Plaintiff, Walther & Cie, entered into a contract with International Boiler Works Company to furnish material, primarily boilers and boiler tubing, for use in the Harrisburg Incinerator project, being constructed by International-Noonan, a joint venture consisting of International Boiler Works Company and R. S. Noonan, Inc. The purchase price agreed to in the contract was 1.280.140 Deutsche marks. U. S. Fidelity & Guaranty Company and Planet Insurance Company executed a payment bond in connection with the aforementioned project undertaken by the joint venturers. Plaintiff delivered the last substantial amount of material pursuant to the contractual terms in May of 1971. On September 20, 1971, Walther & Cie received partial payment of the purchase price in the amount of 100.000 Deutsche marks. No additional payments having been made to plaintiff, this suit was instituted upon the payment bond against U. S. Fidelity & Guaranty Company, Planet Insurance Company, International-Noonan, R. S. Noonan, Inc. and International Boiler Works Company. Plaintiff filed a motion for summary judgment which the court denied. Subsequently the case was listed for trial.
On the day fixed for trial, September 23, 1974, the parties settled under the following conditions: (1) plaintiff would receive $425,000.00, $50,000.00 to be paid immediately and the remainder to be secured by a promissory note signed by defendants R. S. Noonan, Inc. (hereinafter Noonan) and International Environmental Systems, Inc. (hereinafter IES), the successor to International Boiler Works Company (hereinafter IBW) in the amount of $375,000.00, without interest, payable December 31, 1974, at the Deutsche Bank in Cologne, Germany, said note to be delivered to plaintiff's counsel; (2) the fidelity company defendants -- U. S. Fidelity & Guaranty Company (hereinafter U.S.F. & G.) and Planet Insurance Company (hereinafter Planet) -- would guarantee the payment of said note unconditionally by letters directed to Walther & Cie (hereinafter plaintiff) in Germany, with copies to plaintiff's counsel in Philadelphia; and (3) if the aforementioned guarantees were not forthcoming, plaintiff would receive a letter of credit from one of Noonan's banks guaranteeing the promissory note. On October 7, 1974, the $50,000.00 payment was made to plaintiff. Due to internal disputes among the defendants, a promissory note with the appropriate guarantees was never delivered to the plaintiff. On December 20, 1974, plaintiff filed the motion for sanctions against the defendants for their failure to carry out the settlement terms. On December 27, 1974, Noonan presented a certified check in the amount of $375,000.00 to counsel for plaintiff, which check was stipulated before the court to be in full satisfaction of all claims except those arising from the delay in implementation of the aforementioned settlement.