PPG Industries, Inc. v. Continental Oil Co.

• Decision Date: 15 February 1973
• Docket Number: No. 16016,16016
• Citation: 492 S.W.2d 297
• Parties: PPG INDUSTRIES, INC., Appellant, v. CONTINENTAL OIL COMPANY, Appellee. (1st Dist.)
• Court: Texas Court of Appeals

Page 297

492 S.W.2d 297

PPG INDUSTRIES, INC., Appellant, v. CONTINENTAL OIL COMPANY, Appellee.

No. 16016.

Court of Civil Appeals of Texas,

Houston (1st Dist.).

Feb. 15, 1973.

Rehearing Denied March 15, 1973.

Raymond A. Cook, Alfred H. Ebert, Jr., Houston, for appellant; Andrews, Kurth, Campbell & Jones, Houston, Stockwell, St. Dizier, Sievert & Viccellio; Oliver P. Stockwell, Fred H. Sievert, Jr., Lake Charles, La., David A. Cort, Richard C. Packard, Pittsburgh, Pa., of counsel.

Vinson, Elkins, Searls, Connally & Smith, John C. Snodgrass, F. Russell Kendall, Harry M. Reasoner, John E. Kennedy, Houston, for appellee; Liskow & Lewis, austin W. Lewis, Gene W. Lafitte, James B. St. John, Jr., New Orleans, La., Keith W. Blinn, Stamford, Conn., John M. Berlinger, Joseph C. Johnson, Houston, Van E. Langley, Stamford, Conn., of counsel.

COLEMAN, Justice.

This is an appeal from an order granting a temporary injunction enjoining PPG Industries, Inc., its employees, agents, and attorneys from continuing to prosecute the suit styled PPG Industries, Inc. v. Continental Oil Company, in the 14th Judicial District Court, Parish of Calcasieu, State of Louisiana. The Louisiana suit was subsequently filed, and raised substantially the same issues as does this case.

This suit was filed on May 10, 1972, by appellee, hereinafter referred to as Continental, against appellant, hereinafter referred to as PPG, and Olin Corporation, hereinafter referred to as Olin. Olin is not a party to this appeal.

Continental contracted to supply a substantial portion of PPG's natural gas requirements at its chemical plant located near Lake Charles, La. Continental also supplies Olin and other natural gas users, including a facility which it owns. In 1969 Continental determined that it would have difficulty in meeting the delivery requirements of its contracts with PPG and Olin. Continental alleges that it is impossible or commercially impracticable for it to deliver the gas required because of the catastrophic impact of the national energy crisis, with related changes in governmental regulation and market conditions. After two years of negotiations failed to resolve the problem, this suit was filed in the District Court of Harris County, Texas. By this suit it seeks a declaration of its contractual obligations and an equitable decree allocating its available supplies of natural gas.

Continental is a corporation organized under the laws of the State of Delaware with a permit to do business in Texas. It maintains a regional office in the City of Houston, Texas, and its Louisiana operations are generally supervised from this office. PPG is a Pennsylvania corporation. It has a permit to do business in Texas and has plants and offices in Harris County. Olin is a Virginia corporation. It also has a permit to do business in Texas and has plants and offices in Harris County. Service was perfected on May 24, 1972, and the District Court of Harris County acquired in personam jurisdiction of the parties.

In April, 1972, arrangements were made between officials of Continental and PPG to discuss the gas contract in Pittsburgh on May 22, 1972. Prior to that date this suit was filed. On May 31, 1972, PPG filed its suit in the Louisiana State Court. On June 27, 1972, a temporary restraining order was issued by the Harris County District Court without notice restraining the prosecution of the Louisiana State Court suit for the reason that there was a probability that PPG would seek in that court to restrain the prosecution of the suit in Harris County. A hearing on a temporary injunction was set for June 28, 1972. A hearing on the temporary injunction began on June 29, 1972. On that date PPG also filed a suit against Continental on the same cause of action in the United States District Court in Lake Charles, La. On July 14, 1972, the order from which this appeal was taken was signed and entered. The reason for its issuance as stated by the court in the order was that the Harris County suit was filed first, the controversy was identical to that in the Louisiana State Court, and that the prosecution of the latter suit would interfere with the exclusive jurisdiction of the Harris County Court.

On July 20, 1972, Olin filed suit against Continental in a state court in Louisiana and enjoined Continental from seeking a Texas injunction to stop its prosecution. Thereafter the Calcasieu District Court stayed proceeding in PPG's suit until the Harris County case was disposed of, and the Federal District Court also stayed proceedings, although permitting an appeal from its stay order.

Appellant complains that the granting of this injunction was an abuse of discretion and asserts the following reasons:

'A. The only justifiable ground for a Texas court to enjoin a Louisiana lawsuit is the protection of its own citizens or property, neither of which is involved here.

'B. Under the undisputed evidence this is a Louisiana controversy between two foreign corporations and should be litigated in Louisiana.

'C. In equity there is no priority in Conoco's lawsuit, filed while PPG was waiting to negotiate in deference to Conoco's own invitation.'

There can be no doubt that the District Court of Harris County had the power, in a proper case, to restrain persons in its jurisdiction from prosecuting suits in other states. Moton v. Hull, 77 Tex. 80, 13 S.W. 849 (1890). In the cited case the court stated the rule to be 'that, if the averments of the petition for injunction are of such a character as to make it the duty of the court to restrain or enjoin the party from instituting or conducting like proceedings in a court of this state, it would be a proper case for restraining him by a similar process from prosecuting such suit in the courts of another state.'

It is clearly the law in Texas that when a suit is filed in a court of competent jurisdiction and all the necessary parties are before it, it is entitled to proceed to judgment and may protect its jurisdiction by enjoining the prosecution of a suit subsequently filed involving the same controversy. Cleveland v. Ward, 116 Tex. 1, 285 S.W. 1063 (1926); V. D. Anderson Co. v. Young, 128 Tex. 631, 101 S.W.2d 798 (1937).

The question presented by this appeal is whether the trial court abused its discretion in granting the temporary injunction.

A foreign corporation doing business in a state after complying with statutory conditions permitting it to do so is treated as a resident of the state within the principles involved in suits for injunctions against proceedings in other states. Anno.--Injunction--Action in Another State, 6 A.L.R.2d 901. The author of this annotation states as a rule:

'There is a third class of cases, in which the gravamen of the prayer for injunction is not some duty owed by one resident toward another of the same...