the interrogatories thus limited disclosed the following:
Lyman's total dollar volume of sales for the year 1957 was $ 640,581, and for the year 1958 to May 20, was $ 169,318. Lyman's sales in the Middle District of Pennsylvania for the year 1957 amounted to 1.90 per cent of its total sales and to 1.37 per cent of its total sales for 1958 to May 20. During the period in question Lyman did some advertising in the Middle District of Pennsylvania, generally by catalogue, mail circular, letter, and magazine. During the period in question Lyman made no sales or deliveries in the Middle District of Pennsylvania through an agent, employee or distributor for the company. It did make sales at its home office in Connecticut to merchants who were independent contractors. Lyman listed seven merchants with places of business in the Middle District of Pennsylvania, six of whom bought Lyman's product in 1957 to the extent of $ 12,018, and six of whom in 1958 bought to the extent of $ 2,335. During the period January 1, 1957 to May 20, 1958, no employees, agents or independent representatives of Lyman came into the Middle District of Pennsylvania to effect the aforesaid sales. However, in April of 1957, Henry H. Lyman, Jr., Secretary of the company, and in March of 1958 Frank Jury, an employee, J. A. Widner, Jr., an employee, and Henry H. Lyman, Jr., Secretary as aforesaid, made good will tours which extended into this district.
In seeking to determine the question of venue with relation to Lyman, we have again to apply the test of 'business of a substantial character' as above indicated originally propounded in Eastman, supra, and reaffirmed in Scophony, supra. The court in Scophony, supra, after noting that refinements such as previously were made under the 'mere solicitation' and 'solicitation plus' criteria were no longer determinative, and pointing out that in Eastman, supra, under the broader room given by Section 12 venue was held to have been established where under the earlier tests of Section 7 of the Sherman Act the company was not 'present' either for the purpose of venue or as being amenable to service of process, then went on to say (333 U.S. 795, 68 S. Ct. 862):
'Thus, by substituting practical, business conceptions for the previous hair-splitting legal technicalities encrusted upon the 'found'- 'present'-' carrying-on-business' sequence, the Court yielded to and made effective Congress' remedial purpose. Thereby it relieved persons injured through corporate violations of the antitrust laws from the 'often insuperable obstacle' of resorting to distant forums for redress of wrongs done in the places of their business or residence. A foreign corporation no longer could come to a district, perpetrate there the injuries outlawed, and then by retreating or even without retreating to its headquarters defeat or delay the retribution due.'
The unmistakable trend both by legislation and by court decisions has been to expand the concept of what constitutes doing business in a state by a foreign corporation. While the volume of business done in the state has frequently been the controlling factor in arriving at this determination,
certainly it is not the sole test. In 1931 in Jeffrey-Nichols Motor Co. v. Hupp Motor Car Corporation, 1 Cir., 46 F.2d 623, 625, the court stated, 'The sale of goods is not essential to constitute transacting business.' See also Abrams v. Bendix Home Appliances, Inc., D.C.S.D.N.Y., 96 F.Supp. 3, 8. 'It is the totality of acts and conduct rather than isolated and fragmented items thereof which must govern.' Abrams v. Bendix Home Appliances, supra.
The problem here is well stated in Echeverry v. Kellogg Switchboard & Supply Co., 2 Cir., 175 F.2d 900, 902-903, as follows:
'The published decisions on what constitutes 'doing business' in a State by a foreign corporation are literally legion. Yet, in spite of this vast array of judicial authority, border-line cases still have to be decided each on its own peculiar set of facts, which too often cannot be fitted into a stereotyped pattern. In this field, realism, not formalism, should be dominant; the problem must be solved in the light of commercial actuality, not in the aura of juristic semantics. In United States v. Scophony Corporation, 333 U.S. 795, 810, 68 S. Ct. 855, 863, 92 L. Ed. 1091, Mr. Justice Rutledge spoke of 'the practical, nontechnical, business standard."
