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VALLEY FORGE INDUSTRIES v. ARMAND CONSTRUCTION (11/28/78)

decided: November 28, 1978.

VALLEY FORGE INDUSTRIES, INC., APPELLANT
v.
ARMAND CONSTRUCTION, INC. AND UNITED SURETY & FINANCIAL GUARANTEE COMPANY, APPELLEES



Appeal from the Order of the Court of Common Pleas of Northampton County in case of Valley Forge Industries, Inc. v. Armand Construction, Inc. and United Surety and Financial Guarantee Co., No. 37 May Term, 1974.

COUNSEL

William Manning, with him Donald B. Corriere and Haber and Corriere, for appellant.

Lawrence Center, with him Maloney, Danyi, Goodman, Hensel & Center, for appellee.

Judges Wilkinson, Jr., DiSalle and MacPhail, sitting as a panel of three. Opinion by Judge DiSalle.

Author: Disalle

[ 38 Pa. Commw. Page 604]

This case involves the interpretation and application of Section 7 of the Public Works Contractors' Bond Law of 1967 (Bond Law), Act of December 20, 1967, P.L. 869, 8 P.S. ยง 197.

The facts are not in dispute. On October 3, 1972, Valley Forge Industries, Inc. (Appellant), entered

[ 38 Pa. Commw. Page 605]

    into a contract with Armand Construction, Inc. (Armand), to furnish certain labor and materials to repave the streets in the Borough of Macungie following the installation of sewers. Appellant performed its subcontracting obligations during the weeks of October 16, 23, and 30, 1972, and billed Armand for $37,715.46. On November 20, 1972, Armand remitted $31,015.47 to Appellant but retained the balance pending final approval of the work. The engineers for the Borough of Macungie Sewer Authority refused to approve some of the work, and, following negotiations, Appellant agreed to correct certain defects and completed the work in June, 1973. No bills were submitted for this additional work and, if submitted, payment would have been refused.

Armand defaulted on payment of the remaining $6,699.99 due under the original billing and, on May 31, 1974, Appellant filed a complaint in assumpsit against Armand and United Surety and Financial Guarantee Co., the surety on Armand's labor and material bond. The lower court determined that the one-year limitation contained in Section 7 of the Bond Law barred Appellant from recovering on the bond.*fn1 In so doing, it held that the period of limitation was not extended by the subsequent repairs which Appellant performed.

The pertinent language of Section 7 of the Bond Law provides:

(b) No such action may be commenced after the expiration of one year from the day on which the last of the labor was performed or material was supplied for the payment of ...


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