City of Lancaster v. Frescoln

• Decision Date: 19 July 1899
• Docket Number: 74
• Citation: City of Lancaster v. Frescoln, 192 Pa. 452, 43 A. 961 (Pa. 1899)
• Parties: City of Lancaster, to the use of the Penn Iron Company, Limited, et al., v. Samuel W. Frescoln and the American Surety Company, Appellant
• Court: Pennsylvania Supreme Court

43 A. 961

192 Pa. 452

City of Lancaster, to the use of the Penn Iron Company, Limited, et al.,

v.

Samuel W. Frescoln and the American Surety Company, Appellant

No. 74

Supreme Court of Pennsylvania

July 19, 1899

Argued May 16, 1899

Appeal, No. 74, Jan. T., 1899, by defendants, from order of C.P. Lancaster Co., March T., 1898, No. 4, making absolute a rule for judgment for want of a sufficient affidavit of defense. Reversed.

Assumpsit on a bond. Rule for judgment for want of a sufficient affidavit of defense.

The bond was given by a contractor to a city and recited that the contractor should perform his work, pay his laborers and pay for the materials used. The use plaintiffs alleged that the contractor owed them for work done and materials furnished.

The affidavit of defense was as follows:

And now, March 15, 1898, comes the American Surety Company of New York, one of the defendants in the above action, and saith that it has a just and true defense to the whole of plaintiffs' claim in this action as set forth in their statement, the nature and character of which are as follows:

It denies that it is indebted to the nominal or use plaintiffs in the sum of $64,000, for the reasons and on the account set forth in their statements, or in any amount or on any account whatsoever, and it avers that:

1. It has no knowledge whether the bills appended to plaintiffs' statement and purporting to be accounts against Samuel W. Frescoln, are valid or not. It has no knowledge whether Samuel W. Frescoln is indebted to the use plaintiffs in the account therein set forth or not, and it demands proof of the same, and it avers and maintains that it is not obligated to pay, and there can be no legal recovery against it in any form of action whatsoever for such bills until the validity of the same has been duly established by law, and that it is not bound to make any answer regarding the same until such claims have been established by judgment in an independent action by the said use plaintiffs against the said Samuel W. Frescoln.

2. It admits the execution of a bond by it and Samuel W. Frescoln in the sum of $64,000, for the performance by the said Samuel W. Frescoln of a certain contract, which bond and obligation it believes, are correctly set forth in plaintiffs' statement of claim filed in this suit. It denies, however, that there was in said obligation any privity of contract between it and the use plaintiffs in this suit, and that there is anything in said bond or obligation to make the defendant liable to the use plaintiffs for any of the debts of the said Samuel W. Frescoln. It denies that the use plaintiffs furnished to the said Samuel W. Frescoln any materials relying upon the defendants' bond to pay for the same. It denies that the said Samuel W. Frescoln did not perform all the duties required of him, as contracted according to the conditions of said writing obligatory, or that he neglected or refused so to do. It further avers that all claims and rights of the city of Lancaster under the said contract of agreement between it and the said Samuel W. Frescoln, and all obligations of the said Samuel W. Frescoln under said agreement were made the subject of a suit in the circuit court of the United States, for the eastern district of Pennsylvania, at Philadelphia, No. 57 of October sessions, 1894, wherein the said Samuel W. Frescoln brought suit upon said contract against the said city of Lancaster, and, in said suit, on the 8th day of April, 1896, there was entered a judgment against the said city of Lancaster and in favor of the said Samuel W. Frescoln, for $13,750, which judgment was a determination of all matters at issue and variance between the said Frescoln and the said city of Lancaster, and which was conclusive and binding upon the city of Lancaster, and all offsets or claims of whatsoever kind which the said city of Lancaster had against the said Frescoln and of all rights which the said city of Lancaster had under said bond against either the said Samuel W. Frescoln or the defendants, the American Surety Company, and which said judgment was final and conclusive of all rights which the use plaintiffs had, or which any other person had, under said bond, and which judgment has been paid by the city of Lancaster.

The defendants further aver that, by reason of the premises, and by reason of the fact that there was no privity of contract between the said use plaintiffs and the defendants, and by reason of the neglect of the said use plaintiffs to intervene in the said suit between the said Samuel W. Frescoln and the city of Lancaster, they have no right of action in this case, and all obligations of the defendants upon the said bond and agreement are discharged, and that it is not indebted to the plaintiffs, or to any of them, in any amount whatsoever.

A supplemental affidavit of defense of the American Surety Company was as follows:

And now, March 24, 1898, comes the American Surety Company, one of the above named defendants, and reaffirming all the matters alleged and set forth in the affidavit of defense already filed, and that the same is fully adequate and sufficient in law, in addition thereto, files this supplemental affidavit of defense and further alleges a full, complete and legal defense to the plaintiffs' cause of action, because the city of Lancaster, the nominal plaintiff above, to whom the bond set forth in the plaintiffs' statement was given, acting through its duly constituted and authorized agents, made material changes and alterations in the plans and specifications of the contract work in relation to which the said bond was given, after the execution and delivery of the said bond and without notification to or the approval and consent of the American Surety Company, the surety on said bond. And further, that said changes and alterations were fully set forth and considered in the suit already referred to, in the circuit court of the United States for the eastern district of Pennsylvania, No. 57 of October sessions, 1894, wherein Samuel W. Frescoln was plaintiff and the city of Lancaster, aforesaid, was defendant, and formed part of the moving consideration for the said judgment in favor of the said plaintiff and against the said defendant therein, for $13,750.

The court made absolute the rule for judgment.

Error assigned was the order of the court.

The judgment is reversed.

William H. Keller, of Coyle & Keller, and W. U. Hensel, of Brown & Hensel, for appellants. -- The liability on this bond was res adjudicata: Bell v. Allegheny County, 184 Pa. 300; 1 Herman on Estoppel, 117.

There is no privity between the plaintiffs here and the defendants. They are not mentioned in the bond or contract. Plaintiffs were not known to the contracting parties. It is well settled that third parties are not allowed to sue unless made a party to a contract under a seal: McLaren v. Hutchinson, 18...