author: JUSTICE HOPF

text:
    FINANCE AMERICA COMMERCIAL CORPORATION, Plaintiff-Appellant, v. ECONO COACH, INC., Defendants—(William H. Herchenbach et al., Interpleaders-Appellees).
    Second District
    No. 82—750
    Opinion filed September 30, 1983.

      Steven J. Teplinsky, Joel A. Haber, Alvin D. Meyers, and Gary H. Smith, all of Berman, Fagel, Haber, Maragos and Abrams, of Chicago, for appellant.
    George E. Downs, of Palatine, for appellees.
   JUSTICE HOPF

delivered the opinion of the court:

This case is before us for the second time. See Finance America Commercial Corp. v. Econo Coach, Inc. (1981), 95 Ill. App. 3d 185, 419 N.E.2d 935.

In April 1978 plaintiff, Finance America Commercial Corporation (Finance) filed an action against defendants seeking, among other things, a judgment for immediate possession of 17 recreational vehicles which were pledged as security for loans made to defendants pursuant to an inventory loan agreement. In February 1979, Arthur Frey, Donald Gable and William Herchenbach (Intervenors) filed a petition to interplead, alleging that during 1977 they each had purchased recreational vehicles from certain of the defendants; that certain of the defendants represented to interpleaders that they would forward the certificates of origin for the vehicles to the Illinois Secretary of State for issuance of the titles in interpleaders’ names; that certain of defendants titled said vehicles in the name “Econo-Coach, Inc.” in the State of Florida; and, that the titles were then pledged by certain of the defendants as security for loans from plaintiff. Plaintiff thereafter filed a motion for summary judgment against defendants which was granted by the court. In January 1980, plaintiff filed a motion for summary judgment against interpleaders and interpleaders filed an answer thereto. Summary judgment was entered in plaintiff’s favor against interpleaders in April 1980. Thereafter, two of the inter-pleaders, Herchenbach and Gable, appealed from the order granting summary judgment and from a June 1980 order denying their petition for reconsideration. In September 1980, Finance repossessed the two vehicles in Herchenbach’s possession and sold them at an auction for a total of $16,100.

In our previous opinion, we noted initially that Herchenbach and Gable were in fact intervenors within the meaning of section 26.1 of the Civil Practice Act (Ill. Rev. Stat. 1979, ch. 110, par. 26.1, now codified at Ill. Rev. Stat. 1981, ch. 110, par. 2 — 408) rather than inter-pleaders (Ill. Rev. Stat. 1979, ch. 110, par. 26.2, now codified at Ill. Rev. Stat. 1981, ch. 110, par. 2 — 409). (Finance America Commercial Corp. v. Econo Coach, Inc. (1981), 95 Ill. App. 3d 185, 186, 419 N.E.2d 935.) We will therefore refer to them in this appeal as Intervenors. In the initial appeal, we ultimately reversed and remanded the cause because there existed a genuine issue of material fact as to whether Intervenors were buyers “in ordinary course of business” so as to be entitled to the protection afforded to purchasers under section 9 — 307(1) of the Uniform Commercial Code. 95 Ill. App. 3d 185, 187, 419 N.E.2d 935; Ill. Rev. Stat. 1979, ch. 26, pars. 1-201(9), 9-307(1).

Upon remand, both Intervenors and Finance moved for summary judgment, and both motions were denied. The cause proceeded to trial and after hearing the evidence and arguments of counsel, the trial court held that Intervenors were buyers “in ordinary course of business.” Plaintiff was ordered to turn over the title of the recreational vehicle in Gable’s possession to Gable, and to pay Intervenor Herchenbach the value of the two vehicles it had repossessed from him and subsequently sold. Finance appeals, raising the following issues for review: (1) whether Intervenors sustained their burden of proving they were buyers “in ordinary course of business”; and, (2) whether the . trial court’s finding as to the value of the property sold by Finance was against the manifest weight of the evidence.

Before considering the questions presented for review, we first turn our attention to the inventory loan agreement upon which Finance bases its claim to the recreational vehicles in question. After examining the language contained in the agreement, we conclude that Finance contemplated there might be sales of the recreational vehicles which were used as inventory collateral. The agreement does not specifically prohibit the sale of the vehicles but rather creates a security interest on Finance’s behalf in “all of the Collateral and *** the proceeds thereof covering Inventory.” “Collateral” is defined under the agreement as including inventory (i.e., motor homes or coaches), proceeds and receivables. “Proceeds,” under the agreement, means “all cash received by the Borrower upon the sale or lease of Inventory, together with all Receivables of Borrower arising out of the sale or lease of Inventory.” (Emphasis added.) Further, the agreement specified that Econo Coach was to pay the “unpaid balance of any loan or advance plus accrued interest outstanding and applicable to any item of Inventory sold by Borrower.” Thus, the inventory loan agreement clearly contemplated the possibility of the sale of the motor coaches, and provided for a continuing security interest in the proceeds resulting from such sale. (See also Ill. Rev. Stat. 1979, ch. 26, par. 9 — 306.) We therefore conclude that Econo Coach’s sale of the coaches to Intervenors was an authorized sale under sections 9 — 201 and 9 — 306(2) of the Uniform Commercial Code and that Finance is estopped from asserting a continuing security interest in the motor coaches. (Ill. Rev. Stat. 1979, ch. 26, pars. 9 — 201, 9 — 306(2); Massey-Ferguson, Inc. v. Helland (1982), 105 Ill. App. 3d 648, 654-55, 434 N.E.2d 295; Bitzer-Croft Motors, Inc. v. Pioneer Bank & Trust Co. (1980), 82 Ill. App. 3d 1, 9-15, 401 N.E.2d 1340; Draper v. Minneapolis-Moline, Inc. (1968), 100 Ill. App. 2d 324, 241 N.E.2d 342.) Intervenors therefore acquired the coaches free and clear of any security interest in them without regard to their status as “buyers in ordinary course.” Massey-Ferguson, Inc.; Bitzer-Croft Motors, Inc.; Draper.

In any event, we find no error in the trial court’s determination that Intervenors were buyers “in ordinary course of business” within the meaning of section 1 — 201(9) of the Uniform Commercial Code. (Ill. Rev. Stat. 1979, ch. 26, par. 1 — 201(9).) That section states:

“ ‘Buyer in ordinary course of business’ means a person who in good faith and without knowledge that the sale to him is in violation of the ownership rights or security interest of a third party in the goods buys in ordinary course from a person in the business of selling goods of that kind ***.”

In American National Bank & Trust Co. v. Mar-K-Z Motors & Leas ing Co. (1974), 57 Ill. 2d 29, 33, 309 N.E.2d 567, our supreme court held that whether one is a “buyer in ordinary course of business” and whether one is a “person in the business of selling goods of that kind” are questions of fact for the trial court. Thus, the trial court’s findings on these factual issues will not be disturbed unless they are contrary to the manifest weight of the evidence. (57 Ill. 2d 29, 33, 309 N.E.2d 567.) We believe there is sufficient evidence here to support the trial court’s finding.

In the instant case, there is no question that Intervenors both purchased their respective recreational vehicles in good faith and without knowledge of Finance’s security interest in them. Thus, an analysis of this issue turns upon whether sufficient evidence exists that Econo Coach was “in the business of selling goods of that kind.” As previously noted, the security agreement itself contemplated that the motor coaches might be sold by Econo Coach and that in that event Finance’s security interest would continue in the proceeds of such sales. This supports the trial court’s finding that one aspect of Econo Coach’s business was the sale of its inventory vehicles. (Cf. Hempstead Bank v. Andy’s Car Rental System, Inc. (1970), 35 App. Div. 2d 35, 312 N.Y.S.2d 317.) It was also demonstrated at trial that the Intervenors purchased the vehicles from an inventory of coaches situated on the Econo Coach lot and at a nearby garage, that other people were also discussing sales with someone from the company, and that Herchenbach knew of 17 other sales by Econo Coach and knew three of them personally. In addition, the trial court below noted the prevalent practice among leasing agencies of selling their previously leased vehicles after a certain period of time. Under all of these circumstances, we believe that the trial court’s finding that Intervenors were “buyers in ordinary course of business” was not against the manifest weight of the evidence.

