Chapman v. Marathon Mfg. Co.

• Decision Date: 04 October 1979
• Docket Number: No. 17470,17470
• Citation: 590 S.W.2d 549
• Court: Texas Court of Appeals
• Parties: Roger C. CHAPMAN, Appellant, v. MARATHON MANUFACTURING COMPANY, Appellee. (1st Dist.)

Page 549

590 S.W.2d 549

Roger C. CHAPMAN, Appellant, v. MARATHON MANUFACTURING COMPANY, Appellee.

No. 17470.

Court of Civil Appeals of Texas, Houston (1st Dist.).

Oct. 4, 1979.

Chamberlain, Hrdlicka, White, Johnson & Williams, Larry A. Campagna, Houston, for appellant.

Vinson & Elkins, Ewing Werlein, Jr., Max Hendrick, III, Riddle, Murphrey, O'Quinn & Cannon, John O'Quinn, Houston, for appellee.

Before Coleman, C. J., and WALLACE and DOYLE, JJ.

COLEMAN, Chief Justice.

This is an appeal from an order of temporary injunction issued to preserve the trial court's prior and exclusive jurisdiction of a suit filed by Marathon Manufacturing Company ("Marathon") against Delhi Properties, Inc., J. Dale Campbell, Rodney J. Verret, Sam W. Rankin, B. M. Rankin, Jr., and Roger C. Chapman ("defendants"). The trial court granted a temporary injunction preventing the defendants from prosecuting or taking any action in furtherance of the prosecution of a suit which they had filed against Marathon in St. Martin Parish, Louisiana. Roger C. Chapman alone has appealed from the order. Affirmed.

Marathon and the defendants, who were all the shareholders of IDI, Inc., a Texas corporation, entered into an agreement which provided for the acquisition by Marathon of all the issued and outstanding shares of common stock of IDI in exchange for common stock of Marathon. The stock exchange was to take place at Marathon's office in Houston, Texas, on September 15, 1978. Prior to that date, Marathon notified the IDI shareholders that it was terminating the agreement for cause.

On February 23, 1979, Marathon received notice that the defendants intended to institute suit against Marathon in a Louisiana state court, claiming that the termination of the agreement was wrongful and without cause, and seeking damages in the amount of $16,000,000. That same day Marathon commenced this action by filing its original petition seeking a declaration that Marathon was entitled to terminate the agreement because of the inaccuracy of certain representations and warranties by the defendants contained in the agreement, the defendants' inability to comply with certain conditions precedent in the agreement, and occurrence of material adverse conditions not contemplated by the agreement.

Thereafter, the defendants instituted two suits against Marathon. On February 26, 1979, Campbell, Verret and Rankin filed a complaint against Marathon in the United States District Court for the Western District of Louisiana, in which they alleged that Marathon breached the agreement by terminating it without cause and sought damages. On March 1, 1979, the defendants filed a petition against Marathon in the 16th Judicial Court, St. Martin Parish, Louisiana. This petition also alleges that Marathon breached the agreement by terminating it without cause and prays for damages.

On March 12, 1979, Marathon filed in this cause an application for an order for a temporary restraining order and, after a proper hearing, a temporary injunction. When the application for a temporary injunction came on for hearing only Robert C. Chapman actively appeared in opposition. The injunction was issued and this appeal resulted.

No findings of fact or conclusions of law have been filed. The evidence clearly demonstrates that the District Court of Harris County, Texas, is an appropriate forum for the resolution of the controversy. The agreement for the exchange of stock was executed by both Marathon and all the defendants in Houston. It provides that the closing of the transaction was to take place in the offices of Marathon in Houston. The company whose shares of stock are the subject of the agreement, IDI, Inc., is a Texas corporation. Marathon is incorporated under the laws of Delaware, but has its principal place of business in Houston. Chapman is a resident of Houston, Rankin is a resident of Dallas, Texas, and the corporate defendant, Delhi Properties, Inc., is incorporated under the laws of the State of Texas and maintains its principal office in Dallas. The other defendants are residents of Louisiana, but this action arises out of business done by them in Texas. None of the Louisiana defendants has appealed from the injunctive order. Chapman, the appellant, is a resident of Houston. In a meeting in Houston Marathon notified Chapman of its intention to terminate the agreement for cause. After the agreement was terminated, Chapman negotiated with Armco, Inc., in Houston, and IDI was subsequently acquired by Armco in a transaction closed in Houston. The trial court was entitled to conclude from the evidence presented that Harris County would be the most convenient forum for both parties because of the availability of witnesses and documentary...