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City of Dekalb v. Sornsin

OPINION FILED JANUARY 21, 1965.

THE CITY OF DEKALB, FOR THE USE OF INTERNATIONAL PIPE AND CERAMICS CORPORATION ET AL., APPELLANTS,

v.

M.M. SORNSIN ET AL., APPELLEES.



APPEAL from the Appellate Court for the Second District; heard in that court on appeal from the Circuit Court of DeKalb County; the Hon. CASSIUS POUST, Judge, presiding.

MR. JUSTICE HERSHEY DELIVERED THE OPINION OF THE COURT:

Rehearing denied March 18, 1965.

This action was brought by Lock Joint Pipe Company (its successor being International Pipe and Ceramics Corporation), a materialman herein referred to as plaintiff, against M.M. Sornsin, doing business as M.M. Sornsin Co., a general contractor, and New Amsterdam Casualty Company as surety on the bond of the general contractor, for pipe sold and used by the general contractor in construction of a storm sewer addition for the city of DeKalb.

A summary judgment motion on count II of the amended complaint was allowed, and judgment of $86,051.44 entered in favor of plaintiff against Sornsin and his surety. The Appellate Court reversed the summary judgment and remanded with directions. 46 Ill. App.2d 161.

This is a suit on a statutory bond on a public project given in compliance with "An Act in relation to bonds of contractors entering into contracts for public construction" as amended (Ill. Rev. Stat. 1961, chap. 29, pars. 15 and 16). Its determination involves three questions: First, whether the right of a materialman to recover on a public project surety bond after final settlement is limited by the statute so as to require the materialman to file a verified notice of claim with the public body within 180 days after the date of the last work or furnishing of the last item of materials as a condition of recovery. Second, whether section 2, requiring filing of suit on the bond within 6 months after acceptance of the project by the public body, is applicable. Third, if such notice of claim is required and such suit must be brought within 6 months after acceptance of the project, was notice given and suit brought within these statutory requirements?

On March 11, 1957, Sornsin entered into a contract with the city of DeKalb for construction of a storm sewer as a public project. Sornsin as principal and New Amsterdam Casualty Company as surety executed bond in the amount of $147,392.47. Plaintiff furnished materials used by Sornsin in performance of his contract. Sornsin failed to pay for a balance of $70,964.26 of these materials. The last delivery of material by plaintiff was some time prior to November 14, 1957.

The engineer for the city, on November 13, 1958, sent a letter to the mayor and city council, enclosing a document entitled "Engineer's Payment Estimate No. 9 and Final," which stated that "we now believe this work to be complete" — "this final estimate is presented to the Council subject to the satisfaction of these bills with the understanding that the contractor will furnish Waivers of Lien for all materials and supplies used in connection with this work before he receives final payment on the project." This bill showed a balance due of $16,768.36. The letter and estimate were placed on file by the city council and referred to the finance committee to report back on payment. No other formal acceptance of the work was passed by the council. The city issued its check in payment of the estimate on February 14, 1959, and took a receipt from Sornsin with notation thereon of "Sewer Fund. Final Payment on Contract No. 4, $16,786.36."

Plaintiff filed this suit June 23, 1959, and thereafter on July 30, 1959, filed with the mayor, city clerk and city treasurer a "Notice of Claim on Contractor's Bond."

Defendants contend suit was filed more than 6 months after Sornsin completed his work and after plaintiff furnished its last material, that plaintiff failed to comply with the notice requirement, and that these failures preclude recovery.

Where public works are undertaken, the statutes of this State require the general contractor to furnish a bond "conditioned for the payment of material used in such work and for all labor performed in such work, whether by subcontractor or otherwise." Ill. Rev. Stat. 1957, chap. 29, par. 15.

Section 2 of the act (Ill. Rev. Stat. 1957, chap. 29, par. 16) provides:

"Every person furnishing material or performing labor * * * with the State, or a political subdivision thereof where bond shall be executed as provided in this Act, shall have the right to sue on such bond in the name of the State, or the political subdivision * * * Provided, however, that any person having a claim for labor, and material as aforesaid shall have no such right of action unless he shall have filed a verified notice of said claim with the officer, board, bureau or department awarding the contract, within 180 days after the date of the last item of work or the furnishing of the last item of materials. * * *

"No defect in the notice herein provided for shall deprive the claimant of his right of action under this article unless it shall affirmatively appear that such defect has prejudiced the rights of an interested party asserting the same.

"Provided, further, that no action shall be brought until the expiration of one hundred and twenty (120) days after the date of the last item of work or the furnishing of the last item of materials, except in cases where the final settlement * * * shall have been made prior to the expiration of the one hundred and twenty (120) day period, in which case action may be taken immediately following such final settlement; nor shall any action of any kind be brought later ...


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