We reach this result despite the fact that Econo Coach’s annual report to the Secretary of State states only that it was in the business of leasing recreational vehicles. While this fact is probative of the nature of defendants’ business, it is not as conclusive as the articles of incorporation would have been. (Cf. American National Bank & Trust Co. v. Mar-K-Z Motors & Leasing Co. (1973), 11 Ill. App. 3d 1046, 1048, 298 N.E.2d 209.) Nor do we consider as dispositive the fact that the sign outside Econo Coach’s facility and its business card refer only to the rental of vehicles and not their sale. While these facts indicate the primary business of Econo Coach was the rental of vehicles, they do not necessarily negate the trial court’s finding that the company was also legitimately engaged in the sale of such vehicíes. This is especially true in light of the security agreement between Econo Coach and Finance which clearly contemplated that such sales might be made within the course of Econo Coach’s business. Moreover, the imposition upon Interveners to inquire into the existence of a security interest would serve no purpose here where the security interest in question did not even exist at the time of purchase.

Finance also attempts to avoid our result by claiming that Intervener Herchenbach did not purchase his vehicles “in ordinary course” because the purchases were subject to a leaseback arrangement whereby Econo Coach would act as Herchenbach’s agent in leasing the coaches to others. Herchenbach did not take possession of the vehicles, nor did he obtain the keys. We view this arrangement, which occurred contemporaneously with Herchenbach’s payment of full value for the vehicles, as largely irrelevant to the question whether the initial purchase was “in ordinary course.” It is not the actual delivery of goods to the purchaser that is the critical factor in determining whether a purchase is “in ordinary course.” Rather, the question is whether the transaction between the buyer and seller was “customary in the business” and whether the buyer was “a typical buyer in an ordinary business transaction” with the seller. (Herman v. First Farmers State Bank (1979), 73 Ill. App. 3d 475, 479, 392 N.E.2d 344.) For the reasons previously stated, we believe Herchenbach’s purchase of the vehicles was customary in Econo Coach’s business.

Finance next asserts that the trial court’s award of $38,000 to Herchenbach was against the manifest weight of the evidence. It contends the only evidence of value on the two vehicles was the expert testimony of Mr. Gordon, the auctioneer who sold the vehicles at a public sale on December 11, 1980, for a combined total price of $16,100. We disagree.

A party seeking to recover has the burden not only to establish that he sustained damages but also to establish a reasonable basis for computation of those damages. (Schoeneweis v. Herrin (1982), 110 Ill. App. 3d 800, 808, 443 N.E.2d 36.) Damages may not be awarded on the basis of speculation or conjecture. (Schoeneweis.) However, a reviewing court will not disturb the trial court’s findings as to damages unless these findings are manifestly against the weight of the evidence. (Schoeneweis.) The finding of the trial court here has ample support in the record.

In the instant case, Herchenbach testified, without objection, that at the time Finance picked up the coaches, the Eleganza model was worth between $30,000 and $35,000, and the Jimi Mini model was worth between $8,000 and $12,000. He testified at that time they were both in good condition. The Eleganza had 45,000 miles on it, and the Jimi Mini had 35,000 miles. He also testified that through his research of the vehicles, he learned that the Eleganza had increased in value since the time it was taken because it was a discontinued model and that at the time of trial it was worth about $40,000. The vehicle’s appreciation was verified by Mr. Winslow, testifying as an expert for Herchenbach, who stated that at the time of trial the vehicle could sell for as high as $35,000. Winslow examined the Eleganza in question in 1980, prior to its return to Finance, and stated it was in excellent condition and had a value at that time of between $26,000 and $28,000. At the time of trial, if it were in the same condition as it was in 1980, it would be worth about $32,000. Winslow also testified the Jimi Mini model at the time of trial was worth approximately $10,000, and they originally sold for between $16,000 and $17,000. He further testified that mileage is of little significance on a motor home.

Although at the time of trial Herchenbach believed the vehicles were taken from him in June 1980, it was subsequently learned that in fact he retained possession of the vehicles until at least September 1980. Thus, plaintiff hypothesizes that during this three-month period the vehicles drastically reduced in value due to increased deterioration over the summer rental season. Plaintiff essentially contends this would explain Gordon’s appraisal of the Eleganza at only $12,000 to $13,000, and the Jimi Mini at between $4,300 to $4,500. However, Interveners correctly note, as did the trial court, that the period of time between September 1980, and the sale in December 1980, was also unaccounted for, and such deterioration could have therefore taken place in this period when the vehicles were in the hands of Finance. In any event, it is clear that the plaintiff’s claim regarding the condition of the vehicles at the time of repossession was controverted.

The testimony of an expert witness as to the value of the collateral is subject to the trier of fact’s evaluation of credibility. (A. A. Store Fixture Co. v. Kouzoukas (1980), 87 Ill. App. 3d 631, 635, 410 N.E.2d 131.) The trial court expressly recognized this principle of law and found Interveners’ witnesses, particularly Winslow, to be more credible than Gordon. The court found Winslow’s testimony regarding value to be more accurate and reliable because he was in the business of managing a large retail recreational vehicle operation in the same area in which the vehicles were originally sold. The auctioneer, on the other hand, sold many different items, and the vehicles were auctioned outside the Chicago metropolitan area. The court further noted that Gordon himself admitted the price he received for the Jimi Mini was under full value.

Plaintiff argues that the trial court erroneously believed it did not have authority to enter a judgment in a lesser amount. It bases its argument upon the trial court’s comment that “I don’t like the $38,000 figure.” However, this comment was ambiguous and made in the context of a general comment that the court realized both parties involved were innocent parties. The court also specifically found the auctioneer to be incredible; thus, it did not wish to consider his testimony in arriving at some kind of compromise. The court clearly understood that damages must be based upon something more than mere speculation, and that based upon the only credible evidence presented, the $38,000 figure was the most reasonable. The finding of the court is supported by the record and will not be disturbed.

Accordingly, the judgment of the circuit court of Lake County is affirmed.

Affirmed.

NASH and LINDBERG, JJ., concur.


source: Caselaw Access Project

author: JUSTICE HOPE delivered

license: Public Domain

text:
    AURORA NATIONAL BANK, Plaintiff-Appellee, v. JAMES M. SIMPSON, Defendant—(Human Relations Commission, Garnishee and Defendant-Appellant).
    Second District
    No. 82—973
    Opinion filed September 30, 1983.

      Neil F. Hartigan, Attorney General, of Springfield (Richard J. Puchalski, Special Assistant Attorney General, of counsel), for appellant.
    Gordon R. Hughes, of Tyler, Solomon & Hughes, of Aurora, for appellee.
   JUSTICE HOPE delivered

the opinion of the court:

The Human Relations Commission (Commission), garnishee-defendant, appeals pursuant to Supreme Court Rule 308 (87 Ill. 2d R. 308) from a Kane County circuit court order denying its motion to dismiss a garnishment proceeding seeking a conditional judgment against it. This, court granted the Commission’s application for leave to appeal on January 20, 1983. The question certified by the trial court as the basis for this appeal is:

“Whether section 12 — 807 of the Code of Civil Procedure [Ill. Rev. Stat. 1981, ch. 110, par. 12 — 807(a)] controls and permits the Court to require the garnishee-defendant to show cause why a conditional judgment should not be made final because the garnishee-defendant failed to answer the wage interrogatories or withhold funds pursuant to paragraph 12 — 801 et seq. notwithstanding the employer is the State of Illinois.”

