author: Mr. JUSTICE GOLDBERG

text:
    Be-Mac Transport Company, Inc., Plaintiff-Appellee, v. Barney Grabiec, Director of Department of Labor, et al., Defendants-Appellants.
    (No. 58183;
    First District (1st Division)
    June 3, 1974.

      William J. Scott, Attorney General, of Chicago (John D. Whitenack, Assistant Attorney General, of counsel), for appellant Barney J. Grabiec.
    Sherman Carmell, Sheldon M. Charone, and Stephen Horwitz, all of Chicago (Carmell & Charone, Ltd., of counsel), for appellant Local 705 I.B. of T.
    Lester Asher, Donald W. Cohen, Eugene I. Pavalon, and John S. Adler, all of Chicago (Asher, Greenfield, Gubbins and Segall, Ltd., of counsel), for appellant Local 710 I.B. of T.
    Leonard R. Kofkin and Donald B. Levine, both of Chicago (Axelrod, Goodman, Steiner & Bazelon, of counsel), for appellee Be-Mac Transport Company, Inc.
   Mr. JUSTICE GOLDBERG

delivered the opinion of the court:

Barney J. Grabiec, Director of Illinois Department of Labor, Bureau of Employment Security, Division of Unemployment Compensation (Director) and a group of employees (claimants) of Be-Mac Transport Company, Inc. (plaintiff) have appealed from an administrative review decision by the circuit .court which held claimants ineligible for unemployment compensation. (Ill.Rev. Stat. 1973, ch. 48, par. 434.) Certain of the claimants were employed by plaintiff as truck drivers in the city only, as distinguished from interstate or over-the-road drivers. They are represented by Local 705 of the International Brotherhood of Teamsters. The remaining claimants are employed by plaintiff as dockhands and office workers. They are all members of Local 710 of the International Brotherhood of Teamsters.

It is undisputed that all of these described employees were employed by plaintiff prior to the commencement of this litigation at plaintiff’s transportation and freight facility in Chicago Ridge, Illinois. On March 31, 1970, the collective bargaining agreements between plaintiff and Teamsters Locals 705 and 710 expired. On April 1, 1970, plaintiff sent a certified letter to each of the 10 percent of its employees who were lowest on the seniority list. This letter advised: “Due to labor problems in some of our terminals and a reduction in the flow of freight, it is necessary to place you on a temporary lay-off status effective immediately.” The reduction in the flow of freight to which this letter referred took place because of labor problems in other terminals maintained by plaintiff in Illinois and outside of the state. On April 3, 1970, plaintiff sent a letter by certified mail to each and all of the remaining 90 percent of its employees containing tire identical language. However, on April 4, 1970, by a series of telephone calls, plaintiff recalled to work 10 percent of all of its employees with the highest seniority rank.

On April 10,1970, plaintiff sent a certified letter to all of its employees, except only certain mechanics whose rights are not pertinent here. These letters advised that they superseded the notices of lay-off dated April 3, 1970. These letters also stated, “We are sorry to inform you that effective 6:00 A.M. April 10, 1970, we must lock you out until further notice to protect our bargaining position with your union.” It is agreed that this lockout notice remained in full force and effect until new collective bargaining agreements had been reached by plaintiff with the representatives of Teamsters Locals 705 and 710, which took place on or about July 3, 1970.

The issues between the parties hereto concern claims for unemployment compensation for the period from April 10, 1970 through July 4, 1970. It is undisputed that a national master freight labor agreement had been entered into as of April 1, 1970. The new agreement between plaintiff and Local Unions 705 and 710, effective July 3, 1970, gave employees of these local unions wages over and above those provided in the national agreement, retroactive to April 1, 1970, the date of the national contract. Those of plaintiff’s employees who were recalled to work by telephone on April 4, 1970, and who were thus employed at the time of the lockout, whose claims for compensation were denied, have not appealed.

Upon processing of claims for unemployment compensation filed by the claimants, a deputy of the Division of Unemployment Compensation ruled these claimants ineligible because their unemployment after April 10, 1970, was due to a labor dispute at their last place of employment which condition persisted through July 4, 1970. An appeal was taken and a hearing was held before a representative of the Director. Upon analysis of the evidence, this officer held the claimants “not ineligible” for unemployment benefits. He made the following specific findings of fact:

“1. There was a stoppage of work at the Chicago terminal of the employer during the period from April 10, 1970 through July 4, 1970.
2. The stoppage of work was due to a labor dispute which existed at the Chicago terminal of the employer during the aforesaid period.
3. The unemployment of the claimants herein, either as parties respondent or as appellant was not due to the said stoppage of work because of the said labor dispute.
4. The unemployment of the claimants herein was due directly to a lack of available work at the employer’s Chicago terminal.”

Plaintiff sought further review of this ruling urging, among other contentions, “[tjhere can be no doubt in this proceeding that the claimants were unemployed from April 1, 1970, and that such employment [sic] was due solely and exclusively to a labor dispute.” In due course, the Director affirmed the determination by the deputy as regards all matters pertinent here and accordingly held that all of the employees were “not ineligible” for benefits.

Plaintiff then filed a complaint for judicial review of this administrative decision. (Ill. Rev. Stat. 1973, ch. 110, pars. 264 and following.) After consideration of memoranda of fact and law and hearing lengthy oral arguments, the trial judge filed a memorandum and judgment order. We must point out here the extreme and unusual difficulties imposed upon the trial judge in this matter. He was confronted with four able and forceful lawyers, all of whom did their best to influence his thinking by a plethora of argument and legal citations in the esoteric field of unemployment compensation. In addition, the findings by the Director’s representative presented several difficult and perplexing inconsistencies or ambiguities; or at least the appearance thereof. Furthermore, both sides of the controversy shifted their positions on at least one occasion.

In his memorandum, the trial court pointed out that the initial unemployment suffered by all of the employees here involved, was caused by lack of work at plaintiff’s Chicago facility. The trial court properly held that the presence or absence of labor disputes in other separate facilities operated by plaintiff was not material in reaching this determination. (Walgreen Co. v. Murphy, 386 Ill. 32, 53 N.E.2d 390.) The trial court also devoted considerable effort to a determination as to whether or not there was a labor dispute between plaintiff and the employees at the time of the lockout. The court concluded that there was an issue regarding this question which was not properly answered by the findings placed before the court by the Director. The court accordingly directed that the cause be remanded to the Director with instructions that he vacate the previous findings Nos. 2, 3 and 4 (as above noted) and that he proceed to make a factual determination as to “whether the lockout resulted from a labor dispute within the meaning of Section 604” of the Unemployment Compensation Act of Illinois (Ill. Rev. Stat. 1973, ch. 48, par. 434), the statute here involved.

As the trial judge correctly pointed out, the rights of these parties are governed by the language of this statute which is as follows:

“An individual shall be ineligible for benefits for any week with respect to which it is found that his total or partial unemployment is due to a stoppage of work which exists because of a labor dispute at the factory, establishment, or other premises at which he is or was last employed, provided, that this Section shall not apply if it is shown that (A) he is not participating in or financing or directly interested in the labor dispute which caused the stoppage of work and (B) he does not belong to a grade or class of workers of which immediately before the commencement of the stoppage there were members employed at the premises at which the stoppage occurs, any of whom are participating in or financing or directly interested in the dispute; provided, that if in any case separate branches of work which are commonly conducted as separate businesses in separate premises are conducted in separate departments of the same premises, each such department shall, for the purpose of this Section, be deemed to be a separate factory, establishment, or other premises.
Whenever any claim involves the provisions of this Section, the claims adjudicator referred to in Section 702 shall make a separate determination as to the eligibility or ineligibility of the claimant with respect to the provisions of this Section. This separate determination may be appealed to the Director in the manner prescribed by Section 800."

In due course, the Director filed an amended decision containing 12 specific findings of fact. The Director found that his conclusions previously reached were supported by the record. He found that the unemployment of all of the claimants occurred on April 1, 1970, and on April 3, 1970, by virtue of the notices of lay-off above described. Consequently,. he found that there was a stoppage of work at the Chicago terminal on April 3, 1970, which was not due to a labor dispute. He also found that partial operations at the Chicago terminal were resumed on April 4, 1970, but a stoppage of work occurred on April 10, 1970, when the lockout was instituted. The Director further found that the employees involved in this appeal “were not in employment for this employer at such time as the stoppage of work due to the lockout occurred.” The Director also found that all of the employees “had become unemployed because of a lack of available work and not because the stoppage of work was due to a labor dispute” and that all of them were "not ineligible” under the applicable statute.

Upon the filing of this amended decision by the Director, plaintiffs moved the court to vacate it. Additional authorities were cited by both sides of the controversy and additional argument was heard. At this point, all counsel advised the court that they stipulated that there was a labor dispute between plaintiff and the unions at the time of the lockout on April 10, 1970. At the conclusion of the entire argument, the court reversed the result reached by the Director and ruled that all of the claimants involved in this appeal were not eligible for compensation.

In this court, separate briefs have been filed by the Attorney General and by each of the labor unions. Generally speaking, they contend the Unemployment Compensation Act is a remedial statute which should be liberally construed; the findings of the Director should be affirmed unless they are against the manifest weight of the evidence; the result reached is repugnant to public policy; the existence of a labor dispute does not automatically disqualify a claimant but a labor dispute must be the cause of the work stoppage to disqualify; and lack of sufficient work was the direct and proximate cause of unemployment of the claim-. ants. Plaintiff urges that the amended decision of the Director was against the manifest weight of the evidence; the claimants were unemployed from April 10, 1970, solely because of the existence of a labor dispute at the terminal in question; the lockout of April 10, 1970, was a labor dispute within the meaning of the statute and was the direct cause of the unemployment of claimants; and, finally, claimants failed to establish eligibility for benefits.

