author: Mr. JUSTICE LORENZ

text:
    Floyd R. Kortenhof, Plaintiff-Appellant, v. Andrew Messick et al., Defendants-Appellees.
    (No. 58516;
    First District (5th Division)
    February 8, 1974.

      Rehearing denied April 16, 1974.

      Ruben Kaplan & Lasky, of Skokie (Bernard M. Kaplan, of counsel), for appellant.
    Baime and Baime, of Chicago (Joseph L. Baime, of counsel), for appellees.
   Mr. JUSTICE LORENZ

delivered the opinion of the court:

Plaintiff appeals from an order dismissing certain portions of his complaint that sought an injunction and other appropriate equitable relief enjoining and restraining defendants Andrew Messick, Aetna State Bank, William Fauber, Joseph L. Dombrowski and National Boulevard Bank of Chicago from transferring certain properties out of a land trust and barring their sale except pursuant to a judgment of foreclosure by a court of competent jurisdiction.

Plaintiff and his now deceased wife were owners in joint tenancy of the beneficial interest in eight improved parcels of Chicago real estate, titles to which were held in trust by the National Boulevard Bank of Chicago as trustee under a trust agreement dated January 31, 1969. On September 30, 1971, they entered into a transaction with defendant Mes-sick whereby Messick loaned them $80,000 for a term of six months. Plaintiff and his wife secured the loan by giving Messick: (1) their collateral note in the amount of $90,000 (the additional $10,000 allegedly represents Messick’s fee for making the loan); and (2) assigning their certificate of beneficial interest in the land trust to him. This assignment was filed with the land trustee.

No payment was ever made by plaintiff or his wife on the collateral note and on its due date, April 1, 1972, the entire amount of the note remained unpaid.

On May 5, 1972, defendant Dombrowski mailed notice to plaintiff that he had been retained as an attorney by Messick to represent his interests regarding the loan. The letter indicated that under the assignment of the beneficial interest in the trust the rental income on the eight properties would be collected by Dombrowski’s agent and turned over to Messick and that the properties would be disposed of at a private sale on May 23, 1972, in Dombrowski’s office.

On the same date that notice of the intended sale was sent to the Kortenhofs, Messick directed defendant National Boulevard Bank to convey the eight properties to defendant Fauber, an employee of defendant Aetna State Bank, allegedly to hold title as Messick’s nominee.

On May 22, 1972, plaintiff filed his complaint alleging, inter alia, that the collateral assignment of the beneficial interest did not authorize or warrant Messick’s direction to the National Boulevard Bank to convey the eight properties out of the land trust to defendant Fauber and that the action constituted a wrongful and unlawful conversion. It was also alleged that a “rider” attached to the collateral assignment reserved plaintiff and his wife the right to refinance or sell any of the eight properties at certain agreed upon minimum prices to reduce the indebtedness, that by reason thereof Messick’s interest is at best, if it survived the act of conversion, in the nature of and constitutes an equitable mortgage and that therefore the properties cannot be sold except pursuant to a lawful order of court. It was further alleged that the $10,000 fee was usurious, that the trust properties were valued at $324,000 while the loan was only $90,000 and that plaintiff was in the process of obtaining mortgage refinancing and/or sales of the various land parcels sufficient in amount to fully pay Messick. Plaintiff prayed for: (1) an order restraining and epjoining National Boulevard Bank and Fauber from conveying the eight properties and a temporary and/or permanent injunction blocking the proposed sale without a strict foreclosure as required under section 23 of the Illinois Mortgage and Foreclosure Act (Ill. Rev. Stat. 1971, ch. 95, par. 23); (2) the sum of $20,000 plus reasonable attorney’s fees for the usurious and unlawful fee of $10,000 charged by Messick on the $80,000 loan in violation of section 5 of the interest statute (Ill. Rev. Stat. 1971, ch. 74, par. 5); and (3) other equitable relief that the court deemed appropriate.

Messick’s answer to the complaint admitted the conveyance of properties to Fauber but denied that he did not have that right. It also stated that plaintiffs reservation in the “rider” did not create an equitable mortgage, that the loan was not usurious, that the property value of the eight parcels was considerably less than $324,000, that due to liens and other encumbrances, plaintiffs equity in the properties was only a few thousand dollars and that plaintiff was not in fact making any realistic effort to liquidate or borrow money on the properties.

Plaintiff’s reply disputed the evaluation of the eight properties.

On October 2, 1972, the trial court denied plaintiffs motion for. a temporary injunction and thereafter, on October 24, 1972, entered an order sustaining Messick’s motion, for judgment on the pleadings with regard to the relief sought in prayers (1) and (3) because plaintiffs complaint failed to state a cause of action for equitable relief. This appeal ensued. The allegation in prayer (2) that the loan was usurious and unlawful is still pending adjudication.

OPINION

The essence of plaintiffs position is that Messick’s interest in the eight parcels of real estate is in the nature of an equitable mortgage and falls within the purview of section 23 of the Illinois Mortgage and Foreclosure Act (Ill. Rev. Stat. 1971, ch. 95, par. 23) which requires that:

“No real estate within this state shall be sold by virtue of any power of sale, contained in any mortgage, trust deed or other conveyance in the nature of a mortgage, executed after the taking effect of this act; but all such mortgages, trust deeds or other conveyances in the nature of a mortgage, shall only be foreclosed, in the manner provided for foreclosing mortgages containing no power of sale; and no real estate shall be sold to satisfy any such mortgage, trust deed or other conveyance in the nature of a. mortgage, except in pursuance of a judgment or decree of a court of competent jurisdiction.”

Plaintiff relies on DeVoigne v. Chicago Title and Trust Co., 304 Ill. 177, 136 N.E.2d 498, where owners of real estate for the purpose of inducing a contractor to proceed with the construction of a residence on the premises, agreed to place title to the realty in a land trust as security against their default in payments due for the contractor’s performance. When plaintiffs did in fact default on the payments, the contractor sought to sell the real estate. Plaintiffs filed suit to block the sale unless conducted pursuant to a judgment of a court of competent jurisdiction. In upholding plaintiff’s claim, the court found that the disposition of the property was subject to the foreclosure act since the trust arrangement was conceived out of an attempt to evade the protection afforded by the statute, and because the agreement provided for the sale of the real estate property on default.

The applicability of this statute was raised again in Horney v. Hayes, 11 Ill.2d 178, 183, 142 N.E.2d 94. In that case Horney was the owner of the beneficial interest in a land trust. He assigned his interest to Hayes as security for a loan and when the loan was not repaid, Hayes, proceeding under a power of sale conferred by the assignment, sold the beneficial interest to one Walsh. Thereafter, Horney brought suit to set aside the sale and certain subsequent conveyances alleging among other things that the transaction constituted a mortgage in equity in real estate. The Supreme Court held:

“The contention that the sale of the certificate of beneficial interest was in violation of the statute concerning powers of sale in mortgages cannot be sustained * * *. It is evident from the terms of the statute that it applies only to sales of real estate * * *. It has been repeatedly held that beneficial interests under such trusts are personal property and not real estate. (Sweesy v. Hoy, 324 Ill. 319; Duncanson v. Lili, 322 Ill. 528; Berning v. Berning, 320 Ill.App. 686; Chicago Title & Trust Co. v. Merchantile Bank, 300 Ill.App. 329.) It follows that the sale of the certificate by Hayes, being a sale of personal property only, did not fall within the prohibitions of the statute relied upon.”

In amplification and clarification of the. DeVoigne holding the court said:

“* * * The pledge in the case at bar is on an entirely different footing * * *. It does not provide for sale of the real estate, as in the DeVoigne case, nor was the trust itself created as security for a debt. The transaction between plaintiff and Hayes occurred subsequent to the creation of the trust, and concerned only the beneficial interest represented by the certificate.” (Emphasis added.)

Likewise here, we note, the collateral assignment in the instant case did not provide for the sale of real estate upon default but concerned itself only with Messiek’s right to sell what Kortenhof had the right to pledge—the beneficial interest. Under such circumstances legal and equitable title remained in the trustee and Kortenhof did not—nor could he—pledge real estate as the security for the debt. (Lawn Savings & Loan Ass’n v. Quinn, 81 Ill.App.2d 304, 225 N.E.2d 683.) The fact that the “rider” to the assignment reserved the assignor the right to sell the real estate parcels as opposed to selling the beneficial intrest in those parcels is not determinative of Kortenhof’s interest in the trust since the beneficiary’s rights and powers are not determined by his own fiat but are fixed by the terms of the trust agreement. (See Madigan v. Buehr, 125 Ill.App..App.2d 8, 260 N.E.2d 431.) It therefore cannot be maintained that Messick’s rights are affected by Kortenhof’s description of his own powers. Clearly then plaintiff’s reliance on DéVoigne is misplaced. Mes-sick could have sold the beneficial interest in the land trust upon plaintiff’s default provided he complied with the default provisions contained in the assignment.

Messick, however, acted without regard to his rights under the assignment. Eighteen days prior to the intended sale of the assigned beneficial interest, Messick directed the land trustee to convey title to the trust properties to Fauber purportedly to have him hold as Messick’s nominee. This conveyance was not authorized under the cellateral assignment.

An attempt is made to characterize Messick’s conduct as mere preparation for the sale. It is argued that since Messick was seeking to convey eight properties and there was but one beneficial assignment covering these properties, he directed the transfer from the trustee to Fauber only out of an intent to expedite possible sales to more than one purchaser. If this is true, he acted unadvisedly. Illinois law permits the beneficiary to contract to sell real estate even though title is vested in the trustee. The beneficiary is entitled to the purchase price and, as title is held by the trustee, when the time for performance arrives, the deed will be executed by it. (Burns v. Epstein, 413 Ill. 476, 109 N.E.2d 774; Schneider v. Pioneer Trust and Savings Bank, 26 Ill.App.2d 463, 168 N.E.2d 808.) Therefore, it was not necessary for Messick to have title in order to sell the properties. As his beneficial interest was personalty, his disposition of individual parcels could have been handled through directions to the trustee at the appropriate time.

