United States Fid. & Guar. Co. v. Dickason

• Decision Date: 21 February 1917
• Docket Number: No 10832.,10832.
• Citation: 115 N.E. 173,277 Ill. 77
• Court: Illinois Supreme Court
• Parties: UNITED STATES FIDELITY & GUARANTY CO. v. DICKASON.

277 Ill. 77

115 N.E. 173

UNITED STATES FIDELITY & GUARANTY CO.

v.DICKASON.

No 10832.

Supreme Court of Illinois.

Feb. 21, 1917.

Error to Appellate Court, First District, on Appeal from Circuit Court, Cook County; Samuel C. Stough, Judge.

Action by the United States Fidelity & Guaranty Company against Elizabeth G. Dickason, executrix of the estate of L. T. Dickason, deceased. From a judgment of the Appellate Court (198 Ill. App. 207) reversing a judgment of the circuit court for plaintiff, plaintiff brings certiorari. Affirmed.

Judah, Willard, Wolf & Reichmann, and Arthur M. Cox, all of Chicago, for plaintiff in error.

Ashcraft & Ashcraft, of Chicago (E. M. Ashcraft, of Chicago, of counsel), for defendant in error.

FARMER, J.

This litigation arises out of the following state of facts: In January, 1900, C. E. Loss & Co. was awarded a contract to do certain work for the Ohio & Kentucky Railroad Company. The railroad company required the contractor to give a bond in the sum of $20,000, with security, for the performance of the contract, and Loss & Co. applied to plaintiff in error, the United States Fidelity & Guaranty Company, to sign its bond to the railroad company. Plaintiff in error was unwilling to sign the bond unless Loss & Co. would indemnify it. Loss & Co. proposed L. T. Dickason as surety on an indemnifying bond to plaintiff in error. After some investigation as to the financial standing of Dickason, plaintiff in error agreed to accept him as surety on an indemnifying bond to it. The bond of Loss & Co. to the railroad company, with plaintiff in error as surety, and the indemnifying bond of Loss & Co. to plaintiff in error, with Dickason as surety, were executed the same date, January 8, 1900; the penalty of each being $20,000. Loss & Co. defaulted in the performance of its contract and abandoned it in 1901. The railroad company employed other contractors to complete the work at an increased cost, and in November, 1901, rendered to plaintiff in error a statement of account of the cost of completing the work Loss & Co. had failed to do. The claim was something over $30,000. J. K. Bartlett, the general counsel of plaintiff in error, with offices in Baltimore, took the matter up at once by correspondent with J. L. Bennett, of Chicago, the then attorney for Dickason. Many letters passed between them. Dickason did not want the claim of the railroad company paid without litigation, and it was finally agreed the suit, which was begun March 4, 1903, should be resisted, and the management of the defense was left to Bennett, Dickason's attorney, and other counsel employed by him, with the approval of the plaintiff in error. The case was not tried until June 9, 1910, and then resulted in a judgment against plaintiff in error for the penalty of the bond, $20,000, and interest from January 1, 1902, at 6 per cent., amounting to $10,126.66, making the total sum for which judgment was rendered, $30,126.66. Some preliminary steps were taken by Dickason's counsel toward having the case reviewed by a higher court, but that was abandoned and the judgment was paid off by plaintiff in error June 7, 1911, which, with interest at that time, amounted to $31,934, besides costs. Dickason died March 22, 1913, and plaintiff in error filed in August following a claim against his estate for the sum of $32,748.11 paid by it in settlement of the judgment of the Ohio & Kentucky Railroad Company. An amended claim for the same amount was filed May 14, 1914. The amended claim sets out more fully the facts and circumstances upon which the claim is based than did the original claim.

