Arthur Greenfield, Inc. v. Great American Indemnity Co.

16 Pa. D. & C. 225, 1932 Pa. Dist. & Cnty. Dec. LEXIS 8
CourtPennsylvania Court of Common Pleas, Philadelphia County
DecidedFebruary 9, 1932
DocketNo. 7980
StatusPublished

This text of 16 Pa. D. & C. 225 (Arthur Greenfield, Inc. v. Great American Indemnity Co.) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Philadelphia County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Arthur Greenfield, Inc. v. Great American Indemnity Co., 16 Pa. D. & C. 225, 1932 Pa. Dist. & Cnty. Dec. LEXIS 8 (Pa. Super. Ct. 1932).

Opinion

Gordon, Jr., J.,

This case, which is(before us on affidavit of defense in the nature of a demurrer, involves the right of a third party beneficiary to sue upon a contract. The Great American Indemnity Company, the defendant, is the surety on a bond given to the Commonwealth of Pennsylvania by the Nelson-Pedley Construction Company to guarantee the faithful performance of a contract between it and the Commonwealth for the erection of South Office Building No. 2, in Capitol Park, Harrisburg, Pennsylvania. The plaintiff, which was a subcontractor on the work, has brought this suit on the bond in its own name to recover the amount of an unpaid claim against the principal in the bond- for labor and materials furnished to the work. One of the conditions of the bond was that the Nelson-Pedley Construction Company, the general contractor, would “pay all lawful claims of subcontractors, materialmen and laborers for labor performed and materials furnished in the carrying forward, performing or completing” the work.

Under the foregoing facts, disclosed by the plaintiff’s statement, the defendant contends, first, that the Act of April 22, 1903, P. L. 255, under which'the bond appears to have been given, and which requires approved surety for the protection of laborers and materialmen to be given by all contractors for public work, is unconstitutional; and, second, that, even if the act were constitutional, the language of the bond in suit neither expressly, nor, under the established rules for the interpretation of such instruments, impliedly confers on third parties the right to sue upon it.

[226]*226In support of the first of these contentions, the defendant relies upon the case of Smith’s Appeal, 241 Pa. 336, as holding the entire Act of 1903 in violation of article in, section seven, of the Constitution, which prohibits local or special legislation providing or changing methods for the collection of debts. It is true that the case cited does hold the Act of 1903 unconstitutional in this respect. We cannot agree, however, that the decision in Smith’s Appeal determines the unconstitutionality of that act in its entirety, since the constitutional question there presented and decided involved only the procedural part of the act. It is well established that, if one provision of an act is found to be unconstitutional, the remaining provisions are not thereby invalidated, unless the unconstitutional provision is so interwoven with the others that the latter are inoperable independently of the one invalidated, and the general scheme of the legislation is destroyed: 36 Cyc. 976; Bagley Co. v. Cameron, 282 Pa. 84. Applying this principle to the Act of 1903, we see no such interdependence between its unconstitutional procedural provisions and its requirement that security shall be entered by contractors on public works as to render the latter and principal purpose of the act unconstitutional. The act amends section six of the Mechanics’ Lien Law of June 4, 1901, P. L. 431, and provides as follows: “Section 6. Where labor or materials are furnished for any structure or other improvement for purely public purposes, in lieu of the lien given by the act, any sub-contractor who has furnished labor or materials thereto may give a written and duly sworn notice to the Commonwealth, or any division or sub-division thereof, or any purely public agency thereunder, being the owner of the structure or other improvement, setting forth the facts which would have entitled him to a lien as against the structure or other improvement of a private owner; whereupon, unless such claim be paid by the contractor, or adequate security be given or have been given to protect all such claimants, the Commonwealth or the division or sub-division thereof, or purely public agency thereunder, shall pay the balance actually due the contractor into the court of common pleas of the county in which the structure or other improvement, or the principal part thereof, is situate, for distribution to such parties as would be entitled thereto were it paid into court in the case of a private owner; and the Commonwealth hereby does, and any division or sub-division thereof, or any purely public agency thereunder, may, require that any contract for public work shall, as a condition precedent to its award, provide for approved security to be entered by the contractor to protect all such parties. If a dispute arises as to the balance actually due, the amount admitted shall be paid into court, and a suit brought to recover the disputed part, in the name of the contractor to the use of the parties interested, and any amount recovered shall be distributed as above set forth.”

The reason for the inclusion of section six in the Mechanics’ Lien Law, to which the Act of 1903 is an amendment, is evident. Since liens could not be filed against public property held for purely public purposes, some measure of effective protection had to be devised for subcontractors on public works, who could not resort to the mechanic’s lien. The legislature, therefore, supplied that protection in section six, first, by requiring all contracts for public work to provide for approved security to be entered by the contractor “to protect” subcontractors; and, second, by providing as a purely alternative and independent remedy, arising only in the event of the failure of a contractor to give the required security, that if the claim of the subcontractor is not paid by the contractor or adequate security “be given or have been given to protect” him, the Commonwealth should, on receipt of notice of an unpaid [227]*227claim of a subcontractor, pay the balance actually due the contractor into court “for distribution to such parties as would be entitled thereto were it paid into court in the case of a private owner.” In Smith’s Appeal, the constitutionality of the alternative procedure provided by the act was the only question before the Supreme Court. The Commonwealth had paid the money due the general contractor into court as provided by the act. On distribution, it was awarded to the subcontractor against the protest of the general contractor’s personal representative, and the latter appealed from the award. The opinion of the Supreme Court deals exclusively with the constitutionality of the act as special legislation creating a new method for collecting debts, and holds the act unconstitutional in that respect. This was the only question before the Supreme Court, which neither had before it, nor pretended to deal with, the validity of that part of the act which requires contractors on public works to give security for the protection of subcontractors. This form of protection is neither new nor unusual in contracts for public work. The Commonwealth and all governmental agencies are constantly exacting it. It is found in the provisions of numerous acts of assembly regulating the letting of public contracts, and the right of the Commonwealth to protect subcontractors in this manner has been repeatedly upheld: Greene County v. Southern Surety Co., 292 Pa. 304; Philadelphia v. Stewart, 195 Pa. 309. Such protection does not involve questions of remedies or methods of collecting debts. It relates to substantive and not remedial law; and could not fall within the ban of the constitutional prohibition under consideration in Smith’s Appeal.

That being so, it remains only to consider whether that part of the Act of 1903 which was held unconstitutional in Smith’s Appeal is so inextricably linked with the part requiring security to be given by contractors as to invalidate the latter.

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Bluebook (online)
16 Pa. D. & C. 225, 1932 Pa. Dist. & Cnty. Dec. LEXIS 8, Counsel Stack Legal Research, https://law.counselstack.com/opinion/arthur-greenfield-inc-v-great-american-indemnity-co-pactcomplphilad-1932.