Dragor Shipping Corporation, a Corporation, Formerly Ward Industries Corporation v. Union Tank Car Company, a Corporation

Union Tank Car Company (Union) brought this action against Dragor Shipping Corporation (Dragor), to recover one million dollars for breach of a settlement agreement between the parties dated October 3, 1963, and to obtain payment of a promissory note in that amount. Dragor counterclaimed for one million dollars for breach of the same agreement. The district court granted summary judgment for Union on its complaint, and Dragor appealed pursuant to Rule 54(b), Federal Rules of Civil Procedure.

While that appeal was pending before our court the district court dismissed Dragor’s counterclaim for lack of prosecution. Dragor also appealed from that order. On the first appeal we reversed the district court because it lacked in personam jurisdiction over Dragor. Dragor Shipping Corporation v. Union Tank Car Company, 9 Cir., 361 F.2d 43 . The second appeal is now before us to decide whether the district court had jurisdiction to dismiss Dragor’s counterclaim.

The suit was instituted in the United States District Court for the District of Arizona. After Union filed its complaint, Dragor appeared specially and moved for an order quashing, vacating and annulling the service of process, and…