that the defendant failed to answer or otherwise defend and on the motions of the defendant, T.M.S. Realty and Financial Services, Inc. ("T.M.S."), to set aside the entry of default and to dismiss the complaint on the ground that this Court lacks in personam jurisdiction under the Pennsylvania "Long Arm" statute. After consideration of the briefs and affidavits submitted to the Court, and for the reasons hereinafter discussed, we grant the plaintiff's motion and deny the defendant's motions.
Motion to Dismiss
The plaintiff filed his complaint on February 14, 1974 alleging that this Court has diversity jurisdiction. The plaintiff avers that he is a resident of Pennsylvania, is a real estate broker registered to do business in Pennsylvania, and the defendant is a New Jersey corporation, not qualified to do business in Pennsylvania, but subject to service on the basis of the Pennsylvania "Long Arm" statute, Pa.Stat.Ann. tit. 42, § 8301 et seq. (Supp.1973-74), in that T.M.S. is a foreign corporation "doing business" in Pennsylvania.
The plaintiff's complaint, when read in conjunction with his affidavits filed in opposition to the defendant's motion, sets forth the following facts as a basis for the application of the Pennsylvania "Long Arm" statute. Defendant Lawrence Drosnes, as President and agent for T.M.S., met with the plaintiff in the law offices of T.M.S.'s counsel, Stein and Silverman here in Philadelphia. At that meeting the plaintiff was requested to obtain a mortgage to enable T.M.S. to finance the purchase by T.M.S. of real estate in New Jersey. In the event the plaintiff was successful in obtaining such a mortgage, the defendant T.M.S. was to pay the plaintiff a fee equivalent to one percent of the mortgage and retain the plaintiff as the manager of the real estate which T.M.S. desired to purchase in New Jersey for a period of five years for which he was to receive a commission of not less than three percent of the gross rentals collected. On several subsequent occasions, the plaintiff met here in Philadelphia with the President of T.M.S. and its attorneys. Pursuant to their request, the plaintiff prepared an appraisal of the New Jersey real estate and assembled information necessary to process a mortgage application for T.M.S. After compilation of all the necessary material, the plaintiff and the President of T.M.S. attended meetings at the office of Centennial Mortgage Company at the IVB Building in Philadelphia. As a result of these negotiations, a mortgage in the amount of $270,000.00 was obtained from Farmbanc Mortgage Company (a division of Farmer's National Bank of Wilmington, Delaware) enabling T.M.S. to purchase the New Jersey real estate. Settlement was completed and T.M.S. paid a commission to the Centennial Mortgage Company in Philadelphia. For the breach of the agreement to pay the mortgage placement fee, the rental commission and the appraisal fee, the plaintiff seeks judgment against T.M.S. in the amount of $12,496.50.
It is the plaintiff's position that these facts clearly demonstrate that T.M.S. is amenable to service pursuant to the Pennsylvania "Long Arm" statute and that this Court has in personam jurisdiction over the defendant. The plaintiff argues that T.M.S. was "doing business" in Pennsylvania within the meaning of § 8309 of the "Long Arm" statute.
On the other hand, the defendant contends that it has never done business in Pennsylvania; that it is registered to do business only in New Jersey; and that its sole purpose and function is to hold certain real property located in New Jersey. The defendant further argues that the plaintiff has not demonstrated that T.M.S., as a foreign corporation, had sufficient minimum contacts with Pennsylvania "to make it apparent that maintenance of suit in the state will not offend traditional notions of fair play and substantial justice. Hanson v. Denckla, 357 U.S. 235, 78 S. Ct. 1228, 2 L. Ed. 2d 1283 (1958)." For these reasons, T.M.S. claims that it is not and cannot be subject to the in personam jurisdiction of this Court and, thus, asserts its motion to dismiss.
In 1972, the Pennsylvania "Long Arm" statute was amended by adding thereto a new section 8309(b) which reads as follows:
(b) Exercise of full constitutional power over foreign corporations. -- In addition to the provisions of subsection (a) of this section the jurisdiction and venue of courts of the Commonwealth shall extend to all foreign corporations and the powers exercised by them to the fullest extent allowed under the Constitution of the United States.