author: MR. JUSTICE CLARK

text:
    (No. 53161.
    BLACKHAWK HOTEL ASSOCIATES, Appellant, v. GERALD S. KAUFMAN, Appellee.

      Opinion filed March 18, 1981.

    — Rehearing denied June 4, 1981.

      Bishop 8c Crawford, Ltd., of Oak Brook (Leslie R. Bishop, John N. Dore, and Carl A. Neumann, of counsel), for appellant.
    Schwartz, Cooper, Kolb 8c Gaynor, Chartered, of Chicago (Ira S. Kolb and Martin W. Salzman, of counsel), for appellee.
   MR. JUSTICE CLARK

delivered the opinion of the court:

This is an action on a guaranty contract. Plaintiff, Blackhawk Hotel Associates, owned the Blackhawk Hotel, located in Davenport, Iowa. Defendant, Gerald S. Kaufman, guaranteed a portion of the hotel lessee’s rental payments. The hotel was subject to a mortgage held by the Davenport Bank and Trust Company (bank). The lessee defaulted on its rental payments. The plaintiff thereafter defaulted on its mortgage payments.

The bank instituted foreclosure proceedings. The plaintiff then demanded performance from the defendant guarantor. Defendant did not pay the rent owed, the plaintiff did not pay the bank, and the foreclosure proceedings ended with a public judicial sale, at which the bank bought the hotel. No deficiency judgment was entered. Plaintiff brought suit in July 1977 on the guaranty contract. Defendant contended that the terms of the contract released him from liability. Cross-motions for summary judgment were made, and the circuit court of Cook County granted defendant’s motion. The appellate court affirmed. (80 Ill. App. 3d 462.) Plaintiff’s petition for leave to appeal to this court was granted, and we now reverse the judgments of the appellate and circuit courts and remand the cause for further proceedings.

The facts are contained in the complaint, the answer as amended, which included several affirmative defenses, plaintiff’s reply, both parties’ answers to interrogatories, and various affidavits and exhibits. The complaint, the answers, and the reply were all verified.

Plaintiff is a limited partnership organized pursuant to the laws of the State of Massachusetts. It owned and operated the Blackhawk Hotel (hotel) in Davenport, Iowa. In 1975 the hotel apparently experienced financial difficulties, and Knightsbridge Realty Partners, Ltd.-75 agreed to invest $300,000 in return for acquiring a 50.1% interest in the plaintiff partnership and becoming the general partner. The general partners of the plaintiff (before this agreement was made), in turn, became limited partners and relinquished their controlling interest in the partnership. Through a corporation they controlled, however, Knights-bridge Hotels of Iowa, Ltd., a Delaware corporation, they agreed to lease and operate the hotel. The negotiations were begun and concluded in late December 1975. Article IV of the lease between plaintiff and the corporation formed by its former general partners (lessee) stated in pertinent part:

“Section 1. Basic Rental.
From and after the commencement of this Lease, Lessee shall pay to Lessor an aggregate annual basic rental (“Basic rental”) of the sum of (a) THIRTY THOUSAND AND 00/100 DOLLARS ($30,000.00) payable in equal monthly installments commencing on February 1, 1976 and on the first day of each and every month thereafter, provided, however, that if the term hereof shall commence prior to February 1, 1976, the first monthly payment of rent hereunder shall in addition include payment for the time between the date of commencement and February 1, 1976, and (b) the annual payments of or provision for principal and interest due under:
1. ) promissory notes of Lessor dated 27 January 1975 in the amount of $825,000, and 8 July 1975 in the amount of $175,000, both secured by Deed of Trust to Davenport Bank and Trust Company dated 27 January 1975,and
2. ) note of Lessor dated 27 January 1975 in the amount of $1,250,255.00, secured by Mortgage dated 27 January 1975 to Small Business Administration, as the schedules of payments thereunder now require.”

