Court Opinion

ID: 6250722
Source: CourtListenerOpinion
Date Created: 2022-02-17 21:14:04.992113+00
Date Added: 2024-06-11T08:59:24.787706
License: Public Domain

Opinion by
Mr. Justice Elkin,
This suit ivas brought to recover the balance due upon a municipal contract for the paving and grading of certain city streets. An ordinance, duly passed and approved, provided for the street improvement. A contract was entered into between the contractor and the city specifying the terms and conditions upon which the work was to be done and how payment should be made. It was expressly provided in the contract that the city should only be liable to the contractor for the amounts actually collected from assessments upon property benefited by the improvement. The language of the contract in this *609respect is as follows: “It is further expressly understood and agreed that the fund for the payment of the above contract price is to be derived from assessments on property benefited by the work; and that the city is to be liable to the contractor only for the amounts actually collected from said assessments as the same are collected.” The defense is that the city has not yet collected all of the assessments from the property benefited and that to the extent of the uncollected assessments there was no obligation upon the city to pay at the time the suit was instituted. The ordinance was passed and approved in 1901. The contract was executed June 30, 1902, and the work commenced the following month. It was completed in a manner satisfactory to the city authorities in July, 1904. It is conceded that a large balance remains unpaid but it is contended that this suit was prematurely brought because under the terms of the contract the city was not liable to pay until the assessments are collected from the owners of the properties benefited. The contractor is now dead and the administrators of his estate brought suit to recover the balance due on the contract upon the theory that the city by its negligence in collecting the assessments made itself liable for the entire contract price. In their essential features these facts present a case similar in principle to a number of cases decided by this court. The city solicitor concedes that under our decisions the city would be liable to the contractor under the following circumstances: (1) In the event of failure to make valid assessments; (2) upon failure to file liens within the proper time; (3) failure to issue writs of scire facias within five years. The cases do so hold. Where a city issued bonds to pay the cost of paving, and it was provided that the bonds shall be payable only out of assessments levied on and collected by the city from property owners, the city is liable to the bondholders for loss resulting to them by reason of negligence in filing liens, or in failing to issue writs of scire facias upon the liens when filed: Dime Deposit & Discount Bank v. Scranton, 208 Pa. 383. See also *610Gable v. Altoona, 200 Pa. 15, and O’Hara v. Scranton, 205 Pa. 142. We think the principle of these cases rules the case at bar. The, answer óf the city is that in the present cáse liens were filed and writs of scire facias issued within the time prescribed by law. This, it is asserted, was a technical compliance with the rule and nothing more is required. We cannot adopt this view. Such an adherence to the letter would destroy the spirit of the rule. The primary duty rested upon the city to file the liens and collect the assessments, and the contracting parties covenanted upon this basis. The contractor who in good faith completed the work had a right to insist that the city be diligent in collecting the assessments, which means colléction within a reasonable time. If the city had neglected to file the claims within the statutory period, or had failed to issue writs of scire facias within the time prescribed by law, it would have been liable under the authorities cited. So, too, if the liens were not pressed to collection within a reasonable time, the city failed in the performance of a duty resting upon it as the basis of the contractual relation existing between the parties, and the contractor under such circumstances may sue for the balance due upon the contract. It would be most unconscionable to permit the city- to stand idly by for a period of four years and more, either refusing or neglecting to do its duty in the collection of the assessments, and then to say to the contractor you have no redress except to await the pleasure of the municipal authorities who in their own good time may of may not press the claims to collection. While the contract provided that the city was only liable to the extent of the assessments as they were collected, the positive duty, from which nothing but performance will absolve it, rested upon the city to file the claims and make the collections. The city, and not the contractor, had this power. It must be held to the utmost good faith in dealing with such a situation. Failure to collect for four, five or six years without reasonable excuse does not show such diligence or good faith *611as the law requires, and was in violation of its duty to collect within a reasonable time. Under these circumstances the city must be held to have waived its right to withhold payment until the assessments are collected and became liable to pay upon demand by the contractor. When payment was refused suit was properly brought.
The interest question is not free from difficulty, but after a careful review of the findings of the referee we have concluded in view of all the circumstances that the conclusion reached by him should not be disturbed.
Judgment reversed and record remitted with instructions to the court below to enter judgment as recommended by the referee