It is first necessary to refresh our recollection as to the precise meaning of terms commonly used in this type of litigation. “Labor dispute” as used in the pertinent statute, has been defined as “any controversy concerning wages, hours, working conditions or terms of employment. Oil Workers Union v. Gordon, 406 Ill. 145; Fash v. Gordon, 398 Ill. 210; Local Union No. 11 v. Gordon, 396 Ill. 293.” Buchholz v. Cummins, 6 Ill.2d 382, 387, 128 N.E.2d 900.

We are further assisted by the same decision from which we learn that a lockout may be defined as “ ‘a cessation of furnishing of work to employees in an effort to get, for the employer, more desirable terms’ ”; or, alternatively as a “ suspension of operations by the employer resulting from a dispute with his employees over wages, hours, or working conditions.’ ” We also learn “ ‘that a strike may be generally defined as a stoppage of work by common agreement [by the employees] for the purpose of obtaining or resisting a change in the conditions of employment.’ ” (6 Ill.2d at 388.) In addition, the court has construed the pertinent statute as making “no distinction in principle between a lockout arid a strike” and that “a labor dispute, within the purview of our statute, includes a lockout.” (6 Ill.2d at 388.) The phrase “stoppage of work” as used in the statute refers “to a stoppage of work at the plant or particular department of a plant and not to the individual unemployment of the worker or workers.” (Abbott Publishing Co. v. Annunzio, 414 Ill. 559, 569, 112 N.E.2d 101.) It may also be useful to note that “stoppage of work” ends when the employer’s business operations return to a substantially normal condition. Travis v. Grabiec, 52 Ill.2d 175, 182, 287 N.E.2d 468.

Applying these clear principles to the record before us, a stoppage of work undoubtedly occurred at plaintiff’s plant on April 3, 1970. This was not due in any direct sense to a labor dispute but, as stated by plaintiff in its own letter to its employees, this stoppage was caused by economic conditions or by shortage or unavailability of work for the employees at plaintiff’s Chicago terminal. As already pointed out, the fact that this shortage may in turn have been caused by labor disputes in other installations operated by plaintiff is of no legal significance. (Walgreen Co. v. Murphy, 386 Ill. 32, 53 N.E.2d 390.) It follows necessarily that the administrative finding (No. 3) that the unemployment of the claimants herein was not “due to the said stoppage of work because of the said labor dispute” is legally and factually correct as it pertains to the period from April 3, 1970 to April 10, 1970.

Thus, we must conclude that each' and all of the claimants here involved were eligible for unemployment compensation on April 10, 1970, when plaintiff sent its certified letter to them advising of the lockout. The remaining issue is the effect of this subsequent lockout, which resulted from a labor dispute as the parties stipulated, upon the rights of claimants who at the time were unemployed because of unavailability of work at the employer’s premises. We find no authority in Illinois which answers this precise question. All of the cases cited by able counsel deal with strikes which took place after involuntary unemployment. Our own search discloses no case dealing with a lockout under these circumstances. However, examination of the authorities in other jurisdictions leads us to conclude that the proper governing principle in cases of this type involving strikes may well be stated as follows: if unemployment of a claimant is originally caused by lack of work and a labor dispute develops during this period, this does not disqualify him from unemployment compensation until work becomes available and he refuses to accept this work because of the strike resulting from a labor dispute.

This basic theory is developed in a number of decided cases. In Muncie F. Division v. Review Board, 114 Ind. App. 475, 51 N.E.2d 891, the employer notified the union that all assets of the company were to be sold and the employment contract was canceled. Some 2 weeks later the union was informed that the plant had been sold to another company. All employees were notified that they would receive their pay in full on the last day of the year and that the office would be open for 4 days prior thereto to receive applications for employment. Thereafter a labor dispute (strike) developed and there was picketing for some 12 days. The new employer advised the mediation service that the plant would not be ready to reopen for some 30 days, pending installation of new equipment. The record thus presented a stoppage of work due to lack of employment and a subsequent strike because of a labor dispute.

The court held that the evidence sufficiently sustained a finding that the unemployment of the claimants was not due to the labor dispute. The court reasoned that if work actually existed at the plant after completion of the sale, the conclusion would be “inevitable that the failure to work was due to the labor dispute.” On the contrary, if the lack of available work at the plant, which caused the original unemployment, continued to exist throughout the period in which there was a labor dispute, the result would necessarily be that the unemployment of the claimants was not caused by the labor dispute. (See 51 N.E.2d at 894.) The Muncie court thus noted that the “vital factual question was” whether work was available at the plant during the' time of the labor dispute. (51 N.E.2d at 894.) The court also described the remaining element as refusal of the claimants to accept work. In other words, the court held that existence of a labor dispute and a strike subsequent to unemployment originally caused by unavailability of work does not in and of itself, ipso facto, terminate eligibility to receive unemployment compensation.

In the later case of Sweeney v. Board of Review, 43 N. J. 535, 206 A. 2d 345, in a similar situation involving a strike, the Supreme Court of New Jersey reached the same result. Among other authorities, the court cited the decision of the Indiana court in Muncie. The New Jersey court pointed out that claimants are not necessarily disqualified by the mere existence of a labor dispute subsequent to unemployment without more. The labor dispute must itself be the cause of the unemployment. This comports with the Illinois test since our statute provides that the unemployment must be “due to a stoppage of work which exists because of a labor dispute at the factory.” Citing a number of authorities, the New Jersey court stated the principle that the development of a labor dispute during unemployment caused by unavailability of work does not disqualify the employee “until work becomes available and he refuses the work because of the dispute.” See 206 A. 2d at 348.

It may well be that astute counsel, as always, can ferret out factual differences between these cases and the one before us. However, upon fair reading of these and other decisions, it seems abundantly clear that this principle must constitute our guiding light in decision of the case before us. (See also in accord Tucker v. American Smelting & Refining Co., 189 Md. 250, 55 A. 2d 692, and Abbott v. Appeal Board, 323 Mich. 32, 34 N.W.2d 542.) In our opinion, the pertinent statutes in these four jurisdictions parallel the Illinois enactment to such an extent as to make the decisions persuasive authority.

We see no reason why this principle so strongly adopted in situations involving an involuntary cessation of employment and a subsequent strike, should not be applied to similar cases revolving about a lockout which resulted from a labor dispute. Our Illinois statute does not use the terms lockout or strike but refers generically to “a labor dispute at the factory,” Our courts have stated that there is no distinction in principle between a lockout and a strike (Buchholz v. Cummins, 6 Ill.2d 382, 387, 388, 128 N.E.2d 900), and that “a labor dispute, within the purview of our statute, includes a lockout.” (See 6 Ill.2d at 388.) Note also the language of another portion of the pertinent statute referring “to a strike, lockout, or other labor dispute.” (Ill. Rev. Stat. 1973, ch. 48, par. 433.) We will, therefore, apply to this cause involving a lockout the same test applied by the great weight of authority to similar situations involving strikes. The questions to be answered are whether work was available to these claimants at the terminal during the disputed period (April 10, 1970 to July 4, 1970); and, if so, did they refuse to work because of the labor dispute.

Plaintiff urges that the burden of proof in answering these questions rested upon the claimants. Plaintiff cites Brown v. Board of Review, 8 Ill.App.3d 19, 23, 289 N.E.2d 40, decided by this court under Ill. Rev. Stat. 1971, ch. 48, par. 420. The holding in Brown is Hmited to the burden of proof requirement as regards need for active search for work, by the claimant. On the contrary, reading of that portion of the statute here involved shows decisively that it incorporates a factor of causal connection between the total or partial unemployment of the claimant and the labor dispute. This is strongly indicated by use of the phrases “due to" and “because of.” Also the last portion of the pertinent statute which requires a separate administrative “determination as to the eligibility or ineligibility of the claimant with respect to the provisions of this section” would seem to indicate a legislative desire for separate treatment of factual problems which might be created by this enactment.

Furthermore, the factual issue regarding availability of work at any plant during any given period of time is generally a matter peculiarly within the knowledge of the employer; diametrically different from the active search for work test which is solely within the knowledge of the worker. Therefore, in the process of attempting to bring otherwise eligible claimants within the affirmative defense created by this specific exception in the statute, the burden of proof should logically rest upon the employer. In addition, the nature and purpose of unemployment compensation legislation requires that we give the Act a liberal construction. (Huggins v. Board of Review, 10 Ill.App.3d 140, 143, 294 N.E.2d 32 and other authorities there cited.) We conclude that the burden of proof of avoiding continuing efigibility because of this affirmative defense of availability of work and refusal thereof rested upon the plaintiff.

As regards availability of work, the Director originally approved a specific finding of fact by his representative that “the unemployment of the claimants herein was due directly to a lack of available work at the employer’s Chicago terminal.” The specific findings by the Director of eligibility of all claimants under this particular section of the statute necessarily presupposes a finding that there was not sufficient evidence to invoke the statutory exception to their continued eligibility. In addition, examination of the entire record also indicates that any administrative finding that the unemployment of these claimants was due to the labor dispute and not to unavailability of work could not be sustained in-a court of review. On April 4, 1970, plaintiff. recalled only 10 percent of its work force. No additional employees were recalled thereafter until April 10, 1970, when the lockout was proclaimed. The only evidence bearing on availability of work on that day was merely that there was freight on plaintiffs dock on April 9 but not enough to require recall of all plaintiffs drivers. There is no evidence to support plaintiffs contention that there was “a substantial amount of freight on plaintiffs dock on that date.” Plaintiffs own conduct shows that on April 4, 1970, there was only sufficient work to recall 10 percent of plaintiffs drivers. There is no evidence of a drastic increase of work availability between April 6 and April 10, 1970. Similarly there is no evidence that full work was resumed at plaintiffs terminal on July 4, 1970, when the national union contract was signed. The record shows only that plaintiff resumed normal operations on some unspecified date after July 3, 1970.

