee, entéred into a written contract with the latter, on the 14th day of March, 1906, which forms the basis of this suit. As the lease did not confer certain privileges and rights, desired by Beckwith, the contract just mentioned contemplated the procurement of certain alterations in it by Laing, and the consummation of the sale was made to depend somewhat upon the result of Laing’s efforts in this behalf. The contract recited the following imperfections in, or objections to, the lease, in the condition in which it then was: It gave no right to sublet the premises; nor to haul coal through the lands from any other or adjoining lands; nor did it include all the seams of coal in the land. The contract also recited a proposition on the part of Beckwith, trustee, to purchase the lease of Laing at the price of $6,750.00, in case he should obtain the desired changes. It then recited the payment to Laing of $50'.00 by Beckwith, in consideration of which the former agreed “to use his efforts to get said ‘lease changed” in the respects named, and bound himself to assign and transfer it, when so changed, to Beckwith, trastee, or to such person or corporation as should answer the description of the person to be designated in the lease if changed, as the lawful person to whom it could be assigned, which sum was to be paid in cash on the date of the assignment. This contract also bound Beckwith, trustee, to purchase the lease from Laing in case the changes or alterations in it should be made. It further provided that Laing should notify Beckwith of the result of his efforts, within ten days from the date of the new lease. A further provision was this: “If the said Laing shall fail to secure all the changes herein provided, but shall obtain the right to assign and transfer said lease, then and in that event the said Beckwith, trustee, is hereby given the exclusive right to purchase said lease as changed, at the price aforesaid and upon the- terms aforesaid at any time within ten days from the date said letter is mailed as aforesaid.” Laing obtained all the desired alterations, but, in doing so, he allowed other alterations to be made, imposing burdens upon the lessee, not provided for in the original lease. Instead of notifying Beckwith, he telephoned his son, T. K. Laing, tha£ he had procured the desired changes, and thereupon T. K. Laing, on the 23rd day of March, 1906, notified Beckwith by letter that the lease had been obtained' in the form desired. Discovering the error, in a day or two afterwards, T. K. Laing, on the 26th of March, 1906, wrote and mailed another letter to Beck-with in which he enclosed a copy of the new lease and said he was holding both it and the old one, but was bound to re-d’eliver one of them to the lessors at an early date, and called upon Beckwith to notify him, within twenty-four hours of the receipt of the letter, as to whether he would accept either of them. On the 28th of March, Beckwith and McGrath wired him as follows: “Lease not according to contract and notice. Will see you Monday.” To this James Laing responded as follows: “I construe wire of 28th inst. to T. IÍ. Laing signed Beckwith & McGrath a refusal to accept lease as changed. Answer.” Then Beckwith wired: “Will decide after seeing you Monday. Note terms of contract.” On the second day of April, 1906, L. F. McGrath, attorney and associate of Beckwith, came to Beckley, West Virginia, and called upon James Laing and T. E. Laing and Ashton File, the latter two then acting professedly as attorneys only, and a controversy ensued which resulted in an alleged tender by them of the two leases, for McGrath’s election, and refusal on his part to accept either, and an alleged tender of the money by McGrath and refusal on the part of Laing and File, to deliver either one of the leases to him. Then this suit was instituted for specific enforcement of the contract and a lis pendens notice was recorded in the clerk’s office of the county court. On the next day, Laing assigned the lease to Isadore Meadows, trustee, and he was made a party to the bill. James Laing and Meadows, having unsuccessfully demurred to the bill, filed their separate answers thereto, and' depositions were taken, showing great conflict and contradiction, upon which the court pronounced a decree, canceling the assignment made to Meadows and requiring Laing to assign the second lease to Beckwith. From this de-decree, the defendants have appealed.