In 1957 defendant had gross sales of $ 640,581 of which 1.90% or $ 12,018 represented sales in the Middle District of Pennsylvania. For the period January 1 to May 20, 1958, defendant's total sales amounted to $ 169,318 of which 1.37% or $ 2,335 represented sales in the Middle District of Pennsylvania. During the period in question defendant engaged in a vigorous advertising and sales promotion campaign. It circularized the trade generally by mailing its catalogues, mail circulars and letters into this district and also advertised in various magazines which have circulation in this district. In addition, during April 1957 defendant caused its secretary to make 'good will calls' in this district, and again in March 1958 it caused its secretary and two other employees to make similar 'good will tours' in this district.
This defendant is not a philanthropic organization. It is in business to make money. In order to promote sales in this district it caused its catalogues and various advertising material to be circularized through the district, it made extensive use of magazine advertising media. Certainly, the good will calls or tours could have but one purpose, namely, to increase sales.
It is my opinion that from the average business man's point of view the activities of this defendant constitute the transaction of business in the Middle District of Pennsylvania.
The motion of Lyman Gun Sight Corporation to dismiss it from this action will be refused.
As to Popular Science Publishing Co., Inc.
As above indicated, Popular Science has moved to quash the summons and dismiss the complaint the reasons stated, in the alternative for more specific statement and to strike certain alleged scandalous and impertinent statements. Defendant has withdrawn its objections to certain paragraphs of the complaint.
Considering the reasons given in support of the motion, seriatim,
(a) Improper service. The Marshal's return reads as follows:
'I hereby certify and return that on the 22nd day of May 1958, I received the summons and served it together with the complaint herein as follows: On the 23rd day of May, 1958, executed the within Summons by serving James Scott, Manager of the Popular Science Publishing Co., Inc., by making known to him the contents thereof and leaving with him a true attested copy of summons together with copy of complaint. Service was made at their office, 1136 Moosic St., Scranton, Pa.'
Plaintiff filed of record affidavit of William E. Lavin, the Deputy Marshal who made the service and return. This affidavit sets forth the following:
'* * * William E. Lavin, who being duly sworn according to law, deposes and says that he is a Deputy United States Marshal for the Middle District of Pennsylvania, and that in the course of his duties on May 23, 1958, he attempted to serve a Complaint in the case of S. A. Wentling v. Popular Science Publishing Co., Inc., Civil Action No. 6300 a defendant in said action, at the registered office of said corporation as listed in the Complaint, namely, 400 Wyoming Avenue, Scranton, Lackawanna County, Pennsylvania; that upon arriving at said address it was apparent that there were no offices there at the time as the building was being remodeled and the window sign formerly indicating Popular Science Publishing Co. had been removed and the said defendant had no office at that address; that he then looked in the City Directory for the City of Scranton, Pennsylvania, and determined that there was set forth therein an address for said company at 1136 Moosic St., Scranton, Lackawanna County, Pennsylvania; and that he then served the said Complaint on May 23, 1958, upon one James Scott, at the office of said defendant at 1136 Moosic St., Scranton, Pennsylvania; and that the said James Scott was or held himself out to be the manager or person in charge of said place of business.'
Attached to defendant's motion to quash summons and dismiss complaint was affidavit of Ralph H. Flynn, President of defendant. This affidavit set forth that James Scott is an employee of defendant whose sole duty consisted of supervising the operation of defendant's warehouse at 1136 Moosic Street, Scranton, Pennsylvania; that he is not an officer, director or managing agent of defendant; that his duties consist of being responsible for the inventory in the warehouse; that he has no discretionary power and receives orders from defendants' New York office; that he has no authority to enter into any contracts on defendant's behalf or to make business commitments of any kind on defendant's behalf.