On the contrary, the record shows that between April 6 and April 10, 1970, the labor problem in other installations operated by plaintiff had expanded “a little bit.” In cases of this type, since the condition of unavailability of work is indisputably evident at least until April 10, 1970, the prior existence of this same situation is “in human experience some indication of its probable persistence or continuance at a later period.” (See 2 Wigmore on Evidence (3d ed. )sec. 437, cited with approval in Petersen v. General Rug & Carpet Cleaners, Inc., 333 Ill.App. 47, 66, 77 N.E.2d 58; also In re Chicago & Northwestern Ry. Co. (7th cir. 1943), 138 F. 2d 753, 755.) This same principle is conversely applied to show that a condition subsequently established had prior existence. Gass v. Carducci, 37 Ill.App.2d 181, 190, 185 N.E.2d 285.

Other analysis leads inevitably to the same result. As shown, the Director approved a specific finding of fact that “the unemployment of the claimants herein was due directly to a lack of available work at the employers Chicago terminal.” Not only are we mandated by statute to accept this finding as being “prima facie true and correct” (Ill. Rev. Stat. 1973, ch. 110, par. 274), but also the cases limit the permissible scope of our inquiry in situations of this type “to ascertaining if the agency decision was contrary to the manifest weight of the evidence.” (Basketfield v. Police Board of Chicago, 56 Ill.2d 351, 358, 307 N.E.2d 371.) Thus, even assuming that the burden of proof rested upon claimants, we would be obliged to approve the ultimate finding of eligibility made by the Director which rested necessarily upon the basic premise that unemployment during the disputed period existed because of unavailability of work.

This determination is dispositive of the case before us. We need not carry the matter further and decide theoretical questions as to whether an inference of refusal to work can be drawn with equal facility from a lockout as from a strike or whether an employer who institutes a lockout is required preliminarily to recall his employees and offer them work. From the record before us it is factually certain that none of these claimants ever refused to work. All of them were originally laid off for lack of work. The only evidence on this subject matter was that the claimants were told by their union to go to work unless they were locked out. There is also testimony that claimants were willing to work whenever they would be recalled by their employer. No evidence to the contrary was offered by the plaintiff.

We conclude that each and all of these claimants are eligible to receive unemployment compensation for the entire period in dispute from April 10, 1970, to July 4, 1970. The judgment appealed from is therefore reversed and the cause remanded for the entry of a judgment affirming the amended decision of the Director, in effect awarding compensation to claimants as above set forth.

Judgment reversed and cause remanded.

BURKE and HALLETT, JJ., concur.


source: Caselaw Access Project

author: PER CURIAM.

license: Public Domain

text:
    Walter J. Egebergh, Plaintiff-Appellant, v. Richard F. Schumann, Defendant-Appellee.
    (No. 59090;
    First District (1st Division)
    June 3, 1974.

      Alan Kawitt, of Chicago, for appellant.
    Richard F. Schumann, pro se.

   PER CURIAM.

HALLETT, J., took no part.


text:
      In re Reginald Price, a Minor, Respondent.
    (No. 59518;
    First District (1st Division)
    June 3, 1974.

      James J. Doherty, Public Defender, of Chicago (Marilyn Dershem Israel, Assistant Public Defender, of counsel), for appellant.
    Bernard Carey, State’s Attorney, of Chicago (Patrick T. Driscoll, Jr., and Jerald A. Kessler, Assistant State’s Attorneys, of counsel), for the People.
   PER CURIAM.

HALLETT, J., took no part.


author: Mr. JUSTICE MEJDA

text:
    Edna S. Phillips, Plaintiff-Appellee, v. Salk, Ward & Salk, Inc. et al., Defendants-Appellants.
    (Nos. 57023, 57163;
    First District (3rd Division)
    June 6, 1974.

      Mandel and Lipton, Ltd., of Chicago (Alfred R. Lipton and Richard D. Mandel, of counsel), for appellant Salk, Ward & Salk, Inc.
    Shaheen, Lundberg and Callaghan, of Chicago (James J. O’Meara, Jr., and James J. Kemp, Jr., of counsel), for appellant All American Life and Casualty Company.

      Van Duzer, Gershon, Jordan & Peterson, of Chicago (John B. Van Duzer and Horace W. Jordan, of counsel), for appellee.
   Mr. JUSTICE MEJDA

delivered the opinion of the court:

Plaintiff, Edna S. Phillips, brought suit in chancery for the reformation of a term life insurance policy against defendant All American Life and Casualty Company (hereinafter All American) and for damages against All American and defendant Salk, Ward & Salk, Inc. (hereinafter Salk) for the alleged failure to procure and provide the policy intended. After a trial by the court without a jury a decree was entered in favor of plaintiff against defendant All American, ordering reformation, and for a judgment against both defendants in the amount of $18,299. Both defendants have appealed.

Upon appeal, defendant Salk contends that (1) the trial court erred in finding that Salk was engaged to obtain a level term life insurance for plaintiff’s decedent; (2) the duty, if any, was extinguished by the decedent’s personally securing the policy from defendant All American; and (3) the policy which issued fully complied with the term life insurance requirement contained in the application for a mortgage loan.

Defendant All American contends in its appeal that the trial court erred (1) in excluding from the evidence the mortgage loan contract between All American and plaintiff and her decedent; (2) in finding that the insurance contract between All American and plaintiff’s decedent was the result of a mutual mistake and subject to reformation; and (3) in finding that All American breached its obligation to provide the term insurance contemplated by the parties. The facts follow.

Plaintiff, Edna S. Phillips, is the widow of Don R. Phillips; together they were the co-obligors upon a certain note executed by them evidencing a loan made to them by defendant Salk and sold by Salk to All American. The note was secured by a mortgage on a commercial building and land and, as further security, by a life insurance policy on the life of Don R. Phillips issued by All American and assigned to it. Decedent and his wife, plaintiff, were the sole owners of a Michigan corporation. In 1963, decedent was approximately 57 years of age and was the president and sole salesman of the corporation. The Phillipses decided to move the company plant to Illinois and to borrow funds to build at the new location. Unable to obtain a bank loan, they were referred to private mortgage sources. Their attorney contacted Salk— mortgage investment brokers — who occasionally made loans out of their own funds, and it was understood that this application would be offered to institutional investors by Salk acting as agent for the Phillipses. The Phillipses signed an application for a loan dated March 28, 1963, prepared by Salk on a printed form and rider, by which Salk was appointed as the Phillipses’ agent for a period of 60 days for procuring a $100,000 mortgage loan. Paragraph 6 of the rider provided:

“Term Life Insurance in the amount of $50,000 on Don R. Phillips will be instituted with a company selected by Salk, Ward & Salk, Inc. It is understood and agreed that the mortgagee has the option to reduce the outstanding principal balance or disburse the proceeds to a beneficiary.”

The above application, although included in the record on appeal, upon objection of defendants was refused admission into evidence by the trial court. Salk submitted the loan application to All American. On April 25, 1963, All American delivered a written approval and commitment for a loan of $100,000 to the Phillipses, specifically providing:

“This commitment is subject to DON R. PHILLIPS furnishing a $50,000 Life Insurance Policy acceptable to the Company as further collateral which is to be assigned to ALL AMERICAN LIFE & CASUALTY COMPANY.”

Subsequently, on April 30, 1963, Salk acknowledged and accepted the commitment of April 25, 1963, from All American by returning to All American an executed copy of the commitment. Again, although included in the record on appeal, the April 25, 1963, commitment and the April 30, 1963, acceptance were, on plaintiff’s objection, excluded from evidence by the trial court. The record is silent as to how the direct contact came into being, but on April 26, 1963, Don R. Phillips, decedent, appeared at the construction loan department of All American, which referred him to R. Dean Ballard in its insurance department. Mr. Ballard was an employee in the agency department and a licensed agent for writing life insurance. He knew that Mr. Phillips had been referred by the construction loan department in connection with a contemplated loan of $100,000 which All American was making to the Phillipses. Mr. Phillips then signed an application for term life insurance which Mr. Ballard had prepared in his presence. The insurance application which was incorporated by reference into the policy stated that the application was for a $50,000 “Home Security 10 yrs-8 yrs pay” plan policy. The quoted expression is not defined in the application. The insurance application and the term life insurance policy issued thereon remained at all times in the possession of All American. At a later date Mr. Phillips executed a separate form of assignment of the policy to All American as collateral for the loan, but neither he nor his wife, the named beneficiary, ever received the original or a copy of either the insurance application or the policy. Mr. Ballard testified that he had no specific recollection of his conversations with Mr. Phillips concerning the policy. He was paid a commission by All American.

Edward Walle, an employee of Salk, testified at trial that Salk did not refer Phillips to All American; that Salk never selected All American as the company to issue the term insurance required by the mortgage loan application; and that neither Phillips, his wife, nor his attorney ever requested that Salk obtain insurance coverage for Phillips. Walle stated that Salk first became aware that All American had issued an insurance policy to Phillips some time in October 1963, when a letter accompanying an insurance assignment form was received from All American requesting that Salk forward the assignment form to Phillips for execution and collect the first annual premium from him for All American. However, correspondence from Salk to Charles F. Meyers, which was introduced into evidence, indicates that Salk became aware of the issuance of the policy some time prior to September 5, 1963. Walle testified that Salk received no commission for the policy issued to Phillips and that its only remuneration for the entire transaction was a 2 percent commission based on the amount of the mortgage loan, and thereafter a fee for servicing the loan for All American. Walle further testified that Salk extended interim financing to the Phillipses for construction costs until All American tendered the mortgage loan funds, and that Salk did not require the Phillipses to secure this short term financing with anything other than fire insurance.