The Commission is a State agency created under section 8 — 101 of the Illinois Human Rights Act (Ill. Rev. Stat. 1981, ch. 68, par. 8— 101). Although it concedes that it is not immune from garnishment proceedings by virtue of our supreme court’s opinion in First Finance Co. v. Pellum (1975), 62 Ill. 2d 86, 92, 338 N.E.2d 876, the Commission argues that the doctrine of sovereign immunity and public policy preclude the imposition of any monetary judgments under section 12 — 807(a) of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 12 — 807(a)), formerly section 6 of “An Act relating to wage deductions for the benefit of creditors and regulating the issuance of deduction orders.” Ill. Rev. Stat. 1979, ch. 62, par. 76.

On July 1, 1982, Aurora National Bank (bank), plaintiff, filed an affidavit for wage deduction order which stated that James M. Simpson owed the bank $6,913.58 pursuant to a September 21, 1977, judgment in its favor for $5,852.79 plus costs and interest. It had a wage deduction summons served on the Commission, which required the Commission to file answers to the bank’s interrogatories.

After the Commission failed to answer the bank’s interrogatories within the specified time, the bank sought the issuance of a conditional judgment against the Commission. The Commission filed a special and limited appearance and moved to dismiss the action against it. The trial court entered an order denying the Commission’s motion to dismiss the bank’s motion for conditional judgment. The court found that the Commission failed to file answers or withhold nonexempt wages of Simpson when answers were required to be filed and refused to forward any sums from Simpson’s wages, that the Commission acknowledged it was not immune from wage garnishment proceedings but it was immune from a judgment order pursuant to section 12 — 807 of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 12 — 807), that the above provisions was akin to the power of contempt to enforce compliance with the provisions of the wage deduction proceedings, and that such enforcement was necessary to prevent the circumventing of these proceedings.

The bank filed a new affidavit stating that the amount owed had increased to $7,126.80. The Commission answered the interrogatories, stating that it withheld $4,373.70 from Simpson’s salary and that $642.95 was the amount to be withheld pursuant to the wage deduction order. Based upon these answers, the court entered an order against the Commission for $642.95. The parties agree that the Commission has tendered this amount to satisfy the judgment and that Simpson is no longer employed by the Commission.

On November 23, 1982, the trial court certified the question presented here on the Commission’s motion, finding that the order denying the Commission’s motion to dismiss involves an important question of law to which there is substantial grounds for difference of opinion and that an immediate appeal may materially advance the ultimate termination of this litigation. The court stayed the proceedings pending this appeal. We granted the Commission’s application for leave to appeal.

. We must decide whether sovereign immunity precludes a circuit court from entering a conditional judgment against a State agency in a garnishment proceeding where the agency, as the employer of a judgment debtor, failed to answer wage interrogatories or withhold portions of the employee’s salary pursuant to a wage deduction summons.

Under the wage deduction provisions of the Code of Civil Procedure, a judgment creditor may have summons served on a judgment debtor’s employer commanding the employer to appear in court and answer written interrogatories. The judgment or balance due becomes a lien on the wages due at the time of the service of summons for a specified period of time and the employer must answer the interrogatories setting forth the amount due as wages to the judgment debtor. If the employer fails to appear and answer these interrogatories, the court may enter a conditional judgment against the employer for the amount due upon the judgment against the judgment debtor; the employer may then be required to show cause why the conditional judgment should not be made final. If the employer fails to appear and answer, the court shall confirm the conditional judgment in the amount of the judgment against the judgment debtor. Ill. Rev. Stat. 1981, ch. 110, pars. 12 — 805 through 12 — 808.

In First Finance Co. v. Pellum (1975), 62 Ill. 2d 86, 338 N.E.2d 876, our supreme court held that the doctrine of sovereign immunity did not exempt the State from wage deduction proceedings. While conceding that it is not exempt from wage deduction proceedings, the Commission argues that the doctrine of sovereign immunity precludes the imposition of a conditional judgment upon it. In its argument, the Commission urges that the application of this doctrine would not leave a judgment creditor remediless because that creditor could maintain a declaratory action (see Landfill, Inc. v. Pollution Control Board (1978), 74 Ill. 2d 541, 552, 387 N.E.2d 258), an injunction action (see Board of Trustees v. Illinois Community College Board (1978), 63 Ill. App. 3d 969, 973, 380 N.E.2d 988), or a mandamus action (see People ex rel. Hilger v. Myers (1969), 114 Ill. App. 2d 478, 482, 252 N.E.2d 924), in the circuit court to compel the Commission to comply with wage deduction proceedings, or more likely file a claim with the court of claims.

In seeking to sustain the trial court’s judgment, the bank contends that a court can abolish the doctrine of sovereign immunity if it finds it is unjust, unfair, or against public policy, but fails to cite any case law in support of this incorrect proposition. It further argues that it would be inconsistent to hold that the State is subject to garnishment proceedings but not to the rendering of a conditional judgment. The bank characterizes the provision allowing the entering of such a judgment as an enforcement device and compares the instant cause to a mandamus action.

Section 4 of article XIII of the 1970 Illinois Constitution abolished sovereign immunity in this State except as may be provided by law by the General Assembly. (Ill. Const. 1970, art. XIII, sec. 4.) To determine whether the State is immunized in an action against it, the issue is whether the General Assembly statutorily granted it sovereign immunity. In “An Act in relation to immunity for the State of Illinois” (Immunity Act), the General Assembly provided that, “Except as provided in ‘AN ACT to create the Court of Claims ***’ *** the State of Illinois shall not be made a defendant or party in any court.” (Ill. Rev. Stat. 1981, ch. 127, par. 801.) Section 8 of the Court of Claims Act gives the court of claims exclusive jurisdiction to hear and determine, inter alia, all claims against the State founded upon State law, contract, and tort. Ill. Rev. Stat. 1981, ch. 37, par. 439.8.

Ascertaining whether the State may claim sovereign immunity in a particular action pursuant to the General Assembly’s grant of sovereign immunity requires a determination of whether the State is “a defendant or party” within the meaning of the Immunity Act. This determination requires an examination of the issues involved and the relief sought in the action. Hudgens v. Dean (1979), 75 Ill. 2d 353, 355, 388 N.E.2d 1242; G. H. Sternberg & Co. v. Bond (1975), 30 Ill. App. 3d 874, 877, 333 N.E.2d 261.

A suit brought against a governmental agency with relation to matters in which the agency represents the State in action and liability constitutes a suit against the State, even where the State is not a party to the record. (Scoa Industries, Inc. v. Howlett (1975), 33 Ill. App. 3d 90, 94, 337 N.E.2d 305.) If the relief sought could operate to control the action of the State or subject it to liability, the suit is thus deemed to be against the State. (Hoffman v. Yack (1978), 57 Ill. App. 3d 744, 748, 373 N.E.2d 486.) Thus, when the property of the State is involved, the State becomes directly and adversely affected by the suit and the action must be held to be one against the State. Gordon v. Department of Transportation (1982), 109 Ill. App. 3d 1071, 1074, 441 N.E.2d 904.

In the instant case, the Commission sought to dismiss an action seeking a money judgment for the amount due to the judgment creditor. Since the relief sought would subject the State to financial liability, sovereign immunity bars the action. Where a party seeks a monetary judgment against an agency payable out of State funds, the proper forum is not the circuit court, but rather the court of claims. (See McGuire v. Board of Regents (1979), 71 Ill. App. 3d 998, 1001, 390 N.E.2d 632; Boards of Education v. Cronin (1977), 54 Ill. App. 3d 584, 587, 370 N.E.2d 19; Scoa Industries, Inc. v. Howlett (1975), 33 Ill. App. 3d 90, 94, 337 N.E.2d 305.) The rationale for this rule is that the court of claims has been established with exclusive jurisdiction to provide for the orderly disbursement of State funds if a plaintiff’s claim has merit, whereas the State has not otherwise budgeted for such payment. See Ill. Rev. Stat. 1981, ch. 37, par. 439.24 (payment of claims).

