402 F.2d 400 (5th Cir. 1968), 24507, Mooney Aircraft, Inc. v. Donnelly

Docket Nº:24507.
Citation:402 F.2d 400
Party Name:MOONEY AIRCRAFT, INC., Appellant, v. Dennis J. DONNELLY, Administrator of the Estate of Joseph M. Donnelly, Deceased, Appellee.
Case Date:September 18, 1968
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 400

402 F.2d 400 (5th Cir. 1968)



Dennis J. DONNELLY, Administrator of the Estate of Joseph M. Donnelly, Deceased, Appellee.

No. 24507.

United States Court of Appeals, Fifth Circuit.

Sept. 18, 1968

Rehearing En Banc Denied Nov. 8, 1968.

James W. Wilson, Austin, Tex., for appellant.

Franklin S. Spears, San Antonio, Tex., for appellee.

Before RIVES, BELL and GOLDBERG, Circuit Judges.

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GOLDBERG, Circuit Judge:

State statutes authorizing service of process on corporations for from home have filled the reporter system with a cornucopia of decisions. Of these decisions, Mooney Aircraft, Inc., has had its plethoric share. In Delray Beach Aviation Corp. v. Mooney Aircraft, 5 Cir. 1964, 332 F.2d 135, cert. den., 379 U.S. 915, 85 S.Ct. 262, 13 L.Ed.2d 185, we inspected the Florida long-arm service of process statute and found that it 'reaches as far as Texas.' 332 F.2d at 137. Here, however, we measure the Pennsylvania long-arm service of process and find that Mooney lies outside its reach.

On June 23, 1962, Joseph M. Donnelly, a resident of Pennsylvania, died in the crash of his private aircraft near Meadowville, Virginia. In May, 1963, Dennis J. Donnelly, Administrator of the Estate of Joseph M. Donnelly, filed suit for negligence and breach of warranty against the manufacturer of the aircraft, Mooney Aircraft, a Texas corporation. The suit was filed in the United States District Court for the Western District of Pennsylvania. Although notified of the suit, Mooney chose not to enter the district court proceedings, and the administrator was subsequently awarded a default judgment in the amount of $175,000.00.

On July 1, 1964, the default judgment against Mooney was registered in the District Court for the Western District of Texas pursuant to 28 U.S.C. § 1963. 1 Mooney then filed a Motion to Quash Registration and to Quash Execution, contending that this judgment had not been brought under the jurisdiction of the Pennsylvania district court. On March 16, 1966, the Texas district court denied Mooney's motion, which action precipitated this appeal.

As provided in Fed.R.Civ.P. 4(d)(3) and (7), 2 the Administrator elected to serve Mooney through procedures prescribed by Pennsylvania law. Service of process was initially attempted on June 11, 1963, by personal service upon Charles E. Campbell, a Pennsylvania distributor of aircraft manufactured by Mooney. In addition, on July 5, 1963, substituted

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service was made on the Secretary of the Commonwealth of Pennsylvania by certified mail. Mooney does not challenge either attempt on procedural technicalities. Rather, Mooney contends that neither attempt at service was authorized by Pennsylvania law.

We need not search far for an authoritative commentary of Pennsylvania law as it relates to the issues at bar. On November 14, 1967, the Pennsylvania Supreme Court handed down yet another Mooney long-arm decision, Myers v. Mooney Aircraft, 1967, 429 Pa. 177, 240 A.2d 505, involving two similar actions in the state courts caused by the crash of another of Mooney's airplanes. In one of the actions, instituted by the executor of the estate of Helen E. Myers, the pilot, Mooney filed preliminary objections denying personal jurisdiction (over two and one-half years after service was made); the Court of Common Pleas overruled such objections; and Mooney appealed to the Pennsylvania Supreme Court. In the other action, instituted by the executor of the estate of Maurice F. Wilhere, the passenger accompanying Myers, Mooney filed no appearance or answer; a default judgment was taken by the plaintiff; Mooney, one year later, filed a petition to strike off the default judgment for lack of personal jurisdiction; the court denied such motion; and Mooney appealed. The Myers and Wilhere cases were consolidated on appeal. In both actions the record before the Pennsylvania Supreme Court consisted solely of certain depositions, affidavits, and exhibits which had been introduced in the Donnelly controversy at bar. Therefore, our analysis of both attempts by the Administrator to serve Mooney will be founded upon the respective statutes as interpreted by the Pennsylvania opinion.

I. Substituted Service on the Secretary of the Commonwealth, July 5, 1963

Section 1011, subd. B of the Pennsylvania Business Corporation law of 1933, 15 P.S. § 2852-1011, subd. B, authorizes the Secretary of the Commonwealth to accept substituted service of process for 'any foreign business corporation which shall have done any business in this Commonwealth, without procuring a certificate of authority to do so from the Department of State.' However, on July 5, 1963, when the administrator's attempt was made, the availability of such service was severely restricted in that the statute allowed substituted service only in an 'action arising out of acts or omissions of such corporation within this Commonwealth.' 3 (An amendment to the statute, which became effective August 13, 1963, omitted the 'acts or omissions' requirement and prescribed substituted service as now authorized 'in any action arising within this Commonwealth,' 4 but, as we shall discuss, such amendment is inapplicable to the case at bar.)

The Pennsylvania court in Myers, as well as the district court below, found affirmatively that Mooney, which had obtained no certificate of authority from the Department of State, was 'doing business' as that term was used in Section 1011, subd. B and defined in Section

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1011, subd. C. 5 Mooney does not contest this finding on appeal. Instead, it stresses that none of the 'acts or omissions' which precipitated this suit occurred in Pennsylvania and, therefore, that the substituted service on July 5, 1963, was void for lack of statutory authority. The district court below accepted Mooney's defense, relying on Rufo v. Bastian-Blessing Company, 1961, 405 Pa. 12, 173 A.2d 123, in which the Pennsylvania Supreme Court held:

'The question is not where the injury occurred or where the cause of action arose; where did the company's negligent acts or omissions take place?' 173 A.2d at 127.

See also Frisch v. Alexson Equipment Corp., 1966, 423 Pa. 247, 224 A.2d 183, 187.

In Myers the Pennsylvania Supreme Court acknowledged the Rufo holding as the law before August 13...

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