Dietrich v. Texas Nat. Petroleum Co.

Citation6 Storey 435,56 Del. 435,193 A.2d 579
CourtSuperior Court of Delaware
Decision Date19 August 1963
Parties, 56 Del. 435 Noah DIETRICH, Plaintiff, v. TEXAS NATIONAL PETROLEUM CO., a Delaware corporation, Union Oil Company of California, a California corporation, W. Stewart Boyle, George Bond, L. C. Oldham, Charles F. Parker and H. W. Sanders, individually, Defendants.

H. Albert Young and Bruce M. Stargatt (of Morford, Young & Conaway), Wilmington, for plaintiff.

William Prickett, Sr. (of Prickett & Prickett), Wilmington, for defendant Texas National Petroleum Co. David F. Anderson (of Berl, Potter & Anderson), Wilmington, for defendant Union Oil Co. of Cal.

LYNCH, Judge.

Plaintiff, a resident of California, has sued Texas National Petroleum Co., a Delaware Corporation, (referred to hereafter as T.N.P.) and Union Oil Company of California, a California corporation, and registered to do business in Delaware, on causes of action based on alleged contract liability and on alleged tort liability. The complaint names a number of individuals, residents of Texas or California as defendants. No individual defendant resides in Delaware and none have been served with any kind of process, nor have they appeared and answered the complaint.

It appears that in 1961-1962, Union negotiated with T.N.P. to purchase from it certain of T.N.P.'s assets located in the Gulf Coast area and the Western States, consisting largely of crude oil and gas reserves. The negotiations took place and were completed about May, 1962, entirely in California. There were some communications between California and Texas.

Plaintiff filed suit on March 27, 1963. He sues to recover a 'finder's fee for having allegedly found Union as a buyer of T.N.P.'s assets, and having introduced one to the other. Other causes of action are asserted in the complaint, involving the individual defendants; they, however, are not of importance since such defendants are not before the Court.

The complaint alleges that T.N.P. agreed with Plaintiff that if plaintiff found a purchaser for its assets, he would be fully compensated; it further avers that he found defendant Union and introduced Union to T.N.P.; and that as a result of this introduction, T.N.P. entered into and concluded negotiations with Union resulting in Union's purchase of T.N.P.'s assets for $54,000,000. Plaintiff therefore claims that he became entitled to a 'finder's fee' from Texas National. Alternatively, plaintiff's claim is that T.N.P. and/or Union became obligated to compensate him on a quantum meruit basis for the reasonable value of his services in making the introduction which led to Union's purchase of T.N.P.'s assets. Plaintiff further claims that defendants have conspired together with certain individuals named in the complaint to deprive him of his 'finder's fee' in a fashion which represented malicious interference with plaintiff's contract with T.N.P.

T.N.P. and Union were served with process on April 1, 1963.

At one time, T.N.P. was registered to do business in Texas. It filed a Certificate of Withdrawal from that State on March 18, 1963. By this Certificate of Withdrawal T.N.P. represented to Texas officials (1) that it surrendered its authority to transact business in Texas; (2) that it was no longer transacting business in Texas; and (3) that the corporation revoked the authority of its registered agent in that State to accept service of process; but it asserted that service of process in any action, suit, or proceeding 'based upon any cause of action, arising in Texas during the time the corporation was authorized to transact business in this State might thereafter be made on such corporation by service thereof on the Secretary of State.' It is highly doubtful that it can be demonstrated that Plaintiff's causes of action arose in Texas; even T.N.P. makes no argument that they did.

The statutory effect of such withdrawal is stated in Article 8.15 of the Texas Business Corporation Act, V.A.T.S.

'* * * Upon the issuance of such certificate of withdrawal, the authority of the corporation to transact business in this State shall cease.'

It appears that T.N.P. is no longer actively conducting any business, and is in the process of winding up its affairs, intending eventually to make distribution of its cash assets to its stockholders.

A study of the docket in the Office of the Prothonotary of this county and of the papers which have been filed in this case reveal many interesting developments.

March 27, 1963 Suit filed.

