Dixon v. American Industrial Leasing Co.

205 S.E.2d 4, 157 W. Va. 735, 1974 W. Va. LEXIS 220
CourtWest Virginia Supreme Court
DecidedApril 9, 1974
Docket13292
StatusPublished
Cited by37 cases

This text of 205 S.E.2d 4 (Dixon v. American Industrial Leasing Co.) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dixon v. American Industrial Leasing Co., 205 S.E.2d 4, 157 W. Va. 735, 1974 W. Va. LEXIS 220 (W. Va. 1974).

Opinion

Sprouse, Justice:

This case is before the Court upon an appeal from the judgment of the Circuit Court of Monongalia County in a civil action instituted by William E. Dixon, Robert H. Law, Harry H. Meeks and John H. Junkins, partners, trading and doing business as the Beechurst Avenue Joint Venture, as the plaintiffs, against American Industrial Leasing Company, a West Virginia corporation, and the West Virginia University Board of Governors, as defendants.

The plaintiffs sought to recover damages for an alleged breach of contract between the plaintiffs and the defendant, American Industrial Leasing Company, and to recover damages from both defendants for allegedly conspiring to illegally terminate a lease between the plaintiffs and the defendant leasing company in order that the building leased by the plaintiff might be sold to West Virginia University free of the encumbrance of the lease. The Board of Governors was subsequently dismissed as a party upon agreement of counsel for the plaintiffs and defendant.

American Industrial Leasing filed an answer and counterclaim and subsequent amended pleadings. The counterclaim demanded damages from the plaintiffs for past due rent, and recovery of sums paid by American Industrial Leasing for taxes and mechanics liens.

The four plaintiffs and Alfred C. LeCocq had, on April 24, 1964, entered into an agreement designated as the Beechurst Avenue Joint Venture. The Beechurst Avenue Joint Venture was described in a deposition made a part of this record as a partnership formulated for the purpose *738 of financing, constructing, and maintaining a dormitory building at the campus of West Virginia University.

During the development of the project, the plaintiffs, Beechurst, and the defendant, American Industrial Leasing, concluded an involved purchase and lease-back agreement. The net effect of the executed agreement transferred the building to American Industrial Leasing which leased it back to the plaintiffs. The plaintiffs agreed to pay as rent an annual amount equal to ten percent of the landlord’s investment. The lease agreement contained other details covering payment and default, payment of taxes, mechanics liens, insurance, and other provisions not pertinent to this appeal.

Alfred C. LeCocq transferred all or part of his interest in the “venture” to Ronald Sinclair prior to litigation. No consent was given by the other members for the transfer to Sinclair, although the original Beechurst Avenue Joint Venture agreement required consent of all the original members. The record also indicates that the other members were not aware of the transfer until after it was made.

On June 22, 1971 (some seven months after a prior separate trial on the defendant’s counterclaim), the defendant moved, under Rule 12(b) (7) of the West Virginia Rules of Civil Procedure (hereinafter referred to as R.C.P.), to dismiss the plaintiffs’ action for failure to join an indispensable party as required by Rule 19(a) R.C.P.

The court, on July 12, 1971, entered an order relating to two matters; it granted defendant’s June 22, Rule 12 (b) (7) motion to dismiss the plaintiffs’ action for failure to join Ronald Sinclair as an indispensable party, and overruled a motion made by plaintiffs on December 21, 1970 concernihg the counterclaim. The court’s action on the second motion will be considered later in this opinion.

As regards the order dismissing the action under Rules 12 (b) (7) and 19 (a), the plaintiffs, on July 21, 1971, moved *739 that the court reconsider its order of July 12. While this motion is not specifically designated, it is apparently pursuant to Rule 59 (e) R.C.P., “Motion to Alter or Amend a Judgment.” The Rule 59 (e) motion was directed solely to the Rule 12 (b) (7) and Rule 19 (a) indispensable party issue, and the court disposed of it by order entered October 7, 1971. The plaintiffs filed their petition to appeal to this Court precisely within eight months from that October date, and it is conceded that the part of this appeal relating to the indispensable party issue was timely filed.

There are two principal issues: The first is whether Ronald Sinclair was an indispensable party; and the second, which will be treated later, is concerned with the timeliness of appeal of the trial court’s rulings pertaining to the counterclaim.

Rule 12 (b) (7) R.C.P. is in part as follows:

“Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross-claim, or third-party claim, shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion: * * * (7) failure to join an indispensable party. * * * ”

Rule 19 (a) R.C.P. provides:

“Subject to the provisions of Rule 23 and of subdivision (b) of this rule, persons having a joint interest shall be made parties and be joined on the same side as plaintiffs or defendants. When a person who should join as a plaintiff refuses to do so, he may be made a defendant or, in proper cases, an involuntary plaintiff.”

In Lugar and Silverstein, West Virginia Rules, 170, the following statement appears:

“Although the terminology heretofore used in equity suits as to parties may have been somewhat different, there is no real difference between the former equity practice as to parties needed *740 in a suit and the practice required by Rule 19. The former decisions will serve as precedents. However, under the Rules these principles will apply to both legal qnd equitable claims.”

Federal Rule 19 was identical to our procedural rule until 1966, therefore, federal precedent established during that period is helpful in reaching a determination of the issues herein involved.

“Subdivision (a) of original Rule 19 was a generalized statement concerning necessary and indispensable parties to be read in the light of cases at law and in equity. It was not intended to change the rules governing compulsory joinder that had been laid down in those cases.” 3A Moore’s Federal Practice, § 19.05[1], page 2202.

Under federal practice, the phrase “joint interest” was construed to mean those persons who were necessary or indispensable parties under the previous prior practice. Note, 68 W. Va. L. Rev. 53, 54; 3A Moore’s Federal Practice, § 19.05 [1], page 2203.

There is no precise or universal test to determine when a person’s interest is such as to make him an “indispensable” party. 59 Am. Jur. 2d, Parties, Section 96, page 485; 1 Hogg, Equity Procedure, § 40 (3d ed.); 3A Moore’s Federal Practice, § 19.07 [1], page 2227.

In the case of an indispensable party, his presence is required in order that the court may make an adjudication equitable to all persons involved. 3A Moore’s Federal Practice, § 19.05[2], The principle which underlies this doctrine of equity is that every judicial controversy, should, if possible, be ended in one litigation, and that the decree pronounced in a single suit should determine all rights, claims, interests, etc. 59 Am. Jur. 2d, Parties, Section 97, page 490.

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Bluebook (online)
205 S.E.2d 4, 157 W. Va. 735, 1974 W. Va. LEXIS 220, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dixon-v-american-industrial-leasing-co-wva-1974.