Defendant guaranteed the payment of the “Basic Rental.” The following contract, not one of standard form, was originally drafted by plaintiff’s attorney, and was signed by defendant after he reviewed and revised it:

“GUARANTY
In consideration of the making of the foregoing Lease by and between Blackhawk Hotel Associates (“Lessor”) and Knightsbridge Hotels of Iowa, Ltd. (“Lessee”), the undersigned Gerald S. Kaufman, an individual resident in the State of Illinois, at the request of Lessor, and in reliance of Lessor on this Guaranty, hereby unconditionally guarantees payment of the Basic Rental described in Section 1 of Article IV of said Lease to the Lessor. Any assignment or assignments and successive assignments of the Lease, or any sale of the premises which are the subject of the Lease, or if the General Partner of the Lessor ceases to own at least 50.1% of its Partnership interest in the Lessor, shall release the undersigned from liability as guarantor.
Notwithstanding the forgeoing this Guaranty shall expire:
(a) at the end of two years from the date hereof, or
(b) when such amount of Basic Rent due and payable during the two-year period commencing on the date hereof has been paid,
whichever is later.
This Guaranty shall be governed by and construed and interpreted in accordance with the laws of the State of Illinois.”

Although the record is unclear on this point, the parties also apparently executed a collateral assignment of the lease, by which defendant had the option, in the event of lessee’s default, of operating the hotel. This document is referred to in the affidavits and in plaintiff’s motion for summary judgment, but is not contained in the record, and we therefore decline to afford it any significance.

After the execution of these documents, the operation of the hotel again apparently became unprofitable, and lessee did not pay the rent after the end of February 1976. Subsequently plaintiff defaulted in its payments due to the bank. The bank initiated foreclosure proceedings in the Scott County district court of Iowa, on June 22, 1976. On June 25, plaintiff demanded payment from defendant. Defendant never performed his obligations as owed under the contract. The hotel was sold at a public judicial sale on October 5, 1976.

The sheriff’s return on execution indicated what was sold:

“[the hotel], [a] 11 accounts receivable, contract rights, documents, instruments, chattel paper, general intangibles, inventory, machinery, furniture, fixtures, equipment, more fully described in one Bill of Sale dated January 27, 1975, a copy of which is attached to the Petition in Equity of Plaintiff [the bank] in the above-captioned cause as Exhibit ‘K’ on file in the office of the Clerk of the above-captioned Court, including all substitutions thereof and additions thereto, whether then owned or thereafter acquired and whether then existing or thereafter arising, together with the proceeds thereof, including the personal property identified in Exhibit ‘C’ to the Final Report and Accounting of Receiver filed July 12, 1976 in the above-captioned proceedings in the office of the Clerk of the above-captioned Court.”

Neither exhibit C nor exhibit K was submitted on the record.

The appellate court held that the “any sale” provision of the guaranty precluded finding defendant liable. It reasoned that this provision encompassed sales held pursuant to foreclosure proceedings. (80 Ill. App. 3d 462, 465-66.) Plaintiff does not challenge this holding, and we therefore will not discuss this issue. In addition, because the parties have not raised these issues, we assume for purposes of this case that plaintiff, rather than the bank, is still owed the rent due prior to the sale and that the judicial sale held on October 5 is to be treated for all purposes as any other sale.

Plaintiff’s argument in this court is that defendant should be estopped from relying on the “any sale” terms of the agreement because defendant’s failure to perform caused the sale’s occurrence, or that defendant should at least be liable for the rent which accrued prior to the sale. Defendant’s argument is simply that plaintiff has waived the estoppel contention, an argument repetitive of its answer to the petition for leave to appeal, or, alternatively, that the estoppel argument is without merit. It is defendant’s contention that the appellate court implicitly found that the “any sale” provision extinguished accrued, as well as prospective, liability.

A guaranty contract is to be interpreted “according to the standards that govern the interpretation of contracts in general.” (Restatement of Security sec. 88 (1941); L. Simpson, Suretyship secs. 29 to 30 (1950); State Bank of East Moline v. Cirivello (1978), 74 Ill. 2d 426, 431.) Thus our duty is to effectuate, if ascertainable, the intent of the parties to the contract. Martindell v. Lake Shore National Bank (1958), 15 Ill. 2d 272, 283; Dora Township v. Indiana Insurance Co. (1980), 78 Ill. 2d 376, 378-79.

