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COMMONWEALTH TO USE WALTERS TIRE SERVICE v. NATIONAL UNION FIRE INSURANCE COMPANY (04/23/69)

decided: April 23, 1969.

COMMONWEALTH TO USE WALTERS TIRE SERVICE, INC.
v.
NATIONAL UNION FIRE INSURANCE COMPANY, APPELLANT



Appeals from judgments of Court of Common Pleas of Allegheny County, Oct. T., 1965, No. 1839, and April T., 1966, No. 2495, in cases of Commonwealth to use of Walters Tire Service, Inc. v. National Union Fire Insurance Company, and Walters Tire Service, Inc. v. Same.

COUNSEL

Robert F. McCabe, Jr., with him James M. McCandless, for appellant.

John L. Laubach, Jr., with him Jack W. Plowman, and Kenney, Stevens, Clark & Semple, and Plowman & Spiegel, for appellee.

Bell, C. J., Jones, Cohen, Eagen, O'Brien, Roberts and Pomeroy, JJ. Opinion by Mr. Justice Jones. Concurring Opinion by Mr. Justice Roberts. Mr. Justice Pomeroy joins in this concurring opinion.

Author: Jones

[ 434 Pa. Page 237]

These two cases, consolidated for trial in the Court of Common Pleas of Allegheny County, involve substantially the same factual situation. Walters Tire Service, Inc. (Walters) brought suits against appellant, National Union Fire Insurance Company (National) as surety on a labor and material payment bond given in each case by the Indyk Brothers Construction Company (Indyk) in connection with contracts for certain excavation work on two separate highway construction projects in the Commonwealth. In both cases Walters had supplied Indyk with quantities of tires designed for heavy earth-moving equipment. When Indyk got into financial difficulty, National took over the projects and finished both jobs. The claims in these two suits involve amounts allegedly due from Indyk before National took over the projects.

The pertinent bond language in each case is almost identical. The crucial language in one bond obligated National in the event of default by Indyk to pay "all

[ 434 Pa. Page 238]

    just claims for materials furnished . . . in the prosecution and completion of the work to be done . . . whether or not said materials . . . entered into and became component parts of the work or improvement contemplated . . . ." The other bond required payment "for all material furnished . . . in the prosecution of the work, whether or not the said material . . . enter into and become component parts of the work or improvement contemplated . . . ." The jury returned verdicts in favor of Walters in both cases, and, after interest was computed, Walters recovered the sums of $43,246.26 and $77,070.59 in the two cases. The court en banc dismissed motions for a judgment n.o.v. and for a new trial, and from judgments entered on the verdicts the instant appeals were taken.

National's first contention is that tires and related products are not included within the terms of the surety bonds. Both parties agree, and our research indicates, that this is a case of first impression on the appellate level in Pennsylvania. In the only Pennsylvania decision which we have found apposite, the Court of Common Pleas of Allegheny County held that tires were included within the bond's coverage. Pennsylvania Turnpike Commission v. Eidemiller, 89 Pitts. L. J. 477 (1940).

The blackletter rule governing what items are included within the terms of the bond was set forth by the Superior Court in Philadelphia School District v. B. A. Shrages Co., 134 Pa. Superior Ct. 533, 4 A.2d 558 (1939), aff'd per curiam, 336 Pa. 433, 9 A.2d 900 (1939). In that case the Court held that scaffolding which would be removed after completion of the project in a reusable condition was not included within the terms of the bonds. The Court recognized that we held in Commonwealth v. Ciccone, 316 Pa. 111, 173 A. 642 (1934), that gasoline and oil used to operate machinery

[ 434 Pa. Page 239]

    in the course of construction were included within the terms of the bond but then developed the following distinction which we think adequately reflects the state of the law today: "But we think there is a clear distinction between such material [e.g., gasoline, oil, form lumber and nails] and the purchase of equipment, apparatus and appliances which were not intended to go into or become a part of the improvement, or to be consumed or used up in the prosecution of the work, but which were intended as aids or appliances which the contractor would naturally be expected to furnish, and which he would take away with him on the completion of the work, to be used by him in like manner on subsequent contracts." (134 Pa. ...


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