author: JUSTICE STOUDER

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. RUBEN VARELA, Defendant-Appellant.
    Third District
    No. 3—89—0275
    Opinion filed February 14, 1990.

      Mark D. Fisher, of State Appellate Defender’s Office, of Ottawa, for appellant.
    Tony L. Brasel, Special Prosecutor, of Watseka (Judith Z. Kelly, of State’s Attorneys Appellate Prosecutor’s Office, of counsel), for the People.
   JUSTICE STOUDER

delivered the opinion of the court:

Following a jury trial, the defendant, Ruben Varela, was convicted of two counts of aggravated battery and sentenced to concurrent terms of fours years’ imprisonment. The court also imposed a $25 fine. The defendant appeals.

The record reveals that on August 10, 1988, at about 8 p.m., Michael Coleman, the chief of police for the Village of Onarga, Illinois, was leaving Durham Park in Onarga to proceed home to change into his uniform for the late-night shift. As Coleman got into his truck, he noticed the defendant’s car rapidly passing him by and throwing gravel into the air. Coleman, believing the defendant to be driving recklessly, stopped the defendant’s car and asked to see the defendant’s driver’s license. Coleman, off duty at the time, was wearing shorts and a T-shirt, was without his badge or gun, and was driving his truck.

The defendant told Coleman he had no driver’s license. Coleman then retrieved a whiskey bottle from the defendant’s car and told the defendant he was under arrest. The defendant told Coleman he would not go with him and a scuffle ensued. The defendant’s brother Joel, seeing his brother and Coleman struggling on the ground, grabbed Coleman from behind. During the struggle, the bottle broke. The imbroglio continued. Joel picked up the broken bottle and swung the bottle at Coleman. Joel plunged the jagged edge of the bottle into Coleman’s chest and slashed Coleman’s arms. Coleman, bleeding from his arm and chest, left the scene.

Coleman was taken by ambulance to a hospital and underwent surgery. The defendant and his brother were arrested the following morning in Durham Park after spending the evening in a nearby cornfield.

After waiving his Miranda rights, the defendant acknowledged the fight with Coleman and admitted that he and his brother Joel were drinking beer the night of the fight. The defendant also stated that he knew Coleman was a police officer prior to the scuffle. The defendant’s brother Joel also made a statement. Joel stated that he was watching a basketball game in Durham Park when he heard a commotion in the parking lot and saw Coleman on top of the defendant. Joel stated that he subsequently kicked Coleman and hit him with a bottle in order to protect the defendant. At trial, Coleman stated the entire incident lasted two or three minutes.

At the close of the prosecution’s case, the court granted the defendant’s motion for a directed verdict on the attempted murder charge. Also, at the jury instructions conference, the court granted the defendant’s motion for a directed verdict as to the armed violence charge. The jury found the defendant guilty of two counts of aggravated battery. Ill. Rev. Stat. 1987, ch. 38, pars. 12 — 4(a), (b)(6).

At the sentencing hearing, the defendant’s attorney requested probation for the defendant. He noted that, other than a few traffic offenses, this was the defendant’s first offense. The trial court, however, noted that this was an “alcohol case” and that the incident would not have happened except for the presence of alcohol, and that the defendant was the one who “put in motion these events which ultimately caused harm to Officer Coleman and which created his brother’s problem.” The court sentenced the defendant to concurrent terms of four years’ imprisonment and imposed a $25 fine.

The defendant on appeal raises two issues: (1) whether one of the defendant’s two aggravated battery convictions should be vacated because both convictions were based on the same conduct; and (2) whether the trial court considered an improper factor in sentencing the defendant when he considered the defendant’s responsibility for his brother’s conduct.

The defendant first contends one of his aggravated battery convictions should be reversed because both convictions were based on a single act. The State counters, arguing that both convictions should be affirmed since each was caused by a separate physical act.

The defendant was convicted of aggravated battery on two separate grounds: battery against a police officer (Ill. Rev. Stat. 1987, ch. 38, par. 12 — 4(b)(6)), and battery causing great bodily harm (III. Rev. Stat. 1987, ch. 38, par. 12 — 4(a)). The defendant contends these convictions stem from the single act of fighting with Coleman. The defendant admits in the reply brief that he failed to raise the issue at trial and that, therefore, the issue is waived. However, we choose to address this issue as plain error. 107 Ill. 2d R. 615(a).

As was first established in People v. King (1977), 66 Ill. 2d 551, 566, 363 N.E.2d 838, 844-45:

“Prejudice results to the defendant only in those instances where more than one offense is carved from the same physical act. Prejudice, with regard to multiple acts, exists only when the defendant is convicted of more than one offense, some of which are, by definition, lesser included offenses. Multiple convictions and concurrent sentences should be permitted in all other cases where a defendant has committed several acts, despite the interrelationship of those acts. 'Act,' when used in this sense, is intended to mean any overt or outward manifestation which will support a different offense. We hold, therefore, that when more than one offense arises from a series of incidental or closely related acts and the offenses are not, by definition, lesser included offenses, convictions with concurrent sentences can be entered.”

Prior to the decision in King, Illinois courts followed what is referred to as the “independent motivation” test with respect to multiple convictions and concurrent sentences. The history of how Illinois courts addressed this issue before and after King was thoroughly articulated by this court in People v. Ellis (1986), 143 Ill. App. 3d 892, 493 N.E.2d 739.

It is well settled that multiple convictions based upon the same physical act or acts cannot stand. (People v. King (1977), 66 Ill. 2d 551, 363 N.E.2d 838.) Thus, we believe one of defendant’s convictions must be vacated.

In People v. Dixon (1982), 91 Ill. 2d 346, 438 N.E.2d 180, the court held that separate blows, even though closely related, were not one physical act and could support separate convictions and concurrent sentences for both aggravated battery and mob action. Dixon seems to support the State’s argument that defendant’s dual aggravated battery convictions are sustainable in the instant case. We disagree. One factor which supports our conclusion is that the State made no attempt to differentiate between conduct supporting the first aggravated battery charge from that supporting the second charge.

Count III of the information charged the defendant with committing aggravated battery for causing great bodily harm to Officer Michael Coleman. Count IV charged the defendant with committing a battery to Officer Michael Coleman knowing Officer Michael Coleman to be a peace officer engaged in the execution of his official duties. More importantly, both counts of the information referred to the defendant’s conduct, along with his brother’s conduct, as “striking Officer Michael Coleman on or about his head or body with is [sic] fist, kicking at Officer Michael Coleman, and stabbing Officer Michael Coleman in the chest and both arms.” Prosecutorial intent, as reflected in the language of the charging instrument, is a factor to be considered in determining whether a defendant’s conduct constituted a single act or several separate acts. (People v. Horne (1984), 129 Ill. App. 3d 1066, 473 N.E.2d 584.) Along with prosecutorial intent, courts are to consider other factors when determining whether a defendant’s conduct constituted a single act or several separate acts; among these are: (1) the time interval between successive parts of defendant’s conduct; (2) the existence of an intervening act or event; and (3) whether the conduct occurred at the same location. (People v. Horne (1984), 129 Ill. App. 3d 1066, 473 N.E.2d 584.) Applying these factors to the instant case, we find the defendant’s conduct constituted a single act.

In the case sub judice, like Ellis, “the method of charging the defendant is really nothing more than an insurance policy for the prosecution.” What is obvious is that the prosecution wanted to convict the defendant of aggravated battery. The charging instrument gave the prosecution two shots at the target. If proof were made that the battery occurred with the defendant knowing Officer Michael Coleman to be a peace officer engaged in the execution of his official duties, then the battery became aggravated battery whether or not it caused great bodily harm. On the other hand, if proof were made that the battery caused great bodily harm, then the battery became aggravated battery whether or not the defendant knew the officer to be a peace officer.

When the prosecution employs this type of strategy, there is a strong indication that the defendant can only be guilty of one offense. We cannot assume the jury would have determined the defendant knew Coleman to be a peace officer at the time of the incident. The record reveals that without the defendant’s statement indicating that he knew Coleman to be a peace officer, the evidence would show a man wearing a T-shirt and shorts, without a police officer’s badge, who ordered the defendant out of his car and told the defendant he was under arrest. A reasonable jury may have determined the defendant did not know Coleman to be a peace officer at the time of the incident. More importantly, the prosecutor did not know whether he could prove the defendant knew Coleman to be a peace officer at the time of this incident, and in order to “cover his tracks,” charged the defendant with two counts of battery.

Moreover, we do not believe the defendant’s conduct can be broken into separate acts. The foregoing factors favor finding a single physical act: according to Coleman, the entire incident lasted two to three minutes; there was no intervening event; the conduct took place in the parking lot; both counts referred to the same acts; and the language in the charging instruments was virtually identical. The plain and simple fact of this case is that the defendant and his brother beat up an off-duty police officer. The fact that this act occurred against a police officer does not belie the fact that a single offense of aggravated battery was committed. This case calls to mind Justice Golden-hersh’s comment in People v. Manning (1978), 71 Ill. 2d 132, 135, 374 N.E.2d 200, 201-02, “If a person steals four horses from the barn of another, all being of different color, it would not be competent to charge the thief with four different larcenies ***.”

