effected by the Dolan decision. It is probable that no party to the controversy considered that the alleged personal animosity of Osterberger was relevant and that all the parties were of the view that the court did not have jurisdiction to dispose of the controversy between Flaherty and United because of the statutory employer doctrine. Under the circumstances it would seem unfair to destroy Flaherty's cause of action because of a delay of eighteen months in filing a motion to amend his complaint. But quite apart from the foregoing, on reviewing the entire situation, we can perceive no substantial prejudice accruing to United if the amendment is allowed. It is of course the policy of the federal law to allow amendments freely to serve the ends of justice.
The motion for summary judgment will be denied and the proposed amendment to the complaint will be allowed and treated as filed. The only valid issues to be tried between Flaherty and United are: Did Osterberger's personal animosity cause the injuries suffered by Flaherty, and if so, can United be held responsible for Osterberger's action?
ON DEFENDANT THEW SHOVEL COMPANY'S MOTION UNDER RULE 12(b) TO DISMISS THE COMPLAINT AND ITS MOTION FOR A PROTECTIVE ORDER UNDER RULE 30(b).
The Supreme Court of Pennsylvania decided Rufo v. Bastian-Blessing Co., 405 Pa. 12, 173 A.2d 123, on July 17, 1961, and held that subdivision B of Section 1011 of the Pennsylvania Business Corporation Act requires as an essential element of jurisdiction over a foreign corporation that the action sued upon must arise out of a corporate act or omission occurring within the Commonwealth of Pennsylvania. See 15 P.S. § 2852-1011, subd. B. In so holding the Supreme Court of Pennsylvania demolished the decision of the Court of Appeals of this Circuit on this point in Florio v. Power Tool Co., 248 F.2d 367, 374 (3 Cir., 1957).
Flaherty concedes that the complaint does not allege any act or omission on the part of Thew in Pennsylvania unless it be those set out in paragraph 20. There are ten breaches of express and implied warranties alleged in that paragraph. The fatal defect in Flaherty's position, however, is that he has not shown any act or omission by Thew within the Commonwealth of Pennsylvania. Absent an act or omission by Thew in Pennsylvania that defendant could not be served validly under Section 1011, subdivision B. It follows that the court does not have jurisdiction over the person of Thew. Despite the foregoing, although the crane was manufactured in Ohio, the court would grant a reasonable opportunity to Flaherty to discover whether or not any repairs were made on it by Thew's servicemen
in Pennsylvania for the change effected in the pre-existing law by the decision of the Supreme Court in the Rufo case had occurred less than six months ago. But such a course would not aid the plaintiff since he is unable to meet the second requirement of jurisdiction for service of summons as set out immediately hereinafter.
While Flaherty has proved beyond any question that Thew solicited business in Pennsylvania in the year 1959 and in prior years, he has failed to meet the 'solicitation-plus' standard which was the test of doing business in Pennsylvania under 15 P.S. § 2852-1011, subd. B on July 22, 1959. It will be borne in mind that the alias summons in this case was served on the Secretary of the Commonwealth on that day and that subdivision C had then been deleted from the Pennsylvania Business Corporation Act. See the prior opinion in this case, 191 F.Supp. 661 (1961). The law therefore was in the same condition as it was at the time of the decision of the Supreme Court of Pennsylvania in Lutz v. Foster & Kester Co., 367 Pa. 125, 79 A.2d 222 (1951). In the Lutz opinion Mr. Chief Justice Jones, referring to the earlier decision of Shambe v. Delaware & Hudson R.R. Co., 288 Pa. 240, 135 A. 755 (1927), and quoting from the opinion in that case, made clear that a foreign corporation had to have an agent or employee in the Commonwealth of Pennsylvania with the authority to bind the corporation contractually if the solicitation-plus test was to be met. Mr. Chief Justice Jones said that this factor was 'crucial'.
It is clear that Broad, Thew's district manager, did not have power to bind Thew contractually. It is equally apparent that Thew's distributor in the eastern area, L. B. Smith, Incorporated, was not a mere agent but an independent contractor, one which bought cranes from Thew and re-sold them. See note 6, supra. Smith exercised complete control over its own operations and sold machinery of other manufacturers in addition to that made by Thew.
Flaherty has produced no proof of the existence of any agent or employee of Thew in the Commonwealth of Pennsylvania with authority to bind it contractually.
Flaherty's position will not be assisted by answers to the interrogatories which he has filed and which are the subject of the protective order based on Rule 30(b) presently sought by Thew. The number and monetary amount of sales by Thew to persons in Pennsylvania in the years 1955-1959 and the names of the individuals who made service calls in the Commonwealth and the frequency of their calls during the years stated would aid Flaherty in showing solicitation but as had been stated solicitation has been sufficiently demonstrated by evidence already in the record. The answers would fail to disclose information showing the presence in the Commonwealth of any individual or individuals who had power to bind Thew contractually. Ample time has been allowed to Flaherty to develop the solicitation-plus aspect of his case. He has failed to do so. The complaint must be dismissed as to Thew because it was not doing business within the State of Pennsylvania and therefore could not be validly served under Section 1011, subdivision B.
This decision will render Thew's motion for a protective order under Rule 30(b) moot.
This case is nearly three-and-a-half years old. It must be proceeded with vigorously. The order of October 23, 1961, limiting discovery, will be vacated. A period of three months from the date when issue is joined on the first count as amended will be allowed to the parties to complete discovery. As soon as practicable thereafter a final pretrial conference will be held and trial had.