Seaboard Surety Co. v. Glenayre Estates, Inc.

252 N.E.2d 712, 114 Ill. App. 2d 341, 1969 Ill. App. LEXIS 1461
CourtAppellate Court of Illinois
DecidedSeptember 10, 1969
DocketGen. 52,812
StatusPublished
Cited by3 cases

This text of 252 N.E.2d 712 (Seaboard Surety Co. v. Glenayre Estates, Inc.) 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
Seaboard Surety Co. v. Glenayre Estates, Inc., 252 N.E.2d 712, 114 Ill. App. 2d 341, 1969 Ill. App. LEXIS 1461 (Ill. Ct. App. 1969).

Opinion

MR. PRESIDING JUSTICE DRUCKER

delivered the opinion of the court.

This action was brought by plaintiff, a surety company, to recover from its indemnitors, defendants, sums paid to the Highway Commissioner of Maine Township of Cook County, to obtain release of a performance bond upon which plaintiff was surety. The trial court found in favor of the plaintiff and entered a judgment in the amount of $6,140, plus $2,815.70 for costs and attorneys’ fees.

Defendants raise three points in their appeal: (1) that they were not proven to have inadequately performed on their contract with the Maine Township Highway Commissioner for the construction of certain streets; (2) that the amount of damages is excessive because it includes the cost of a superior type of surface than that required in the contract with the Highway Commissioner; and (3) that pursuant to the “Sureties” statute of Illinois, Ill Rev Stats 1961, c 132, § 1, plaintiff, instead of paying the amount claimed and suing the defendants, should have sought a release from its obligations.

On February 15,1957, defendant Glenayre Estates, Inc., entered into an agreement with the Maine Township Highway Commissioner to construct certain streets in the Eugenia Subdivision in accordance with the “Standard Specifications for Road and Bridge Construction of the State of Hlinois.” The streets were to be “a minimum of 20 feet of paved area with blacktop A-3 surface on a seven-inch stone Base,” and were to be subject to the approval of the County Superintendent of Highways. The agreement required a performance and completion bond which was obtained from plaintiff.

In order to obtain the bond, defendant Glenayre Estates, Inc., entered into one agreement, and the individual defendants entered into another agreement, to indemnify plaintiff against losses suffered by it as a consequence of the performance and completion bond. Glenayre then hired Troyh-McNeil Paving Company to build a street known as Stacey Court. According to appellants’ Statement of Facts “[i]n Spring of 1958, defendant Glenayre caused Stacey Court to be constructed under the supervision of the Highway Commissioner to 1-11 standards rather than the lesser A-3 standards set forth by the Surety Bond.” Appellants’ brief also states that “with the approval of the Highway Commissioner a wider street of 26 feet with a better surface of 1-11 asphalt was in fact constructed.”

About two years after the completion of Stacey Court, Troyh-McNeil did some repairs on Stacey Court consisting of replacing some small patches of base and resurfacing those areas. Thereafter, in the spring of 1960, the then Commissioner Elmer Dean inspected Stacey Court and found it in a state of disrepair; he stated that if the holes were repaired that the street would be accepted. Defendants did not make the repairs and shortly thereafter Commissioner Dean died. Dean had ordered tests of the road from Ki-Mat Soil Testing. Ki-Mat made seven boring tests and found a damp clay base and varying depths of stone and gravel; some of the borings revealed the presence of sand immediately below the surface. The stone found varied from fine gravel to coarse and crushed stone; and the heaviest stone was always found immediately above the subbase. In several borings, the heavy stone was found below the seven-inch level. Moisture and dampness in different degrees was found in six of the seven borings.

Another inspection of the base in 1964 made by sinking a pick into deteriorated locations revealed about two inches of crushed stone and several more inches of a mud clay.

During the course of 1963 and 1964 several meetings were held between representatives of defendants, of the plaintiff, and of the Highway Commissioner. At one meeting defendants offered to patch the holes in the road and resurface it with A-3, but the Commissioner refused to accept this and insisted on an 1-11 surface. At a later meeting the Commissioner brought in a bid from the Skokie Valley Asphalt Company to repair the road, but the defendants thought that the bid was too high and offered to find a lower bidder by the next meeting. At the next meeting there was no lower bidder so Skokie Valley was awarded a contract to make repairs on Stacey Court.

Skokie Valley found it necessary to replace the entire base which was done with existing broken asphalt and poz-o-pac; and the road was resurfaced with 1-11. The total cost to Skokie Valley for the work was $6,289.02 for which the Highway Commissioner was charged only the bid price of $6,140. A reasonable charge for the work done by Skokie Valley was $7,054.55.

It is undisputed in the instant case that Stacey Court needed major repairs in the summer of 1964 when Skokie Valley was hired to rebase and resurface that road. The question raised on these facts is whether the deterioration was caused by faulty initial installation of the road or by some other force. Defendants contend that if they followed the plans and specifications properly, then they cannot be held liable for the cost of repairing any subsequent deterioration. This is correct. When a surety company settles a claim before the validity of that claim has been adjudicated, then the burden is upon the surety in an action against its indemnitor to prove a valid and legal liability. See United States Fidelity & Guaranty Co. v. Dickason, 277 Ill 77, 115 NE 173; National Slovak Society of the United States of America for the use of American Surety Co. of New York v. Matlocha, 307 Ill App 41, 29 NE2d 946. Thus the issue in the instant case is whether the initial construction of Stacey Court was properly accomplished according to the plans and specifications; and the burden was on the plaintiff surety company to prove that the road was not properly constructed.

The only direct evidence on the question of what materials were put into the base is the testimony of defense witnesses McNeil and Hill. Earl McNeil is one-half owner of the paving contractor that originally installed Stacey Court and was at the job site twice a day while the road was being built. He testified that a seven-inch stone base was put in according to the plans and specifications, and he testified further that he measured the depth of the base. Defendant Virgil Hill testified that he was on Stacey Court every day that the road was being built because he was in charge of the construction of houses along the street. He testified that he was not in charge of the road building but that he observed a seven-inch stone base being put in on Stacey Court.

Plaintiff was unable to offer any direct evidence that seven inches of stone was not put into the Stacey Court base; rather plaintiff introduced evidence of the soil tests made in 1961 and 1964 and had experts testify as to their conclusions from materials found in the Stacey Court base.

Plaintiff’s expert witness William Mathieu, who made some soil tests in 1961, testified that the conditions he found would not have existed if the road had had a hard clay subbase and a compacted stone base. He stated that it was fair to conclude that the subbase and base he found contained the materials that were actually placed in the road.

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Bluebook (online)
252 N.E.2d 712, 114 Ill. App. 2d 341, 1969 Ill. App. LEXIS 1461, Counsel Stack Legal Research, https://law.counselstack.com/opinion/seaboard-surety-co-v-glenayre-estates-inc-illappct-1969.