After a hearing in the probate court the claim was allowed in the sum of $32,979.22, which was the amount paid on the judgment by plaintiff in error, with interest from the time of payment of said judgment. The executrix of the Dickason estate appealed from that judgment to the circuit court, where a trial was had by jury. At the conclusion of all the evidence the executrix of the Dickason estate submitted to the court a motion to instruct the jury to find the issues for the claimant in the amount of $20,000, the penalty of the bond, with interest on that amount at 5 per cent. per annum from June 7, 1911, the date the judgment of the railroad company was paid off. The court refused to give this instruction, but on motion of counsel for claimant instructed the jury to find for claimant in the sum of $20,000, with interest from January 1, 1902, at the rate of 5 per cent., making a total of $33,330.55. Upon verdict returned in obedience to said instruction the court rendered judgment in favor of plaintiff in error for the sum of $33,330.55 and $333.30 interest from the date of the verdict. The executrix of the Dickason estate appealed from that judgment to the Appellate Court for the First District. That court held the circuit court erred in refusing the instruction offered by the executrix, and in giving the instruction offered by the claimant and rendering judgment for the penalty of the bond, with interest thereon from January 1, 1902. It was the view of the Appellate Court that interest could not be computed from the date of the breach, January 1, 1902, because of the bar of the statute of limitations, and that the claimant was only entitled to recover the penalty of the bond, with interest on that sum from the date the judgment was paid to the railroad company, June 7, 1911. It accordingly reversed the judgment of the circuit court and rendered judgment in the Appellate Court in favor of plaintiff in error for $24,750, that being the penalty of the bond and interest thereon at 5 per cent. from June 7, 1911. The case was brought to this court for review by writ of certiorari.

It was admitted in open court at the hearing of this case in the circuit court by counsel for defendant in error, executrix of Dickason's estate, that the bond of Loss & Co., with plaintiff in error as surety, was executed and delivered to the railroad company in the penal sum of $20,000, as alleged in the claim, January 8, 1900, and that on the same day Loss & Co., with Dickason as surety, executed a bond in the same penalty to plaintiff in error to indemnify it for signing the bond of Loss & Co. to the railroad company, and that each of the said bonds was delivered on the day of its date; that Loss & Co. proceeded with the work under its contract with the railroad company until January 16, 1901, when it abandoned the contract, and that a claim was made by the railroad company against plaintiff in error for damages resulting from the abandonment of the contract by the contractor, and that said claim on January 1, 1902, became an obligation in favor of the railroad company in the amount of $35,000; that the railroad company brought suit on that claim in March, 1903; that Dickason was notified to defend the suit, and did so in co-operation with plaintiff in error; and that the suit resulted in a judgment in favor of the railroad company against plaintiff in error for $30,126.66, which was paid June 7, 1911. Counsel admitted in a statement to the court and jury that the claim should be allowed against the Dickason estate in favor of plaintiff in error for $20,000, and interest on that amount at 5 per cent. from the date plaintiff in error paid the judgment to the railroad company.

The bond of plaintiff in error, as surety for Loss & Co., bound Loss & Co. to faithfully perform and fulfill its contract, and to protect the railroad company from all loss by reason of claims, defects, errors, objections, liens, and incumbrances arising from the failure of the principal to perform the covenants of the bond and contract. The indemnifying bond of Dickason to plaintiff in error bound Dickason to keep plaintiff in error indemnified ‘against all suits, actions, debts, damages, demands, costs, charges, and expenses, including court costs and counsel fees, at law or in equity, and against all loss and damages whatever,’ that might accrue to plaintiff in error by reason of its suretyship on the bond of Loss & Co. to the railroad company.

Plaintiff in error contends that, if its cause of action against Dickason by reason of the breach of the covenants of the bond to the railroad company prior to the bringing of the suit by said company March 4, 1903, is barred by the statute of limitations, the bringing of said suit was a new breach, and the statute did not begin to run against the cause of action accruing on account of that breach until the date the suit was commenced. In our view of the evidence, nothing was sufficiently proven as to Dickason's temporary absence from the state in March, 1903, to arrest the running of the statute; but we are further of opinion that the cause of action for which the claim was filed accrued January 1, 1902. It was so held in the suit in the federal court in Kentucky, and in the admission made by counsel for defendant in error in the circuit court for...