Source: https://law.justia.com/cases/federal/appellate-courts/F2/384/21/392672/
Timestamp: 2019-12-09 16:07:39
Document Index: 569676800

Matched Legal Cases: ['§ 1441', '§ 2', '§ 74', '§ 1', '§ 74', '§ 74', '§ 76', '§ 76', '§ 76', '§ 76', '§ 74', '§ 39', '§ 75', '§ 2', '§ 1', '§ 74', '§ 74', '§ 1', '§ 8', '§ 39', '§ 39', '§ 5']

The Miami Pipe Line Company, Inc., a Corporation, Appellant, v. the Panhandle Eastern Pipe Line Company, a Corporation, Appellee, 384 F.2d 21 (10th Cir. 1967) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Tenth Circuit › 1967 › The Miami Pipe Line Company, Inc., a Corporation, Appellant, v. the Panhandle Eastern Pipe Line Comp...
The Miami Pipe Line Company, Inc., a Corporation, Appellant, v. the Panhandle Eastern Pipe Line Company, a Corporation, Appellee, 384 F.2d 21 (10th Cir. 1967)
U.S. Court of Appeals for the Tenth Circuit - 384 F.2d 21 (10th Cir. 1967) October 6, 1967
In its petition for removal, Panhandle averred that Miami's petition set up a separate and independent claim against it, which would be removable if sued upon alone, and joined it with one or more otherwise nonremovable claims or causes of action within the meaning of 28 U.S. C.A. § 1441(c); and that the Welfare Board was fraudulently joined as a party defendant for the sole purpose of preventing Panhandle from removing the case from the State court to the Federal court.
That "on or about January 6, 1953, the plaintiff (Miami) had a contract with the defendant Panhandle for the purchase of natural gas to be transported through plaintiff's (Miami's) pipeline for resale to the defendant Board (the Welfare Board) for use at the Osawatomie State Hospital";
That "at the same time the plaintiff (Miami) had a contract with the defendant Board (Welfare Board) for the purchase of such gas";
That on or about such date "the defendants (Panhandle and the Welfare Board) entered into a plan or devise for the purpose of breaching their contracts with plaintiff (Miami)" and obtaining for Panhandle "the 6½¢ per M.C.F. rightfully due plaintiff (Miami)."
Miami alleged that for many years prior to October 1, 1943, it "had been supplying natural gas to the Osawatomie State Hospital from shallow gas wells in and about the * * * hospital grounds" and that "the last written contract was entered into on October 1, 1943." Miami attached to its petition as Exhibit A a copy of such contract.
"This Contract made and entered into this 1st day of October, 1943 by and between the Miami Pipe Line Company, a Kansas Corporation, hereinafter called the vendor, and The State of Kansas, hereinafter called the vendee."
It recited that "The vendor * * * for the past several years" had been "furnishing to the vendee the greater part of its fuel requirements at the Osawatomie State Hospital" and that it was "the mutual desire of the parties" to the contract "that the facilities of the vendor * * * be enlarged and increased to meet the entire fuel requirements of" the State Hospital.
By its terms "the vendee" agreed "to purchase and accept delivery from the vendor the merchantable natural gas that said vendor" could "deliver toward the fuel demand of" the State Hospital; and "the vendor" agreed it would "use its best endeavors and abilities to supply enough of such natural gas to meet the entire fuel requirements of the" State Hospital; and "the parties * * * mutually" agreed "that the price of said gas" should be "twenty-one (21¢) cents per 1000 cubic feet" and that the contract should remain in force and effect for a period of one year from its date.
"In Witness Whereof, The parties hereto have set their hands and seals this date above first mentioned."
