Potato City, Inc. v. State Highway & Bridge Authority

45 Pa. D. & C.2d 185, 1968 Pa. Dist. & Cnty. Dec. LEXIS 184
CourtPennsylvania Court of Common Pleas, Dauphin County
DecidedApril 22, 1968
DocketNo. 2; Commonwealth Docket, 1967, no. 525, no. 2837, in equity
StatusPublished

This text of 45 Pa. D. & C.2d 185 (Potato City, Inc. v. State Highway & Bridge Authority) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Dauphin County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Potato City, Inc. v. State Highway & Bridge Authority, 45 Pa. D. & C.2d 185, 1968 Pa. Dist. & Cnty. Dec. LEXIS 184 (Pa. Super. Ct. 1968).

Opinion

Herman, J.,

Potato City, Inc., the owner and operator of a hotel situate on U. S. Route 6, east of Coudersport, Potter County, Pa., filed a complaint in equity against Robert G. Bartlett, Secretary of Highways, Commonwealth of Pennsylvania; Stabler Construction Company and Central Pennsylvania Quarry, Stripping and Construction Company (the two corporate defendants hereinafter called “contractors”) praying that this court “grant a mandatory injunction to compel the Defendants, jointly and/or severally to immediately do whatever is necessary to maintain traffic along Route 6 from Denton Hill to Walton or the east extremity of the construction along said highway” and to grant such other equitable relief as the court deems fair and equitable under the circumstances.

[187]*187After preliminary objections of defendants had been disposed of on January 8, 1968, 43 D. & C. 2d 725, answers were filed and a hearing held before the chancellor. At the hearing, the only witness called was Donald G. Betz, President and Manager of Potato City, Inc., who, after preliminary statements, testified over objections to conversations with a Mr. Stanton Funk, a District Engineer for the Department of Highways, with V. W. Anckaitis, Chief Engineer of the Department of Highways, Carl Fleming, Superintendent for Central Pennsylvania Quarry, Stripping and Construction Co., Thomas Shon, Project Engineer for the Department of Highways, and Secretary of Highways Robert G. Bartlett, all of which testimony was offered for the purpose of establishing that Potato City was a donee-beneficiary of one clause1 in the construction contract between Stabler and Central Pennsylvania Quarry on the one hand and the State Highway and Bridge Authority2 on the other, and thus to establish its right to relief. This proffered testimony was incompetent as violative of the parol evidence rule and without it plaintiff has failed to meet its burden of proof and the suit should be dismissed.

Assuming for the sake of argument, however, that the proffered testimony was competent, nevertheless, the relief sought should be denied.

[188]*188Considering first the admissibility of the evidence, we must remember that we are concerned with a formal written construction contract of over 100 pages calling for an expenditure of some $2,800,000 by the Commonwealth of Pennsylvania through an Authority for the construction of a part of the State highway system, and it is the isolated “detours” clause naming no beneficiary which plaintiff wants to explain and enlarge by parol evidence.

The law is clear that “where parties, without any fraud or mistake, have deliberately put their engagements in writing, the law declares the writing to be not only the best, but the only evidence of their agreement” :3 Gianni v. R. Russell & Co., Inc., 281 Pa. 320 (1924). In that case, it is further said at page 324:

“[W]here the cause of action rests entirely on an alleged oral understanding concerning a subject which is dealt with in a written contract, it is presumed that the writing was intended to set forth the entire agreement as to that particular subject. Tn deciding upon this intent [as to whether a certain subject was intended to be embodied by the writing], the chief and most satisfactory index ... is found in the circumstances whether or not the particular element of the alleged extrinsic negotiation is dealt with at all in the writing. If it is mentioned, covered, or dealt with in the writing, then presumably the writing was meant to represent all of the transaction on that element. . .’ ”. (Emphasis the Supreme Court’s.)

See also IX Wigmore on Evidence, §2430 (3rd ed., 1940), where it is said by the learned author that this test is the one used by most careful judges rather than the looser and incorrect inquiry as to whether the alleged extrinsic negotiations contradicts the terms of the writing.