                April 1         Corporate defendants served with process
                April 11        William Prickett files appearance for T.N.P
                April 18        Stipulation between Plaintiff's counsel and Union's
                                attorney extending Union's time to plead or answer
                April 18        T.N.P. files its answer
                                T.N.P. propounds interrogatories to Plaintiff.  Notice
                                given by T.N.P. of taking of Plaintiff's deposition in
                                Wilmington on May 15, 1963
                April 26        Plaintiff propounds interrogatories to Union.
                May 1           Union objects to certain of Plaintiff's interrogatories.
                May 2           Stipulation extending time to May 10, 1963, for Plaintiff
                                to answer T.N.P.'s Interrogatories.
                May 10          Union files answer to Plaintiff's interrogatories (as not
                                objected to).
                                Union moves (1) to Dismiss under Rule 12 (b), Del.C.
                                Ann. and to Dismiss on ground of Forum non conveniens.
                May 13          Plaintiff files his answers to interrogatories propounded by
                May 16          Plaintiff gives notice of taking deposition of Defendant
                                Union by named Officers.
                May 16          Plaintiff gives notice of taking deposition of Defendant
                May 20          Plaintiff propounds Interrogatories to T.N.P.
                May 20          Plaintiff moves for production of records of Union.
                May 21          T.N.P. moves for protective order under Rule 30 (b) as
                                to deposition of W. Stewart Boyle.
                May 21          Union moves for protective order under Rule 30 (b) as to
                                depositions of its officers.
                May 21          T.N.P. moves to amend its answer; to dismiss on ground
                                of Forum non conveniens and for an amended Order of
                May 24          Order entered on Plaintiff's motion to produce records of
                                Union and directing production of the records.
                May 28          Order entered setting pending motions for argument and
                                fixing Brief Schedules and permitting Plaintiff to proceed
                                with limited discovery.
                June 14         T.N.P. filed a second amendment to its answer by
                                stipulation dated June 11, 1963.

In Union's Motion to Dismiss on the ground of Forum non conveniens filed May 10, 1963, the suggestion is made that Plaintiff should have brought suit in either Texas or California; the motion notes--both the corporate defendants are subject to the jurisdiction of the courts of Texas. The Motion of T.N.P. to dismiss on grounds of Forum non conveniens notes that 'both the corporate defendants are subject to the jurisdiction of Texas.'

It has clearly developed that these contentions were not factually true. I therefore find that plaintiff had no choice of jurisdictions at the time he filed his suit. T.N.P. could not be served in either Texas or California on March 27, 1963. Delaware was the only state in which he could have obtained service of process on both corporate defendants. Plaintiff stresses this in his brief.

As I read Forcum-Dean Company v. Mo. Pac. R. R. Co., 341 S.W.2d 464 (Tex.Civ.App.1960) Plaintiff could not have maintained a suit against either or both of the two corporate defendants in Texas, since the suit did not involve Texas residents or citizens, and the cause of action had not arisen in Texas.

Just a few days before oral argument was to be held, T.N.P. filed an 'Offer of Stipulation', agreeing to waive 'service of process' and agreeing to appear generally in an appropriate court in the State of California on a complaint substantially in the form that was filed in this case.

A brief review of the complaint and of T.N.P.'s answer thereto shows that it denies both the alleged agreement to pay the 'customary finder's fee' and that plaintiff found and introduced Union to T.N.P. 'as a purchaser of' T.N.P.'s assets. The answer, as amended, admits that Union purchased 'certain of' T.N.P.'s assets and that T.N.P.'s shareholders approved the sale. Such answer admits plaintiff has demanded 'compensation from' T.N.P. and 'that it has refused to pay him anything'; in the same paragraph of the answer, T.N.P. stated it is without knowledge or information sufficient to form a belief as to whether there is such a thing as a 'customary finder's fee'. T.N.P. denies it owes plaintiff the amount claimed; it denies it owes plaintiff 'the reasonable value' of his work and labor in finding Union as the purchaser of its assets.

As his Fourth cause of action, plaintiff charged that after May, 1962, the corporate defendants and certain of their officers conspired together in order to deprive him of the compensation due him; that they coerced 'certain individuals and business contacts' so as to deprive him of his compensation; that plaintiff would have earned and become entitled to his compensation had it not been for the conspiracy, and their acts caused plaintiff to suffer damages.

As his Fifth cause of action, plaintiff charges that T.N.P.'s corporate officers made representations to him about his finding a purchaser for assets of T.N.P. and to compensate him therefor; that plaintiff relied on these representations; that as a result of such reliance on such false misrepresentations plaintiff has been damaged.

T.N.P.'s answer (1) generally denied the allegations of Plaintiff's Fourth and Fifth causes of action; (2) contended that its...

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