Summary
holding that use of traffic signal equipment was inconsistent with seller's ownership and constituted acceptance
Summary of this case from In re Qimonda Richmond, LLCOpinion
June 21, 1966.
September 15, 1966.
Municipalities — Contracts — Use of equipment as acceptance — Uniform Commercial Code — Requirement that supplier bring records to Controller's department as condition precedent to action against city — Philadelphia Home Rule Charter.
In an action in assumpsit to recover the contract price of certain traffic signal equipment purchased and used by defendant city, in which it appeared that defendant by way of new matter in its answer contended that the equipment did not meet specifications and was not accepted by it, that plaintiff at the time it was issued the purchase orders had on its payroll certain of defendant's employes and that the orders were obtained as a result of rigged bidding, and that plaintiff failed to exhaust its administrative remedies in accordance with the Philadelphia Home Rule Charter; and that the court below, holding that (a) defendant's use of the equipment constituted acceptance under the Uniform Commercial Code, (b) acceptance of the equipment obligated defendant to pay the contract price therefor, although it was not precluded from seeking affirmative relief for the alleged failure of the equipment to comply with specifications, and that (c) the Charter did not require a supplier to bring its records to the Controller's department as a condition precedent to the institution of suit against the city, entered judgment on the pleadings for plaintiff; it was Held that the judgment of the court below should be affirmed.
Before ERVIN, P.J., WRIGHT, WATKINS, MONTGOMERY, JACOBS, and HOFFMAN, JJ. (SPAULDING, J., absent).
Appeal, No. 68, Oct. T., 1966, from judgment of Court of Common Pleas No. 5 of Philadelphia County, Dec. T., 1964, No. 2006, in case of The Marbelite Company, Inc. v. City of Philadelphia. Judgment affirmed.
Same case in court below: 40 Pa. D. C. 2d 347.
Assumpsit.
Plaintiff's motion for judgment on the pleadings granted, opinion by WEINROTT, J. City appealed.
Matthew W. Bullock, Jr., Second Deputy City Solicitor, with him Rudolph A. Chillemi, Assistant City Solicitor, and Edward G. Bauer, Jr., City Solicitor, for City of Philadelphia, appellant.
Steven A. Arbittier, with him Howard Gittis, and Wolf, Block, Schorr and Solis-Cohen, for appellee.
WRIGHT, J., filed a dissenting opinion.
MONTGOMERY, J., filed a dissenting opinion, in which HOFFMAN, J., joined.
Argued June 21, 1966.
The judgment of the Court of Common Pleas No. 5 of Philadelphia County is affirmed on the opinion of Judge WEINROTT, for the court below, reported at 40 Pa. D. C.2d 347.
This case is of great concern to the City of Philadelphia. It involves the right of the City to protect the public treasury. In my view it is not a case in which summary judgment should have been entered. The City asserts that collusion existed between employes in the Streets Department and this appellee, that certain equipment was purchased as a result of the collusion, and that this equipment was defective. Important issues of fact are presented which should be submitted to a jury.
I respectfully dissent.
I agree that Hemphill v. Lenz, 413 Pa. 9, 195 A.2d 780 (1963), is not in point. That case was decided solely on the jurisdictional question relating to service of process to enforce a subpoena on Lenz, the treasurer of the plaintiff company, and I find no law which imposes on a creditor of a municipality the obligation of securing the approval of the controller or treasurer of such a body as a condition to entering suit for a claim. See Com. ex rel. Harkins v. Hinkson, City Treasurer, 161 Pa. 266, 28 A. 1081 (1894), where a treasurer could not resist payment of a judgment although recovered on an illegal contract. See also Lancaster County v. Lancaster City, 170 Pa. 108, 32 A. 567 (1895). Claims may be denied by city officers but thereafter if litigated and a judgment secured against the municipality it is too late to refuse payment.
The purpose of Section 6-402 of the Philadelphia Home Rule Charter is to place in the hands of the controller supervising powers over disbursements from the city treasury and he is given the right of subpoena to secure the necessary evidence on which to come to a proper conclusion. However, in this case it was not necessary to secure a favorable decision from him since the matter was placed in litigation. Furthermore, the city was not prejudiced in securing necessary evidence. Instead of securing the evidence through the controller as in the case of payments before litigation, the city could have resorted to the Discovery Rules of Pennsylvania Civil Procedure and secured it for the preparation of its pleading or for trial.
However, I cannot agree that because the city set up the defenses of collusion and nonconformity as a complete defense to plaintiff's claim and not merely to mitigate damages that judgment should be entered against it on the pleadings. There are sufficient allegations in the city's answer and new matter to indicate the illegality of the contract as well as a variance from specifications. Although these defenses are not set forth specifically or with any claim of particular damage, such a pleading is subject to amendment. An opportunity should have been granted to the city to amend, particularly in view of the efforts of the city controller to gain evidence on which to determine the validity of plaintiff's claim resulting in the litigation previously referred to.
Judge WEINROTT said in his opinion, "From the failure to counterclaim or so plead we deem that the City was not damaged monetarily or otherwise as a result of the placement of the order with plaintiff or by the purchase and use of the goods delivered to it." I cannot agree with this conclusion in view of the defenses to the claim set forth in the answer.
I would reverse the judgment and grant the appellant City of Philadelphia the right to amend its answer and new matter.
HOFFMAN, J., joins in this dissenting opinion.