It is clear that the appellate court held, without saying so, that the foreclosure sale was a condition (see State Bank of East Moline v. Cirivello (1978), 74 Ill. 2d 426, 431) designed to discharge all liability, whether accrued or unaccrued. (See Restatement of Contracts sec. 250(b) (1932); Restatement (Second) of Contracts sec. 250(e) (Tent. Draft No. 7, 1972); see generally Dethloff v. Zeigler Coal Co. (1980), 82 Ill. 2d 393, 401-05.) It is not clear from the contract, however, whether the event of a sale should be considered a condition subsequent, i.e., an event discharging liability, or whether the nonoccurrence of the sale should be treated as a condition precedent to the accrual of liability. (See Restatement of Contracts sec. 259 (1932).) Nevertheless, the result we reach here would be the same regardless of how we interpret the provision.

If the nonoccurrence of the sale is considered a condition precedent, defendant would be liable as each duty for immediate performance arose until the sale took place. Therefore, the occurrence of the sale would not extinguish accrued liability because the condition precedent had not failed as to the prior duties to render immediate performance.

Assuming that the parties intended a true condition subsequent, our analysis would lead to the same result. Under both the first and second Restatements, a condition which would otherwise terminate the promisor’s duty will not do so if the happening of the condition is caused or rendered inevitable by the promisor’s unjustified conduct. See Restatement of Contracts sec. 307(a) (1932); Restatement (Second) of Contracts sec. 255A (Tent. Draft No. 13, 1978); see also Restatement of Contracts sec. 295 (1932); Restatement (Second) of Contracts sec. 269 (Tent. Draft No. 8, 1973); 5 Williston, Contracts secs. 677 to 677B (W. Jaeger 3d ed. 1961); 3A Corbin, Contracts secs. 767 to 769 (1960); Foreman State Trust & Savings Bank v. Tauber (1932), 348 Ill. 280.

The rental provision in the lease clearly referred to promissory notes secured “by Deed of Trust to Davenport Bank and Trust Company.” One portion of the “Basic Rental,” as set forth in the lease, was earmarked to pay the mortgage. Defendant guaranteed this same “Basic Rental.” The parties here, moreover, did not manifest an awareness that defendant would fail to perform, if called upon. Rather, the only reasonable purpose of the guaranty contract was to shift to the guarantor the risk that the hotel would prove unprofitable to the lessees during the first two years of its operation, thereby preventing the foreclosure of the hotel in the event of lessees’ default. The “any sale” provision, consistent with this analysis, has an effect similar to an anti-assignment clause. Along with the provision ending the guarantor’s liability if the plaintiff’s general partner ceased to own 50.1% of the partnership, it ensures that the guarantor’s risk, as affected by a change in lessors, will not be altered without his assent. See generally Burkhardt v. Bank of America National Trust & Savings Association (1953), 127 Colo. 251, 256 P.2d 234; Annot. 41 A.L.R.2d 1213 (1955); compare Essex International, Inc. v. damage (7th Cir. 1971), 440 F.2d 547 (applying Illinois law), with Second National Bank of Peoria v. Diefendorf (1878), 90 Ill. 396.

Our analysis of the purpose of the clause can lead to only one conclusion as to the effect of defendant’s breach of contract, for if the purpose of the clause were to shift the risk of the hotel’s possible unprofitability to the defendant guarantor, thereby preventing the foreclosure of the hotel, it is difficult to conceive how the failure of defendant to perform would not cause the hotel’s foreclosure. (See generally Foreman State Trust & Savings Bank v. Tauber (1932), 348 Ill. 280, 285-87; Shear v. National Rifle Association of America (D.C. Cir. 1979), 606 F.2d 1251.) The facts here bear out this conclusion. When defendant first alleged the sale of the property as its second affirmative defense, plaintiff, in its reply to it, stated:

“The property which is the subject matter of Exhibit 1 attached to the Complaint has been acquired pursuant to certain foreclosure proceedings instituted by said bank in the Scott County District Court for the State of Iowa. Said foreclosure proceedings were caused by the Defendant’s failure to meet the terms and conditions of the guarantee [sic] referred to in plaintiffs complaint.”

In defendant’s amended answer and affirmative defenses, it is stated simply: “1. That the property which is the subject matter of Exhibit 1 to the complaint has been sold. 2. That pursuant to the terms of the guaranty attached to Exhibit 2 to the complaint, the defendant Kaufman is released of any and all liability.” Plaintiff, in its reply to this document, again stated, in pertinent part, that “[s] aid foreclosure proceedings were caused by the defendant’s failure to meet the terms and conditions of the guarantee referred to in plaintiff’s Complaint.” Defendant has never contravened this contention, and we therefore view defendant’s reliance on the “any sale” provision as misplaced. Defendant argues that plaintiff failed to demand performance until after the initiation of foreclosure proceedings. That fact, however, does not negate plaintiff’s argument that it was defendant’s failure to perform which caused and rendered inevitable the sale of the hotel, and the acceptance of such an argument here would transform the guaranty into a purposeless document.