Under circumstances analogous to the instant case, one physical act was found when a defendant struck a victim three times with his fists, then kicked him twice. (People v. Hawk (1980), 80 Ill. App. 3d 827, 400 N.E.2d 499.) One act was also found when a defendant struck a victim first on the back of her head and neck, then, after she turned around, hit her in the face and broke her nose. (People v. Ellis (1986), 143 Ill. App. 3d 892, 493 N.E.2d 739.) In both cases, the court determined that when a defendant’s conduct does not give rise to separate acts, multiple convictions with concurrent sentences result in prejudice. (People v. King (1977), 66 Ill. 2d 551, 363 N.E.2d 838.) As we hold the instant defendant to have been so prejudiced, we vacate the defendant’s conviction for battery based on committing a battery causing great bodily harm (count III) and affirm defendant’s conviction for aggravated battery knowing Officer Michael Coleman to be a peace officer engaged in the execution of his official duties (count IV).

The defendant’s next assignment of error is that his sentence should be vacated and this cause remanded for resentencing because the trial court considered an improper factor in imposing sentence. Although the defendant also waived this issue on appeal, we will address it as plain error. 107 Ill. 2d R. 615(a).

The trial court sentenced the defendant to two concurrent four-year terms of imprisonment for the two aggravated battery convictions. The imposed sentences equal twice the minimum sentence for a Class 3 felony.

The trial court agreed with the defendant that this was a case for probation, but noted at the sentencing hearing that it was defendant who “put in motion the series of events which eventually got his brother Joel in trouble.” The record reveals the defendant, a 10-year resident of Onarga, has five traffic offenses in his background. The trial court aptly noted that the defendant had led a “substantially law abiding life.”

We cannot determine from the record whether the defendant’s two convictions for aggravated battery, one of which we hereby vacate, influenced the trial court’s sentencing decision. Moreover, we find the trial court’s consideration of the conduct of the defendant’s brother improper.

In addition, we note the record contains a letter from a citizen of Onarga, a letter from the village board of Onarga, and a probation officer’s report all replete with inflammatory comments. The gravamen of the letters and report is that the citizens of Onarga, as spoken presumably through the words of the village board, request that the defendant’s sentence include a provision expelling defendant and his brother from Onarga, and that, according to the probation officer, defendant and his brother are of a different culture unassimilable with the majority of the citizens of Onarga.

The record indicates the trial court did address the defendant’s concern with these letters and noted that he “wasn’t in the expulsion business today.” Under these inflamed circumstances, however, the trial court sentenced the defendant to twice the minimum sentence for a Class 3 felony offense. Moreover, we do not know whether the inflammatory letters and report contained within the presentencing report prejudicially impacted the trial court’s decision.

A proper sentence must be based upon the particular circumstances of each case. (People v. Perruquet (1977), 68 Ill. 2d 149, 368 N.E.2d 882.) Along with the defendant’s rehabilitative potential, the trial court must consider the nature of the crime, the protection of the public, deterrence, and punishment. (People v. Darnell (1981), 94 Ill. App. 3d 830, 419 N.E.2d 384.) Where, as here, the record shows the trial court considered improper evidence in imposing a sentence, the sentence must be vacated and the defendant must be granted a new sentencing hearing. (People v. McCambry (1979), 76 Ill. App. 3d 314, 395 N.E.2d 129.) Here, the defendant, as the trial court pointed out, is not likely to commit another crime and is not a danger to society. The sentences were imposed in an inflamed atmosphere after the trial court improperly considered the actions of defendant’s brother. Accordingly, we vacate defendant’s sentence and remand this proceeding for a rehearing to determine an appropriate sentence.

Accordingly, for the reasons given, the judgment with respect to count IV is affirmed, and the judgment and sentence with respect to count III are vacated. With respect to the sentence entered in count IV, we vacate the sentence imposed and remand the cause for re-sentencing.

Affirmed in part and reversed in part; cause remanded with instructions.

HEIPLE, P.J., and SCOTT, J., concur.


source: Caselaw Access Project

license: Public Domain

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. JOEL VARELA, Defendant-Appellant.
    Third District
    No. 3—89—0269
    Opinion filed February 14, 1990.

      Mark D. Fisher, of State Appellate Defender’s Office, of Ottawa, for appellant.
    Tony L. Brasel, Special Prosecutor, of Watseka (Judith Z. Kelly, of State’s Attorneys Appellate Prosecutor’s Office, of counsel), for the People.
   JUSTICE STOUDER

delivered the opinion of the court:

Following a jury trial, the defendant, Joel Varela, was convicted of two counts of aggravated battery and one count of armed violence. The jury acquitted the defendant of an attempted murder charge. At the sentencing hearing, the trial court vacated one of the defendant’s aggravated battery convictions, finding it formed the predicate felony for the armed violence conviction. The trial court sentenced the defendant to concurrent terms of imprisonment of nine years for armed violence and five years for aggravated battery. The court also imposed a $25 fine. The defendant appeals.

This case involves a fight between two brothers and an off-duty Onarga police officer. The relevant facts of this fight can be found in the companion opinion, People v. Varela (1990), 194 Ill. App. 3d 357. The defendant raises several issues on appeal.

The defendant first contends that because he came into the fight unarmed he cannot be convicted of armed violence. A person commits armed violence, when, while armed with a dangerous weapon, he commits a felony defined by Illinois law. (Ill. Rev. Stat. 1987, ch. 38, par. 33A— 2.) A person is considered armed with a dangerous weapon for purposes of the armed violence statute when he carries on or about his person or is otherwise armed with a category I or category II weapon. (Ill. Rev. Stat. 1987, ch. 38, par. 33A— 1(a).) As was stated in People v. Eure (1986), 140 Ill. App. 3d 387, 393-94, 488 N.E.2d 1267, 1272:

“The armed-violence statute must therefore be read as a strong statutory deterrent to carrying a dangerous or deadly weapon, the sanctions of which statute are activated when coupled with the commission of a felony.
The armed-violence statute, however, does not seek merely to penalize the commission of the underlying felony, although that certainly is an inevitable adjunct of an armed-violence conviction. Rather, it seeks to deter the use of weapons in the commission of the predicate felony. *** In short, the gravamen of the armed-violence statute focuses on the offender, and not on the results of the offense.”

Contrary to the defendant’s argument, there is no requirement the defendant be armed with a dangerous weapon before or at the inception of the commission of the felony; the only requirement is that the defendant be armed with the weapon while committing a felony. (See People v. Chrisos (1986), 142 Ill. App. 3d 747, 492 N.E.2d 216.) The crucial point in time is not when an accused arms himself; it is when the underlying offense is committed. People v. Eure (1986), 140 Ill. App. 3d 387, 488 N.E.2d 1267.

The record in the instant case reveals that at the fight’s inception the defendant was unarmed. After kicking Coleman in the head, however, the defendant grabbed the bottle and swung it at Coleman, inflicting serious wounds. We believe, after reviewing the record, the jury had ample evidence from which to conclude that the defendant’s arming himself with the bottle, a dangerous weapon as used, was premeditated.

We also find the defendant’s reliance on People v. Alejos (1983), 97 Ill. 2d 502, 455 N.E.2d 48, inapposite. Alejos stands for the proposition that voluntary manslaughter, as distinguished from armed violence by the complete absence of any premeditation or criminal intent, cannot be the predicate felony for armed violence. (People v. Alejos (1983), 97 Ill. 2d 502, 455 N.E.2d 216.) In contrast, aggravated battery requires specific intent and lacks mitigating factors. (People v. Eure (1986), 140 Ill. App. 3d 387, 488 N.E.2d 1267.) Under the circumstances presented in the instant case, we believe Alejos is of little help to the defendant.

The defendant contends, as an ancillary argument, that the bottle, intact, is not a dangerous weapon under the armed violence statute. We note that in two recent cases, the appellate court has determined that a three-inch piece of glass was a per se deadly weapon (People v. Hall (1983), 117 Ill. App. 3d 788, 453 N.E.2d 1327), and that a two-inch piece of glass was a deadly weapon if it is used in a manner dangerous to the physical well-being of the victim (People v. Chrisos (1986), 142 Ill. App. 3d 747, 492 N.E.2d 216). In the instant case, the weapon was a whiskey bottle. The record indicates the bottle was used in a manner dangerous to Coleman’s physical well-being. Under the circumstances presented, there is no question the bottle, intact or broken, constituted a dangerous weapon under the armed violence statute. Accordingly, we believe a reasonable jury could have found the defendant guilty of armed violence.

