Super Products Corp. v. Parkin

20 F.R.D. 377, 1957 U.S. Dist. LEXIS 4518
CourtDistrict Court, S.D. New York
DecidedFebruary 8, 1957
StatusPublished
Cited by1 cases

This text of 20 F.R.D. 377 (Super Products Corp. v. Parkin) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Super Products Corp. v. Parkin, 20 F.R.D. 377, 1957 U.S. Dist. LEXIS 4518 (S.D.N.Y. 1957).

Opinion

RYAN, District Judge.

On this motion made by defendants prior to answer to dismiss the complaint under Rule 12(b), Fed.Rules Civ.Proc., 28 U.S.C.A., the following reasons are advanced:

A. as to the defendant Parkin that Count II should be dismissed as to him because the relief it seeks is a declaration of invalidity and non-infringement on a certain patent in which this defendant has no right, title or interest;

B. as to defendant Hovlid, that the suit must be dismissed in toto, or in the alternative, transferred as not being brought in the proper judicial district under Section 1391, 28 U.S.C.A.

C. and D. as to defendant Hovlid, that the suit must be dismissed because the court has no jurisdiction, for he is a resident of California and was not duly served within the provisions of Federal Rules 4(f), 4(d) (7) and Section 229-b, New York Civil Practice Act.

E. in the alternative, that this suit, be stayed pending disposition of another action based on the patent here at issue brought by defendant Hovlid as plaintiff against third parties in California.

[379]*379The background facts essential to a determination of the merits of these contentions are:

Plaintiff is a Pennsylvania corporation engaged in the business of selling filter supports for water purifying apparatus of aquaria; defendant Hovlid is a California resident, doing business under the name of Miracle Filter Company at Long Beach, California, and manufacturing and selling similar type aquaria filters covered by a patent of which he is the sole owner and over which he has sole claim and interest; defendant Parkin is a New York resident engaged in soliciting sales for defendant Hovlid’s product throughout the Northeast area. Since 1956, Parkin has been under a commission sales agreement with Hovlid and another (not here significant) under which he receives a 10% commission on all filters sold in this area whether through his direct solicitation or not, and in addition a guaranteed weekly commission of $100, plus reimbursements for reasonable expenses while engaging in Hovlid’s business, such as postage, telephone, gas and oil for car, etc. Hovlid’s sales in Parkin’s area average 25%' of a total of about $100,000 per annum. All the filters are manufactured at Hovlid’s plant in California; he maintains in New York no clerical staff, no bank account, no trucks; he does, however, for the purpose of expediting deliveries maintain about $3,-000 of inventory in space rented by him at a store located in New York City; he has not designated any agent to receive process on his behalf. Parkin’s duties consist of selling Hovlid’s filters in this area; he has access to the stock maintained by Hovlid here in the City in order to fill orders for customers upon whose credit Hovlid has passed; he is permitted to represent himself as Hovlid’s "Eastern Representative” and has letterheads and cards to this effect; he maintains no office or staff, but works out of his apartment'in the City (for which he pays the rent), but where there is a telephone listed under the name of Mir,acle Filter Co. and for which Hovlid pays the charges. Parkin has no authority to sign checks, bill or receive payments, extend or pass upon credit of purchasers, negotiate or settle claims, or hire personnel; he does not appear to have control over the policies of the business or the price of the goods; he does, however, solicit, accept and fill orders and is probably covered by workmen’s compensation as an employee of Hovlid doing business as Miracle Filter Co.

The complaint herein was filed on September 26,1956; jurisdiction is predicated on diversity of citizenship. In the first count, it is alleged that defendants conspired to and did commit acts of unfair competition for which plaintiff seeks damages and an injunction; in the second count, it is alleged that Hovlid is the owner of a certain patent claimed to cover plaintiff’s product, and that this patent is invalid and here plaintiff prays for a declaration of invalidity and non-infringement, Declaratory Judgments Statute — Sec. 2201, 28 U.S.C.A.

The patent is referred to as the “Hovlid patent” and nowhere is defendant Parkin alleged to have any interest, right or claim to the patent. It is obvious that no claim is pleaded as against Par-kin in this second count, that as between him and plaintiff there is no justiciable controversy and that the motion with respect to Parkin designated as "A” must be granted.

I next take up parts “C” and “D” of the motion which concern the jurisdiction of the court over the defendant Hovlid doing business as Miracle Filter Co.

On 10/3/56, Dave Parkin was individually served with a summons and complaint; an additional copy of the summons and complaint was served on January 16,1957 on Parkin (under Rule 4(d) (7), F.R.C.P. and Sec. 229-b, N.Y.C. P.A.), “as the person in charge of the business in which defendant Hovlid, doing business as Miracle Filter Co., is engaged within the State of New York” and on January 17, 1957 a copy of the summons and complaint, with the notice [380]*380required by Sec. 229-b, was sent by registered mail to Hovlid addressed to his residence in California. The receipt was returned signed by Hovlid’s wife, and filed together with plaintiff’s affidavit of service pursuant to the state statute.

There is no dispute that Hovlid is not a resident of this state and that he was not “personally” served in this state. The validity of the service upon him within the territorial limits of the court Under Rule 4(f) is predicated however on service on his agent Parkin under the service of state process rule provided for by Rule 4(d) (7). Prerequisite to a determination of the procedural validity of this service is a finding that Hovlid “is engaged in business in this state”, and that Parkin is a “person, who at the time of service, is in charge of defendant’s business.” From the undisputed facts above set forth, I find that both these elements are present and this whether I apply the New York test of “doing business”, Pine & Co. v. McConnell, 298 N.Y. 27, 80 N.E.2d 137, or that laid down by International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95.

The next question presented is whether Rule 4(f) limits the availability of the rule for service of state process permitted by Rule 4(d) (7) where “the manner prescribed by the law of the state” resorts to “substituted” service and “personal service” outside the state. There is no problem here of due process as to the non-resident defendant Hovlid received actual notice and service by mail as provided for in the state statute. Pennoyer v. Neff, 95 U.S. 714, 733, 24 L.Ed. 565; Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278.

It appears clear that Sec. 229-b has a purpose similar to that of the nonresident motorist statute and that applicable to foreign corporations conducting business — that is, an automatic designation of an agent for service in exchange for the privilege of availing oneself of the facilities provided by the state. “The person designated is a true agent. The consent that he shall represent the corporation is a real consent”. Bagdon v. Philadelphia & Reading Coal & Iron Co., 217 N.Y. 432, 436, 111 N.E. 1075, 1076 L.R.A.1916F, 407.

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Bluebook (online)
20 F.R.D. 377, 1957 U.S. Dist. LEXIS 4518, Counsel Stack Legal Research, https://law.counselstack.com/opinion/super-products-corp-v-parkin-nysd-1957.