Company v. Illinois

COMPANY, INC., A CORPORATION, Claimant, vs. STATE:

BUILDICE

OF ILLINOIS, Respondent.

Opinion $led September 18, 1962.

BLUM AND SANG, Attorneys for Claimant.

IVAN A. ELLIOTT, Attorney General; WILLIAM H. SUMPTER AND H ARRY E(. O’MELIA,

Assistant Attorneys

General, for Respondent.

CoNmucTs-construction. Where evidence showed that final payment wan accepted, and there was a provision in the contract with reference to the acceptance of final payment waiving all claims, such provision is a binding provision on the parties, and a bar to the claim filed herein.

S CHUMAN, C.’J. The claimant, Buildice Company, Inc., a Corpo-. ration, filed its claim in this Court seeking to recover damages for unreasonable delay by the State in per[*305]mitting it to commence work under a contract dated October 17, 1946.

The contract was to install a refrigeration system in the Kankakee State Hospital, Kankakee, Illinois, at a total cost of $19,340.00. It is conceded claimant was to complete the work in 300 calendar days, but could not commence work until April 15,1950, and, by reason thereof, sustained damages over and above the contract price in the amount of $5,984.00, as listed in exhibit “B” attached to claimant’s complaint.

The contract specifically provided under Article IV that the General Conditions of the contract, the specifications, etc., formed the contract. Under the General Conditions of the contract, Article 25, it is provided : “The making and acceptance of the final payment shall constitute a waiver of all claims by the owner, otherwise than under Article 15 of these conditions or under requirements of the specifications, and of all claims by the contractor, except those previously made and still unsettled. (Emphasis Supplied.)” In the case of Herlihy Mid-Continent Company vs.

Sanitary District, 390 Ill. 160, the Court, on page 166, said: “In construing a contract, the primary object is to ascertain the intention of the parties. (Decatur Lumber and Mfg. Co. VB. Crail, 350 Ill. 319.) That intention must be determined from the language in the contract. If the intention may be ascertained from the wording of the contract, rules of construction have no application. (Domeyer vs. O’ConneZl, 364 Ill. 467.) No words can be added to or taken from a contract and thereby change the plain meaning of the parties as expressed therein. (Stevens vs. Felman, 338 Ill. 391.) Nor may the courts engage in surmises as to what the parties intended but which they failed to express.”

The contract in this case is clear and explicit in stating that final payment bars all claims, and cannot be changed by any wording or construction outside of its own terms.

Claimant, in it’sbrief, concedes that the cases cited by it of Underground Construction Company vs. Sanitary [*306] District, 367 Ill. 360, and the Herlihy Mid-Contineni!

Co. vs. Sanitary District, supra, denied recovery where the contract provided that no damages may be allowed from delays caused by defendant. The contract in the instant case is much broader in effect, when it provides that the acceptance of final payment waives all claims of the contractor. This Court has construed provisions relating to acceptance of final payments in a number of cases. S. G. Cool Company vs. State, 17 C.C.R. 138; Urich vs. State, 8 C.C.R. 212; Midwest Construction Company vs. State, 9 C.C.R. 443; HenkeE Construction Company vs. State, 10 C.C.R. 538; Strandberg and Son Co. vs. State, 13 C.C.R. 49. All of the cases cited, while the language of the contract may vary, have held that the acceptance of final payment constituted a full release.

The contract in this case, as previously cited, stated that the making and acceptance of final payment constituted a waiver of all claims by the contractor.

There is no dispute that a check in the amount of $4,340.00 was accepted as final payment, as shown by the exhibits in evidence in this case.

Respondent’s exhibit No. 3-b discloses that claimant submitted the required guarantee form to receive its final payment of $4,340.00, and nowhere in the evidence, or in the exhibits, is it shown that claimant advanced any amount for damages due to delay.

The provision of the contract with reference to the acceptance of final payment waiving all claims is a binding provision on the parties, and a bar to the claim filed herein.

An award is denied, and the claim dismissed.

[*307] WILLIAM WINSTON AND PATRICK CLANCY, Claimants, vs. STATE OF ILLINOIS, Respondent.

Opinion filed September ,12, 1952.

CHARLES A. BELLOWS, Attorney for Claimants.