On April 29, 1963, the Phillipses, through their attorney, signed a new loan application and rider prepared by and submitted to Salk, intended as a revision of the prior application following All American’s April 25 commitment. Paragraph 7 provided:

“A 10-year Term Life Insurance Policy in the amount of $50,000.00 on Don R. Phillips will be secured with a company to be selected by Salk, Ward & Salk, Inc. In the event of the death of the insured, the mortgagee shall have the option to reduce the outstanding principal balance or disburse the proceeds to a beneficiary.”

On June 20, 1963, Don R. Phillips and Edna S. Phillips, his wife, executed a $100,000 installment note as co-obligors. The trust deed prepared by Salk and executed to secure the note provided in paragraph 12 of a rider thereto:

“It is further covenanted and agreed that there has been assigned to ALL AMERICAN LIFE & CASUALTY COMPANY, an Illinois corporation, all right, title and interest in Policy No. [136189] in the amount of Fifty Thousand Dollars ($50,000.00) on the life of Don R. Phillips.”

Thereafter, on September 5, 1963, Salk, by letter to the Phillipses’ attorney, stated: “I have been advised by the insurance company which will be a holder of the above mortgage that they have approved a life insurance policy on the life of Don R. Phillips in the amount of $50,000.” The letter requested Mr. Phillips to execute an enclosed Collateral Assignment of Life Insurance Policy which was signed by Mr. Phillips on October 7, 1963 and returned to All American. The form did not describe the policy other than by policy number.

Don R. Phillips died on July 8, 1969, at which time there was over $71,000 still outstanding on the installment note. After making a claim for the proceeds of the insurance policy, the plaintiff was advised by All American that the policy issued to her decedent was a reducing term policy which at the date of his death carried a death benefit value of $28,500. The instant suit was then initiated.

At trial, plaintiff presented Alfred H. Rohdl, a local insurance broker of over 34 years of experience, as an expert witness. He testified that the words used in paragraph 7 of the rider to the April 29 loan application, “a 10-year Term Life Insurance Policy in the amount of $50,000,” would have a meaning within the insurance industry of a level term policy rather than a reducing term policy. He further testified that in his own business a customer would be specifically informed that a particular term insurance policy was of a reducing nature before such a policy would be issued. On cross-examination, the witness admitted that “term insurance” is a generic name, and that increasing, decreasing and level term policies are classifications within that general designation.

Harold Hayword, a local insurance agent of 35 years’ experience, was called by defendant Salk as an expert witness. He testified that the expression “Home Security 10 yrs-8yrs pay” was one of a variety of phrases within the insurance industry having a connotation of a reducing term policy, especially with the addition of the designation “10 yrs-8 yrs pay.” He stated that the language used in paragraph 7 of the rider to the April 29 mortgage loan application, “a 10-year Term Life Insurance Policy in the amount of $50,000,” would only indicate the period which the policy is to run and not whether it was a level or reducing policy. The witness further testified that it is a custom in the insurance industry to inform a potential customer that a particular term policy is of a reducing nature at the time such policy is applied for and that any literature advertising such a policy would be clearly marked “decreasing.” The trial court entered a decree from which both defendants have appealed, which included the following finding:

“9. The policy of insurance which SALK WARD & SALK, INC., undertook and was obligated to obtain for DON R. PHILLIPS and EDNA S. PHILLIPS, his wife, and which ALL AMERICAN LIFE & CASUALTY COMPANY should have issued was a 10-year Level Term Life Insurance Policy in the amount of $50,000.-00, with the sum of $50,000.00 being in effect during each of the ten years of the term;”

The decree, inter alia, further found in paragraph 10 that the annual premium of the level term policy was $1,481.50 and decreed the reformation of the policy to provide a death benefit payable to plaintiff of $50,000, of which $28,500 had been paid to plaintiff, and that the balance of $21,500 is due and owing, less a credit of $3,201 for the additional premiums due All American on account of the reformation of the policy, and entered judgment against both defendants in the amount of $18,299.

We proceed to a consideration of the contentions raised by each of the defendants.

Defendant Salk first contends that the trial courts finding that Salk had undertaken and was obligated to obtain a level term life insurance policy for plaintiffs decedent is erroneous and, in the alternative, that even if such a duty was undertaken by it, that duty was extinguished by the unilateral action of the decedent in personally applying for the policy directly from All American. We agree with defendant’s alternative contention. Even if one assumes that Salk had a duty to procure the insurance required under the Phillipses’ mortgage loan application, the record in the instant case fails to establish any action or lack of action on the part of Salk which could be deemed to be a breach of that obligation.

At trial, Charles E. Meyers, the attorney who represented the Phillipses in the negotiations with Salk, testified that in the negotiations preliminary to the formal application for a loan, the use of reducing term life insurance as security for the loan was discussed with Salk and then discarded. He further testified that no instructions were given by Salk relative to the term insurance required under the riders to the loan application except the language of the rider provisions.

Edward Walle, an employee of Salk, testified that his company was never requested by either the decedent, his wife or their attorney to obtain the required term life insurance coverage. He further testified that Salk did not select any insurance company to issue such coverage; that Salk in no way referred the decedent to All American for this purpose; and that Salk did not know that the decedent had directly applied for the policy in question until several months after the fact, and even then had no notice that the policy as issued was not proper in all respects. Hence, on the state of this record, if in fact Salk had a duty to obtain the required insurance policy, that duty arose from the rider to the March 28 loan application and continued for 27 days, at which time the decedent independently and directly applied for the policy from All American. Therefore, any duty imposed on Salk as agent for the purpose of obtaining the required insurance was terminated when that purpose was thereby accomplished. The April 29 modification of the Phillipses’ initial application for loan, executed 3 days after the decedent and All American had arranged for the required insurance, was ineffective to impose a duty on Salk as to a previously extinguished obligation.

When it appears from a consideration of the entire record that the evidence does not support the findings of the trial court, it is the duty of a court of review to reverse. (Liddell v. Smith (1985), 65 Ill.App.2d 352, 213 N.E.2d 604.) The record in the case before us fails to support the findings of the trial court that defendant Salk had incurred a duty to procure level term insurance under its agency contract with the Phillipses and that defendant Salk had later breached that duty. Therefore, the judgment for damages against defendant Salk for the alleged breach of its agency contract with plaintiff and her decedent must be reversed.

In' its first contention, defendant All American alleges that the trial court erred in excluding from evidence the mortgage loan contract between itself and the Phillipses, entered into by the latter through Salk, their agent. It is argued that All American’s commitment of April 25, 1963, constituted a counter offer to make a loan to the Phillipses because the commitment was conditioned upon the furnishing of a $50,000 life insurance policy acceptable to the company as further collateral, and that when Salk acknowledged and accepted that commitment on April 30, 1963, then and only then did a contract arise between the parties. Thus, it is further argued that because it is the nature of a reformation action to ascertain the intent of the parties from other than the contract sought to be reformed, those documents were highly relevant as to what was the actual insurance agreement between decedent and All American.

We agree that the nature of the relief sought by plaintiff made those two documents relevant and that the trial court erred in excluding them. This applies similarly to the initial loan application of the Phillipses, dated March 28, 1963, which was excluded on objection by defendants. However, we do not feel compelled to reverse and remand the cause due to such error. The correspondence of April 25 and April 30, 1963, between Salk and All American and the March 28, 1963, loan application of the Phillipses, which were also refused, are included in the record on appeal. In chancery cases, the whole record is before a court of review and if there is competent evidence to support a decree it must be affirmed; if not, it must be reversed, and this is without regard to the views of the chancellor as to the competency of the evidence at the hearing. Dombrow v. Dombrow (1948), 401 Ill. 324, 82 N.E.2d 47; Newman v. Youngblood (1946), 394 Ill. 617, 69 N.E.2d 309.

In the recent case of Goldblatt Bros., Inc. v. Addison Green Meadows, Inc. (1972), 8 Ill.App.3d 490, 290 N.E.2d 715, this court in a supplemental opinion questioned the practice of including within a factual determination on review evidence excluded at trial but contained in the record upon appeal. There, in a suit in part for specific performance, the appellate court in its original opinion had considered, in addition to other evidence, the evidence erroneously excluded by the trial court consisting of the oral testimony of an expert witness and an offer of proof as to his opinion of the possible damages to the plaintiff as a result of the defendant’s breach of contract. Upon rehearing, the appellate court held that to have a court of review consider the erroneously excluded testimony in a factual determination as to the sufficiency of evidence without remand and without allowing the defendant an opportunity to meaningfully cross-examine the expert witness or rebut his testimony raised substantial questions of fairness and due process of law. We feel that the facts in Goldblatt distinguish it from the instant case. Here, the evidence erroneously excluded by the trial court consisted of documents, and as such the exhibits speak for themselves. For this reason, consideration of these rejected exhibits in our determination of the sufficiency of the evidence to support the instant decree of reformation does not present questions of fairness or due process of law. A reversal and remand of this cause for the sole purpose of admitting these documents would be a needless formality. Accordingly, our review will consider tírese exhibits the same as if the trial court had admitted them into evidence at the hearing below. See Gundich v. Emerson-Comstock Co. (1960), 24 Ill.App.2d 138, 164 N.E.2d 512; Gustin v. Bryden (1917) 205 Ill.App. 204.

All American next contends that the trial court erred in finding that the insurance contract between it and plaintiff’s decedent was the product of a mutual mistake of fact, a requisite for an action in reformation. This argument is predicated upon the assertion that the plaintiff failed to introduce any evidence that either her decedent or All American was operating under a mutual mistake of fact when All American issued a reducing term life insurance policy to the decedent.