The bank attempts to find an exception to the above rules governing sovereign immunity by focusing upon our supreme court’s decision in First Finance Co. v. Pellum (1975), 62 Ill. 2d 86, 338 N.E.2d 876, where the court held that the State is not immune from wage deduction proceedings. That opinion, however, does not compel an affirmance of the trial court’s order.

In First Finance Co. v. Pellum (1975), 62 Ill. 2d 86, 338 N.E.2d 876, the court found, as it did in Henderson v. Foster (1974), 59 Ill. 2d 343, 319 N.E.2d 789, which concerned a municipality as a garnishee, that no rational basis exists to distinguish between a governmental employer and a private employer. It also reiterated that the State, as a body politic, is a “person” as that word is used in the wage deduction provisions. In finding that the wage deduction provisions and public policy do not exclude the State as a possible garnishee, the court examined whether the doctrine of sovereign immunity barred a garnishment proceeding against the State. Recognizing that the legislature enacted a sovereign immunity statute, the court stressed that whether the State is a “defendant or party” depends upon the particular issues involved and the relief sought rather than an identification of the formal parties to the record. (First Finance Co. v. Pellum (1975), 62 Ill. 2d 86, 91, 338 N.E.2d 876.) Applying this rule, the court found that a wage deduction proceeding, a statutory proceeding unknown to the common law, was not a distinct and separate action against the employer, but an additional step in the original action against the judgment debtor: it imposed on the employer only the duty to answer interrogatories and hold subject to the order of the court any nonexempt wages due or which become due within the period provided by the statute. Since the proceeding did not seek a judgment or decree against the defendant nor make the State a defendant within the meaning of the Immunity Act, the court held that the State was amenable to these proceedings.

In holding the State not immune from a garnishment proceeding, the court stated, however, that:

“On this record the only question presented is whether the State is immune from wage-deduction proceedings under the Wage Deduction Act. We hold that it is not and that the circuit court had jurisdiction in this wage-deduction proceeding against the Department. We need not and do not decide in what manner plaintiff would enforce the collection of monies found to be subject to a deduction order.” (First Finance Co. v. Pellum (1975), 62 Ill. 2d 86, 92, 338 N.E.2d 876.)

Thus, the court left open- the question of whether a circuit court would have jurisdiction to enter a conditional judgment to enforce the State's duty, as an employer, in garnishment actions.

Subjecting the State to garnishment proceedings and to conditional judgments are inherently distinguishable situations. In the former, the State will not lose any of its money but will only be required to deliver what it owes its employees. (See Henderson v. Foster (1974), 59 Ill. 2d 343, 350, 319 N.E.2d 789.) In the present situation, however, the State would be subject to a monetary judgment payable out of its general _funds. (See McGuire v. Board of Regents (1979), 71 Ill. App. 3d 998, 390 N.E.2d 632.) The bank’s argument which, in essence, warns against the anomalous result should the State be amenable to garnishment proceedings but not subject to a conditional judgment necessary to compel compliance lacks persuasiveness.

The bank has not contended that it cannot seek such a judgment in the Court of Claims. Section 8 of the Court of Claims Act gives exclusive jurisdiction to that court to hear and determine, inter alia, “[a]ll claims against the state founded upon any law of the State of Illinois ***.” (Ill. Rev. Stat. 1981, ch. 37, par. 439.8.) Not only does this section preempt a circuit court from entering a conditional judgment, but it gives the bank a remedy should it seek to assert it.

The bank contends that requiring it to perform extra acts against an employer merely because it is a State agency is unfair and burdensome. However, our supreme court has held that the vesting of exclusive jurisdiction in the Court of Claims is not offensive to any provision in the United States Constitution. (Williams v. Medical Center Com. (1975), 60 Ill. 2d 389, 395, 328 N.E.2d 1.) Such a requirement, it has been held, is necessary to protect the State treasury, to enable the government to function unhampered by threat of time and energy consuming legal actions, and to protect the State in high-risk activities. (Seifert v. Standard Paving Co. (1976), 64 Ill. 2d 109, 118-19, 355 N.E.2d 537.) As reiterated in Chicago Welfare Rights Organization v. Weaver (1972), 5 Ill. App. 3d 655, 284 N.E.2d 20, aff'd (1973), 56 Ill. 2d 33, 305 N.E.2d 140, cert. denied (1974), 417 U.S. 962, 41 L. Ed. 2d 1135, 94 S. Ct. 3164: “ ‘[t]he obligations of a State rest for their performance upon its honor and good faith, and cannot be made the subjects of judicial cognizance, unless the State consents to be sued or comes itself into court.’ ” 5 Ill. App. 3d 655, 659, 284 N.E.2d 20.

A somewhat analogous situation arose in Campbell v. Department of Public Aid (1975), 61 Ill. 2d 1, 329 N.E.2d 225. A recipient of old-age assistance appealed from a circuit court judgment entered in an action under the Administrative Review Act which found that the defendant incorrectly terminated the plaintiff’s benefits and ordered their reinstatement but refused to order the defendant to pay the plaintiff the sums he should have been paid. The appellate court reversed and ordered the defendant to pay the plaintiff this past due amount. The supreme court found that although the appellate court could hold that the plaintiff was entitled to payment which had been withheld, it could not authorize the circuit court to enter a monetary judgment against the State. (61 Ill. 2d 1, 5, 329 N.E.2d 225.) Similarly, in the instant case, while a circuit court could issue a summons against a State agency and find that a judgment creditor has a lien on an employee’s wages, it could not order a monetary judgment against the State for the amount of that lien.

The bank posits that the General Assembly’s rejection of a proposed amendment to the wage deduction provisions, which would have immunized the State, school districts and units of local government from garnishment proceedings, after the supreme court held municipalities subject to wage deduction proceedings in Henderson v. Foster (1974), 59 Ill. 2d 343, 319 N.E.2d 789, signifies that the General Assembly intended the State to be subject to all of the wage deduction provisions. (See First Finance Co. v. Pellum (1975), 62 Ill. 2d 86, 90, 338 N.E.2d 876.) The rejection of this proposed amendment, however, does not necessarily support the bank’s hypothesis. The General Assembly may have rejected the amendment because it believed the State was already immune from wage deduction provisions. Indeed, the General Assembly may have wanted the State to be subject to a wage deduction summons but not to the entering of a conditional judgment. Since various interpretations may be placed on the reason behind the rejection of the amendment, the bank’s argument lacks merit. Furthermore, despite any interpretation placed upon the General Assembly’s rejection of the proposed amendment, the State may consent to suit against it only by affirmative action of the General Assembly, not by nonaction. See Crane Paper Stock Co. v. Chicago & Northwestern Ry. Co. (1976), 63 Ill. 2d 61, 68, 344 N.E.2d 461; Edelen v. Hogsett (1969), 44 Ill. 2d 215, 217, 254 N.E.2d 435.

The bank further contends that since the General Assembly exempted certain pension retirement funds from deduction orders (see Ill. Rev. Stat. 1981, ch. 110, par. 12 — 804), the legislature’s failure to similarly extend the exemption to wages paid by the State to indicate that such wages are not exempt. However, the present issue is not whether State-paid wages are exempt from wage deduction proceedings but whether a monetary judgment may be entered against the State. For that reason, and the reasons previously stated concerning the legislature’s rejection Of the proposed amendment, this argument is not persuasive.

In its brief, the bank makes several references to Henderson v. Foster (1974), 59 Ill. 2d 343, 319 N.E.2d 789. Many of those references evince the bank’s misunderstanding that Henderson was not based upon the doctrine of sovereign immunity. Thus, while the court can interpret and determine what public policy demands, as it did in Henderson, where a statute bars an action against the State, a court is required to give effect to that statute.