[189]*189“Where a third person not a party to an instrument claims rights or benefits thereunder and seeks to take advantage thereof, the parol evidence rule applies to him as much as to a party, and he is not entitled to introduce evidence to vary or contradict the writing”: Johnson v. Stewart, 243 Pa. 485, 499 (1914). See also Grubb v. Rockey, 366 Pa. 592 (1951); Crew Levick Company v. Philadelphia Investment Building and Loan Association, 117 Pa. Superior Ct. 397 (1935).

Ferita v. Farrise, 360 Pa. 382 (1948), cited by plaintiff, we feel is clearly distinguishable. There, a contract for the purchase of realty was executed by two persons, one a minor. Down payment of $2,600 was paid and then the minor sought to disavow his contract and obtain the down payment. The agreement did not indicate which of the prospective purchasers had paid the down payment, and so plaintiff sought to show by parol that he had paid it all. It was held that this was proper, since the agreement gave no indication as to how much either had paid and that it would have been unnatural and abnormal to so indicate in the agreement.

In the instant case, had it been the intent of the parties that the clause should benefit any individual or group of individuals, as distinct from the general traveling public, it certainly would have been natural and normal to name the individual or the group.

If we should assume that the rejected testimony were competent, still plaintiff has failed to sustain its burden that it is a third-party beneficiary entitled to recover on this contract, for there is no evidence at all either in the contract or by testimony that either of the contractors intended that Potato City be a third-party beneficiary and, at best, the objected-to testimony of plaintiff indicates that it is an incidental [190]*190beneficiary and, as such, has no rights under the contract.

One of the leading cases in Pennsylvania on this question is Spires v. Hanover Fire Insurance Co., 364 Pa. 52, 56-7 (1950), where Mr. Justice Stern, later Chief Justice, said:

“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 latter 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 . . .”. (Emphasis the Supreme Court’s)

The justice then goes on to say that the fact that plaintiffs there incidentally benefited from the contract would not give them a right to recover by virtue of any arrangement between them and one party to the contract where the other party to the contract assumed no obligation to them in the contract. To the same effect is Van Cor, Inc. v. American Casualty Company of Reading, 417 Pa. 408 (1965); Silverman v. Food Fair Stores, Inc., 407 Pa. 507 (1962).

In the Van Cor case, by a per curiam opinion, the court said, in part, quoting from Reed v. Adams Steel & Wire Works, 57 Ind. App. 259, 106 N. E. 882:

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Related

SPIRES Et Ux. v. Hanover Fire Ins. Co.
70 A.2d 828 (Supreme Court of Pennsylvania, 1950)
Silverman v. Food Fair Stores, Inc.
180 A.2d 894 (Supreme Court of Pennsylvania, 1962)
Grubb v. Rockey
79 A.2d 255 (Supreme Court of Pennsylvania, 1951)
Gianni v. Russell Co., Inc.
126 A. 791 (Supreme Court of Pennsylvania, 1924)
Ferita v. Farrise
61 A.2d 836 (Supreme Court of Pennsylvania, 1948)
Williams v. Paxson Coal Co.
31 A.2d 69 (Supreme Court of Pennsylvania, 1942)
Crew Levick Co. v. Philadelphia Investment Building & Loan Ass'n
177 A. 498 (Superior Court of Pennsylvania, 1934)
Johnson v. Stewart
90 A. 349 (Supreme Court of Pennsylvania, 1914)
Van Cor, Inc. v. American Casualty Co.
208 A.2d 267 (Supreme Court of Pennsylvania, 1965)
Reed v. Adams Steel & Wire Works
106 N.E. 882 (Indiana Court of Appeals, 1914)

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Bluebook (online)
45 Pa. D. & C.2d 185, 1968 Pa. Dist. & Cnty. Dec. LEXIS 184, Counsel Stack Legal Research, https://law.counselstack.com/opinion/potato-city-inc-v-state-highway-bridge-authority-pactcompldauphi-1968.