"Attest: The Miami Pipe Line Company Kenneth R. Johnson, By Emil J. Miller, President Secretary Vendor Approved The State of Kansas David L. MacFarlan, By (illegible) Chairman Its Business Manager, Vendee" State Board of Social Welfare
That following the expiration of the one-year term of the contract of October 1, 1943, "the parties continued to operate under the terms of the contract and extended it by gas supplied, bills rendered, bills paid, efforts on the part of both parties to make a supply of gas available";
That by August 30, 1946, the amount of gas produced from the local wells adjacent to the State Hospital was falling off, and that on that date Miami entered into a contract with Panhandle, whereby the latter agreed to apply to the Federal Power Commission for a certificate of public convenience and necessity, authorizing it to install the necessary facilities and to sell to Miami gas, as provided for in the contract, "for resale to Osawatomie State Hospital", and upon the issuance of such certificate to construct and operate a metering and regulating station at a point on its pipeline in close proximity to Miami's transmission line; and whereby Miami agreed to construct and operate all necessary pipeline connections to the outlet side of Panhandle's meter, that such gas should be used solely at the Osawatomie State Hospital and that Miami would cooperate with Panhandle in securing such certificate; and whereby the parties thereto mutually agreed such contract should continue "for a term of one year commencing on the date of First delivery" thereunder "and from year to year thereafter unless terminated by either party upon not less than sixty (60) days notice prior to the termination of the then current term"; that Panhandle made application to the Federal Power Commission for such certificate and that Miami cooperated with Panhandle in its efforts to secure such certificate; that on October 11, 1946, the Federal Power Commission granted Panhandle temporary authorization to proceed with the construction and operation of the facilities and rendering service to Miami referred to in such contract, and that the certificate was granted on March 12, 1947;
That on December 4, 1950, Miami mailed a letter to the Business Manager of the State Hospital and sent copies to other various state agencies involved, which stated that the State Hospital was taking in excess of the base load; that such excess was costing Miami 1½¢ per M.C.F. more than the base load; and suggested the following future rate:
"For the first 425 M.C.F. per day 21¢ per M., as at present; for any and all gas delivered in excess of 425 M. per day for the billing period, 22½¢ per M.C.F.";
"If this proposal is agreeable to you, we will increase the volume of gas available to you up to the reasonable limits of our physical plant and the current rules and regulations of the Federal Power Commission";
and that "on December 12, 1950," Miami "received verbal assurance from" the Business Manager of the State Hospital "of the State's acquiescence in the new rate and * * * new billings as of December 17, 1950."
That by July 3, 1951, the supply of gas from local wells had become exhausted, and in order to assure the State Hospital of an adequate supply of gas, Miami on that date entered into a new gas purchase contract with Panhandle, which superseded the agreement of August 30, 1946, and which provided that it would run for a definite term of 20 years, commencing October 1, 1951, and continue thereafter from year to year, unless and until cancelled by either party on 18 months written notice; that the maximum delivery obligation would be 1,950 M.C.F. per day, and that the service area would be "suburban and rural Miami County, Kansas, including especially and particularly the Osawatomie State Hospital";
"The State of Kansas has determined that it may obtain natural gas at the Osawatomie State Hospital * * * at a rate less than that for which your company now furnishes such gas supply.
"Therefore, effective February 15, 1953, any and all arrangements or agreements expressed or implied by which your company has been furnishing gas to the Osawatomie State Hospital are hereby cancelled.
"If you care to negotiate with the state for the state's purchase of the pipeline through which you service this institution, we will be glad to discuss such matter with you within the next 10 days";
"* * * we have agreed to offer $4,500.00 for the pipe line that your company is now furnishing the hospital with gas through this line. Hoping that I may have a decision by February 3, 1953, I am";
That in the summer of 1953 "the defendant Board did cause a four inch pipeline to be constructed paralleling defendant's pipeline at a cost to the state of $8,400";
That on July 17, 1953, "the defendant Board entered into an industrial gas purchase contract with * * * Panhandle for the purchase of natural gas for use as fuel and other uses in the Osawatomie State Hospital"; that "the contract was for a period of two years and was to continue from year to year thereafter unless cancelled at the end of a subsequent year by giving sixty days written notice"; and that the price of the gas fixed by said contract was 31¢ per M.C.F.
"In Witness Whereof, the parties hereto have caused this agreement to be signed by their respective officers thereunto duly authorized."
"Panhandle Eastern Pipe Line Company By Leslie T. Fournier, Vice-President State of Kansas By Eugene W. Hiatt, Director of Purchases, Department of Administration By George W. Jackson, Md. Director of Institutions, Department of Social Welfare By Assistant Director, A. E. (illegible)"
"The plaintiff has, by the improper and illegal conduct of the defendants resulting in a continuing breach of their contracts with plaintiff suffered damages in the amount of $130,864.76 * * *."
Section 5 of such Act provided that said Board of Administration should constitute the Board of Trustees for the "educational, benevolent and penal institutions of the state" and should control and manage such institutions.
Section 3 of the Act of April 2, 1937, Kan.L.1937, ch. 327, created a State Board of Social Welfare, consisting of five members. Section 8 of such Act empowered such Board to make contracts in the name of "the state board of social welfare" and provided that "in such name" it could "sue and be sued on such contracts."
Section 1 of the Act of March 28, 1939, Kan.L.1939, ch. 202, created a State Department of Social Welfare, to consist of the State Board of Social Welfare provided for in § 2 of the Act and its agents and employees. Section 2 provided that there should be a State Board of Social Welfare, to consist of three members appointed by the Governor.
Section 7 of such Act provided that all jurisdiction, powers and duties then conferred by law relating to the State Hospital and other designated institutions not here material "are hereby withdrawn from the state board of administration and conferred upon the state department of social welfare" and that "the powers and duties now or hereafter conferred by law upon the state business manager relating to the benevolent institutions herein named, shall be exercised by such business manager by and through said department of social welfare."
