text:
      In re Annexation of Certain Territory to the Village of Downers Grove—(Robert J. Dewire et al., Petitioners-Appellees, v. The City of Darien et al., Objectors-Appellants.)
    (No. 72-347;
    Second District
    September 18, 1974.

      Barbara G. Caruso and F. Willis Caruso, both of Hinsdale, for appellants.
    Duane G. Walter, of Wheaton, for appellees.
   Mr. PRESIDING JUSTICE THOMAS J. MORAN

delivered the opinion of the court:

This is an appeal from a judgment finding that a petition for annexation conformed to the provisions of the Illinois Municipal Code (Ill. Rev. Stat. 1971, ch. 24, § 7 — 1—1 et seq.).

Objectors-appellants claim that the petition was void for failing to comply with (1) section 7 — 1—1 which requires that the trustees of the affected fire protection districts be notified in writing prior to the hearing on the annexation petition, and (2) section 7 — 1—4 which requires that the petition be supported by an affidavit stating that the signatures on the petition represent the owners of record of more than 50% of the land in the territory to be annexed.

Section 7 — 1—1 of the Municipal Code provides, in part, that:

“When any land proposed to be annexed is part of any Fire Protection District * * * the Trustees of each District shall be notified in writing by certified or registered mail before any court hearing or other action is taken for annexation. Such notice shall be served 10 days in advance. An affidavit that service of notice has been had as provided by this Section must be filed with the clerk of the comt in which such annexation proceedings are pending or will be instituted # * #. No annexation of such land is effective unless service is had and the affidavit filed as provided in this Section.”

On April 13, 1972, there was filed in the circuit court of Du Page County a petition requesting annexation of certain unincorporated territory to the Village of Downers Grove. Subsequently, one of the petitioners filed an affidavit wherein it was stated that the petition contained tire-signatures of a majority of the property owners, the owners of record of more than 50% of the land involved and a majority of the electors of the territory therein described. A hearing on the petition was set for May 11. Notice of the hearing and a copy of the petition were mailed to the clerk of the Village of Downers Grove and, allegedly, to the Downers Grove Estates Fire Protection District. On May 11, the court initiated proceedings, in accord with section 7 — 1—4 of the statute, by entertaining uncontested perimeter objections. The hearing was continued until June 22 at which time objectors filed a motion to strike the petition. The motion stated that the trustees of the Downers Grove Fire Protection District have not received written notice of the proceedings and that petitioners’ affidavit, which purported to show service of notice on the fire protection district, was invalid for failure to state that such notice was sent by registered or certified mail. In support of the motion, three trustees filed affidavits stating their non-receipt of written notice. The court continued the cause until July 12 for an evidentiary hearing on the question of notice.

Meanwhile, by registered mail, petitioners’ attorney, on July 7, sent a duplicate of the April 13 notice and a copy of the annexation petition to the residences of the three Downers Grove fire protection district trustees. A new affidavit was executed to this effect. The affidavit additionally explained that this procedure was effected in reliance upon section 1.25 of the Construction of Statutes Act (Ill. Rev. Stat. 1971, ch. 131, § 1.25). (The Act provides for filing a duplicate writing in cases when a writing or payment required to be filed with the State or any political subdivision thereof is mailed but not received.) Copies of two return receipts, dated July 11, appear in the record.

On July 12, petitioners’ attorney introduced into evidence the April 13 notice of filing and the affidavit of mailing. The notice was addressed to the clerk of the Village of Downers Grove and to:

“Downers Grove Estate Fire Protection District
75th & Lyman
Downers Grove, Illinois 60515”

The affidavit of mailing executed by petitioners’ attorney, Mr. Walter, stated that he had “mailed a copy of the notice of annexation and a copy of the petition to the above named parties in a properly addressed envelope with sufficient postage at the U.S. Mail chute at the 'Wheaton Post Office, Wheaton, Illinois.” Attorney Walter’s secretary testified that on April 13, 1972, Mr. Walter gave her notices and petitions for two separate annexations which were to be mailed, that she prepared the envelopes for certified mail with return receipts, addressed as shown on the notice, and returned them to Mr. Walter. The secretary stated that she did not know what had happened to the receipts but that she never got them back. Mr. Walter stated to the court that he would stand on his affidavit of mailing.

Objectors stated that they would stand on the trustees’ affidavits of non-receipt of written notice but called Mr. Paul Spinka, secretary and trustee of the Downers Grove Fire Protection District, to testify concerning the district’s address. Mr. Spinka testified that the fire protection district did not maintain an office but did have two facilities (one at 75th and Lyman) and that mail addressed to “Downers Grove Estate Fire Protection District, 75th and Lyman, Downers Grove” would be directed to his home.

The court held that while the petitioners were not in strict compliance with section 7 — 1—1 of the Municipal Code (their notice being addressed to the district and not to the trustees) they did follow the substance of the statute. The court also held that the trustees’ affidavits made it apparent that they did not receive written notice and that the purpose of the statute’s requirement was thus defeated. As a result, the court continued the proceedings for 2 weeks (until July 26 to comply with the 10-day advance notice requirement) and ordered petitioners to mail notice of the July 26 hearing to the trustees. The next day, petitioners, by registered mail, sent new notice to each trustee and when court reconvened on the scheduled date, an attorney for the fire protection district acknowledged receipt of the notice of hearing. The court then considered perimeter objections after which hearing on the petition resumed.

Objectors insist that at the time the court determined there was no service of notice on the trustees, it was required to dismiss the petition because such deficiency is irremediable according to People ex rel. Hopf v. Village of Bensenville, 132 Ill.App.2d 907, 910 (1971). In addition, objectors contend that section 1.25 of the Construction of Statutes Act is not applicable because it is a filing statute rather than a notice statute.

Objectors’ argument is based, at least in part, upon the assumption that because petitioners’ initial notice was misaddressed, no written notice had been sent to the fire protection district prior to the hearing. This assumption, however, was not shared by the court nor is it substantiated by the record. The fact that the receipt was never returned, although receipts were received from the Village of Downers Grove and from mail (posted at the same time) relating to another annexation, certainly suggests that the notice was simply lost in the mail. While the original notice was not addressed to the “trustees” of the fire protection district and the accompanying affidavit did not state that it was sent registered or certified mail, these omissions were only formal defects. Neither omission was material because trustee Spinka testified that he would usually receive mail which was addressed in the manner of petitioners’ original notice, and petitioners’ attorney and the attorney’s secretary testified that the original notice was in fact sent by certified mail. The court, however, was faced with a dilemma for which the statute offers no solution: the trustees had not received written notice of the hearing despite petitioners’ having mailed it. We agree with objectors that section 1.25 of the Act is a filing statute not applicable in this situation. To interpret séction 7 — 1—1 as requiring only mailing of notice without respect for its receipt would ignore the purpose of the statute. Conversely, it must be noted that if verification of receipt were intended, the legislature could have required the filing of return receipts or required personal service. Under the circumstances, the trial court’s decision to continue the proceedings until new notice could be issued and the 10-day requirement met, substantially complied with the spirit and intent of the statute. Additionally, we take cognizance of the fact that there was in the record a letter of objection to the annexation which letter was signed on May 2,1972, by trustee Spinka in his capacity as a property owner in the petitioning territory.

The Bensenville case supra, upon which objectors rely, is clearly distinguishable. There, petitioners attempted to comply with the notice requirements of section 7 — 1—1 after the ordinance of annexation was adopted. (132 Ill.App.2d 907, 908.) Here petitioners attempted to comply with the statute 28 days prior to the first hearing and, upon a finding of non-receipt, new notice was given prior to the date of hearing. Under the circumstances we find no reversible érror on this issue.

Objectors claim that the original petition for annexation was void because the supporting affidavit was false for stating that the signatures on the petition represented the owners of record of more than 50% of land in the territory described. The assertion is founded upon an interpretation that section 7 — 1—4 requires the initial petition, filed under section 7 — 1—2, to be supported by an affidavit to the effect that more than 50% of the owners of record of the land sought to be annexed have signed the petition. This is not true. In previous years there was such a requirement but the legislature, in 1961, amended section 7 — 1—2 and deleted that requirement. Now the original petition to annex need be signed only by a majority of the owners of record of the land in the territory described and a majority of the electors residing in such territory. Section 7 — 1—2 does not require the petition to be accompanied by an affidavit. Ill. Rev. Stat. 1971, ch. 24, § 7 — 1—2.

The first mention of an affidavit occurs in section 7 — 1—4 which prescribes that the circuit court conduct a two-phase hearing, wherein, first:

“Prior to hearing evidence on the validity of the annexation petition * * *, the court shall hear and determine any objections under sub-paragraph (4) of Section 7 — 1—3. If the court is satisfied that such objection is valid, it shall order the petition * ” * to be amended to eliminate such objector’s land from the territory sought to be annexed.”

Second, the court is directed that:

“Thereafter upon this hearing the only matter for determination shall be the validity of the annexation petition * * *. All petitions shall be supported by an affidavit of one or more of the petitioners, or someone on their behalf, that the signatures on the petition represent a majority of the property owners of record and the owners of record of more than 50% of land in the territory described and a majority of the electors of the territory therein described. Petitions so verified shall be accepted as prima facie evidence of such facts.”

As can be seen, it is during the second phase of the proceeding that the court determines the validity of the petition, either as originally filed or as amended under the first phase. It is at this time that the affidavit, if it is to be considered as prima facie evidence, must state that the signatures on the petition represent a majority of the property owners of record, the owners of record of more than 50% of land in the territory described and a majority of the electors of that territory. In the case at bar, petitioners’ unrebutted evidence reveals that the petition as amended was signed by the majority of landowners, the majority of electors and the owners of record of 51.22% of the land in the territory as finally described. Objectors’ claim is therefore without merit.