The question then remaining is the effect of the unauthorized conveyance out of the land trust and into the hands of Fauber. Plaintiff contends that Messick’s interest in the eight parcels of real estate is at best in the nature of and constitutes an equitable mortgage thereby necessitating any intended sale to comply with section 23 of the Illinois Mortgage and Foreclosure Act (Ill. Rev. Stat. 1971, ch. 95, par. 23). The gist of plaintiff’s argument is that the existence of a beneficial interest in a trust is predicated on the fact that title to the trust res is vested in a trustee and that since legal title here is no longer in the land trustee, the beneficial interest must have been extinguishd by the conveyance. It follows, plaintiff contends, that Messick’s intended private sale will not be the sale of a personal property interest in a land trust but an equitable interest in real estate parcels and therefore subject to the foreclosure act. Plaintiff contends in the alternative that the entire debt is extinguished by Messick’s conversion of the trustee’s legal and equitable estate. For reasons that follow, we need not reach these contentions.

It has been the policy of our courts to demand that persons dealing with trust property strictly observe the trust features. In Schneider v. Pioneer Trust and Savings Bank, 26 Ill.App.2d 463, 466, 168 N.E.2d 808, the following explanation was given for the necessity of observing the separation of the rights, powers and duties of persons dealing with the trust:

"The land trust form of land ownership yields certain benefits to the beneficiaries, whether it be effective management, secret ownership, insulation from personal liability or some other advantage. These benefits result from the willingness, on the part of the courts of Illinois, to observe the form of the trust transaction. Reducing one’s ownership to a beneficial interest brings about this result. Consistency requires, then, the observance by the beneficiary of the form of the trustee’s ownership. Retaining the nature of his interest in order to be entitled to the advantages of a land trust, he may not then deal with the property as if no such trust existed * *

In Madigan v. Buehr, 125 Ill.App.2d 8, 16, 260 N.E.2d 431, it was observed:

“There is a natural tendency to blend the power of the beneficiary with that of the trustee * * *. Rut the nature of the land trust is such that, if the trust is to be preserved, the powers of the beneficiary and the trustee must be kept distinct.”

The beneficiary of a land trust cannot then deal with the property as if no trust existed. (Madigan v. Buehr, 125 Ill.App.2d 8, 260 N.E.2d 431.) In his contractual relations with others, the beneficiary must deal with the land as beneficiary. When he acts contrary to the provisions of the trust agreement, the contract is not enforceable. (See Feinberg v. Great Atlantic & Pacific Tea Co., 131 Ill.App.2d 1087, 266 N.E .2d 401.) We think it plain, that beneficiary’s assignee, in this case Messick, would likewise be constrained in his dealings with the trust properties. The powers of the beneficiary’s assignee here, however, were not kept distinct from those of the land trustee.

The basic powers and rights of the trustee as set forth by the trust agreement were modified in the instant case by the assignment of beneficial interest in the trust property. Under the specific terms of the collateral assignment that had been filed with the trustee, the assignee’s power of sale was limited to only a personal property interest in the trust. The power of the land trustee thereunder was to convey legal title upon the direction of the beneficiary’s assignee provided that the assignor defaulted on the loan, that ten-day notice of any proposed disposition of the collateral was given to the assignor and that this disposition met ¿ny other conditions set forth by the agreement entered into between Messick and Kortenhof. The conveyance of legal title to Fauber was contrary to the terms of this assignment and, as such, constituted a violation of the trust agreement, albeit inadvertent, by the trustee. It must therefore be set aside (Lehnard v. Specht, 180 Ill. 208, 54 N.E. 315; Savit v. Chicago Title and Trust Co., 329 Ill.App. 277, 68 N.E.2d 472; Restatement (Second) of Trusts, sec. 288 (1959)) to allow the trustee to reclaim his interest in the trust res. (Ludington v. Mercantile National Bank of City of New York, 92 N.Y.S. 454, 102 App.Div. 251, 74 N.E. 1119; see generally Bogert Trusts & Trustees § 861 (2nd ed. 1962).) The effect of avoiding the unauthorized conveyance is to return this default proceeding to the status that existed prior to May 5, 1972, when Messick directed the land trustee to convey title to Fauber.

Liberally construing plaintiff’s prayer for relief, we believe he has stated a good cause of action for setting aside National Boulevard Bank’s transfer of title to Fauber. Accordingly, the judgment of the circuit court dismissing that portion of plaintiff’s complaint is reversed and the cause remanded for further proceedings not inconsistent herewith.

Reversed and remanded.

SULLIVAN, P. J., and DRUCKER; J., concur,

       The prayer should perhaps be read as “Avoiding National Boulevard Bank’s Conveyance”. since the real estate had already been transferred to Fauber.

       The assignment provided:
      “2. That in the event of the non-payment of principal or of interest on any of said indebtedness when due, whether by its terms or by acceleration, said Assignee may, upon giving ten days written notice to said Assignor, sell said Assignor’s interest (beneficial interest) in said trust property, at public or private sale; and said Assignee may become the purchaser thereof; that as a result of such a sale, all of the said Assignor’s right, title and interest in and to the beneficial interest of said property, including all power of direction and including Assignor’s right of redemption, if any, shall cease and terminate; and that said Assignors agree that any expense of such a sale shall become an additional indebtedness due the said Assignee.”


source: Caselaw Access Project

author: PER CURIAM:

license: Public Domain

text:
    The People of the State of Illinois, Plaintiff-Appellee, v. Malcom Mayes, Defendant-Appellant.
    (No. 59038;
    First District (2nd Division)
    February 13, 1974.
    STAMOS, J., took no part.
    James J. Doherty, Public Defender, of Chicago (Marilyn Dershem Israel, Assistant Public Defender, of counsel), for appellant.
    Bernard Carey, State’s Attorney, of Chicago (Kenneth L. Gillis and John M. Cutrone, Assistant State’s Attorneys, of counsel), for the People.
   PER CURIAM:

Malcom Mayes (also referred to in the record as Malcom Mays), defendant, was found guilty after a bench trial of the offense of theft in violation of section 16—1(a)(1) of the Criminal Code (Ill. Rev. Stat. 1971, ch. 38, par. 16—1 (a)(1)). He was placed on probation for a period of one year with the condition that he pay restitution of ten dollars.

Defendant’s only argument on appeal is that the evidence was insufficient to establish his guilt beyond a reasonable doubt. At trial, Millicent Crenshaw testified that she was a student at South Shore High School. On November 21, 1972, as she was going into her locker, defendant took her wallet containing $10 from the shelf of her locker. Despite her request for the return of the wallet and money, defendant refused. A short time later, she again met the defendant in the lunchroom and again requested the return of her wallet and the $10. Defendant returned her wallet but refused to return the $10. This evidence was sufficient to support defendant’s conviction, even though the defendant presented evidence to the contrary. No error of law appears in the record and a full opinion by this court would have no precedential value. A review of the entire record leads to the conclusion that there is no reasonable doubt as to the defendant’s guilt.

The judgment of the circuit court of Cook County is affirmed.

Judgment affirmed.

STAMOS, J., took no part in the consideration or decision of this case.


author: Mr. JUSTICE STAMOS

text:
    The People of the State of Illinois, Plaintiff-Appellant, v. Harvey Holt, Defendant-Appellee.
    (No. 59448;
    First District (2nd Division)
    February 13, 1974.

      Bernard Carey, State’s Attorney, of Chicago (Kenneth L. Gillis and Mary Dienes, Assistant State’s Attorneys, of counsel), for the People.
    Lawrence E. Kennon, of Chicago, for appellee.
   Mr. JUSTICE STAMOS

delivered the opinion of the court:

Defendant, Harvey Holt, was charged with attempt rape, armed robbery, and aggravated battery. The trial court sustained defendant’s motion to suppress certain items of physical evidence, namely, a revolver and a pair of trousers. The State, pursuant to Supreme Court Rule 604(a) (1), appeals only that part of the order regarding the trousers. Although no brief has been filed by defendant, the practice of this court has been to consider the merits of such appeals. (People v. Caruso, 2 Ill.App.3d 80, 276 N.E.2d 112.) At the hearing on defendant’s motion to suppress, the following evidence, relevant to the issue on appeal, was presented:

At approximately 6:30 A.M. on October 24, 1971, Josephine Peek was the victim of an armed robbery, aggravated battery, and attempt rape. The attack was observed and interrupted by a neighbor who endeavored to capture the assailant. In fleeing, the assailant slipped and fell on a muddy patch of ground. The neighbor was unable to apprehend the assailant, but he did retrieve and turn over to police an address book and a knife from where the assailant fell in the mud.

After learning that the address book belonged to Harvey Holt, Police Investigator Storck and other officers went to Holt’s apartment at 12:00 noon on the same day the offense was committed. According to Officer Storck, the defendant admitted the officers into his apartment, and after inquiry, stated that the address book belonged to him. Holt was arrested and immediately thereafter, the officer, from where he was standing, saw a pair of trousers on the bed in the adjacent bedroom; he noticed that the arrestee was dressed only in underwear and was not wearing trousers. Storck testified that as he observed the trousers on the bed, he recalled that the assailant had fallen into mud while escaping, and that the victim had received wounds causing her to bleed. However, it was not until Storck walked into the bedroom, that he actually saw bloodstains and mud on the trousers.

Defendant denied that the trousers were on the bed, but gave conflicting testimony as to their exact location. On direct examination, defendant said the trousers were on a chair behind the bedroom door that could be seen only by opening the door all the way and looking behind it. On cross-examination, he testified that anyone entering the bedroom could see the trousers on top of the chair. His testimony did indicate, however, that one standing in the officer’s position at the time of the arrest could see part of the bed, albeit not the entire bedroom.

After argument and the submission of memoranda, the trial court held that the seizure of the trousers was unlawful, basing its ruling on Chimel v. California, 395 U.S. 752, which held that a search of a dwelling incident to arrest must be limited to the area within the immediate control of the arrestee at the time of the arrest.

On appeal, the State argues that the trial court erred in applying the rule of Chimel to evidence which was in plain and open view at the time of defendant’s arrest.

