Appeal from the Circuit Court of the 19th Judicial Circuit of
McHenry County, Magistrate Division; the Hon. CHARLES T. SMITH,
Judge, presiding. Judgment adverse to defendant reversed.
MR. JUSTICE DAVIS DELIVERED THE OPINION OF THE COURT.
This is an appeal by the defendant, State Oil Company (herein called State), from a judgment rendered against it by the trial court in a matter heard without a jury. The plaintiff, Douglas R. Crittendon, brought this suit for the recovery of damages to his automobile caused by Gary Mendenhall (herein called Mendenhall), the operator of a service station owned by State.
The plaintiff took his Chevrolet car to the service station operated by Mendenhall and, while there, discussed the problem of its faulty wheel bearings with Mendenhall. Apparently, he asked Mendenhall if he had repaired Chevrolets; Mendenhall answered affirmatively, and stated that he had previously worked at a Chevrolet garage.
Plaintiff left his car with Mendenhall to have the necessary repair work done. Several days later, Mendenhall after completing repair work on another car had his wife deliver such car to the owner in a nearby town and, in order to bring her back to the service station, he followed her in plaintiff's car to her destination. While en route to the other town, plaintiff's car, which Mendenhall was driving, slid on some ice, went off the road, and was thereby extensively damaged.
The service station was owned by State and displayed two identifying signs, each containing only the word "State." One sign was located at the corner of the premises and the other on the building. No other signs were on the premises, and in this respect there was no identification of Mendenhall or any indication of his relationship with State in the operation of the station.
The trial court found that the presence of the two signs containing the word "State," the absence of any signs identifying Mendenhall, the visibility of tools, a grease rack, and a place on the premises where cars could be repaired, justified plaintiff's assumption that Mendenhall was the agent of State and that State was estopped to deny such agency.
The written agreement entered into between State and Mendenhall was introduced in evidence. Proof of various transactions between State and Mendenhall, pertaining to the issue of whether Mendenhall was an actual agent of State or an independent contractor, were admitted in evidence. However, in his brief and argument, plaintiff no longer contends that Mendenhall was an actual agent of State, but rather, urges that under the existing facts there was an agency by estoppel. Thus, the terms of the written agreement between Mendenhall and State and the various transactions between them all of which were unknown to plaintiff become irrelevant.
In Morse v. Illinois Power & Light Corp., 294 Ill. App. 498, 14 N.E.2d 259 (1938), at pages 503 and 504, the court stated that:
"The rule is that one who holds out another as his agent to act for him in a given capacity, and by his habits and course of dealing, justifies the inference that such other is authorized to act as his agent, whether it be in a single transaction or in a series of transactions, will not be heard to deny the agency to the prejudice of an innocent party, who has been led to rely upon the appearance of authority in the agent. Union Stock Yard & Transit Co. v. Mallory, Son & Zimmerman Co., 157 Ill. 554. This rule arises out of the application of the principle of estoppel and may be applied in favor of a third person even though as between the persons charged with the consequences of the relation, it does not in fact exist. 2 CJS Agency Sec 29."
Also see: 1 ILP, Agency, §§ 14 and 128.
The conduct relied upon as the basis for the estoppel must be such that an ordinarily prudent person would consider it as consistent only with the fact that a designated person is the agent of another and has authority to perform a particular act. Such conduct is that which is calculated to mislead in event the principal so holding out such person as an agent were permitted to deny the existence of the agency. Faber-Musser Co. v. William E. Dee Clay Mfg. Co., 291 Ill. 240, 244, 245, 126 N.E. 186 (1920); 1 ILP, Agency, § 128.
It is essential to the application of the doctrine of estoppel that such conduct or representations be relied and acted upon; and it must appear that there was reliance and action thereon, in good faith, by the innocent third party to his injury. Tri-City Transp. Co. v. Bituminous Cas. Corp., 311 Ill. App. 610, 615, 616, 37 N.E.2d 441 (1941); Morse v. Illinois Power & Light Corp., supra, 507.
In the case at bar, in order to constitute estoppel against State, the conduct or representations relied upon by plaintiff must have come from State. Thus, in order to recover, plaintiff had to prove that he had knowledge of and, in good faith, relied upon representations and conduct of State, which indicated that Mendenhall was in fact acting as agent for State in repairing plaintiff's car and in driving it at the time of the accident. Merchants' Nat. Bank of Peoria v. Nichols & Shepard Co., 223 Ill. 41, 50, 79 N.E. 38 (1906); Bailey v. Walters, et al., 202 Ill. App. 422, 425, 426 (1916).
The sole representations or acts urged as the basis for the application of estoppel against State consist of its act of placing two signs containing the word "State" on the filling station premises; and the visibility of tools, a grease rack and a place on the premises where cars could be repaired. There is no evidence that State prohibited Mendenhall from placing other signs on the station designating his capacity or position in the operation of the station. His failure to so identify himself is not conduct that can be attributed to State. ...