Block & Co. v. Storm Printing Co. , 40 Ill. App. 3d 92 ( 1976 )

Mr. JUSTICE BURKE

delivered the opinion of the court:

Storm Printing Company (Storm) appeals from an order enjoining it from further prosecution of an action against Block and Company, Inc. (Block), in the United States District Court for the Northern District of Texas, Dallas Division. Storm brought suit against Block in the Judicial District Court of Dallas County, Texas subsequent to the filing of the present action by Block in the circuit court of Cook County. Block removed the action from the Texas State court to the United States District Court.

Storm is a corporation organized under the laws of Texas and maintains its principal office in Dallas, Texas. Block is an Illinois corporation which is located in Wheeling, Illinois. Block is a merchandiser of a variety of equipment and supplies utilized by banks, savings and loan associations, and other financial institutions. Block and Storm entered into a contract by which Storm agreed to print and distribute certain merchandise catalogs. Block promotes the sale of its products through the distribution of merchandise catalogs to numerous financial institutions.

Block filed a complaint in the circuit court against Storm on April 7, 1975, alleging breach of contract on the ground that Storm defectively produced 220,000 catalogs contrary to the requirements contained in the parties’ agreement and contrary to the standards of good workmanship. Block further alleged that Storm failed to complete printing and distribution of the catalogs in the time specified by the agreement, and that Storm did not properly distribute many of the catalogs in accordance with Block’s instructions. The complaint averred that the contract between the parties was formed in Illinois.

On May 20, 1975, Storm filed a special appearance and a motion to dismiss for lack of jurisdiction. Storm did not request a hearing on the motion to dismiss. However, on August 14, 1975, Storm submitted an answer alleging that the terms of the parties’ agreement are different from the terms represented by Block in its complaint; that the catalogs were completely printed and ready for distribution in the time required by Block; that any default and delay in performance was caused by the actions of Block; and that improper distribution of catalogs resulted from Block’s faulty shipping instructions. Storm further alleged that the contract was formed in Texas.

Prior to filing its answer, Storm brought an action against Block in the Judicial District Court of Dallas County, Texas on June 7, 1975. Storm sought recovery of the purchase price of goods and services rendered to Block in the production of the same merchandise catalogs which Block claimed in its Illinois action to be defectively printed and distributed. Block subsequently removed the suit from the Texas State court to the United States District Court for the Northern District of Texas, Dallas Division.

On July 3,1975, Block filed an emergency motion in the circuit court for an injunction to restrain Storm from taking any further action in the Texas State court. On July 16, 1975, the injunction was granted by an order which extended the injunction’s effect until “further order of the court.” The injunction order was amended nunc pro tunc on August 8, 1975, to specify the reasons for the court’s ruling. Storm filed a notice of appeal from the injunction order on August 11,1975. Storm did not, however, file the record with this court until October 6,1975. On October 15,1975, on the motion of Storm, the circuit court made a finding that pursuant to Supreme Court Rule 304 there was no just reason for delaying enforcement or appeal of the injunction order of July 16,1975. (Ill. Rev. Stat. 1975, ch. 110A, par. 304.) Thereafter, Storm filed a second notice of appeal from the July injunction order. Storm’s appeal is predicated on the second notice of appeal.

At the outset we consider Block’s contention that the appeal be dismissed because of failure by Storm to comply with Supreme Court Rule 307 which provides that an appeal from an interlocutory order must be perfected within 30 days from the entry thereof by filing a notice of appeal and the record within the same 30 days unless the time is extended by this court. (Ill. Rev. Stat. 1975, ch. 110A, par. 307.) Block offered the same argument to this court in a motion to dismiss the appeal on October 15, 1975, which we denied.

We are of the opinion that the injunction order of July 16,1975, is a final and appealable order. The purpose of the order was and is to restrain the prosecution of the action by Storm in the Texas court. The intention is to retain jurisdiction of the case and to protect that jurisdiction against interference. While the order for the injunction uses language usually pertaining to a temporary injunction, the order in fact grants a permanent injunction. We adhere to the previous order entered by this court denying Block’s motion to dismiss the appeal.

We next consider the only two issues presented by Storm on appeal. Storm first contends that it had the option of instituting a separate action in a Texas State court instead of filing a counterclaim in the circuit court pursuant to section 38 of the Civil Practice Act. (Ill. Rev. Stat. 1975, ch. 110, par. 38.) Storm argues that electing to file a separate action under section 38 precludes issuance of the trial court’s injunction. Secondly, Storm contends that the criteria established by the Illinois Supreme Court for enjoining foreign actions was not satisfied.

