Frisch v. Alexson Equipment Corp.

• Decision Date: 15 November 1966
• Parties: William C. FRISCH v. ALEXSON EQUIPMENT CORPORATION, Equipment Rentals Company, Briggs & Stratton Corporation, Bell & Gossett Company and Marlow Pumps. Appeal of BRIGGS & STRATTON CORPORATION.
• Court: Pennsylvania Supreme Court

Page 183

224 A.2d 183

423 Pa. 247

William C. FRISCH v. ALEXSON EQUIPMENT CORPORATION, Equipment Rentals Company,

Briggs & Stratton Corporation, Bell & Gossett

Company and Marlow Pumps.

Appeal of BRIGGS & STRATTON CORPORATION.

Supreme Court of Pennsylvania.

Nov. 15, 1966.

John W. Wellman, Chadwick, Petriken, Smithers & Ginsburg, Chester, for appellant

Donald M. McCurdy, Jacques H. Fox, Fox & McCurdy, Media, for appellee.

Before BELL, C.J., and MUSMANNO, JONES, COHEN, EAGEN, O'BRIEN and ROBERTS, JJ.

OPINION

JONES, Justice.

W. C. Frisch (Frisch), instituted a trespass action in the Court of Common Pleas of Delaware County, on April 24, 1961, against five defendants, including Briggs & Stratton Corporation (Briggs), a Delaware corporation not registered to do business in Pennsylvania. This action was commenced by the issuance of a summons the personal service of which upon an alleged agent of Briggs at the agent's Philadelphia address failed. ¹ In the meantime, Frisch attempted to make a substituted service of his complaint upon Briggs, under the provisions of the Business Corporation Law of 1933, ² by sending a copy of the complaint by registered mail to the Secretary of the Commonwealth and to Briggs at its office in Milwaukee, Wisconsin.

Briggs, by preliminary objections, challenged the validity of the substituted service upon two grounds: (a) that it had not 'done any business' in Pennsylvania and (b) that Frisch's action did not arise 'out of acts or omissions of' Briggs in Pennsylvania. Interrogatories, Briggs' answers thereto and Frisch's answer to Briggs' preliminary objections were duly filed. On the basis of the record before it--the complaint, the preliminary objections, the answers to interrogatories and the answers to the preliminary objections--the court below dismissed Briggs' preliminary objections 'without prejudice to the rights of (Briggs) to raise the question of jurisdiction at trial.' From that order Briggs has appealed. ³

The present action was commenced on April 24, 1961; it is the statutory law in effect at that time which governs this case. ⁴ See: Kilian v. Allegheny County Distributors, Inc. (et al.), 409 Pa. 344, 350, 351, 185 A.2d 517 (1962). Construing the statute in effect when this action was commenced we said in Rufo v. The Bastian-Blessing Co., 405 Pa. 12, 14, 173 A.2d 123, 125: 'Section 1011, subd. B clearly sets forth two jurisdictional requirements which must be satisfied before a non-registered foreign corporation may be validly served with process through the Secretary of the Commonwealth: (1) the corporation must have 'done business' in the Commonwealth (as defined in § 1, Act of November 10, 1959, P.L. 1406, 15 P.S. § 2852--1011 (Pkt.Pt.)) and (2) the action must arise out of 'acts or omissions' of the corporation within the Commonwealth.' Both parties and the court below are in full accord with this construction of Section 1011(B); the divergence in their views lies in the application of Section 1011(B) to the factual situation herein presented.

Has Frisch, relying on substituted service to obtain In personam jurisdiction over Briggs, satisfied the dual requirements of Section 1011(B) permitting such substituted service by demonstrating that Briggs has 'done any business' in Pennsylvania and that this trespass action arises 'out of acts or omissions of (Briggs)' within Pennsylvania? Such is the purpose of our inquiry and, in pursuing such inquiry, we examine the findings of the court below to ascertain whether such findings find support in any evidence on this record. The court below found that Briggs had 'done business' in Pennsylvania and that this action arose out of Briggs' 'acts or omissions' in Pennsylvania.

