Monaco v. Montgomery Cab Co.

• Decision Date: 16 March 1965
• Citation: 417 Pa. 135,208 A.2d 252
• Parties: Michael MONACO, Appellant, v. MONTGOMERY CAB COMPANY.
• Court: Pennsylvania Supreme Court

Page 252

208 A.2d 252

417 Pa. 135

Michael MONACO, Appellant, v. MONTGOMERY CAB COMPANY.

Supreme Court of Pennsylvania.

March 16, 1965.

Joseph P. Gorham, Philadelphia, for appellant.

Richard S. Hoffmann, Philadelphia, for appellee.

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

COHEN, Justice.

This is an appeal from the dismissal of a complaint in trespass against a corporate defendant because of improper venue.

In his complaint, plaintiff-appellant, Michael Monaco, alleged injuries arising out of an accident in Montgomery County caused by the negligence of an employee of defendant-appellee, Montgomery Cab Company. Plaintiff began suit in Philadelphia County by a writ of summons, which was served on November 18, 1957. Defendant filed a 'de bene esse' appearance on November 27, 1957 'for the purpose of raising questions of jurisdiction.' The summons was reissued on August 21, 1959, and, by deputized service, was served on defendant in Montgomery County on September 2, 1959. On October 6, 1959, defendant caused a rule to issue on plaintiff to file a complaint. In due course, the complaint was filed by plaintiff and preliminary objections were filed by defendant, challenging the propriety of venue in Philadelphia County. The lower court sustained the objection and dismissed the complaint.

Plaintiff contends that defendant entered a 'general appearance' when it caused a rule to file a complaint to issue and thereby waived its right to object to venue. Notwithstanding the promulgation of the Pennsylvania Rules of Civil Procedure, the prior doctrine persists that the entering of a 'general appearance,' i.e., the performance of an act which unconditionally accepts the jurisdiction of the court for all purposes, causes a waiver of 'jurisdictional objections, C. E. Williams Co. v. Henry B. Pancoast Co., 412 Pa. 166, 194 A.2d 189 (1963), Simpson v. Simpson, 404 Pa. 247, 251, 172 A.2d 168, 171 (1961), which, for procedural purposes only, includes venue. County Construction Co. v. Livengood Construction Corp., 393 Pa. 39, 45, 142 A.2d 9, 13 (1958). Assuming, arguendo, the continued general propriety of this doctrine, in the face of the Rules of Civil Procedure, it is plain that it is inapplicable here. ¹ Defendant never entered a 'general appearance.'

In the case of a personal action against a corporate defendant, venue lies in the county where it has its registered office or principal place of business, where it regularly conducts business, where the cause of action arose, or where a transaction or occurrence took place out of which the cause of action arose. Pa.R.C.P. 2179(a), 12 P.S. Appendix. Here the action was begun by summons. The summons did not inform defendant where the cause of action arose. Therefore, defendant could not have intelligently decided whether it had an objection to venue before the facts surrounding the cause were alleged in the complaint. Nor could the court dispose of the objection before these facts came onto the record. Accordingly, instead of constituting a waiver, the action taken by defendant in causing a complaint to be filed was, in this case, a necessary prerequisite to an objection to venue. Accord, Immitt v. Vacabet, 56 Lanc.Rev. 353 (1959).

In addition, there is another and more general reason why an objection to venue is not waived by obtaining a rule to file a complaint. Under the Pennsylvania Rules of Civil Procedure the exclusive method by which a party may raise 'jurisdictional' objections is by preliminary objections. C. E. Williams Co. v. Henry B. Panacoast Co., supra 412 Pa. at p. 170, 194 A.2d 189, Pa.R.C.P. 1017(b), 1028(b), 1032. But preliminary objections may not be filed until after the complaint is filed. This is true even though certain 'jurisdictional' objections may become apparent immediately after service of a writ of summons and before the complaint is filed. The inclusion of preliminary objections in the list of allowable pleadings, Pa.R.C.P. 1017, indicates that it was intended to be a response to a prior pleading; a writ of summons is not a pleading. Also, the Note of Procedural Rules Committee to Rule 1017 states that '[a] preliminary objection may be filed to a complaint, answer, reply or counter-reply,' without mentioning a summons. Moreover, waiting until after the complaint is filed would accord with the policy of the Rules to reduce the pretrial stages of the action, and to telescope the various dilatory actions of the defendant, 1 Goodrich-Amram Standard Pennsylvania Practice § 1013(b)6, p. 54, Vant v. Gish, 412 Pa. 359, 368, 194 A.2d 522, 527 (1963), because the objections raised by the writ of summons could be disposed of at the same time as the objections raised by the complaint independently of the writ.