IVAN A. ELLIOTT, Attorney General; WILLIAM H. SUMPTER,Assistant Attorney General, for Respondent.

C OVENANT N OT To SuE-where an employer released. Where action is based on doctrine of respondeat superior, covenant not to sue executed with employee is a - bar to action against the employer, as it would be indirectly violated by employer’s right to reimbursement from employee.

SCHUMAN, C. J. On December 16, 1949, at about 3:30 P.M., John M. Flahive was driving his 1947 Plymouth Sedan automobile north on Torrence Avenue toward the intersection of 147th Street in Calumet City, Cook County, Illinois. In his automobile were William Winston, seated next to the driver, Patrick Clancy, seated at the right, and, Thomas Flisk, seated at the left in the rear seat.

John M. Flahive and his passengers had been to Gibson City, Indiana on Union business for the Brotherhood of Railway and Steamship Clerks. All of said parties were officials of said Union.

The undisputed facts show that the intersection was protected by traffic lights, and, as Flahive approached, the light turned to green in his traffic lane, and a car ahead of him went across the intersection.

At said time Stanley Glowexenski, a maintenance patrolman, employed by respondent in its Department of Public Works and Buildings, Division of Highways, was operating a dump truck loaded with cinders in an easterly direction on 147th Street. The State truck failed to stop, and Flahive’s car struck it. The truck driver made statements to witnesses, which is corrobor[*308]ated by respondent’s Departmental Report, that he saw the red light and applied his brakes, but that they failed to hold, and both cars approached the intersection at the same time.

As a result of the collision, complaints were filed ’ by Patrick Clancy and William Winston for personal injuries sustained in the collision.

From the undisputed facts, there is no question that the proximate cause of the collision and resultant injuries were due to the negligence of the respondent, through its agent and servant, and no further details of any facts causing said collision are deemed necessary.

The cases were consolidated for trial, and so heard, and will be considered as consolidated by the Court.

The pertinent question in this case is the effect of the covenant not to sue executed by both claimants to Stanley F. Glowezenski, employee of the respondent.

The IiabiIity of the respondent can only be predicated on the theory of respondeat superior. While both employer and employee may be sued jointly in Illinois, they are not considered joint tort feasors, and, in the event of the employer having to pay for any damages due to the negligence of his employee, he may recover said sum from the employee. The covenant not to sue does not reverse a cause of action against the employer, but only says it does not operate as a release to Stanley F. Gloweeenski. In the event respondent would have to pay additional damages, it could sue its employee for the amount it had to pay, and, would, therefore, involve the employee in litigation to respond its damages, which the covenant was supposed to guard against.

In Purple Swan Lines vs. Egyptian Transportation Co., 256 Ill. App. 442,the Court, on page 444,said: [*309] “An employee is directly liable to his employer for any damages occasioned by his negligence, whether such damage be direct to the property of the employer, or arise from the compensation which the employer has been obliged to make to third persons for injuries sustained by them; 18 R.C.L. 502.”

In Griflths and Son Co. vs. Fireproojing Co., 310 Ill. 331, the Court, on page 339, said: “The further general principle is announced, however, in many cases, that where one does the act which produces the injury, and the other does not join in the act but is thereby exposed to liability and suffers damage, the latter may recover against the principal delinquent, and the law will inquire into the real delinquency, and place the ultimate liability upon him whose fault was the primary ‘ cause of the injury.”

There is no reason why the rule above enunciated does not apply to the facts in this case. The rule as applied would, if a recovery is allowed against respondent, authorize a cause of action against the covenantee, and, in effect, defeat the very purpose of the covenant.

In the case of Karcher vs. Burbanlc, Et Al, Mass. 21 N.E. (2d) 549, as reported in 124 A.D.R. 1292, the Court, on pages 1296-1297, said: “The Company’s liability is of a derivative or secondary character, resting solely upon the doctrine of respondeat superior. Pangburn vs. Buick Motor Co., 211 NY 228, 234, 105 NE 423. The Company was, in effect, the plaintiff’s surety, and could, therefore, recover over against him if compelled to pay damages for his negligence while he was acting as its agent within the scope of his authority. Kramw vs. Morgan, 2 Cir., 85 F (2d) 96. See Pittsley vs. Allen, Mass., 7 N E (2d) 442. It is a principle of the law of suretyship that a release or covenant not to sue the person known by the covenantor to be the principal will discharge the surety. Potter vs.