The defendant next contends the trial court should have granted him a mistrial after Coleman testified at trial that the defendant stated “kill mother fucker” while brandishing the broken bottle. The defendant argues a mistrial should have been granted here because the statement had not been disclosed to the defense prior to trial and was so prejudicial that a mistrial should have been granted notwithstanding the trial court’s curative measures.

The trial court agreed the statement should have been disclosed, noting “it’s a serious omission and affects the strategy of the case.” Defense counsel, insisting that the prosecution intentionally withheld the evidence, sought a mistrial. The trial court, however, allowed defense counsel to question Coleman outside the presence of the jury. Following the interrogation, the trial court concluded there was no willful intent on the prosecution’s part to evade a discovery rule, and it ordered the statement stricken. The trial court then instructed the jury not to consider the statement in determining the outcome of the case.

The prosecution is obligated to disclose to the defense any statements made by the accused and is under a continuing duty to promptly disclose relevant information throughout trial. (See 107 Ill. 2d Rules 412(a)(ii), 415(b).) When presented with an undisclosed statement of the defendant at trial, a trial court may, under Supreme Court Rule 415, order disclosure of the material, grant a continuance, exclude the evidence, or enter such order as seems just under the circumstances. (107 Ill. 2d R. 415(g)(i); People v. Morgan (1986), 112 Ill. 2d 111, 492 N.E.2d 1303.) In Morgan, a prosecution witness testified to an inculpatory statement of the defendant which had not been previously disclosed during discovery. The trial court instructed the jury to disregard the testimony, granted the defendant’s motion to strike, and commented that the statement should have been disclosed during discovery. The supreme court, in finding that the trial court did not abuse its discretion, noted that a trial court can usually correct the error by sustaining an objection and instructing the jury to disregard the improper remark. People v. Morgan (1986), 112 Ill. 2d 111, 492 N.E.2d 1303.

In the instant case, not only did the trial court adhere to the dictates of Morgan, the statement did not have a prejudicial impact. The defendant was charged with, inter alia, attempted murder. The undisclosed statement could have influenced the jury’s consideration of that charge. The jury, however, disregarded the improper statement and acquitted the defendant of the attempted murder charge. Accordingly, we believe the trial court’s actions with respect to the undisclosed statement do not amount to error.

The defendant’s next assignment of error is the trial court committed reversible error by refusing to tender reckless conduct instructions. The record reveals that during the jury instruction conference, defense counsel tendered reckless conduct instructions. The court refused them. The operative question is, therefore, whether there was any evidence presented that the defendant was acting recklessly.

The record indicates that the defendant acted intentionally and knowingly throughout this incident. The defendant stated that he punched and kicked Coleman knowing Coleman to be a police officer. Defendant then saw a bottle on the ground, picked it up, and slashed Coleman’s arm and stabbed Coleman in the chest. After reviewing the record, we believe the defendant did not act recklessly during this incident.

Moreover, there must be evidence to support a jury instruction. (People v. Cox (1930), 340 Ill. 111, 172 N.E.2d 64.) A defendant is not entitled to a charge on a lesser included offense simply in the hope that the jury will exercise compassion and convict him on the lesser offense. People v. Tiller (1978), 61 Ill. App. 3d 785, 378 N.E.2d 282.

While some cases hold that a defendant is entitled to the benefit of any defense shown by the entire evidence, even if the facts on which such defense is based are inconsistent with the defendant’s own testimony (People v. Izzo (1958), 14 Ill. 2d 203, 151 N.E.2d 329), and that very slight evidence upon a given theory of a case will justify the giving of an instruction (People v. Kalpak (1957), 10 Ill. 2d 411, 140 N.E.2d 726), the evidence presented in this case is insufficient to meet that minimal level. To hold otherwise would permit a defendant to demand unlimited instructions, which are wholly unrelated to the case but are based upon the merest factual reference or witness’ comment. Accordingly, we believe the trial court’s refusal to tender a reckless conduct instruction did not amount to error.

The defendant next cites as error the prosecutor’s closing argument. During the course of the argument, the prosecutor urged the jury to “not believe or give any scintilla of credibility to defendant’s story.” The defense counsel did not object to the statement. However, defense counsel asks that this court review the issue as a matter of plain error. (107 III. 2d R. 615(a).) Having reviewed the entire transcript, notwithstanding defendant’s waiver of the issue, we do not find that the prosecutor’s comments amount to error.

It is now well settled that alleged errors at trial must be brought to the attention of the trial judge by timely objection at trial and in a written post-trial motion, or the errors are deemed waived. (People v. Enoch (1988), 122 Ill. 2d 176, 522 N.E.2d 1124.) The defendant’s failure to object to the allegedly inflammatory closing argument operates as a waiver of the issue for purposes of this appeal.

The defendant finally contends that because the convictions for armed violence and two counts of aggravated battery all arose from a single incident, both counts of aggravated battery must be vacated as predicate felonies to the armed violence conviction. The State counters, arguing that the trial court properly vacated the defendant’s conviction for aggravated battery causing great bodily harm (count III), as the predicate felony for the armed violence conviction, and properly convicted and sentenced defendant on the remaining count of aggravated battery.

The State further argues the defendant waived this issue and that plain error should not be applied. This court, however, chooses to address this issue as plain error. (107 Ill. 2d R. 615(a).) After reviewing the record, we believe, like Ruben’s case, the defendant’s conduct constitutes one act as defined by People v. King (1977), 66 Ill. 2d 551, 363 N.E.2d 838. Thus, because this incident constitutes one act, the defendant could only have been convicted of one aggravated battery. As such, we conclude the one remaining aggravated battery conviction constitutes the predicate felony for armed violence.

Therefore, in order to prevent prejudice to the defendant, we hereby vacate the defendant’s conviction and sentence for aggravated battery and affirm his conviction for armed violence. The defendant’s sentence for armed violence is vacated and remanded for a resenten-cing hearing consistent with the reasons set forth in the companion case.

Affirmed in part and reversed in part; cause remanded with instructions.

HEIPLE, P.J., and SCOTT, J., concur.


author: PRESIDING JUSTICE UNVERZAGT

text:
    STATE FARM FIRE AND CASUALTY COMPANY, Plaintiff-Appellee, v. PEGGY KLECKNER, as Special Adm’r of the Estate of Alex Kleckner, Deceased, and as Mother and Next Friend of Suzanne Kleckner, a Minor, Defendant-Appellant (Melvin Harms et al., Defendants).
    Second District
    No. 2—89—0579
    Opinion filed February 20, 1990.

      Robert J. Cooney, Jr., and James E. Ocasek, both of Cooney & Conway, of Chicago, for appellant.
    Victor J. Piekarski, of Querry & Harrow, Ltd., of Chicago, for appellee.
   PRESIDING JUSTICE UNVERZAGT

delivered the opinion of the court:

Defendant, Peggy Kleckner, appeals from an order in this declaratory judgment action in which the trial court found that none of four insurance policies issued by plaintiff, State Farm Fire and Casualty Company (State Farm), to Melvin and Evelyn Harms extended coverage for defendant’s losses. Defendant contends that each policy applies because the policies’ provisions do not limit their coverage. Alternatively, defendant asserts that State Farm waived its rights to deny coverage. We affirm.

The record on appeal reveals the following facts. On September 3, 1984, defendant’s eight-year-old son, Alex Kleckner, and five-year-old daughter, Suzanne Kleckner, were riding a mini dirt bike at the Ma-plehurst Cycle Park located on Wilmot Road, Spring Grove, Illinois. Alex was piloting the vehicle when he apparently left the “bunny” track and accidentally entered the “expert” track going the wrong way. He and his sister were hit by another motorcyclist. Alex died as a result of the collision, and Suzanne sustained serious injuries. Defendant, as special administrator for Alex’s estate, and as mother and next friend of Suzanne, commenced a personal injury action against Maplehurst Cycle Park; Harms Realty Investment Corporation, which leased the property on which the park was located; Robert Banasack, the president and a shareholder in Harms Realty; and Melvin and Evelyn Harms, who owned the property. Defendant’s second amended complaint, filed March 6, 1987, alleged that Maplehurst and Banasack operated and managed the motorcycle park which was known as Turtle Track Race Course; defendant further alleged that the Harmses and Harms Realty Investment Corporation owned and controlled the premises and motorcycle track on Wilmot Road. Defendant’s personal injury complaint alleged negligence on the part of all the named defendants and sought damages for Alex’s death and Suzanne’s injuries.

