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March 20, 1950


Appeal, No. 207, Jan. T., 1949, from judgment of Court of Common Pleas No. 4 of Philadelphia County, Sept. T., 1948, No. 1170, in case of Commonwealth of Pennsylvania, to use, Anthony Herzog et al., trading as Joseph Herzog v. Henry W. Horst Company et al. Judgment affirmed.


Edward Paul Smith, with him Albert Smith Faught, for appellants.

Walter B. Gibbons, for appellees.

Before Maxey, C.j., Drew, Linn, Stern, Stearne and Jones, JJ.

Author: Drew

[ 364 Pa. Page 404]


This action in assumpsit was brought in the name of the Commonwealth to the use of Joseph Herzog, a partnership, against Henry W. Horst Company, a construction engineering firm employed by the Commonwealth, and its surety, the Maryland Casualty Company, to recover $7,642.60 due under an excavation and hauling contract. Defendants answered and by way of counterclaim averred that a material change had occurred when the excavation operations were shifted from one site to another and, by the terms of the contract, this necessitated a readjustment of the amount due. The jury returned a verdict for plaintiff, but only for $5000. The learned court below granted plaintiff's motion for a judgment n.o.v. From this judgment and the judgment overruling its motion for a new trial, defendants have appealed.

Defendant, Henry W. Horst Company, is an Illinois corporation registered to do business in Pennsylvania. On August 15, 1946, the Commonwealth of Pennsylvania contracted with that company for the improvement of a certain highway and bridge in Tinicum Township, Delaware County, Pennsylvania, on route 762. A joint and several bound for the payment of any labor and materials to be supplied under the contract was executed the same day between Horst and the Maryland Casualty Company. Horst Company then entered into a written subcontract on August 26, 1946, with plaintiff whereby plaintiff was to excavate dirt from a lot designated by defendant and transport it to the construction site.

Plaintiff began the work of excavation under the direction of defendant on a plot of ground later designated Pit No. 1. This ground was bounded on the northwest by South MacDade Boulevard, on the southeast by West Knowles Avenue and on the northeast by tracks of the B. & O. Railroad. However, within a few days an injunction was issued restraining further excavation and

[ 364 Pa. Page 405]

    by oral agreement operations were shifted to a section later known as Pit No. 2. This plot was directly opposite the West Knowles Avenue boundary of Pit No. 1 but was separated from it by a swamp which was approximately two hundred and fifty feet in depth. The marsh could not support a road, and ingress to Pit No. 2 had to be made via South Avenue, the southern boundary of that lot. This street was approximately four tenths of a mile nearer the construction site than was the entrance to Pit No. 1. Although this lessened to some extent the distance plaintiff's trucks had to travel, defendant continued to pay plaintiff at periodic intervals without complaint or discussion of a possible lowering of the unit contract price. But, when all the work had been completed and defendant had been paid in full by the Commonwealth, it demanded an adjustment of the unit yardage basis established by the contract and refused to pay plaintiff until it agreed to such an adjustment. Upon plaintiff's refusal of that demand, defendant withheld the remaining money due under the contract.

Section (a) of Article VII of the contract provides: "The Contractor may by a written order change the extent or amount of the work covered by this subcontract. If any such change causes a material increase or decrease in the amount or character of such work, an equitable adjustment shall be made, and this subcontract shall be modified in writing accordingly." Defendant contends that such a decrease did take place when plaintiff's hauling distance was shortened by the shifting of excavation operations to Pit No. 2 and argues that the contract entitled defendant to an appropriate adjustment of the cost basis. Obviously this argument can be sustained only if the area to be excavated, as described in the contract, did not include Pit No. 2.

It is a settled rule that where a contract contains no words pertaining to an art or trade, is written in plain and popular ...

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