In order to reform a contract of insurance the party seeking the reformation must show by clear and convincing evidence that at the time the contract was executed there existed a mutual mistake of fact, not law, common to both parties to the contract, and that because of this mutual mistake of fact the policy as issued does not reflect the real agreement between the parties. (State Farm Mutual Automobile Insurance Co. v. Hanson (1972), 7 Ill.App.3d 678, 288 N.E.2d 523; Sedlacek v. Sedlacek (1969), 107 Ill.App.2d 334, 246 N.E.2d 6; New York Life Insurance Co. v. Rak (1961), 30 Ill.App.2d 86, 173 N.E.2d 603, affd (1962), 24 Ill.2d 128, 180 N.E.2d 470; Hyman-Michaels Co. v. Massachusetts Bonding & Insurance Co. (1956), 9 Ill.App.2d 13, 132 N.E.2d 347.) As the plaintiff in a reformation action is seeking not to rescind or avoid the contract, but instead, to enforce a contract different from that which he signed, he must be able to point to the contract he intended to make and prove a like intention on the part of the defendant. In each of those cases where reformation of an insurance contract has been allowed there has been a clear showing of what the plaintiff intended to procure from the defendant insurer and of the latter’s knowledge of that intention, as a result of either express directions from the insured or by knowledge on the part of the insurer of circumstances wholly inconsistent with the provisions of the policy as issued. Hyman-Michaels Co. v. Massachusetts Bonding & Insurance Co., supra.

In considering All American’s contention that the evidence is insufficient to support the decree of reformation entered herein, we are limited in our review of the record by the general rule that a decree will not be disturbed where it rests upon disputed questions of fact, unless the findings upon which the decree is based are contrary to the manifest weight of the evidence. State Farm Mutual Automobile Insurance Co. v. Hanson, supra; Swan v. Allstate Insurance Co. (1967), 89 Ill.App.2d 205, 232 N.E.2d 491; Stoltz v. National Indemnity Co. (1952), 345 Ill.App. 495, 104 N.E.2d 320.

In the instant case, all of the documentary exhibits introduced at trial, as well as those rejected but contained in the record on appeal, reflect that one of the conditions to the issuance of a mortgage loan to the Phillipses was the furnishing of a $50,000 term life insurance policy on the life of the decedent, Don R. Phillips. Their original March 28, 1963, application to Salk for a mortgage loan speaks of this condition as a “Term Life Insurance Policy in the amount of $50,000.” Their second application to Salk of April 29, 1963, executed by their attorney, also speaks of the insurance requirement as a “10-year Term Life Insurance Policy in the amount of $50,000.” The trust deed prepared by Salk and executed by the Phillipses refers to he insurance policy in question as “Policy No. (136189) in the amount of FIFTY THOUSAND DOLLARS ($50,000.00).” As opposed to a level term life insurance policy, a reducing term policy in an amount of $50,000 is only a $50,000 policy in the first year it is issued; thereafter, the death benefits will be less. In both an ordinary and a logical meaning, a term life insurance policy in the amount of $50,000, whether for a specified or an unspecified period, does not have a $50,000 value unless it is a level term policy. The conclusion that the plaintiff’s decedent gave this same common interpretation to the language contained in these documents readily arises. This conclusion is buttressed by the testimony of Charles F. Meyers that the possibility of using decreasing term life insurance as security for the mortgage loan was discussed in the preliminary negotiations with Salk, and then subsequently rejected.

On the basis of the above evidence and the inferences therefrom, the trial court’s conclusion that it was the decedent’s intent to procure a $50,000 level term life insurance policy from All American is not unreasonable. Similarly, such language was included in the Phillipses’ March 28, 1963, mortgage loan application which was used by Salk to solicit All American. The response to this solicitation by All American embodied in its April 25, 1963, commitment letter speaks of the acceptance of the mortgage loan as “subject to DON R. PHILLIPS furnishing a $50,000 Life Insurance Policy.” This evidence suports a conclusion that All American had knowledge of the decedent’s intention to procure a level insurance policy, both from the decedent’s directions contained in the loan application and All American’s knowledge of the language contained in its own commitment letter which is inconsistent with the provisions of the policy it later issued.

All American argues that the application for the term insurance policy issued shows upon its face that the decedent received that for which he knowingly bargained, because the application he signed states that the policy applied for is a “Home Security 10 yrs-8 yrs pay” plan policy. It is true that expert testimony was presented that this designation was understood within the insurance industry as a reducing type of term policy, and that the custom within the industry was to inform a customer of the nature of a policy before issuing a reducing term policy. However, R. Dean Ballard testified that he could not recall any of his conversation with the decedent at the time of the execution of the insurance application. There is no evidence of record that the decedent understood the connotation of the designation used in the application. Furthermore, the policy was never given to the decedent, nor was he ever furnished with a copy of it or the application. The plan designation written on an insurance application by the insurer’s agent and which was seen by the insured on one brief occasion is not sufficient of itself to charge the insured with knowledge of the nature of that policy because of the connotation that designation carries within the insurance industry and so defeat a subsequent action for reformation. State Farm Mutual Automobile Insurance, Co. v. Hanson, supra.

All American further argues that it is ludicrous to assume that an experienced business man such as plaintiffs decedent would, in borrowing money, procure or attempt to procure a life insurance policy with annual premiums substantially greater than those of a policy required by and acceptable to the lending institution. This argument overlooks another equally logical explanation — that the decedent desired the greatest death benefit possible in order to protect the financial resources of his wife who was the maker of the installment note herein, from depletion upon his death.

After a thorough examination of the record we cannot say that the trial court’s decree ordering the reformation of the term life insurance policy from a reducing term to a level term is contrary to the manifest weight of the evidence. It is not necessary that we pass upon the final contention of All American that the additional finding that it had breached its contract to issue a level term insurance policy in the amount of $50,000 to plaintiffs decedent is erroneous. By our affirmance of the decree of reformation that issue becomes moot. The reformed term policy requires that All American fulfill its contractual obligation of providing full death benefits according to those reformed terms, minus only the excess premium amounts of a level term policy over that of a reducing term policy and any proceeds already paid to plaintiff as beneficiary.

For the foregoing reasons, the decree as to defendant Salk is reversed, and as to All American is affirmed.

Reversed in part and affirmed in part.

DEMPSEY and McGLOON, JJ., concur.


text:
    Exchange National Bank of Chicago, Plaintiff-Appellee, v. P. J. Cullerton et al., Defendants-Appellants.
    (No. 57248;
    First District (3rd Division)
    June 6, 1974.

      Edward V. Hanrahan, State’s Attorney, of Chicago (Vincent Bentivenga, Jr., Paul P. Biebel, Jr., and Robert M. Sarnoff, Assistant State’s Attorneys, of counsel), for appellants.
    Frank A. Edelman and Albert Siegel, both of Chicago, for appellee.
   Mr. JUSTICE MEJDA

delivered the opinion of the court:

Plaintiff, Exchange National Bank of Chicago, as trustee, filed a complaint in the chancery division of the circuit court of Cook County against defendants, County Assessor, County Board of Appeals, County Clerk, and County Treasurer and Collector, for declaratory judgment and injunctive relief as to an allegedly void and invalid increase in assessed valuation of plaintiff’s real estate for the year 1970, a non-quadrennial year. Both plaintiff and defendants filed motions for summary judgment. A judgment in favor of plaintiff was entered. Defendants appeal.

Defendants originally contend that (1) plaintiff’s complaint filed before the Board of Appeals constituted a general appearance; (2) the complaint waived the defects of the Assessor’s notice and hearing provisions; and (3) the filing of the complaint conferred jurisdiction on the Board of Appeals to validate an increase in assessed valuation in a non-quadrennial year. Defendants, in a supplemental memorandum filed after oral arguments by leave of this court, argue that the trial court erred in not dismissing the plaintilFs complaint because of an adequate, available remedy at law by which it could have raised the questions presented herein. We affirm. Tire facts follow.

On January 10, 1971, one of the beneficiaries of the above trust received notice from the Assessor that a hearing would be held on January 18, 1971, as to a proposed increase in valuation of plaintiffs described real estate in Elk Grove Township for the year 1970. Upon his arrival at the Assessors office on the date set, counsel for plaintiff was advised that no such hearing would be held due to the unavailability of the pertinent property record cards. The Assessor had completed work on the books for Elk Grove Township prior to January 18, 1971, and transmitted them to the Board of Appeals without granting plaintiff any opportunity for a hearing on the increased valuation.

On or about March 16, 1971, plaintiff filed a real estate valuation complaint before the Board of Tax Appeals. In that document plaintiff alleged that the assessment was excessive, and in support thereof stated that “the unit price should be reduced” and “the condition factor should be corrected” as per the affidavits which it intended to file with the Board on the date of the hearing. At the hearing before the Board, plaintiff confined its argument to its motion filed at that time in which it contested the jurisdiction of the Assessor to revise an assessment in a nonquadrennial year without complying with the statutory requirements and also contested the jurisdiction of the Board to confirm such void assessment. The motion was denied and the Board upheld its jurisdiction and the action of the Assessor in increasing the assessed valuation of the property. Subsequently, plaintiff filed this action in the chancery division of the circuit court.

The relevant portion of the Illinois Revenue Act of 1939 (Ill. Rev. Stat. 1969, ch. 120, par. 578) which empowers the Assessor to revise real estate assessments in nonquadrennial years states:

“On any such revision by the county assessor, except where such revision is made on complaint of the owner, no assessment shall be increased without previous notice to the owner and an opportunity to be heard. * * * The assessor shall have no power to change the assessment or alter the assessment books in any other manner or for any other purpose so as to change or affect the taxes in that year, except as ordered by the board of appeals.”

