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SCHUYLKILL PRODUCTS v. H. RUPERT & SONS (09/24/82)

filed: September 24, 1982.

SCHUYLKILL PRODUCTS, INC., APPELLANT,
v.
H. RUPERT & SONS, INC., INTERNATIONAL FIDELITY INSURANCE COMPANY, UNITED BONDING INSURANCE COMPANY AND EMMCO



No. 2570 Philadelphia, 1980, Appeal from Judgment of the Court of Common Pleas, Civil Division, of Columbia County, No. 140 May Term, 1971.

COUNSEL

William D. Hutchinson, Pottsville, for appellant.

John Arnold Crisman, Berwick, for appellees.

Spaeth, Wieand and Johnson, JJ. Johnson, J., files a concurring opinion. Spaeth, J., files a dissenting opinion.

Author: Wieand

[ 305 Pa. Super. Page 38]

May a materialman maintain a direct action against a reinsurer who has contracted with the surety on a contractor's bond to insure any loss which the surety may be called upon to pay? The trial court held that such an action could not be maintained and sustained preliminary objections in the nature of a demurrer to the materialman's second amended complaint. We affirm.

H. Rupert & Sons, Inc., (Rupert) entered a written contract to perform work for the Bloomsburg Sewer Authority. Schuylkill Products, Inc., the appellant herein, was a materialman who supplied sewer pipe to Rupert. In this action, appellant alleged that Rupert was indebted to it for materials sold and delivered in the amount of $7,407.

Prior to the commencement of work, Rupert delivered to the Authority a public works contractor's bond,*fn1 with surety,

[ 305 Pa. Super. Page 39]

    providing security for costs of labor and materials. The co-sureties on that bond were United Bonding Insurance Company and Prudence Mutual Casualty Company. An affidavit attached to the bond recited:

That Treaties of (automatic) Reinsurance now exist between the Prudence Mutual Casualty Company and certain other surety companies by which the liability assumed by said Company under the Bond above described, is Reinsured in accordance with the following percentages, or in the following "Limits of Availability" (or, by Specific Facultative Reinsurance):

Reinsurers and Participants Amount Available Amount Reinsured

1) International Fidelity

Ins. Co.

Newark, New Jersey $62,300.00 $42,000.00

2) Allegheny Mutual Casualty

Company

Meadville, Pennsylvania 110,000.00 63,000.00

3) United Bonding Insurance

Company

Indianapolis, Indiana 100,000.00 ...


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