The foregoing facts were argued by the plaintiff in the trial court, and they constituted part of the record in the appellate court. Under these circumstances, plaintiff cannot be considered to have waived these contentions. See People ex rel. Resnik v. Curtis & Davis, Architects & Planners, Inc. (1980), 78 Ill. 2d 381, 383.

Plaintiff, however, cannot recover damages for rent liability which might have accrued after the foreclosure sale. The rent here was owed in monthly installments. Installment-payment contracts like this one generally are breached one installment at a time. (Quick v. American Steel & Pump Corp. (2d Cir. 1968), 397 F.2d 561, 564; Restatement of Contracts secs. 316, 318 (1932).) We note, too, that the guaranty contract contains no provision for the acceleration, upon the guarantor’s default, of the payments owed. (See Restatement (Second) of Contracts sec. 268, comment c (Tent. Draft No. 8, 1973.) Therefore, considering only the “any sale” provision of the guaranty contract, defendant is liable, as plaintiff argues, for the rent owed from the time he “was given notice under his guaranty” until October 5, the date of the judicial sale. See Hilgenberg v. Iowa Beef Packers, Inc. (Iowa 1970), 175 N.W.2d 353, 356, quoting Kollman v. McGregor (1949), 240 Iowa 1331, 1334-35, 39 N.W.2d 302, 304.

The judgments of the appellate and circuit courts are reversed. Other affirmative defenses were presented by defendant in the trial court and have not been argued on these appeals; therefore the cause is remanded to the circuit court for proceedings consistent with this decision.

Reversed and remanded.

MR. JUSTICE SIMON took no part in the consideration or decision of this case.


source: Caselaw Access Project

author: MR. JUSTICE WARD

license: Public Domain

text:
    (No. 53233.
    JAMES R. ANSELL, Appellant, v. THE INDUSTRIAL COMMISSION et al.— (Godfrey Dry Wall, Appellee).

      Opinion filed March 31, 1981.

    — Rehearing denied June 4, 1981.

      Londrigan 8c Potter, P.C., of Springfield (Alexandra de Saint Phalle, of counsel), for appellant.
    Heyl, Royster, Voelker 8c Allen, of Springfield (Gary M. Peplow and John A. Ess, of counsel), for appellee.
   MR. JUSTICE WARD

delivered the opinion of the court:

The principal and controlling question on this appeal is whether the finding of the Industrial Commission that the injuries to James R. Ansell, the petitioner, did not arise out of and in the course of his employment was contrary to the manifest weight of the evidence.

In a Workmen’s Compensation Act case (Ill. Rev. Stat. 1975, ch. 48, par. 138.1 et seq.), the burden is on the party seeking an award to prove by a preponderance of the evidence the elements of the claim, and in particular the requirement that the injury complained of arose out of and in the course of employment. It is axiomatic that the Commission is to determine the facts and may draw all reasonable inferences from the evidence. (Illinois Institute of Technology v. Industrial Com. (1977), 68 Ill. 2d 236, 246.) It is the Commission’s function to pass on the credibility of witnesses, and its findings will not be disturbed unless they are contrary to the manifest weight of the evidence. (Thrall Car Manufacturing Co. v. Industrial Com. (1976), 64 Ill. 2d 459, 464.) The circuit court of Sangamon County confirmed the Commission’s finding here.

