Kulicke v. Rollway Bearing Company, Civ. A. No. 17799.

Citation131 F. Supp. 572
Decision Date01 June 1955
Docket NumberCiv. A. No. 17799.
PartiesFred W. KULICKE v. ROLLWAY BEARING COMPANY, Inc.
CourtUnited States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)

John J. Brooks, Philadelphia, Pa., for plaintiff.

George E. Beechwood (of Conlen, LaBrum & Beechwood), Philadelphia, Pa., for defendant.

LORD, District Judge.

Plaintiff, a citizen of Pennsylvania, and a former engineering representative of the defendant, a New York corporation, has brought this action for an alleged breach of an employment contract. The defendant has filed a motion to dismiss the action for want of jurisdiction. Thus, the question is presented as to whether the activities of the defendant constitute doing business in Pennsylvania so as to render it subject to the jurisdiction of this Court. Rule 4(d) (7) of the Federal Rules of Civil Procedure, 28 U.S.C., provides that service of process on a foreign corporation is valid if done in the manner prescribed by the law of the state in which the service is made.

The facts developed at a hearing on defendant's motion are as follows: defendant is a foreign corporation organized and existing under and by virtue of the laws of the State of New York and is not registered to do business in the Commonwealth of Pennsylvania. It is engaged in the manufacture and sale of cylindrical roller bearings. It has an office in the City of Philadelphia where it is listed in the lobby of the office building and its name appears on the door of its office. The lease is in the name of the engineering representative but it is assigned to the defendant which pays the rent, telephone bills and other expenses of operation. On all correspondence emanating from the Philadelphia office quoting prices and furnishing delivery information, the name of the defendant appears with "Philadelphia Office" added, giving its address and telephone number in Philadelphia. In its advertisements and catalogs, defendant lists its Philadelphia office. The defendant does a substantial business in Pennsylvania and for the last ten years has averaged $300,000, exclusive of the war years. The furniture and equipment is owned by the defendant. It is listed in the Philadelphia telephone directory as well as in the classified directory. There are two employees in the office, one, an engineering representative for Eastern Pennsylvania and surrounding states, and the other who acts as secretary and sales assistant, on occasion quoting prices to customers. The duties of the engineering representative, a graduate engineer, are to advise customers and prospective customers as to the design, type, use, and fitness of purpose of defendant's products in the customer's business, and to endeavor to obtain orders, make sales, and generally to promote business for the defendant. To that end, he will make drawings and designs for submission to prospective customers and work on the customer's own drawings and designs at their plants, making specific recommendations. Where necessary, he will make specifications and dimensions of bearings for a particular customer's need which would be submitted to the home office in Syracuse for approval. He has sole authority to hire and fire personnel in the Philadelphia office. He participates in practically every sale in his territory. On occasion, he has been asked to assist in the collection of accounts. He has authority to quote prices for the defendant's products within a certain range and with certain limitations to encourage the issuance of purchase orders by customers which would be accepted at the home office. He checks the supply of bearings on hand of the defendant's licensed distributors to ascertain whether they have sufficient stock and inventory. He advises customers as to delivery dates and shipments. He approaches prospective customers from leads given him by the sales office of the defendant at Syracuse, who are his superiors. He also develops leads from classified directories and advertisements in the industry magazines. He regularly visits the purchasing agents of defendant's customers. He is paid a salary of $7,200 a year plus commissions on the volume of business done annually in the territory.

The question of the validity of service of process upon a foreign corporation has been one of frequent recurrence before the courts. The variables present in each case account for the lack of any well-defined formula for determining what constitutes the doing of business by such a corporation so as to subject it to a particular jurisdiction.

While there are conflicting views, and each case must be decided on its own facts, it would appear to be generally recognized, and the Supreme Court has said, that solicitation alone is not sufficient to constitute doing business. Green v. Chicago, Burlington & Quincy Ry. Co., 1907, 205 U.S. 530, 27 S.Ct. 595, 51 L.Ed. 916. Later, in International Harvester Co. v. Kentucky, 1914, 234 U. S. 579, 586, 34 S.Ct. 944, 58 L.Ed. 1479, the court held that solicitation plus other activities would be sufficient, and in referring to the Green case, labeled it as an "extreme case". It also said that each case must be decided on its own facts and there is jurisdiction if the corporation is carrying on business in such sense as to manifest its presence within the state. As Chief Judge Kirkpatrick of this Court said, the rule in the Green case "`readily yields to slight additions.'" Minker v. Pennsylvania R. Co., D.C.E.D.Pa.1945, 63 F.Supp. 1017, 1020.

