Rao Electrical Equipment Co. v. MacDonald Engineering Co.

260 N.E.2d 294, 124 Ill. App. 2d 158, 1970 Ill. App. LEXIS 1482
CourtAppellate Court of Illinois
DecidedApril 28, 1970
DocketGen. 54,620
StatusPublished
Cited by11 cases

This text of 260 N.E.2d 294 (Rao Electrical Equipment Co. v. MacDonald Engineering Co.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rao Electrical Equipment Co. v. MacDonald Engineering Co., 260 N.E.2d 294, 124 Ill. App. 2d 158, 1970 Ill. App. LEXIS 1482 (Ill. Ct. App. 1970).

Opinion

MR. JUSTICE LYONS

delivered the opinion of the court.

The defendant, Macdonald Engineering Co. (hereinafter referred to as Macdonald), prosecutes this interlocutory appeal (Ill Rev Stats 1969, c 110A, § 307) from a temporary injunction order, as later modified by the court, entered against it and in favor of the plaintiff, Rao Electrical Equipment Co., Inc. (hereinafter referred to as Rao).

In its verified complaint Rao alleged that it is a foreign corporation in Illinois with its principal place of business in New York City whereas Macdonald is also a foreign corporation but is qualified to do business in Illinois with its principal place of business in Chicago; that on or about February 7, 1969, a written contract was entered into between Rao as electrical subcontractor and Macdonald as general contractor for the electrical work required in the construction of a cement plant in Pennsuco, Florida, on premises owned by Maulé Industries, Inc.; that Rao proceeded to perform under this written contract which was later modified by the mutual consent of the parties, as the contract price was increased from $1,067,000 to $1,251,154, exclusive of $250,000 overtime pay and the completion date was allegedly changed from August 1, 1969 to a date to be mutually agreed upon by Rao and Macdonald. Thereafter, on or about June 18, 1969, Rao and Koppers Company, Inc. entered into a written contract whereby Rao, as subcontractor, was to install for Koppers on the same cement plant site in Pennsuco, Florida, certain electrical air pollution equipment for the price of $79,400 (Koppers was another subcontractor for Macdonald performing other work on the Florida project); and that the written contract between Rao and Macdonald, which contract was attached to the complaint as an exhibit, contained a provision stating that:

“Should the Sub-contractor (Rao) fail to prosecute said work or any part thereof with promptness and diligence, or otherwise violate the terms of this agreement, the General Contractor (Macdonald) shall be at liberty, after three (3) days’ written notice to the Sub-contractor, to provide such labor or materials as may be necessary to complete the work, and to deduct the cost and expense thereof from any money then due or thereafter to become due to said Sub-contractor under this agreement, and the General Contractor shall be at liberty to take possession, for the purpose of completing the work included in this contract, of all materials, tools, scaffolding and appliances thereon, and to employ or contract with any other person or persons to finish the work and provide the materials therefor.”

The verified complaint then referred to a letter prepared on Macdonald’s stationery, signed by Roy White, Vice-President of Macdonald, and hand-delivered to Rao in Florida on October 11,1969. The typed letter, attached to the complaint as an exhibit, stated that since Rao had advised Macdonald that it (Rao) was not going to perform any further work under its written contract with Macdonald, Macdonald — pursuant to its contract with Rao — would take possession of all materials, tools, scaffolding and appliances on the job site for the purpose of completing the work and would withhold all further payments to Rao. In its complaint Rao also alleged that on October 10, 1969, the date of the typed letter, it employed over one hundred men on the project site and on that date Macdonald owed it $550,364.45; that on October 14, 1969, agents and employees of Macdonald broke the locks on Rao’s tool sheds located on the construction site and wrongfully confiscated and took possession of: (1) Rao’s tools and equipment inventory valued in excess of $52,000; (2) Rao’s vehicles valued at $25,750; and (3) Rao’s supply and material inventory located on the site which was not valued in the complaint.

In conclusion, Rao’s complaint alleged that it had never refused to complete the work required of it under the written contract with Macdonald but rather was performing with promptness and diligence; that Macdonald had wrongfully prevented Kao’s employees from working on the job site thereby keeping Kao from further performing under the contract and had wrongfully taken Kao’s tools, materials, supplies and equipment in addition to wrongfully preventing Rao from performing its contract with Hoppers Company by such conduct Kao alleged that Macdonald, by its wrongful actions, had caused Rao to suffer irreparable loss and damage for which it had no adequate remedy at law and prayed for the following relief: (1) that a temporary mandatory injunction be entered immediately, to be made permanent later after a final hearing, whereby the court would compel Macdonald to return to Kao all of the latter’s tools, equipment, materials and supplies; (2) that a temporary injunction be entered against Macdonald, to be made permanent later after a final hearing, enjoining the defendant corporation from terminating its contract with Rao and attempting to employ other electrical subcontractors to perform Kao’s work and enjoining Macdonald from all actions tending to prevent Rao from performing its contractual obligations with Macdonald and with Hoppers Company, Inc.; (3) that a temporary injunction be entered against Macdonald enjoining it from instituting proceedings in other courts in other states against Rao wherein the subject matter would be the same as the matters presented in the complaint at bar; and (4) that a money judgment be entered in Rao’s favor and against Macdonald for the sum of $550,364.45 and statutory interest.

Macdonald filed a motion to strike the complaint alleging that chancery had no jurisdiction since Rao had an adequate remedy at law for damages arising from the alleged breach of contract. After argument, this motion was denied. Macdonald filed its verified answer admitting the existence of the written contract between the parties but denying that Rao had performed under this contract and affirmatively stating that Rao had refused to finish the work required by the contract.

The answer went on to state that on February 9, 1969, Rao forwarded a letter to Macdonald which indicated that Rao would complete its subcontract with Macdonald by September 1, 1969, with no overtime being necessary but that on September 1, 1969, Macdonald gave Rao a second extension of time and agreed to overtime pay which eventually resulted in the authorization of six ten-hour workdays each week as Rao had requested; that on October 10, 1969, Rao informed Macdonald that it would complete its subcontract only upon three conditions: (1) that Macdonald pay immediately all of Rao’s invoices for material and labor which had been submitted to Macdonald but not yet paid by it; (2) that Macdonald pay over immediately to Rao the 15% retainage which it had been withholding from each monthly payment; and (3) that the contract between them be changed from a lump-sum contract to a cost plus 5 % (of cost) contract.

In conclusion, the sworn answer alleged that on October 10, 1969, Rao had completed only 30% of the electrical work whereas 96% of the cement plant was completed including 92% of the machinery and 70% of the piping; and that the court enter judgment for Macdonald and against Rao.

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Cite This Page — Counsel Stack

Bluebook (online)
260 N.E.2d 294, 124 Ill. App. 2d 158, 1970 Ill. App. LEXIS 1482, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rao-electrical-equipment-co-v-macdonald-engineering-co-illappct-1970.