Court Opinion

ID: 6259930
Source: CourtListenerOpinion
Date Created: 2022-02-17 21:59:35.234259+00
Date Added: 2024-06-11T08:59:40.768878
License: Public Domain

Dissenting Opinion by
Mr. Justice Egberts:
I am of the opinion that the preliminary objections were properly sustained and would affirm the judgment of the trial court.
First, with regard to the Commonwealth, it is indisputable that as a sovereign state it is immune from suit except insofar as it waives its immunity.1 The Constitution of Pennsylvania, Article I, Section 11, provides that: “Suit may be brought against the Commonwealth in such manner, in such courts and in such cases as the Legislature may by law direct.” The scope of the immunity, then, turns on what the Legislature has done with its power. I have discovered only two legislative pronouncements relevant to the waiver of sov*167ereign immunity in cases such as the one confronting ns now.
The Act of May 26, 1931, P. L. 191, §2, 12 P.S. §105, states that: “All actions at law or in equity by which it shall be sought to compel a State officer to perform or restrain him from performing any official act in the execution of the laws of the Commonwealth shall be instituted in the court of common pleas of Dauphin County.” Only two observations need be made with respect to this statute. First, it is not at all clear that the instant case is of the type covered; and, secondly, even if this suit is within the ambit of the statute it is clear that it was brought in the wrong court.
The second piece of legislation which has bearing on our problem is the Act of May 20, 1937, P. L. 728, as amended, 72 P.S. §4651.1, which provides that: “There is hereby created a departmental administrative board in the Department of the Auditor General, known as the Board of Arbitration of Claims, the duty of which shall be to arbitrate claims against the Commonwealth arising from contracts entered into by the Commonwealth . . . .”
This statute, if it does anything, supports the lower court’s determination that it lacked jurisdiction. The Commonwealth, by creating the Board of Arbitration, has provided a forum wherein claims arising out of contracts with the state can be pursued against the state.2 It is probable that the board was intended to be the exclusive forum for the prosecution of such claims.3 Were this not so it would have been senseless *168for the Legislature to have included a six month statute of limitations.4
For the foregoing reasons, and because I can find no other legislative pronouncement authorizing this type of suit in the forum in which it was brought, I am forced to conclude that the court below properly decided that it was without jurisdiction over the Commonwealth.
Coming to the question of the sufficiency of appellant’s complaint insofar as National is concerned, I am of the opinion that it fails to state a cause of action against National.
Appellant’s fundamental contention is that he, standing in the shoes of the bankrupts,5 is a third party beneficiary of the indemnity agreement between National and the Commonwealth. The only reference to the indemnification agreement in the complaint is in paragraph 10 thereof: “10. In order to induce the Commonwealth of Pennsylvania to turn over those funds the defendant National Surety Company signed an indemnification bond holding the Commonwealth of Pennsylvania harmless from any and all claims against the said Commonwealth for releasing said funds to defendant National Surety Company.”
Appellant alleges no more than a simple indemnity agreement6 and a simple indemnity agreement does not *169create any rights of action in third persons.7
Turning to the majority opinion, I have two observations: I feel that this Court should not go quite so far out of its way to construct a theory of recovery for a plaintiff who has so clearly failed here and on at least one other occasion to construct one for himself;8 and I do not believe that the majority’s suggested theory is tenable.
As nearly as I can understand the majority’s theory, it depends upon a finding that the debt allegedly due from the Commonwealth gave the bankrupts, and therefore the trustee in bankruptcy, a property right in the fund which the Commonwealth had set aside to cover the cost of the project. The complaint contains no assertion of any such property right, and I cannot see how any could have been alleged.9 The fund held *170by the Commonwealth was in no accepted sense of tbe word tbe “property” of tbe bankrupt.10 At tbe time 'tbe money was transferred to National tbe most that tbe bankrupt had was a chose in action against tbe Commonwealth,11 and I cannot believe that the transfer worked to give the bankrupt an interest greater than that which be bad before it was made.
Since I would affirm tbe judgment of tbe trial court sustaining tbe preliminary objections of tbe appellees, I must register my dissent.-
Mr. Justice Eagen joins in this dissent.

 Box Office Pictures, Inc. v. Board of Finance and Revenue, 402 Pa. 511, 166 A. 2d 656 (1961); Kaufman Construction Co. v. Holcomb, 357 Pa. 514, 55 A. 2d 534 (1947).

