226 Pa. Super. 157 | Pa. Super. Ct. | 1973
Opinion by
This is an appeal from an order sustaining preliminary objections in the nature of a demurrer, filed by Penn Federal Savings and Loan Association, and dismissing the complaint with respect to appellee.
Paragraph 7 of the complaint sets forth appellee’s connection with the case: “Defendant, Penn Federal Savings and Loan Association, not only provided the construction financing and the final mortgages to many of the purchasers, but was also a co-developer of the project in that it provided substantially all of the construction money required to build the homes of the plaintiffs and exercised supervision and control over the design and construction of the project.” Paragraph 24 alleges that appellee’s “participation” was made known to appellants by large posters and pamphlets “prominently displayed” in the sales office. Paragraph 25 alleges that these posters proclaimed appellee’s participation in other successful housing projects in center city Philadelphia.
It is further alleged that “[appellee] was well aware of the thin capitalization of Philcent Corp. and the precarious position of Defendant, Ralph Heller” (paragraph 27), and that “[appellee] did participate in both the physical and financial planning of the development and indeed was the final arbiter of all problems” (paragraph 28). Finally, it is alleged that appellants relied on the “reputation and expertise” of appellee and were led to believe that appellee “would inspect and supervise the design and construction of their homes” (paragraph 29).
We hold that the complaint fails to state a cause of action in assumpsit. Insufficient facts are pleaded to show the existence of any contractual relationship between appellants and appellee, much less any duty arising out of a contract.
Appellants rely heavily on their characterization of appellee as a “co-developer” of the project. We surmise that by this appellants intend to allege a relationship between appellee as lender and Philcent Corp. as builder analogous, if not identical, to that of a joint venture. This allegation, however, is not only a conclusion of law, but the complaint fails to state sufficient facts from which the conclusion may logically be inferred.
“The existence or non-existence of a joint venture depends upon what the parties intended in associating together. It must arise from a contractual basis, although the contract need not be express but may be implied from the acts and conduct of the parties. To constitute a joint venture certain factors are essential: (1) each party to the venture must make a contribution, not necessarily of capital, but by way of services, skill, knowledge, materials or money; (2) profits must be shared among the parties; (3) there must be a ‘joint proprietary interest and right of mutual control over
Appellants also rely heavily on the decision in Connor v. Great Western Savings and Loan Ass’n, 69 Cal. 2d 850, 447 P. 2d 609, 73 Cal. Rptr. 369 (1968). In that case, sounding in tort, the financing institution was held not to be vicariously liable for the contractor’s negligence, but directly liable for its own.
Connor was an appeal from a judgment of nonsuit after plaintiffs had offered all their evidence. Thus a far more extensive exposition of the facts was before the court than would be expected to appear on the face of a complaint. Nevertheless, the complaint in the
The allegation of appellee’s “participation” as manifested by the presence of posters and pamphlets in the rental office adds nothing of substance, for no participation is specified beyond the extension Of construction financing. The allegation that appellee was the “final arbiter of all problems” is so general as to amount to no more than a conclusion; it will therefore be disregarded.
This case is quite like Callaizakis v. Astor Development Co., 4 Ill. App. 3d 163, 280 N.E. 2d 512 (1972), an appeal from a dismissal of a complaint in negligence. The complaint (which was far more detailed than the one under consideration in this case) alleged that the lender’s participation created a duty with respect to the plaintiffs. The court refused to assume or infer the facts that were present in Connor v. Great Western Savings and Loan Ass’n, supra: “Even construing the complaint liberally we cannot assume that defendant received a construction loan fee nor that discovery would disclose a right of first refusal with a penalty if other financing was utilized [footnote omitted]. These assumed facts simply do not follow from any specific facts alleged in the complaint.” Callaizakis v. Astor Development Co., supra at 168-9, 280 N.E. 2d at 516-17.
The complaint was not dismissed with respect to the other two defendants: Philcent Corp., the builder, and Ralph Heller, the owner of Philcent Corp.
“Final mortgage” is not defined, but presumably implies that appellee was tbe purchase money mortgagee on some of tbe bornes.
We refrain from conjecturing what our decision would be if appellants had chosen to proceed in trespass or if further facts had been alleged to support the action in assumpsit.
The fact that Connor was effectively reversed by a later action of the California legislature (West’s Annotated California Codes, Civil §3434 (1970)) does not, as appellee contends, detract from the soundness of the reasoning, which is based on common law principles. Whether, absent a similar legislative enactment in this Commonwealth, we would reach the same result, is a matter which we do not here decide.
The court assumed that there was no privity of contract between a construction lender and the ultimate purchaser of a home.
"Approval of plans and specifications, and periodic inspection of houses during the construction is normal procedure for any construction money lender. The allegation that it supervised construction is a conclusion and will be disregarded.” Bradler v. Craig, 274 Cal. App. 2d 466, 475, 79 Cal. Rptr. 401, 407 (1969).