The trial' court based its ruling on the well-known permissible exceptions to, and limitations of a warrantless search incident to a valid arrest. (Chimel v. California, supra.) However, an equally well-recognized exception to the warrant requirement is that police officers may lawfully seize articles in plain view which, due to the surrounding circumstances, they reasonably believe constitute evidence of criminal activity. (Harris v. United States, 390 U.S. 234; People v. Sprovieri, 43 Ill.2d 223, 252 N.E.2d 531; People v. McCracken, 30 Ill.2d 425, 197 N.E.2d 35; People v. Caruso, supra.) Although the “plain view” exception to the warrant requirement is often-times intimately linked to the search-incident-to-arrest exception, the doctrine of plain view is not in conflict with the law of search incident to a valid arrest as expressed in Chimel. Consequently, an arresting officer may seize evidence within a dwelling that inadvertently comes into plain view, even though outside of the area under the immediate control of the anrestee. (Coolidge v. New Hampshire, 403 U.S. 443, 465-466, n. 24.) Accordingly, if the seizure of the trousers falls within the purview of the open view doctrine, the trial court erred in suppressing them.

That an item is in plain view is not sufficient by itself to justify the warrantless seizure of evidence. In addition, the officer must view the evidence from a position where he has the right to be (Harris v. United. States, supra; People v. Wright, 41 Ill.2d 170, 242 N.E.2d 180), and further, the facts and circumstances known to the officer at the time he acts must give rise to the reasonable belief that the item seized constitutes evidence of criminal activity. (People v. McCracken, supra; People v. Caruso, supra.) The test of reasonableness with respect to search or seizure is whether the facts available to the officer at the moment of seizure or search were such as to warrant a man of reasonable caution to believe the action taken was appropriate (People v. Caruso, supra; Peo pie v. Miezio, 103 Ill.App.2d 398, 242 N.E.2d 795.); and the conclusions drawn by the officer should be judged upon "factual and practical considerations of everyday life on which reasonable and prudent men, not legal technicians, act.” People v. Hester, 39 Ill.2d 489, 514, 237 N.E.2d 466, citing Brinegar v. United States, 338 U.S. 160, 175.

Turning from these general propositions to the record before us, we initially note the trial court’s finding that the officers had probable cause to enter defendant’s apartment and arrest him; and that at the time of the arrest the officers could see the trousers in plain view. Therefore, the trousers were in plain view from a position where the officers had a right to be.

The decisive issue, then, is whether the officers had probable cause to reasonably believe that the trousers were evidence of criminal activity. Chronologically, the reasonableness of the officers’ act must be gauged not when he entered the room and actually observed the bloodstains and mud, but at the time when the trousers were first viewed. At this earlier point in time, the record indicates that the seizure of the trousers was motivated by the officer’s knowledge of the following: the address book was found near a muddy patch of ground where the assailant had slipped; the defendant admitted ownership of the book; when Officer Storck saw the trousers lying on the bed, and noticed that defendant was wearing underwear, he was aware that the offender had fallen into the mud only a few hours before in his attempt to escape from the scene of the crime, and that the victim had bled. Under these circumstances, the officers had a sufficient basis to believe that the trousers constituted evidence of the crimes for which defendant was arrested (People v. Caruso, supra.); we conclude, therefore, that the seizure was not unreasonable.

Accordingly, the order of the trial court as to the trousers is reversed and the cause remanded for such other and further proceedings as are not inconsistent with the views herein expressed.

Reversed and remanded.

LEIGHTON and DOWNING, JJ., concur.

       Notice of Appeal was mailed to defendant and his trial counsel.


author: Mr. PRESIDING JUSTICE ADESKO

text:
    Aarco American, Inc., et al., Plaintiffs-Appellants, v. James Baylor, Director of Insurance, et al., Defendants-Appellees.
    (No. 56622;
    First District (4th Division)
    February 13, 1974.
    C. Gus Kages, of Steinberg, Burtker & Kages, of Chicago (Joseph B. Lederleitner, of counsel), for appellants.
    William J. Scott, Attorney General, of Chicago (Warren K. Smoot and Donald S. Carnow, Assistant Attorneys General, of counsel), for appellees.
   Mr. PRESIDING JUSTICE ADESKO

delivered the opinion of the court:

The Illinois Director of Insurance filed charges of fraud, dishonesty and wilful violation of the Insurance Code to determine if grounds exist for revoking the licenses of Aarco American, Inc., Fairway Acceptance Corporation and Raymond M. Lavelle.

Aarco was charged with false advertising regarding its powers to represent its customers with' insurance carriers; misleading advertising with respect to the accumulation of cash values in whole life insurance policies it sold; with iUegally assessing service charges for late payments against its customers; with illegaUy placing canceUation assessments against its customers; with the placement of double finance charges against certain of its customers; with keeping inadequate books and records; with misappropriation of its customers’ funds; with refusing to make refunds to its customers; with violating an agreed Cease and Desist Order; and showing untrustworthiness and incompetency to transact business as insurance agents, brokers or solicitors in a manner to safeguard the public. Fairway was charged that it iUegally' assessed load and service charges against its customers in violation of article 13 of the Code and violations of an agreed Cease and Desist Order entered into in 1968 regarding the same prohibited activities; UlegaUy adding motor club charges to its customers’ invoices; falsifying the signatures of its customers on premium finance agreement; and failing to submit the premium finance agreements to its customers. The same charges were placed against Raymond M. LaveUe to the extent that he served as an official of both Aarco and. Fairway.

After a hearing, the Director of Insurance adopted the recommendations of the hearing officer, finding plaintiffs to be culpable and imposed a fine. The Circuit Court of Cook County affirmed the following order of the Director:

“The undersigned, James Baylor, Director of Insurance of the State of Illinois, hereby certifies that he has read the recommendations of the Hearing Officer, H. Edwin Hilton, heretofore appointed and designated, pursuant to Sections 402 and 502 of the Insurance Code of Illinois to conduct a hearing to determine whether the Director of Insurance will revoke and cancel all licenses for insurance which have been issued to the Respondents and whether a fine shall be levied against the Respondents.
The undersigned Director, having been fully advised in the premises, does hereby ratify, approve and confirm all actions and recommendations set forth in the report made by the Hearing Officer dated April 24, 1970, which is attached and made a part hereof.
The undersigned adopts said Report as his findings and reasons for entering the following order pursuant to the authority given him by Sections of the Illinois Insurance Code as stated above.
It is, therefore, ordered:
1. That Aarco American, Inc., be fined $1,000.
2. That Fairway Acceptance Corporation be fined $1,000.
3. That the cost of this action for stenographic transcripts be assessed to Mr. Raymond M. Lavelle in the amount of $661.10. 4. That an affidavit continuing the former affidavit of 1968 be prepared and signed by the Respondents.”

Under the Administrative Review Act, the findings of the administrative agency on questions of fact are prima facie correct. They may be reviewed to determine if they are supported by the evidence, but they can be set aside only if against the manifest weight of the evidence. Fenyes v. State Emloyees’ Retirement System, 17 Ill.2d 106, 111, 160 N.E.2d 810, 813.

The phrase “manifest weight of the evidence” came up for consideration many times in courts of review. A court of review cannot substitute its judgment for the judgment of an administrative tribunal. It should not disturb administrative findings unless such findings are arbitrary or constitute an abuse of discretion; or are without substantial foundation in evidence, or are obviously or clearly wrong, or unless an opposite conclusion is clearly evident. Board of Education of Libertyville-Fremont Consolidated High School District v. County Board of School Trustees, 32 Ill.App.2d 1, 6, 176 N.E.2d 633, 635.

Plaintiffs admit that they did violate many of the statutory provisions relating to the regulation of insurance companies and their agents. However, they claim that these violations were discontinued or were caused by mistakes or human errors. We agree with the Director that generally an honest mistake of fact will shield one from criminal prosecution, but ignorance of common or statutory law furnishes no exemption from responsibility.

Plaintiffs claim that former employees of the Department of Insurance approved some of the plaintiffs’ acts, now objected to, and that the failure of the Department to subpoena said employees prejudiced plaintiffs’ defense. The record does not support this allegation. No petition was presented by any of the plaintiffs to have a subpoena issue. We agree with the Director that it was not his duty to bring in said employees. It was the plaintiffs’ duty to request their appearance and the issuance of the subpoenas.

We find, after giving full consideration to the record and the plaintiffs’ brief, that the decision of the Illinois Director of Insurance and the imposition of the fines are not against the manifest weight of the evidence and we affirm the order of the Director.

Order affirmed.

BURMAN and DIERINGER, JJ., concur.


author: Mr. JUSTICE JOHNSON

text:
    Peter Wonaitis et al., Plaintiffs-Appellees, v. Arlene E. Kustak, Defendant-Appellant.
    (No. 57982;
    First District (4th Division)
    February 13, 1974.
    Taylor, Miller, Magner, Sprowl & Hutchings, of Chicago (John A. Hutchings, James J. Hoffnagle, and Arthur A. Sullivan, Jr., of counsel), for appellant.
    Robert Q. Hoyt, of Chicago (Philip J. Rock, of counsel), for appellees.
   Mr. JUSTICE JOHNSON

delivered the opinion of the court:

This is an appeal from an action brought by the plaintiffs for personal injuries and damages caused by the alleged negligence of the defendant in driving her car. During the pendency of the cause, plaintiff, Antoinnette Wonaitis, died. Her death was suggested of record and Peter Wonaitis, her husband, was substituted as personal representative of the deceased. No amended complaint was filed and the case continued solely as one for the injuries and damages sustained by each plaintiff. No action for wrongful death as to Antoinnette was filed.

The jury returned a verdict; (1) for the defendant and against Peter Wonaitis individually and (2) for Peter Wonaitis, special administrator to prosecute the action of Antoinnette Wonaitis and against the defendant.

The issues presented for review are:

1. Whether the cause of action for the injuries and damages sustained by Antoinnette Wonaitis and prosecuted by her special administrator abated. ■
2. In the event that the aforesaid cause of action did not abate, whether a new trial should be granted with instructions limiting the medical evidence relating to Antoinnette Wonaitis.
3. Whether the court erred in determining as a matter of law that Peter Wonaitis was not acting as agent of Antoinnette Wonaitis, thus taking the issue of the contributory negligence of Antoinnette Wonaitis from the jury.

The appellant cites Holton v. Daly (1882), 106 Ill. 131, as authority for the proposition that if a person dies as a result of injuries sued for,. the cause of action of the injured person abates and cannot be further prosecuted. She then reviews a list of cases that have followed Holton.

