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Arrow Contractors Equipment Co. v. Siegel

FEBRUARY 10, 1966.

ARROW CONTRACTORS EQUIPMENT COMPANY, A CORPORATION, PLAINTIFF-APPELLEE,

v.

ARTHUR J. SIEGEL, D/B/A SECO CONSTRUCTION COMPANY, DEFENDANT. AETNA CASUALTY & SURETY COMPANY, A CORPORATION; AND BOARD OF EDUCATION OF THE CITY OF CHICAGO, A BODY POLITIC CORPORATE, DEFENDANTS-APPELLANTS.



Appeal from the Superior Court of Cook County; the Hon. JOHN J. LUPE, Judge, presiding. Reversed in part and affirmed in part.

MR. PRESIDING JUSTICE SULLIVAN DELIVERED THE OPINION OF THE COURT.

Defendants Aetna Casualty & Surety Company and Board of Education of the City of Chicago appeal from a decree in which judgment was entered for $6,732.54, against defendant Arthur J. Siegel, d/b/a Seco Construction Company, a general contractor, and decreeing a section 23 lien therefor upon money, bonds or warrants in the hands of the Board of Education of the city of Chicago; also from that part of the same decree entering judgment in the sum of $6,732.54 against Aetna Casualty & Surety Company upon the statutory performance and payment bond. The decree directs that all costs, stenographic and master's fees be adjudged against the defendants.

The defendants argue two points, (a) that section 23 (Ill Rev Stats 1961, c 82, § 23) does not provide a lien against public contract funds for major repairs to contractor's own equipment which were not consumed in the performance of the contract work, and (b) plaintiff is not entitled to recover upon the statutory performance and payment bond of Aetna Casualty & Surety Company.

The facts are these: On January 26, 1961, Arthur J. Siegel, d/b/a Seco Construction Company, entered into a contract with the Board of Education of the City of Chicago for the construction of the Ludwig Von Beethoven School at 48th and State Streets, Chicago, Illinois. Under the contract the contractor was required to furnish all material and do the work required in the erecting of the new elementary school building. The contractor, as principal, and Aetna, as surety, executed and delivered to the Board of Education a statutory performance and payment bond conditioned:

"Now, if the said Arthur J. Siegel . . . shall in all things . . . truly keep and perform all of the covenants, conditions and agreements mentioned and contained in said contract . . . and shall promptly make payment to all persons supplying him labor or materials in the prosecution of said work, then the above obligation to be void, . . . ."

Siegel, the general contractor, owned a Bay City Model 185 T 60 truck crane with an 80-foot boom and a 15- or 20-foot jib which he had purchased in October, 1959, for $36,130, and had used on two other large jobs. He brought the crane to the job site about February 1, 1961, and thereafter used it to pour concrete and hoist materials. About April 1, 1961, the crane was standing on a construction road about 15 feet from an excavation for the north tower of the school. The outriggers, which are steel beams which slide out from the bottom of the crane to give it stability, were not out. The crane, while the operator thereof was "booming out," lost its footing and the entire unit slid down an embankment which had been excavated for the school.

The expression "booming out" means that the "stick" (boom) is out at an angle and the operator permits the boom or stick to go out too far and the machine is unable to handle that weight when the outriggers are not extended out. As a result the crane was damaged.

The plaintiff was employed by Siegel, the contractor, to make the necessary repairs. The plaintiff inspected the damaged crane at the job site, dismantled the crane and brought it to the plaintiff's shop. After making certain repairs, plaintiff returned the crane to the job site. The plaintiff invoiced the contractor for labor for its mechanic to straighten the cab fenders, install new glass in cab, replace a broken battery and install new boom complete with center sections, jibs, pendants and cable. The new parts totaled $6,358.57 including sales tax; incoming freight on the new parts totaled $88.97; hauling the crane to and from the job site cost $25, and $260 was charged for certain labor performed in repair work. After the repair of the crane it was used by the contractor in performing his concrete work under the terms of the contract with the Board of Education until early summer of 1961. The crane was then put in the contractor's yard for a few weeks and on or about August 24, 1961, was sold and delivered by contractor to O'Neill Bros. of Danville, Illinois, for $22,000.

