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CLARDY v. BARCO CONSTRUCTION COMPANY (03/18/65)

decided: March 18, 1965.

CLARDY
v.
BARCO CONSTRUCTION COMPANY, INC. (ET AL., APPELLANT)



Appeal from judgment of Court of Common Pleas of Delaware County, June T., 1962, No. 1371, in case of George H. Clardy v. Barco Construction Company, Inc.

COUNSEL

Morton Craine, for appellant.

Douglas D. Royal, with him Robert E. Porter, and Greenwell, Porter, Smaltz & Royal, for appellee.

Ervin, Wright, Watkins, Montgomery, and Flood, JJ. (Rhodes, P. J., and Woodside, J., absent). Opinion by Montgomery, J.

Author: Montgomery

[ 205 Pa. Super. Page 220]

This appeal by Bell Savings and Loan Association (Bell), the garnishee in an attachment execution on a judgment recovered by George H. Clardy (Clardy) against Barco Construction Company, Inc. (Barco), is from a judgment in favor of Clardy entered against it in a non-jury trial. The money sought to be attached in the hands of Bell was the balance of a fund originally comprising a construction loan (mortgage fund) which it had made under a construction loan agreement to Barney Goldman, the owner of a tract of land in Radnor Township, Delaware County, for the purpose of improving it with residential units, paved streets, etc., and additional money advanced by Goldman (primary fund) for the same purpose. Barco was the general contractor for Goldman and Clardy was a subcontractor.

This judgment was rendered on the theory that Barco was a third party beneficiary of the contract between Bell and Goldman, thereby making its interest subject to attachment by its creditors; and that Bell is equitably estopped from denying that liability. Bell contends that Barco was not a beneficiary of the contract; that it (Bell) had the sole discretion in the disbursement of the funds; that it was not liable to anyone

[ 205 Pa. Super. Page 221]

    except Goldman, the owner; and that it is not estopped from denying liability to Clardy or Barco. The balance remaining in its hands at the time of the attachment was subsequently credited on the loan when the mortgage was satisfied. Thus it can be said to have been returned to Goldman.

Our principal consideration is whether Barco or Clardy may be considered as beneficiaries of the contract between Bell and Goldman. The facts relating to the contracts are not in dispute. On September 28, 1960, Goldman entered into two contracts. One was with Barco to erect eight buildings and make road and street improvements on the land owned by Goldman. The other was with Bell for the construction loan. Barco was also a signatory to the construction loan agreement, which stated that its main purpose was to pay for the improvements in the amount of $127,184.72 "in accordance with a bid heretofore submitted by Barco Construction Company, Inc., hereinafter called 'contractor'. . . ."

It is appellant's contention that this case is ruled by Demharter v. First Federal Savings & Loan Association of Pittsburgh, 412 Pa. 142, 153, 194 A.2d 214, 219 (1963), which held, "Nothing in this Agreement obligated First Federal to make any payment to any 'subcontractors' or 'materialmen', whether they be in the status of third party beneficiaries or not. If, and only if, First Federal elected to do so would any payment be made. This Agreement contains no actionable promise to the suppliers of labor and materials which can be enforced by them."

The provisions of the Demharter contract on which that decision was based are identical with the provisions of the ...


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