Section 5 of the Act of March 31, 1939, Kan.L.1939, ch. 285, amended § 74-108, Kan.G.S.Supp.1937, to provide that the State Business Manager "under the direction of the state board of regents, state department of social welfare or board of administration, as the case may be, shall purchase all the supplies required by the institutions under the management and control of each of said boards * * *."
It will appear from an examination of Appendix A that the State Board of Social Welfare, provided for as a part of the State Department of Social Welfare created by the Act of March 28, 1939, Kan. L.1939, ch. 202, was abolished by the Act of June 30, 1947, Kan.L.1947, ch. 425, and a new Board of Social Welfare was created by the latter Act; and that the new State Board of Social Welfare created by such 1947 Act was abolished by the Act of March 22, 1949, Kan.L.1949, ch. 446, and a new Board of Social Welfare was created by the latter Act; and that the powers and duties of the State Board of Social Welfare were redefined by the Act of March 15, 1951, Kan.L.1951, ch. 288.
The court concluded that Miami's cause of action against Panhandle was based on the contention that Panhandle wrongfully caused Miami to lose a customer; that the loss occurred on September 29, 1953, and that the instant action was not commenced until October 16, 1961, and was barred by the Kansas statute of limitations; and that Miami's claim to equitable relief was barred by "estoppel and laches"; and further that the service agreement between Miami and Panhandle was not breached by Panhandle and was still operative and being given full force and effect, both by Miami and Panhandle; and that Panhandle had no part in the termination of the arrangement between the State and Miami, whereby the latter was to furnish to the State gas for the State Hospital.
The Act of May 26, 1917, Kan.L.1917, ch. 297, § 1, Kan.R.S.1923, § 74-101, created a Board of Administration to manage the state institutions of Kansas.
Section 5 of such Act, Kan.R.S.1923, § 74-105, provided: "Said board shall constitute * * * the board of trustees or directors for all the educational, benevolent and penal institutions of the state of Kansas, and shall control and manage said institutions * * *."
Section 13 of the Act of May 26, 1917, Kan.L.1917, ch. 297, Kan.R.S.1923, § 76-107 provides that the Act of which it is a part contemplates the employment of an expert business manager for the business and scientific management of the state institutions covered by the Act and for the placing of all educational, beneficial and penal institutions of the State of Kansas under one management and one board of trustees or directors.
Section 14 of such Act, Kan.R.S.1923, § 76-108 provides: "The institutions to be under the control of such business manager and the state board of administration, shall be as follows: [Here are set forth the University of Kansas and other state educational institutions] * * *; also, the industrial school for girls, state industrial school for boys, the orphans' home, and such other benevolent institutions as now exist or may hereafter be created * * * [the section also enumerates the state penitentiary and other penal or corrective institutions]."
Section 17 of such Act, Kan.R.S.1923, § 76-111, provided: "The present board of directors of the various educational, benevolent, penal and corrective institutions referred to in this act, shall on and after July 1, 1917, have no further legal existence, and the power heretofore exercised by them shall be and become vested in the state board of administration, and the state board of administration shall be, on July 1, 1917, and without further process of law, authorized and directed to assume and exercise all the powers vested in or exercised by the boards of the said respective institutions, and the state board of administration shall be and constitute the board of directors or trustees for each of said several institutions * * * and government of said various institutions, shall apply to and be performed by the state board of administration, the business manager and his assistants * * *."
Section 2 of the Act of July 1, 1925, Kan.L.1925, ch. 259; Kan.R.S.Supp. 1930, § 76-108a, provided that all the jurisdiction, powers and duties then conferred by law on the State Board of Administration relating to the University of Kansas, Kansas State Agricultural College and all branch experiment stations of such Agricultural College, Kansas State Teachers' Colleges at Pittsburg, Emporia and Hays, were withdrawn from the State Board of Administration and conferred upon the State Board of Regents, except that all the powers and duties then or thereafter conferred by law upon the State Business Manager relating to said educational institutions should be exercised by such Business Manager, by and through said Board of Regents.
Section 2 of the Act of April 1, 1933, Kan.L.1933, ch. 271, Kan.G.S.1935, § 74-108, provided that the Board should employ and appoint a Business Manager for all institutions covered by the Act and that such Business Manager should have full authority to manage and control such institutions, by and with the advice of "The Board."
Section 3 of the Act of April 2, 1937, Kan.L.1937, ch. 327, Kan.G.S.1947, § 39-703, created a State Board of Social Welfare, to be composed of five members appointed by the Governor. Its duties primarily were to cooperate with the Federal government and the counties of the State in furnishing assistance to the needy aged, needy blind, and dependent children and to supervise such welfare activities by county boards.
The Act provided: "All contracts shall be made in the name of `the state board of social welfare of Kansas,' and in such name the state board may sue and be sued on such contracts."