Finally, the bank compares the instant action to a mandamus action. While a circuit court has jurisdiction to hear a mandamus action, comparing the instant action to a mandamus action is inappropriate. Mandamus is a proper remedy to enforce officials to perform their duty where the action charges an individual official with acting in abuse of his discretion. (People ex rel. Hilger v. Myers (1969), 114 Ill. App. 2d 478, 481-82, 252 N.E.2d 924.) Since a suit against a State official to compel that official to perform his duty is not a suit against the State, the payment of State funds may be thus compelled. (City of Springfield, v. Allphin (1980), 82 Ill. 2d 571, 579, 413 N.E.2d 394; Board of Trustees v. Illinois Community College Board (1978), 63 Ill. App. 3d 969, 971, 380 N.E.2d 988.) Here, however, the action did not charge an individual official with abusing his discretion in the performance of his duties. Therefore, classifying this action as a mandamus action is incorrect.

In response to the specific question certified by the trial court, we hold that sovereign immunity precludes the circuit court from entering a conditional judgment against the State of Illinois. Ill. Rev. Stat. 1981, ch. 37, par. 439.8.

For the reasons stated, the judgment of the circuit court of Kane County is reversed and remanded for proceedings consistent with this opinion.

Reversed and remanded.

LINDBERG and REINHARD, JJ., concur.


author: JUSTICE LORENZ

text:
    CHICAGO TITLE AND TRUST COMPANY, Plaintiff-Appellee, v. FIRST ARLINGTON NATIONAL BANK et al., Defendants—(Executive Construction, Inc., Defendant and Third-Party Plaintiff-Appellant, v. First Arlington National Bank, Defendant and Third-Party Defendant-Appellee; Dennis L. Coates, Defendant-Appellant).
    First District (5th Division)
    No. 82—1525
    Opinion filed September 16, 1983.
    Rehearing denied October 17, 1983.

      Shearer, Blood, Agrella, Boose & Balog, of St. Charles (Richard H. Ba-log, of counsel), for appellant.
    Marshall E. Winokur, of Chicago, for appellee Chicago Title & Trust Co.
    Berman, Fagel, Haber, Maragos & Abrams, of Chicago (Joel A. Haber, Alvin D. Meyers, and Kenneth G. Anspach, of counsel), for appellee First Arlington National Bank.
   JUSTICE LORENZ

delivered the opinion of the court:

Chicago Title and Trust Company (CT&T) filed a complaint against Executive Construction, Inc. (E.C.I.), Dennis L. Coates, John and Nancy Lewis, and First Arlington National Bank (Arlington Bank), as trustee for the Lewises, seeking (1) restitution of an overpayment mistakenly made to E.C.I. from a CT&T escrow account, and (2) damages for a misrepresentation made by E.C.I. and Coates when applying for a disbursement from the escrow.

E.C.I. cross-claimed against the Lewises, and filed a third-party complaint against Arlington Bank in its individual capacity. (The action against the Bank as trustee was dismissed before trial.)

Following trial by the court, judgment was entered in favor of CT&T, and against E.C.I. and Coates, in the amount of $40,662.90. The court also entered judgment against E.C.I. in its cross-claim and third-party action.

E.C.I. and Coates appeal, raising the following issues:

1. Was the evidence sufficient to find them liable in tort for deceit?

2. Did the trial court err when it denied E.C.I.’s motion for summary judgment?

3. Does section 2 of the Interest Act (111. Rev. Stat. 1981, ch. 17, par. 6402) authorize an award of interest against a defendant who has obtained funds by deceit?

4. Did the trial court abuse its discretion by (a) declining to dismiss CT&T’s complaint as a sanction for alleged failure to comply with discovery requests, and (b) permitting CT&T to amend its complaint during trial?

5. Is E.C.I. an intended beneficiary of the construction loan agreement between the Lewises and Arlington Bank?

6. Did the trial court abuse its discretion by permitting an architect to give an opinion on the value of construction work completed by E.C.I.?

7. Was it manifestly erroneous to find that E.C.I. was not entitled to judgment against the Lewises on the cross-claim?

We affirm in part and reverse in part. The following evidence is material to our decision.

Arlington Bank agreed to lend $312,000 to the Lewises so that they could build a manufacturing facility in Hoffman Estates, Illinois. E.C.I. was hired as general contractor, and the Lewises, along with Arlington Bank, entered into an escrow agreement with CT&T so that the contractor could obtain progress payments as work was completed on the project.

To receive progress payments under this escrow agreement, E.C.I. was obligated to submit a sworn application detailing the work performed and materials supplied. Once the architect hired by the Lewises certified that the application was correct, Arlington Bank was to furnish CT&T with funds to pay E.C.I.

The first disbursement application was filed on November 4, 1977, and, as requested, E.C.I. received $42,000.20. In its second application, E.C.I. sought a progress payment of $39,459.10. Then, on December 13, 1977, while the second application was pending, CT&T mistakenly issued a $42,000 check to E.C.I., although Arlington Bank had not supplied funds to cover this payment. Two days later, CT&T paid E.C.I. the $39,459.10 requested in the second application.

E.C.I.’s president, Dennis Coates, testified that although he knew the $42,000 had been issued by mistake, the check was deposited in one of E.C.I.’s accounts without notifying CT&T of its error.

E.C.I. submitted a third application on January 15, 1978, seeking a progress payment of $47,187. In his sworn statement, although Coates claimed that the value of work performed and materials supplied by E.C.I. was $136,478.77, and that the contractor had only received payments of $81,459.30, this statement was incorrect, because it omitted the $42,000 payment which had been issued by mistake.

CT&T’s escrow officer testified that she relied upon Coates’ representation in the third application in deciding to approve the payment of $47,187 and was unaware of the $42,000 mistaken payment. Therefore, CT&T did not recoup the $42,000 overdraw from the $47,187 sought in the third application.

The Lewises cancelled the construction project in February of 1978, and E.C.I. submitted a fourth and final application on February 15. In it, Coates stated that E.C.I. had supplied services and material costing $169,272, and payments of $127,866.10 and that it was entitled to a final payment of $41,405.90. When Coates testified, he stated that he called John Lewis to explain that E.C.I. had received an unapplied for payment of $42,000, and that E.C.I. would credit this amount toward the balance owed on the terminated contract. (Later, E.C.I. forwarded the excess to Arlington Bank, and the bank sent this money to CT&T.)

On May 19, 1978, CT&T filed a complaint seeking restitution of $40,622.90 from either E.C.I. or the Lewises. The complaint alternatively alleged that either E.C.I. or the Lewises were unjustly enriched by the overdraw in the escrow account, depending upon whether E.C.I. had actually performed the work and supplied the material listed in the fourth application.

E.C.I. cross-claimed against the Lewises, and filed a third-party action against Arlington Bank.

At trial, after Coates testified he knew about the mistakenly issued $42,000 check, CT&T received leave to amend its complaint to add a count against Coates and E.C.I. for tortious misrepresentation. (Coates did not join in E.C.I.’s cross-claim or third-party action, however.)

At the close of the evidence the trial court entered judgment against E.C.I. and Coates in the principle action, and entered judgment against E.C.I. in both its cross-claim and third-party action. Additional evidence is discussed below where pertinent.

Opinion

I

First we consider whether the evidence was sufficient to justify finding Coates and E.C.I. liable in tort for fraud. The defendants argue that CT&T was not justified in relying on the representation Coates made in the third application because it knew or should have known that Coates’ statement was false. Also, the defendants contend that Coates did not act with the requisite culpable mental state when he made this representation.

CT&T’s escrow officer testified she was unaware of the $42,000 overdraft, and that she approved the third disbursement without recouping the overdraw because she relied on the representation made by Coates concerning the amount of money which E.C.I. had already received from CT&T. As the defendants point out, however, CT&T’s auditors became aware of the overdraw within a few days of when the $42,000 check was mistakenly issued, and the defendants conclude CT&T was not deceived because it had imputed knowledge that Coates’ representation was false. Furthermore, the defendants contend that the escrow officer’s reliance on Coates’ representation was not justified because reasonably prudent investigation would have revealed the falsity of the statement.