Finally, objectors argue that the court erred in denying LaGrange State Bank’s motion to amend its objection. The record shows that the bank’s attorney made an oral motion to amend the objection, that hearing on the motion was continued at the bank’s request, and that the court entered an order reserving its decision until that date. At the hearing, the court overruled the bank’s original objection. No one moved for a ruling on the pending motion and the court neither granted nor denied it. The law is clear that when the court reserves its ruling on a motion or an objection, the movant or objecting party must seek a decision or ruling in order to preserve the motion or objection for review. Trimmer v. Franklin Life Insurance Co., 319 Ill.App. 520 (1943 abstract opinion)/, app. denied; in accord, Schroeder v. Busenhart, 133 Ill.App.2d 180, 183 (1971), cert. denied, 405 U.S. 1017, 31 L.Ed.2d 479, 92 S.Ct. 1293.

For the reasons stated, the judgment appealed is hereby affirmed.

Judgment affirmed.

SEIDENFELD and RECHENMACHER, JJ., concur.


source: Caselaw Access Project

author: Mr. JUSTICE STOUDER

license: Public Domain

text:
    Bernard J. McLaughlin, Plaintiff-Appellant, v. Rainville Company, Inc., Counterdefendant-Appellee.
    (No. 73-128;
    Second District
    September 23, 1974.
    Murray McGuire, of Crystal Lake, for appellant.
    Frank T. Steponate, of Friend & Steponate & Assoc., of Chicago, for appellee.
   Mr. JUSTICE STOUDER

delivered the opinion of the court:

This action was brought by plaintiff-appellant, Bernard McLaughlin, against Continental Can Company to recover a commission. Continental Can Company answered, paid the amount claimed to the circuit clerk and impleaded two additional counterdefendants, Rainville Company, Inc., and John B. Clark. (Clark did not participate in the trial and is not involved in this appeal.) The trial court entered judgment without a jury in favor of one of the impleaded defendants, Rainville Company, Inc., against plaintiff.

According to the complaint plaintiff McLaughlin had an oral agreement with Continental Can whereby the Can Company promised to pay McLaughlin a commission if he sold an item of machinery belonging to the Can Company. The machinery was sold and the Can Company admitted that a commission was due on the sale but in accord with its answer the Can Company alleged that the commission was claimed by two counterdefendants and accordingly the Can Company paid the commission into court so that the party entitled to the commission could be determined. Rainville, one of the counterdefendants claiming the commission, filed its pleading claiming that it was entitled to the commission either because plaintiff was its employee at the time of the sale or because the sale was consummated by another employee.

Plaintiff moved to dismiss Rainville’s pleading after the response to interrogatories indicated: one, that it was a foreign corporation; two, that it had never received a certificate of authority from the State of Illinois; and three, that it maintained an office or offices in the State of Illinois and transacted business in this State. The trial court denied plaintiff’s motion to dismiss Rainville’s pleading and after hearing evidence on the merits of the claim the trial court decided that Rainville rather than plaintiff McLaughlin was entitled to the commission.

On this appeal the only issue raised by plaintiff-appellant is the court’s ruling on his motion to dismiss Rainville’s pleading and in this court as in the trial court it is plaintiff’s theory that because Rainville had no certificate of authority to conduct business in this State it was disqualified from filing the pleading raising the issue in which the court decided in its favor. As indicated in the statement of facts, the essential facts are undisputed.

The statutory provision relied upon by the plaintiff is section 125 of the Business Corporation Act (Ill. Rev. Stat. 1969, ch. 32, par. 157.125), which provides in pertinent part;

“Transacting Business Without Certificate of Authority
No foreign corporation transacting business in this state without a certificate of authority shall be permitted to maintain an action at law or in equity in any court of this State, until such corporation shall have obtained a certificate of authority. * * *
The failure of a foreign corporation to obtain a certificate of authority to transact business in this State shall not impair the validity of any contract or act of such corporation, and shall not prevent such corporation from defending any action at law or suit in equity in any court of this State. * *

Relying on Roberts v. Cat-Nak Manufacturing Co., 216 Ill.App. 245, decided in 1919, in which the court held an unqualified foreign corporation could not claim a setoff, plaintiff urges that Rainville is seeking similar relief and should be similarly disqualified.

Conceding that it could not have initiated any action in this State to collect the commission because of its status as a foreign corporation without any certificate of authority to do business in the State, the appellee nevertheless insists that it became a party to the action against its will and consequently under the terms of the statute relied upon by the appellant it has the right to defend itself and this is all it did. The circumstances of this case appear to be unique and no case has been called to our attention from this State or from any other state having legally equivalent statutory provisions in which an unqualified corporate defendant is made a party to the litigation by interpleader. However, it is our conclusion that in the absence of any specific prohibition against interpleading unauthorized corporate defendants such a defendant may assert its defense even though by the nature of the action the defense entails a determination of the party entitled to the interpleaded funds. If the appellee is to be bound by the court’s adjudication it should have the right to assert a defense which is inherent in the nature of the issues to be resolved.

For the foregoing reasons, the judgment of the circuit court of McHenry County is affirmed.

Judgment affirmed.

SCOTT, P. J., and DIXON, J., concur.


author: Mr. JUSTICE SEIDENFELD

text:
    The People ex rel. Hamer et al., Plaintiffs-Appellants, v. Board of Education of School District No. 113, Defendant-Appellee.
    (No. 73-105;
    Second District
    September 24, 1974.

      Rehearing denied October 15, 1974.

      Paul E. Hamer, pro se.

    Hall, Meyer, Fisher, Holmberg, Snook & May, of Waukegan, (Henry D. Fisher, and Jay J. Johnston, of counsel), for appellee.
   Mr. JUSTICE SEIDENFELD

delivered the opinion of the court:

We review the order of the trial court dismissing plaintiffs’ second amended complaint and denying leave to file a proposed amendment The second amended complaint alleged in substance that the plaintiffs were taxpayers and property owners in the defendant school district who were damaged by the wrongful investment of public funds by the district authorities. Count I sought a declaratory judgment; Counts II and IV sought a writ of mandamus and Count III sought a writ of injunction.

In the challenged ruling, the trial court specifically found as to Count I that plaintiffs failed to allege any facts upon which a claim to relief could be predicated and that plaintiffs had no standing to sue for the declaratory relief requested. As to the mandamus Counts II and IV, the court held that they were filed in direct violation of its previous order regarding the first amended complaint which excepted from the leave to amend all allegations concerning mandamus. The court also found that plaintiffs failed to state a cause of action for mandamus. As to Count III, the court found that plaintiffs had no standing to sue for the injunctive relief requested; and that insufficient facts were alleged to state a cause of action.

On appeal plaintiffs contend that they have standing to institute the litigation; that the second amended complaint states a cause of action; that the trial court deprived them of a right to a remedy guaranteed by the Illinois Constitution; and that the court erred in refusing further amendments and otherwise erred in ruling on the pleadings.

By its motion to dismiss defendant admitted all well pleaded facts. (Zanbetiz v. Trans World Airlines, Inc. (1966), 72 Ill.App.2d 192, 199.) With this overriding principle in mind, we consider the questions raised in relation to the separate counts of the complaint.

COUNT I — DECLARATORY JUDGMENT.

In Count I the plaintiffs allege in substance that they are citizens of the state and residents of the defendant district as well as the owners of property situated in the district and taxpayers therein; that during the period from July 2, 1968, to January 1, 1969, the district, disregarding the Local Government Act (Ill. Rev. Stat. 1969, ch. 85, par. 902), invested all of their public funds in various securities which matured or were redeemable on dates long after the dates when the district knew they would be required for expenditure, arbitrarily assigning the investments to certain funds, i.e., education, building, etc., without regard to the funds for which the tax monies were collected; and diverting the funds from one account to another, and comingling funds; that the district issued tax-anticipation warrants at a time when it had money in the treasury in the form of these securities; that the manipulation of the public funds by investing all of the tax monies in notes and securities when the funds should have been used to defray the necessary expenses of the district is a wrongful diversion of public funds and

“15. That there is on deposit in the Tranportation Fund FNMA note with, a maturity value of $50,000.00, Exhibit £C’ that since the filing of this suit, the DISTRICT has levied a tax for the Transportation Fund in excess of its actual financial needs, since sufficient funds were on hand in the fund in the form of notes, bills and other securities to defray the necessary expenses accruing to the Transportation Fund; that this matter was called to the attention of the DISTRICT and that thereafter, the DISTRICT did reduce the tax levy for the Transportation Fund by $90,000.00, resulting in a savings to the taxpayers of the DISTRICT.”

The plaintiffs state the purpose of the litigation is to assure that tax-anticipation warrants are issued only when needed in the amount needed. They pray that the court declare that funds not required to be expended within a period of 90 days from and after the date of the investment be used to purchase securities which shall mature or be redeemable prior to the time when the public funds so invested will be required for expenditure by the district.

On defendant’s motion to dismiss the trial court agreed with defendant’s contentions and held that plaintiffs did not have standing to sue for declaratory relief. In our view the trial court erred and plaintiffs do have standing to litigate in the public interest. A citizen and taxpayer, as beneficiary, has the right and therefore “standing” to force public bodies to comply with their public trust, without alleging and proving special damage to his property or interest different in degree and kind from that suffered by the public at large. Paepcke v. Public Building Commission (1970), 46 Ill.2d 330, 341. See also People ex rel. Naughton v. Department of Public Aid (1973), 12 Ill.App.3d 43, 49-50.

It does not necessarily follow, however, that the trial court erred in dismissing the declaratory judgment. To state a cause of action the plaintiffs were required to allege facts which would entitle them to the relief sought. While it was not necessary to state facts to show that they suffered a special damage different in degree or kind from that suffered by taxpayers generally, it was necessaiy to state facts which demonstrated an injury to the legal interests which comprise the public trust.

The complaint in Count I falls far short of alleging such injury and it was properly dismissed for failure to state a cause of action in declaratory judgment. The gist of plaintiffs’ complaint is found in the conclusionary charge that tax-anticipation warrants are issued and funds manipulated in a manner which results in additional tax burden on the plaintiffs. The facts pleaded, however, do not support this conclusion. Paragraph 15 of Count I which we have quoted in full above contains the only factual allegations which we have found in the count regarding the levy of taxes. And the allegations merely show that the tax levy in the transportation fund, there referred to, was in fact reduced, thus resulting in a tax saving.