Green, 6 Allen 442, 444. See 2 Williston on Contracts (Rev. Ed.) s. 342; compare Tobey vs. Ellis, 114 Mass. 120; see Matheson vs. O’Kane, 211 Mass. 91, 94, 95, 97 NE 638, 39, LRA (NS) 475, Ann Cas 1913B, 267. But such a covenant not to sue does not so operate where it contains an express reservation of the covenantor’s rights against others. Sohier vs. Loring, 6 Cush. 537; Hutchins vs. Nichols, 10 Cush. 299. Kenworthy vs.Suwyer, 125 Mass. 28. In the case at bar the covenant contained no such reservation. Whether or not the defendants knew of the relationship between the plaintiff and the Company when the covenant was entered into, they must have known, on the record that is before us, that any claim they might then have against the Company on account of the plaintiff’s negligence would be of a derivative character. Although the result of granting injunctive relief to the plaintiff has the effect of releasing the Company, nevertheless we are of the opinion that this does not amount to a denial of the correctness of the result reached in the [*310] Johnson case. Compare New Ywk Central Railroad vs. William Culkeen & Sou?

Co., 249 Mass. 71, 144 NE 96. Wells Fargo & Co. vs. Taylor, 254 US 175,41 S. Ct. 93, 65 L.Ed. 205.

The defendant’s covenant was at least an undertaking “to forever restrain from . , , in any way aiding any claim” against the plaintiff. If they should recover judgment in their actions against the Company, a possible cause of action against the plaintiff will have been created. Although these actions are against the Company, the defendants must know that, in theory at least, the dtimate loss in the event \ that damages are recovered will fall upon the plaintiff, and that under the principle stated in Levinton vs. Pooruu, Mass. 200 N E 9, the plaintiff, if he does not take over the defense of the actions against the Company, may be bound by any judgment recovered. It has been said, in discussing the effect of a covenant not to sue that “the intention of the parties is carried out by allowing the creditor to take judgment at law, leaving the party who holds the covenant to his remedy in equity for a specific performance, by which he is fully protected not only from paying any more directly, but, if there be sureties, by restraining the creditor from collecting any amount out of them, because that would subject him to their action, and thus indirectly violate the covenant, or, if there be other principal obligators, by restraining the collection of any more than an aliquot part of the debt, or any amount that would subject the party to an action for contribution.” ” In the case of Losito vs. Kruse, 136 Ohio St. 183, 24 N.E. (2d) 705, and annotated in 126 A.D.R. 1194, the Court, on page 1197, said: “A settlement with and release of the servant will exonerate the master. Otherwise, the master would be deprived of his right of reimbursement from the servant, if the claim after settlement with the servant could be enforced against the master.

Herron vs. City of Youngstown,Ohio Sup. 24 NE (2d) 708; Bello vs. City of Ckueland, supra; Brown vs. Town of Louisburg, 126 NC 701,36 SE 166,78 Am. St. Rep. 677.”

The form of the covenant not to sue, limiting its effect to the employee only, amounts to a release, and necessarily a bar to a cause of action by claimants herein.

For the reasons above assigned, both claims are hereby denied.

[*311] I (No. 4410-Claim denied.)

LOREN P ERRY AND NAOMI P ERRY, Claimants, us. STATE OF ILLINOIS, Respondent.

Opinion $led September 12, 195.9.

DAVID M. WILSON, Attorney for Claimants.

IVAN A. ELLIOTT, Attorney General; CHARLES H. EVANS, Assistant Attorney General, for Respondent.

HroHwAYs-contributory negligence. Evidence showed that cause of accident was the negligence of claimant in driving through water and mud on the highway at too high a rate of speed.

LANSDEN, J. Commissioner Wise, who heard the evidence in this case, has filed a report herein, which reads as follows: “Loren Perry and Naomi Perry, husband and wife, residents of Springfield, Illinois, filed their complaint herein on April 3, 1951 for damages to an automobile allegedly belonging to claimant, Naomi Perry, and for personal injuries suffered by claimant, Loren Perry.