The contract between contractor and the Board of Education provided that the contractor agrees to furnish all material and do all of the work required in the erection of the school for $1,000,742.

There is no claim in this case that the amount of $6,732.54 was for material, apparatus, fixtures or machinery which were incorporated into the school building, or for labor employed by the contractor to perform work required under his contract. The amount claimed is solely for repairs made to and new parts installed by the plaintiff in a crane owned by the contractor which had been used between February 1, 1961, and early summer of 1961, in performing his contract, and which was damaged on April 1, 1961, when it tipped over into an excavation. There is no contention, nor could such a contention be sustained, that the repair items and new parts were consumed during the performance by contractor of his remaining contract work. The contractor had used the same crane on two other previous jobs as large as his contract with the Board of Education in this case. The crane was originally purchased for $36,130 in 1959 and that following its repair it was used in completing the contract work. It was sold in August, 1961, by the contractor to another contractor for approximately $22,000. It cannot therefore be said that the items supplied by the plaintiff were consumed during the performance of the contract work and yet be available to the contractor or others for other work.

The pertinent portions of section 23 (Ill Rev Stats 1961, c 82, § 23), are as follows:

"Any person who shall furnish material, apparatus, fixtures, machinery or labor to any contractor having a contract for public improvement for any . . . school district . . . shall have a lien on the money, bonds or warrants due or to become due the contractor having a contract with such . . . school district . . . under such contract, . . . ."

In Alexander Lumber Co. v. City of Farmer City, 272 Ill. 264, 111 N.E. 1012, the pertinent facts were these: Farmer City had passed an ordinance for the construction of a system of sewers to be paid for in part by general taxation and in part by special assessment. The city entered into a written contract with the Howes Bros. Company which agreed to do the work for $16,888.15. The contract between Howes Bros. Company and Farmer City provided in part as follows: "It is further agreed that all funds becoming due said contractor under this contract shall be and are subject to the provisions of section 23 of an act entitled `An act to revise the law in relation to mechanics' liens.'" Numerous persons claimed liens on the fund which was alleged to be in the possession of the city and due to the contractor. The circuit court allowed claims and decreed their payment by Farmer City, which decree was reversed by the appellate court, and some of the lien claimants prosecuted an appeal to the Supreme Court. The decree entered in the trial court found that all of the claims were for material and labor furnished by the claimants under contracts with Howes Bros. Company. The decree of the trial court had allowed a lien on behalf of Joseph C. Gould for $179.17. The Supreme Court in its opinion on page 275 said the following:

"It is also claimed that a small part of the claim of appellant J.C. Gould was for work in repairing machinery and tools."

The Supreme Court in that opinion, without deciding whether a small part of Gould's claim for work for repairing machinery and tools was well founded, affirmed the decree of the trial court which had found that the claims were for material and labor. The main issue of the Alexander case was whether any lien against money in the hands of a city due a contractor can be allowed in favor of subcontractors or parties furnishing material under section 23 of the lien act unless the material furnished entered into or became a part of the improvement. The court in that case did not state whether these items did or did not become a part of the improvement. The court did not discuss the repair item. The nature and amount of repairs is not revealed in the opinion except that they construed a small part of an entire claim for $179.17. The opinion does not reveal whether the repairs took place because of an accident, as in the instant case, or whether they consisted only of items for the normal maintenance of machinery and tools in connection with their everyday use on the project.

The later case of Acker v. Vanderboom, 235 Ill. App. 417, which construed the Alexander case, concluded that the rule announced therein is that materials, services and rentals which actually are used or consumed during the progress of the work are the proper subjects of a mechanics' lien, even though they do ...


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