The authority and jurisdiction of the Board of Appeals is set forth in section 113 of the Revenue Act of 1939 (Ill. Rev. Stat. 1969, ch. 120, par. 594) which provides, in pertinent part:

“In counties containing 500,000 or more inhabitants, the board of appeals in any year shall
(1) On complaint that any property is over assessed or under assessed, or is exempt, review and order such assessment corrected;
(2) Order the county assessor to correct any mistake or error (other than mistakes or errors of judgment as to the valuation of any real or personal property) in the manner provided in Sections 122 and 124 of this Act; •* *

Concerning defendants’ first contention on appeal, the same question was presented to this court in Goodfriend v. Board of Appeals (1973), 18 Ill.App.3d 412, 305 N.E.2d 404. In that case several taxpayers in independent suits sought to enjoin the collection of real estate taxes for the reason that the assessment was void and illegal in that the Assessor had failed to provide taxpayers with proper notice and opportunity to be heard. The assessments were made in a nonquadrennial year. Taxpayers filed limited appearances before the Board of Appeals and at the hearing contested only the jurisdiction of the Board to confirm the assessments and the legality of the assessment itself. In all cases the Board confirmed the assessments. Three taxpayers filed in chancery two-count complaints, one count requesting that a writ of certiorari issue, and the other praying for injunctive relief from the collection of the taxes. Two other taxpayers, in separate suits, sought injunctive relief only. The trial court concluded that all the increased assessments were void and permanently enjoined the defendants from attempting to collect the tax. On appeal we held that:

“Notice to the property owner and an opportunity to be heard are jurisdictional; they must precede any change or reassessment. (Lindheimer v. Nelson, 369 Ill. 312, 316, 16 N.E.2d 734.) An assessment without notice and hearing is invalid. People ex rel. Edgar v. National Box Co., 248 Ill. 141, 93 N.E. 778.
* * *
The notice and hearing were jurisdictional. (People ex rel. Rea v. Nokomis Coal Co., 308 Ill. 45, 50, 139 N.E. 41.) Appellant Board of Appeals could not confirm the increases in assessments in the presence of this jurisdictional defect. Under these circumstances, the complaints which [plaintiffs] filed were necessary; they did not waive any right under the Revenue Act. Therefore, by filing the complaints which only questioned the jurisdiction of appellant Board of Appeals [plaintiffs] did not waive their objection that the County Assessor had not given them notice and an opportunity to be heard before the assessed valuation of their real estate was increased in a non-quadrénnial year.” 18 Ill.App.3d at 424-425.

Defendants inferentially contend that in the case before us plaintiff’s original complaint before the Board of Appeals constituted an election of remedies, and plaintiff was barred from seeking equitable relief in the circuit court. They further maintain that Goodfriend is distinguishable on its facts in that plaintiffs there also sought relief in the form of a writ of certiorari.

We note that the plaintiff in the instant case initially filed a complaint before the Board of Appeals in which it alleged reasons why the reassessment was incorrect. In its complaint in the trial court plaintiff alleged that it filed a motion and affidavit with the Board of Appeals in which the jurisdiction of the Board and that of the Assessor was questioned, and further alleged that on March 26, 1971, the Board of Appeals approved the increased assessment and upheld the jurisdiction of the Board and the Assessor. Defendants admitted in their answer that the above motion and affidavit were filed and that the Board so certified the assessment as correct and upheld its jurisdiction and that of the Assessor to make the assessment. The only affidavit filed in support of any of the parties’ respective motions for summary judgment was that of the attorney for plaintiff. In that document he alleged that “[t]he only hearing before the Board of Appeals was on the affidavit of Counsel which was heard on March 19, 1971, as to the validity of the increase and the jurisdiction of the Board to approve the increase. The motion was denied and there was no further hearing in the Board of Appeals.” No affidavits to the contrary were filed by the defendants.

In Illinois Institute of Technology v. Skinner (1971), 49 Ill.2d 59, 63, 273 N.E.2d 371, the court held that “plaintiff did choose to pursue the statutory remedy before the board of review as to the 1967 exemption claim. In our opinion, that claim was therefore not a proper subject for equity jurisdiction, * * The court reversed the order of the lower court granting taxpayer an injunction on the grounds that the taxpayer, by filing a complaint with the board of review, elected to pursue his statutory remedy and therefore made that remedy exclusive. See Illinois Central R. R. Co. v. Hodges (1885), 113 Ill. 323; and Owens-Illinois Glass Co. v. McKibbin (1943), 385 Ill. 245, 52 N.E.2d 177.

In Goodfriend v. Board of Appeals, supra, this court found that “The three taxpayers did not introduce any evidence relative to the accuracy of the assessed valuations, but insisted that the increased assessments were illegal and void because they violated the provisions of the Revenue Act of 1939.” (18 Ill.App.3d at 422-423.) In the case before us, considering the motion and affidavit of plaintiff which constituted the special appearance as set forth in the pleadings in the trial court, we conclude that the special appearance of the plaintiff was equivalent, at the least, to a withdrawal of the original complaint or the grounds stated therein. The Board of Appeals admitted that argument before the Board was limited to the special appearance. Therefore, plaintiff effectively abandoned its original complaint before the Board, and by filing and arguing its objections to the jurisdiction of both the Board of Appeals and the Assessor, did not conclusively elect to pursue its statutory remedy.

In Goodfriend, supra, this court held that the complaints filed before the Board of Appeals were “necessary.” As to those taxpayers who sought the issuance of a writ of certiorari to the Board of Appeals, the complaints before the Board were necessary. That was the only way those taxpayers could preserve a record for review by the court. However, we note that the taxpayers in Goodfriend who sought only injunctive relief also filed complaints contesting the jurisdiction of the Board and the Assessor. We need not determine whether the complaints filed before the Board by those taxpayers, as the one filed by the plaintiff in the instant case, were necessary. Nevertheless, we do hold that in the instant case the filing of a complaint with the Board of Appeals, wherein the jurisdiction of the Board is contested and the invalidity of the assessment is urged, does not constitute an election of remedies.

In Illinois Institute of Technology v. Skinner, supra, the taxpayer did not contest the invalidity of the assessment but made application to the Board, by way of complaint, for exempt status. The Board clearly had the jurisdiction to pass upon the question of exempt status in the first instance. (Ill. Rev. Stat. 1969, ch. 120, par. 594.) In the case before us, the plaintiff urged lack of jurisdiction in the Board of Appeals to confirm an allegedly void assessment. It is upon this basis that we distinguish Skinner, supra. As in Goodfriend, the Board of Appeals could not confirm the increase in assessments in the presence of this jurisdictional defect.

As to defendants’ final issue, they cite and rely upon the recent decision in Clarendon Associates v. Korzen (1973), 56 Ill.2d 101, 306 N.E. 2d 299. At page 105, the court held that “A taxpayer need not look to the remedy at law but may seek relief by way of injunction where the tax is unauthorized by law or where it is levied upon property exempt from taxation. These two situations constitute independent grounds for equitable relief and in such , cases it is not necessary that the remedy at law be inadequate. [Citations.]”

In the instant case, plaintiff specifically alleged in its complaint that the 1970 assessment (the increase in excess of the 1969 assessment) was a “fraud and is void, invalid and unlawful” for the reason that the Assessor did not grant it a hearing as contemplated by section 97 of the Revenue Act of 1939 (Ill. Rev. Stat. 1969, ch. 120, par, 578), and therefore deprived plaintiff of due process and equal protection of the law. Such is not an allegation of overly excessive valuation amounting to constructive fraud but rather an unequivocal statement that the assessment was unauthorized by law.

Defendants maintain that the Assessor’s failure to grant the plaintiff a hearing amounted to no more than an “irregularity” in the taxing process. They cite and rely upon Bowman v. County of Lake (1963), 29 Ill.2d 268, 276, 193 N.E.2d 833, where the court stated:

“If, on the other hand, the taxing power is present, but has been exercised in an erroneous or irregular manner, it gives rise merely to an erroneous or irregular tax, as distinguished from a tax wholly unauthorized by law, which will not be enjoined in equity. Ames v. Schlaeger, 386 Ill. 160.”

In the supplemental memorandum filed with this court, defendants claim that assertions of irregularities “approaching a violation of one’s constitutional rights” are nevertheless irregularities. Such is not the case here. The Assessor’s failure to grant a hearing does not merely “approach” a violation of the plaintiff’s constitutional right to due process. Such action clearly and emphatically denies the plaintiff that right. For, as we have noted above, notice and an opportunity to be heard must precede the final assessment. (Lindheimer v. Nelson (1938), 369 Ill. 312, 316, 16 N.E.2d 734.) An assessment without notice and an opportunity to be heard is illegal and void. (Goodfriend v. Board of Appeals, supra.) The plain words of section 97 of the Revenue Act of 1939 (Ill. Rev. Stat. 1969, ch. 120, par. 578) read that “no assessment shall be increased without previous notice to the owner and an opportunity to be heard.” (Emphasis supplied.) The Assessor of Cook County therefore acted not in an irregular manner but without any statutory authority, in increasing plaintiff’s assessment for the year 1970. The tax thereby imposed was unauthorized, and the trial court properly issued the injunction and declared the rights of the parties.

For the reasons stated herein, the judgment of the circuit court of Cook County is affirmed.

Affirmed.

McNAMARA, P. J., and McGLOON, J., concur.


author: Mr. PRESIDING JUSTICE McNAMARA

text:
      In re Aaron Tucker et al., Respondents-Appellants. The People of the State of Illinois, Petitioner-Appellee, v. Aaron Tucker et al., Respondents-Appellants.
    (No. 57418;
    First District (3rd Division)
    June 6, 1974.

      Paul M. Brayman, of Cook County Legal Assistance Foundation, Inc., of Evanston, for appellants.
    Bernard Carey, State’s Attorney, of Chicago (Kenneth L. Gillis, Patricia C. Bobb, and Robert Faithful, Assistant State’s Attorneys, of counsel), for the People.
   Mr. PRESIDING JUSTICE McNAMARA

delivered the opinion of the court:

After an adjudicatory hearing in the juvenile division of the circuit court of Cook County, the respondents were adjudged to be delinquent; Melvin Malone for committing robbery and murder and Aaron Tucker for committing theft. Respondents contend that the trial court erred in denying their motion to suppress statements made after an illegal arrest, and also that the evidence was insufficient to establish their guilt beyond a reasonable doubt.

