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Northbrook Supply Co. v. Thumm Const. Co.

FEBRUARY 19, 1963.

NORTHBROOK SUPPLY CO., A CORPORATION, PLAINTIFF-APPELLANT,

v.

THUMM CONSTRUCTION CO., ETC., ET AL., DEFENDANTS-APPELLEES. CONSOLIDATED WITH CITY OF HIGHLAND PARK, ETC., ET AL., PLAINTIFF-APPELLANT

v.

THUMM CONSTRUCTION CO., ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Lake County; the Hon. THOMAS J. MORAN, Judge, presiding. Judgment affirmed.

MCNEAL, P.J.

This case involves a suit filed by Northbrook Supply Co., a corporation, against Thumm Construction Co., a corporation, and the City of Highland Park to enforce a lien against public funds under Section 23, Chapter 82, Illinois Revised Statutes, and also a suit brought by the city for the use of the Northbrook Company against W.J. Lewis Construction Co., a corporation, and General Insurance Company to recover on a contractor's bond under Sections 15 and 16, Chapter 29, Illinois Revised Statutes. The two suits were consolidated for trial.

The evidence shows that Highland Park entered into a contract with the Thumm Company as general contractor to construct sanitary sewers. Thumm furnished a performance bond with General Insurance as surety and sublet a portion of the work to the Lewis Company. Lewis, in turn, purchased over $10,000 worth of sewer pipe from the plaintiff Northbrook Company. Northbrook was advised that the general contractor Thumm was ready to pay out. Northbrook's vice president then prepared a lien waiver and a trust receipt. William Lewis of the Lewis Construction Company executed the trust receipt, and the lien waiver was delivered to him so that the Lewis Company could obtain payment from Thumm. The trust receipt provided that Lewis was to collect from Thumm and turn over to Northbrook the sum of $10,400.95 within twenty-four hours and that failure to do so was to constitute a wrongful conversion. Northbrook's vice president testified that he prepared and delivered the lien waiver so that Lewis could obtain payment from Thumm, that he knew that Northbrook had a lien only upon the funds and not upon the property, that he intended to waive all lien rights under the statutes of Illinois, and that he was relying upon the trust receipt. The exact wording of the waiver is as follows:

"Waiver of Lien Geo. E. Cole & Co. Chicago Materials or Labor Legal Blanks

STATE OF ILLINOIS } COOK COUNTY } SS

December 16, 1959

TO ALL WHOM IT MAY CONCERN:

WHEREAS, We, the undersigned NORTHBROOK SUPPLY CO. has been employed by W.J. Lewis Construction Co. to furnish Sewer Pipe for the building known as County Line Road Sewer Job, Highland Park, Illinois.

NOW, THEREFORE, KNOW YE, that we the undersigned, for and in consideration of Ten thousand Four hundred & 95/100 Dollars, and other good and valuable considerations, the receipt whereof is hereby acknowledged, do hereby waive and release any and all lien, or claim, or right of lien on said above described building and premises under the Statutes of the State of Illinois relating to Mechanics' Liens, on account of labor or materials, or both, furnished or which may be furnished by the undersigned to or on account of the said W.J. Lewis Construction Co. for said building or premises.

GIVEN under our hand and seal this 16th day of December, 1959.

NORTHBROOK SUPPLY CO. (Corporate Seal)

/s/ DON CUNNINGHAM V.P. & Treas."

Lewis delivered this lien waiver to Thumm together with other waivers and received payment of $12,161.20 from Thumm, but failed to pay Northbrook. Northbrook then instituted the present actions, which were consolidated. After hearing the evidence, the circuit court entered a decree dismissing the actions for want of equity and entering judgment for the defendants. This appeal followed, the sole question being whether plaintiff is barred by the above waiver.

The difficulty in this case arises from the fact that the statute gives a lien on funds, whereas the lien waiver refers to property. Appellants rely upon Douglas Lumber Co. v. Chicago Home for Incurables, 380 Ill. 87, 100, 43 N.E.2d 535, wherein the Supreme Court held that a waiver of lien on real estate could not be construed to waive a lien on funds. In the Douglas case the materialman had a lien on both the real estate and the funds, so that it was reasonable to conclude that a waiver of one lien would not release the other. In the case at bar, however, there was only a single lien, namely, on the funds. In this case, if the waiver has ...


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