On January 22, 1974, the Supreme Court of Illinois filed its opinion in Murphy v. Martin Oil Co., No. 45195, September Term, 1973, wherein Mr. Justice Ward said:

“We consider that those decisions which allow an action for fatal injuries as well as for wrongful death are to be preferred to this court’s holding in Holton v. Daly that the Wrongful Death Act was the only remedy available when injury resulted in death.
The holding in Holton was not compelled, we judge, by the language or the nature of the statutes examined. The statutes were conceptually separable and different. The one related to an action arising upon wrongful death; the other related to a right of action for personal injury arising during the life of the injured- person.
The remedy available under Holton will often be grievously incomplete. There may be a substantial loss of earnings, medical expenses, prolonged pain and suffering, as well as property damage sustained, before an injured person may succumb to his injuries. To say that there can be recovery only for his wrongful death is to provide an obviously inadequate justice. Too, the result in such a case is that the wrongdoer will have to answer for only a portion of the damages he caused. Incongruously, if the injury caused is so severe that death results, the wrongdoer’s liability for the damages before death will be extinguished. It is obvious that in order to have a full liability and a full recovery there must be an action allowed for damages up to the time of death, as well as thereafter. Considering ‘It is more important that the court should be right upon later and more elaborate consideration of the causes than consistent with previous declarations’ (Barden v. Northern Pacific R.R. Co. (1894), 154 U.S. 288, 322, 38 L.Ed. 992, 1000), we declare Holton and the cases which have followed it overruled.”

The court further said:

“ We have repeatedly held that the doctrine of stare decisis is not an inflexible rule requiring this court to blindly follow precedents and adhere to prior decisions, and that when it appears that public policy and social needs require a departure from prior decisions, it is our duty as a court of last resort to overrule those decisions and establish a rule consonant with our present day concepts of right and justice.’ ”

We therefore conclude that the cause of action alleged in the complaint by Peter Wonaitis, special administrator to prosecute the action of Antoinnette Wonaitis, did not abate.

We further conclude that there is no necessity to grant a new trial limiting the medical evidence relating to Antoinnette Wonaitis, since her estate would be entitled to recover for loss of property, loss of wages, pain and suffering, as well as medical expenses to the time of her death and other expenses incident thereto.

We also conclude that the trial court was correct in determining that Peter Wonaitis was not acting as agent of Antoinnette Wonaitis, and taking the issue of contributory negligence of the deceased from the jury.

It was the opinion of the trial judge that there was not sufficient evidence in the record to raise the issue of agency and therefore the court refused to give defendant’s tendered instructions No. 16 and No. 16A. Th court also refused to submit a special interrogatory concerning agency. Mr. Wonaitis testified that he was driving his wife to a bus stop and intending to return home. He was performing a service for her as she did not drive. The essential elements of agency are ownership and control. (Lilegdon v. Hanuska (1967), 85 Ill.App.2d 262, 229 N.E.2d 314; Simaitis v. Thrash (1960), 25 Ill.App.2d 340, 166 N.E.2d 306.) There was no evidence that the decedent exercised ownership or control over the automobile. Mr. Wonaitis owned the car and Mrs. Wonaitis did not drive. Negligence could not be imputable on a joint-enterprise theory since the element of business enterprise is absent. Babington v. Bogdanovic. (1972), 7 Ill.App.3d 593, 288 N.E.2d 40.

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

Affirmed.

ADESKO, P. J., and BURMAN, J., concur.


author: Mr. JUSTICE DIERINGER

text:
    Peter Hordorwich, Plaintiff-Appellant, v. The Board of Police and Fire Commissioners of Melrose Park et al., Defendants-Appellees.
    (No. 58652;
    First District (4th Division)
    February 13, 1974.
    Lawrence Schlam, of Chicago (Clark & Schlam, of counsel), for appellant.
    Jerome N. Zurla, of Chicago (John J. O’Toole, of counsel), for appellees.
   Mr. JUSTICE DIERINGER

delivered the opinion of the court:

This is an appeal from a judgment entered by the Circuit Court of Cook County sustaining the plaintiffs discharge by the Board of Police and Fire Commissioners of the Village of Melrose Park.

The issues presented on appeal are (1) whether the findings and decision of the Board of Police and Fire Commissioners of Melrose Park were based upon cause and supported by substantial evidence; (2) whether the Board’s denial of plaintiff’s motion for continuance constituted prejudicial error and deprived the plaintiff of a fair hearing; and (3) whether the findings of the Board were adequate to support the decision of the Board.

The plaintiff, Peter Hordorwich, became a fireman for the village of Melrose Park in 1967. On March 15, 1971, Fire Chief Anthony Zito posted a general order which directed all Melrose Park firemen to be clean-shaven and to have their hair cut in conformity with an attached drawing of a human head. In December, 1971, Chief Zito suspended the plaintiff from duty for his failure to comply with the general order and insubordination in disobeying a direct order to obtain a haircut. Chief Zito also filed charges with the Board of Police and Fire Commissioners of the village of Melrose Park asking for plaintiffs discharge. A hearing on the charges was held on January 21, 1972. At the hearing counsel for plaintiff requested a continuance for the reason that he was not yet adequately prepared for trial. The motion was denied by the Board. On February 28, 1972, the Board found that cause existed for the discharge of the plaintiff from his position as fireman in that he “was not clean-shaven nor did he have a length of hair so as to be able to perform all of his duties required as a fireman * * * [and in that he was] * * * guilty of insubordination in that on December 21, 1971, he did violate a direct order of the Chief of the Fire Department of the Village of Mel-rose Park to get a hair cut that would place him within the purview of the General Order of March 15,1971,” and he was thereupon discharged. He filed suit in the Circuit Court of Cook County and on November 17, 1972, a hearing was held on the plaintiff’s amended complaint in administrative review. At the close of the hearing the court sustained and affirmed the Boards decision to discharge the plaintiff.

The plaintiffs first contention is the findings and decision of the Board of Police and Fire Commissioners of Melrose Park were neither based upon cause nor supported by substantial evidence. The plaintiff argues the Board’s finding plaintiff was “unfit for duty by reason of his long hair” was insufficient. He relies on the decision in Gigger v. Board of Fire and Police Comm'rs (1959), 23 Ill.App.2d 433, wherein the appellate court held it is imperative the record of an administrative hearing show that an impartial inquiry into the facts was conducted.

We believe the findings and decision of the Board of Police and Fire Commissioners were based upon cause and supported by substantial evidence. The scope of review of the final decision of an administrative agency is well settled and succinctly stated in Davern v. Civil Service Com. (1970), 47 Ill.2d 469, wherein the Illinois Supreme Court stated:

“The Administrative Review Act provides that agency findings on questions of fact are prima facie true and correct’ (Ill. Rev. Stat. 1967, ch. 110, par. 274.) We have construed this provision to limit the function of the reviewing court to ascertaining whether the findings and decisions of the administrative agency are against the manifest weight of the evidence * * *. The courts will not reweigh the evidence, but are limited to a determination whether the final decision of the administrative agency, is just and reasonable in light of the evidence presented.”

In the case at bar the Chief of the Melrose Park Fire Department promulgated a general order which directed all firemen to be clean-shaven and to have their hair cut in accordance with an attached drawing of a human head. Failure to comply with the order would result in disciplinary action. Evidence submitted at the hearing before the Board established that inordinate growth of hair and sideburns could cause an inability to wear a smoke mask required at certain types of fires and would be detrimental to a fireman’s safety and the safety of others. It was further established the plaintiff did not comply with the general order and disobeyed the direct orders of his superior to comply with said general order. We conclude, therefore, that the findings and decision of the Board were based upon valid cause for removal of the plaintiff from his duties and fully supported by the evidence,.

The plaintiff’s second contention is the denial of his motion for continuance by the Board constituted prejudicial error and deprived plaintiff of a faff hearing. The plaintiff bases his contention on the decision in Lindeen v. State Police Merit Board (1962), 25 Ill.2d 349, wherein the Supreme Court held the Board’s denial of a motion for continuance deprived plaintiff Lindeen of a fair trial.,

We do not agree with the plaintiff’s contention. It is well settled that the granting of a continuance is a matter which rests in the sound discretion of an administrative tribunal. (People ex rel. Egan v. Dunham (1942), 314 Ill.App. 110.) In the instant case, the plaintiff and his attorney did not file a written motion for continuance prior to the hearing but, rather, orally requested a continuance at the hearing. Plaintiff’s counsel stated he was requesting a continuance because he was not adequately prepared for trial. At the hearing, however, counsel demonstrated he was well versed in all facets of the circumstances giving rise to plaintiff’s suspension and presented an admitted expert in fire fighting devices. Under these circumstances we conclude the Board did not breach its discretion in denying plaintiff’s motion for continuance.

Plaintiffs final contention is tire findings of the Board were inadequate to support its decision to discharge the plaintiff. The plaintiff argues he was not insubordinaate and the order issued by Chief Zito to get a haircut could not reasonably be construed as an order which the plaintiff had to obey. In support of his contention the plaintiff relies primarily on the decision in Lindquist v. City of Coral Gables (1971), 323 F. Supp. 1161, wherein the District Court of Florida held a hair regulation was invalid as the City had shown no relationship between sideburns and interference with the proper functioning of the fire department.

We believe the findings of the Board were adequate to support its decision. A review of the record indicates the plaintiff violated a General Order promulgated as a safety measure to firemen as well as victims of fires. Furthermore, the plaintiff violated a direct order of the Fire Chief to obtain a haircut. Such insubordination cannot be condoned. Rules designed for purposes of safety and efficiency must be followed. What if a fireman refused to wear his uniform, or boots, or fire hat, or ride the firetruck to the scene of a fire, insisting upon doing as he pleased? Such results could be chaotic and disastrous. Personal rights must be reasonably limited when the safety of firemen and others is involved.

For the reasons stated herein, the judgment of the Circuit Court of Cook County is affirmed.

Affirmed.

ADESKO, P. J., and BURMAN, J., concur.


text:
    South Holland Trust and Savings Bank, Plaintiff-Appellee, v. Gerrit Witvoet et al., Defendants—(Gerrit Witvoet, Appellant.)
    (No. 58707;
    First District (4th Division)
    February 13, 1974.
    Gerrit Witvoet, pro se.

