277 Pa. 345 | Pa. | 1923
Opinion by
After proper competitive bidding, defendant’s board of directors accepted plaintiff’s bid for the erection of a school house, and directed its officers to enter into a specific contract with plaintiff, by which the latter was required to fully complete the building according to the plans and specifications upon which it had bid, and, when completed, to deliver it to the board, pending which defendant agreed to “maintain insurance on the same against loss or damage by fire, the policies to cover all work incorporated in the building, and all materials for the same in or about the premises, and to be made payable to the parties hereto as their interests may appear.” The contract was duly executed and the work proceeded
The building burned down before it was entirely completed. The board tried to induce plaintiff to agree to a settlement on the basis of the policies it had taken out, and the loss as adjusted by the insurance companies, but this proposition was declined. The board thereupon made settlement on its own responsibility, later apportioned the fund received and paid to plaintiff only a part of its loss. Upon notification so to do, the latter completed the building (which was accepted by the board), and then sued herein to recover the contract price, plus the loss it sustained by the fire, less certain admitted credits. The court below gave binding instructions for defendant, refused plaintiff’s motion for judgment non obstante veredicto, and the latter appeals from the judgment entered on the verdict.
It is clear plaintiff can recover unless some statute or public policy forbids it. The provision of the contract, above quoted, expressly required defendant to “maintain [fire] insurance......to cover all work......and all materials......[the policies to be] made payable to the parties hereto [that is, to plaintiff and defendant] as their interests may appear.” Admittedly this was not done, and for whatever damage resulted the defaulting owner would ordinarily be liable: McAlpine v. Trustees of St. Clara Female Academy, 101 Wis. 468; Gallagher v. St. Patrick’s Church, 45 Neb. 535; Watts v. Shuttleworth, 5 Hurlstone & Norman 235; Same v. Same, 7 Hurlstone & Norman 353.
In the first of these cases, — where, so far as regards the form and amount of the policies, the contract was in all essential respects the same as here, — it was said at page 475: “There was pleaded a good cause of action for damage for breach of contract......to be measured by
Upon this point defendant refers to and relies upon the Act of February 4, 1870, P. L. 14, which forbids insurance except by virtue of an “authority expressly conferred by a charter of incorporation.” The statute has no relevancy to the present controversy for the contract here does not require defendant to insure, but to “maintain insurance.......payable to the parties hereto as their interests may appear.” If we were to sustain the contention now made, great harm would result, for the insurance clauses appearing in most of the modern mortgages, would be invalidated thereby. This consideration alone would not defeat the argument, but it calls for serious thought; without it, however, we are clear the statute is inapplicable.
Defendant further alleges that, because it is a school district, sections 403 and 617 of the School Code of May 18, 1911, P. L. 309, 330, 350 (the latter section being amended by the Act of July 10, 1919, P. L. 889), stand
Plaintiff’s damage is not to be measured by the premium it would have had to pay, had it taken out insurance to protect it against such a loss. This would be the measure had defendant notified plaintiff the insurance would not be or could not be obtained (Veley v. Clinger, 18 Pa. Superior Ct. 125), for in that event plaintiff would be required to minimize the possible loss, if it elected to continue performance of the contract notwithstanding. No such notice appears to have been given, however, and, in the absence thereof, plaintiff was entitled to assume defendant would comply with its contract, and may recover the damages actually sustained because of its failure so to do.
The payments made by defendant to plaintiff, out of the fund received from the insurance companies, do not operate to estop plaintiff or to ratify the settlement. Admittedly the latter was made without plaintiff’s consent,
It follows that the existing record does not sustain the instructed verdict, and the judgment thereon must be reversed. We cannot, however, enter judgment for plaintiffs non obstante veredicto. They had the burden of proving the disputed extent of the loss, and since its complete establishment depended on oral evidence, the amount can only be determined by the verdict of a jury, under proper instructions from the court: Second National Bank v. Hoffman, 229 Pa. 429; Bradican v. Scranton Ry. Co., 260 Pa. 555; Shaughnessy v. Director General of Railroads, 274 Pa. 413.
The judgment of the court below is reversed and a venire facias de novo awarded.