The accident occurred on July 3, 1950 at approximately 9:40 A.M. on U. S. Highway No. 67, approximately four to four and one-half miles west of Virginia, Illinois.

The car involved was a 1940 Studebaker Four-Door Sedan, which had been driven approximately 40,000 miles.

On the morning of July 3, 1950, Loren and Naomi Perry, claimants, accompanied by their small son and daughter, left Springfield, Illinois on a trip to Beardstown, Illinois. Loren Perry was driving, and his wife and son were in the front seat, and the daughter in the rear seat. They left a filling station in Springfield at approximately 8:20 A.M., and drove westwardly on Illinpis Highway No. 125 to Virginia, Illinois, and then continued on U. S. Highway No. 67. As they were [*312] nearing a point approximately four miles west of Virginia, there was mud and water on the highway in several spots, and at the point of the accident the road made a slight curve across a bridge, and in that area, there was considerable water. Perry was driving about, 40 miles per hour, and slowed to about 35 miles per hour. While driving through the water, he suddenly lost control of the car, which swerved across the highway, and landed in a ditch. Perry, his wife and son were thrown from the car, and both Mr. and Mrs. Perry sustained injuries, but the injuries to Mrs. Perry were not serious, and no claim was made for same in this suit. The daughter and the son were not injured.

There is very little evidence on behalf of claimants as to the condition of the highway, how long the con-. dition had existed, and whether or not the State of Illinois had notice of this condition. Gordon A. Smedley, a former employee of the respondent, testified that he had maintained this section of the highway for approximately the six year period from 1943 to 1949; that the highway in the area of Virginia to Bluff Springs, Illinois was lower than the surrounding area, running through and around the hills, and that during the farming season, when the soil was plowed, the highway would become covered with mud, and that he had helped remove mud on several occasions. He further testified that water from approximately 90% of the land north of the highway drained toward the road.

Naomi Perry testified substantially the same as her husband, but again there was little testimony as to the condition of the highway, and how long said condition had existed. Mrs. Perry testified that her husband was driving about 40 miles per hour, and never over 50, and that he slowed down at her request shortly [*313] before the accident. She also corroborated his testimony as to the injuries sustained, and his inability to perform his former occupation.

The respondent offered no evidence other than the Departmental Report. From the Departmental Report it appears that the highwaymen had been working on a ditch-cleaning job in the area of the accident, and that on the night of July 2, and the early morning of July 3, 1950 there was a heavy rainfall in the area of the accident. The report further shows that in this particular area the highway follows the foot of the hills for several miles, and that, when the hills are cultivated, the State is burdened by filling ditches, and removing mud from the pavement after each rain. The Departmental Report further discloses that the highway section man arrived on the scene prior to the wreck, and found the highway covered with mud and water, and proceeded to the vicinity of Bluff Springs to get the scraper to remove it, and that, when he returned to the scene of the accident, the wreck had occurred. The highway man then proceeded to clear the highway, and put up proper warning signs. From the evidence and: the Departmental Report, it appears that this mud and water covered the highway sometime in the early morning of July 3, 1950, and that the highway section man, who lived at Ashland, Illinois, arrived at the scene of the wreck within a reasonable time after the highway became covered; that there was no negligence on the part of the State in discovering the condition, and that its employees did everything possible to clear the highway.

It is my opinion upon hearing the evidence and reading the Departmental Report that this accident was caused solely by the negligence of the claimant, r [*314] Loren Perry, in driving at a too high rate of speed through the water and mud on the highway. He had a clear view of the highway, saw the condition of the highway, and attempted to drive through the same at the speed of approximately 35 miles per hour. He was also cautioned by his wife shortly before the accident to slow down. It is my opinion that there was no negligence on the part of the State. For these reasons, I recommend that the claim of both Loren Perry and Naomi Perry be denied.”

The report of Commissioner Wise is hereby adopted as the opinion of the ’Court, and his recommendations are approved, since they are in harmony with previous decisions of this Court, such as: Mounce vs. State, No. 4317, opinion filed April 10, 1951, and Beenes vs.

State, No. 4377, opinion filed October 5, 1951.

Awards to claimants are denied.