    Edward T. Havey, of Chicago, for appellee.
   Mr. PRESIDING JUSTICE ADESKO

delivered the opinion of the court:

This is an appeal from a decree of foreclosure entered against the defendants, Gerrit Witvoet and his wife, Alice Witvoet. It is only Gerrit Witvoet who prosecutes this appeal. The defendants owned a forty-acre tract of land and failed to pay the real estate taxes for 1959 and the subsequent years. The taxes for the years 1959 to and including 1968 were sold by the County and were purchased at a tax sale. The last day to redeem the taxes was June 10, 1970. Gerrit and Alice Witvoet went to the plaintiff on May 29, 1970, and requested a loan of $30,000 for the purpose of redeeming the delinquent taxes. The loan was approved and was to be evidenced by a note and trust deed. A note and bust deed securing the loan were signed by Gerrit and Alice Witvoet. On June 10, 1970, the delinquent taxes were redeemed.

The defendants have failed to make any payments on the loan and have not paid any of the real estate taxes on the property. The plaintiff paid the second installment of the 1969 taxes and the taxes for 1970. The trial court entered a decree of foreclosure and ordered that the subject property be sold at a sheriff’s sale. The trial court found that the sum of $41,000.62 was due the plaintiff. This amount included the money spent to redeem the delinquent taxes; the plaintiff’s costs and attorney’s fees in prosecuting the foreclosure suit; the amounts paid for the 1969 and 1970 taxes and interest. The defendant, Gerrit Witvoet, appeals pro se from the enby of the foreclosure decree. He contends that.the bial court failed to allow the defendants the right to a jury trial to determine if there was a mortgage in existence. He also maintains that the trial court erred in not allowing the defendants the right of confrontation of witnesses and that the bial court erred in not allowing the defendants the right to redeem fifteen months after the sale of the property. We find no merit in these contentions.

An action to foreclose a mortgage is equitable in nature. (Southwest Federal Savings and Loan Ass’n v. Cosmopolitan National Bank, 23 Ill.App.2d 174, 161 N.E.2d 697 (1959).) In such a proceeding there is no right to a jury trial.

“The right of trial by jury guaranteed by the constitution is only .in such actions as were known to the common law. Where equity takes jurisdiction the defendants are not deprived of their, constitutional right to a bial by jury. A bial by jury is not a matter of right in an equity proceeding.” [Citations omitted.] Weininger v. Metropolitan Fire Insurance Co., 359 Ill. 584 at 590, 195 N.E. 420 at 422 (1935); accord Martin v. Strubel, 367 Ill. 21, 10 N.E.2d 325 (1937).

The Illinois Civil Practice Act, section 63, gives the bial court discretion in a case in equity to order that an issue be tied by a jury. (Ill. Rev. Stat. 1971, ch. 110, par. 63.) A bial by jury, therefore, in an equity proceeding is a matter of discretion and not of right. The bial court did not err in denying the defendants demand for a jury bial.

The defendant maintains that he was denied his right of confrontation of witnesses because he was not permitted to cross-examine Jay I. Rosenberg and Willis Gouwens. The right of confrontation provided for in the sixth amendment to the United States Constitution and in article I, section 8 of the Illinois Constitution of 1970 is only applicable to a criminal prosecution. The mortgage foreclosure action in the case at bar was a civil proceeding. The defendant asserts that he was not allowed to cross-examine these witnesses/ However, the defendants were not represented by counsel but wanted their son, James Witvoet, to represent them. The trial court permitted this and stated at the outset that only James would be allowed to ask questions and if the defendants had any questions they should direct them to James so that he could ask them. James Witvoet was allowed to cross-examine Rosenberg and Gouwens. Proceeding in this manner facilitated the trial and did not constitute an abuse of discretion or error.

The final contention of the defendant is that the trial court erred in not allowing the defendants the right to redeem fifteen months after the sale of the property. The defendant cited Ill. Rev. Stat. 1967, ch. 95, pars. 29 and 30 as authority for this contention. However, those sections of the Illinois Revised Statutes were repealed effective August 19, 1969. The law applicable to the foreclosure of a mortgage or trust deed is contained in Ill. Rev. Stat. 1971, ch. 77, par. 18(e). This section provides that for a mortgage executed on or after August 7, 1961, the period for redemption is 12 months after the date of service or summons or 6 months after the foreclosure sale, whichever is later. The decree of foreclosure entered by the trial court was in accordance with this provision and was, therefore, appropriate and proper. The defendant also questions the evidence upon which the decree was entered but the record amply supports the decree and indicates that the plaintiff was entitled to the foreclosure.

For the reasons here stated, the decree of foreclosure is affirmed and the cause is remanded to the trial court for a hearing as to court costs and expenditures made by the plaintiff in this appeal and to ascertain a reasonable amount for attorney’s fees to be granted to the attorney for the plaintiff.

Affirmed and remanded to trial court for determination of attorneys fees, costs and expenditures.

BURMAN and JOHNSON, JJ., concur.


text:
    The People of the State of Illinois, Plaintiff-Appellee, v. Herman Ashton, Defendant-Appellant.
    (No. 59049;
    First District (4th Division)
    February 13, 1974.
    Paul Bradley, Deputy Defender, of Chicago (Martin Carlson, Assistant Appellate Defender, of counsel), for appellant.
    Bernard Carey, State’s Attorney, of Chicago (Kenneth L. Gillis and Alan W. Brothers, Assistant State’s Attorneys, of counsel), for the People.
   Mr. JUSTICE DIERINGER

delivered the opinion of the court:

This is an appeal from a judgment entered by the Circuit Court of Cook County. The defendant, Herman Ashton, was indicted for armed robbery and aggravated battery. Following a bench trial, the defendant was found guilty and sentenced to a term of from two to five years in the Illinois State Penitentiary.

The only issue presented on appeal is whether the defendant was denied his right to a fair trial when the physical evidence involved in his case was destroyed by the State prior to trial.

The defendant, Herman Ashton, was charged in an indictment returned on May 21, 1968, with the offenses of armed robbery and aggravated battery. On August 27, 1968, the trial court granted the defendant’s motion for a Fourth Term discharge. The State appealed the order, and this court reversed the judgment of the trial court and remanded the cause for further proceedings on September 29,1970 (People v. Ashton, 130 Ill.App.2d 147). The defendant was retried on November 29, 1972. At the trial, the complainant, Margaret Pearman, testified that on April 3, 1968, about 12:30 A.M., she was standing on an “L” platform at 58th Street waiting for a train. The defendant gtabbed her from behind and held a knife to her throat. The defendant pushed the complainant behind an advertisement sign, grabbed a radio which she was carrying, and asked her if she had any money. The encounter lasted three or four minutes, during which time the complainant directly faced the defendant. The defendant then descended the platform stairs to the street. The complainant followed the defendant down the stairs, saw a policeman in the station, and yelled to him that the man who just ran by had robbed her. Police officer Howard Medici testified he chased after the defendant, saw him throw a knife into a doorway, caught and arrested the defendant, and then immediately recovered the knife. Following the arrest, the officer took the defendant back to the “L” station and the complainant identified Herman Ashton as the man who robbed her. The officer searched the defendant and recovered a portable radio which the complainant identified as belonging to her. Officer Medici further testified that the knife and radio he recovered were destroyed by the Chicago Police Department on July 16, 1969, after the defendant had been granted a Fourth Term discharge by the trial court and before such discharge order was reversed by the Appellate Court.- At the conclusion of the trial, the court found the defendant guilty of armed robbery and aggravated battery and sentenced him to a term of from two to five years on his conviction of armed robbery.

The defendant contends he was denied a fair trial when the physical evidence involved in his case was destroyed by the State prior to trial. The defendant argues that the destruction of the portable radio and knife by the Chicago Police Department denied him his right to confront the evidence against him. The defendant bases his contention on the decision in Pointer v. Texas (1965), 380 U.S. 400, 13 L.Ed.2d 923, 85 S.Ct. 1065, wherein the Supreme Court held that the right of an accused in a criminal case to confront the witnesses against him is a fundamental right of due process of law guaranteed by the Fourteenth Amendment.

We believe the defendant was afforded a fair trial and was proven guilty beyond a reasonable doubt. While it is improper to destroy evidence material to the outcome of a trial, the instant case turned on the positive identification of the defendant by the complainant and police officer, and the hot pursuit and. immediate arrest of defendant by said officer. The portable radio in and of itself was not a material and deciding factor in the case at bar. The complainant identified the radio as “her radio,” and defendant made no attempt to distinguish or identify the radio. In People v. Flournoy (1971), 1 Ill.App.3d 918, this court held that the destruction by the State of certain physical evidence did not deny the defendant due process of law where the materiality of the evidence was not demonstrated by the defendant. In the instant case, testimony proved the defendant guilty beyond a reasonable doubt, and the physical evidence would have only increased the evidence against him.

For the reasons stated herein, the judgment of the Circuit Court of Cook County is affirmed.

Affirmed.

ADESKO, P. J., and BURMAN, J., concur.


author: Opinion by Mr. JUSTICE McGLOON.

text:
    Gladys White, Plaintiff-Appellant, v. Checker Taxi Company, Inc., Defendant-Appellee.
    (No. 57519;
    First District (3rd Division)
    February 14, 1974.
    Robert Q. Hoyt, of Chicago, for appellant.
    Jesmer and Harris, of Chicago, for appellee.
   Opinion by Mr. JUSTICE McGLOON.


author: Mr. PRESIDING JUSTICE McNAMARA

text:
    The People of the State of Illinois, Plaintiff-Appellee, v. Theresa Ramirez, Defendant-Appellant.
    (Nos. 57562, 57563 cons.;
    First District (3rd Division)
    February 14, 1974.
    James J. Doherty, Public Defender, of Chicago (Ian Levin, Assistant Public Defender, of counsel), for appellant.
    Bernard Carey, State’s Attorney, of Chicago (Elmer C. Kissane and Peter F. Costa, Assistant State’s Attorneys, of counsel), for the People.
   Mr. PRESIDING JUSTICE McNAMARA

Defendant was charged in two indictments in the circuit court of Cook County with unlawful possession of a narcotic drug and in one indictment with unlawful possession and sale of a narcotic drug. She withdrew her pleas of not guilty, entered pleas of guilty to the crimes charged, and was sentenced to two to four years on each charge, the sentences to run concurrently. Defendant appeals, contending that the trial court committed reversible error by failing to comply with specific sections of Supreme Court Rule 402 regarding its acceptance of her pleas. Defendant’s brother, a co-defendant in these proceedings, is not involved in this appeal.