The petitioner was injured on September 18, 1975, when he drove his pickup truck into the rear end of another vehicle when proceeding from Eureka to Springfield. At the time he was employed by Godfrey’s Dry Wall of Springfield as a drywall finisher. He was paid by the hour and in addition was paid $80 a month for the use of his truck to transport coworkers, tools and materials between Godfrey’s office and the jobsite. On the date of the accident, the petitioner and other Godfrey workers were at a jobsite in Eureka, which is approximately 100 miles north of Springfield. He testified that he arrived at the site at about 8 a.m. and that he worked until about noon, when he and Michael Chastain, a fellow employee, went to lunch at a nearby combination tavern and restaurant. He said that he was there until about 2:30 p.m., during which time he drank four beers. Another witness and coworker, Tim Allen, testified that the petitioner had left the jobsite between 11 a.m. and noon and said that when he left the site between 3 and 4 in the afternoon, the petitioner had not returned. Chastain said that the petitioner drank six or seven beers at the tavern and that he and the petitioner bought a 12-pack of beer to take with them when they left the tavern. Chastain testified that the petitioner drank two more beers between the time he left the tavern and the time the petitioner drove into the other vehicle. Another witness, Ralph Olson, who was employed by another contractor, testified that he had seen Ansell and Chastain at the tavern at about 3:45 in the afternoon, that he was loud and boisterous and took a glass and a bottle of beer with him when he and Chastain left with the 12-pack of beer. Olson said that he told Chastain that he should drive because he did not think that the petitioner was in a condition to drive. Chastain did drive the petitioner’s truck on leaving the tavern but was asked to turn over the driving to the petitioner because he had been driving too slowly. The petitioner stated that when he and Chastain returned to the jobsite to return to work they found that their coworkers had left the job. He testified that they then gathered up their tools and left Eureka to return to Springfield.

James Godfrey, the employer, testified that he had instructed his men not to drink on the job and that he was aware that sometimes they did drink at lunch. He said that in the past he had reprimanded the petitioner for drinking and had admonished him not to drink at lunch.

A State trooper testified that the petitioner’s pickup truck had rear-ended a Chevrolet automobile and then had struck a utility pole. The people in the lead car were not seriously injured. He said there was a strong odor of alcohol on the petitioner’s breath and expressed his opinion that the truck had been traveling at a speed of from 80 to 90 miles an hour. The employer introduced an evidence deposition of Larry Leesman, who had testified over objection that he had seen a pickup truck swerve in front of him at a high rate of speed about 20 miles north of the scene of the accident. He declared that the pickup truck was the same truck that he saw later at the scene of the accident.

Chastain had testified that the petitioner appeared to be able to work when Ansell and he returned to the job-site from the tavern, but the employer’s objection to this testimony was sustained and it was stricken.

The petitioner contends that the finding of the Commission that his injuries did not arise out of or in the course of his employment was contrary to the manifest weight of the evidence. He argues, too, that the arbitrator and the Commission erred in admitting the State trooper’s accident-reconstruction testimony, and in striking Chastain’s testimony that the petitioner was capable of working when he left the tavern. There also was error, he says, in admitting the deposition testimony that the petitioner had been driving recklessly 20 miles from the scene of the accident.

We consider that a review of the entire evidence, which parenthetically we observe with approval was objectively and fairly summarized in the petitioner’s brief, defeats any claim that the Commission’s finding was contrary to the manifest weight of that evidence. An employee, who has deviated from his performance of duty, may of course return to the course of employment, but on the record here the Commission certainly could have not unreasonably found that the petitioner, after quitting work for lunch, never did return to his employment. A finding that he did abandon his employment would certainly not be contrary to the manifest weight of the evidence. Our conclusion is not altered by the petitioner’s claims of evidentiary error. Regarding the trooper’s testimony and the testimony by Larry Leesman of the petitioner’s negligent or reckless driving 20 miles from the scene of the accident, it is of course true that contributory negligence does not bar recovery under the Workmen’s Compensation Act. We cannot say, however, that there was an abuse of discretion in admitting the testimonies because, in conjunction with the other evidence, the Commission may well have regarded the testimonies as evidence that the petitioner was not acting in the course of his employment. We do not consider that there was error of substance, if at all, in striking the testimony of Chastain that in his opinion the petitioner was able to work. A witness may of course express an opinion as to whether a person was or was not intoxicated. Even if we assume that the stricken testimony of Chastain that the petitioner was able to work was to be considered equivalent to stating that he was not intoxicated, we believe there was no error in striking the testimony. We consider that the record shows that the petitioner never did in fact return to the course of his employment, and whether he was capable of doing so or not was not relevant under the circumstances here.

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

Judgment affirmed.

MR. JUSTICE SIMON took no part in the consideration or decision of this case.


author: MR. JUSTICE UNDERWOOD

text:
    (No. 53757.
    HOBART R. JOINER et al., Appellant, v. ALFRED R. JANSSEN et al., Appellees.

