Appeal from judgment of Court of Common Pleas of Montgomery County, No. 65-5148, in case of Philadelphia Forrest Hills Corp. v. Bituminous Casualty Corporation.
David L. Steck, with him J. Grant McCabe, III, and Rawle & Henderson, for appellant.
Michael H. Malin, with him White and Williams, for appellee.
Ervin, P. J., Wright, Watkins, Montgomery, Jacobs, Hoffman, and Spaulding, JJ. Opinion by Spaulding, J.
[ 208 Pa. Super. Page 462]
On January 17, 1963, an unfinished house owned by Philadelphia Forrest Hills Corporation was damaged by fire as a result of the negligence of the T. R. Dry Wall Company, Inc., whose employes were working on the house at the time. Dry Wall was insured under a standard contractor's policy issued by the Bituminous
[ 208 Pa. Super. Page 463]
Casualty Corporation. Shortly after the fire, Dry Wall and Bituminous agreed to an adjustment of damages in the amount of $685. This sum was paid by Bituminous to Dry Wall. The latter executed and delivered a policy release which purported to discharge Bituminous from all claims which might arise from the fire.
Forrest Hills instituted a suit in trespass against Dry Wall in the County Court of Philadelphia in September of 1963 and subsequently secured a verdict for $2390. In May of 1964, prior to the verdict, Dry Wall was adjudicated a bankrupt.
A separate suit was commenced in the Court of Common Pleas of Montgomery County by Forrest Hills against Bituminous and Bituminous alleged that it had discharged its obligation under the policy by its payment to the insured. Forrest Hills moved for judgment on the pleadings which was granted in the amount of $2390. Bituminous appeals.
The question before us is whether Forrest Hills has a right of action directly against Bituminous, despite the prior settlement between Bituminous and the insured, Dry Wall. The authorities are in agreement that in the absence of a statute or a policy provision on which such right may be predicated, a person may not maintain a suit directly against the insurer to recover on a judgment rendered against the insured. Ferguson v. Manufacturers' Casualty Insurance Company of Philadelphia, 129 Pa. Superior Ct. 276, 195 A. 661 (1937).
However, it is also recognized that "where the policy itself permits suit, . . . the injured creditor may be considered a third party beneficiary entitled to maintain the action". Ferguson, supra, at 280. Paragraph 13 of the insurance policy issued by the appellant to Dry Wall provides in pertinent ...