When the case was called for trial, defendant’s attorney informed the court that the results of a plea-bargain agreement engaged in by the court, the prosecutor, and him on the preceding day had befen relayed to the defendant and that defendant wished to withdraw, her ..pleas of not guilty and enter pleas of guilty to the crimes charged in the indictments.

The trial judge then advised defendant that a plea of guilty waived her rights to a jury trial, to confront the witnesses against her, and to plead not guilty and compel the State to establish her guilt beyond a reasonable doubt. Without stating the terms or the result of the plea-bargain arrangement, the court then asked defendant whether the results of the conference conducted the previous day, pursuant to defendant’s request, involving the court, the State, and her defense counsel, had been transmitted to her, to which the defendant replied affirmatively. Defendant replied negatively when the judge asked if any force, duress, or promises “aside from the results of the conference” had forced her to alter her pleas. After the assistant State’s Attorney had read the indictments and stipulated facts involved in the indictments, the court announced that these were sufficient factual bases to accept the pleas and entered final judgments upon them. The record is silent regarding any admonition by the trial judge concerning the minimum and maximum sentences to which the defendant would be subject by her guilty pleas, and the State admits that none was given. A hearing on aggravation and mitigation was conducted on the following Monday, and the trial judge and defense counsel had a brief discussion on the record in which it was implied that another judge promised to render a sentence at a later time for defendant’s violation of probation which would be served concurrently with the one handed down in the instant case.

Defendant contends that the trial court committed reversible error in its acceptance of defendant’s guilty pleas, specifically by its failure to state the terms of the plea bargaining agreement in open court, as required by Supreme Court Rule 402(b); by its failure to indicate its concurrence or conditional concurrence of the ageement in open court, as required by 402(d)(2); by its failure to advise the defendant of the minimum and maximum sentences to which her guilty pleas would make her subject, as required by 402(a)(2); and by its failure to determine if the defendant was fully apprised of the nature of the offenses to which she was charged, as required by 402(a)(1).

Supreme Court Rule 402 (Ill. Rev. Stat. 1970, ch. 110A, par. 402) sets forth the procedures to be utilized and warnings to be given by the trial court to a defendant who expresses a desire to plead guilty to a crime, and by its terms requires substantial compliance on the part of the trial judge rather than absolute compliance. We believe, however, that the trial court’s total failure to advise the defendant of the possible minimum and maximum penalties fixed by law for the offenses and the court’s failure to state the terms of the plea bargaining agreement was a failure to substantially comply with Supreme Court Rule 402, and. therefore constituted reversible error.

The less stringent forerunners to Rule 402 also contained a provision, Supreme Court Rules 27A and then 401(b), requiring that a defendant be advised of the penalties to be faced by entering a plea of guilty. The Supreme Court consistently has held that non-compliance with that provision required reversal of the conviction. (People v. Mackey (1965), 33 Ill.2d 436, 211 N.E.2d 706; People v. Washington (1955), 5 Ill.2d 58, 124 N.E.2d 890.) In Washington, the court stated at p. 62:

“Similarly, defendant was never informed of the punishment fixed by law for the crime charged nor was he apprised of the limits of the punishment he might receive as a result of his plea, an omission which has long been held to constitute error. Krolage v. People, 224 Ill. 456; People v. Moore, 342 Ill. 316.”

Since Rule 402 has come into effect, Illinois courts have held that failure to advise defendant of the minimum and maximum sentences to which guilty pleas would make the accused subject, constitutes an absence of substantial compliance with Rule 402. (People v. Short (1972), 4 Ill.App. 3d 849, 281 N.E.2d 785; People v. Fairchild (1971), 133 Ill.App.2d 875, 272 N.E.2d 445.) However, compare People v. Goodman (1971), 2 Ill. App.3d 584, 277 N.E.2d 136; People v. Warship (1972), 6 Ill.App.3d 461, 285 N.E.2d 224; and People v. Hartman (1972), 6 Ill.App.3d 543, 285 N.E.2d 600.

Additionally, the trial court failed to state the terms of the plea bargaining agreement in open court, as required by 402(b). In People v. Ridley (1972), 5 Ill.App.3d 680, 284 N.E.2d 37, we held that the great weight and significant inducement which a plea bargain agreement bears on the will of the defendant requires that 402(b) be followed to enable the trial judge to discern the true voluntariness of a guilty plea. The second aspect of the Ridley decision was to discourage future collateral attacks upon guilty pleas. In the present case, we reaffirm our belief that full disclosure of the plea bargaining agreement on the record represents the only effective method to prevent a defendant from swearing falsely in a later attack that the terms of the agreement reached were other than the actual sentence imposed. Nor do we believe that the facts in the present case are distinguished from Ridley because here the trial judge and defense counsel had a brief discussion in open court in which it was allegedly implied that defendant would receive a sentence which would run concurrently with another sentence to be handed down later by another trial judge.

In view of the fact that the trial court failed to advise defendant of the minimum and maximum sentences which her guilty pleas would make her subject and failed to state the terms of the plea bargaining agreement in open court, we find that the trial court did not substantially comply with the requirements of Rule 402. Accordingly, the judgment of the circuit court of Cook County is reversed, and the cause is remanded for further proceedings not inconsistent with the holdings in this opinion.

Judgment reversed and remanded.

DEMPSEY and MEJDA, JJ., concur.


text:
    David M. Wood et al., Plaintiffs-Appellants, v. School District No. 65 et al., Defendants-Appellees.
    (No. 58571;
    First District (3rd Division)
    February 14, 1974.

      G. James Arnett, of Chicago, for appellants.
    William J. Scott, Attorney General and Bernard Carey, State’s Attorney, both of Chicago (Bonny Sutker Barezky, Assistant Attorney General, and Sheldon Gardner and John A. Dienner, III, Assistant State’s Attorneys, of counsel), for appellees.
   Mr. PRESIDING JUSTICE McNAMARA

delivered the opinion of the court:

Plaintiffs appeal from an order of the circuit court of Cook County dismissing their amended complaint for a declaratory judgment and injunction. On September 29, 1972, plaintiffs, alleging that they were parents of school children, property owners and taxpayers'residing in School District 65 which includes all of the city of Evanston and part of the village of Skokie, filed their amended complaint in six counts concerning a school district referendum which had been held in March 1972. In the referendum, a majority of voters favored an increase of $.50 per $100 of assessed valuation to increase the amount of tax money available to School District 65.

Count I of the complaint charged in effect that residents of the school district voted in favor of the tax increase because school administrators and board members misrepresented the facts and figures for the need of a tax increase by wrongful use of school funds including the time of school personnel to prepare and .distribute various letters and publications favoring the tax increase; that letters were distributed to the parents of school children in which it was falsely stated that unless the tax increase was approved some teachers would have to be discharged,, school quality would decline, and certain school services would be terminated; and that plaintiffs had been denied use of a mailing list containing the addresses of the parents of school children so that plaintiffs could communicate their disapproval of the tax increase. Plaintiffs sought a declaratory judgment that school officials grossly misrepresented the need for a tax increase; that the voters were denied the necessary information upon which to make an enlightened vote; and that the use of school funds to promulgate one side of a referendum was a misappropriation of school funds and that various officers so spending were guilty of misfeasance and malfeasance. Plaintiffs’ last prayer in Count I was to enjoin the County Clerk from certifying the district’s tax levy unless the tax increase was omitted. (The County Clerk was not served with summons, and apparently plaintiffs have abandoned their request for injunction.)

Count II of the amended complaint charged that one of the school board members, who served as a member of the board’s wage negotiations committee, was married to a district school teacher; and that another school board member was an official of Encyclopedia Britannica with whom the district had contracts. Plaintiffs sought a declaration that the two school board members had a conflict of interest.

Count III, the only count addressed to the State Superintendent of Instructions and the County Superintendent of Schools, charged that those two officials and the school board deprived plaintiffs of their free speech and prompt and complete justice. The complaint conceded that the Election Code (Ill. Rev. Stat. 1967, ch. 46, par. 23—5) provided that election contests must be filed within 30 days after the election, and that such procedure was not followed in the present case; that plaintiffs were not contesting tire results of the referendum; that the School Code (Ill Rev. Stat. 1967, ch. 122, par. 3—10) requires the two elected officials to recognize the existence of a controversy; that the facts set forth in Count I revealed a controversy between plaintiffs and the school district; that on June 2, 1972, plaintiffs wrote to the County Superintendent concerning the controversy; that his response failed to comprehend, the nature of the controversy; that on June .12 the State Superintendent arranged a meeting with plaintiffs, but that after the meeting no further action was taken.

Count IV sought damages from the school district and school board members in the amount of $9,577.42 plus attorney’s fees and costs for misrepresentation. Count V prayed for a declaration that the school district and board be denied the use of any school funds for legal fees and expenses in defending their wrongful acts and omissions.

In their final count of the amended complaint, plaintiffs charged that a letter was distributed under the direction and with the approval of the business manager of the school district by a representative of the Dual Enrollment Committee for the Evanston Council for Catholic Education, and that the letter was mailed through the school, facilities using public funds. Plaintiffs sought a declaration that the use of public funds for sectarian purposes violated the state constitution.

Defendants filed motions to strike and dismiss the amended complaint, and plaintiffs filed memoranda in opposition. Defendants in turn filed reply memoranda. After considering the pleadings, the memoranda, and hearing argument, the trial court, on November 8, 1972, dismissed the complaint.

Without even considering the conclusionary nature of plaintiffs' complaint, we find that the trial court correctly entered an order dismissing the complaint. Courts shall refuse to enter declaratory judgments where it appears that the judgment order would not terminate the controversy or some part thereof, giving rise to the proceedings. (Ill. Rev. Stat. 1967, ch. 110, par. 57.1(1); Spalding v. City of Granite City (1953), 415 Ill. 274, 113 N.E.2d 567; State Farm Mutual Automobile Insurance Co. v. Morris (1961), 29 Ill.App.2d 451, 173 N.E.2d 590.) The issue in an action seeking declaratory relief is whether, considering all the circumstances, under the facts alleged, there is a substantial controversy between parties having adverse legal interests of sufficient immediacy and reality to warrant issuance of declaratory judgment. (Farmers Oil and Supply Co. v. Illinois Central R.R. Co. (1972), 6 Ill.App.3d 965, 286 N.E.2d 68.) And if a complaint for declaratory judgment fails to show a controversy exists, or if the question involved is moot, the suit should be dismissed on motion. Burgard v. Mascoutah Lumber Co. (1955), 6 Ill.App.2d 210, 127 N.E.2d 464.

