Appeal from judgment of Court of Common Pleas, Trial Division, of Philadelphia, Dec. T., 1966, No. 2827, in case of County Commissioners of Tioga County to the use of L. B. Smith, Inc. v. C. Davis, Inc. et al.
Stephen R. Bolden, with him Fell, Spalding, Goff & Rubin, for appellant.
Herbert A. Barton, with him Swartz, Campbell & Detweiler, for appellee.
Bell, C. J., Jones, Cohen, Eagen, O'Brien, Roberts and Pomeroy, JJ. Opinion by Mr. Justice Roberts. Mr. Justice Pomeroy concurs in the result. Dissenting Opinion by Mr. Justice Cohen. Mr. Chief Justice Bell joins in this dissent.
On August 30, 1965, C. Davis, Inc. entered into a contract with the County Commissioners of Tioga County, under the terms of which Davis agreed to perform certain excavation work at the March Creek Water Shed Flood Project in Wellsboro, Pennsylvania. As a condition of this contract, Davis was required to post a Contractor's Payment Bond to protect all persons supplying labor or material in the prosecution of the work. Appellee issued the bond which provided ". . . all persons supplying labor and material in the prosecution of the work provided for in said contract . . ." would be paid by appellee if the contractor did not pay them.
C. Davis, Inc. began work in September, 1965 and suspended operations for the winter on December 20. Work resumed on May 2, 1966 and continued through July, 1966 at which time it ceased because the contractor went out of business. In order to do the work that it did, C. Davis, Inc. leased certain heavy equipment from Davis Equipment Co., a corporation separate and distinct from C. Davis, Inc. but composed of the same officers and directors. This action in assumpsit was brought on the Contractor's Labor and Material Payment Bond against the bonded contractor and its surety to recover the value of repair parts supplied by L. B. Smith, Inc., appellant, to the bonded contractor, C. Davis, Inc., in order to replace the undercarriage on a TC-12 tractor, one of the leased pieces of heavy equipment. After trial without jury, the trial court held that the language of the bond limited its coverage to material which had entered into and become a component part of the work, and that the terms of the
bond, which were not as broad as those required by The County Code, Act of August 9, 1955, P. L. 323, § 2318, 16 P.S. § 2318, could not be expanded by reading into them the terms of the statute. It then entered judgment in favor of appellee.
I. The Language of the Bond
The County Code, § 2318, states: "(a) It shall be the duty of every county to require any . . . corporation entering into contract with such county for the construction . . . of or addition to any public work or improvement of any kind, whatsoever . . . before commencing work under such contract, to execute and deliver to such county . . . an additional bond for the use of any and every person, copartnership, association or corporation . . . . Such bond . . . shall be conditioned for the prompt payment for all material furnished and labor supplied or performed in the prosecution of the work, whether or not the said material or labor enter into and become component parts of the work or improvement contemplated." The difference between the bond as executed and the statute is the presence in the latter of the following specific language: "whether or not the said material or labor enter into and become component parts of the work or improvement contemplated." The court below, on the authority of Commonwealth to Use v. A. Stryker, Inc., 109 Pa. Superior Ct. 137, 167 Atl. 459 (1933), held that the terms of the act are not to be read into the bond. While it is true that some decisions have held that the terms of a bond are not to be so expanded, Commonwealth to use of Pandolfo v. Pavia Company, 381 Pa. 488, 113 A.2d 224 (1955), Anno. 77 A.L.R. 21, 152 (1932), § 2318 speaks in mandatory language. Subsection (d) states "any contract executed in violation of the provisions of this section shall be null and void." Thus, as written,
the bond is of no effect, and in order to satisfy the statutory requirements, it is necessary to read into ...