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MANOR JUNIOR COLLEGE v. KALLER'S INC. AND JOHN J. SPENCER ROOFING (04/18/86)

filed: April 18, 1986.

MANOR JUNIOR COLLEGE, APPELLANT,
v.
KALLER'S INC. AND JOHN J. SPENCER ROOFING, INC., APPELLEES



Appeal from the judgment entered January 24, 1984 in the Court of Common Pleas of Philadelphia County, Civil, No. 1632 May Term, 1979.

COUNSEL

William J. Barker, Jr., Philadelphia, for appellant.

Dean F. Murtagh, Philadelphia, for appellees.

McEwen, Cercone and Trommer,*fn* JJ.

Author: Mcewen

[ 352 Pa. Super. Page 312]

We here consider an appeal from a compulsory non-suit in favor of one of the appellees, John J. Spencer Roofing, Inc. ("Spencer"), in a suit arising from a contract under which Kaller's, Inc. ("Kaller") agreed to perform certain renovation work for appellant and then subcontracted the job to Spencer. We affirm.

Manor Junior College entered into a written contract with Kaller under which Kaller was to install a new roof on a college building. Kaller and Spencer then entered into an unwritten agreement that called for Kaller to supply all of the materials and Spencer to provide most of the workmanship necessary to replace the old roof with a new one. When rainstorm water caused interior damage to the building during the construction of the roof and Kaller did not proceed to take satisfactory preventive measures, appellant ordered Kaller "off of the job" and secured another roofer to install the roof.

Appellant thereafter brought suit against both Kaller and Spencer. The trial judge, prior to the trial, ruled that appellant had failed to state a cause of action in negligence against Spencer and at the conclusion of the testimony refused to submit to the jury appellant's claim against

[ 352 Pa. Super. Page 313]

Spencer under the contract. The claim against Kaller, however, was submitted to the jury which determined that Kaller was liable to appellant. Kaller and appellant had stipulated that, in the event of a verdict in favor of appellant and against Kaller, the damages would be set at the sum of $140,000.00.

Appellant raises the following issues in this appeal:

(1) Whether appellant was a third-party beneficiary of the oral contract between Kaller's and Spencer.

(2) Whether an implied warranty of reasonable workmanship applies to one who renders construction services but who does not sell a product.

(3) Whether the trial court erred in finding that appellant had failed to state a cause of action in negligence against Spencer.

We note, as we commence our seriatim discussion of the assertions of appellant, that the standard for designation of a party as a third party beneficiary was clearly established by our Supreme Court in Spires v. Hanover Insurance Company, 364 Pa. 52, 70 A.2d 828 (1950), when it ruled that a party does not become a third party beneficiary unless both parties to the contract express an intention to benefit the third party in the contract itself.

To be a third party beneficiary entitled to recover on a contract it is not enough that it be intended by one of the parties to the contract and the third person that the later should be a beneficiary, but both parties to the contract must so intend and must indicate that intention in the contract; in other words, a promisor cannot be held liable to an alleged beneficiary of a contract unless the latter was within his contemplation at the time the contract was entered into and such liability was intentionally assumed by him in his undertaking; the obligation to the third party must be created and must affirmatively appear, in the contract itself . . . .

Spires v. Hanover Insurance Co., supra, 364 Pa. at 56-57, 70 A.2d at 830-831 (footnote ...


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