We are of the opinion that the amended complaint fails to set forth a justiciable issue or controversy which would entitle plaintiffs to declaratory judgment. Any declaration on the court’s part would not aid in the termination of the controversy or even of a portion of it, and therefore the trial court correctly dismissed the complaint. As plaintiffs concede, the present suit was not filed until after the statutory period for contesting the referendum had expired. Indeed, the plaintiffs agree that they are not attempting to overturn the results of the referendum. The trial judge, during argument, pointed out accurately that the whole case as it related to the referendum was post-factum. Thus there was no actual controversy of a justiciable nature. We note that defendants Mart-wick and Bakalis were not contacted by plaintiffs until at least 90 days after the referendum. At that point in time, there was nothing that either official could do concerning the referendum or its results.

Plaintiffs urge that defendants denied them their First Amendment right to free speech, apparently basing this argument on their allegation that the school district refused to give them access to a mailing list of the parents of school children residing in the school district. We believe the plaintiffs were entitled to this list inasmuch as school officials in the district were making use of it to communicate their own views to the childrens parents. And it may be that the plaintiffs prior to the referendum through proper proceedings could have successfuUy obtained access to the list, but we do not believe that the denial of its use can be deemed an infringement of plaintiffs’ constitutional right of free speech. Additionally, plaintiffs were free to speak out and communicate with the electorate prior to the referendum, and had access to a voting list of the entire electorate of the school district from the County Clerk.

We find no merit in plaintiffs’ contention that advising parents of parochial students concerning the referendum constituted a use of public funds for sectarian purposes. Those parents were taxpayers within the school district and were entitled to be made aware of the benefits and burdens which would result from the referendum.

For the reasons stated, the order of the circuit court of Cook County dismissing plaintiffs’ amended complaint is affirmed.

Order affirmed.

DEMPSEY and MEJDA, JJ., concur.


author: PER CURIAM.

text:
    The People of the State of Illinois, Plaintiff-Appellee, v. Garrett Watson, Defendant-Appellant.
    (No. 58678;
    First District (3rd Division)
    February 14, 1974.
    MEJDA, J., took no part.
    James J. Doherty, Public Defender, of Chicago, for appellant.
    Bernard Carey, State’s Attorney, of Chicago, for the People.
   PER CURIAM.


author: Mr. JUSTICE MEJDA

text:
    Somerset Importers, Ltd., Plaintiff-Appellee, v. Gold Standard Liquors, Inc. et al., Defendants-Appellants.
    (No. 58920;
    First District (3rd Division)
    February 14, 1974.
    Schultz & Schultz, of Chicago (Allen H. Schultz and Jay L. Schultz, of counsel), for appellants.
    Morton Siegel and Allan Goldberg, both of Chicago, for appellee.
   Mr. JUSTICE MEJDA

delivered the opinion of the court:

This is an interlocutory appeal from an order denying a motion to dissolve a preliminary injunction. On December 1, 1972, plaintiff filed a verified complaint for a “temporary” and permanent injunction against the defendants to restrain the advertising, offering for.sale or selling plaintiff’s products at prices below those stipulated in accordance with the Fair Trade Act (Ill. Rev. Stat. 1969, ch. 121½, pars. 188—191). On December 5, 1972, plaintiff served notice of motion that on December 11, 1972, it would present a motion for “temporary” injunction pursuant to the verified complaint. On the latter date defendants filed their appearance and answer, and the plaintiff’s motion was set for hearing on January 5, 1973, on which date an order was entered granting the plaintiff a “temporary” injunction. On February 2, 1973, the court granted a substitution of attorneys for defendants who thereupon filed a motion to dissolve the “temporary” injunction. On March 7, 1973, defendants’ motion was denied, and defendants appeal.

On appeal, as in their motion to dissolve the preliminary injunction, defendants contend that the order of January 5, 1973, violates the provisions of section 3—1 of the Illinois Injunction Act (Ill. Rev. Stat. 1971, ch. 69, par. 3—1), specifically that: (1) it does not set forth the reasons for its issuance; (2) it is not specific in its terms; and (3) it makes reference to other documents as describing the acts sought to be restrained.

The pertinent portions of the injunction order entered on January 5, 1973, read as follows:

“THIS CAUSE coming on to be heard on the motion of plaintiff, by MORTON SIEGEL, its attorney, for a temporary injunction; the Court having before it the verified Complaint of plaintiff, having read and considered the same, and the Court being advised that defendant does not object to the entry of this order, and thus being advised in the premises;
IT IS HEREBY ORDERED, ADJUDGED AND DECREED that the: defendants, * * * their agents and servants, and each and every one of them be, and they are hereby jointly and severally enjoined and restrained during the pendency of this action, from wilfully and knowingly advertising, offering for sale or selling SOMERSET IMPORTERS, LTD., products, including but not limited to TANQUERAY GIN in Illinois, at less than the prices stipulated by plaintiff from time to time under the Fair Trade Act of the State of Illinois, and in accordance with the contracts made pursuant to said Fair Trade Act, which contracts at the time of filing of the Complaint were, or now are, or may hereafter be in force in Illinois relating to the sale or resale of any of said beverages in that State. Attached hereto for Exhibit 1, is current schedule of Fair Trade prices for TANQUERAY GIN.”

Section 3—1 of the Illinois Injunction Act provides, in relevant part:

“Every order granting an injunction and every restraining order shall set forth the reasons for its issuance; shall be specific in terms; shall describe in reasonable detail, and not by reference to the complaint or other document, the act or acts sought to be restrained; * *

We first consider defendants’ contentions that the order lacks specificity and makes reference to other documents. In sustaining an order practically identical in language to the order challenged herein, we stated in Paddington Corp. v. Westville Beverage Mart, Inc. (1973), 12 Ill.App.3d 555, at 558:

“Upon examining these cases, we do not believe the instant injunction creates undue hardship for defendant. Defendant is actively involved in the liquor business and is aware of the products which are fair traded. The injunction informs defendant of whose products are involved and how in accordance with law defendant will be informed of any subsequent changes in plaintiffs fair trade program. The burden placed upon defendant is not so onerous as to render the injunction invalid. [Citation.]”

In the case before us the order additionally provides that attached thereto for Exhibit 1 is current schedule of fair trade prices for Tanqueray Gin and does have attached such schedule as a part of the order. The order for preliminary injunction reasonably informs the defendants of the acts restrained and also provides sufficient flexibility to meet the needs of a changing market. The order clearly advises defendants of the acts restrained. Here defendants are informed of the current market prices of a particular product, and the injunction order further informs them how, in accordance with law, they will be informed of any subsequent changes in plaintiffs fair trade program. (Seagram-Distillers Corp. v. New Cut Rate Liquors, 221 F.2d 815 (7th Cir. 1955); and Paddington Corp. v. Westville Beverage Mart, supra.) We accordingly hold that the order herein is sufficiently specific in terms and describes in reasonable detail the acts sought to be restrained within the requirements of section 3—1 of the Injunction Act.

Defendants’ final contention is that the injunction order failed to set forth the reasons for its issuance. We disagree. An examination of the order of January 5, 1973, reveals that it expressly sets forth that the court considered the verified complaint and specifically states, “* * *, and the Court being advised that defendant does not object to the entry of this order, * * The defendants advised that they did not object to the entry of the order then and there being presented for entry by the court restraining defendants from selling, offering for sale and advertising plaintiffs products contrary to prices stipulated in accordance with the Illinois Fair Trade Act. We must assume that defendants’ prior counsel reviewed the order before its entry and did in fact advise the court as set forth in the order. (Sampson v. Village of Stickney (1962), 24 Ill.2d 134, 139.) It appears therefrom that the reason for the issuance of the injunction was defendants’ advisement of no objection. Such interpretation is reasonable and not inconsistent with a reading of the order.

Furthermore, when the motion came on for hearing and the order for preliminary injunction was presented for entry by the court, it was incumbent upon defendants to then specificaUy object to the order and to call the attention of the court to any alleged ground or statute upon which such objection was based. (Presbyterian Distribution Service v. Chicago National Bank (1959), 21 Ill.App.2d 188, at 194.) Counsel are presumed to know the law. Defendants, on the contrary, in effect advised the court that they had reviewed the order and, at the very least, affirmatively indicated that they had no objection thereto. We are here presented with a situation where the defendants did not join in a consent order which was tendered to the court, nor did they approve the order as to form as is traditionally done by specific statement (and signature or initials) on the order. However, defendants did indirectly voice approval of the order by stating affirmatively that they had “no objection” to its entry. Such action constitutes more than more acquiescence in the entry of this order. Defendants thereby obviated and dispensed with the necessity of any further proceedings or requirements. Under the particular circumstances, we are of the opinion that this action by the defendants was tantamount to a waiver of the requirements of section 3—1 of the Injunction Act. (Cf. Vermilion County Production Credit Ass’n v. Izzard (1969), 111 Ill.App.2d 190, 195.) Waiver is the intentional relinquishment of a known right. (Perlman v. First National Bank (1973), 15 Ill.App.3d 784.) In the case before us the trial court entered this order in reliance upon defendants’ statement. They may not now complain that no reason or insufficient reason, is set forth in the order granting the preliminary injunction.

The guidelines as to the form of an injunction order are not so inflexible as to preclude variation therefrom. The United States Supreme Court, in Lawrence v. St. Louis-San Francisco Ry. Co. (1927), 274 U.S. 588, 71 L.Ed. 1219, referred to United States Code of Laws, Title 28, § 383, and at page 591 held:

“Although proper practice demands that the provision thus prescribed by Congress be scrupulously observed, disregard of . the statutory requirement concerning the form of the order did not render the interlocutory decree void. [Citation.]”

