270 Pa. 42 | Pa. | 1921
Opinion by
Use-plaintiff, the Southwestern Surety Insurance Company, hereinafter called the insurance company, was surety on two bonds given to protect the city against any loss it might sustain by reason of the failure of Mark P. Wells to complete, according to contract with defendant, the erection of certain buildings to be used by the Philadelphia Home for Feeble Minded. Wells and his assignees did not complete the buildings, and city officials called upon the insurance company to finish them. This was undertaken and the buildings erected, at a cost in excess of "the contract price, including amount paid to subcontractors, for all of which one of the bonds was liable. Part of the balance due on the contract was paid plaintiff and this action was brought to recover the remainder, including retained percentages, with interest; from a verdict and judgment in the plaintiff’s favor, defendants appeal.
It was not essential to the use-plaintiff’s right to recover that the receiver, even if appointed, be named as party-plaintiff; his appointment did not authorize or oblige him to sue, nor give him any authority over suits instituted. The claim against" the city was to reimburse the use-plaintiff within the limits of the contract price for the balance of moneys expended in the completion of the buildings and in satisfying the claims of subcontractors. The city had ample means at hand to protect and safeguard its rights without such receiver, not only against any wrongful claim made by the use-plaintiff, but also against any possible duplication of payment to Wells or the Wells Construction Company, or even the receiver; moreover, it could have had certain basic facts in issue determined in this litigation, whether such litigation resulted favorably to plaintiff or defendant. If plaintiff has, by prior engagement, dealt with others with respect to the identical sums here recovered, so that it could not in equity receive them, the city, with full knowledge, under the order of the federal court, will pay as directed; there the receiver may become an important party—the federal court will determine that question; but, as between use-plaintiff and defendant, the present litigation is a distinct adjudic'atidn by a
That Wells or the Wells Construction Co. had instituted suit in Philadelphia County against this same defendant for the wrongful abrogation or annulment of contract, and for a balance that apparently involved a part of the fund here claimed by the insurance company, would not, for the reasons above mentioned, prevent use-plaintiff from litigating its demand in its own right.
The city is not bound to recognize partial assignments of contracts (Philadelphia’s Appeals, 86 Pa. 179; Vetter v. Meadville, 236 Pa. 563, 565), but use-plaintiff does not appear as a partial assignee of the balance due on the contract or of the retained percentages. When default on the contract was declared against Wells and those under him, the surety was called upon to complete the contract in accordance with the obligation assumed by it with the city; the surety, on electing to complete, stood , in a new relation to the contract. It was in direct relation to defendant as a party contracting to complete the work, becoming so on the contractor’s default. In agreeing to finish the work, it exercised its rights under the contract and bond, stepping into the shoes of the contractor, operating under the contract as though a party originally alternately bound by its terms: See Phila. v. Nichols Co., 214 Pa. 265, 273. It was not a new engagement but a continuation of the,old one, wherein the surety succeeded to all the rights, of the contractor
The original contract provided for the payment of $50 per day as liquidated damages for delay in the completion of the contract, if it extended over two hundred working days from the date of the notice to commence. This clause was not a penalty and could be enforced as written (Malone v. Phila., 147 Pa. 416), and the proper authorities had power to enforce it. While there was some inconsistency between specifications and contract, they should be read together, and when this is done the liquidated damages to be collected were to be fixed by the director of public health and charities and the architect. To enforce a claim for such damages, this stipulation should be followed. These officers were the persons entrusted by all parties to fix the amount, and, as nothing was done or intended to be done by them, and as there was sufficient evidence to show a waiver of the claim by the city, the damages cannot now be imposed. We have not only a waiver as to the time of performance but a waiver as to the claim for damages. It is true that a waiver of delay is not necessarily a waiver of damages. A waiver of the provision of the time of performance does not necessarily waive the owner’s claim for damages by reason of‘the failure to perform in time, as the owner may grant or refuse to grant an extension of time, irrespective of damages resulting therefrom; and the mere fact that the owner permits the builder to continue the work, and makes payment thereon,—although this may constitute a waiver as to the time in which the work should have been completed,—would not necessarily be a waiver as to the owner’s rights to recover damages for delay; and the,acceptance of the work would not alter this: 9 Corpus Juris 792. Care should be taken to distinguish in our cases between specific acts evidencing waiver and the general rule as here indicated. The
The evidence as to the cost of completing the work was entirely proper, and, though possibly the cost was not mentioned in plaintiff’s statement, defendant presents no record to take advantage of a variance. The right to retained percentages arises not only under the contract but in the application for bonds. The city will not be prejudiced by paying under the contract, as it is not a case of subrogation but one of contract. Attention is called to McKallip v. City of Altoona, 265 Pa. 192,198. The judgment of the court below is affirmed.