We start with the fundamental principle that “[t]he recipient of a fraudulent misrepresentation can recover against its maker for pecuniary loss resulting from it if, but only if,

(a) he relies on the misrepresentation in acting or refraining from action, and

(b) his reliance is justifiable.” (Restatement (Second) of Torts sec. 537 (1977); accord, Soules v. General Motors Corp. (1980), 79 Ill. 2d 282, 286, 402 N.E.2d 599.) The first element of this two-part requirement refers to factual causation: If plaintiff knew that defendant’s representation was false, he could not have relied on the misrepresentation, and was not deceived.

To determine whether CT&T had imputed knowledge that the third application contained a misrepresentation, we turn to principles of agency law.

“Corporations are artificial legal entities, and the only knowledge which a corporation can be said to have is the knowledge which is imputed to it under principles of agency law. (3 Fletcher, Cyclopedia of Corporations sec. 787, at 9 (1975).) Thus, knowledge which a corporate agent receives while acting within the scope of his or her agency is imputed to the corporation if the knowledge concerns a matter within the scope of the agent’s authority.” Campen v. Executive House Hotel, Inc. (1982), 105 Ill. App. 3d 576, 585-86, 434 N.E.2d 511.

CT&T therefore had imputed knowledge of what its auditors became aware of. Nevertheless, a tortfeasor does not automatically escape liability for deceit merely because a defrauded corporation had imputed knowledge of the truth. Corporations typically have a large number of employees, and it would not be reasonable to expect each of them to be aware of all the knowledge obtained by every other corporate employee. To blindly preclude recovery for deceit practiced upon a corporate agent merely because a fellow employee knew the truth would make corporations safe marks for fraud. In an action for deceit, therefore, the appropriate focus is on the knowledge of the agent who was deceived, and “[a] person *** who by fraud causes the agent to do what would be a violation of his duty to the principal if the agent knew the facts, is subject to liability to the principal whether the fraud is practiced upon the agent or upon the principal.” Restatement (Second) of Agency sec. 315 (1958).

In the present case, CT&T’s escrow officer testified that she relied on the misrepresentation made by the defendants in their third application. This was sufficient to satisfy the “actual reliance” requirement even though CT&T had imputed knowledge of the truth through other corporate agents.

We next consider whether the escrow officer’s reliance was justifiable.

The attitude of courts toward the question of justifiable reliance has almost completely changed in the last 50 years (Prosser, Torts sec. 108, at 717 (4th ed. 1971)), and Illinois has two opposing lines of authority on this question. As in other jurisdictions, “[ejarlier decisions, under the influence of the prevalent doctrine of ‘caveat emptor’ laid great stress upon the plaintiff’s ‘duty’ to protect himself and distrust his antagonist, and held that he was not entitled to rely even upon positive assertions of fact made by one with whom he was dealing at arm’s length. It was assumed that any one may be expected to overreach another in a bargain if he can, and that only a fool will expect common honesty. Therefore the plaintiff must make a reasonable investigation, and form his own judgment.” Prosser, Torts sec. 108, at 717 (4th ed. 1971).

This older approach is typified by Schmidt v. Landfield (1960), 20 Ill. 2d 89, 169 N.E.2d 229, where the court stated:

“The rule is well established that a party is not justified in relying on representations made when he has ample opportunity to ascertain the truth of the representations before he acts. When he is afforded the opportunity of knowing the truth of the representations he is chargeable with knowledge; and if he does not avail himself of the means of knowledge open to him he cannot be heard to say he was deceived by misrepresentations.” 20 Ill. 2d 89, 94. See also Morel v. Masalski (1928), 333 Ill. 41, 46, 164 N.E. 205; Dillman v. Nadlehojfer (1886), 119 Ill. 567, 577, 7N.E. 88.

The other line of Illinois authority, which Dean Prosser cites as among “[t]he better reasoned cases” (Prosser, Torts sec. 108, at 716 (4th ed. 1971)), rejects the notion that plaintiff’s negligence in failing to discover intentional fraud will bar his action for deceit. This line of authority accordingly holds that “[t]he law does not require that neither shall believe the statements of the other. If one party makes a positive statement of a material fact as true which he knows to be false but intends to be relied upon by the other party as true, and the statement actually is relied and acted upon as true by the other party, the party making the statement cannot charge the other with negligence in believing it.” Eisenberg v. Goldstein (1963), 29 Ill. 2d 617, 621, 195 N.E.2d 184, cert. denied (1964), 377 U.S. 964, 12 L. Ed. 2d 735, 84 S. Ct. 1645.

Despite Schmidt v. Landfield, the rule enunciated two years later by the supreme court in Eisenberg v. Goldstein is not a recent development in Illinois law, and as far back as 1863 the supreme court stated, in Linington v. Strong (1883), 107 Ill. 295, 302, that under “well settled” authority,

“[A] party guilty of fraudulent conduct shall not be allowed to cry ‘negligence,’ as against his own deliberate fraud. Even where parties are dealing at arms’ length, if one of them makes to the other a positive statement, upon which the other acts (with the knowledge of the party making such statement) in confidence of its truth, and such statement is known to be false by the party making it, such conduct is fraudulent, and from it the party guilty of fraud can take no benefit. While the law does require of all parties the exercise of reasonable prudence in the business of life, and does not permit one to rest indifferent in reliance upon the interested representations of an adverse party, still, as before suggested, there is a certain limitation to this rule, and, as between the original parties to the transaction, we consider that where it appears that one party has been guilty of an intentional and deliberate fraud, by which, to his knowledge, the other party has been misled, or influenced in his action, he can not escape the legal consequences of his fraudulent conduct by saying that the fraud might have been discovered had the party whom he deceived exercised reasonable diligence and care.” 107 Ill. 295, 302-03. Accord, Roda v. Berko (1948), 401 Ill. 335, 342, 81 N.E.2d 912; Leonard v. Springer (1902), 197 Ill. 532, 539, 64 N.E. 299; Restatement (Second) of Torts secs. 540, 545A (1977).

This, of course, does not obviate the requirement that plaintiff’s reliance must be justifiable, and there is a recurring tension between the approaches typified by Linington and Schmidt as courts determine, on a case-by-case basis, whether a particular plaintiff was justified in relying on a particular misrepresentation. When a court finds, for example, that reliance was not justifiable, it can cite to Schmidt. (See, e.g., Soules v. General Motors Corp. (1980), 79 Ill. 2d 282, 286, 402 N.E.2d 599.) Conversely, if the court decides that reliance was justifiable, it can rely on Linington. See, e.g., Eisenberg v. Goldstein (1963), 29 Ill. 2d 617, 621, 195 N.E.2d 184, cert. denied (1964), 377 U.S. 964, 12 L. Ed. 2d 735, 84 S. Ct. 1645.

As a practical matter courts apply elements of both lines of authority, and all the relevant circumstances of the particular case must be considered in determining whether plaintiff’s reliance was justifiable. In short, the “reliance must be found to be reasonable under the circumstances. The plaintiff’s conduct must not be so unreasonable, in light of the information open to him, that the law may properly say that this loss is his own responsibility.” (Prosser, Torts sec. 108, at 715 (4th ed. 1971).) It is therefore recognized that “[although the plaintiff’s reliance on the misrepresentation must be justifiable *** this does not mean that his conduct must conform to the standard of the reasonable man. Justification is a matter of the qualities and characteristics of the particular plaintiff, and the circumstances of the particular case, rather than of the application of a community standard of conduct to all cases. Negligent reliance and action sometimes will not be justifiable, and recovery will be barred accordingly; but this is not always the case.” Restatement (Second) of Torts sec. 545A, comment b (1977).