Section 383 was the predecessor of what is now Rule 65(d) of the Federal Rule of Civil Procedure (28 U.S.C. Rule 65(d)) and is substantially similar thereto. Section 3—1 of the Illinois Injunction Act as it relates to the contents and form of injunction orders is identical with Rule 65(d).

Defendants’ affirmative statement of “no objection” whether viewed as a waiver of the statutory requirement of section 3—1, or viewed as a reason for the issuance of the preliminary injunction, leads us to conclude that the order of January 5, 1973, does not violate the requirements of section 3—1 of the Injunction Act.

Accordingly, the order of the trial court refusing to dissolve the order for preliminary injunction is affirmed. A motion to dismiss filed by plaintiff in this court was taken with the appeal. Since the appeal was decided on the same grounds, the motion is denied.

Judgment affirmed,

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


text:
    The People of the State of Illinois, Plaintiff-Appellee, v. John Lester, Defendant-Appellant.
    (No. 58064;
    First District (5th Division)
    February 15, 1974.

      DRUCKER, J., took no part.
   PER CURIAM.

James J. Doherty, Public Defender, of Chicago (Robert Morel Gray, Assistant Public Defender, of counsel), for appellant.

Bernard Carey, State’s Attorney, of Chicago (Kenneth L. Gillis and Linda West Conley, Assistant State’s Attorneys, of counsel), for the People.


text:
    The People of the State of Illinois, Plaintiff-Appellee, v. Francis Baker, Defendant-Appellant.
    (No. 58354;
    First District (5th Division)
    February 15, 1974.

      DRUCKER, J., took no part.
    James J. Doherty, Public Defender, of Chicago (Shelvin Singer, Professor of Law, I.I.T. Chicago-Kent College of Law, of counsel), for appellant.
    Bernard Carey, State’s Attorney, of Chicago (Kenneth L. Gillis and Lee T. Hettinger, Assistant State’s Attorneys, of counsel), for the People.
   PER CURIAM.


text:
    The People of the State of Illinois, Plaintiff-Appellee, v. Eddie Horton, Defendant-Appellant.
    (No. 58598;
    First District (5th Division)
    February 15, 1974.
    BARRETT, J., took no part.
    James J. Doherty, Public Defender, of Chicago (Harold A. Cowen, Assistant Public Defender, of counsel), for appellant.
    Bernard Carey, State’s Attorney, of Chicago (Kenneth L. Gillis and Jerald A. Kessler, Assistant State’s Attorneys, of counsel), for the People.
   PER CURIAM.


author: Mr. JUSTICE DRUCKER

text:
    Gulf Atlantic Life Insurance Company, Plaintiff-Appellee, v. Merchants & Manufacturers State Bank, Defendant-Appellant.
    (No. 58538;
    First District (5th Division)
    February 15, 1974.
    Collins & Amos, of Chicago (Alan O. Amos, of counsel), for appellant.
    Epton, McCarthy and Druth, Ltd., of Chicago (Bernard E. Epton, Donald Segel, and Lawrence A. Berman, of counsel), for appellee.
   Mr. JUSTICE DRUCKER

delivered the opinion of the court:

This is a suit for the recovery of $7500 paid by plaintiff to defendant, Merchants & Manufacturers State Bank, on a group credit life insurance policy issued by plaintiff insuring the lives of the debtors of the bank and arranged for by Dearborn Insurance Brokers, Inc., a co-defendant below. The court, sitting without a jury, found for plaintiff against both defendants. Only Merchants & Manufacturers State Bank (hereinafter defendant) appeals.

On appeal it is contended that (1) plaintiff undertook to insure all debtors without regard to their state of health and (2) defendant did have an affirmative burden to volunteer facts dealing with the condition of its debtors’ health.

Plaintiff is an insurance company which writes group credit life insurance policies. Under the terms of such a policy plaintiff agrees to insure the fives of persons included in enumerated classes of debtors of a bank, the bank being the beneficiary. On June 10, 1969, defendant applied for such coverage. The application stated that under the policy, coverage would be limited to:

“* * * persons ages 18 through 65 inclusive at the time of becoming indebted to the creditor, who are liable, directly or indirectly, to pay or repay sums of money to the creditor over a period not to exceed 60 months and agree to pay the required premium contribution to the creditor, and who represent themselves to he in good health and gainfully employed shall be eligible for insurance hereunder.” (Emphasis added.)

The application was apparently signed by Leo Waxman as president of the defendant bank. He denied it was his signature but testified that Irving Karlin was “empowered to do whatever was necessary to get the insurance.” Karlin was president of Dearborn Insurance Brokers which had been employed by plaintiff as its agent for the collection of premiums and the issuance of certificates of insurance under the group credit policy issued to defendant. In addition, Karlin attended the board meetings of defendant, advising it on matters pertaining to insurance. He had been a shareholder of defendant until January 1968. On March 22, 1970, defendant made an unsecured loan to Karlin in the amount of $24,025.27. A credit life certificate was issued covering Karlins loan to the extent of $7500, the maximum amount available to a man his age. On May 7, 1970, Karlin suffered a cardiac arrest and died. Defendant sought recovery under the policy and, thereafter, payment of $7500 was made by plaintiff. On December 11, 1970, plaintiff, alleging that the credit life certificate was issued because of misrepresentations made by defendant and Dearborn Insurance Brokers concerning Karlin’s health, brought this action to recover the $7500.

Edward Edelstein, the general agent of plaintiff, testified that he dealt with Karlin in arranging the group credit life policy covering defendant’s debtors. In setting up this policy an agency contract was entered into between plaintiff and Dearborn Insurance Brokers. Under the policy, defendant had authority to issue certificates evidencing the inclusion of individuals within the group insured by plaintiff. These certificates were submitted to Dearborn Insurance Brokers which forwarded them to Edelstein. There was no requirement that debtors of defendant take a physical examination before the issuance of the certificates. During the autumn of 1969 Edelstein observed that Karlin “looked sick” and that he had lost a great deal of weight, perhaps 35 pounds. Edelstein stated that a heart condition was a “physical impairment which would cause the rejection of an application for group life insurance.” He was not aware that Karlin was a debtor of the bank.

Waxman testified that he had a friendly relationship with ICarlin, seeing him approximately a dozen times a month.. He was aware that Karlin had been hospitalized several times in the years immediately preceding his death and had visited him in tire hospital in March 1970. He believed it to be “common knowledge” that Karlin had a heart problem. At its meetings defendant’s board of directors would often discuss Karlin’s health. He knew that Karlin frequently borrowed money from defendant and assumed that the rules applying to unsecured loans a-plied to those made to Karlin.

Dr. Marvin Rosenberg, a cardiologist, testified in an evidentiary deposition submitted to the court below that Karlin had been his patient from August 1968 until his death. Karlin’s appearance was that of a man who was chronically ill. This would be obvious even to a layman. Karlin showed evidence of severe weight loss (Rosenberg’s records indicated that his weight had dropped from 210 pounds to 155 pounds) and there was a marked swelling of his abdomen. Karlin’s prognosis was so poor that he was a candidate for “heart transplantation.” During 1970 Karlin was hospitalized on three occasions: from January 11 through January 30, from March 6 through March 27, and from May 2 until his death. Heart disease was the cause of all three hospitalizations.

OPINION

Defendant first contends that plaintiff undertook to insure all debtors without regard to their state of health. A reading of the application for insurance reveals this contention to be erroneous. This application stated that coverage would be extended only to those debtors who represented themselves to be in good health. By its terms the master policy issued by plaintiff included this document. Clearly, then, there was a good health limitation on the scope of coverage offered by plaintiff.

While as its second contention defendant argues that it did not have an affirmative burden to volunteer facts dealing with the state of a debtor’s health, it cannot deny that it had an obligation to act in good faith in its dealings with its insurer. Apolskis v. Concord Life Insurance Co., 445 F.2d 31 (7th Cir.); Carroll v. Preferred Risk Insurance Co., 34 Ill.2d 310, 215 N.E.2d 801; Western and Southern Life Insurance Co. v. Tomasun, 358 Ill. 496, 193 N.E. 451; Tesluk v. Metropolitan Life Insurance Co., 130 Ill.App.2d 290, 264 N.E.2d 566.

Examining the record in light of this fundamental principle, we note that the policy here in question was apparently “self administrative” in nature. (See generally Crawford v. Equitable Life Assurance Society of the United States, 56 Ill.2d 41, 305 N.E.2d 144.) It was for defendant to determine which of its debtors were members of that class of persons whom plaintiff undertook to insure. Specifically, defendant was obligated to submit credit life certificates only on those debtors who represented themselves to be in good health. In the case at bar it was “common knowledge” that Karlin suffered from heart disease. Due to the extreme fluctuations in his weight, it was clear to his business associates that Karlin was a very sick man. This was discussed at the board meetings of defendant. Waxman, president and chairman of the board of defendant, in particular, knew of Karlins heart condition and of his repeated hospitalizations. Waxman, an attorney with some experience in dealing with insurance, testified that the master policy was probably approved by the board of directors over which he presided. He knew that bank rules required credit life coverage on all unsecured loans and that defendant repeatedly made such loans to Karlin. Moreover, on March 22, 1970, the date on which defendant made its last loan to Karlin and submitted a credit life certificate signifying that he had represented himself to be in good health, Karlin was, in fact, a patient at the Presbyterian-St. Lukes Hospital confined there due to congestive heart failure. Waxman visited him during this period of convalescence. Even the most unsophisticated person is subject to “the spirit of fair dealing” in his duty to disclose to his insurer matters which affect the insurer’s risk. (Stipcich v. Metropolitan Life Insurance Co., 277 U.S. 311.) Here defendant, through the acts of its officers and advisers, all experienced businessmen, issued certificates of credit life insurance covering a man who was critically ill. We believe that in so ignoring the provisions found in the master policy, defendant failed to meet its obligation to act in good faith in its dealings with plaintiff. We therefore affirm the judgment entered below.

Affirmed.

SULLIVAN, P. J., and LORENZ, J., concur.

       This contract states, in part, that the "[a]gent agrees not to issue certificates to individuals known by him to be mentally or physically impaired.”

       Upon the death of Karlin, Waxman became president of Dearborn Insurance Brokers. Even before his assumption of that office Waxman had an “indirect” financial interest in Dearborn.