It is agreed, I believe, as facts, that Warner Bros. Pictures, Inc., is not incorporated in New Jersey, that it has no direct representative herein, nor does it transact business here unless certain acts hereinafter set forth subject it to this jurisdiction.
It owns 100 per cent of the capital stock of Vitagraph, Inc. This latter corporation, under a contract between it and moving corporation, handles the film of moving corporation, which is distributed to exhibitors in the State of New Jersey and elsewhere in the United States to be exhibited in moving picture houses and, after expenses are paid, Vitagraph receives 20% of clear proceeds and Warner Bros. 80% of clear proceeds. The films during all of this period are the property of Warner Bros. and when their use is discontinued are returned to it.
On this showing defendant says it is not found in or transacting business in this district.
Plaintiff's attorneys insist that these conditions subject Warner Bros. to the jurisdiction of this court and contest claimed right of dismissal.
It is alleged that Vitagraph, Inc., is the agent of Warner Bros., but this claim does not seem to be supported by any reported cases. As a matter of fact, it would appear that under a contract of this character, even though the acting corporation may be 100 per cent owned by the nonresident, the doctrine of agency cannot apply.
The plaintiff raises a new proposition which does not appear to have been determined in any jurisdiction, and that is, that Warner Bros. property having been circulated in this district by Vitagraph, in itself establishes the fact that Warner Bros. is transacting business in New Jersey.
It does not seem necessary to go deeply into reported opinions on the primary question. Judge Walker in the case of Westor Theatres, Inc., a corporation et al. v. Warner Bros. Pictures, Inc., D.C., 41 F.Supp. 757, filed October 30, 1941, under practically the same state of facts, determined that Warner Bros. could not be brought into this district and directed the quashing of service of summons.
The argument as to the latter question does not impress me to the extent that it overcomes the general situation. I am satisfied that the ownership of property handled by another party would not justify a decision determining that Warner Bros. is transacting business in this district. It is not necessary to determine the question of validity of service of summons.
The service will be quashed.
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