APPEAL from the Circuit Court of Sangamon County; the Hon.
JERRY S. RHODES, Judge, presiding.
MR. JUSTICE WEBBER DELIVERED THE OPINION OF THE COURT:
Rehearing denied January 5, 1978.
This appeal comes to us in a plain brown wrapper labeled garnishment when in fact it involves several intricate questions of law which do not lend themselves readily to such a simplistic solution.
In 1975 the State of Illinois was engaged in constructing Interstate Highway 72 between Monticello and Springfield. As a part of that project it entered into a contract with General Paving, Inc., defendant-appellant, herein referred to as "General Paving." General Paving, in turn, entered into a number of subcontracts, one of which was with James M. Canfield Contracting Company, Inc., whose principal officer was James M. Canfield. For convenience both of the latter will be referred to collectively as "Canfield." Canfield likewise entered into a number of subcontracts, one of which was with Marle, Inc., defendant-appellant, herein referred to as "Marle." Other subcontractors of Canfield are not involved in this appeal.
In order to finance his work Canfield consulted with Town & Country Bank of Springfield, plaintiff-appellee, herein referred to as "Bank." The upshot was that Bank agreed to advance funds to Canfield and Canfield made an assignment to Bank of the contract with General Paving, which acknowledged the assignment. The entire contract is not material here except for two provisions which are in hot dispute: (1) That Canfield present at the time of payments by General Paving either affidavits of payment or non-payment or lien waivers from his subcontractors; and (2) that Canfield post a performance bond with General Paving in the amount of 100% of the value of the subcontract.
From the time of the assignment on May 28, 1975, until December 1, 1975, General Paving paid over $46,370.30 under the assignment. On December 1, 1975, Bank, apparently feeling itself insecure as a result of some conversation with an officer of General Paving, took judgment by confession against Canfield in the circuit court of Sangamon County in the sum of $165,410.31 and costs. Thereafter, it served a garnishment summons on General Paving.
General Paving answered the garnishment interrogatories indicating that it held $104,000 to the account of Canfield, less any amount due to Canfield's subcontractors. The answers were subsequently amended on motion until the final amount due became $66,633.01. Shortly after the first answer was filed, General Paving filed a motion to set aside the order which the trial court had entered requiring General Paving to pay Bank $104,000. The basis for the motion was to require Canfield to supply either the affidavits or lien waivers from his subcontractors as required by the contract.
The trial court ordered General Paving to give notice to all parties who, to its knowledge, had a claim on the Canfield funds. A number of subcontractors, including Marle, did file such claims. Bank filed a motion to dismiss such claims.
Thereafter, the trial court entered an order vacating its prior garnishment order, allowing General Paving to file an amended answer and directing the Canfield subcontractor-claimants to file answers as to why their claims should not be stricken. The latter part of the order apparently grew out of Bank's motion to dismiss which was supported by an affidavit made by an official of the Department of Transportation of the State of Illinois, stating that none of the subcontractors involved had served a lien notice upon the department.
Finally, on January 19, 1977, the trial court entered an order based on the pleadings in favor of Bank and against General Paving in the amount of $66,633.01; the same order dismissed the claims of the subcontractors as prayed in Bank's motion. Motions to reconsider were denied and this appeal followed.
Meanwhile, prior to the order directing notice to the subcontractors-claimants, Marle had filed a separate proceeding in the circuit court of Sangamon County for an accounting, naming as defendants General Paving, Canfield, and the Department of Transportation of the State of Illinois. This was brought to the attention of the trial court in Marle's pleading filed in the garnishment action. So far as the record in the case at bar is concerned, the accounting suit has not been disposed of.
The parties raise a number of issues; some of them are common to all parties, others to certain ones only. We shall discuss such issues irrespective of how they are raised.
General Paving's primary argument is that nothing was due to Canfield because he had not provided the affidavits or lien waivers called for by the contract; that Bank, as assignee of Canfield, can have no greater rights than Canfield himself. Bank answers the argument by saying that General Paving is estopped to raise such a defense because all prior payments made during 1975 (apparently four in number) were made without requiring such documents and without knowledge by Bank that such was the case. Bank further argues estoppel as to General Paving because General Paving waived the requirement of a performance bond by Canfield, again without Bank's knowledge.
In recent times, "estoppel" has become a sort of a legal catch-all, rivaling "res gestae" as one of the least-understood but most often used refuges when all else fails. Notwithstanding its frequent allegation, it is a highly technical and restrictive principle of law.
1 At least three types of estoppel are recognized: (1) By matter of record; (2) by matter of writing; and (3) by matter in pais. The first two are less often encountered, but the third, sometimes designated as "equitable estoppel," is more commonplace and is the one involved in the case at bar. The requirements of raising an estoppel in pais are fully set forth in the recent opinion of this court in Stewart v. O'Bryan (1977), 50 Ill. App.3d 108, 365 N.E.2d 1019, and in National Tea Co. v. 4600 Club, Inc. (1975), 33 Ill. App.3d 1000, 339 N.E.2d 515, and hence need no reiteration here. We are concerned with the first requirement as set ...