State Farm, which had issued several insurance policies to Melvin and Evelyn Harms, filed a complaint for declaratory judgment on August 17, 1988, in which it requested a court order declaring that defendant was not entitled to the benefit, protection or coverage of any of the Harmses’ policies. These policies include: (1) a homeowners policy which specified the insured premises as 327 Burnett, Lake Villa, Illinois (the Harmses’ residence); (2) a rental dwelling policy which specified the “location of premises” as 41061 North Second Street, Antioch, Illinois; (3) a business liability policy which designated as the covered premises the site of Melvin Harms’ former refrigeration sales and service business at 100-102 South Milwaukee Avenue, Lake Villa; and (4) an “umbrella” personal liability policy providing excess liability coverage for losses covered by the underlying policies listed on its declaration page.

After defendant and other named parties had filed answers, State Farm moved for judgment on the pleadings pursuant to section 2— 615(e) of the Code of Civil Procedure (Code) (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 615(e)) with respect to the homeowners and rental dwelling policies. Shortly thereafter, State Farm requested summary judgment pursuant to section 2 — 1005 of the Code (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 1005) with respect to the business liability and umbrella policies. In a written memorandum order, the trial court analyzed definitional and exclusion language contained in each of the policies and concluded that none extended coverage to the losses sustained by defendant’s decedent and minor child. Thus, the trial court granted summary judgment on counts I and II (the business liability and umbrella policies counts) and judgment on the pleadings on counts III and IV (the homeowners and rental dwelling policies) for State Farm. The trial court concluded that State Farm was not obligated to defend or indemnify Melvin and Evelyn Harms in defendant’s personal injury action against them. Defendant’s timely appeal ensued. The sole issue presented on appeal is whether any or all of the four insurance policies furnished by State Farm to Melvin and Evelyn Harms provide coverage for the losses sustained by defendant’s decedent and minor child.

At the outset, we note that a motion for judgment on the pleadings is similar to a motion for summary judgment since both require the trial court to examine the pleadings in order to determine the existence or absence of a genuine issue of material fact and, in the absence of such an issue, whether the movant is entitled to judgment as a matter of law. (Hagy v. McHenry County Conservation District (1989), 190 Ill. App. 3d 833, 842; Mitchell v. Waddell (1989), 189 Ill. App. 3d 179, 181-82.) A motion for judgment on the pleadings differs from a summary judgment motion in that the former asserts that the movant is entitled to judgment solely on the basis of the pleadings, while the latter may include affidavits, deposition transcripts and other evidentiary documents in order to establish the absence of a factual issue. (Mitchell, 189 Ill. App. 3d at 182.) Both motions are properly granted when the pleadings (and in the case of a motion for summary judgment, the affidavits, depositions and other documents) establish the absence of a genuine issue of material fact and the moving party’s entitlement to judgment as a matter of law. (Allstate Insurance Co. v. Tucker (1989), 178 Ill. App. 3d 809, 812; Pfeil v. Weerde (1987), 152 Ill. App. 3d 759, 760.) The standard of review for the granting of both orders is similar: the reviewing court must determine whether the trial court properly ruled on the absence of a genuine issue of material fact and, if so, whether judgment was proper, that is, whether the prevailing party was entitled to judgment as a matter of law. Hagy, 190 Ill. App. 3d at 842-43; Upper Avenue National Bank v. First Arlington National Bank (1980), 81 Ill. App. 3d 208, 210.

The trial court properly determined that the issue presented to it, i.e., the applicability of Melvin and Evelyn Harms’ four insurance policies to defendant’s losses, is grounded solely on the construction of the language contained in the four insurance policies. The rules of contract construction apply to a court’s interpretation of insurance policy language. (Nationwide Mutual Insurance Co. v. Hecker (1989), 183 Ill. App. 3d 13, 15.) Such matters present questions of law only; thus, the trial court properly proceeded to examine the policies’ provisions and construe their language. (Kravis v. Smith-Marine, Inc. (1974), 20 Ill. App. 3d 483, 487.) We will consider each of the four policies in turn.

The homeowners policy contained a declaration page on which the location of the premises specified the Harmses’ home address, 320 Burnett, Lake Villa, Illinois. By its terms, the policy provided coverage to “the dwelling on the residence premises shown in the declarations used principally as a private residence, including structures attached to the dwelling.” (Emphasis in original.) The policy defined “residence premises” as the dwelling and other structures and grounds in which the named insured resides and which is stated on the declarations page. In addition to the residence premises as defined, the policy included under the term “insured location,” inter alia, “500 acres or less of farm land (without buildings) rented to others.” This policy specifically excluded property coverage on structures used partially or wholly for business purposes. Liability coverage contained in the policy specified that coverage for medical payments applied only to persons injured on the insured location or to persons off the insured location, “if the bodily injury. (1) arises out of a condition in the insured location; (2) is caused by the activities of any insured.” (Emphasis in original.) The exclusions portion of the policy exclusively stated that liability and medical coverages were not applicable to bodily injuries arising out of any insured’s business pursuits or out of the rental or holding for rental of any premises by any insured. The exclusion provisions further stated that such coverages were not applicable to “bodily injury *** arising out of any premises owned [by] or rented to any insured which is not an insured location.” (Emphasis in original.)

A straightforward reading of the provisions noted above resolves any doubt concerning the policy’s coverage and supports State Farm’s position. It is clear that defendant’s losses, viz., Alex’s death and Suzanne’s injuries, did not occur on an “insured location” but on other property owned by the insured and not included on the policy. It is obvious that the Wilmot Road address in Spring Grove, McHenry County, was not the Harmses’ residence, which was located in Lake Villa, Lake County. Defendant contends that the 500-acre farm definition of “insured location” is applicable here, as the Spring Grove property was characterized as a farm in the Harmses’ lease with Harms Realty Investment Corporation. The plain language of the policy, however, specifies “500 acres or less of farm land (without buildings) rented to others.” (Emphasis added.) The record establishes that the 60 acres located on Wilmot Road contain not one but six buildings. We think it immaterial that defendant’s losses did not arise from conditions in or around these buildings. Nevertheless, even if we were to accept defendant’s tortured interpretation of the definition of “insured location,” the fact that the Harmses held the property for rental purposes plainly excludes the defendant’s injuries from coverage. The trial court correctly concluded that the homeowners policy did not extend coverage to defendant’s losses.

The rental dwelling policy specified the premises as 41061 North Second Street, Antioch (Lake County) Illinois. The policy defined “insured premises” as the “residence premises,” which in turn was defined as “the one or two family dwelling, other structures and grounds shown in the declarations.” An additional definition of “insured premises” is stated as “one or two family dwelling premises alienated by any insured if possession has been given to others.” (Emphasis in original.) Because the Harmses’ daughter and son-in-law resided in a house located on the Spring Grove property, defendant contends that the location falls under this heading. As State Farm points out, however, there is no indication in the record whatsoever that the Harmses ever rented or otherwise alienated this property. Finally, the policy specifically excludes liability and medical coverages for injuries arising “out of premises other than the insured premises.” (Emphasis in original.)

The trial court correctly concluded that defendant’s losses did not occur on “insured premises,” and we note that the exclusion provision expressly precludes coverage of losses arising elsewhere. The record establishes that the race course was not located at the residence premises in Antioch; similarly, the record fails to establish that the Harmses rented or otherwise alienated (as that word is used in the policy) the Spring Grove property. In conclusion, neither the homeowner nor the rental dwelling policies furnished by State Farm to Melvin and Evelyn Harms provided coverage for defendant’s losses. Thus, the trial court correctly determined that State Farm was entitled to judgment on the pleadings as a matter of law with respect to these two policies.

Accompanying its motion for summary judgment with respect to the business liability and umbrella policies, State Farm submitted, inter alia, Melvin Harms’ discovery deposition and numerous corporate records for Harms Realty Investment Corporation. In his deposition, Harms testified that he owned the property at Wilmot Road in Spring Grove but did not hold an insurance policy for it. He stated that he leased the property to Harms Realty Investment Corporation, a closely held corporation in which his daughter and son-in-law were the sole shareholders. Harms admitted that he was a corporate officer and had assisted in the incorporation of the business entity; however, he testified that he neither invested in nor performed services for the corporation. Additionally, he stated he received no benefits from the corporation other than rental payments for the Spring Grove property. Although Harms testified that he held 33 or 36 shares of Harms Realty, the corporate records reveal that out of the 100 shares issued, 67 were held by his son-in-law, Robert J. Banasack, and the remaining 33 were held by his daughter, Lynette Banasack. Harms stated that he leased the entire 60 acres on Wilmot Road to Harms Realty but was unaware of any sublease between Harms Realty and Maple-hurst Cycle Park. He stated that two corporations, Maplehurst Trails and Maplehurst Snow Tubing, of which his daughter and son-in-law were the shareholders, conducted dirt-biking and snow-tubing operations on the property. Harms stated that he did not perform any services for and did not receive any remuneration or compensation for the operation of either business. He further stated that he did not supervise, oversee or take part in the operation of these two businesses.

Harms further testified that he had held insurance on the Wilmot Road property at one time but did no longer. He stated that State Farm had indicated it was uninterested in insuring this property. He testified that he believed at one time his son-in-law had held a policy from Lloyds of London but was unsure of any additional information.