In other allegations in Count I (paragraph 11), plaintiffs state a conclusion that the issuance of tax-anticipation warrants for a longer period than is actually required results in the unnecessary expenditure of public funds due to the interest being paid on said warrants for a longer period of time than is actually required. But there are other allegations in Count I that die district, in fact, profited by the issuance of tax-anticipation warrants to the extent that it invested in securities which yielded a higher interest than tire district paid on the warrants issued. Additionally, in oral argument counsel for the plaintiffs conceded that no injury could be shown by the issuance of the tax-anticipation warrants. This is, of course, true since tax-anticipation warrants are issued only against taxes already levied. People ex rel. Toman v. M. Born & Co. (1940), 373 Ill. 490, 493. See also People ex rel. Hamer v. Board of Education, 132 Ill.App.2d 46, 49-50.

Plaintiffs’ counsel further conceded in oral argument that the only injury he claims resulted from the fact that the district levied for taxes for the transportation fund at the maximum allowable rate under the law without consideration of the $50,000 long-term bond held in the transportation fund. He concludes that the taxpayers were thereby required to pay more taxes than were necessary to defray the expenses for which the fund was established. But no such allegations are found within the complaint. And, in absence of a direct attack on a levy of taxes, it is doubtful that any such allegations could be factually sustained since the management of district funds and reserves is a matter left largely to the discretion of school boards. See People ex rel. Hamer v. Board of Education, 132 Ill.App.2d 46, 49-50.

The accepted standard for the granting declaratory relief is whether under the facts alleged there is a substantial controversy between the parties having adverse legal interests of sufficient immediacy and reality to warrant the issuance of declaratory judgment. (Farmers & Supply Co. v. Illinois Central R.R. Co. (1972), 6 Ill.App.3d 965, 968.) Under the pleadings, the trial court correctly found that the plaintiffs had not alleged sufficient facts to show the injury to a legal interest required to, establish the requisite justiciability of a cause of action for declaratory judgment.

COUNT III — INJUNCTION.

Count III of the complaint repleads the allegations of Count I with some additional allegations which we deem either not to be material here or cumulative. The plaintiffs pray in this count that the district be enjoined from issuing tax-anticipation warrants in an amount greater than is necessary to defray the estimated necessary expenses of the district and for other relief essentially the same as prayed in the declaratory judgment count.

Similarly, we must conclude that no facts have been stated in the pleadings sufficient to set forth injury to the public as a basis for the granting of injunctive relief. (See Malkin v. City of Chicago, (1955), 6 Ill.App.2d 151, 154-5; Walgreen Co. v. American National Bank & Trust Co. (1972), 4 Ill.App.3d 549, 556.) The trial court therefore properly dismissed Count III for failure to state a cause of action.

COUNTS II and IV — MANDAMUS.

In Count II of the second amended complaint, plaintiffs incorporate several paragraphs originally stated in Count I of the original complaint. The trial court’s order dismissing their original complaint denied plaintiffs leave to amend the mandamus count.

Defendant contends that plaintiffs have waived the right to appeal from that order by filing an amended complaint; and that further pleadings in mandamus are therefore a nullity. No authority has been cited for this argument under the circumstances here and we know of none. An amendment which refers to or adopts portions of a prior pleading to the extent herein includes the adopted portion as a part of the record on review. (See Bowman v. County of Lake (1963), 29 Ill.2d 268, 272.) We will therefore disregard the order of the trial court to the extent that its dismissal of Count II of the second amended complaint was predicated on a violation of its order denying leave to amend the mandamus count; and our review of the propriety of the order will be limited to determining whether plaintiffs stated a cause of action in mandamus.

A writ of mandamus will not issue unless the petitioner shows a clear legal right to the writ and a clear obligation on the part of the party against whom the writ is sought to perform the acts which the petitioner seeks to have performed; and it will not be awarded in a doubtful case. (People ex rel. Albright v. Blair (1920), 292 Ill. 139, 144; People ex rel. Vlahakis v.Hanrahan (1972), 8 Ill.App.3d 313, 314.) The grant or refusal of this extraordinary writ rests within the sound discretion of the court. (White v. Board of Appeals (1970), 45 Ill.2d 378, 382.) The benefit of the doubt will extend in favor of the officer and where the performance of an official duty or act involves the exercise of judgment or discretion; and an officer cannot ordinarily be controlled with respect to the particular action he will take in the exercise of his discretion. MacGregor v. Miller (1926), 324 Ill. 113, 118.

Here, the plaintiffs seeking mandamus face the difficult task of alleging facts which would clearly establish that the defendant abused its discretion by its procedures in investing funds and issuing tax anticipation warrants; mere conclusions will not suffice. People ex rel. Vlahakis v. Hanrahan, 8 Ill.App.3d 313, 314.

Count II in substance alleges that the school board invested in securities, creating a financial crisis which it surmounted by the issuance of tax-anticipation warrants. Count IV repeats the allegations contained in Count I of the second amended complaint and in substance further alleges the breach of the duties of the board to issue only the amount of warrants required to defray the necessary expenses of the district and to invest only those funds not required to be expended in a 90-day period in securities which will mature prior to the time the invested funds will be required for expenditure. The plaintiffs pray that the writ of mandamus be issued to command the district to utilize tax monies to defray the necessary expenses of the district before tax-anticipation warrants are issued and to force compliance with all applicable provisions of the law regulating school-board investments. Ill. Rev. Stat. 1971, ch. 85, par. 902.

We have previously recognized that the statute which empowers public agencies to invest funds (now Ill. Rev. Stat. 1973, ch. 85, par. 902) upon which plaintiffs rely, is not a precondition to the power to invest, but rather a direction of the manner of the exercise of the board’s authority, involving a broad grant to discretion. (People ex rel. Hamer v. Board, of Education, 132 Ill.App.2d 46, 50.) We further held that the court is not in the position to step into the shoes of the board to examine its decisions regarding the necessity of the issuance of tax-anticipation warrants (page 49).

In our view plaintiffs’ allegations in Counts II and IV do not meet the requirements of pleading a clear right to the writ of mandamus and of alleging a clear breach of duty by the defendant. These counts were therefore properly dismissed for failure to state a cause of action.

Plaintiffs next contend that if we uphold the dismissal of their complaint they have been denied all right to a remedy guaranteed under article I, section 12, of the 1970 Illinois Constitution. The argument has no application here. Where a complaint fails to state a cause of action, the dismissal involves no deprivation of constitutional rights. Belmar Drive-In Theatre Co. v. Illinois State Toll Highway Commission (1966), 34 Ill.2d 544, 552; Zamouski v. Gerrard (1971), 1 Ill.App.3d 890, 898.

We have also given careful attention to plaintiffs’ final attention that the trial court erred in refusing to permit an amendment to the complaint. The order of dismissal states that leave is denied to file any further amendments of the pleadings. But except for the implication from the language of the order, the record is devoid of any evidence of a motion by plaintiffs to amend.

Plaintiffs did file a motion to modify, reconsider and vacate the order of dismissal. The whole import of this motion, however, was to point out the alleged errors of the court in ordering a dismissal with references throughout to what the court allegedly overlooked. The prayer of the motion did not ask to amend the pleadings and the record does not show that plaintiffs either proffered a proposed amendment or moved to amend.

Even in oral argument before this court, plaintiffs’ counsel has not suggested any amendment to the pleadings which would be curative of the defects which support the conclusion that no cause of action has been stated. In the nature of plaintiffs’ various complaints, it is not apparent to us that plaintiffs could show any injury or any deprivation of their rights sufficient to state a cause of action. We therefore have no basis for determining that the trial court abused its discretion in denying leave to amend the second amended complaint. See Bowman v. County of Lake, 29 Ill.2d 268, 281-282; Stevenson v. Maston (1969), 107 Ill.App.2d 65, 70.

For the reasons stated we affirm the judgment of the trial court which dismissed plaintiffs’ second amended complaint.

Affirmed.

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

       A further count (Count V) in the first amended complaint for quo warranto was severed for trial. The trial court dismissed the action and we affirmed in People ex rel. Hamer v. Board of Education (1971), 132 Ill.App.2d 46.


author: Mr¡ JUSTICE ALLOY

text:
    Hills Bank and Trust Company, Plaintiff-Appellant, v. Arnold Cattle Company, Defendant-Appellee.
    (No. 73-275;
    Third District
    September 17, 1974.

      Rehearing denied October 11, 1974.

      David Thompson, of Winstein, Kavensky & Wallace, of Rock Island, for appellant.
    Rick Moskowitz, of Bozeman, Neighbour, Patton & Noe, of Moline, for appellee.
   Mr¡ JUSTICE ALLOY

delivered the opinion of the court:

Plaintiff, Hills Bank and Trust Company, appeals from a judgment of the Circuit Court of Henry County granting a motion for summary judgment to defendant, Arnold Cattle Company, in an action to. recover damages for the conversion of 144 head of cattle upon which plaintiff held a security interest.

The action with which we are concerned was originally commenced by Hills Bank and Trust Company, an Iowa corporation, against defendant, Arnold Cattle Company, a Delaware corporation, to recover damages for conversion of 144 head of cattle upon which the bank held a security interest under chattel mortgages executed in 1964 and in 1966, by one G. E. Grace, an Iowa farmer. A financing statement evidencing the plaintiff s security interest was properly filed in Iowa in the Johnson County recorder’s office on July 5, 1966. On December 6, 1967, Grace brought the 144 head of cattle from Iowa to the place of business of Arnold Cattle Company in Illinois. At that time and location, defendant, Arnold Cattle Company, auctioned the cattle and disposed of them by sale.

Nearly 5 years later, on November 21, 1972, judgment was confessed by Grace upon the promissory notes which the mortgages had secured. Before the confession of judgment, however, Grace requested and received from plaintiff releases of the chattel mortgages. These releases were filed of record on November 22, 1972. On December 4, 1972, the present action was commenced as against defendant Arnold Cattle Company.