Our Supreme Court’s decision in James v. Grand Truck Western R.R. Co., 14 Ill. 2d 356, 152 N.E.2d 858, cert. denied, 358 U.S. 915, 3 L. Ed. 2d 239, 79 S. Ct. 288, controls the disposition of the issues raised. The plaintiff in James, a resident of Michigan, instituted a wrongful death action in Illinois. In reaction, the defendant railroad filed suit in Michigan and obtained an injunction restraining plaintiff from further prosecuting her Illinois action. The Supreme Court allowed plaintiff’s motion for a counterinjunction enjoining the enforcement of the Michigan injunction.

The James decision firmly establishes that a court of equity has the power, in appropriate circumstances, to restrain persons within its jurisdiction from instituting or proceeding with actions in the courts of sister States. More specifically, James reaffirms this State’s policy to protect the jurisdiction which is first acquired over the parties and the merits of the cause. Illinois courts have consistently refrained enjoining parties from prosecuting a prior instituted action pending in another jurisdiction absent convincing proof of fraud, gross wrong or oppression. (James v. Grand Trunk Western R.R. Co., 14 Ill. 2d 356, 366, 371, 152 N.E.2d 858, 864, 866.) The James decision does not require a similarly stringent standard of proving gross wrong or manifest injustice, as suggested by Storm, before an Illinois cotut may enjoin a party from further proceeding in a subsequently instituted action pending in a sister jurisdiction. People ex rel. Scott v. Jones, 44 Ill. 2d 343, 255 N.E.2d 397.

Moreover, Storm has not sustained its burden of demonstrating that the trial court’s order is based upon insufficient grounds. Block alleged in its motion for an injunction that further prosecution of the Texas action would result in fraud, oppression, irreparable harm, and a possible conflict in judgments. It has been held that a party initiating a subsequently filed out-of-State action will be restrained if further prosecution appears to be oppressive, vexatious, annoying, harassing, or unduly interfere with the progress of a prior instituted local action. (University of Texas v. Morris (1961), 162 Tex. 60, 344 S.W.2d 426; Childress v. Johnson Motor Lines (1952), 235 N.C. 522, 70 S.E.2d 558; Simmons v. Superior Court (1950), 96 Cal. App. 2d 119, 214 P.2d 844.) The trial court conducted two separate hearings on Block’s motion and entertained arguments of counsel. The record does not contain a report of proceedings. When the record on appeal is incomplete, it will be presumed that the trial court heard sufficient evidence and argument to support its decision. Any doubt arising from the incompleteness of the record will be resolved against the appellant. Aetna Life Insurance Co. v. Strickland, 33 Ill. App. 3d 52, 337 N.E.2d 285.

Storm’s argument that section 38 of the Civil Practice Act prohibits the issuance of the trial court’s injunction is without merit. Section 38 provides that a defendant having a claim against any plaintiff or any co-defendant may elect to assert such claim in the form of a counterclaim. (Ill. Rev. Stat. 1975, ch. 110, par. 38.) If defendant’s claim constitutes a separate cause of action, the claim may be asserted in a subsequent independent action. However, if the claim involves the same operative facts, the doctrine of res judicata may operate to bar a subsequent action. Stoner v. Stoner, 351 Ill. App. 304, 115 N.E.2d 103; Kaufman v. Somers Board of Education (D. Conn. 1973), 368 F. Supp. 28.

Section 38 does not preclude an Illinois court from protecting its jurisdiction in order to decree complete and final justice between the parties. The action filed by Storm in Texas and the action instituted by Block involve the same subject matter and the same contract. Contrary to Storm’s insistence, both actions raise identical questions relative to the conforming nature of the printing and distribution of the merchandise catalogs, the value of goods and services rendered by Storm minus any justified credits, and the possible incidental and consequential damages resulting to Block from any nonconformity. The trial court was not precluded by section 38 in ordering that an injunction issue for the purpose of completely adjudicating the controversy in its prior obtained jurisdiction.

We have not discussed the legal significance of the removal of the Texas case to the United States District Court because no issue thereon was raised by either of the parties in the trial court or in this court.

For these reasons the judgment is affirmed.

Judgment affirmed.

O’CONNOR, J., concurs.