for the sovereign state and hence the principles of law invoked by the courts in adjudicating questions involving the rights of individuals and the state when engaged in the exercise of the governmental functions are equally applicable to municipalities in performing such functions. Thus it was said in Schuylkill County v. Com., 36 Pa. 524: "The Commonwealth is not to suffer by the laches of its agent, nor can the County of Schuylkill obtain a discharge from its liability because the state treasurer was not vigilant," citing United States v. Kirkpatrick, infra. See also Commonwealth v. Brice, 22 Pa. 211, 60 Am.Dec. 79; United States v. Kirkpatrick, 9 Wheat. 720, 735, 6 L. Ed. 199.
In Szilagyi v. Bethlehem, supra, an action of trespass had been instituted against the City of Bethlehem for failure to procure laborers' and materialmen's bonds. The court held that in the construction, maintenance and repair of highways a municipality is acting in its governmental rather than its business capacity and its statutory duty to procure a bond for the protection of labor and materialmen on such construction is governmental.
So it has been uniformly held that the municipality is not liable for negligence of its officers or employees in the performance of a duty, if the service was of a governmental character delegated to the municipality and performed on behalf of the sovereign state. Devers v. Scranton, 308 Pa. 13, 161 A. 540, 85 A.L.R. 692; Scibilia v. Philadelphia, 279 Pa. 549, 124 A. 273, 32 A.L.R. 981; Balashaitis v. County, 296 Pa. 83, 145 A. 691; Collins v. Com., 262 Pa. 572, 106 A. 229.
This is the answer to the plaintiff's assertion of laches of and estoppel against the municipality, and distinguishes the cases cited by plaintiff.
Furthermore, it is even questionable if the plaintiff was deceived by "a factual misrepresentation that Municipal (Construction Company) was not a defaulter" (it is so averred in the complaint). According to the ordinance, the "blacklist" is a public record, and its inspection was available to everyone, including the plaintiff and primary defendant.
It should also be noted that the city is under no obligation to see to it that the labor and materialmen on the contract are paid. Philadelphia to Use v. McLinden, 205 Pa. 172, 54 A. 719. In that case the Supreme Court of Pennsylvania has said (page 176 of 205 Pa., page 720 of 54 A.): "The power of the city to exact the additional bond was upheld in Philadelphia v. Stewart, 195 Pa. 309, 45 A. 1056, in which it was decided that the condition was not ultra vires and contrary to public policy, as it was the right of the city to protect itself against the risk of defective materials and workmanship in the construction of its public works, against which there is no right of lien, by exacting assurance from the contractor that he will pay the debts which he incurs."
The Supreme Court further said (page 176 of 205 Pa., page 720 of 54 A.): "* * * The city was under no obligation to pay the claimants, nor to see that they were paid. They had no claim upon the fund in its possession which could be enforced, and the city could not retain the money in order that the creditors of the contractor or his surety could reach it by any process. Lesley v. Kite, 192 Pa. 268, 43 A. 959. The city had no direct financial interest in the bond, for, although it was a nominal plaintiff, it was merely a trustee for those who might beome beneficially interested. Philadelphia v. Stewart, 201 Pa. 526, 51 A. 348. It is equally clear that the surety cannot set up the violation of the law and of the contract forbidding the employment of alien labor by its principal as a defense in an action on the bond."
In Sundheim v. Philadelphia School District, 311 Pa. 90, 99, 166 A. 365, 368, the Supreme Court of Pennsylvania ruled: "These cases [cited] clearly show a municipality has no duty to see that labor and materialmen are paid and the labor and materialmen themselves have no preference or claim to the retained percentages. Therefore, the surety whose rights rise no higher than those of labor or materialmen can have no right of subrogation to money in the owner's hands as retained percentages."
In Szilagyi v. Bethlehem, supra, it was pointed out that the city was not liable for its neglect to procure the laborers' and materialmen's bonds.
Indeed, it has even been held by the Supreme Court of Pennsylvania that the municipality may not provide by ordinance a remedy whereby subcontractors might enforce payments of their claims out of the money in the hands of the city due the principal contractor. Lesley v. Kite, 192 Pa. 268, 43 A. 959.
For the reasons stated, the motion of the City of Philadelphia (third-party defendant) to dismiss the complaint against it by the National Surety Corporation (third-party plaintiff) is granted; and the said complaint is accordingly dismissed.