Koehring Co. v. Hyde Const. Co.

• Decision Date: 04 October 1965
• Docket Number: No. 43572,43572
• Parties: KOEHRING COMPANY v. HYDE CONSTRUCTION COMPANY, Inc.
• Court: Mississippi Supreme Court

Page 838

178 So.2d 838

254 Miss. 214

KOEHRING COMPANY v. HYDE CONSTRUCTION COMPANY, Inc.

No. 43572.

Supreme Court of Mississippi.

Oct. 4, 1965.

Butler, Snow, O'Mara, Stevens & Cannada, Roger C. Landrum, Jackson, John F. Friedl, W. A. Denny, Milwaukee, Wis., for appellant.

Cox. Dunn & Clark, Jackson, for appellee.

RODGERS, Justice:

This case grew out of the following facts and circumstances: On November 18, 1959, a contract was awarded to Hyde Construction Company, Inc. in the amount of $16,173,876.86 for the construction of a large concrete spillway, Keystone Dam, Arkansas River, in the State of Oklahoma. The specification of the United States Corps of Engineers, as incorporated in the contract, required that the contractor erect a Koehring proposed the installation of a cooling and heating facility, which was to operate on a vacuum principle. Hyde was experienced in the operation of a concrete mixing plant of similar make and design which had been previously sold and offered by Koehring, but had had no experience with the proposed vacuum cooling system or equipment necessary to control the temperature of the mix proposed to be manufactured by Koehring. A contract was negotiated between the appellant and appellee on February 5, 1960, in which Koehring guaranteed that its cooling plant would operate to the satisfaction of Hyde, but it is charged that the plant failed to operate as guaranteed and as a result of the failure of the plant and system to operate and produce the required cement mix from the date of installation, the progress of the work on the Keystone Dam Project was thereby greatly delayed, resulting in many 'shutdowns' and periods of loss of time and labor efficiency, resulting in great damage to Hyde in the sum of $500,000.

suitable concrete plant of sufficient capacity to satisfactorily batch, mix and discharge two hundred cubic yards of concrete per hour, and sixteen hundred cubic yards of concrete in any eight-hour shift. The specifications also required that the concrete be placed in the facility at a certain temperature. The Hyde Construction Co., Inc. (hereinafter called Hyde) went about securing a plant and equipment that would produce a concrete mix required by the contract, and entered into negotiations with the Koehring Company (C. S. Johnson Company, Division, hereinafter called Koehring) for the purchase of a plant to manufacture the required mix.

On August 30, 1961, in Civil Action No. 3175, Hyde exhibited its complaint in the Federal Court at Jackson, Mississippi, wherein it sought a money judgment against Koehring for the breach of the contract and warranty set out in the sale contract for the concrete mixing and cooling plant. This bill of complaint also made two companies defendants by way of attachment. Dalrymple Equipment Company was named attachment defendant in the State and Federal Courts. It was alleged that each of the attached defendants knew of other residents having effects of the non-resident defendant Koehring and others who were indebted to it. Attachment was requested under the method set out in Mississippi Code Annotated sections 2729 through 2734, inclusive (1956). The complaint also charged that there was diversity of citizenship existing between the complainant on the one hand and Koehring (C.S. Johnson Division) on the other. The complaint asks that the court enter a decree in favor of the complainant, jointly and severally, against the non-resident defendant in the full sum of $500,000, with legal interest and the cost of court, and that the funds and effects in the hands of the attached defendants be condemned for the satisfaction in whole or in part of a money decree. It requests that judgment be entered as provided by law in such cases against the attached defendants upon a recovery of judgment. The bill of complaint alleged that Koehring was a foreign corporation, doing business in Mississippi, without having qualified and appointed an agent for process, thereby calling into play the statute which designated the Secretary of State as agent for process. Kochring filed no answer in the Federal action, but instead filed a special appearance in the form of a motion to dismiss for want of jurisdiction.

Koehring's motion to dismiss the Federal action for lack of jurisdiction also included a request in the alternative, that the court transfer the case to the Federal District Court of Oklahoma under section 1404(a), Title 28 U.S.C.A. This motion was overruled; whereupon, Koehring appealed to the Court of Appeals of the Fifth Circuit. Thereafter, on September 27, 1961, while the above-mentioned suit was pending in the Federal District Court at Jackson, Hyde filed a suit in the State Chancery Court of the First Judicial District of Hinds County, Mississippi, setting out an identical cause of action theretofore filed by Hyde in the Federal Court.

