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PENNSYLVANIA TURNPIKE COMMISSION v. UNITED STATES FIDELITY AND GUARANTY COMPANY. (10/11/63)

October 11, 1963

PENNSYLVANIA TURNPIKE COMMISSION, APPELLANT,
v.
UNITED STATES FIDELITY AND GUARANTY COMPANY.



Appeal, No. 47, May T., 1963, from order of Court of Common Pleas of Dauphin County, Jan. T., 1961, No. 725, in case of Pennsylvania Turnpike Commission v. United States Fidelity and Guaranty Company and James F. Torrance. Appeal quashed.

COUNSEL

Harold E. Kohn, with him Henry E. Harner, Aaron M. Fine, and Dilworth, Paxson, Kalish, Kohn & Dilks, for Pennsylvania Turnpike Commission, appellant.

Edward E. Knauss, III, and Gilbert J. Helwig, with them F. Brewster Wickersham, Elder W. Marshall, and Metzger, Wickersham & Knauss, and Reed, Smith, Shaw & McClay, for appellees.

Before Bell, C.j., Musmanno, Eagen, O'brien and Roberts, JJ.

Author: Eagen

[ 412 Pa. Page 224]

OPINION BY MR. JUSTICE EAGEN

This is an appeal in an action of assumpsit from the order of the lower court refusing plaintiff's motion for judgment on the pleadings. The appeal is prosecuted pursuant to the provisions of the Act of April 18, 1874, P.L. 64, § 1, 12 P.S. § 1097.

James F. Torrance was a member of the Pennsylvania Turnpike Commission and also secretary-treasurer of the commission of February 28, 1955, when it entered into a multimillion dollar engineering contract with the Manu-Mine Research and Development Company. Torrance and others were subsequently indicted, tried and convicted for conspiracy to defraud the commission and for misbehavior in office in activities relating to the consummation and performance of the contract. These convictions were sustained by the appellate courts of the Commonwealth, with the exception of one count contained in the three count misbehavior in office indictment.*fn1

Pursuant to statutory requirements,*fn2 Torrance executed a $50,000 official bond in his capacity as a member of the commission, and a $100,000 bond as secretary-treasurer of the commission, for the period August 14, 1954, to August 14, 1955. Identical bonds were executed for the period August 14, 1955, to August 14, 1956. In each of the foregoing bonds, the United States Fidelity and Guaranty Company (Fidelity) was surety and bound itself unto the commission

[ 412 Pa. Page 225]

    in varying penal sums. The pertinent provisions of each bond included the condition, "That if the said James F. Torrance ..., shall well and truly, correctly and faithfully in all things, execute, perform and discharge, the trusts and duties of the said office or employment enjoined and required by law, or the terms of this employment, ..., and shall well and truly correctly and faithfully account for and pay according to law, all moneys which shall be received by him as such officer, or employe ... then this obligation to be void ...."

This action of assumpsit was instituted by the commission against Torrance and Fidelity to recover the penal sum on all four bonds, totaling $300,000. The complaint alleges that Torrance did not satisfy the conditions of the bonds in that he participated in a conspiracy to defraud the commission and was also guilty of misbehavior in office during the periods of coverage, which resulted in loss to the commission in an amount in excess of the bonded amount. The record of the criminal proceedings was incorporated by reference. It was further alleged that the judgments of conviction entered against Torrance were conclusive as to the defendant's liability for the full face amount of the bonds.

In their answers to the complaint, Torrance and Fidelity specifically denied the existence of the conspiracy to defraud, and misbehavior in office, and that the former had breached the conditions of the bonds; also that the conviction of Torrance was conclusive of their liability. Fidelity ...


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