With regard to his own business pursuits, Harms testified that he had been in the refrigeration sales and service business until February 1, 1984, at which time he retired. His business was located at 100-102 South Milwaukee Avenue, Lake Villa, Illinois, where he had constructed the business building in 1956. He testified that he had sold the business but continued to own the building and maintained a business liability policy on it. He also testified that he held an “excess” policy which he obtained upon the recommendation of his insurance agent. He understood this policy to provide excess coverage in addition to that provided by his business policy, his rental policy and automobile policies.

We turn now to a consideration of the business liability policy. The policy’s declaration page specifies the Lake Villa location noted above as the “location of covered premises.” The declarations further designate the named insured as Harms and state that he is an individual. The policy, by its own express terms, provides liability coverage to the person or persons named on the declarations page as an individual, “only with respect to the conduct of business of which [he is] the sole proprietor.” Defendant claims that Harms’ rental of the Spring Grove property to Harms Realty Investment Corporation constituted a business of which Harms was the sole proprietor. Nevertheless, we think it clear that Harms’ act of renting the property had no bearing on or connection to defendant’s losses, which occurred while her children were customers of Maplehurst Cycle Park, a corporate entity not designated anywhere as a named insured on Harms’ business policy. As defendant notes in her reply brief, the coverage issue of the business policy is whether Melvin Harms’ activities at the motorcycle course on the Spring Grove property are business activities not otherwise excluded by the business policy. It is clear that his activity as a landlord is excluded. Harms neither owned nor operated the motorcycle park and had no financial interest in or business connection to the entity which did operate it. Further, although defendant’s children sustained injuries on property owned by Harms, the children were neither guests nor customers of Harms; Harms did not provide them with any goods or service and had no business relationship with them of any kind. In short, the tragic injuries sustained by defendant’s minor children did not arise out of the conduct of a business of which Harms was the sole proprietor; thus the business liability policy issued to him by State Farm did not extend coverage for these losses.

Lastly, we examine the umbrella policy. Its declaration page lists a number of underlying insurance policies, including auto liability, recreational vehicle liability, comprehensive personal liability and water craft liability. The policy excludes coverage for losses caused by the insured’s business operations unless underlying insurance listed on the declaration page provides coverage for such loss. In other words, this umbrella policy only provided insurance coverage in excess of other policies held by the insured and specifically listed on the policy’s declaration page. We think it is clear that the umbrella policy would provide such excess coverage for losses caused by Harms’ business operations only if Harms held an underlying policy which would cover the losses. Even if Harms’ “business” was renting the Spring Grove property to Harms Realty Investment Corporation, the umbrella policy fails to provide coverage for the rental because Harms had no underlying insurance policy for the rental. Further, even if we were to conclude that Harms’ other policies (specifically, his business liability or rental dwelling policy) did provide coverage to this rental property, defendant’s losses were not caused by the rental of such property. As noted above, defendant’s minor children incurred their injuries while they were customers of Maplehurst Cycle Park, a corporate entity unrelated to Harms.

In view of the facts discussed above, we conclude that the trial court properly granted summary judgment for State Farm with regard to the business and umbrella policies.

We now consider defendant’s contention that State Farm waived its rights to deny coverage under the homeowner and rental dwelling policies. The trial court found, and we agree, that defendant’s losses did not occur on an insured location, within the meaning of either policy. Further, the losses arose out of a business activity entirely unrelated to the insured. We note, as did the trial court, that State Farm provided Melvin Harms with a reservation of rights letter on November 14, 1986, in which it denied coverage under the homeowners policy because: (1) the losses involved a business pursuit, and (2) the losses did not occur on an insured location.

Further, although the reservation of rights letter did not specifically deny coverage under the rental dwelling policy, this omission does not operate to waive State Farm’s rights as to this policy. As State Farm observes in its appellate brief, insurance coverage cannot be “waived” into existence. The rental dwelling policy simply does not provide insurance coverage for the Spring Grove property, and State Farm’s alleged waiver does not alter the policy’s definition of “insured premises.” We hold that State Farm did not waive any rights under either policy.

Accordingly, the judgment of the trial court of McHenry County is affirmed.

Affirmed.

McLAREN and REINHARD, JJ., concur.


text:
    KELLEY/LEHR AND ASSOCIATES, INC., Agent, Plaintiff-Appellant, v. TOM O’BRIEN et al., Defendants-Appellees.
    Second District
    No. 2—89—0564
    Opinion filed February 23, 1990.

      Richard W. Christoff, of Sanford Kahn, Ltd., of Chicago, for appellant.
    John E. Waghorne, of John E. Waghorne & Associates, of Addison, for appellees.
   PRESIDING JUSTICE UNVERZAGT

delivered the opinion of the court:

Plaintiff, Kelley/Lehr and Associates, Inc., the agent for Republic Savings and Loan Association of Wisconsin, which styles itself as a mortgagee in possession, appeals the judgment entered in favor of the defendants, Tom O’Brien and Cove Development (Cove). Plaintiff brought an action in forcible entry and detainer against defendants, who were occupying the premises of suite 134 of the Roselle Station Shopping Center pursuant to an alleged lease granted by Roselle Station Partners, Ltd. (Roselle), the mortgagor and landlord. Plaintiff raises two issues on appeal: first, that the trial court’s finding that a lease existed was against the manifest weight of the evidence, and second, that any agreement between the Roselle mortgagor and the tenant regarding offsets against rental payments was not binding on plaintiff as the assignee of Roselle.

At the trial on the action for forcible entry and detainer, plaintiff testified that it had taken possession as agent for Republic. Republic claimed possession under an “agreement for voluntary possession.” This agreement was admitted into evidence and contained certain provisions as follows:

“WHEREAS, Republic holds a Promissory Note (‘Note’) dated October 29, 1985 on the Property made by the Borrowers [(Roselle)] which Note is secured by a Multifamily Mortgage (‘Mortgage’) dated October 29, 1985, and recorded in the Real Estate records for Du Page County on October 31, 1985, as document number R85 — 95124;
WHEREAS, the Mortgage contains a provision for the Assignment of Rents in favor of Republic;
WHEREAS, Borrowers are and continue to be in default under the Note and Mortgage;
WHEREAS, in the event of a default by the Borrowers under the Note and Mortgage, Paragraph 26 of the Mortgage provides, among other things, that Republic ’may, in person, agent or by a court appointed receiver, regardless of the adequacy of Lender’s (Republic’s) security, enter upon and take and maintain full control of the Property ***.’;
WHEREAS, the Borrowers and Republic all desire to reach an accommodation under which Republic will peacefully take control of the Property, collect rents and otherwise arrange for the management of the Property, without seeking a court-appointed Receiver.
Borrowers and Republic agree:
3. Collection of Rents. Effective with the Commencement Date, Republic shall have the right to collect all rental payments due and owing, whether in arrears or current, from all tenants of the Property. It is expressly understood by and between Republic and Borrowers that Republic shall not assume any obligations under any lease on the Property.
11. Relationship Between the Parties. Each of the Borrowers expressly acknowledge^] and agree[s] that nothing herein shall be deemed, held or construed as creating a partnership, agency, relationship or joint venture between Republic and Borrowers or either of them in the ownership of the Property or in the conduct of business on or at the Property, nor as rendering Republic liable for any debts, liabilities or obligations incurred by any of the Borrowers or either of them. It is expressly understood and agreed by and between the Borrowers and Republic that by executing this Agreement, Republic is not agreeing to assume or be bound by any lease, contractual obligation, or any other agreement of Borrowers with respect to the Property. Furthermore, Borrowers expressly agree that Republic is not and will not be acting in any fiduciary or trustee capacity to Borrowers or either of them under the terms of this Agreement.”

The mortgage itself was not offered into evidence. The voluntary agreement was executed on December 8, 1988, and gave Republic control commencing January 1, 1989. On December 15, 1988, Roselle sent letters notifying all tenants that Republic was in control of the premises. Plaintiff demanded rent from defendants for the months of January and February 1989, but the defendants refused. Plaintiff served a five-day notice of termination of the lease. When defendants still refused to pay rent, plaintiff filed a complaint in forcible entry and detainer, praying for possession and the sum of $2,190, being rent for January, February and March.

At the trial, plaintiff testified that it could not locate any executed lease with defendants in its records. The plaintiff did produce plaintiffs exhibit No. 1, which was an unexecuted copy of a lease. It was a standard office lease between Roselle as landlord and defendant Cove as tenant, with a term of 24 months from September 1, 1986, to August 31, 1988, and monthly rent of $662.29. Attached was an inflation-adjustment rider and a rider granting defendant an option to renew for two one-year periods.