In support of the trial court’s decision, granting summary judgment to defendant on the motion made in the trial court, defendant, among other things, argues that it is the intent of the Uniform Commercial Code (Ill. Rev. Stat. 1971 ch. 26, § 1 — 101 et seq.) hereinafter referred to as the “Code”, to allow a secured party only those remedies that are provided in section 9 — 501, which, the defendant contends, limits the secured party to those remedies that it may have as against the debtor and therefore precludes any remedies the secured party may have against third parties. We do not agree with the reasoning of defendant on this issue. While it is true that article 9 of the Code contains no specific provision establishing a cause of action against a third party for the conversion of property upon which another holds a security interest, that omission does not preclude or pre-empt another remedy. It is made manifest that no such pre-emption was intended in section 1 — 103 of the Code, which states in part:

“Unless displaced by the particular provisions of this Act, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, or other validating or invalidating cause shall supplement its provisions.”

Thus, as is stated in the official comments (S.H.A., ch. 26, 5 9 — 306, at 403 (1963)):

“In most cases when a debtor makes an unauthorized disposition of collateral, the security interest, under prior law and under this Article, continues in the original collateral in the hands of the purchaser or other transferee. That is to say, since the transferee takes subject to the security interest, the secured party may repossess the collateral from him or in an appropriate case maintain an action for conversion.”

See, e.g., Farmers State Bank v. Stewart, 454 S.W.2d 908, 916 (Mo. App. 1970); Clovis National Bank v. Thomas, 77 N.M. 554, 425 P.2d 726, 731 (1967).

In absence of facts creating a waiver or release or showing an acquiescence or consent to the sale, the defendant, Arnold Cattle Company, an auctioneer, became liable to the plaintiff for the conversion of the cattle in 1967 when defendant sold the cattle. As stated at 96 A.L.R.2d 208, 210 (1964):

“The great weight of authority follows the rule that a sale by an auctioneer for a principal who has no title to the property or who holds it subject to a mortgage or other lien, or who for other reasons has no right to dispose of it, entails liability to the true owner, lienor, or conditional vendor, as for a conversion, on the part of the auctioneer who sells it under such circumstances, pays over the proceeds to tire principal, and hands the property over to the purchaser with a view to passing the title to him, notwithstanding the auctioneer acts without knowledge of the principal’s lack of authority to-sell #

See Farmers State Bank v. Stewart, 454 S.W.2d 908 (Mo. App. 1970); Clovis National Bank v. Thomas, 77 N.M. 554, 425 P.2d 726, 731 (1967); Rapid City Production Credit Association v. Transamerica Insurance Co., 85 S.D. 395, 184 N.W.2d 49 (1971); Duvall-Wheeler Livestock Barn v. United States, 415 F.2d 226 ( 5th Cir. 1969).

Since the record does not disclose any evidence oí consent or acquiescence to the sale of the cattle, the issue to which this court will first direct its attention is whether or not the release of the security interest in the cattle did in fact waive plaintiff’s cause of action for defendant’s conversion of cattle or release such cause of action. It is important to note that whether or not there is a waiver or release of a cause of action is a matter which hinges on the intention of the parties involved. (76 C.J.S. Release §§24, 38, 51 (1952); 31 I.L.P. Release §§ 6, 21, 26 (1957); 18 I.L.P. Estoppel §21 (1956); Shaw v. Close, 92 Ill.App.2d 1, 235 N.E.2d 830 (1st Dist. 1968); Podbielniak v. Podbielniak, 38 Ill.App.2d 451, 187 N.E.2d 454 (1st Dist. 1962); Butcher v. United Electric Coal Company, 174 F.2d 1003 (7th Cir. 1949).) The plaintiff contends that there was no intention to waive or release its cause of action against the defendant when it released the chattel mortgages. In support of its position, the plaintiff first argues that it was required to execute such releases under section 9 — 404 of the Code since there no longer existed any collateral or proceeds of the collateral which could secure the outstanding obligation (when the cattle were sold by the auctioneer in 1967). With this argument we cannot agree. Section 9 — 404 of the Code, prior to its amendment effective July 1,1973, stated in pertinent part:

'Whenever there is no outstanding secured obligation and no commitment to make advances, incur obligations or otherwise give value, the secured party must on written demand by the debtor send the debtor a statement that he no longer claims a security interest under the financing statement, which shall be identified by file number.”

Obviously the authors of the Code did not intend this to permit a debtor to force a release of a security interest by illegally disposing of the collateral. For this reason alone we believe it clear that where a secured obligation has not been satisfied and the collateral or proceeds of the collateral have not been transferred to the secured party in reduction of the outstanding obligation, the secured party is not required under section 9 — 404 to release any security interest it may have upon the collateral. Specifically, a debtor can only force such a release by the secured party by paying the total amount due or applying the collateral or the entire proceeds | from the sale of the collateral to the debt. The fact that the plaintiff was not required to release its chattel .mortgages, however, dogs not necessarily mean- that its release of the: mortgages waived or released its causes of action for conversion against Grace or the defendant. This, as stated above, is a question of the parties’ intention.

To the extent that the parties’ intention can be demonstrated by a clear and unambiguous written instrument signed with full knowledge of its contents and without any fraud, mistake, or duress, the matter is a question of law and one to which this court may properly direct its attention upon review and one to which, the trial court could properly direct its attention upon defendant’s motion for summary judgment. (76 C.J.S. Release § 72(f) (1952); Atlantic Coastline R.R. Co. v. Boone, 85 S.2d 834 (Sup. Ct. Fla. 1956); Warrior Constructors, Inc. v. E. C. Ernst Co. 127 Ga. App. 839, 195 S.E.2d 261 (1973); Dial Temp Air Conditioning Co. v. Faulhaber, 340 S.W.2d 82 (Tex. Civ. App. 1960); Hilley v. Blue Ridge Insurance Co., 235 N.C. 544, 70 S.E.2d 570 (1952).) Where, however, the evidence is conflicting regarding the parties’ intentions in the execution of a document which is unclear in its terms, the issue is a question of fact for a trier of fact to decide. 76 C.J.S. Release § 72(f) (1952); Butcher v. United, Electric Coal Co., 174 F.2d 1003 ( 7th Cir. 1949).

In the present situation the release made by the plaintiff reads!

“The Hills Bank & Trust Company, Hills, Iowa, hereby releases the following Chattel Mortgages executed to said bank by G. E. Grace and authorizes the Johnson County Recorder to cancel the same on his books and records:
1. File Number R188 dated June 20, 1964;
2. File Number 1447 dated May 6, 1965;
3. File Number L472 dated April 28, 1966; and
4. File Number L474 dated April 28, 1966.
Dated this 26th day of October, 1972.”

Just as we cannot as a matter of law say that the mere release of a mortgage conclusively indicates the satisfaction of its underlying obligation (59 C.J.S. Mortgages §475 (1949)), we cannot a,s a matter of law say that the above release, which makes no mention of releasing any- . thing more than the mortgages, releases the plaintiff’s cause of action., based on conversion against the defendant.

Nor can we say as a matter of law on the record before us that plaintiff’s acceptance of the confessed judgment ipso facto waived its cause of action for conversion. Again, it is the intention of the parties, which is determinative, and such an issue where disputed is one for the trier of fact to decide. In other words, the acceptance of additional, new or substituted security such as the confessed judgment from one obligor (e.g., Grace) does not necessarily release a third party (e.g., defendant) on another or similar cause of action.

Thus, in Lusk v. Throop, 189 Ill. 127, 59 N.E. 529 (1901), defendant promised the plaintiff, a grocer, that defendant would pay for whatever supplies plaintiff furnished to a third party. Later defendant requested that plaintiff take notes and chattel mortgages from the third party as security for the debt. In response to defendant’s argument on appeal that plaintiff’s acceptance of the notes and mortgages constituted a release of defendant’s obligation to plaintiff, our Supreme Court stated pages 137-138:

“* e » Complaint is made by the appellants that the third instruction given for the appellees, which calls attention to these notes and mortgages, was erroneous. That instruction told the jury that, if they believed from the evidence, facts and circumstances proven on the trial that the plaintiffs, in taking the notes and chattel mortgages from Carlson & Olson, did not intend thereby to release any claim they had against the defendants, if any claim they had, then the plaintiffs did not, by taking said notes and chattel mortgages, release any claim or indebtedness they had against the defendants, if the jmy should find from the evidence they had any such claim.
The execution of these notes and mortgages presents a question in the case whose solution is attended with much difficulty. The fact, that these notes and mortgages were taken is a strong circumstance, standing by itself, to support the contention of the appellants, but, upon a consideration of the whole case, we are satisfied that the court committed no error in leaving it to the jury to determine, whether the taking of the notes and mortgages amounted to a release of the claim of the appellees against the appellants or original promisors.”

See also 72 C.J.S. Principal and Surety § 154 (1951); Oxley v. Storer, 54 Ill. 159 (1870); German Insurance & Savings Institution v. Vahle, 28 Ill.App. 557 (3rd Dist. 1887).

Since the record before us is incomplete on the question of the intention of the parties and since there is a significant factual question to be determined on that issue, the trial court’s allowance of defendant’s motion for summary judgment was improper and such judgment is therefore reversed and the cause is remanded for trial.

Reversed and remanded.

STOUDER and DIXON, JJ., concur.


author: Mr. PRESIDING JUSTICE SMITH

text:
    Dale M. Bayles, Plaintiff-Appellee, v. Jerry E. Bennett, Defendant-Appellant. Helen Lee Cavins, Plaintiff-Appellee, v. Jerry E. Bennett, Defendant-Appellant.
    (Nos. 12391, 12392 cons.;
    Fourth District
    September 19, 1974.
    S. John Muller, of Muller & Komada, of Charleston, for appellant.
    Jack H. Anderson, of Anderson Law Offices, and William A. Sunder-man, both of Charleston, for appellees.
   Mr. PRESIDING JUSTICE SMITH

delivered the opinion of the court:

These cases were consolidated for purpose of oral argument and are hereby consolidated for purpose of opinion as the issue involved is precisely the same in each case. In each case, the defendant filed a motion to open a judgment by confession and a motion to be awarded attorney fees and expenses. Both motions were denied by the trial court. We affirm.