Certain facts are undisputed. On July 23, 1971, at approximately 2 P.M., Marion Gahagan, age 73, was the victim of a purse snatching which occurred as she was walking in front of a post office at Custer and Main Streets in the city of Evanston. She was knocked to the ground during the incident. She was taken to a hospital where she died approximately 1 week later. A coroner’s pathologist examined her body and testified that Mrs. Gahagan died from a skull fracture and brain lacerations caused by the application of violence to her skull.

Connie Hutchinson and Patricia Peterson observed the victim walking at the time and place in question. A short time later they observed her lying on the street and saw several young men running north on Custer Street. They could not identify any of the offenders, but observed a purse approximately 30 feet down Custer Street in the direction in which the boys had fled.

During a hearing on the motion to suppress, Officer James Edwards of the Evanston Police Department testified that following the incident he had a conversation with a private citizen who refused to disclose her identity. She informed the officers that two male Negroes had run through her yard to the alley. One of the men was 5'6" tall and the other was 5'8" tall. One had braided hair and carried something in his hand. Officer Edwards testified that he never talked to any other witnesses. Pursuant to the officers’ investigation, the respondents, along with two other youths not involved in this appeal, were arrested on the day of the crime. They were taken to the police station where a lineup was conducted. They were released the same day. On August 2, 1971, both respondents were again placed under arrest. On neither occasion did the police have warrants for respondents’ arrest. They were again transported to the police station where they were given their constitutional Miranda warnings. After about 1 hour, respondents gave written statements which they subsequently signed. The trial court denied respondents’ motion to suppress, and their statements were introduced into evidence at the adjudicatory hearing.

Respondent, Melvin Malone, in his written statement, asserted that on the day in question, Aaron Tucker told him that Charles Davis and Carl Malone had gone to Main Street to snatch a purse. He went to Main Street to stop them, and observed the two walking behind a woman. Melvin Malone stated that he then ran up to the woman and grabbed her purse. He and Aaron Tucker then ran down the street. He threw the purse down on Custer Street and went into his home.

Respondent, Aaron Tucker, in his written exculpatory statement, asserted that Davis and Carl Malone told him they were going to Main Street to snatch a purse. Shortly thereafter, Tucker informed Melvin Malone and they followed Davis and Carl Malone. Melvin told Carl not to snatch a purse, but Davis and Carl continued to follow the woman down Main Street. Tucker stated that he started to walk away and after taking several steps, he heard a scream. He ran. He looked back and saw Melvin Malone running behind him, carrying something in his hand.

Aaron Tucker testified at the adjudicatory hearing that he never took part in the robbery. On July 23, at 1:30 P.M., he was at home with his mother and cousin. At 1:50 P.M., he was walking to the Malone home when he was stopped by the police. It was stipulated that Tucker did sign the statement, but he testified that the contents of the written statement given to the police were untrue.

Respondents’ first contention is that the trial court erred in denying their motion to suppress statements which were the result of an illegal arrest. Under the Code of Criminal Procedures, a police officer may arrest a person without a warrant when he has reasonable grounds to believe that the person has committed an offense. (Ill. Rev. Stat. 1971, ch. 38, par. 107 — 2(c).) The quantum of proof needed to establish probable cause is less than that required to sustain a conviction at trial. (People v. Harper (1973), 16 Ill.App.3d 252, 305 N.E.2d 680.) The test of probable cause is whether a reasonable and prudent man in possession of the knowledge of the arresting officer would believe that the person to be arrested is guilty of a crime. People v. Macias (1968), 39 Ill.2d 208, 234 N.E.2d 783.

In the present case, the police officers learned from a witness that two men ran through her yard shortly after the crime. The description was brief and scanty. On the same day, the respondents were taken into custody, put into a lineup, and were released. On August 2, they were again arrested, although the officers had no new evidence linking them to the crime. Officer Edwards testified that during this period of time he did not interview any additional witnesses. Under these circumstances, the officers did not have reasonable grounds to believe that the respondents had committed an offense, and their arrest on August 2 was illegal.

However, the fact that respondents’ arrest was illegal does not necessarily require that statements given thereafter be suppressed. In People v. Brown (1974), 56 Ill.2d 312, 307 N.E.2d 356, the defendant urged on appeal that statements taken after his illegal arrest should have been suppressed by the trial court. Our supreme court rejected defendant’s argument, stating at page 317:

“From our examination of the record, in light of the circumstances shown by the testimony, we conclude that the giving of the Miranda warnings, in the first instance by the police officer and in the second by the assistant State’s Attorney, served to break the causal connection between the illegal arrest and the giving of the statements and that defendant’s act in making the statements was sufficiently an act of free will to purge the primary taint of the unlawful invasion.’ (Wong Sun v. United States, 371 U.S. 471, at 486.) We hold, therefore, that the circuit court did not err in admitting the statements into evidence.”

In the present case, the statements made by both respondents, one of which was exculpatory, were not made contemporaneously with respondents’ illegal arrest. The statements were made approximately 1 hour after their arrest, and after both had been given proper Miranda warnings. The signed statements themselves show that proper Miranda warnings were given to both respondents. After an examination of the record, we conclude that there was sufficient time accompanied by the warnings so as to break any causal connection between the illegal arrest and the giving of the statements. Respondents’ statements were properly admitted into evidence.

Respondents also contend that they were not proved guilty beyond a reasonable doubt. The quantum of proof required in a juvenile delinquency proceeding is the same as that required for a conviction in a criminal case. In re Urbasek (1967), 38 Ill.2d 535, 232 N.E.2d 716.

In the present case, the victim had her purse stolen. During the robbery, she was knocked to the ground. She was taken to the hospital where she subsequently died as a result of the injuries sustained during the robbery.

In his statement, Melvin Malone implicated himself in the occurrence. Where there is evidence that a crime has been committed, the confession of a defendant that he committed the crime can be sufficient to sustain a conviction. (People v. Dagge (1973), 10 Ill.App.3d 726, 295 N.E.2d 336.) Malone, in his statement, admitted grabbing the victim’s purse and then fleeing down the street. The evidence was sufficient to establish his guilt beyond a reasonable doubt.

The only competent evidence against Aaron Tucker was his statement given to the police. Melvin Malone’s statement was not competent evidence against Tucker because it was not made in Tucker’s presence and was not assented to by him. People v. Tunstall (1959), 17 Ill.2d 160, 161 N.E.2d 300.

Tucker, in his own statement, stated that on the date in question he went to stop Carl Malone from snatching a purse. After hearing Melvin tell Carl not to take the purse, Tucker stated that he walked away. He heard a scream, and ran. According to Tucker’s statement, he was at all times attempting to stop the purse snatching and was unaware that Melvin Malone was going to commit a crime. Mere presence at or near the scene of a crime or negative acquiescence is insufficient to make a party accountable for the actions of another. (People v. Barnes (1924), 311 Ill. 559, 143 N.E. 445.) After a review of the entire record, we conclude that the evidence adduced at the adjudicatory hearing was insufficient to prove Tucker guilty beyond a reasonable doubt.

Accordingly, the judgment of the circuit court of Cook County finding Melvin Malone to be delinquent is affirmed. The judgment finding Aaron Tucker to be delinquent is reversed.

Affirmed in part; reversed in part.

DEMPSEY and McGLOON, JJ., concur.


author: Mr. JUSTICE RECHENMACHER

text:
    James C. Crest, III, Plaintiff-Appellee, v. State Farm Mutual Automobile Insurance Company, Defendant-Appellant.
    (No. 72-371;
    Second District
    July 2, 1974.

      Querrey, Harrow, Gulanick & Kennedy, of Chicago, for appellant.
    Hart, Banbury & Banbury, of Aurora, for appellee.
   Mr. JUSTICE RECHENMACHER

delivered the opinion of the court:

This is an action for breach of a contract based upon the refusal of defendant to pay the plaintiff’s loss under a collision and public liability policy. The case was tried without a jury and resulted in a judgment for the plaintiff in the amount of $3042.60.

From the judgment of the trial court the defendant appeals on several grounds which will be considered separately.

The main contention of the defendant is that due to a material misrepresentation by the plaintiff in his application for the insurance, the defendant elected to rescind the contract and thus rendered it void ab initio.

In order to judge the merits of the defense, a brief review of the facts is necessary. On April 22, 1969, the plaintiff having purchased a new automobile applied to an agent of the defendant, one Sam Lupei, for insurance against liability, for personal injury and property damage and for collision damage to the automobile. The agent prepared a form, designated thereon “automobile application” and the plaintiff signed it after the agent had read it back to him, but plaintiff did not read it. The application contained a question as follows: “Has license to drive or registration been suspended, revoked or refused for the applicant or any member of his household within the past three years?” In the boxes designated “yes” and “no” for answer to this question, the “no” box was marked with an “X”.

Actually, the plaintiff had been involved in an accident several years before as a result of which his license to drive had been suspended or revoked as of August 10, 1966. After the application was signed on April 22, 1969, the plaintiff paid the agent $60 as a preliminary payment on the premium and the agent said the application would be binding and would cover for 30 days. On May 16, 1969, the plaintiff collided with a Commonwealth Edison Company utility pole, resulting in damage to his automobile to the extent of $2,224.04 and the destruction of the pole, which cost the plaintiff $418 to replace. The plaintiff reported the accident to Agent Sam Lupei on the evening of the same day that it occurred. The following day, May 17, the plaintiff received a letter from the defendant’s office at Bloomington stating that the defendant had elected to rescind the coverage and return the premium payment of $60 which was in fact returned with the letter. The defendant claims the letter rescinding the coverage was written and mailed before it had any knowledge of the accident.