Also at the trial, defendants called Pamela Mack, a partner of Ro-selle, as a witness. She stated that defendant Cove had been renting under a lease when Roselle took possession in March 1985. The lease was amended in September 1985, when Cove reduced its occupied space and the corresponding rent fell from $1,672 per month to $662.29 per month. She testified that defendant’s month-to-month lease was converted to a lease almost identical to plaintiff’s exhibit No. 1. She prepared plaintiffs exhibit No. 1 in 1986, but it was not executed because the amount of the rent was then up to $700 per month. She prepared a lease identical to plaintiff’s exhibit No. 1 with the correct amount included, and she and defendant executed it. However, because Roselle was no longer in possession of its files at the time of the trial, she was unable to produce the executed lease.

Mack also produced a copy of the rent roll regarding Roselle’s account with Cove. The rent roll showed that Cove was charged $1,672 per month from April 1985 to August 1985; $662.29 per month from September 1985 to August 1986; $700 per month from September 1986 to August 1987; and $730 per month from September 1987 to February 1988. No payments of rent were indicated on the rent roll, and the balance due increased every month by the amount of the monthly rental. The rent roll did show credits to defendant of $11,009.16 in January 1986, $11,636.03 on July 1, 1987, and $21,089.56 in February 1988. The first two credits reduced the outstanding balance on those dates to exactly zero. Mack testified that these credits were given for invoices that defendants produced from time to time. Defendants would perform jobs for Roselle, which included taking care of repairs to the various units of the shopping center, cleaning the exterior, patching the cement, taking down trees, removing a parking island to increase the capacity of the parking lot, cleaning rotten timbers, and most recently rodding out the sewers after a backup of the sewers. Mack had contacted the defendants at least two or three times a week in the course of her duties. Defendants had originally built and owned the shopping center. Although the rent roll had not been updated with charges for accruing rent since February 1988, Mack testified that the current outstanding balance of credits due defendants was approximately $11,000, after accruing rent had been deducted. Mack testified that defendants had exercised their options to renew the lease orally but not in writing. Tim O’Brien, a principal of Cove with Tom O’Brien, also testified that he had executed the lease described by Pamela Mack, but that she had taken the only original copy of it and never gave him a copy.

The trial court determined that the defendant had “prepaid rent” of $21,000 and entered judgment in favor of defendants. Plaintiff appeals.

Plaintiff’s first argument is that the trial court’s finding that there existed a lease which provided that rent may be offset by the cost of services performed by the tenant is against the manifest weight of the evidence. We believe that the wording of this issue mis-characterizes the findings of the trial court. The record reflects that Roselle and defendant Cove entered into a definite, written lease which was identical to plaintiffs exhibit No. 1 except for the amount of the rent, which, as related by both the landlord and the tenant, and as corroborated by the landlord’s records, was initially $700 per month. The lease contained the essential requirements of (1) the extent and bounds of the property, (2) a definite and agreed term, (3) a definite and agreed price of rental, and (4) the time and manner of payment. (Feeley v. Michigan Avenue National Bank (1986) 141 Ill. App. 3d 187, 191.) The record does not show, nor does defendant contend, that the lease included a “setoff” provision for services rendered. The “setoff” provision is outside the lease and not a term of the lease. However, the trial court’s finding that a lease existed is not against the manifest weight of the evidence. Kelley v. First State Bank (1980), 81 Ill. App. 3d 402.

The second issue regarding the validity of the defense presented is a much thornier issue. The trial court determined that defendant paid prepaid rent to Roselle and thus had a valid defense. In Illinois, however, the defense that a tenant had paid rent in advance to a landlord mortgagor has never prevailed against the mortgagee where the mortgage was filed and of public record prior to the execution of a lease. A lessee had no right, as against a mortgagee, to possession of the premises and had to pay the mortgagee the reasonable value of the use and occupancy once the mortgagee or his receiver took possession, even if the lessee had already paid rent to the mortgagor in advance. (Rohrer v. Deatherage (1929), 336 Ill. 450, 454-56; Lawn Savings & Loan Association v. Quinn (1967), 81 Ill. App. 2d 304, 319-20; Belleville Savings Bank v. Souris (1932), 266 Ill. App. 565, 567.) A tenant under the mortgagor, who, having notice of the mortgage, paid rent in advance to the mortgagor did so at his peril, for if a receiver was appointed during the period for which the rental had been paid in advance, such tenant would be required to pay the same again. (Greenebaum Sons Bank & Trust Co. v. Kingsbury (1928), 248 Ill. App. 321, 333.) A tenant was considered to have constructive notice of a recorded encumbrance on the landlord’s property. De Kalb Bank v. Purdy (1988), 166 Ill. App. 3d 709, 725.

This rule flowed naturally from the “title theory of mortgages,” which held that the mortgagee held paramount title over a mortgagor. (See In re Michigan Avenue National Bank (Bankr. N.D. Ill. 1980), 2 Bankr. 171, 174-82.) A mortgagor had the right of possession, and, hence, the right to rents, until default only pursuant to the terms of the mortgage. Upon default in a condition of a mortgage, the mortgagee had the right to immediate possession and could eject the mortgagor or any person claiming an interest subsequent to the mortgagor. (Rohrer, 336 Ill. at 454-55.) Since the mortgagee already had title, there was no necessity of bringing suit in order to obtain possession, although the mortgagee could bring a suit to foreclose the mortgagor’s equitable rights of redemption. (Michigan Avenue National Bank, 2 Bankr. at 178.) When a mortgagee took possession and entered the property, the lease was destroyed because neither the mortgagor nor the lessor had any right of possession. (Kingsbury, 248 Ill. App. at 332.) Since there is no privity of estate or privity of contract between a mortgagee and a lessee of the mortgagor, the mortgagee could treat the lessee as a trespasser and bring ejectment without notice to quit. (Kingsbury, 248 Ill. App. at 332.) As a consequence, a lessee’s remedy was solely against the usually insolvent mortgagor to recover prepaid rent. A mortgagor could not execute a lease that would prevail against a mortgagee’s superior rights, and a subsequent lease would have no force against a mortgagee. Silverstein v. Schak (1982), 107 Ill. App. 3d 641, 645-46.

However, where the mortgagor was rightfully in possession at the time of the execution of the lease, a tenant had priority over a subsequent mortgage (Central Republic Trust Co. v. Petersen Furniture Co. (1935), 279 Ill. App. 492, 504), so long as the lease had not been assigned to the mortgagee as additional security (Metropolitan Life Insurance Co. v. W.T. Grant Co. (1944), 321 Ill. App. 487, 501). Where a lessor obtains title under an instrument granting it full possession, and later assigns its rights back to the grantor upon a default in a contract, the grantor takes the property back subject to valid leases executed by the lessor, and tenants who paid rent in advance do not pay twice. (Meyer v. Sachsel (1908), 143 Ill. App. 563, 566.) The grantor became the assignee of the lessor and, as such, acquired only the rights of the assignor in the property. 143 Ill. App. at 566.

Although the above cases provide precedent regarding the issue before the court, we cannot follow them for the following reasons. The cases apply the rule that a mortgagee has paramount title and has the right of possession against all other interests subsequent to the execution of the mortgage. However, the State of Illinois has recently adopted the “lien theory of mortgages,” and a mortgagee is not deemed to own the title of the property but only a mere lien. (Harms v. Sprague (1984), 105 Ill. 2d 215, 222-23.) The adoption of the lien theory of mortgages created a legal environment where many issues of mortgage law remained unresolved. (J. Gearen, J. Vranicar & E. Becker, Into Harms’ Way: Now That Harms v. Sprague Has Established the Lien Theory of Mortgages in Illinois, Does Foreclo sure Cut Off Junior Lease [sic] or Can a Mortgagee Elect to Preserve Them? 34 De Paul L. Rev. 449 (1985).) According to the authors of Harms’ Way, the question of whether a mortgage foreclosure cuts off the rights of junior lessees in Illinois has never been definitively decided, because a lease has been cut off upon a mortgagee’s taking possession prior to foreclosure; however, now that a mortgagee is deemed to have only a lien and not title prior to foreclosure, Illinois courts would have the opportunity to determine the scope of the lessee’s rights since the lease would not be cut off merely by the mortgagee’s entry into possession. (J. Gearen, J. Vranicar & E. Becker, Into Harms’ Way: Now That Harms v. Sprague Has Established the Lien Theory of Mortgages in Illinois, Does Foreclosure Cut Off Junior Lease [sic] or Can a Mortgagee Elect to Preserve Them?, 34 De Paul L. Rev. at 486 (1985).) Similarly, there has been no reported case in Illinois which deals with the possessory rights of a mortgagee whose interest is derived from a lien rather than a title. Michigan Avenue National Bank, 2 Bankr. at 182.

