Blum v. Postal Telegraph

• Decision Date: 26 April 1944
• Docket Number: No. 2003.,2003.
• Citation: 54 F. Supp. 898
• Parties: BLUM v. POSTAL TELEGRAPH, Inc.
• Court: U.S. District Court — Western District of Pennsylvania

54 F. Supp. 898

BLUM v. POSTAL TELEGRAPH, Inc.

No. 2003.

District Court, W. D. Pennsylvania.

April 26, 1944.

E. B. Goldsmith and C. J. Tannehill, both of Pittsburgh, Pa., for plaintiff.

Henry O. & Oliver Evans, of Pittsburgh, Pa., for Postal Telegraph, Inc.

Edw. Schreiner, of Pittsburgh, Pa., for Postal Telegraph Cable Co.

McVICAR, District Judge.

This action is now before us on three motions, the first being the motion of the defendant to dismiss the action against it, etc.; the second is the motion of plaintiff to amend his statement of claim or complaint; and the third is the motion of the Postal Telegraph Cable Company of Pennsylvania to set aside certain service made upon it, etc. We will consider these motions in the order mentioned:

Motion of Defendant to Dismiss, etc.

The defendant moved to vacate or set aside the service of the summons made upon it in this case, to quash the writ and dismiss the action as against the defendant, because of lack of jurisdiction of the person of the defendant, insufficiency of process issued against the defendant and insufficient service of process issued against defendant.

This action was brought, originally, in the Court of Common Pleas of Allegheny County, Pa. It was removed to this court by the defendant. The sheriff of Allegheny County made service on defendant April 8, 1942, by serving a true and attested copy of the writ, with a copy of plaintiff's statement of claim, to N. A. Aaron, Superintendent in Pittsburgh, the person, for the time being, in charge of the business of the defendant.

The plaintiff is a citizen of the State of Pennsylvania; the defendant is a Delaware corporation (not registered in Pennsylvania) incorporated with powers to hold the stock of subsidiary companies, and, also, to operate and carry on a telegraph business. The defendant owns the stock of thirty-four companies, one of them being the Postal Telegraph Cable Company, a Pennsylvania corporation. The business of the defendant and of the thirty-four companies of which it holds the stock was transacted at the same address in New York City under the name of "Postal Telegraph." The officers of the defendant holding company and of the subsidiary companies were substantially the same. The annual reports of the defendant and its subsidiaries, filed with the Federal Communications Commission, were entitled "Consolidated Report of Postal Telegraph, Inc. and Subsidiary Companies." The defendant made loans to its subsidiary companies, including the Postal Telegraph Cable Company of Pennsylvania, for the use of said companies in the operation of the Postal Telegraph business. It took security from the subsidiary companies for the loans made. The business at Pittsburgh of the Postal Telegraph Cable Company of Pennsylvania was transacted in the Keenan Building, Pittsburgh. It was advertised by an electric sign and on the windows of the first floor by the name of "Postal Telegraph." The blanks furnished at the office to persons desiring to send messages were all headed "Postal Telegraph." Recently, there has been a merger between the defendant, which included the thirty-four subsidiary companies, and the Western Union Telegraph Company.

Defendant relies largely in support of the motion now before us, upon the ruling of the Supreme Court in Cannon Manufacturing Company v. Cudahy Packing Company, 267 U.S. 333, 45 S.Ct. 250, 251, 69 L.Ed. 634. It was held in that case that the holding company was not doing business in the State of North Carolina, although it owned all of the stock of the subsidiary company. The corporate separation was carefully maintained. The Court stated, however, "There is here no attempt to hold the defendant liable for an act or omission of its subsidiary * * *. Hence, cases concerning substantive rights, like Hart Steel Company v. Railroad Supply Co., 244 U.S. 294, 37 S.Ct. 506, 61 L.Ed. 1148; Chicago, Milwaukee & St. Paul Ry. Co. v. Minneapolis Civic Association, 247 U.S. 490, 38 S.Ct. 553, 62 L.Ed. 1229; Gulf Oil Corp. v. Lewellyn, 248 U.S. 71, 39 S.Ct. 35, 63 L.Ed. 133, and United States v. Lehigh Valley R. R. Co., 254 U.S. 255, 41 S.Ct. 104, 65 L.Ed. 253, have no application."

In Chicago, Milwaukee & St. Paul Railway Co. v. Minneapolis Civic and Commerce Association, 247 U.S. 490, 38 S.Ct. 553, 557, 62 L.Ed. 1229, the Court stated:

"Much emphasis is laid upon statements made in various decisions of this court that ownership, alone, of capital stock in one corporation by another, does not create an identity of corporate interest between the two companies, or render the stockholding company the owner of the property of the other, or create the relation of principal and agent or representative...