      Opinion filed March 18, 1981.

    — Rehearing denied June 4, 1981.

      John C. Hedrich, of Princeton, for appellants.
    Louis E. Olivero, of Peru, for appellees.
   MR. JUSTICE UNDERWOOD

delivered the opinion of the court:

Plaintiffs, Hobart and Catherine Joiner, brought suit to quiet title to a strip of land 14 feet wide adjacent to the east line of their residential lot in the village of Tiskilwa, claiming title by adverse possession under the 20-year statute of limitations (Ill. Rev. Stat. 1977, ch. 83, par. 1). The rough diagram appearing below will assist in an understanding of the facts.

The portion of the east 14 feet of lot 206 claimed by the plaintiffs is marked with horizontal lines. The driveway which circles the defendants’ house on lot 11 is marked with dotted lines.

The defendants, Alfred and Blanche Janssen, who live on lot 11 adjoining plaintiffs on the north, claim title to the 14-foot strip under a warranty deed. The north and south driveway serving defendants’ property is located principally on an 11-foot strip of land adjoining the 14-foot strip on the east. The driveway does, however, gradually veer over on the 14-foot strip as it nears the north lot line, and the west fork of the driveway actually crosses the northeastern corner of plaintiffs’ lot. The disputed property is that which lies in the 14-foot strip and west of a line of trees and bushes forming both the western boundary of the driveway and the eastern boundary of that portion of the 14-foot strip claimed by plaintiffs. Following a bench trial in the circuit court of Bureau County the plaintiffs were found to have established title by adverse possession. The judgment divided the 14-foot strip between the plaintiffs and defendants according to a survey which approximated plaintiffs’ claimed boundary line. The Appellate Court for the Third District reversed, one judge dissenting (84 Ill. App. 3d 462), the majority stating that it was bound by a decision of the Second District, with the logic of which it expressed some “uneasiness” (84 Ill. App. 3d 462, 465). The essence of that majority holding is that, because the strip of land in question was excluded in the legal description in plaintiffs’ purchase contract and deed, plaintiffs were on notice that they did not have title to the land. Consequently, according to that holding, plaintiffs’ possession could not be hostile in the sense necessary to establish adverse possession. We granted plaintiffs’ petition for leave to appeal, and we now reverse.

The trial judge indicated that he found the plaintiffs and the witnesses on their behalf more credible, and our review of the record indicates his findings of fact are not against the manifest weight of the evidence. As our diagram indicates, three adjoining lots, 205, 206 and 207, are bordered by Main Street on the south. Lot 11 adjoins lots 206 and 207 on the north. Defendants obtained title to lot 11 and the east 14 feet of lot 206 in 1945 and have since resided in their home on lot 11. The west 11 feet of lot 207 over which defendants’ driveway actually passes was never conveyed by the common grantor of all the lots in question. Quitclaim deeds to that 11-foot strip were obtained by defendants from surviving heirs of the common grantor, who died in the 1930’s, and defendants now hold title to that 11-foot strip. The driveway from lot 11 was supposed to have been on the 14-foot strip of lot 206 rather than the 11-foot strip of lot 207, and thus all parties mistakenly considered the tree and bush line on the 14-foot strip as the boundary.

Plaintiffs purchased on contract in 1951 the east part of lot 205 and all of lot 206 except the east 14 feet and have since resided thereon. Plaintiffs’ house is on lots 205 and 206 west of the 14-foot strip in question. In 1958 they paid the balance of the contract and obtained a deed to the property. At the time of their purchase plaintiffs were taken by the seller onto the lot, and it was then indicated to them that the east boundary was the tree and bush fine adjoining the driveway. Plaintiffs believed this fine to be the actual boundary, and went into possession of the property to that line. They did not erect a fence, but the evidence indicates that this tree and bush line formed a definitely ascertainable boundary. Plaintiffs mowed the grass on the 14-foot strip in question, raked leaves, planted and removed trees, bushes and flowers, gave away trees, bushes and flowers from the land as gifts, buried their pet dog on the strip when it died, shoveled snow from the walk in front of the strip, and generally maintained the property, thus indicating to neighbors and members of the community that they were in possession of and claiming ownership to the ground west of the line of trees and bushes.