Therefore, it is appropriate to examine the law of other States to determine the status of a lessee to a mortgagee in a lien theory State. The general rule is that a mortgagee is bound by advance payments of rent made in good faith by the tenant to the mortgagor, and when the mortgagee’s receiver takes possession after a default, he will find himself unable to collect any rents from the tenant. (R. Kratovil, Modern Mortgage Law & Practice (1972), citing Ottman v. Tilbury (1931) 204 Wis. 56, 58-59, 234 N.W. 325, 326.) The lessee is entitled to possession notwithstanding an assignment of rents by the mortgagor to the mortgagee as collateral security. (Zimmerman v. Walgreen Co. (1934), 215 Wis. 491, 501, 255 N.W. 534, 539.) Since the right to collect rents is an incident of possession, under the lien theory of mortgages, the mortgagee does not have any right to collect rent by virtue of its mortgage, which does not give it possession. A passive assignment of rents which becomes activated when the mortgagee does take possession is subsequent to the lessee’s interest. Hence, under the lien theory of mortgages, a lease is not terminated by a mortgagee taking possession prior to foreclosure, and the mortgagee would be bound by the prepayment of rent by the tenant to a mortgagee. Thus, under the cases concerning the lien theory of mortgages, we determine that defendants could assert a valid defense to the plaintiff’s request for rent.

In addition, recent statutory changes support this outcome. Although the action before the court was not brought under the Illinois Mortgage Foreclosure Law (Act) (Ill. Rev. Stat. 1987, ch. 110, par. 15 — 1101 et seq.), the Act defines the relationship between the parties. A mortgage is explicitly defined as being a lien upon the real estate. (Ill. Rev. Stat. 1987, ch. 110, pars. 15 — 1207, 15 — 1301.) A lessee’s interest is not terminated even if joined as a party defendant to the foreclosure action unless specifically ordered by the court in the judgment of foreclosure. (Ill. Rev. Stat. 1987, ch. 110, par. 15 — 1501(d).) Title to the property does not pass until the court issues the deed after the expiration of all the mortgagor’s redemption rights. Ill. Rev. Stat. 1987, ch. 110, par. 15-1509.

Most importantly, the Act defines the rights of the parties concerning possession prior to foreclosure. Possession is defined as “physical possession of the mortgaged real estate to the same extent to which the mortgagor, absent the foreclosure, would have been entitled to physical possession.” (Emphasis added.) (Ill. Rev. Stat. 1987, ch. 110, par. 15 — 1701(a).) Thus, whoever takes possession can take only those rights that the mortgagor had. The Act also provides that a lease subordinate to a mortgage shall not be terminated during the pendency of a foreclosure solely by virtue of a mortgagee’s entry into possession under the Act. (Ill. Rev. Stat. 1987, ch. 110, par. 15— 1701(e).) Although plaintiff did not enter into possession in a proceeding under the Act, it would be inconsistent to apply any other rule. Although the Act does not address the issue of prepaid rent, it does provide the background to address the rights of the parties. Since the lease is not terminated when a mortgagee takes possession, both the tenant and the mortgagee are bound by its terms. The mortgagee accedes only into the shoes of the mortgagor; hence, if the mortgagor would be bound by a lease, the mortgagee in possession would also be bound.

This result is consistent with the traditional notions of property law. Under the statute of 32 Henry VIII, chapter 34 section 1, the grantees of any leased lands and the assignees of the lessor of any lease have the same remedies for the recovery of rent as their grantor or lessor had if the reversion had remained in such lessor grantor (Ill. Rev. Stat. 1987, ch. 110, par. 9 — 215), and the lessee has the same remedy against the lessor’s grantees or assignees as such lessee might have had against his immediate lessor (Ill. Rev. Stat. 1987, ch. 110, par. 9 — 216; Purvis v. Shuman (1916), 273 Ill. 286, 289).

In the cause before the court, plaintiff brought an action for forcible entry and detainer based on the nonpayment of rent. A defendant may resist the action by raising the issue of whether excess rent has been paid (Pole Realty Co. v. Sorrells (1979), 78 Ill. App. 3d 361, 366), or whether the tenant was entitled to credit for services rendered (Quel v. Hansen (1984), 126 Ill. App. 3d 1086). The right to file a counterclaim in a forcible entry and detainer action has been recognized where the subject matter is germane to the subject of possession. (Bleek v. Cosgrove (1961), 32 Ill. App. 2d 267, 272.) Even in the stricter world of commercial leases, the issue of the amount of rent is germane when the cause of action is based on nonpayment of rent. Poulos v. Reda (1987), 165 Ill. App. 3d 793, 799.

Thus, defendants were entitled to raise a defense in the forcible entry and detainer suit. Because plaintiff, the alleged mortgagee in possession, was only the assignee of the mortgagor/lessor Roselle, it had only Roselle’s right to collect rent from defendants. Plaintiff argues that it is not liable for the debts of the mortgagor because it did not assume them when it signed the agreement for voluntary receivership. This argument confuses a counterclaim with a setoff. Plaintiff would not be liable for any claim the tenants may have against Ro-selle that may be raised as a counterclaim, but the tenant may set off to the extent of the amount claimed for rent but cannot have judgment for any amount that his damages may exceed the rent due. (Selz v. Stafford (1918), 284 Ill. 610, 618.) The obligor may assert a claim as a subtraction from an assignee’s judgment, but may not obtain a judgment against the assignee for any excess over the assignee’s claim, because the assignee has only the rights of the assignor against the obligor. The assignee takes the assignor’s interest subject to all legal and equitable defenses existing at the time of the assignment. (Stavros v. Karkomi (1976), 39 Ill. App. 3d 113, 123.) In other words, because the defendants had the right to subtract the amount of their services rendered from their obligation to pay rent to Roselle, they had the same right against Roselle’s assignee. As defendants note, this is a rare case where the landlord owes more to the tenant, i.e., the tenant is a creditor of the landlord.

Plaintiff also argues that because the right of setoff is outside the lease and does not run with the land, it is not bound by the setoff. This argument does not address plaintiff’s capacity to sue for the rent. As we have discussed, Roselle did not grant title to plaintiff in the mortgage. In the voluntary agreement, Roselle did not convey the reversion after the lease, Roselle did not assign its interest in the lease, and plaintiff did not assume any lease. Roselle assigned only its right to collect rent, and plaintiff has made no showing of any other basis for its right to sue defendant. Under the facts of this case, plaintiff sues only under Roselle’s right to collect rent and thus is subject to all defenses against Roselle’s rights. It is still Roselle’s building which is supplying the consideration for the payment of rent. (Cf. Stafford Security Co. v. Kremer (1931), 258 N.Y. 1, 179 N.E. 32.) We note, however, that contrary to plaintiffs argument, it is not bound to accept any future services from defendant.

Finally, we note that we have made this decision based on the policy espoused by the Illinois Supreme Court and the legislature. Mortgage lenders are interested in security for their loans. The value of a commercial property lies not so much in the physical building but the stream of rents produced by the building. Lenders may not be willing to lend funds for the acquisition or construction of buildings if the value of the collateral is impaired by tenants who occupy rentable premises without an obligation to pay rent to the lessor or the lessor’s assignee. Lenders have several remedies to prevent abuse. Vendors and lessors must reveal any rent concession whereby a tenant has credit against rent accruing during the term of the lease to any prospective purchaser or lender taking real estate as security. (Ill. Rev. Stat. 1987, ch. 80, pars. 41 through 47.) Purchasers may bring an action for fraud where rent concessions are misrepresented. (Kanter v. Ksander (1931), 344 Ill. 408, 414.) The law of fraudulent conveyances can avoid the transfer of an interest in property for insufficient consideration. Courts protect tenants who have paid in advance in good faith. (Ottman v. Tilbury (1931), 204 Wis. 56, 234 N.W. 325; see also section 3 — 504 of the Uniform Land Transactions Act (13 U.L.A. 604 (1986), which is not enacted in Illinois, which also protects tenants who have made rental payments in advance in good faith.) Courts may not be sympathetic to tenants who make sweetheart deals with mortgagors on the eve of foreclosure. See First National Bank v. Gordon (1936), 287 Ill. App. 83.

We also note that plaintiff has not alleged that it had a separate agreement whereby the mortgagor/lessor agreed not to do any act which would impair the assignment of rents to the mortgagee. (See D. Mitchell Investments, Inc. v. Spellman (Fla. App. 1978), 364 So. 2d 805.) Although such an obligation not to impair may be implied (Gordon, 287 Ill. App. at 87; Kingsbury, 248 Ill. App. at 337), Roselle’s failure to collect rent from defendants was not an impairment of its assignment of rents, but a recognition that no rent could be collected because of defendants’ right of setoff, which in this case resulted from defendants’ improvements to the mortgagee’s collateral.

