Geodynamics Oil & Gas, Inc. v. US Silver & Mining Corp.

• Decision Date: 23 March 1973
• Docket Number: Civ. A. No. 71-C-209.
• Citation: 358 F. Supp. 1345
• Parties: GEODYNAMICS OIL AND GAS, INCORPORATED v. U. S. SILVER & MINING CORPORATION.
• Court: U.S. District Court — Southern District of Texas

358 F. Supp. 1345

GEODYNAMICS OIL AND GAS, INCORPORATED v. U. S. SILVER & MINING CORPORATION.

Civ. A. No. 71-C-209.

United States District Court, S. D. Texas, Corpus Christi Division.

March 23, 1973.

Willard E. Shuart, Corpus Christi, Tex., for plaintiff.

J. Michael Mahaffey, Corpus Christi, Tex., for defendant.

ORDER

OWEN D. COX, District Judge.

The Plaintiff, Geodynamics Oil & Gas, Inc., called Geodynamics, a Pennsylvania corporation, brought this suit for the alleged breach of a contract which provided for the drilling of a test well for oil and gas on a tract of land, Concession 71, in the Republic of Panama. The Defendant U. S. Silver & Mining Corp., called Silver, a Nevada corporation with its principal place of business in Illinois, has filed herein a motion to dismiss the complaint, setting forth several reasons why this action should be abruptly terminated as a matter of law.

The first reason Defendant Silver gives for dismissing the complaint is that it fails to state a claim upon which relief can be granted. No specific reasons are put forward why it fails to do so. This Court, having reviewed the complaint, concludes that a cause of action is clearly set forth.

The Defendant further contends in its motion to dismiss that it is a Nevada corporation, has no office in Texas, and thus is not subject to the service of process under the provisions of Article 2031b, Vernon's Ann.Tex.Civ.St. The Defendant seems to think it must be amenable to process "within the Southern District of Texas" and that the location of its principal place of business in the State of Utah is of some consequence. But, this Court considers such matters to be inconsequential, so long as the Defendant's principal place of business is not in Texas. Such situation would destroy diversity.

This Court concludes Defendant Silver, a foreign corporation, had sufficient minimum contacts in the State of Texas, in connection with the transaction before this Court, so that in personam jurisdiction may be maintained over it. The execution of a contract by mail or otherwise is sufficient to establish that a foreign corporation is doing business in the State of Texas. Section 4 of Texas Article 2031b. While the Defendant Silver had no office in Texas and no certificate to do business in Texas, Silver was "doing business" in Texas within the meaning of said Texas Article 2031b of Vernon's Texas Civil Statutes. The Fifth Circuit has made it clear, in Atwood Hatcheries v. Heisdorf & Nelson Farms, 357 F.2d 847 (5th Cir. 1966), that this so-called Texas Long Arm Statute will reach just as far as the federal constitutional eye can see. The extension of the reach of state long arm statutes by International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), would have caught Mr. Pennoyer. The principle of "minimum contacts" is now the order of the day. McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957); O'Brien v. Lanpar Co., 399 S.W.2d 340 (Tex.1966). The only limitation, if this is any, on this expanded reach is that of Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958), which requires that there be, in each case, "some act by which the defendant purposely avails itself of the privilege of conducting activities within the Forum State, thus invoking the benefits and protection of its laws."

Now, let's take a look at the facts which confront us here. Defendant maintained a bank account in Corpus Christi, Texas, within the Southern District, for the purpose of the transaction between Plaintiff and Defendant, which is the basis of this litigation. In addition, the President, Secretary, Chairman of the Board, and other representatives of Defendant Silver, traveled to Texas in regard to such transaction. The Defendant's President, Mr. Pinder, executed the settlement agreement here sued on in Dallas, Texas. Certainly, these activities constituted sufficient minimum contacts with the State of Texas so that the maintenance of in personam jurisdiction does not offend due process. However, if this Court's conclusion needs bolstering, there were several other contracts between Plaintiff and Defendant executed in Corpus Christi, Texas, and in Dallas, Texas, some of which provided venue in Texas and Nueces County, and thus agreed to the jurisdiction within this state.

Further, Defendant Silver moves the dismissal because it is not licensed to do and it is not doing business in Texas. This is not a valid contention. This issue has already been covered. Nor is it objectionable that the Plaintiff Geodynamics is a foreign corporation. It has a certificate to conduct business in Texas, and, under Article 8.18, V.A.T. C.S., Business Corporation Act, is entitled to maintain this suit in this Court.

Defendant Silver's motion to dismiss because jurisdiction is invoked on federal question grounds is specious. Jurisdiction is invoked under the diversity statute. 28 U.S.C., § 1332.

The Defendant Silver's motion to dismiss further urges that the claim sued upon did not arise within this district. 28 U.S.C., § 1391, provides that a civil diversity action "may . . . be brought only in the judicial district where all plaintiffs or all defendants reside, or in which the claim arose." (Emphasis added.) Although the Defendant was doing business in Texas, it did not reside in the Southern District of Texas. Its home office and it principal place of business were in the states of Utah and Illinois. So, venue can be maintained in the Southern District of Texas only if the "claim arose" here. Ryan v. Glenn, D.C., 52 F.R.D. 185, 192, says that the word "claim" as it is used in the quoted statute providing for venue in a United States judicial district means "the aggregate of...