As Dean Prosser explained, “It is only where, under the circumstances, the facts should be apparent to one of [plaintiff’s] knowledge and intelligence from a cursory glance, or he has discovered something which should serve as a warning that he is being deceived, that he is required to make an investigation of his own.” Prosser, Torts sec. 108, at 718 (4th ed. 1971).

Applying these principles to the present case, the initial inquiry is whether the evidence was sufficient to support finding that Coates intended to deceive plaintiff’s escrow officer when he submitted E.C.I.’s third disbursement application. The defendants argue that there was no direct evidence of intent to deceive, and they assert that the misrepresentation was innocently made. However, “Fraud, like all other facts, may be proved by circumstances. We seldom expect to prove it by the admissions of a party and rarely to find direct and positive evidence of the fact. ‘Whatever circumstances, when proven, convince the mind that the fraud charged has been perpetrated, is all that is required.’ ” Schwarz v. Reznick (1913), 257 Ill. 479, 485, 100 N.E. 900, quoting Bryant v. Simoneau (1869), 51 Ill. 324, 327.

Moreover, the trial court’s findings of fact will not be disregarded unless they are against the manifest weight of the evidence. (Schulenburg v. Signatrol, Inc. (1967), 37 Ill. 2d 352, 356, 226 N.E.2d 624.) On appeal the court must take questions of testimonial credibility as resolved in favor of the prevailing party, and must draw from the evidence all reasonable inferences in support of the judgment. (Blue v. St. Clair Country Club (1955), 7 Ill. 2d 359, 363, 131 N.E.2d 31.) Thus, a judgment is not against the manifest weight of the evidence merely because “there is sufficient evidence to support a contrary judgment.” People ex rel. Lauth v. Wilmington Coal Co. (1949), 402 Ill. 161, 167, 83 N.E.2d 741.

This deferential attitude toward the trial court’s findings of fact is based upon the realization that a factfinder which observes witnesses testify has a superior ability to assess their believability than a reviewing court which is limited to reading a lifeless transcript. Schulenburg v. Signatrol, Inc. (1967), 37 Ill. 2d 352, 356, 226 N.E.2d 624.

Taking the evidence in the present case in the light most favorable to the appellee, and giving proper deference to the trial court’s evaluation of the credibility of the witnesses, we conclude it is not manifestly wrong to decide that Coates intended to deceive plaintiff’s escrow officer. It may be that Coates expected CT&T would recoup its overdraw from the Lewises, and that he did not intend to cause pecuniary damage to CT&T, but the relevant question is whether there was intent to induce reliance on the misrepresentation, and it is not necessary to prove intent to cause pecuniary loss in order to recover for deceit. Case v. Ayers (1872), 65 Ill. 142.

The third disbursement application appeared regular on its face, and plaintiff’s escrow officer did not have notice of suspicious circumstances which would have triggered a duty to investigate further. Under the circumstances of this case it was not against the manifest weight of the evidence to find that plaintiff’s employee acted reasonably and was thereby justified in relying upon the misrepresentation.

We briefly note the additional argument that the doctrine of laches precludes plaintiff’s action. Laches is not applicable to actions at law, however, and “[i]t is frequently held that where a legal right is involved, and, upon ground of equity jurisdiction, the courts have been called upon to sustain the legal right, the mere laches of a party, unaccompanied by circumstances amounting to an estoppel, constitutes no defense.” 2 Pomeroy on Equity Jurisprudence sec. 419(e), at 180 (5th ed. 1941). See, e.g., Pyle v. Ferrell (1958), 12 Ill. 2d 547, 552, 147 N.E.2d 341 (“Laches *** operatejs] to bar relief in equity”).

The defendants do not argue that the doctrine of estoppel is applicable to the facts of the present case, and the doctrine of laches is not a defense to plaintiff’s tort action.

II

The second issue is whether a litigant can appeal from an order denying a motion for summary judgment in cases where the movant subsequently lost in a trial on the merits. The trial court denied E.C.I.’s motion for summary judgment, and the corporation argues that this was reversible error. Analytically this is an unusual question because (1) plaintiff presented sufficient evidence to prevail after trial on the merits, but (2) defendant contends the judgment should be reversed because plaintiff failed to show before trial that it would be able to produce the evidence it eventually presented. See Home Indemnity Co. v. Reynolds & Co. (1962), 38 Ill. App. 2d 358, 366, 187 N.E.2d 274.

As the court pointed out in Home Indemnity, if the trial court erroneously denied a motion for summary judgment, it would be unjust to hold that this decision is never reviewable. However, if the party opposing the motion prevailed after trial on the merits, it would also be unjust to set aside the judgment merely because the opponent was able to produce more evidence at trial than it adduced during pretrial proceedings. 38 Ill. App. 2d 358, 366.

Balancing these competing interests, the court concluded that “[t]he greater injustice would be to the party which would be deprived of the jury verdict. Otherwise, a decision based on less evidence would prevail over a verdict reached on more evidence and judgment would be taken away from the victor and given to the loser despite the victor having the greater weight of the evidence. This would defeat the fundamental purpose of judicial inquiry.” (38 Ill. App. 2d 358, 366.) Accordingly the court held that if a motion for summary judgment is improperly denied, the error must be considered harmless in light of the subsequent trial. (38 Ill. App. 2d 358, 367. See also Annot., 15 A.L.R.3d 899, 902 (1967).) We therefore hold that even if the trial court erred when it denied E.C.I.’s motion for summary judgment, the error is harmless in light of the subsequent trial.

Ill

Next, the defendants argue it was improper to award plaintiff prejudgment interest under section 2 of the Interest Act. (Ill. Rev. Stat. 1981, ch. 17, par. 6402.) The pertinent portion of section 2 authorizes prejudgment interest when there has been “an unreasonable and vexatious delay of payment” by a debtor, and this portion of section 2 has "been interpreted as providing that “where property has been wrongfully taken, or converted into money, and an action of trespass or trover may be maintained, interest may properly be recovered.” (Illinois Central R.R. Co. v. Cobb, Blaisdell & Co. (1874), 72 Ill. 148, 153. Accord, Geohegan v. Union Elevated R.R. Co. (1915), 266 Ill. 482, 492-93, 107 N.E. 786.) The supreme court explained that under this portion of section 2, “[tjhere can be no difference between the delay of payment of a moneyed demand and one where property has been wrongfully taken, or taken and converted into money or its equivalent — the two rest upon the same principle.” 72 Ill. 148, 153. Compare Toledo, Peoria & Warsaw Ry. Co. v. Johnston (1874), 74 Ill. 83 (holding that interest could not be recovered under section 2 where plaintiff was deprived of his property by misconduct which was merely negligent).

Employing the rationale of Cobb in the present case, there can be no difference, under section 2 of the Interest Act, between a situation in which repayment of a contract debt has been unreasonably and vexatiously delayed and an action to recover funds which were obtained by tortious misrepresentation — “the two rest upon the same principle” (72 Ill. 148, 153.) Thus, plaintiff was entitled to interest under section 2 of the Interest Act.

IV

The defendants further argue that the trial court abused its discretion by (a) denying their motion to dismiss the complaint as a sanction for failure to comply with supreme court discovery rules, and (b) permitting plaintiff to amend its complaint during trial.

We disagree.

Just before trial commended, E.C.I. moved to dismiss the complaint on the grounds that plaintiff failed to respond to its interrogatories and requests for discovery of documents. (See 87 Ill. 2d Rules 213, 214.) Plaintiff insisted, however, that it had complied with all requests for discovery, and the trial court denied the motion as untimely. We find that the defendants have failed to establish that the trial court abused its discretion.

