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Housing Authority v. Holtzman

FEBRUARY 17, 1970.

THE HOUSING AUTHORITY OF THE COUNTY OF FRANKLIN, ILLINOIS, FOR THE USE AND BENEFIT OF THE SMITH-ALSOP PAINT AND VARNISH CO., INC., PLAINTIFF,

v.

JOSEPH HOLTZMAN, ET AL., DEFENDANTS, AND THE SMITH-ALSOP PAINT AND VARNISH CO., INC., A CORPORATION, PLAINTIFF,

v.

THE HOUSING AUTHORITY OF THE COUNTY OF FRANKLIN, ILLINOIS, ET AL., DEFENDANTS.



Appeal from the Circuit Court of Franklin County; the Hon. RANDALL S. QUINDRY, Judge, presiding. Judgment reversed, cause remanded. EBERSPACHER, J.

Rehearing denied March 25, 1970.

The plaintiff, the Smith-Alsop Paint and Varnish Company, Inc., appeals from a decree entered by the Circuit Court of Franklin County. The original suit, as well as this appeal, involves the consolidation of two separate actions. The first suit was filed by the plaintiff hereinafter referred to as Smith-Alsop, pursuant to the provisions of chapter 82, section 23, demanding a lien upon the funds due Holtzman & Silverman, a copartnership from the Housing Authority of Franklin County. The second suit was filed pursuant to the provisions of chapter 29, sections 15 and 16, Ill Rev Stats 1965, demanding relief from Holtzman & Silverman as principal and the Insurance Company of North America as surety upon a performance and payment bond. Relief was also asked against Harold Kennedy, Roy Kennedy and John Boyd, doing business as Kennedy Painting and Decorating Service as the direct recipient under contract with the plaintiff on materials used upon a public building project in West Frankfort, Illinois.

The two causes were consolidated for trial. After a trial with the court sitting without a jury, the Court entered judgment against the plaintiff in each of the law and chancery proceedings insofar as relief was sought against the defendants, Holtzman & Silverman and the Insurance Company of North America, and allowed plaintiff recovery against the Kennedy firm. The plaintiff, Smith-Alsop has appealed from the judgment.

The plaintiff has presented two issues to this Court for review. The first is whether the judgment of the trial court was contrary to the law and the evidence in failing to give the plaintiff a lien upon public funds under section 23, chapter 82, and second whether the judgment of the trial court is contrary to the law and the evidence in failing to allow recovery on the payment bond pursuant to sections 15 and 16 of chapter 29.

The facts as may be gleaned from the record are as follows: On October 1, 1963, Holtzman & Silverman, a partnership, as "Contractor," entered into a contract for complete construction with the Housing Authority of the County of Franklin, as "Local Authority." The contract between the "Contractor" and the "Local Authority" provided that the "Contractor" would furnish to the "Local Authority" a performance and payment bond as security for the faithful performance of the contract and for the payment of all persons, firms or corporations to whom the Contractor may become legally indebted.

Pursuant to the contract of October 1, 1963, Holtzman & Silverman delivered to the Local Authority a Performance and Payment Bond executed on October 1, 1963, wherein Holtzman & Silverman, was principal, and the Insurance Company of North America, was surety.

On January 16, 1964, Holtzman & Silverman, as Prime Contractor, entered into a contract with Kennedy Painting & Decorating Service, as Subcontractor. Under that contract the Subcontractor agreed to furnish all labor, material, equipment and services to complete work under section II for the construction of Project Ill. 61-1 for the Housing Authority of the County of Franklin. Under the Contract the Subcontractor was to do two things: (1) furnish the sheetrock and necessary labor for its installation, and (2) furnish all the paint required and the necessary labor for the application of that paint. The total contract price was $149,000, which was divided as $87,500 for the sheetrock and installation and $61,500 for the paint and its application.

On January 28, 1964, an agreement was entered into between the West Frankfort Paint & Wallpaper Store and Harold Kennedy, Kennedy Painting and Drywall Co., whereby the West Frankfort Paint & Wallpaper Store agreed to furnish and Kennedy to use Smith-Alsop Paint and Varnish products on the Public Housing Project Ill. 61-1 in West Frankfort, Illinois. Plaintiff, Smith-Alsop, is an Indiana Corporation authorized to do business in Illinois and it operates a store in West Frankfort, Illinois, under the trade name of West Frankfort Paint and Wallpaper Store. Pursuant to this agreement the plaintiff supplied to Kennedy paint and other necessary materials for use on Project Ill. 61-1. The plaintiff supplied paint and materials to Kennedy for which money is claimed owing from January 29, 1964, to September 30, 1964. It was stipulated at trial that Kennedy last performed work on Project Ill. 61-1 on October 12, 1964, at which time his contract was terminated by Holtzman & Silverman.

It also appears from the record that on April 30, 1964, the plaintiff furnished a statement to the Housing Authority that all materials furnished to Kennedy for use on the project were paid up to date as of April 30, 1964.

The date on which the last materials used on Project Ill. 61-1 were actually charged against the Kennedy account was on September 30, 1964. The amount of the balance on that date was $8,333.79.

The materials furnished by plaintiff to Kennedy for use on Project Ill. 61-1, the value of which remains unpaid, included paint which was consumed and became part of the Project Ill. 61-1 and materials used in the prosecution of the work which did not become a constituent part of the Project Ill. 61-1. The latter materials included paint brushes, scrapers, paint buckets, sandpaper, and other like items which did not become part of the project, these materials were wholly consumed in the prosecution of the work on the Project and were thereby rendered useless.

After Kennedy was terminated from Project Ill. 61-1 under his Contract, Holtzman & Silverman relet the Contract to Marvin Ferguson. Under that contract Ferguson completed all of the painting and drywall on the Project. The contract with Ferguson was in the amount of $31,885. For the work performed Kennedy received payment in the amount of $98,897.98. There was, therefore, a total cost of $130,782.98 to Holtzman & Silverman for the work that had been originally contracted at $149,000. Kennedy, apparently, did not seek additional payment after default.

The plaintiff contends that the judgment of the trial court was contrary to the law and the evidence in failing to give the plaintiff a lien upon the funds held by the ...


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