The contract of March 14, 1906, showing it had been executed to the plaintiff as trustee, was exhibited with the bill and constitutes a part thereof. While it does not disclose the names of the cestui que trustent, it establishes a fiduciary relation or status on the part of the plaintiff. In view of this, the court should have regarded the bill as defective, for want of necessary parties, and sustained the demurrers thereto. This was held to be a sufficient objection to the bill in Pyle v. Henderson, 55 W. Va. 122. In that case, Judge Dent said, after observing that one of the plaintiffs was suing as trustee, without naming the beneficiaries of the trust: “If such Miller is acting in the capacity of trustee for others and not in his individual capacity, such others are necessary parties that they may be bound by the decree entered, and that the defendants, if successful, may not again be compelled to relitigate the same matters with the beneficiaries in such trust, who, not being parties to the suit, would not be bound by such decree.” The general rule in equity, in respect to parties, is that all persons interested in the subject matter of the suit are proper and necessary parties. Burlew v. Quarrier, 16 W. Va. 108; Howard v. Stephenson, 33 W. Va. 116; Rexroad v. McQuain, 24 W. Va. 32; Bryan v. McCann, 55 W. Va. 372; Hill v. Proctor, 10 W. Va. 59. There is one well recognized exception to this rule, namely, that one or more of a numerous set of plaintiffs, all interested alike or similarly, ihay sue on behalf of themselves and the others. This rule applies the doctrine of representation and this excuses the omission of interested parties who could' have been made defendants in a few other rare instances. It may be that the only circumstance that will justify its application to defendants is the impossibility of making them all parties. An illustration of this is found in those cases in which unborn children stand in the same class and have the same rights as living persons, who are made parties defendant, and are, therefore, deemed to be before the court by representation in all proceedings for the sale of their interests. Ammons v. Ammons, 50 W. Va. 390, 406. The decisions indicate other exceptions, but they are apparent rather than real. Most of them are instances in which the appellate court, after final decree upon the bill, answer and proof, without the intervention of a demurrer in the court below, has refused to disturb decrees for want of persons who might properly have been made' parties, and, on account of whose absence, a demurrer would have been sustained, if it had been interposed. It will be found, we think, in nearly, if not quite, all such cases, that the decrees in favor of the trustees afforded all the relief that the cestui que trustent could possibly have obtained, making it clear that no injury had resulted to the opposite parties, and highly improbable that the beneficiaries would ever assert any subsequent claim against them on account of the matters involved in the cause. This is a mere rule, pertaining to appellate, rather than trial, practice, and is predicated on waiver and lack of injury or prejudice, the former generally, and the latter always, precluding relief by appellate proceedings. See Buck v. Pennybacker, 4 Leigh 5; Woodson v. Perkins, 5 Grat. 346. There, are other cases in which the relief sought and granted' could not possibly have affected the omitted parties. Not being interested in the actual litigation, although bearing some relation to the property or right, in respect to. which the suit is prosecuted, such persons are not within the general rule. Mayo v. Murchie, 3 Munf. 258; Lambert v. Nanny, 2. Munf. 196; M’Clintic v. Manns, 4 Munf. . This ease does not belong to any of these real or apparent exceptions to the rule. While the decree gives to the plaintiff all the beneficiaries of the trust could possibly have obtained, the defect of parties is not urged for the first time in this Court, as in some of the cases to which reference has been made. The defendants, having challenged the sufficiency of the bill in limine, cannot be deemed to have waived or lost the benefit of the objection. If they had made the objection here for the first time, and the decree appeared to be right in all other respects, this Court, seeing that no harm could ever come to them by reason of the failure of the trustee to make the beneficiaries of his trust parties, we might, consistently with the principle applied in some of the cases mentioned, refuse to entertain it. But if the decree, viewed as one on the merits, were wrong, or gave less than the fullest possible relief to the plaintiff, this reasoning would fail. Whether such decisions are sound in principle, we are not now called upon to decide.

On the hearing it appeared from the proof that Laing also is a trustee and the names of the beneficiaries in his trust were fully disclosed. This, too, is ground of reversal, although it may not have been brought to the attention of the court below. Ralphsnyder v. Titus, 63 W. Va. 469; Reger v. Gall, 54 W. Va. 373; Gallatin Land &c. Co. v. Davis, 44 W. Va. 109. Some of these cases are authority for the .further proposition that the omission of necessary parties may be disclosed by the evidence adduced. If it appears in any way by the record that a final decree has been rendered in the absence of necessary parties, such decree will be reversed and the cause remanded so that proper parties may be made.

Though, in such cases, the court will enter upon no inquiry as to the .merits, the cause will not be remanded, unless .the subject matter of the bill appears to be within the jurisdiction of a court of equity. It would be useless to remand, a cause, so plainly beyond the jurisdiction of the court as to make manifest the impossibility of its retention in any form. Contrary to the views expressed by counsel for the appellants we think the subject matter of this bill is one of equitable cognizance. Although the lease in controversy may. be.^ technically . personal property, it pertains to, and vests rights in, land, and a contract for the sale thereof is analogous to a contract for the sale of lan'd. The remedy at law, for breach thereof, is obviously inadequate. Equity jurisdiction in such cases is sustained by authority as well as reason and principle. Gas Co. v. Oil Co., 56 W. Va. 402, 415; Oil Co. v. Oil Co., 47 W. Va. 84, 102; Bettman v. Harness, 42 W. Va. 433; West Va. &c. v. Vinal, 14 W. Va. 637; 26 A. & E. Enc. Law 104.

For the reasons stated, the decree must be reversed and the cause remanded, with leave to the plaintiff to amend his bill.

Reversed and Remanded.