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January 2, 1962


Appeal, No. 218, March T., 1961, from judgment of Court of Common Pleas of Allegheny County, Oct. T., 1960, No. 1596, in case of Carnegie Natural Gas Company v. County of Allegheny. Judgment reversed.


Maurice Louik, County Solicitor, with him Arthur L. McLaughlin, III, Assistant County Solicitor, for County of Allegheny, appellant.

J. Tomlinson Fort, with him Carl E. Glock, and Reed, Smith, Shaw & McClay, for appellee.

Before Bell, C.j., Musmanno, Jones, Cohen, Eagen and Alpern, JJ.

Author: Cohen

[ 406 Pa. Page 135]


Carnegie Natural Gas Company (Carnegie) seeks to recover from the County of Allegheny (County) the cost of replacing part of its gas lines. Liability is sought to be imposed upon the County by agreement of Carnegie with County entered into in August, 1929.*fn1 The County resists, claiming that the agreement had no validity since Carnegie did not seek its approval by the Public Service Commission as provided for in the agreement and as required by the Act of 1913, P.L. 1374.*fn2

[ 406 Pa. Page 136]

The lower court, in permitting recovery by Carnegie, overlooked the clear pronouncements of this court that where a statute provides that a contract entered into by a municipality should be executed in a particular manner, no liability is imposed upon that municipality unless the method prescribed by statute has been pursued. Patterson v. Delaware County, 404 Pa. 5, 171 A.2d 47 (1961); Maryland Casualty Co. v. Darby Township, 399 Pa. 492, 160 A.2d 706 (1960); Commonwealth v. Seagram Distillers Corporation, 379 Pa. 411, 109 A.2d 184 (1954); Luzerne Township v. Fayette County, 330 Pa. 247, 199 Atl. 327 (1938). Statutory requirements for execution of such contracts are mandatory - not merely directory. Similar provisions in other statutes have been uniformly construed as mandatory. See Yoder v. Luzerne Township School District, 399 Pa. 425, 426-9, 160 A.2d 419 (1960).

In addition to the usual purposes behind the provisions requiring the execution of governmental contracts in a certain prescribed manner, i.e., the prevention of collusion and dishonesty, we can see in this instance an additional reason for the legislative requirements of commission surveillance in the Act of 1913 and, now, in the Act of 1937. The engineering, accounting and legal staffs of utilities are specially trained in

[ 406 Pa. Page 137]

    utility representation and thus, in many cases, have a decided advantage in contract negotiations with their counterparts in municipal government. For this reason, the legislature may have required the commission, which also possesses expertise in all phases of utility matters, to approve such contracts, thus safeguarding the municipality by providing a method for preventing overreaching on the part of the utility.

We see no reason why failure to conform with the statutory requirements of approval by the commission should be excepted from the general rule that no contractual liability is incurred by the municipality unless statutory requirements are complied with. The legislature in the Act of 1913 required the commission to approve such contracts between municipalities and utilities. Such approval was not obtained, hence no recovery may be had by the utility for work done while the contract was unapproved. Proper though this contract might be, and as favorable as its terms are to the County, the County is without authority to pay in this instance. Subsequent approval of the contract by the commission in 1959 did not validate the contract so as to legalize the payment. The approval by the commission of the contract specifically was not made nunc pro tunc; hence, it is not necessary to decide whether the contract would have been revitalized by a nunc pro tunc approval.


Judgment reversed and here entered for the County.

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