In the State Chancery Court suit, Hyde also invoked a non-resident or attachment statute of Mississippi and Dalrymple Equipment Company again was made a resident attachment-defendant. The State Chancery Court action remained relatively dormant while proceedings were had on Koehring's appeal from the decision of the Federal Court in Mississippi.

While the appeal in the Fifth Circuit was pending in the Federal Court suit, Koehring filed its answer in the State court on January 30, 1963, thereby entering its appearance in the Chancery Court proceedings. In this answer, Koehring pleaded the pendency of the prior Federal court action, and alleged that the issue in the former Federal Court suit and the issue set out in the State Chancery Court suit was the same, and that the prior Federal Court suit was brought as a quasi in rem proceeding. Koehring requested in its answer that the Chancery Court suit should be dismissed or stayed, pending the disposition of the earlier filed Federal Court action. However, no plea in abatement was filed and no proof of a restraining order was made prior to the entry of the final decree in the State Chancery Court. On September 19, 1963, the Court of Appeals for the Fifth Circuit, 324 F.2d 295, rendered an opinion in the Federal Court proceeding which pretermitted the jurisdictional question, but reversed the lower U. S. Court directing that the Federal Court suit be transferred to the First District for the Northern District of Oklahoma.

After the U. S. Fifth Circuit Court had rendered its opinion, Hyde requested that the State Chancery Court suit be set for trial. Koehring requested that the state court stay or dismiss the proceeding because of the prior proceedings filed in the Federal Court but this motion was overruled. The Chancery Court then set the state case for trial to be held Monday, March 9, 1964. During this time, Hyde had filed a petition for rehearing in the U. S. Fifth Circuit, and Koehring had filed in the same court a motion for an injunction to restrain Hyde from proceeding to trial in the State Chancery Court suit. On January 27, 1964, this motion was overruled without prejudice to Hyde's right to apply to the Oklahoma Federal District Court, to which the case was remanded, for a transfer back. February 5, 1964, the Fifth Circuit denied Hyde's petition for a rehearing. On February 14, 1964, the U. S. Fifth Circuit issued its mandate reversing the District Court's previous judgment of September 19, 1963, which inter alia 'ordered and adjudged' that the case 'be and it hereby is remanded to the * * * Court for the Mississippi Southern District with instructions that it be transferred to the Northern District of Oklahoma. * * *' Thereupon, Hyde attempted to dismiss his action in the Mississippi Federal Court. After the District Court entered an order of dismissal on February 24, 1964, Koehring petitioned the U. S. Fifth Circuit Court for a writ of mandamus to have the dismissal order vacated and the action immediately transferred to the Oklahoma Federal District Court.

The hearing on the petition for a writ of mandamus in the U. S. Fifth Circuit (by order dated March 6, 1964) temporarily enjoined Hyde from proceeding further in the Mississippi Chancery Court action. On March 10, 1964, the Fifth Circuit Court of Appeals held that the Federal District Court in Jackson had committed error in allowing Hyde to dismiss the Federal Court suit. Thereupon, the Fifth Circuit Court directed a vacation of the order of dismissal which had been entered by the Federal District Court in Jackson on February 24, 1964, and ordered the Clerk of the Federal Court in Jackson to immediately transfer the record in that case to the Clerk of the Federal Court of the Northern District of Oklahoma. It further ordered that pending the physical filing of that order in the Oklahoma Court, the Fifth Circuit's order would 'constitute a transfer to enable the parties to present the matter to the District Court in Oklahoma.' The U. S. Fifth Circuit Court found that the immediate transfer to Oklahoma would protect and effectuate the order of the Fifth Circuit Court, and Although, as previously stated, the Mississippi Chancery Court suit was set for trial on March 9, 1964, it was continued for hearing until March 11, 1964. At a hearing, participated in by counsel for both Hyde and Koehring on March 11, 1964, the Federal District Court in Oklahoma, prior to 2 P.M. and prior to the commencement of the trial in the State Chancery Court suit, issued a temporary restraining order against Hyde, its attorneys and those in concert with them, from proceeding with the trial in the State Chancery Court. Notice of a temporary restraining order was transmitted to Jackson by telephone and announced in open court at the outset of the trial, and the attorneys for Koehring requested that Koehring be granted permission to refrain from proceeding in the Chancery Court suit. Nevertheless, the State Court directed that the case proceed to trial as previously ordered.

thereupon vacated the temporary injunction...