Central Contracting Co. v. C. E. Youngdahl & Co.

• Citation: 209 A.2d 810,418 Pa. 122
• Parties: CENTRAL CONTRACTING COMPANY, a Corporation, Appellant, v. C. E. YOUNGDAHL & COMPANY, Inc., Crump, Incorporated--Psaty & Fuhrman, Inc., a joint venture, and Housing Authority of the City of Pittsburgh, a Public Corporation, Garnishee.
• Decision Date: 03 May 1965
• Court: United States State Supreme Court of Pennsylvania

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209 A.2d 810 418 Pa. 122 CENTRAL CONTRACTING COMPANY, a Corporation, Appellant,
v.
C. E. YOUNGDAHL & COMPANY, Inc., Crump, Incorporated--Psaty
& Fuhrman, Inc., a joint venture, and Housing
Authority of the City of Pittsburgh, a
Public Corporation, Garnishee. Supreme Court of Pennsylvania. May 3, 1965.

[418 Pa. 124]

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Bresci R. P. Leonard, Royston, Robb, Leonard, Edgecombe & Miller, Pittsburgh, for appellant.

John A. Metz, Jr., Metz, Cook, Hanna & Kelly, A. Leonard Balter, Harry Rubin, Rubin & Balter, Everett E. Utterback, Pittsburgh, for appellee.

Before BELL, C. J., and MUSMANNO, JONES, COHEN, EAGEN, O'BRIEN and ROBERTS, JJ.

COHEN, Justice.

This is an appeal by plaintiff, in an assumpsit action, from an order of the lower court en banc sustaining[418 Pa. 125] preliminary objections to foreign attachment ¹ and to jurisdiction; the latter objection was apparently based upon certain arbitration clauses set forth in the contract.

In 1960, plaintiff-appellant, Central Contracting Company (Central) entered into an agreement with a party contracting under the name of 'C. E. Youngdahl & Company, Inc.--Crump, Incorporated--Psaty & Fuhrman, Inc., A joint Venture.' The joint venture had a general contract with the Pittsburgh Housing Authority. Central agreed with the joint venture to do certain painting work generated by the general contract. Central brought suit against the joint venture, alleging that 'defendants required plaintiff to perform extra and additional painting services' for which Central sought compensation, and against the Housing Authority as garnishee.

While the lower court did not dismiss the complaint or enter judgment against the plaintiff or order arbitration, its order so restricted Central's further action 'as, virtually to put [it] out of court on the cause of action which [it] seeks to litigate,' Sullivan v. City & County of Philadelphia, 378 Pa. 648, 649, 107 A.2d 854, 855 (1954), and, therefore, the order below is appealable.

The lower court held that property in the hands of a Housing Authority, organized pursuant to the Housing Authorities Law of 1937, Act of May 28, 1937, P.L. 955, 35 P.S. § 1541 et seq., is, ipso facto, immune from an otherwise appropriate foreign attachment because the Authority Could not be summoned as garnishee. This was error.

Appellee argues that as a 'general rule * * * the United States, the states and their political subdivisions[418 Pa. 126] and agencies cannot be summoned as garnishees in any action, without statutory statutory authorization or consent or waiver.' 6 Am.Jur.2d, Attachment and Garnishment § 78, p. 615. See also 17 McQuillin, Municipal Corporations, § 49.86 (1950 ed.). Pennsylvania courts have applied this so-called general rule to prohibit attachment of property in the hands of the Pennsylvania Turnpike Commission, Iron City Spring Co. v. Teer, 53 Dauph. 118 (1942), the Urban Redevelopment authority of Pittsburgh and the Public Parking Authority of Pittsburgh, Richter v. George Doherty Lumber Co., 16 Pa.D. & C.2d 181 (1958), and the City of Pittsburgh, Wood Refrigerating Co. v. Preston, 7 Pa.D.& C.2d 648 (1956). The most recent case in which this Court discussed this rule was Haines v. Lone Star Shipbuilding Co., 268 Pa. 92, 110 A. 788 (1920). In Haines we did not apply the rule for reasons discussed below.

Appellee further contends that, because Section 10 of the Housing Authorities Law provides that '[a]n authority shall constitute a public body, corporate and politic, exercising public powers of the Commonwealth

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as an agency thereof * * *,' ² and because, in certain other contexts, we have recognized its public or governmental nature, ³ we should determine that, under the so-called general rule, it cannot be summoned as garnishee in foreign attachment proceedings. Granting, for present purposes only, that the Housing Authority is engaging in governmental projects on behalf of the Commonwealth,[418 Pa. 127] nevertheless, we cannot agree with appellee's position.

It is apparent that the rationale behind the so-called general rule, as stated first in Bulkley v. Eckert, 3 Pa. 368 (1846) has little force in the instant circumstances.

'Great public inconvenience would ensue, if money would be thus arrested in the hands of officers, and they be made liable to all delay, embarrassment, and trouble that would ensue, from being stopped in the routine of their business compelled to appear in court, employ counsel, and answer interrogatories, as well as take care that the proceedings are regularly carried on, and bail to return duly given.' ⁴

The activities carried on by the Housing Authority implicate it in various and complex legal relationships involving bonds, construction contracts, and leases. This is why '[a]ny Authority may employ its own counsel and legal staff.' ⁵ In this context it is plain that the duties of a garnishee in foreign attachment proceedings are not overly burdensome upon an Authority. ⁶ Indeed, rather then 'being stopped in the routine of their business,' Bulkley, supra, this type of [418 Pa. 128] everyday legal work is routine business for the Authority.

Moreover, notwithstanding their public and nonprofit nature, Housing Authorities engage in activities that have the aspect of large...