Subsequently, the plaintiff made claim against the defendant and payment was refused on the ground that the policy had been rescinded by defendant “because of plaintiff’s misrepresentation on the application.” (We quote from appellant’s brief, since the letter of rescission was apparently not made a part of the record.)

While the defendant in its brief adverts to certain general principles it contends are controlling in connection with the rescission of contracts generally (citing an article entitled “Reformation and Rescission” by Milton M. Hermann, 1960 U. Ill. L.F. 1) it appears to us that the particular situation before us is governed by the provisions found in the Illinois Insurance Code (Ill. Rev. Stat. 1969, ch. 73, par. 766). This section reads as follows:

“No misrepresentation or false warranty made by the insured oí in his behalf in the negotiation for a policy of insurance, or breach of a condition of such policy shall defeat or avoid the policy or prevent its attaching unless such misrepresentation, false warranty or condition shall have been stated in the policy or endorsement or rider attached thereto, or in the written application therefor, of which a copy is attached to or endorsed on the policy, and made a part thereof. No such misrepresentation or false warranty shall defeat or avoid the policy unless it shall have been made with actual intent to deceive or materially affects either the acceptance of the risk or the hazard assumed by the company. This section shall not apply to policies of marine or transportation insurance.”

The defendant does not seriously contend that the misrepresentation as to the suspension or revocation of plaintiffs driver’s license was made with actual intent to deceive. The plaintiff testified that he did not read the application before he signed it and the defendant’s attorney did not cross-examine plaintiff as to his knowledge of the misrepresentation or his intent to deceive and, in fact, in his closing argument remarked “apparently there was no intent to deceive.” In its affirmative defense the defendant does not allege either an intent to deceive or that a misrepresentation was made which was material to the acceptance of the risk. In the pertinent paragraph stating the basis for the rescission, the affirmative defense refers to the application as providing, “in accordance with this statute that no coverage is afforded under said policy where there is a misrepresentation regarding suspension of driving privileges within a three year period.” However, actually the application does not make this statement but merely says, “If the answer to either question [as to prior cancellation or as to suspension of driver’s license within three years] is yes’ a nonbinding application may be submitted.” The affirmative defense pleading is therefore defective both in asserting a positive defense which has no actual basis in the language of the application itself, and because it misquotes the statute it relies on.

The plaintiff served interrogatories on the defendant seeking the answers to certain questions bearing on the materiality of the misrepresentations in question to the acceptance of the risk, but these interrogatories were never answered by the defendant and no evidence as to the materiality of the misrepresentation to the acceptance of the risk was ever put into the record by the defendant.

From the wording of the statute quoted above it is clear that the burden is on the party raising a misrepresentation in a policy or application as a ground for avoidance to establish either that the misrepresentation was made with actual intent to deceive or that it was material to the hazard assumed or to the acceptance of the risk. Likewise, it appears to be the general rule in Illinois that the materiality of the misrepresentation is a question of fact for the jury. (Mooney v. Underwriters at Lloyds, London (1966), 33 Ill.2d 566; Hofeld v. Nationwide life Insurance Co. (1972), 7 Ill.App.3d 226; Downey v. John Alden Life Insurance Co. (1972), 3 Ill.App.3d 638 (abstract opinion); Elvret v. Loyal Protective Life Insurance Co. (1969), 112 Ill.App.2d 289.) In Mooney v. Lloyds, London, supra, our supreme court said, at page 569:

“The materiality of false representations in an application for insurance is a question of fact for the jury, and a verdict should not be set aside if there is any evidence which, standing alone, tends to support it.”

It is true that in the case of Pruitt v. Allstate Insurance Co. (1968), 92 Ill.App.2d 236, this court held that a false statement which concealed the fact that another company had canceUed a similar automobile policy was material to the acceptance of the risk as a matter of law. However, that case is distinguishable from the present case on two grounds. First, in the Pruitt case the insurance carrier not only raised the materiality of the misrepresentation by way of affirmative defense but also filed a request to admit facts in connection with the application which the plaintiff failed to answer. In addition, the defendant in Pruitt filed an affidavit by the division supervisor on underwriting stating that it was the company’s policy to declare void ah initio any policy in which a false answer was given in the declaration. No counter affidavits were filed in response by the plaintiff. Under these facts the court affirmed a summary judgment for the defendant, saying, at page 239:

“In view of defendant’s uncontradicted affidavit, we are of the opinion that the trial court properly granted summary judgment.”

This is exactly the opposite to what happened in the case now before us. Here it was the plaintiff who served interrogatories on the defendant seeking information as to the basis for the affirmative defense, and the defendant who utterly failed to respond, even though sanctions were invoked against it. This decisive difference in the state of the pleadings makes the Pruitt case inapposite to the case before us.

Moreover, there is a substantial difference between a concealment of prior cancellations and other misrepresentations. The fact of prior cancellation by a previous carrier is an ultimate fact — it establishes that a prior judgment was made by a professional source against the risk. In the case of other misrepresentations there is not the same decisive import against the applicant because no judgment has been made. Certainly the revocation or suspension of a driver’s license is a factor to be weighed carefully by the underwriter in deciding whether to continue on tlie risk. Had the defendant here come forward with positive evidence to show the basis for the affirmative defense such evidence might have been decisive in establishing the materiality of the misrepresentation in inducing the company to accept the risk. But the plaintiff is entitled to know the basis, if one exists, and in this case, the defendant refused or neglected to make any record whatsoever. In oral argument before this court defendant’s attorney admitted that the company’s rule in connection with a revocation or suspension of a driving license was not an absolute prohibition but gave the underwriter some discretion. It was a factor to be weighed. There is in the record of the plaintiff’s testimony a suggestion that his driver’s license was suspended by reason of his failure to meet the requirements for financial responsibility. This does not create an automatic judgment that 32 months later the applicant is an absolutely prohibited risk. Facts presented by the underwriter of the company might so establish but that is a burden which the defendant has to meet and in this case it has not met it.

It is our opinion that the materiality of the misrepresentation in this case to the acceptance of the risk was not established as a matter of law and there is no basis for disturbing the judgment of the trial court on this point.

The defendant next contends that the judgment is defective in allowing damages for the cost of repairing the plaintiff’s automobile because no evidence as to the cost of such repairs was adduced by the plaintiff at the trial. It is true that there was no evidence as to the cost of repairs to the automobile in the testimony at the trial. However, the plaintiff served the defendant with a request for admission of facts wherein the plaintiff requested that the defendant admit “that the actual cash value of the collision loss was and is $2,224.04” and the defendant did not reply in any way to this request. Under Supreme Court Rule 216 (c) (Ill. Rev. Stat. 1973, ch. 110A, par. 216(c)) the failure to either deny or object to the requested admission within 28 days of its being served, has the effect of admitting the truth of the fact asserted in the request for admission. We believe the defendant’s contention is not well taken in this regard.

The defendant also contends that with regard to the portion of the judgment awarding damages for the cost of replacing the utility pole, the judgment is in error for the reason that the liability of the plaintiff to the third party, Commonwealth Edison, was not proven by any evidence establishing such liability, therefore, the plaintiff is in the position of a mere volunteer.

We fail to see any merit in the suggestion that the plaintiff is a volunteer. The defendant attempted to rescind the policy and denied liability. Under these circumstances the standard prohibition in the policy about the insured recognizing liability and making an independent settlement with the claimant is not binding on the plaintiff. (See Kinnan v. Charles B. Hurst Co. (1925), 317 Ill. 251; Oscar Heineman Corp. v. Standard Surety & Casualty Co. (1937), 289 Ill.App. 358.) In an annotation in 67 A.L.R. 2d 1084 in discussing this point it is said:

“Although most of the cases involved not only (as here) an unjustified denial of liability but also a specific refusal to defend an action brought against the insured, the reasoning therein as well as the equitable reasons therefor support the conclusion that by the mere denial of the insurer to its insured of any liability under the insurance policy for the damages claimed by a third person, the insurer- forfeits its right to claim the benefits of the no action clause, and the insured policyholder even in the absence of litigation may compromise the claim against him without prejudicing his right to recover from the insurer the amount of a reasonable and good faith settlement made by him.”

The above-quoted statement as to the law on this point seems to us to be reasonable and just and to be in line with the Illinois cases. We therefore must reject defendant’s contention as to plaintiff being a mere volunteer.

Finally, the defendant objects to the award of attorney’s fees of $500 in this case. This portion of the judgment was evidently based on section 155 of the Illinois Insurance Code (Ill. Rev. Stat. 1969, ch. 73, par. 767) which reads as follows:

“In any action by or against a company wherein there is in issue the liability of a company on a policy or policies of insurance or the amount of the loss payable thereunder, if the company has brought suit to cancel the policy or policies or refused upon demand prior to the commencement of the action to pay the amount of the loss, and it appears to the court that such suit or refusal is vexatious and without reasonable cause, the court may allow to the party who by the finding of the court or jury is entitled to prevail against the company, reasonable attorney fees, as a part of the taxable costs in the action and in addition to all other costs, but such allowance shall not exceed any one of the following amounts:
(a) 25% of the amount which the court or jury finds such party is entitled to recover against the company, exclusive of all costs;
(b) $1,000; * * *”

Considering the facts of this case, we cannot say that the company’s refusal to pay was “vexatious and without reasonable cause.” The plaintiff’s own act in allowing a misrepresentation to be made in his application, even if not with intent to defraud, raised a question as to coverage and the defendant should not be penalized for seeking a judicial determination of the question. We therefore reverse that part of the judgment allowing $500 in attorney’s fees.

Accordingly, the judgment of the trial court is affirmed as to the damages to the automobile of $2,224.04 (less the $100 deductible) and to the utility pole in the sum of $418, making the total judgment $2,542.-04 and the judgment is reversed as to the award of $500 for attorney’s fees.

Affirmed in part; reversed in part.

T. MORAN, P. J., and SEIDENFELD, J., concur.