An appellant has the burden of establishing that the trial court erred (Flynn v. Vancil (1968), 41 Ill. 2d 236, 241, 242 N.E.2d 237), and it is presumed that the trial court has not abused its discretion (Anthony v. Gilbrath (1947), 396 Ill. 125, 127, 71 N.E.2d 84). Moreover, “Upon appeal, every reasonable intendment not negatived by the record will be indulged in support of the judgment.” Union Drainage District No. 5 v. Hamilton (1945), 390 Ill. 487, 493, 61 N.E.2d 343.

We cannot conclude that the trial court abused its discretion in the present case, because E.C.I. never established that there was a failure to comply with its discovery requests. The record contains nothing more than an unsupported and unverified allegation of noncompliance — an allegation which plaintiff denied. In the absence of countervailing evidence, it must be presumed that plaintiff complied with E.C.I.’s discovery requests.

Additionally, the defendants argue the trial court abused its discretion when it permitted plaintiff to amend its complaint during trial by adding a count for deceit. This was an abuse of discretion, according to the defendants, because they were not given an opportunity to file a jury demand, and they were not given sufficient time to prepare a defense to the amended complaint.

We find no merit in these arguments. First of all, the trial court never denied the defendants an opportunity to file a jury demand. Instead, the defendants never indicated a desire to have a jury decide the tort action. Their appellate argument on this point appears to be nothing more than a post-trial afterthought. Furthermore, the complaint was amended on March 27, 1981, and the trial did not resume until January 19, 1982 — almost 10 months later. However, the defendants fail to explain why a 10-month continuance was not an adequate amount of time in which to prepare a defense. Nor do they explain how an additional continuance would have aided them.

The trial court has broad discretion in ruling on motions to amend pleadings during trial, and its ruling will not be reversed unless there has been a manifest abuse of discretion. (Mundt v. Ragnar Benson, Inc. (1975), 61 Ill. 2d 151, 161, 335 N.E.2d 10.) Moreover, the trial court’s ruling on a motion to amend pleadings during trial does not constitute an abuse of discretion if it furthers the ends of justice. Deasey v. City of Chicago (1952), 412 Ill. 151, 157, 105 N.E.2d 727.

Again we find that the defendants have failed to rebut the presumption that the trial court did not abuse its discretion. To the contrary, it is apparent that allowing the amendment furthered the goal of justice by permitting a defrauded plaintiff to recover damages.

We briefly note that in their argument concerning the propriety of granting leave to amend, the defendants assert that plaintiff’s action at law for deceit should have been dismissed “for want of equity”; apparently because this case was tried in the chancery division of the circuit court. However, when (as in this case) there has been no demand for jury trial, Supreme Court Rule 232 authorizes the court to try an equitable action together with an action at law. (See 87 Ill. 2d R. 232.) We consequently find no merit in the argument that the action at law for deceit should have been dismissed “for want of equity.”

V

E.C.I. additionally asserts the trial court erred by entering judgment against the firm in its third-party action against Arlington Bank. According to E.C.I., it is entitled to recovery against Arlington Bank for breach of the loan agreement which the bank entered into with the Lewises. The underlying premise in this argument is that E.C.I. was an intended, direct beneficiary of the loan agreement.

“The rule is settled in this State that if a contract be entered into for [the] direct benefit of a third person, not a party thereto, such a third person may sue for a breach thereof. The test is whether the benefit to the third person is direct to him or is but an incidental benefit arising from the contract. If direct, he may sue on the contract; if incidental, he has no right of recovery thereon.” Cherry v. Aetna Casualty & Surety Co. (1939), 372 Ill. 534, 542, 25 N.E.2d 11. Accord, People ex rel. Resnik v. Curtis & Davis, Architects & Planners, Inc. (1980), 78 Ill. 2d 381, 384, 400 N.E.2d 918.

We have carefully examined the loan agreement between Arlington Bank and the Lewises, and we find nothing to indicate that E.C.I. was anything more than an incidental beneficiary of this contract. More importantly, E.C.I. has not referred us to any evidence in the record which would establish that Arlington Bank breached its agreement with the Lewises. In short, we find no merit in E.C.I.'s arguments on this issue, and the trial court properly entered judgment in favor of the bank in the third-party action.

VI

The next issue is whether the trial court abused its discretion by permitting an architect to give his opinion on the value of construction work which he had been hired to supervise.

“A witness is competent to testify as to the value of real property if it appears that he has some peculiar means of forming an intelligent and correct judgment as to the value of the land in question beyond what is presumed to be possessed by men generally.” Department of Public Works & Buildings v. Oberlaender (1969), 42 Ill. 2d 410, 414, 247 N.E.2d 888.
“[T]he value of land is a question of fact to be proved the same as any other fact, and any person acquainted with it may testify as to its value. It is not necessary that a witness be an expert, or be engaged in the business of buying and selling the kind of property under investigation.” Department of Public Works & Buildings v. Bohne (1953), 415 Ill. 253, 264, 113 N.E.2d 319.

The witness in question, Warren Kostak, was an architect hired by the Lewises to supervise construction of their building and certify whether E.C.I. actually performed the work for which it sought payment. Kostak therefore had substantial personal knowledge concerning the value of the improvements made to the property. This knowledge, plus his training as an architect, gave him a sufficient basis for “forming an intelligent and correct judgment as to the value of the land in question beyond what is presumed to be possessed by men generally.” (Department of Public Works & Buildings v. Oberlaender (1969), 42 Ill. 24 410, 414.) We therefore find that it was not an abuse of discretion to permit Kostak to give an opinion on the value of the work performed by E.C.I.

VII

Last, we consider whether the trial court erred by entering judgment against E.C.I. in its cross-claim against the Lewises.

As noted above in section I, it was not manifestly erroneous to find that CT&T suffered pecuniary loss because of an intentional misrepresentation concerning the amount of funds it had disbursed from its escrow account. Nevertheless, this does not mean that E.C.I. did not perform all the work which it claimed, nor that it was not entitled to payment for this work under its construction contract with the Lewises. The Lewises (through the Arlington Bank) apparently paid $127,866.10 for E.C.I.’s work. Therefore, if as E.C.I. claims, it actually performed work and supplied material worth $69,272 before the project was cancelled, E.C.I. must either be permitted to keep the balance of the mistaken payment, or it must be permitted recovery on the contract. To hold otherwise would unjustly enrich the Lewises.

The Lewises have not filed an appellees’ brief, but we have carefully scrutinized the pertinent evidence. The record shows that the architect hired by the Lewises certified that, as of January 24, 1978, E.C.I. had performed $136,478.77 worth of construction work. E.C.I. continued working on the project until it was cancelled in mid-February, and the contractor then submitted a final disbursement application, along with lien waivers from its subcontractors.

These lien waivers established that E.C.I. completed $41,405.90 worth of work on the project between mid-January (when the third application was filed) and mid-February. Taking the value of the work established by this documentary evidence, and adding the value of the work certified by the supervising architect as completed as of the date of the third application, E.C.I. concludes that it proved it performed a total of $169,272 worth of work on the project.

Furthermore, Warren Kostak, the architect hired by the Lewises testified that the work listed in E.C.I.’s fourth application was in fact completed, and that E.C.I. charged reasonable amounts for this work in its final application.

We find the overwhelming, manifest weight of the evidence established that E.C.I. performed approximately $169,272 worth of work on the project before it was cancelled, but that the firm only received about $127,866.10 from the Lewises. Moreover, the Lewises are not entitled to have CT&T’s mistaken payment applied toward their contract liability, and they are therefore liable to E.C.I. on the construction contract. We accordingly reverse the portion of the trial court’s order which entered judgment against E.C.I. on its cross-claim against the Lewises. On remand the trial court must determine the amount of E.C.I.’s contract damages.

Based on the reasons given above, the judgment of the circuit court is affirmed in part, reversed in part, and remanded with directions.

Affirmed in part, reversed in part, and remanded with directions.

WILSON, P.J., and SULLIVAN, J., concur.