The opinion of the court was delivered by: MARSH
The plaintiff, Margaret A. Peterson, has filed this action in equity seeking to have her daughter, Rosalie Dickison, declared trustee ex maleficio of the sum of $23,000. The plaintiff's complaint alleges that on or about March 24, 1970, plaintiff was admitted to Saint Joseph's Hospital in the City of Pittsburgh, Pennsylvania, and advised by her doctors of the possibility that her condition was terminal. Upon being so advised, the plaintiff informed her daughter, Rosalie Dickison, that she had $23,000 secreted at various places at her home in Pittsburgh. Her daughter agreed to take possession of this money; deposit it in a joint bank account; and use it to pay for plaintiff's medical and personal needs while she was hospitalized. Plaintiff's daughter further agreed to deliver the balance of the fund to the plaintiff upon her release from the hospital or to retain any balance in the fund in the event the plaintiff died. Accordingly, on or about April 30, 1970, the plaintiff's daughter removed the money from the plaintiff's house.
In May of 1970 plaintiff was discharged from the hospital and requested her daughter to return the money; her daughter has refused such request, contending in a letter from her attorney to the plaintiff that the money was given as a gift inter vivos.1
The complaint, filed on March 25, 1971, avers that a fiduciary relationship existed between the plaintiff and the defendant. From the facts alleged, it seems that a confidential relationship can be inferred. The complaint avers that upon breach of the promise by the defendant, she became a trustee ex maleficio.
The complaint and summons were personally served on the defendant on May 6, 1971, at her residence in South Shore, Greenup County, Kentucky. It is undisputed that defendant is a citizen of the State of Kentucky and has no assets or other property within the jurisdiction of the Commonwealth of Pennsylvania.
This case is presently before the court on defendant's motion pursuant to Rule 12(b)(2), Fed. R. Civ. P., to dismiss the complaint on the basis that this court has not acquired jurisdiction over the person of the defendant because the service of process was improper. Defendant contends that no statute of the United States or of the Commonwealth of Pennsylvania grants this court personal jurisdiction over the defendant, a resident of the state of Kentucky. On the other hand, plaintiff contends that the service on the defendant in Kentucky gave this court in personam jurisdiction and that, alternatively, if the court should find that the service in Kentucky was not proper, defendant waived her objection by having her attorney correspond with the plaintiff in Pennsylvania.
Proper service of process on defendants in civil litigation is controlled by the standards prescribed in Rule 4, Fed. R. Civ. P. Subsection (f) of this rule delineates the territorial limits of effective service by providing:
In the present case process was served beyond the territorial limits of Pennsylvania and no statute of the United States exists which authorizes extraterritorial service in an action such as the present one.
However, Rule 4(e), Fed. R. Civ. P., does provide an alternative possibility for valid personal service on a non-resident beyond the territorial limits of the state in which the district court is held. This rule reads in pertinent part:
"(e) * * * Whenever a statute or rule of court of the state in which the district court is held provides * * * for service of a summons, or of a notice, or of an order in lieu of summons upon a party not an inhabitant of or found within the state, * * * service may in either case be made under the circumstances and in the manner prescribed in the statute or rule." (Emphasis supplied.)
This subsection permits resort to state procedures for service on non-resident parties and authorizes service in original federal actions pursuant to state "long-arm" statutes and rules of court such as those permitting service on a state official as a means of bringing a non-resident defendant into court.
In order to dispose of defendant's motion, it is necessary to examine the Pennsylvania statutes and rules of court to ascertain if extra-territorial service is authorized under Pennsylvania law (1) under the circumstances alleged in plaintiff's complaint, and (2) in the manner in which it was performed in this case. Martens v. Winder, 341 F.2d 197 (9th Cir. 1965); Jensen v. McInerney, 299 F. Supp. 1309 (D.C.V.I. 1969); Adams Dairy Company v. National Dairy Products Corp., 293 F. Supp. 1135 (W.D. Mo. 1968).
Pennsylvania has recently passed a "long-arm" statute providing for jurisdiction of the courts of the Commonwealth of Pennsylvania over non-residents who commit a tortious act within the Commonwealth. (Act of July 1, 1970, P.L. --, No. 152, 12 Purdon's Pa. Stat. Ann. § 341 et seq.).
This Act deals with procedural rights and applies to non-residents who committed tortious conduct in Pennsylvania before the passage of the Act. Sussman v. Yaffee, 443 Pa. 12, 275 A. 2d 364 (1971). Rule 4(e), Fed. R. Civ. P., makes this state statute available to a federal court sitting in Pennsylvania. If the plaintiff's complaint alleges that the defendant has committed a tortious act in Pennsylvania, then this federal court would be capable of acquiring in personam jurisdiction. We must therefore consider the nature of plaintiff's complaint to determine if it states circumstances under which this court would be capable of acquiring jurisdiction under the cited statute, -- a tortious act.
Under Pennsylvania law, whenever a person has obtained the property of another by fraud, he will be declared the trustee ex maleficio6 of the property for the benefit of the person who has been defrauded. The fraud necessary to invoke this rule can arise out of an abuse of confidence. Rice v. Braden, 243 Pa. 141, 89 A. 877, 880 (1914). Cf. Foster v. Schmitt, 429 Pa. 102, 239 A. 2d 471 (1968); Silver v. Silver, 421 Pa. 533, 219 A. 2d 659 (1966). We believe that since such a breach of confidence contains an element of fraud, this conduct can properly be ...