Appeal, No. 51, Jan. T., 1955, from judgment of Court of Common Pleas of Berks County, Sept. T., 1951, No. 80, in case of Clifford Mowrer v. Poirier & McLane Corporation. Judgment reversed.
Huette F. Dowling, with him, Dowling, Lock & Say, and Ralph C. Body, John C. Clemmens and Body, Muth, Rhoda & Stoudt, for appellant.
George R. Eves, for appellee.
Before Stern, C.j., Stearne, Jones, Bell, Chidsey, Musmanno, and Arnold, JJ
OPINION BY MR. CHIEF JUSTICE HORACE STERN
The controlling question is whether plaintiff is a third-party beneficiary of a contract between defendant and the Commonwealth of Pennsylvania.
The contract with the Commonwealth called for the construction by defendant, Poirier & McLane Corporation, of an impounding dam on the Schuykill River. Paragraph 21a provided that "The Contractor shall take out and maintain during the life of this contract, such Public Liability and Property Damage insurance as shall protect him, and any subcontractor performing work covered by this contract, from claims for damages for personal injury, including wrongful death, as well as from claims for property damages, which may arise from operations under this contract, whether such operations be by himself or by any subcontractor or anyone directly or indirectly employed by either of them ..."
Defendant engaged the Hamilton Construction Company as one of the subcontractors on the job. Plaintiff was the owner of a tractor which, according to the case stated agreed upon by the parties, "was the subject matter of a bailment existing between the plaintiff, Clifford Mowrer, and the Hamilton Construction Company." While the tractor was being used by the latter in the course of its work under the subcontract with defendant it was damaged in some manner which does not appear in the record, causing plaintiff a loss of $4,250.00. Plaintiff brought suit against Hamilton Construction Company and obtained a verdict and judgment in that amount, but, as the case stated further sets forth, he "has made no recovery from said Hamilton Construction Company and no recovery on said judgment can be obtained." Plaintiff seeks in the present action to recover the amount of his loss from defendant, the general contractor, basing his alleged right on the provision of the contract above quoted which required defendant to take out property damage insurance. In pursuance of that obligation defendant had taken out a policy of insurance but there was an
exclusion clause therein which provided that the policy should not apply "to injury to or destruction of property owned, rented, occupied, or used by the insured and ... of property in the care, custody, or control of the insured." The parties agree that by reason of this exclusion the policy did not cover the damage to plaintiff's tractor. The court entered judgment for the plaintiff. Defendant appeals.
The question in the case resolves itself to this: - For what purpose - for whose benefit - was the requirement of insurance inserted in the contract between defendant and the Commonwealth? Plaintiff points to the familiar cases which hold that where, for example, as in Commonwealth v. Great American Indemnity Company, 312 Pa. 183, 167 A. 793, the contractor in the agreement is obligated to pay all claims of subcontractors, materialmen and laborers, such claimants, as donee beneficiaries, can maintain actions against the contractor to recover the amounts due them, or where, as in Keefer v. Lombardi, 376 Pa. 367, 102 A.2d 695, the contractor is obligated to pay the damages sustained by any persons during the performance of the work, a person whose property is thus injured can, as a third-party beneficiary, recover his ...