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JETT, et al.



April 21, 2000

Record No. 991589





Joseph E. Spruill, Jr., Judge

Present: Carrico, C.J., Lacy, Hassell, Keenan,
Koontz, and Kinser, JJ., and Poff, Senior Justice


In this appeal of a judgment which ordered
specific performance of an oral agreement, we consider whether
the judgment is unenforceable because the chancellor ordered the
defendants to convey an interest in real property to a person who
is not a party to this litigation.

Plaintiff, Peter J. DeGaetani, filed a bill of
complaint seeking specific performance of an alleged oral
contract. He claimed that the defendants, F. Talmadge Jett and
Annie May Jett, husband and wife, agreed to convey a parcel of
land with improvements to him and his former wife, Joyce Lynn
Jett, who was not a party to this litigation.

The following relevant facts were adduced
during an ore tenus hearing. The plaintiff and
Joyce Jett were married in 1968. F. Talmadge Jett and Annie May
Jett (collectively the Jetts) conveyed by deed of gift an
unimproved parcel of land in Northumberland County to DeGaetani
and Joyce Jett DeGaetani, then husband and wife, as tenants by
the entirety. In August 1974, DeGaetani and Joyce Jett borrowed
$25,000 from Franklin Federal Savings & Loan Association to
finance the construction of a house on the property. The loan was
secured by a first deed of trust on the property. In June 1975,
DeGaetani and Joyce Jett borrowed an additional sum of $10,000
from Franklin Federal Savings & Loan Association to complete
construction of the house. This loan was secured by a second deed
of trust upon the property. In 1976, DeGaetani and Joyce Jett
were deemed in default of the deeds of trust.

According to DeGaetani, a conversation occurred
among the Jetts, Joyce Jett, and DeGaetani. The Jetts agreed to
pay the amounts due under the deeds of trust, and DeGaetani and
Joyce Jett agreed to convey the property to the Jetts. Talmadge
Jett testified that he was not present when this conversation
occurred, but he was aware of the agreement and he was willing to
honor it. DeGaetani testified that the Jetts agreed to convey the
property to Joyce Jett and DeGaetani at a future date for
$36,300, the amount the Jetts paid to Franklin Federal Savings
& Loan Association. DeGaetani and Joyce Jett, by a deed
recorded in February 1977, conveyed the real property, including
the house constructed thereon, to the Jetts.

DeGaetani and Joyce Jett divorced and DeGaetani
remarried. DeGaetani, who lives with his wife on the property,
testified that he was ready, willing, and able to pay the Jetts
$36,300 for the property.

The chancellor held that DeGaetani proved with
clear and convincing evidence that he had a contract with the
Jetts that required them to convey the property to him and Joyce
Jett for $36,300. The chancellor entered an order which required,
among other things, that DeGaetani satisfy certain conditions and
pay the Jetts $36,300 before a date certain. DeGaetani satisfied
the conditions set forth in the order, and the Jetts were ordered
to "convey to the plaintiff, Peter J. DeGaetani, and to
Joyce Lynn Jett, as tenants in common, the property which is the
subject of this suit."

The Jetts argue that the chancellor erred by
ordering them to execute a deed conveying the property to
DeGaetani and Joyce Jett because Joyce Jett is a necessary party
to this suit, and DeGaetani failed to make her a party to the
proceeding. Responding, DeGaetani asserts that Joyce Jett is not
a necessary party and, therefore, he was not required to include
her as a party in this proceeding. We disagree with DeGaetani.

We have held that a court cannot render a valid
judgment when necessary parties to a suit are not before the
court. Atkisson v. Wexford Associates, 254 Va. 449,
455, 493 S.E.2d 524, 527 (1997); Asch v. Friends of Mt.
Vernon Yacht Club
, 251 Va. 89, 91, 465 S.E.2d 817, 818
(1996); Schultz v. Schultz, 250 Va. 121, 124, 458
S.E.2d 458, 460 (1995); Allen v. Chapman, 242 Va.
94, 99, 406 S.E.2d 186, 188 (1991); McDougle v. McDougle,
214 Va. 636, 637, 203 S.E.2d 131, 133 (1974).

We have also stated the following principles
which are equally pertinent here:

" ‘Necessary parties include all persons,
natural or artificial, however numerous, materially interested
either legally or beneficially in the subject matter or event of
the suit and who must be made parties to it, and without whose
presence in court no proper decree can be rendered in the cause.
This rule is inflexible, yielding only when the allegations of
the bill state a case so extraordinary and exceptional in
character that it is practically impossible to make all parties
in interest parties to the bill, and, further, that others are
made parties who have the same interest as have those not brought
in, and are equally certain to bring forward the entire merits of
the controversy as would the absent persons.

‘This cardinal principle governing as to
parties to suits in equity is founded upon the broad and liberal
doctrine that courts of equity delight to do complete justice by
determining the rights of all persons interested in the subject
matter of litigation, so that the performance of the decree
rendered in the cause may be perfectly safe to all who are
required to obey it and that further litigation touching the
matter in dispute may be prevented.’ "

Kennedy Coal Corp. v. Buckhorn Coal
, 140 Va. 37, 49, 124 S.E. 482, 486 (1924) (quoting The
Buchanan Company
v. Smith’s Heirs, 115 Va. 704,
707-08, 80 S.E. 794, 795 (1914)); accord Atkisson,
254 Va. at 455-56, 493 S.E.2d at 527-28.

We have also stated that "'[necessary
parties’] interests in the subject matter of the suit, and in the
relief sought, are so bound up with that of the other parties,
that their legal presence as parties to the proceeding is an
absolute necessity, without which the court cannot proceed. In
such cases the court refuses to entertain the suit, when these
parties cannot be subjected to its jurisdiction.’" Bonsal
v. Camp, 111 Va. 595, 597-98, 69 S.E. 978, 979 (1911)
(quoting Barney v. Baltimore City, 73 U.S. (6
Wall.) 280, 284 (1867)).

We hold that the chancellor lacked the power to
proceed with DeGaetani’s bill of complaint because Joyce Jett was
a necessary party to that litigation. The chancellor’s order
directed the Jetts to execute and deliver a deed that conveyed
the property to DeGaetani and Joyce Jett as tenants in common.
The chancellor’s order made a determination that Joyce Jett has
an interest in the real property as a tenant in common. This
order, without question, imposed certain duties and obligations
upon her because of her property interests as a tenant in common.
Yet, she was not before the court even though she had a material
legal interest in the subject matter of the suit.

Contrary to DeGaetani’s assertions, no
exception exists which would have permitted the chancellor to
enter a valid judgment in this suit without Joyce Jett’s
presence. We held in McDougle that a court may adjudicate
a suit when it is practically impossible to join all parties in
interest and the absent parties are represented by others having
the same interest or when an absent party’s interests are
separable from those of the parties before the court so that the
court may enter an order without prejudice to the rights of the
absent party. 214 Va. at 637, 203 S.E.2d at 133. Here, it was not
practically impossible to join Joyce Jett as a party, and her
interests are not separable from DeGaetani’s interests to the
extent that the chancellor could enter an order without prejudice
to her rights. Indeed, the challenged final order conferred upon
her the real property rights of a tenant in common with the
related duties and obligations.

Accordingly, we will reverse the chancellor’s
order, and we will remand this proceeding to the circuit court
with instructions that it issue an order requiring that DeGaetani
convey the property to the Jetts. The Jetts shall be required to
return the $36,300 to DeGaetani. The remand will be without
prejudice to the rights, if any, that DeGaetani may have to join
Joyce Jett as a party to any further proceedings.

Reversed and remanded.