To summarize, we hold that defendants had a lease with Roselle which obligated it to pay rent. Defendants did not pay rent because they set off the amount Roselle owed them for services rendered. Ro-selle assigned its right to collect rent from all its tenants to plaintiff. At the time of the assignment, defendants had a legal and equitable defense against the obligation to pay rent, and plaintiff took the right subject to that defense. Since the lease was not terminated when plaintiff took control of the property, the existing lease bound both parties, and plaintiff took only as the assignee of Roselle. Thus plaintiff took the rights of Roselle subject to defendants’ right of setoff.

For the above reasons, we affirm the decision of the circuit court of Du Page County.

Affirmed.

McLAREN and REINHARD, JJ., concur.


author: JUSTICE GEIGER JUSTICE REINHARD,

text:
      In re RICHARD A. SPLETT (The People of the State of Illinois, Petitioner-Appellee, v. Richard A. Splett, Respondent-Appellant).
    Second District
    No. 2—89—0427
    Opinion filed February 26, 1990.

      Guardianship & Advocacy Commission, of Elgin (William E. Coffin, of counsel), for appellant.
    Gary V. Johnson, State’s Attorney, of Geneva (William L. Browers and Marshall M. Stevens, both of State’s Attorneys Prosecutor’s Office, of counsel), for the People.
   JUSTICE GEIGER

delivered the opinion of the court:

The respondent, Richard A. Splett, appeals from the trial court’s order finding him subject to involuntary admission to the Department of Mental Health and Developmental Disabilities (the Department). He argues that the trial court lacked subject matter jurisdiction, that the court’s order is reversible for procedural errors, and that the evidence was insufficient. We reverse.

The record shows that the respondent was voluntarily admitted to the Department on March 7, 1989. On April 6, 1989, the clerk filed, inter alia, a petition for the respondent’s involuntary admission. The case file also includes a notice to be served on the respondent; that notice bears no evidence that it was ever served.

Following a bench trial where the respondent and his attorney were present, the court ordered the respondent involuntarily admitted to the Department. The respondent brought the instant appeal. Although the respondent presents multiple arguments for reversal, we need address only one: that he received insufficient notice of the involuntary admission hearing.

Section 3 — 706 of the Mental Health and Developmental Disabilities Code (the Code) contains notice requirements applying to involuntary admission procedures. (Ill. Rev. Stat. 1987, ch. 91V2, par. 3 — 706.) Under section 3 — 706, after filing of a petition for the respondent’s involuntary admission, the court shall direct that the respondent and his attorney, among others, be served with notice of the time and place of the involuntary admission hearing. The respondent argues that the court failed to satisfy the notice requirement of section 3 — 706 and, thus, that the instant involuntary admission order must be reversed. We agree.

In his argument the respondent relies primarily upon In re Price (1987), 152 Ill. App. 3d 960, 505 N.E.2d 37, and In re King (1986), 148 Ill. App. 3d 741, 499 N.E.2d 1032. In both Price and King, the respondents and the respondents’ attorneys were present at the relevant involuntary admission hearings. Nevertheless, in both cases the appellate court reversed the trial court’s involuntary admission order, .relying upon the absence of affirmative indication in the record that the respondent was properly served with notice in compliance with section 3 — 706.

Both the Price court and the King court held that in mental health cases, strict compliance with the relevant statutory provisions is compelling, as a liberty interest is involved. Both courts also held that any noncompliance with statutory involuntary admission procedures renders an involuntary admission judgment erroneous and ineffective.

The State acknowledges that Price and King may be considered dispositive. However, the State asserts that those decisions are ill-reasoned and urges us not to follow them. The State suggests that the Price and King courts protected no substantial right, merely an empty formality. The State also refers us to People v. Williams (1977), 47 Ill. App. 3d 861, 365 N.E.2d 404, a case rejected in King.

We find no reason to abandon the dispositive cases Price and King, or to rely on Williams. As the King court pointed out, Illinois courts have a long history of holding that an affirmative showing of advance notice is crucial in mental health cases — even if the respondent may have appeared at the relevant hearing. See Eddy v. People (1854), 15 Ill. 386.

In relying on Price and King, we find that the notice provision of section 3 — 706 is certainly no empty formality. The respondent vividly describes one illustrative scenario: if a respondent was committed to a mental health institution on the date of his involuntary admission hearing, as this respondent apparently was, absent section 3 — 706 protections he might receive his only notice when awakened the morning of the hearing. The possibility of last-minute, oral notification of a sleeping, perhaps medicated, involuntarily committed respondent is troubling. The mandatory statutory notice clearly is meaningful in protecting against such a possibility.

Also in relying on Price and King, we reject the State’s suggestion that we should rely upon an analogy to a non-mental-health, juvenile case, In re J.W. (1981), 87 Ill. 2d 56, 429 N.E.2d 501, to find that failure of statutory notice was not fatal. The J.W. court found that despite statutory requirements for prior notice, failure to serve the noncustodial father with unknown address was not fatal to the completed juvenile proceedings. We find that the J.W. decision has very limited persuasiveness here. Besides the fact that it lies outside the historically special category of mental health cases, J. W. focused upon the fact that the unserved father was neither known nor discoverable, unlike the instant, well-known, unserved respondent. Furthermore, the strength of the J.W. ruling is questionable given other supreme court cases requiring strict compliance with statutory service requirements even in juvenile cases. See, e.g., People v. R.S. (1984), 104 Ill. 2d 1, 470 N.E.2d 297.

Based on the foregoing, we reverse the order of the circuit court of Kane County.

Reversed.

WOODWARD, J., concurs.

JUSTICE REINHARD,

dissenting:

I respectfully dissent from the holding of the majority that the failure of the record to show that notice of the time and place of the involuntary admission hearing pursuant to section 3 — 706 of the Mental Health and Developmental Disabilities Code (Mental Health Code) (Ill. Rev. Stat. 1987, ch. 91V2, par. 3 — 706) was served on the respondent and his attorney requires reversal of the judgment of involuntary commitment even where respondent and his counsel appeared at the scheduled hearing and did not raise any issue of lack of proper notice. As the issue was not raised below and there is no showing of prejudice to respondent or his attorney in the record, I would find the question of formal compliance with section 3 — 706 to be waived. People v. Williams (1977), 47 Ill. App. 3d 861, 867, 365 N.E.2d 404.

There is an apparent conflict among the appellate court districts on this issue. The Appellate Court for the First District, in People v. Williams (1977), 47 Ill. App. 3d 861, 365 N.E.2d 704, applies a waiver rule where the record fails to show notice was served pursuant to section 3 — 706 and no issue of notice was raised in the trial court and no prejudice is shown. The Appellate Court for the Fourth District, in In re Plank (1988), 169 Ill. App. 3d 411, 523 N.E.2d 614, In re Price (1987), 152 Ill. App. 3d 960, 505 N.E.2d 37, and In re King (1986), 148 Ill. App. 3d 741, 499 N.E.2d 1032, applies a “plain error” doctrine and reverses a judgment of commitment where the record shows respondent was not properly served with notice of the hearing, even though the respondent and an appointed attorney appeared at the hearing and did not raise the issue of lack of notice.

While I agree generally with the proposition stated in the majority opinion that the need for strict compliance with the relevant statutory provisions in the Mental Health Code is compelling, as liberty interests are involved, the failure to comply formally with the notice requirement of section 3 — 706 does not implicate any violation of a liberty interest, as here, where respondent and his attorney appear at the hearing, voice no objection on the notice issue, and show no prejudice from the lack of notice served on them. I note, too, that the record does contain a notice of the hearing signed by an employee of the Elgin Mental Health Center with a return indicating service of notice on respondent and his attorney, although the return is not signed by the person serving the notice. Under these circumstances, the waiver doctrine is appropriate.

In an analogous situation in proceedings under the Juvenile Court Act (Act) (Ill. Rev. Stat. 1979, ch. 37, par. 701—1 et seq.), where the minor’s mother was not formally served with a delinquency petition pursuant to a requirement under the Act, but appeared at the hearing and actively participated in the proceedings without objection, our supreme court applied the waiver doctrine and rejected useless .formality in complying with the notice requirement, stating as follows:

“The minor’s argument before this court is that the mother had not been formally served either. But we do not read section 4 — 4 as demanding useless formality. The mother had actual notice of the charges against her son and the correlative threat to her own rights; she appeared in court and participated actively in the proceedings without objection. She thereby waived formal service of process and submitted to the jurisdiction of the court. The lack of formal service in no way prejudiced the minor or his mother. Considerations of fairness are all on the State’s side: the respondents should not be permitted to have an adjudicatory hearing, hoping for a finding in their favor, and if they lose get a second chance by complaining of formal defects in service of process that could and should have been objected to immediately, could have been easily cured if timely objected to, and made no difference anyway.” (In re J.W. (1981), 87 Ill. 2d 56, 62, 429 N.E.2d 501, 504.)

These comments are equally applicable to the notice issue presented here.

For the foregoing reasons, I would find a waiver of the notice issue. Although other issues were raised by respondent on appeal, the majority opinion addresses only this one issue, and, consequently, I do also.