Szilagyi v. Bethlehem

• Decision Date: 30 June 1933
• Docket Number: 67,66
• Citation: 167 A. 782,312 Pa. 260
• Parties: Szilagyi et al., Appellants, v. Bethlehem
• Court: Pennsylvania Supreme Court

167 A. 782

312 Pa. 260

Szilagyi et al., Appellants, v. Bethlehem

Nos. 66, 67

Supreme Court of Pennsylvania

June 30, 1933

Argued April 17, 1933

Appeals, Nos. 66 and 67, Jan. T., 1933, by plaintiffs, from judgment of C.P. Northampton Co., Nov. T., 1931, Nos. 80 and 81, sustaining affidavits of defense in lieu of demurrer, in cases of Geza Szilagyi et al. v. City of Bethlehem and Brown-Borhek Co. v. Same. Affirmed.

Trespass for failure to procure laborers' and materialmen's bond. Before STEWART, P.J.

The opinion of the Supreme Court states the facts.

Demurrer sustained. Plaintiff appealed.

Error assigned, inter alia, was order sustaining demurrer, quoting record.

Judgment of the court below is affirmed.

Herbert J. Hartzog, for appellants. -- The provisions of the Act of May 28, 1929, P.L. 106, impose an imperative statutory duty upon the municipal corporation itself.

The function of a municipality to require an additional bond for the protection of subcontractors and materialmen is private and corporate, and not public or governmental: Erie v Schwingle, 22 Pa. 384; Western Saving Fund v. Phila., 31 Pa. 175; McDade v. Chester City, 117 Pa. 414; Betham v. Phila., 196 Pa. 302; Scibilia v. Phila., 279 Pa. 549; Brooks v. Buckley & Banks, 291 Pa. 1; Kelley v. Cumberland Co., 229 Pa. 289.

Daniel L. McCarthy, for appellee. -- The Act of Assembly, on which plaintiffs rely, imposing a duty on a city to require an additional bond from a contractor employed in the erection, alteration, addition or repair of roads, bridges, edifices, and public buildings in the city, for the protection of laborers and materialmen, does not by its terms impose any liability on a city for its failure to comply with the provisions thereof: Gratz v. Ins. Co., 282 Pa. 224; Davidson v. Bright, 267 Pa. 580; Zimmerman v. Coal Co., 286 Pa. 108.

It is well established in Pennsylvania that no action lies against a municipality to recover damages for negligence of officers or employees in the performance of a duty if the service was of a governmental character, delegated to the municipality to be performed on behalf of the sovereign state: Devers v. Scranton, 308 Pa. 13; Scibilia v. Phila., 279 Pa. 549; Balashaitis v. County, 296 Pa. 83; Collins v. Com., 262 Pa. 572.

The defendant city in constructing portions of state highways within its corporate limits was exercising a governmental function delegated to it to be performed on behalf of the state: Greene Co. v. Twp., 305 Pa. 79; Lancaster v. Frescoln, 203 Pa. 640; Sax v. School Dist., 237 Pa. 68.

Before FRAZER, C.J., SIMPSON, KEPHART, SCHAFFER, DREW and LINN, JJ.

OPINION

MR. JUSTICE KEPHART:

The City of Bethlehem contracted with the Rathbun Company for the improvement of two city streets. The contractor gave one bond for each contract, but the bonds did not include labor and materialmen as obligees or potential use-plaintiffs, nor did the city require an additional bond for the payment of labor, material and machinery used. The contractor became bankrupt and failed to pay the appellants who furnished materials to the contractor. This suit was instituted in trespass against the city to recover damages arising out of the neglect of the city to obtain the additional bond. The city, by affidavit of defense, raised the question of law that it was not liable to plaintiffs as it was acting in a governmental capacity. The court below sustained its legal position and this appeal followed.

It is contended that the various acts of assembly requiring municipalities to secure an additional bond for the protection of labor, materialmen and machinery, impose an imperative statutory duty on the municipality which it, and not its officers, is obligated to perform; in failing to procure an additional bond the city was guilty of wilful misfeasance as well as nonfeasance; the function of procuring an additional bond is a private or corporate rather than a governmental duty, and the failure to procure it, through the act of its authorized agents, causes the city to be liable in damages for the nonperformance of this duty.

The Act of May 10, 1917, P.L. 158, required cities in the erection of public buildings to procure an additional bond which would provide for the payment of labor and materialmen who are employed on the improvement. The Act of May 6, 1925, P.L. 546, provided that it should be the duty of cities, etc., to secure the additional bond. These acts, however, were not deemed broad enough to cover all the contingencies of a contractor's failure to pay labor and materialmen. Accordingly, the Act of March 28, 1929, P.L. 106, was enacted, providing: "That it shall be the duty of . . . counties . . . in the erection . . . of roads, bridges, edifices and public buildings . . . to require of the contractor . . . an additional bond . . . providing for the payment of" labor, materialmen and for machinery. These acts speak in the terms of a command to the respective municipalities, and the duty is imposed on them to secure an additional bond which shall provide for the payment of labor, materialmen and for machinery used in and about the work.

We considered these several acts in Sundheim, Receiver, v. Philadelphia School District, 311 Pa. 90, and in reviewing them and the liability of municipalities for the payment of labor and materialmen of the contractor, it was stated: "Ordinarily, and at common law, the owner [municipality or other subdivision of government] is under no liability in a contractual sense, nor is . . . [it] under any duty [at common law] to pay, nor may . . . [its] property be subjected to payment of labor and materialmen of the contractor. . . . Property of municipalities, school districts and the like are exempt from such liability. A mechanics lien or attachment in the nature thereof cannot be filed against property belonging to these agencies of government." On page six, it is stated: ". . . the two bonds . . . [that were required to be given] one for the protection in construction, [and] the other for the benefit of labor and materialmen, [are] two distinct and separate obligations. . . . But . . . neither bond changed the common law status of the owner [municipality] as it related to the contractor's employees or materialmen." After citing many cases, we said: "These cases clearly show a municipality has no duty to see that labor and materialmen are paid. . . ." In construing the real purpose of the acts in question, we there stated: "The legislature has, however, seen fit to protect labor and materialmen engaged by a contractor in the erection of public buildings or doing public work, by requiring the contractor to give a bond to protect them." The legislature in due recognition of services connected with public works deemed it expedient to establish as part of the public policy of the Commonwealth that labor and materialmen should receive additional protection in the matter of compensation for such services to that heretofore given; as their labor and materials went into the construction of state or municipally owned property, they should have some guarantee for payment beyond that of the contractor. It therefore required the additional bond to be given by the contractor. Neither bond was in fact necessary for the actual accomplishment of the particular undertaking, here the construction of a street. The requirement of the additional bond was purely an act of government, a protective measure for the betterment of a substantial part of the public, that is, persons who worked or provided materials for public works. The public generally would be assured that all elements contributory to its buildings, roads, and public works were paid for and no complaint could be lodged against the government that the means had not been afforded to provide for payment of labor or material connected therewith.

The legislature committed the fulfillment of this public policy to the authorities of the various municipalities. It did not prescribe any penalty for their failure to act, nor did it impose any liability on the municipality if anyone should suffer loss by such failure but there is always a remedy to enforce performance of a public duty. It was within the power of those who dealt with the contractor to see that protection was procured, even though the additional bond was not given when their contracts were executed. Where a county, city, borough, town, township, school district, or poor district fails to require a contractor employed in and about the erection,...