Resolution of the question whether Briggs had 'done any business' in Pennsylvania requires consideration of what the legislature meant by 'doing business' and whether, under the instant factual situation, Briggs' activities fall within the legislative intendment.

Section 1011(C) of the statute (Act of November 10, 1959, P.L. 1406, § 1, 15 P.S. § 2852--1011(C) provides the entry of a corporation into Pennsylvania for (a) 'the doing of a series of similar acts for the purpose of thereby realizing pecuniary benefit or otherwise accomplishing an object' or (b) 'doing a single act (in Pennsylvania) for such purpose, with the intention of thereby initiating a series of such acts', constitutes 'doing business'. By such yardstick we must evaluate that which Briggs did or did not do in determining whether the first jurisdictional requirement of Section 1011(B) has been met.

The record reveals that: (1) Briggs, a Delaware corporation, is not registered to do business in Pennsylvania and has its office and place of business in Milwaukee, Wisconsin; (2) Briggs manufactures, distributes, services and supplies machinery and equipment, including engines for pumps; (3) Briggs' executives and other employees 'may' enter Pennsylvania 'on an occasional or sporadic basis to vist customers and to review with (customers) areas of applicability for (Briggs') engines and to discuss other general problems'; (4) it has two salaried employees, responsible for an area, including Pennsylvania, who enter Pennsylvania, 'to maintain liason' with and 'to review the functions of distributors and dealers' who, in the capacity of independent contractors, service Briggs' products and for their own account buy and sell replacement parts and engines; (5) it has another salaried employee who generally performs like duties with respect to 'original equipment manufacturers who buy from (Briggs)'; (6) such employees have no authority to accept orders for Briggs' products; (7) all orders originating in Pennsylvania for Briggs' products are accepted only by Briggs in Wisconsin and all deliveries are made f.o.b. points in Wisconsin; (8) Briggs had contracts with two concerns--one in Pittsburgh, the other in Philadelphia--to act as 'central service distributors', each buying and selling Briggs' products for its own account on orders accepted in Wisconsin calling for delivery f.o.b. points in Wisconsin and each distributor also develops sales an service outlets in Pennsylvania and adjacent states; (9) Briggs has no interest in any company nor does it have a subsidiary in Pennsylvania; (10) Briggs maintains no office or plant, has no telephone facility or bank account, nor does it purchase materials by purchase orders in Pennsylvania; (11) it does advertise in various media which appear in Pennsylvania. A review of this record convinces us that Briggs' activities are of such nature as to indicate it was 'doing business' within the import of Sections 1011(B) and 1011(C).

Swavely v. Vandergrift, 397 Pa. 281, 154 A.2d 779; Miller v. Kiamesha-Concord, Inc., 420 Pa. 604, 218 A.2d 309, and Hilton v. W. T. Grant Co., D.C. 212 F.Supp. 126--all relied on by Briggs--are factually inapposite. In our view, the factual situation more nearly approaches that in Rufo v. The Bastian-Blessing Co., 405 Pa. 12, 173 A.2d 123 (1961). Through its salaried employees who made regular monthly visits in Pennsylvania, through the sporadic visits of its executives and other employees and through the close collaboration with its distributors and those dealing with its products, even though on an independent contract basis, Briggs was carrying on a 'series of similar acts' for pecuniary profit in Pennsylvania.

In deciding whether Frisch's action arises out of 'acts or omissions' of Briggs in Pennsylvania, we accept as true, for the purpose of this inquiry, the well-pleaded facts in the complaint. Frisch avers that, on May 25, 1959, as a pump attendant and operating engineer, he was working on a sewer construction project in Boothwyn, Delaware County; while so employed, he was working near a pump which exploded causing him personal injuries; that Briggs had manufactured the engine which was attached to the pump which exploded; that this engine had been 'sold, leased, consigned, bailed and/or delivered to' either one or both of two named Philadelphia concerns which had, by either or both concerns, been 'sold, leased, rented, bailed, consigned, supplied, serviced and/or delivered' to the general contractor on the sewer project by...