In 1964, Dale M. Bayles, Frank V. Gavins and Jerry E. Bennett entered into a partnership agreement to establish a business entitled “Gavins & Bayles on Campus”. On July 16, 1970, the three partners executed a $5,000 promissory note payable to Dale M. Bayles. On August 19, 1970, the three partners executed a $5,000 promissory note payable to Helen Lee Gavins, the wife of partner Frank V. Gavins. Both notes were signed on their face with the partnership name and followed by the signatures of each of the three partners without designating any representative capacity. Judgment was confessed on the Bayles’ note for $4,440.58 and on the Gavins’ note for $4,418.14. Within an appropriate time the defendant filed his motion to open each judgment and attached his affidavit stating that the note was executed on behalf of the partnership and that the amount claimed by the plaintiffs in each case should have been paid by said partnership as a partnership obligation and that the plaintiffs did or should have known this. The partnership agreement was attached to the affidavit. Plaintiffs attacked the defendant’s affidavit as insufficient because it was conclusionary and failed to allege a meritorious defense to any part of the judgment. Further pleadings need not to be discussed other than to say that the defendant filed a motion for attorney fees and expenses pursuant to section 41 of the Civil Practice Act (Ill. Rev. Stat. 1971, ch. 110, par. 41), stating that the action of the plaintiffs’ attorney constituted bad faith and harassment within the meaning of that statute. Under both the motion to open up the judgment and the motion to allow attorney fees and costs under the stated statute, the sole issue is did the trial court abuse its discretion by denying each motion? We answer that question in each case as to each motion “No.”

Under the provisions of Supreme Court Rule 276 (Ill. Rev. Stat. 1971, ch. 110A, par. 276), a motion to open a judgment by confession must disclose a prima facie defense on the merits to a whole or a part of the plaintiff’s demands and if it does, the motion shall be set down for hearing. If at that hearing it appears that the defendant has a defense on the merits to the whole or a part of the plaintiff’s demands, and has been diligent in presenting it, the court shall sustain the motion either as to the whole of the judgment or as to any part thereof as to which a good defense has been shown and there shall then be a trial upon the complaint. Such a motion is addressed to the sound discretion of the court and its order will only be reversed for an abuse of such discretion. (Windsor Development Co. v. Segal, 10 Ill.App.3d 322, 293 N.E.2d 719.) Controverted questions of fact cannot be considered, (Larsh v. Green Gold Farms, Inc., 68 Ill.App.2d 113, 214 N.E.2d 924.) The motion is addressed to tire sound legal discretion of the court and must be considered under liberal equitable principles. National Boulevard Bank v. Corydon Travel Bureau, Inc., 95 Ill.App.2d 281, 238 N.E.2d 81.

In the case at bar, we have joint and several notes. Whether or not on an accounting or on an action for indemnification this defendant may recover from his co-maker partners is likewise immaterial. The action we consider is on a promissory note and it is no defense to say the partnership owes the note where there is an unconditional joint and several promises to pay as there was in each of these notes. The three makers did not purport to sign in a representative capacity or in any way limit their personal liability to the individual payees. Even if the instrument is by its terms limited to payment out of the entire assets of a partnership “* # * by or on behalf of which the instrument is issued,” such limitation is immaterial. (Ill. Rev. Stat. 1971, ch. 26, par. 3 — 105.) In addition, section 15 of the Uniform Partnership Act (Ill. Rev. Stat. 1971, ch. 106V2, par. 15) states:

“All partners are liable
(a) Jointly and severally for everything chargeable to the partnership under Sections 13 and 14.
(b) Jointly for all other debts and obligations of the partnership; but any partner may enter into a separate obligation to perform a partnership contract.”

The facts stated in the affidavit of the defendant even if believed and testified to on a trial of the case on the merits would not constitute a defense in whole or in part to the defendant’s primary liability on the note.

As to the defendant’s motion for attorney fees and expenses for untrue allegations made in bad faith without reasonable cause in violation of section 41 of the Civil Practice Act (Ill. Rev. Stat. 1971, ch. 110, par. 41), is likewise for the discretionary determination of the trial court. (Horween v. Dubner, 68 Ill.App.2d 309, 216 N.E.2d 288.) An examination of the record in each of these cases indicates that there was no abuse of discretion in regard to the alleged bad faith of the plaintiffs in initiating and pursuing the instant action.

The judgment of the trial court in each case is accordingly affirmed.

Affirmed.

CRAVEN and SIMKINS, JJ., concur.


text:
    Gilda B. Strum, Plaintiff-Appellant, v. Harold A. Strum, Defendant-Appellee.
    (No. 12249;
    Fourth District
    September 19, 1974.

      Michael J. Kehart and A. James Shafter, of Webber, Welsh & Kehart, of Decatur, for appellant.
    John S. Cobb, of Samuels, Miller, Schroeder, Jackson & Sly, of Decatur, for appellee.
   Mr. PRESIDING JUSTICE SMITH

delivered the opinion of the court:

The parties here were divorced on May 28, 1970, at the suit of the wife. Three children were born of this marriage: Michael, December 18, 1950; Stephen, December 14, 1952; Cynthia, August 11, 1954. The mother was awarded custody of the children and the divorce decree provided that the defendant should pay the sum of $145 each month to each minor, payable bi-monthly. Such payment was made until September 2, 1971, when they were unilaterally reduced by eliminating payment to Cynthia. Another child’s payments were terminated on February 1, 1972, and all payments terminated on May 1, 1972. The issues raised are three-fold. (1) Whether the plaintiff is estopped from asserting any claim to support payment for Cynthia for the period of time she was living with her father; (2) whether a statutory change in the age of majority changes the preexisting rights of children under an earlier decree and (3) whether the trial court had jurisdiction to enter an order for payments of educational expenses for children who have reached their majority.

The plaintiff filed her petition on June 21, 1972, for a rule on the defendant to show cause why he should not be held in contempt of court for failing to comply with the child support payments of the divorce decree. The defendant answered alleging that he is entitled to an equitable credit for all support payments for Cynthia after June 1971, because she was living with him after that time, and that all support obligations for Michael and Stephen had terminated because they had obtained their majority. On January 31, 1973, the decree was entered finding that the rule to show cause should be dismissed for the reason that the defendant’s obligation to support ceased when the children reached their respective majority and that the plaintiff was equitably estopped from asserting any child support payments for Cynthia after September 1971 when she apparently began permanent residence with her father. On January 22, 1973, the plaintiff filed a petition to modify the divorce decree as to child support to require the defendant to pay a sum for the support of the children for educational purposes. All three children were then in college. A motion to dismiss the modified petition was filed and on February 14, 1973, the trial court found that the amended petition for educational expenses was inappropriate under the applicable Illinois statute and that the plaintiff now seeks relief which was barred by the court order entered on January 31, 1973. This appeal is from the order terminating support because the children reached their majority and from the order denying a modification of the decree to provide for payments for educational purposes.

Cynthia went to live with her father in June, 1971, and in September, 1971, her father began unilateral termination of payments to his former wife without a modifying court order because, as he testified, his former wife stated that he did not have to continue such payments. The wife denied that she had ever consented to this reduction after Cynthia’s residence became permanent in September. It is well settled in this state that past due installments for child support are a vested right and the court is without authority to modify the amount due of such installments. This court is committed to that proposition. (Stark v. Stark, 131 Ill.App.2d 995, 269 N.E.2d 107; Armstrong v. Ingram, 7 Ill.App.3d 370, 287 N.E.2d 532.) The proper procedure to follow would have been for the father to file a petition to modify the support payments. (Gregory v. Gregory, 52 Ill.App.2d 262, 202 N.E.2d 139.) Such modification will operate prospectively only. Chalmers v. Chalmers, 31 Ill.App.2d 1, 175 N.E.2d 613; Larson v. Larson, 21 Ill.App.2d 264, 157 N.E.2d 689.

However, in Anderson v. Anderson, 48 Ill.App.2d 140, 198 N.E.2d 342, the court indicated that in a proper case it will give effect to an agreement by the parties to waive payments or accept a lesser amount or will apply the doctrine of equitable estoppel where that doctrine is appropriate. It seems abundantly clear that the plaintiff either consented to or acquiesced in Cynthia living with her father and he was supporting her. She became 18 years of age on August 11, 1972, and at the time of the hearing.on the rule to show cause was past 18 years of age. It was not until July of 1972 that any question of termination of payments for her support was raised. Under these circumstances, it is our opinion that this situation is appropriate for the doctrine of equitable estoppel and that as to Cynthia the trial court properly dismissed the petition for a rule to show cause. This same ruling applies to Michael for the very simple reason that he became 21 years of age on December 18, 1971, and the obligation for his support under the original order terminated on that date. Stephen did not become 21 until December 14, 1973, and as to him the dismissal of the rule to show cause is in error.

The contention of the father that the effective date of the statute reducing tire age of majority for males from 21 years of age to provide that all persons over 18 years of age shall be of legal age, effective August 24, 1971, terminated the father’s obligation under the statute so far as further support payments were concerned after each child reached 18. Not so. Those rights were vested rights. Those rights were fixed and determined by decree at the time of its entry. When the court used the words “minor children” it meant minor children as defined under the statute existing at the time of the decree. At that time males became adults at age 21 and females at 18. (Waldron v. Waldron, 13 Ill.App.3d 964, 301 N.E.2d 167.) Accordingly, the trial comt’s order of January 31 dismissing the rule to show cause should be reversed and remanded for a redetermination of the support arrearages owed by the defendant to any of the three children in accordance with the views herein expressed.

As to tire petition for educational support, the trial court dismissed that petition on the grounds that such relief for adult children was inappropriate under applicable Illinois statute and further that such relief was barred by the court’s order of January 31. The January 31 court order did not relate to any request by the plaintiff for educational expenses. In addition, the relief sought was clearly permissible under the Illinois law existing at that time. Section 18 of the act on divorce (Ill. Rev. Stat. 1971, ch. 40, par. 19), states: “The court may, on application, from time to time,- terminate or make such alterations in the allowance of alimony and maintenance, and the care, education, custody and support of the children, as shall appear reasonable and proper. However, after the children have attained majority age, the court has jurisdiction to order payments for their support for educational purposes only.” (Emphasis supplied.) The defendant and the trial court apparently rely on Crane v. Crane, 45 Ill.App.2d 316, 196 N.E.2d 27. Crane, however, was decided prior to the 1967 amendment to the statute underlined above which expressly grants to the trial court tire jurisdiction to order payments for adult children for educational purposes only. The statute successfully destroyed the viability of Crane on this point. Accordingly, that decree denying the petition for educational purposes to adult children must be reversed and the cause remanded for a hearing to determine whether or not support for the educational expenses of the children should have been awarded and if so, in what amount.

