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DONAHUE v. R. C. MAHON COMPANY (06/22/71)

decided: June 22, 1971.

DONAHUE, APPELLANT,
v.
R. C. MAHON COMPANY, APPELLANT



Appeals from orders of Court of Common Pleas of Delaware County, No. 2962 of 1966, in case of Neuman Donahue, Ind. & t/a Armstrong & Donahue v. R. C. Mahon Company.

COUNSEL

George J. McConchie, with him Cramp & D'Iorio, for defendant-appellant.

Philip R. Detwiler, with him Butera and Detwiler, for plaintiff-appellant.

George J. McConchie, with him Cramp, D'Iorio, McConchie and Surrick, for appellee.

Wright, P. J., Watkins, Montgomery, Jacobs, Hoffman, Spaulding, and Cercone, JJ. Opinion by Montgomery, J.

Author: Montgomery

[ 219 Pa. Super. Page 211]

This is an action in assumpsit in which plaintiff Neuman Donahue, individually and trading as Armstrong & Donahue (Donahue), recovered a jury verdict in the sum of $52,072.57, plus interest of $3,905.44, against the defendant, R. C. Mahon Company (Mahon). The action was commenced in foreign attachment but the attachment was dissolved before trial. The amount of the verdict was determined after allowing as a credit a counterclaim asserted by Mahon in the agreed amount of $6,506.34. Mahon filed motions for judgment n.o.v. and for a new trial. The motion for judgment n.o.v. was refused and Mahon appealed. The motion for a new trial was granted and Donahue appealed.

[ 219 Pa. Super. Page 212]

Donahue is an individual proprietorship engaged in the business of erecting structural steel and steel paneling. Mahon is a corporation engaged in the fabrication of steel paneling. Mahon's contracts with purchasers include the erection of such panels but it generally engages independent contractors to install them. Donahue is such an independent contractor who negotiated with Mahon through its representative, Merle Feltenberger, who also in behalf of Mahon generally submitted bids for such work to the general contractors on the various jobs.

Plaintiff and Feltenberger negotiated for a series of ten unrelated jobs. The course the parties followed is described in Mahon's brief (History of the Case), to which Donahue subscribes, as follows: "Generally, Feltenberger would learn of a job and contact Donahue. These two would then familiarize themselves with what was required by way of material and erection, and Donahue would then submit to Feltenberger his bid for the labor involved in the erection. As a rule, this bid would at first be orally communicated to Feltenberger by Donahue. In due course Feltenberger would orally report back to Donahue that Donahue had the job, if such was the case. Donahue would then follow up his oral quotation with a written bid which identified the job in question, contained a brief statement of the work to be done and quoted the price. These written bids were addressed to the Mahon Company c/o Feltenberger. In due course Mahon would send to Donahue a written purchase order in the form of a formset. This purchase order contained a description of the work to be done, the price quoted to Mahon by Donahue and a separate sheet containing a number of paragraphs referred to as clauses, one of which always stated that all extras, additions or changes would have to be in writing and that the prices contained in the purchase order were firm. Donahue

[ 219 Pa. Super. Page 213]

    would then sign and return one of the copies of this purchase order from the formset to Mahon, retaining a copy for himself along with the sheet containing the several clauses. As often as not, however, Donahue would have already started the work before receiving Mahon's purchase order. It was Donahue's practice to send invoices to Mahon for a full month which were then paid by Mahon within two or three weeks."

The first nine contracts were completed with only minor disputes. The tenth contract relating to the renovation of the Boeing-Vertol Corporation at Eddystone, Pennsylvania, is the only one about which there is any serious dispute.

The contentions of the parties are exemplified in the pretrial report agreed to by them which reads in part as follows:

"The pleadings contain certain admissions which will form the agreed facts in this case.

"Counsel are agreed that the following statement may be read to the Jury as agreed facts: Plaintiff and Defendant entered into a series of eight*fn1 separate written contracts between August, 1965, and January, 1966, whereby for an agreed price for each job Plaintiff was to install Defendant's sidewall at various construction sites located in Montgomery and Delaware Counties. The principal contract in question involves the plant built in Eddystone, Pennsylvania, for the Boeing-Vertol Corporation. Defendant was a subcontractor of Austin Company, general contractor on the Boeing-Vertol Corporation job. Plaintiff was a subcontractor of the Defendant. Defendant has paid Plaintiff a total of $83,889.45 in respect to all jobs. [Emphasis supplied]

"Plaintiff contends that in regard to the Boeing-Vertol Corporation job that he was delayed substantially

[ 219 Pa. Super. Page 214]

    in commencing his operations because Defendant failed to deliver materials and have conditions in proper order on the date scheduled. As a result, since a deadline had to be met, Plaintiff was required to vastly increase his number of employees and the entire scope of his operation. The total man hours required to complete the job were increased greatly because Plaintiff had to perform many things not originally a part of his contract. Because of the importance of meeting the deadline Defendant's representative on many occasions assured Plaintiff that his contract would be modified to make fair allowances for the various increases and Plaintiff proceeded to complete the job on a time and material plus overhead and profit basis. A detailed breakdown of the costs, etc. is in the complaint.

"In regard to the other jobs Plaintiff contends that all work was completed satisfactorily and that he was not paid in full.

"Defendant contends that it was backcharged by its customers on several of the jobs and hired a third party to complete another of the jobs for a total cost to Defendant of $9,802.13. The parties orally adjusted the contracts on three or four occasions and Defendant contends that the total agreed price for the eight contracts as orally adjusted was $93,691.58, the sum of the $83,889.45 agreed by the parties to have been paid by Defendant to Plaintiff and the $9,802.13, contended by Defendant to have been incurred by it as above stated.

"Further, Defendant contends that Plaintiff was woefully ill-equipped, ill-experienced and under-capitalized for the totality of these undertakings and incurred debts to certain of his subcontractors which Defendant had to pay in order to receive final payment from one of its customers. These debts totaled $10,831.30, but Defendant was able to settle them for

[ 219 Pa. Super. Page 215]

    a total of $6,750.00 and has taken assignments from these subcontractors. Plaintiff is indebted to Defendant by reason ...


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