Further, in International Shoe Co. v. State of Washington, 1945, 326 U.S. 310 at page 319, 66 S.Ct. 154, at page 160, 90 L.Ed. 95, in considering the same problem the Supreme Court said:

"But to the extent that a corporation exercises the privilege of conducting activities within a state, it enjoys the benefits and protection of the laws of that state. The exercise of that privilege may give rise to obligations; and, so far as those obligations arise out of or are connected with the activities within the state, a procedure which requires the corporation to respond to a suit brought to enforce them can, in most instances, hardly be said to be undue. Compare International Harvester Co. v. Kentucky, supra, with Green v. Chicago, Burlington & Quincy Ry. Co., supra, and People's Tobacco Co. v. American Tobacco Co., supra 246 U.S. 79, 38 S.Ct. 233, 62 L.Ed. 587. Compare Connecticut Mutual Life Co. v. Spratley, supra, 172 U.S. 602 619, 620, 19 S.Ct. 308 314, 315, 43 L. Ed. 569, and Commercial Mutual Co. v. Davis, supra, with Old Wayne Mutual Life Ass'n v. McDonough, supra 204 U.S. 8, 27 S.Ct. 236, 51 L.Ed. 345. See 29 Columbia Law Review, 187-195.
"Applying these standards, the activities carried on in behalf of appellant in the State of Washington were neither irregular nor casual. They were systematic and continuous throughout the years in question. They resulted in a large volume of interstate business, in the course of which appellant received the benefits and protection of the laws of the state, including the right to resort to the courts for the enforcement of its rights. The obligation which is here sued upon arose out of those very activities. It is evident that these operations establish sufficient contacts or ties with the state of the forum to make it reasonable and just according to our traditional conception of fair play and substantial justice to permit the state to enforce the obligations which appellant has incurred there. * * *" (Emphasis supplied.)

To the same effect see Landell v....

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7 cases
  • Florio v. Powder Power Tool Corp.
    • United States
    • U.S. Court of Appeals — Third Circuit
    • September 12, 1957
    ...is being paid to semantics and more to business realities. Judge Lord has ably traced this development in Kulicke v. Rollway Bearing Co., D.C.E.D.Pa.1955, 131 F.Supp. 572. See also Frene v. Louisville Cement Co., 1943, 77 U.S.App.D.C. 129, 134 F.2d 511, 514, 146 A.L.R. 9266; 34 California L......
  • DiLido Hotel v. Nettis
    • United States
    • Pennsylvania Superior Court
    • September 11, 1969
    ...of a local distributor, Florio v. Powder Power Tool Corp., 3 Cir., 248 F.2d 367; volume of business such as in Kulicke v. Rollway Bearing Co., Inc., D.C., 131 F.Supp. 572, where defendant corporation made $300,000.00 a year average over a ten year period in the forum state; number of employ......
  • Brewster v. F. C. Russell Co.
    • United States
    • South Dakota Supreme Court
    • November 4, 1959
    ...v. F. C. Russell Co., 1957, 210 Or. 324, 311 P.2d 737; Scholnik v. National Airlines, 6 Cir., 1955, 219 F.2d 115; Kulicke v. Rollway, Bearing Co., D.C.1955, 131 F.Supp. 572; Florio v. Powder Power Tool Co., 3 Cir., 1957, 248 F.2d 367 (state law considered); WSAZ, Inc. v. Lyons, 6 Cir., 1958......
  • Solt v. Interstate Folding Box Company, Civ. A. No. 16536.
    • United States
    • U.S. District Court — Eastern District of Pennsylvania
    • August 19, 1955
    ...shall constitute "doing business."'" While the rehearing was pending, Judge Lord of this District had occasion in Kulicke v. Rollway Bearing Co., Inc., D.C., 131 F.Supp. 572, to discuss the impact of this amendment on the Shambe and Lutz cases which were prior to the amendment. I am in full......
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