Accordingly, the decree of February 14 and the decree of January 31 .are each hereby reversed and the cause remanded to the trial court to reconsider both orders in accordance with the views herein expressed.

Reversed and remanded.

CRAVEN and CLYDESDALE, JJ., concur.


text:
      In re Petition to Adopt Joanne Louise Shuman, a Minor. Derryl Shuman, Plaintiff, v. Elaine Shuman, Defendant—(Jack D. Jollay et al., Petitioners-Appellants.)
    (No. 73-187;
    Third District
    September 18, 1974.

      B. R. Tongren, of Clinton & Tongren, of Peotone, for appellant.
    Mrs. Elaine Freeland, a/k/a Elaine Shuman, pro se.

   Mr. JUSTICE STOUDER

delivered the opinion of the court:

This is an appeal from the order of the circuit court of Will County denying the adoption petition of petitioners-appellants Jack D. Jollay and Mary Ann Jollay and intervenors-appellants Trenton Massey and Faye Massey and granting custody of two minor children to their natural mother, Elaine Shuman. Since only the appellants filed a brief on this appeal we might be justified in treating this case summarily but in view of the nature of this proceeding we feel that a decision on the merits is required.

The Shumans were married in April-, 1967. Charles Shuman was born in October, 1967, and Joanne was bom in November, 1988. Around September, 1970, Elaine Shuman left Derryl and the children in California and came back to Illinois. In November, 1970, Derryl Shuman left Charles with the Masseys and in January, 1971, he left Joanne with the Jollays. The father, Derryl Shuman, testified that he was not able to take care of the children, was not working, and had consented to the adoption of Joanne by the Jollays. Derryl filed for divorce in March, 1971, and Elaine filed a cross-complaint for divorce and custody in January, 1972. During the period between the granting of the divorce decree to Elaine in April, 1972, and the custody order in April, 1973, the two children remained with the Jollays and the Masseys. The court made the specific finding that Elaine Shuman was a fit and proper person to have custody of Joanne and Charles Shuman. This appeal is from the April, 1973, order granting the mother immediate custody and denying the petition for adoption which matters were considered together by the court.

The appellants raise two main arguments on this appeal. The first is that the finding that Elaine Shuman is á fit and proper person to have the care, custody and control of Joanne and Charles Shuman was against the manifest weight of the evidence. The second argument on appeal rests on the premise that it is not necessary in an adoption proceeding to show that the natural parents have either consented or have been found to be unfit. The appellants argue that it would be in the best interests of tire children to be adopted by appellants and that the trial judge did not make a finding as to what would have been in the best interests of the children.

First we will discuss appellants’ contention that a finding of unfitness is not necessarily required in the present case. Section 8 of the Adoption Act states, “Except as hereinafter provided in this Section, consents shall be required in all cases, unless the person whose consent would otherwise be required shall be found by the court to be an unfit person as defined in Section 1 of this Act.” (Ill. Rev. Stat. 1971, ch. 4, par. 9.1 — 8.) Even if it could be conceded here that it would have been in tire best interests of the children to be adopted by appellants it is clear that there was no consent by the natural mother. There is case law to the effect that custody can be denied a natural parent in the absence of a finding of unfitness. (See Giacopelli v. Florence Crittenton Home, 16 Ill. 2d 556, 158 N.E.2d 613, and People ex rel. Edwards v. Livingston, 42 Ill.2d 201, 247 N.E.2d 417.) It is essential in a case as the one at bar to distinguish between a custody proceeding and an adoption case. In Oeth v. Erwin, 6 Ill.App.2d 18, 22, 126 N.E.2d 526, an adoption proceeding, the court held, “In adoption it is not the duty of the court to determine if petitioners could best provide for the child. The court must first determine if statutory grounds for adoption exist.” The court there cited Jackson v. Russell, 342 Ill.App. 637, 97 N.E.2d 584. In In re Petition to Adopt Cech, 8 Ill.App.3d 642, 645, 291 N.E.2d 21, an adoption proceeding, the court stated that the welfare of the child shall be the prime consideration in all adoption proceedings but “Nevertheless, this declaration does not mean that, absent consent or unfitness, an adoption can be granted solely upon the basis of the best interest of the child” and cited In re Petition of Smith, 4 Ill.App.3d 261, 280 N.E.2d 770, and Robinson v. Neubauer, 79 Ill.App.2d 362, 223 N.E.2d 705. The distinction between the two types of actions is essential because adoption severs conclusively the rights and interests of natural parents. Accordingly, a clear case must be made establishing the statutory grounds before a consideration of the best interests of the child can be made. Appellants cite Talbert v. Wallace, 17 Ill.App.3d 956, 308 N.E.2d 823, to support their contention that a finding of unfitness is not necessary in order to have a valid change of custody. It must be noted that Talbert was an action by the father to change custody from the mother to him on the basis of changed conditions. Accordingly, Talbert is completely distinguishable from the case at bar in that the action was for a custody change only and not for adoption and also in that the action was by the natural father. In light of the foregoing it must be held in this case that a finding of unfitness of Elaine Shuman would be required in the absence of consent on, her part to the petition for adoption.

Were this only an action for change of custody it might be possible to have an order denying custody to a natural parent in the absence of a finding of unfitness of the natural parent on the basis of the best interests of the children, but this court cannot upset the decision of the lower court unless such holding is palpably against the manifest weight of the evidence. This must be particularly true in light of the fact that the children have now been in the custody of the mother for almost 1% years. Any determination as to the best interests of the children at this point would have to take into consideration the effect of such a change on the children at this time after having been with their mother for such a period.

In reviewing the record it can be inferred that the mother was not an ideal mother and that her conduct was not always in the best interests of the children. It can also be inferred that part of the problem originated' in the marital difficulties between the parties and that the mother was a fit and proper custodian of the children. It would serve no useful purpose1 to discuss the evidence in detail and there is sufficient evidence to. support the findings of the trial court that the mother was a fit and proper' person to have control, custody and care of the minor children. It cannot therefore be held as a matter of law that the trial court’s finding was, against the manifest weight of the evidence.

For the foregoing reasons the order of the circuit court of Will County is affirmed.

Judgment affirmed.

ALLOY and DIXON, JJ., concur.


author: Mr. JUSTICE DIXON

text:
    Alliance Engineering & Research Corp., Plaintiff-Appellant, v. Anthony M. Gualtieri, Individually, and d/b/a Dallas City Packing Company, Defendant-Appellee.
    (No. 73-327;
    Third District
    September 19, 1974.
    Richard P. Lamoreaux, of Monmouth, for appellant.
    LaMarr W. Evans, State’s Attorney, of Oquawka, for appellee.
   Mr. JUSTICE DIXON

delivered the opinion of the court:

The plaintiff, Alliance Engineering Research Corp., sold and delivered to defendant, Anthony M. Gualtieri, a packaging machine for the total purchase price of $7,275. Defendant paid $2,425 but failed to pay the balance of $4,850. Action was brought for the balance due. The Circuit Court of Henderson County dismissed the action for want of prosecution and denied plaintiff’s petition to reinstate. The plaintiff appeals.

The appellee has not filed any briefs in accordance with Supreme Court Rule 341 (Ill. Rev. Stat., ch. 110A, par. 341). This court may determine the case on its merits or may reverse because of the failure of the appellee to comply with the Supreme Court Rule in its sound discretion. (People ex rel. Pullman Bank & Trust Co. v. Fitzgerald, 14 Ill.App.3d 247.) Inasmuch as the appellee has abandoned his case, we see no reason to go into the merits. We have therefore decided to reverse pro forma.

The judgment of the Circuit Court of Henderson County is reversed and the,cause remanded with directions to reinstate the cause.

Reversed and remanded with directions.

ALLOY and STOUDER, jj., concur.


author: Mr. JUSTICE ALLOY

text:
    United States Fidelity and Guaranty Company, Plaintiff and Counter-defendant-Appellee, v. Hollerich and Walgenbach Co., Defendant and Counterplaintiff-Appellant. Hollerich and Walgenbach Co., Plaintiff-Appellant, v. Walter Duncan et al., Defendants-Appellees.
    (No. 73-72;
    Third District
    September 18, 1974.

      Kevin Kelly, of La Salle, and Louis E. Olivero, of Peru, for appellant.
    John Berry, of Ottawa, and Anthony C. Raccuglia, of Peru, for appellees.
   Mr. JUSTICE ALLOY

delivered the opinion of the court:

This is an appeal from various orders of the Circuit Court of La Salle County entered in a jury trial of consolidated causes of action wherein the principal parties were United States Fidelity and Guaranty Company (Fidelity), Hollerich and Walgenbach Co. (H& W), a contractor engaged in asphalt road construction, and the Duncan Insurance Agency (Duncan), an agent of Fidelity.

Basic facts gathered from a voluminous record disclose that in August 1963 an officer of H & W contacted Duncan relative to the acquisition of insurance coverage and indemnity bonds necessary for a heavy road construction company. Thereafter, H & W purchased various types of insurance, including fire, floater, general liability and workmen’s compensation policies, and from time to time obtained indemnity bonds guaranteeing its performance of contracts with municipalities, counties and the State of Illinois. All of such bonds and policies were obtained from Fidelity with Duncan acting as agent.

Some of the policies had a fixed annual premium. The workmen’s compensation and general liability policies, however, required periodic audits of the number of employees, their wages and other factors, such as type of work, in order to determine the amount of annual premium due in excess of deposits made at the beginning of the policy terms. In connection therewith, each of the policies in question provided for an interim audit and the adjustment and payment of premiums at the end of the first 6 months of the policy term, and for a final audit, adjustment and payment of premiums at the close of fire policy year. Bills for premiums were sent to Duncan as they became due or were determined, and, under the arrangement between Duncan and Fidelity, Duncan would pay Fidelity for all charges and premiums billed, whether or not they had as yet been collected from the insured. If it later turned out that Duncan was unable to make collection, the bill would be returned to Fidelity, which would reimburse Duncan and then attempt direct collection from the insured.