The Act of March 28, 1939, Kan.L.1939, ch. 202, Kan.G.S.1947, § 75-3301, created a State Department of Social Welfare and provided it should consist of "the state board and such agents and employees as may be authorized and designated as such by the state board." It further provided in § 2 thereof: "The state board of social welfare shall consist of three members appointed by the governor * * *."
Section 7 of such Act provided: "All the jurisdiction, powers and duties now conferred by law upon the state board of administration relating to * * * the state hospital for the insane at Osawatomie * * * are hereby withdrawn from the state board of administration and conferred upon the state department of social welfare; except that all titles to real estate in connection with such institutions now vested in the state board of administration shall be and remain in the state board of administration and the powers and duties now or hereafter conferred by law upon the state business manager relating to the benevolent institutions herein named, shall be exercised by such business manager by and through said department of social welfare. [The section names other state institutions not here involved from which the jurisdiction, powers and duties conferred on the state board of administration were withdrawn and vested in the state department of social welfare.]"
The Act of March 31, 1939, Kan.L.1939, ch. 285, § 1, Kan.G.S.1947, § 74-101, amended previous statutes with respect to a Board of Administration and provided: "A board to manage the state institutions set out and mentioned in section 3 of this act is hereby created, consisting of two members, both of whom shall be appointed by the governor, * * * and one of them shall be designated by the governor as chairman thereof. The board shall be known and called board of administration, which said board shall have all of the jurisdiction, powers and duties now conferred by law upon said board of administration as now constituted except as changed or modified by this act."
Section 3 of such Act amended § 74-105, G.S.Kan.1935, to read in part as follows: "Said board shall constitute the board of trustees for the state penitentiary * * * the state industrial farm for women * * * and the state industrial reformatory * * *."
Section 5 of such Act amended prior statutory enactments with respect to the State Business Manager and provided: "The board shall appoint a business manager for the institutions covered by this act and under its control, * * *. The said business manager under the direction of the state board of regents, state department of social welfare or board of administration, as the case may be, shall purchase all the supplies required by the institutions under the management and control of each of said boards and such purchases shall be made in the manner provided by law."
Section 1 of the Act of June 1, 1947, Kan.L.1947, ch. 425, in part provided: "The state department of social welfare shall consist of the state board established under * * * section 3 of this act, the division of institutional management established under the provisions of section 4 of this act, and such agents and employees as may be authorized and designated as such by the state board established under the provisions of section 3 of this act."
Section 3 of such Act in part provided: "The state board of social welfare provided for in section 75-3302 of the General Statutes Supplement of 1945 is hereby abolished. On and after the effective date of this act the state board of social welfare shall consist of two (2) members appointed by the governor * * *. The state board of social welfare created by this act is hereby authorized, empowered and directed to do all things necessary for the proper exercise of all the powers, duties, authority and jurisdiction conferred upon the state board of social welfare under the provisions of this act and as prescribed in article 7 of chapter 39 and article 33 of chapter 75 of the General Statutes [of Kansas] Supplement of 1945."
Section 1 of the Act of March 24, 1949, Kan.L.1949, ch. 446, amended § 1, Kan. L.1947, and in part provided: "There is hereby created a state department of social welfare which shall consist of the state board established under the provisions of section 2 of this act, the state director of social welfare, the division of social welfare, the division of institutional management,1 and such agents and employees as may be authorized and designated as such pursuant to the provisions of this act."
Section 2 of such Act in part provided: "There is hereby created a state board of social welfare which shall consist of three (3) members appointed by the governor, * * *."
Section 12 of such Act in part provided: "The state board of social welfare provided for in section 75-3302b of the General Statutes Supplement of 1947 is hereby abolished, and all of its properties and all the powers, duties, authority and jurisdiction now exercised by and imposed by law upon the state board of social welfare and the state department of social welfare by article 7 of chapter 39 and article 33 of chapter 75 and article 17a of chapter 76 of the General Statutes Supplement of 1947 are hereby transferred to and imposed and conferred upon the state department of social welfare created under the provisions of section 1 of this act and said state department of social welfare is hereby empowered and directed to do all things necessary for the proper exercise of all such powers, duties, authority and jurisdiction in the manner as provided in this act."
Section 2 of the Act of March 15, 1951, Kan.L.1951, ch. 288, amended § 8 of the Act of April 9, 1949, Kan.G.S. 1949, § 39-708, to read in part as follows:
"(k) All contracts shall be made in the name of `the state board of social welfare of Kansas,' and in such name the state board may sue and be sued on such contracts."2
The same provision appears in Kan. G.S.1961 Supp. § 39-708(k).
Indeed. the Welfare Board, party defendant here, was not in existence when the contract was entered into and the state welfare board then in existence was abolished in 1947, as we shall show more particularly hereinafter
The Division of Institutional Management as provided for by § 5 of the Act, but its functions have no relevancy here