 Foley Bros., Inc. v. Commonwealth, 400 Pa. 584, 163 A. 2d 80 (1960); Road Machinery, Inc. v. Commonwealth, 88 Dauph. 1 (1967).

 Cf. Kaufman Construction Co. v. Holcomb, 357 Pa. 514, 55 A. 2d 534 (1947); Balazick v. Harral, 88 Dauph. 113 (1967); Pentz v. Commonwealth, 110 F. Supp. 809 (E.D. Pa. 1953); 11 Std. Pa. Prac. 432-33 (1964).

 Act of May 20, 1937, P. D. 728, as amended, 72 P.S. §4651.6.

 Martin, trustee of O’Brien and Redmond v. National Surety Co. and Commonwealth of Pennsylvania, Court of Common Pleas of Philadelphia Couuty, April Term 1968, No. 216.

 Appellant prepared and filed his complaint without the benefit of seeing a copy of the actual agreement between National and the Commonwealth. He did so even though he could have obtained a copy of the document through discovery. “A plaintiff may commence an action of assumpsit by writ and then obtain discovery to enable him to prepare his complaint in view of the fact that a petition for discovery may be filed at any time.” 5 Anderson Pa. Civ. Prac. 59 (1966); Philber Lehigh Co. v. Canada Dry Bottling *169Co., 17 Pa. D. & C. 2d 356 (1958); Berg v. Levenberg (No. 1), 17 Pa. D. & C. 2d 29 (1958); Purcell v. Westinghouse Broadcasting Co., 10 Pa. D. & C. 2d 729 (1957); Geer v. Martsolf, 7 Pa. D. & C. 2d 696 (1956); McKeon v. Independence Broadcasting Co., 87 Pa. D. & C. 421 (1954).

 Coleman v. Bradford, 415 Pa. 557, 294 A. 2d 260 (1964); Silverman v. Food Fair Stores, 407 Pa. 507, 180 A. 2d 894 (1962); Burke v. North Huntingdon Township, 390 Pa. 588, 136 A. 2d 310 (1957); 2 Williston on Contracts (3d Ed.), §403, p. 1091 (1959).
It is important to note tliat we are not here dealing with insurance contracts, see Graham v. U. S. Fidelity & Guaranty Co., 308 Pa. 534, 162 Atl. 902 (1932); Rose & Son, Inc. v. Zurich General Accident & Liability Co., 296 Pa. 206, 145 Atl. 813 (1929); or surety contracts, see Pennsylvania Supply Co. v. National Casualty Co., 152 Pa. Superior Ct. 217 (1943); or contacts which go beyond ordinary terms of indemnity, see Bell Telephone Co. v. Livengood, 33 North. 233 (1951).

 See Martin v. National Surety Corporation, Civil No. 43638 (E.D. Pa. March 12, 1968).

 The case of Pearlman v. Reliance Insurance Co., 371 U.S. 132, 83 S. Ct. 232 (1962), is inapposite and unhelpful. In Pearlman a builder defaulted on a contract with the federal government and went into bankruptcy. The builder’s Miller Act surety paid the materialmen, and the question was whether the surety or the *170trustee in bankruptcy had a better claim to a small fund, ten percent of the contract price, that the government had retained to insure completion. The Supreme Court held that the surety, by having paid the materialmen, was subrogated to the government’s equitable property right in the fund, and that it therefore took it in preference to the trustee. Our case involves neither the -federal government, the Miller Act, a small retained fund or the question of subrogation, and I submit that Pearlman is therefore irrelevant.

 When the federal courts were confronted with this very case they reached a similar conclusion. After reciting those sections of the Bankruptcy Act which vest title to all rights of action and property possessed by the bankrupt in the trustee, the court said: “Prom the language above quoted, it appears evident even were the sum paid by the Commonwealth to defendant to be considered proceeds of the contractual debt between the Commonwealth and bankrupts, that, prior to filing, they could by no means have judicially proceeded against the money. It was, furthermore, ‘property’ of bankrupts in no accepted sense of the term. ... No theory has been shown by plaintiff by which he has the right to maintain an action for the possession of this money unler the Bankruptcy Act; and we have been able to conceive of none.” Martin v. National Surety Corporation, Civil No. 43638 (E.D. Pa. March 12, 1968).

 One of the reasons that the trustee is anxious to press this suit against National is that his cause of action against the Commonwealth is probably barred by the six month statute of limitations in the Act of May 20, 1937, P. L. 728, as amended, 72 P.S. §4651.1 et seq.