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SMELTZER v. DEERE & CO.

March 25, 1966

Laird E. SMELTZER, Plaintiff,
v.
DEERE AND COMPANY, a Delaware corporation, Defendant



The opinion of the court was delivered by: MARSH

 Plaintiff, Smeltzer, a citizen of Pennsylvania, brings this action against the defendant, Deere and Company, a Delaware corporation, alleging that in June, 1964, while operating a tractor near Ford City, Pennsylvania, he sustained personal injuries as the result of a brake failure stemming from the defendant's negligence and "breach of the implied warranty of fitness" with respect to the manufacture of such tractor.

 The defendant filed two motions to dismiss for lack of jurisdiction over the defendant foreign corporation. Each motion was accompanied by an affidavit of Robert L. Barrett, an attorney on the legal staff of the defendant. The record consists of these affidavits and depositions of Attorney Barrett and Wayne A. Hindman.

 In our opinion the action should be dismissed and the service of process upon the defendant corporation quashed.

 The plaintiff contends that this court has effectively acquired personal jurisdiction over the defendant corporation on the basis of one or both of two modes of service of process resorted to by him. The first, effectuated on May 18, 1965, consisted of personal service upon Wayne A. Hindman, president of Hindman Supply, Inc., at the latter company's place of business in Butler, Pennsylvania, in this district. The rationale of this first service appears to have been that since the Hindman corporation was a local dealerdistributor of Deere and Company products, Hindman was "an officer, a managing or general agent" of a "foreign corporation" (Deere and Company) within the meaning of Rule 4(d)(3), Fed.R.Civ.P., and/or "an agent or person for the time being in charge of" an "office or usual place of business" of Deere and Company. Rule 4(d)(7), Fed.R.Civ.P.; Rule 2180(a)(2), Penna.R.Civ.P., 12 P.S.Appendix.

 Subsequently, hypothesizing that the defendant had in fact done and was doing business in Pennsylvania, even though not registered to do so, plaintiff had copies of the complaint and summons sent by certified mail to the Secretary of the Commonwealth and to the defendant, in accordance with the provisions of 15 Purdon's Pa.Stat.Ann. ยง 2852-1011, subd. B, and Rule 4(d)(7), Fed.R.Civ.P.

 From the depositions and affidavits, we find the following facts:

 (1) Deere and Company, the defendant, is incorporated under and by virtue of the laws of Delaware and has its principal place of business at Moline, Illinois. It is engaged in the manufacture and sale of agricultural machinery and implements and of motorized industrial equipment.

 (2) The defendant sells all of its products to its wholly-owned John Deere sales subsidiary corporations, each of which is located in a different region of the United States and each of which organizes and has as its special responsibility the marketing and distribution of the defendant's products in territory comprising its designated regional sales territory.

 (3) Each regional sales subsidiary in turn sells and distributes the defendant's products locally through a network of incorporated dealer-distributors such as Hindman Supply, Inc.

 (4) The defendant's products are sold or leased to the ultimate users by the dealer-distributors. Occasionally, the regional sales subsidiaries may lease equipment to large-volume users.

 (5) John Deere Company of Syracuse, Inc. (hereinafter referred to as Syracuse Deere) is the regional sales subsidiary whose sales territory covers the northern two-thirds of Pennsylvania, including the vicinity served by Hindman Supply, Inc. Syracuse Deere is incorporated under and by virtue of the laws of New York and has its principal place of business in Syracuse, New York. All of its common stock is owned by the defendant.

 (6) There are nine men on the board of directors of Syracuse Deere. Four of them are also members of the board of directors of the defendant, in addition to being the defendant's chief executive officers. A fifth member of the board of Syracuse Deere is also contemporaneously an employee of the defendant.

 (7) The active, day-to-day business of Syracuse Deere is conducted by its own officers and board of directors. Matters of general policy affecting the entire Deere ...


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