It has been argued that defendant's evidence in support of his objection to the writ may be weakened if he has to await plaintiff's complaint. The answer to this is that a defendant can, as he did here, force the defendant to file a complaint within 20 days or suffer non pros.

Accordingly, since the rules indicate that a preliminary objection cannot be made before a complaint has been filed and since this interpretation is consistent with the policy of the Rules, we hold that a defendant does not waive 'jurisdictional' objections by obtaining a rule to file a complaint.

Although defendant did not waive its objection to venue, the lower court erred when it found that venue was not proper in Philadelphia County. Defendant is a Pennsylvania Corporation. Pa.R.C.P. 2179(a) provides that 'a personal action against a corporation * * * may be brought in and only in (1) the county where its registered office or principal place of business is located; or (2) a county where it regularly conducts business (3) the county where the cause of action arose; or (4) a county where a transaction or occurrence took place out of which the cause of action arose.' It is clear from the record that clauses '(1),' '(3)', and '(4)' do not support venue in Philadelphia County. The only question is whether defendant 'regularly conducts business' there.

The words 'regularly conducts business' first appeared in Rule 2179(a)(2) in 1944. since that date the only appellate court case which has explicitly considered Rule 2179(a)(2) is Law v. Atlantic Coast Line R.R. Co., 367 Pa. 170, 79 A.2d 252 (1951). There it was suggested that the prior case law on what constituted 'doing business', under a statutory venue provision absolutely suspended by the Rules in 1944, ² was applicable to the concept of 'regularly conducts business' embodied in Rule 2179(a)(2). The lower courts have also assumed the relevancy of the prior law. See Diamond K, Inc. v. Mobile Industrial Equipment Corp., 14 Pa.Dist. & Co.R.2d 178 (1957), Moustakas v. Metropolitan Casualty Insurance Company of New York, 89 Pa.Dist. & Co. R. 551 (1954).

The leading prior case is Shambe v. Delaare & Hudson R.R. Co., 288 Pa. 240, 135 A. 755 (1927). We refer to that case here for only one purpose--for the light it sheds on the standard of 'regulary conducts business' set forth in the corporations venue rule, Pa.R.C.P. 2179(a)(2). The problem of state court jurisdiction over foreign corporations, which Shambe also dealt with, is regulated by the Business Corporation Law. See Act of May 5, 1933, P.L. 364, § 1011, subd. C, as amended, 15 P.S. § 2852-1011, subd. C. We said that, when venue in a particular county depends upon 'doing business there,' '[t]he business engaged in must be sufficient in quantity and quality * * *. The term 'quality of acts' means those directly, furthering, or essential to, corporate objects; they do not include incidental acts. * * * By 'quantity of acts' is meant those which are so continuous and sufficient to be termed general or habitual. A single act is not enough.' Shambe v. Delaware, supra, at pp. 246-247, 135 A. at p. 757. In our opinion, these standards are appropriate in determining where a corporation 'regularly conducts business' within the meaning of Rule 2179(a)(2), for the purpose of venue.

In applying these standards we recognize that '[e]ach case must depend on its own facts, * * *.' Shambe, supra, at p. 247, 135 A. at p. 757. Accordingly, we will not overturn a lower court's determination that a corporation was not regularly conducting business in a particular county when such conclusion is a reasonable one in view of the facts. Cf. New v. Robinson-Houchin Optical Co., 357 Pa. 47, 49, 53 A.2d 79, 80 (1947).

Defendant is engaged in the taxi cab business. Under its certificate from the Public Utility Commission, while it is prohibited from picking up passengers in Philadelphia County, it is permitted to pick them up in Montgomery County and take them to Philadelphia County. From five to ten percent of its gross business is so constituted. In other words, five to ten percent of its fares are collected in Philadelphia County at the end of rides which involve driving a cab there. And, of course, the cab must be driven in Philadelphia County in order to return to Montgomery County, although it must be done without a passenger.

In our opinion, on the basis of these facts, the lower court's determination that defendant did not 'regularly conduc[t] business' in Philadelphia County was unreasonable. Clearly, the acts of driving into Philadelphia County at the request of...