On December 29, 1965,. H & W owed Duncan a balance of $4,510.84 in a running account maintained in Duncan’s books. When such balance remained unpaid on February 3, 1966, Duncan, following up a telephone conversation, wrote H & W that if payment was . not made by February 8, its only alternative would be to cause cancellation notices to be sent out on all policies. It would be noted that'the policies involved gave the insurer the right to cancel on 10 days’ notice without stating a reason. Payment was not made within the time limit set and cancellation notices were sent out on all policies. On February 11, 1966, however, the $4,510.84 was paid and the policies were reinstated. At this time, H & W’s account with Duncan showed a credit balance of $38, the credit arising from a change in insured automobiles. Also, about this time, according to witnesses for H & W, the latter started to complain to Duncan that errors and discrepancies in the computation of prior premiums had. resulted in overcharges to H & W.

On March 21, 1966, Duncan received the interim audit on the policies for the period from August 26, 1965, to February 26,1966, which showed an additional premium of $6,113.47 due for such period. Duncan paid this amount to Fidelity, debited the H & W account therefor, and, on April 5, 1966, billed H & W for $6,075.47, being the amount due as shown by the interim audit, less the $38 credit. According to its president, H & W had by this time made a determination that prior discrepancies and miscalculations had resulted in premium overcharges in excess of $12,000, and he advised Duncan that the April 5 bill would not be paid until the matters questioned had been resolved and adjusted. Duncan, the witness further testified, promised to look into the complaints and to discuss them with Fidelity, but did not again contact H & W with respect thereto. On April 26, 1966, Duncan sent notice to H & W that if tire account was not paid by April 30, 1966, cancellation notices would be sent out on all policies. Payment was not received and on May 9, 1966, at Duncan’s request, Fidelity cancelled all policies. 1

In the meantime, on April 29, 1966, the final audit for the period from August 26, 1964, to August 26, 1965, was completed and showed" additional premiums of $12,063.96 due for that period. This audit'was also sent to Duncan, and was apparently received prior to the daté of cancellation. Duncan, however, did not pay such amount to Fidelity, or charge it to the H & W account, or bill it to H & W or try to collect it, in the belief that an attempt to collect would be futile in light "of the'lack of success in collecting the $6,075.47 already billed. On May 9, 1966, Duncan returned both audit bills to Fidelity for direct collection from Há W, and entered a credit of $6,113.47 in its book account with H & W, since Fidelity was to undertake collection of premiums due on its policies. As was true in the earlier instance referred to, this left H & W with a credit of $38 so far shown on Duncans books.

The present litigation was initiated on May 31, 1972, when Fidelity brought suit against H & W to recover $18,177.43, the total amount due under the two audits. (In the record, Fidelity conceded that, as a result of credits for unearned premiums and adjustments produced by a final audit, the ad damnum could be reduced to $13,178.67.) H & W filed a counterclaim, one count charging Fidelity with breach of contract and other counts charging slander and libel. In addition, H & W filed a separate action against Duncan for breach of contract. The actions were consolidated and at the conclusion of all of H & W’s evidence (offered With respect to its defense in the principal action, iii support of its counterclaim, and in the separate action against Duncan) various motions for directed verdicts were filed and considered by the court. As a result, verdicts were directed for Fidelity on H & W’s counterclaim, and for Duncan in H & W’s separate action for breach of contract. In the principal action, the court denied Fidelity’s motion for a directed verdict in the amount of $8,389.32, stating that there were factual questions as to the amount owed, but allowed an alternative motion directing a verdict on the issue of liability and instructed the jury that the sole issue for its determination was the amount Fidelity was entitled to recover from H & W. Thereafter, the jury returned a verdict of $7,500 in favor of Fidelity, and, when post-trial relief was denied, H & W (hereinafter referred to as appellant) perfected this appeal. For the most part, the issues center on the rulings made on the motions for directed verdicts.

From appellant’s brief, which apparently fails to recognize that Fidelity had an unfettered right to cancel the policies in question at any time, we interpret appellant’s first contention to be that the trial court erred in the principal case when it directed a verdict for Fidelity on the issue of liability. Broadly speaking, it is appellant’s theory that the evidence, viewed in its aspects most favorable to appellant (Pedrick v. Peoria & Eastern R.R. Co., 37 Ill.2d 494), shows that it owed Fidelity no premiums, by reason of which it is contended that it was wrong to direct a verdict on the issue of liability and to submit the amount of damages to the jury. To arrive at the conclusion that the evidence shows no premiums were due to Fidelity, appellant rationalizes, in sequence, that Duncan was the agent of Fidelity for the purpose of collecting premiums on all policies; that the books of Duncan were therefore conclusive and controlling as to the amount of premiums due and owing by appellant from time to time; and that the books of Duncan showed nothing due and owing on May 9, 1966, the date the policies were can-celled and the insured-insurer relationship was terminated, inasmuch as Duncan’s books showed a credit on that date for the $6,113.47 due and billed as the result of the interim audit, and since the $12,063.96 shown to be due by the final audit had neither been charged to appellant on Duncan’s books nor billed to appellant.

When all of the evidence in the record is considered, particularly that which explains the basis for Duncan’s system of accounting for Fidelity’s premiums and shows the circumstances surrounding the entries upon which appellant’s theory is based, it is our opinion that this contention is clearly unsound. The insurance contracts were between appellant and Fidelity, not appellant and Duncan. It is not denied that Fidelity extended coverage for the periods for which additional premiums were due, and there is no pretense that tire premiums shown to be due by the audits were ever paid by appellant to anyone. Neither have we been given, nor have we found, satisfactory authority for the premise that, so far as the liability of an insured to an insurer for premiums is concerned, an insurer is conclusively bound by the books and m,ethod of accounting of an agent. National Hotel Co. v. Merchants’ Fire Assurance Corp., 183 Ill.App. 71; Pulaski Mutual Fire Ins. Co. v. Dawson, 87 Ill. App. 514; and Ellenbogen v. Frankfort General Insurance Co., 202 Ill.App. 125, upon which appellant principally relies, are not applicable and present no persuasive analogy. The rationale of those cases is that where an insurance company delivers its policy to an insured through a broker as agent, to whom the insured pays the premiums, the company is liable on the policy, even though the broker or agent fails to remit the premiums, since the broker or agent had been clothed with apparent authority to collect. In the present case it may be agreed that Duncan was clothed with the authority to coHect premiums from appellant, but there, we believe, aH siimlarity with the cases relied upon comes to an end. The apparent authority to collect premiums would not extend to authority in a broker or agent to waive the insured’s obligation to pay premiums, nor would appellant, or any reasonable person, be led to beHeve that such was the case. In our opinion the trial court correctly rejected appellant’s theory of “nothing due” as a basis for denying Fidelity’s motion for a directed verdict on the issue of liability.

Equally untenable is the contention that the circumstance that evidence showed that appellant had protested, and was contesting, the amount of premiums due, made it improper for the court to direct a verdict on the issue of liability. The mere statement of this contention furnishes the ground for its rejection. Quite obviously, the evidence showing a dispute as to the extent of liability had no bearing on a determination of whether the evidence justified a directed verdict that liability did or did not exist. Just as obviously, since various factors and elements relating to the amount of damages were put in dispute by the evidence, the trial court properly submitted the issue of the amount of damages to the jury.

It will be recalled that the jury was instructed that the sole issue for its determination “is the amount” that Fidelity “is entitled to recover” from appellant. Appellant necessarily argues from a position that the evidence should have been construed as showing nothing due, and argues, first, that the instruction was tantamount to telling the jury that it had to return a verdict for Fidelity in some amount, and, second, that the instruction deprived appellant of the benefit of the evidence by which it disputed the amount due. We do not find that these objections to the instruction were made in the trial court and preserved for review. In any event, however, they are unconvincing. While the use of tire words “if any” would have improved the instruction, we do not see in it a mandate to tire jury that it had to find that some amount was due Fidelity. Most certainly, it did not deprive appellant of its evidence of its defense as now claimed. The recovery sought by Fidelity on the basis of its evidence was $13,178.67, but the jury returned a verdict of only $7,500. Necessarily, the jury took the evidence of appellant into consideration, a circumstance borne out by the showing in the record that the largest items in dispute approximated $5,000. No contention has been made, we might add, that the verdict on damages was against the manifest weight of the evidence.

When Fidelity made its proof of damages, the trial court, over the objection of appellant, permitted proof of the premium rate for certain hazards, “sewer work” in particular, to be established from a company manual. It is now contended that proof of the premium rate in such manner constituted reversible error. The thrust of appellant’s argument is that the rates were controlled by the policy, or insurance contract, and that the manual was not part of the policy. As a general rule a company manual is not a part of an insurance policy. It may, however, become so, provided it is embodied in the policy or an endorsement by clear and unmistakeable terms, or by a reference thereto as governing the rights of the parties. (See 1 Couch, Cyclopedia of Insurance Law § 161, at 316; Tropical Roofing Co. v. Charnow (Fla. 1961), 134 So. 2d 32; Virginia Surety Co. v. Knoxville Transit Lines, Inc. (E.D. Tenn. 1955), 135 F.Supp. 606.) Here, we find that the policies involved provided: “The premium bases and rates for the hazards disclosed in tire declarations are stated therein. Premium bases and rates for hazards not so described are those applicable in accordance with the manuals in use by the Company.” We find that proof of rates from the manual was permitted only with respect to hazards not described in the policy. Under the law, and under policy language so clear, the trial court comr mitted no error in permitting such proof to be made.

In its reply brief appellant advances the additional contention that it was error to admit proof of the rate for “sewer work,” for the reason that the evidence shows that appellant did not engage in such work during the policy period covered by the audits. While we are constrained to remark that the verdict indicates this argument was not lost to the jury, the contention comes too late to permit its consideration. It is well settled that courts of review will not consider points raised for the first time in a reply brief. Department of Public Works & Buildings v. Association of Franciscan Fathers, 3 Ill.App.3d 503; People v. 123 Punch Boards, 8 Ill.2d 520.

