Limitations of Action – Applicable Statute – Third-Party Injury Provision Agreed to by Contractor Subject to Contract Limitation Only

More than two years following an accident in which they sustained personal injuries when their car fell into defendant’s excavation, plaintiffs filed a diversity action in a federal court stating inter alia a cause of action based upon a third-party beneficiary contract entered into by defendant street contractor and the City of Philadelphia for which he was working. The contract provided in essence that defendant alone would be liable for damage sustained by any third party “irrespective of whether or not such injuries … be due to negligence or the inherent nature of the work.” The district court dismissed the complaint on the ground that it was barred by the applicable state two year statute of limitations “for injuries wrongfully done to the person.” On appeal, held, reversed. The action is limited solely by the Pennsylvania “contract without specialty” statute, which permits commencement of an action within six years of breach. Thompson v. Erb, (3d Cir. 1957) 240 F. (2d) 452.