Philadelphia & Reading Railway Co. v. McKibbin
243 U.S. 264 · Supreme Court of the United States · 1917
Facts
Philadelphia & Reading Railway Company (P&R), a Pennsylvania corporation, operated a railroad in Pennsylvania and New Jersey. McKibbin, a New York resident, was a brakeman injured in P&R's New Jersey freight yard. McKibbin sued P&R in the United States District Court for the Southern District of New York, serving the summons on P&R's president while he was in New York on personal matters. P&R had no railroad, office, agent, or property in New York, but sent freight cars via connecting carriers and received a portion of the fare for its line. A connecting carrier, Central Railroad of New Jersey, sold through tickets at a New York ferry terminal, displaying P&R's name on signs and in the telephone directory to facilitate travel.
Procedural history
McKibbin brought an action in the United States District Court for the Southern District of New York. The defendant, P&R, moved to set aside the service of summons, which the District Court denied, finding P&R was doing business in New York. The objection to jurisdiction was renewed in the answer and at trial, but again denied. A verdict was rendered for the plaintiff, judgment entered, and the case was brought to the Supreme Court on writ of error, with the question of jurisdiction certified.
Issue
The main question is whether the Philadelphia & Reading Railway Company was doing business in New York to an extent that would subject it to service of process within the state.
Holding
The Supreme Court reversed the District Court's judgment, finding that the Philadelphia & Reading Railway Company was not doing business in New York, and remanded the case with directions to dismiss for want of jurisdiction.
Rule
A foreign corporation is amenable to process for personal liability only if it is doing business within the state in such a manner and to such an extent as to warrant the inference that it is present there. The mere sale of through tickets by a local carrier for connecting lines, or the display of a foreign railroad's name for convenience, does not constitute "doing business" by the foreign railroad within the state. Even if subsidiary companies do business in the state, it does not automatically mean the parent company is doing business there.
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