Philadelphia & Reading Railway Co. v. McKibbin

Background

A New York resident and brakeman was hurt in a New Jersey freight yard and sued a Pennsylvania railroad in a New York federal court. The railroad had no offices, docks, agents, or property in New York. The plaintiff caused the summons to be served on the railroad’s president while he was passing through New York on personal business. The railroad moved to set aside that service and argued the New York court lacked power to hear the case.

Reasoning

The Court asked whether the railroad was doing business in New York so it could be sued there. The record showed the railroad only used connecting carriers to move freight and received its share of fares through accounting; it had no employees or office at the New York terminal. The terminal sold through tickets for connecting lines and displayed signs, and a telephone listing included the railroad’s name, but the railroad neither ran the ticket office nor placed the telephone listing. The Court held that these facts did not amount to doing business in New York. It rejected the idea that selling through tickets by a local carrier or the activities of possible subsidiaries necessarily made the railroad present in New York. The Court also rejected the argument that an arrangement between counsel had waived the railroad’s jurisdictional objection.

Real world impact

Because the railroad was not doing business in New York, the Court reversed the judgment and directed the case to be dismissed for want of the New York court’s authority to hear it. The Court did not decide other questions about suits based on events in other States.