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Chesterfield Sewer & Water v. Citizens Ins. Co.

JANUARY 26, 1965.

CHESTERFIELD SEWER & WATER, INC., AN ILLINOIS CORPORATION, PLAINTIFF,

v.

CITIZENS INSURANCE COMPANY OF NEW JERSEY, HARTFORD FIRE INSURANCE COMPANY GROUP, DEFENDANT-THIRD PARTY PLAINTIFF-APPELLANT,

v.

PETE PALUMBO, D/B/A PALUMBO EXCAVATING COMPANY, THIRD PARTY DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County; the Hon. JOSEPH J. DRUCKER, Judge, presiding. Judgment affirmed.

MR. JUSTICE LYONS DELIVERED THE OPINION OF THE COURT:

Rehearing denied March 2, 1965.

This is an appeal from an order dismissing an amended third party complaint and denying leave to file a second amended third party complaint.

Chesterfield Sewer and Water, Incorporated, an Illinois corporation, brought an action on an account stated, against the appellant, Citizens Insurance Company of New Jersey, Hartford Fire Insurance Company Group. Thereafter defendant-appellant filed a third party complaint adding as third party defendants the Exchange National Bank, Frank Mauro and Associates and the appellee, Pete Palumbo, d/b/a Palumbo Excavating Company. On motion of the appellee, Palumbo, the third party complaint of the appellant was stricken and leave granted to file an amended third party complaint. A new third party complaint was then filed naming only the appellee. After a hearing on a motion to dismiss, the amended third party complaint was dismissed on motion of appellee and leave to amend was denied, from which order appellant appeals.

The facts are that Chesterfield Sewer and Water Incorporated owned a tractor on which the Exchange National Bank owned a chattel mortgage. Chesterfield defaulted in payments under the chattel mortgage and the Exchange National Bank by its agent, Frank Mauro and Associates, repossessed the tractor. Mauro did not have equipment for transporting the tractor and employed the appellee to transport it. The tractor, while in the possession of the appellee, subsequently disappeared or was destroyed.

Appellant contends that the allegations in its third party complaint claiming ownership in the plaintiff and possession in the appellee were sufficient to create, as a matter of law, a constructive bailment. Appellant further contends that by virtue of this bailment a duty was placed on appellee to return the bailed property to the plaintiff, and a failure to do so was a breach of the bailment, giving the plaintiff a cause of action against the appellee. This in turn created a right of subrogation in appellant. Appellee denies as a matter of law, ownership in one party, and possession in another, are sufficient to create a bailment. Appellee further contends that appellant did not recite sufficient facts of ownership in the plaintiff and thus did not state a cause of action and that the trial court properly denied appellant leave to amend.

The question to be decided is whether or not the amended third party complaint stated a cause of action, and if not, did the court err in refusing to allow the filing of a second amended third party complaint. To resolve this, three issues must be decided:

(1) Could a constructive bailment be created between the plaintiff and the third party defendant, as appellant contends?

(2) If so, is a "claim of ownership" in the plaintiff as alleged in the amended third party complaint a sufficient statement of fact to state a good cause of action?

(3) If not, did the trial court err in exercising its discretion in refusing to allow the third party plaintiff to file a second amended complaint?

It is conceded by both parties that there is no law in Illinois with reference to the creation of a constructive bailment but the subject is treated in 8 CJS Bailments § 15 at Page 362, the following language appears:

"Although bailments are generally founded on a contractual relation, . . . the agreement of the parties may be quasi and constructive, and an actual contract or one implied in fact is not always necessary to create a bailment."

In 8 Am Jur2d Bailments § 53 at Page 959, a bailment implied in law is recognized:

"Another class of cases in which the law imposes the duty of a depositary without any actual contract for that purpose, is where the property of one person is voluntarily received by another by delivery from the owner for some purpose other than that of keeping it, and upon an express or implied agreement of a different kind, which purpose or agreement has been answered or performed, and the property remains in the hands of such party without further agreement. In such cases the law implies a contract for the keeping of the property until it shall be restored to the owner or his agent, and the contract thus implied is ordinarily that of a depositary. The holder is bound to take care of, keep, and preserve the property, ...


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