Popular Science is a foreign corporation and it appears to be agreed was duly registered in accordance with the Business Corporation Law of the Commonwealth of Pennsylvania, Act of May 5, 1933, P.L. 364, art. X, § 1011, 15 P.S. § 2852-1011, in the Office of the Secretary of the Commonwealth of Pennsylvania, appointing the said Secretary as its statutory agent for the service of process and giving its registered office as 400 Wyoming Avenue, Scranton, Pennsylvania.
While it is difficult to understand why the plaintiff did not take the obviously simple, best and most proper method of making service on the Secretary of the Commonwealth, it is not the exclusive method. Furthermore, the defendant having changed its registered office address and having failed to note the change in the office of the Secretary of the Commonwealth, is in direct violation of the Act and should not be permitted to profit by its own dereliction.
Goodrich-Amram, Standard Pennsylvania Practice, § 2180(a)-9, states, inter alia:
'* * * The statutes permitting the registration of foreign corporations and similar entities to do business in the Commonwealth likewise require the designation of such an office. Therefore, in all cases except those where the corporation or similar entity is violating the statute or is exempt from registration, there will be on file, with a state official, an officially designated office of the corporation or similar entity. Most of the statutes permit this 'office' to be changed on application to an appropriate State officer, but the change may be effected only upon the simultaneous designation of a new office within the Commonwealth. For these reasons, it would not lie in the mouth of the corporation or similar entity to deny the validity of the existence of the office at the place specified in the registration papers. Service at such an 'office' could not be attacked by the corporation or similar entity as being a service made at a place which was not in fact the 'office."
Significantly, the affidavit of Ralph H. Flynn attached to defendant's motion states that Scott, the person upon whom service was made, supervises the operation of defendant's warehouse in Scranton, Pennsylvania, that other employees of defendant who work at the same location are the assistants of Scott. It therefore would obviously follow that defendant had a place of business in the Commonwealth and that Scott was in charge of it. It further appears that Scott was, or held himself out to be, the manager or person in charge of the said place of business.
I think the service was proper.
(b) As to plaintiff's failure to register its fictitious name prior to the institution of this action.
The complaint was filed May 20, 1958, the fictitious name was filed in the office of the Prothonotary of Lebanon County, Pennsylvania, on May 22, 1958, and in the office of the Secretary of the Commonwealth on May 21, 1958.
The Act in question, Act of May 24, 1945, P.L. 967, § 4, 54 P.S. § 28.4 provides, inter alia, that:
'* * * Before any such person or persons may institute any action in any of the courts of this Commonwealth or before any justice of the peace or magistrate thereof, on any cause of action arising prior to the filing of the application provided for in this section, such person or persons shall pay to the Secretary of the Commonwealth for the use of the Commonwealth a license fee or fine of twenty-five dollars ($ 25.00). * * *'
In neither instance was the fine provided by the statute paid.
This is not a diversity case. It is founded exclusively on a Federal statute. Accordingly, in this case this Court is not sitting as a State court.
Dealing with a similar situation, the court in O'Donnell v. Elgin, Joliet & Eastern Ry. Co., 7 Cir., 1942, 193 F.2d 348, 352, held as follows:
'* * * But it is different where the action, as in the instant case, is predicated upon a Federal right. As stated in Angel v. Bullington, 330 U.S. (183), at page 192, 67 S. Ct. (657), at page 662, 91 L. Ed. 832: 'Of course, where resort is had to a federal court not on grounds of diversity of citizenship but because a federal right is claimed, the limitations upon the courts of a State do not control a federal court sitting in the State."
Popular Science's motion to dismiss complaint on ground of lack of capacity to sue because of failure to file a fictitious name registered prior to the institution of this action is without merit and will be denied.
Defendant's (Popular Science) reasons (3), (4), and (5) above set forth, together with its alternative motion, can be summarily disposed of. The gist of this action is a single conspiracy. Defendant is fully advised. Whether plaintiff will succeed in establishing a conspiracy as charged is a horse of another color.
Defendant's (Popular Science) several motions will be denied.