Weightman v. Union Trust Co.

Citations

• 208 Pa. 449
• 57 A. 879
• 1904 Pa. LEXIS 782

Syllabus

<p>Bond — -Building contract — Scope of bond — Damages.</p> <p>Where an owner of land enters into an agreement in writing to erect certain buildings and make certain street improvements on the land, in consideration of a loan of money to be secured by a mortgage on the land, and the owner gives to the mortgagee a bond with a trust company as surety by which the latter agrees to hold the mortgagee harmless on account of any deficiency in his mortgage security resulting from failure by the owner to complete the contract, the trust company cannot be held liable in damages on its bond, by reason of the failure of the owner to complete certain street improvements, where there is no evidence to show that the mortgagee suffered any actual loss or damage from the failure of the owner to complete the work. The mere fact that the mortgagee bought in the property at sheriff’s sale for a sum less than the amount of the mortgage debt is not conclusive evidence of loss.</p> <p>In the'above case the distinction between the two agreements is simply that between an affirmative covenant for a specific thing, and one of indemnity against damage by reason of the nonperformance of the thing specified. The object of both agreements may have been substantially the same, in that both were intended to save the plaintiff from loss, but the legal effect of the two agreements is essentially different.</p>