Generally speaking, and so far as is necessary for this opinion, appellant’s counterclaim against Fidelity charging slander and libel entailed communications by Fidelity employees to concerned persons with whom appellant had paving contracts informing them that appellant’s insurance had been cancelled for non-payment of premiums. In other instances, where appellant had defaulted on performance bonds, information of the default was given to other contractors approached by Fidelity to complete the work. In directing a verdict for Fidelity on the counterclaim, the trial court ruled, in substance, that the statements and communications relied upon were true and that the truth constituted a defense, and in any even that their publication had been privileged. Appellant now contends that the directed verdict was improper, first, because Fidelity had admitted in a pleading that the statements were libelous and slanderous and, second, on the ground that the evidence showed that appellant owed no premiums, thus causing the statements relating to the non-payment of premiums to be false. We find no merit in either contention.

It is well established that truth is a defense to an action for libel or slander (Delis v. Sepsis, 9 Ill.App.3d 217; Mitchell v. Peoria Journal-Star, Inc., 76 Ill.App.2d 154), and it is equally well established that, for such defense to be availed of, it must be specially pleaded. (Campbell v. Masonic Chronicler Publishing Co., 214 Ill.App. 601.) Speaking of this matter, it is said in 33A I.L.P. Slander and Libel §96 (1970), at page 104: “The factual truth of defamatory matter as justification must be specially pleaded in the answer. A plea of justification is a plea in confession and avoidance; it confesses the publication and justifies by alleging the truth thereof.” In the present case, Fidelity, by way of an affirmative defense, pleaded the truth of the statements alleged in the counterclaim; however, even if we assume, without deciding, that such plea had the effect of admitting that such statements were libelous and slanderous, as appellant contends, the admission did not render a directed verdict impossible or improper. To repeat, truth is a defense, and on the evidence in this record the direction of a verdict for Fidelity on the charges of libel and slander was entirely proper.

In advancing the contention that the directed verdict was improper because the statements as to non-payment of premiums were false, appellant once again resorts to the theory that no premiums were due when the policies were cancelled because of the zero balance on Duncan’s books, and because appellant was claiming overcharges in the past. We see little purpose in further pursuing this theory. As was true in regard to the motion for a directed verdict on the issue of liability in the principal suit, the evidence showed that premiums were due from appellant and the same evidence justified a finding by the trial court that the statements regarding non-payment of premiums were true.

At least three of the policies cancelled by Fidelity were fixed premium policies upon which no premiums were then due, and it is urged by appellant that this circumstance made a directed verdict on the counterclaim improper. Again, we cannot agree. All of the policies involved gave Fidelity the right to cancel at anytime without giving a reason, and it appears in the record, without contradiction, that the nonpayment of premiums on the workmen’s compensation and liability policies was the catalyst which caused all policies to be cancelled. Accordingly, the fact that there was no premium due on some of the policies cancelled does not, in our opinion, detract from the truth of the statements that appellant’s insurance coverage was cancelled for nonpayment of premiums.

The further contentions of appellant that the cancellation by Fidelity constituted a breach of contract, and that the trial court erred in directing a verdict on the count of the counterclaim which sought to recover damages for such breach, may be readily disposed of. As noted, before, Fidelity had a policy, or contract, providing a right to cancel at any time without giving a reason. In exercising such contract right, Fidelity could not have been guilty of breaching the contract. C.f., Brown v. Federal Life Insurance Co., 353 Ill. 541.

Finally, it is contended by appellant that the trial court improperly directed a verdict for Duncan in appellant’s action against the latter for breach of contract. In essence, it is appellant’s theory that Duncan had an oral contractual obligation to procure insurance for appellant, and that it violated such obligation when it requested Fidelity to cancel the policies. Even if it be assumed that the evidence was sufficient to establish a contractual obligation to appellant on the part of Duncan to do anything other than to procure insurance coverage, the obligation was necessarily dependent upon the payment of the required premiums by appellant, and in our opinion a request by Duncan for the cancellation of the policies under the circumstances here could not constitute a breach which would support appellant’s action. Addressing itself to a comparable problem and factual situation a Massachusetts court has held in Rozen v. Cohen (1966), 350 Mass. 231, 214 N.E.2d 451, that an insurance agent breaches no obligation to an insured when such agent requests a cancellation of policies for non-payment of premiums, and we share that view. (See also Ruby S. S. Co. v. Johnson & Higgins (2d Cir. 1927), 18 F.2d 948.) Accordingly, we find that the court did not err in directing a verdict for Duncan.

Since we find no reversible error, the judgment of the Circuit Court of La Salle County is affirmed.

Judgment affirmed.

SCOTT, P. J., and STOUDER, J., concur.


text:
    Jessie Taylor, Adm’r of the Estate of Robert Florence, Deceased, Plaintiff-Appellee, v. The Hartford Fire Insurance Company, Defendant-Appellant.
    (No. 73-320;
    Third District
    September 18, 1974.

      John E. Cassidy, Jr., of Cassidy, Cassidy & Mueller, of Peoria, for appellant.
    William R. Kelly, of Kelly & Coney, of Peoria, for appellee.
   Mr. JUSTICE STOUDER

delivered the opinion of the court:

This appeal is by defendant-appellant, Hartford Fire Insurance Company, workmen’s compensation carrier for Oliver Farm Equipment Company, from summary judgment entered in favor of plaintiff-appellee, Jessie Taylor, administrator for the estate of Robert Florence, and from an order denying defendant’s post-trial motion.

Decedent, Robert Florence, employee of Oliver Farm Equipment, was injured as a result of an accident arising out of and in the course of his employment. The defendant, Hartford Fire Insurance Company, negotiated a settlement with decedent’s attorney of $2,125 payable in a lump sum. This settlement reflected the equivalent of a 12%-percent loss of use disability to which decedent might have been entitled under section 8 (e) of the Workmen’s Compensation Act for specific loss. This settlement was not approved by the Industrial Commission. The defendant drew a draft payable to decedent and his attorney which was received by the attorney prior to but on the same day as decedent’s death. The cause of decedent’s death was unrelated to his accident as an employee. Decedent never endorsed this draft and defendant stopped payment on the draft.

The first issue raised by defendant-appellant concerns the existence of subject-matter jurisdiction of the trial court in this case. It is defendant’s contention that the Industrial Commission had primary and exclusive jurisdiction under section 13 of the Workmen’s Compensation Act (Ill. Rev. Stat. 1971, ch. 48, par. 138.13) and since the remedies created by the act were unknown to the common law the circuit courts were accordingly limited by the language of the statute and in this case had no jurisdiction to construe and apply sections 22 and 23 of the Act nor to decide claims whose resolution depends upon the construction of sections 22 and 23. In order to understand the nature of the case it would be helpful to set out the pertinent portions of sections 22 and. 23. Section 22 states, “Any right to receive compensation hereunder shall be extinguished by the death of the person or persons entitled thereto, subject to the provisions of this Act relative to compensation for death received in the course of employment, and subject to the provisions of paragraph (e) of Section 8 of this Act relative to specific loss.” (Ill. Rev. Stat. 1971, ch. 48, par. 138.22.) Section 23 states, “No employee, personal representative, or beneficiary shall have power to waive any of the provisions of this Act in regard to the amount of compensation which may be payable to such employee, personal representative or beneficiary hereunder except after approval by the Commission.” Ill. Rev. Stat. 1971, ch. 48, par. 138.23.

Defendant cites three cases in support of the proposition that where courts of general jurisdiction exercise a special jurisdiction not arising out of common law but out of a statutory origin they are limited by the language of the statute and all other forms are excluded. (Nierman v. Industrial Commission, 329 Ill. 623, 161 N.E. 115; Levy v. Industrial Commission, 346 Ill. 49, 178 N.E. 370; Western Shade Cloth Co. v. Industrial Commission, 325 Ill. 570, 156 N.E. 796.) The general proposition of law contended for by defendant is not in dispute in this case. The case at bar is distinguishable because the action here is on a bank draft which constitutes the proceeds of the settlement. This is not an action directly within the scope of the Workmen’s Compensation Act. This is an action by an administrator of an estate to collect the proceeds of a draft which constitutes an asset of the estate. Accordingly, we find no merit to the claim that the trial court lacked jurisdiction over this, matter.

Defendant argues that a purported settlement of the Workmen’s Compensation claim without the approval of the Industrial Commission is not a determination under section 8(e) of the Workmen’s Compensation Act and that therefore the death of the injured employee before completion of the unapproved settlement would abate the claim. It is not disputed that the settlement was not a determination under section 8(e) of the Act. What defendant does not note is that the whole purpose of the Workmen’s Compensation Act is to benefit the employee. Innumerable cases can be cited in support of the proposition that the purpose of the Act is to protect the employee and his dependents. (See Colclasure v. Industrial Commission, 14 Ill.2d 455, 153 N.E.2d 33; Meyer v. Buckman, 7 Ill.App.2d 385, 129 N.E.2d 603; Henson Robinson Co. v. Industrial Commission, 386 Ill. 232, 53 N.E.2d 881; Baker and Conrad, Inc. v. Chicago Heights Construction Co., 364 Ill. 386, 4 N.E.2d 953; Martin v. Kralis, Poultry Co. 12 Ill.App.3d 453, 297 N.E.2d 610; Board of Education v. Industrial Commission, 53 Ill.2d 167, 290 N.E.2d 247.) What we have in the present case is an attempt by an employer to avoid the provisions of the Act by negotiating an unapproved settlement with the employee and then upon the death of the employee to avoid its responsibility entirely.

It may also be noted that section . 23 prohibits the employee’s representative or beneficiary from waiving any provision of the Act regarding the amount of compensation but there is no prohibition as to the employer-waiving any rights it may have under the Act. Such an express prohibition as to the employee and the lack of any such prohibition as to the employer is indicative of the purpose of the Workmen’s Compensation Act.

It is our conclusion that appellant’s claim that the agreement was absolutely void is without merit and that at best the agreement would be voidable at the option of the employee. It seems that the affidavits and documents show that at the time of the issuance of the draft that approval of the Industrial Commission was not contemplated by the parties and resort to the procedure of the Act was not contemplated or a condition of appellant’s obligation.

For the foregoing reasons the judgment of the circuit court of Peoria County is affirmed.

Judgment affirmed.

SCOTT, P. J., and DIXON, J., concur.