Defendants seem to have acquiesced in this line as the boundary until 1977, when a survey made at their request revealed the mistake. Defendants thereafter claimed the land pursuant to their deed and attempted to go into possession by removing rocks and bushes, from the tree and bush line. Plaintiffs then filed this action and obtained an injunction restraining defendants from entering the property west of the tree and bush line.

Although the trial court was satisfied that plaintiffs had established an adverse possessory title, the appellate court reversed because it regarded as dispositive and binding upon it the Second District Appellate Court panel’s opinion in Hansen v. National Bank (1978), 59 Ill. App. 3d 877. The Hansen court indicated that where the disputed land is specifically excluded from the legal description the possessor is put on notice that he does not own the excluded land and therefore his subsequent possession of it cannot be adverse to the true owner, stating, “When an adverse claimant comes into possession of land thinking that he is not the record title holder, such possession lacks the requisite hostility for obtaining title by adverse possession.” (59 Ill. App. 3d 877, 879.) The quoted statement which the appellate panel in this case deemed binding and dispositive is simply not an accurate statement of the law, as is evident from the opinions of this court hereinafter cited.

The essence of the doctrine of adverse possession is the holding of the land adversely to the true titleholder. “A party, claiming title by adverse possession, always claims in derogation of the right of the real owner. He admits that the legal title is in another. He rests his claim not upon a title in himself, as the true owner, but upon holding adversely to the true owner for the period prescribed by the Statute of Limitations.” (Mercer v. Wayman (1956), 9 in. 2d 441, 445-46; White v. Harris (1903), 206 Ill. 584, 592; 3 Am. Jur. 2d Adverse Possession sec. 7, at 87 (1962).) To hold that because the possessor knows or should know that record title is in another precludes any possibility of the possessor’s title being adverse is the antithesis of the doctrine of adverse possession as it has existed in this State. (Illinois Central R.R. Co. v. Houghton (1888), 126 Ill. 233.) The possessor’s good faith in claiming title is, of course, required by the statutory provisions relating to possession for seven years under color of title (Ill. Rev. Stat. 1977, ch. 83, pars. 6, 7); it is not relevant under the 20-year doctrine (Ill. Rev. Stat. 1977, ch. 83, par. 1).

What is essential in order to establish title under the 20-year adverse-possession doctrine incorporated in section 1 of the Limitations Act (Ill. Rev. Stat. 1977, ch. 83, par. 1) is that there must be 20 years’ concurrent existence of the five elements: (1) continuous, (2) hostile or adverse, (3) actual, (4) open, notorious, and exclusive possession of the premises, (5) under claim of title inconsistent with that of the true owner. (Cannella v. Doran (1961), 21 Ill. 2d 514, Cagle v. Valter (1960), 20 Ill. 2d 589; Mercer.) Presumptions are in favor of the title owner, and the burden of proof upon the adverse possessor requires that each element be proved by clear and unequivocal evidence. (Walter v. Jones (1958), 15 Ill. 2d 220; Schwartz v. Piper (1954), 4 Ill. 2d 488.) The incidents of that possession determine its character. The “hostile” nature of the possession does not imply actual ill will, but only the assertion of ownership incompatible with that of the true owner and all others. (Hunsley v. Valter (1958), 12 Ill. 2d 608.) “Where there has been an actual, visible and exclusive possession for twenty years it is not essential to the bar of the Statute of Limitations that there should have been any muniment of title or any oral declaration of claim of title, but it is sufficient if the proof shows that the party in possession has acted so as to clearly indicate that he did claim title, ‘No mere words could more satisfactorily assert that the defendant claimed title than its continued exercise of acts of ownership over the property for a period of twenty years does. Using and controlling property as owner is the ordinary mode of asserting claim of title, and, indeed, is the only proof of which a claim of title to a very large proportion of property is susceptible.’ [Citations.] *** Such improvements or acts of dominion over the land as will indicate to persons residing in the immediate neighborhood who has the exclusive management and control of the land are sufficient to constitute possession. [Citations.] ” Augustus v. Lydig (1933), 353 Ill. 215, 221-22; see also Hunsley v. Valter (1958), 12 Ill. 2d 608, 614.

Since the claim to ownership need not be spoken or supported by title documents, and one’s actions can adequately convey the intent to claim title adversely to all the world including the titleholder (Walter v. Jones (1958), 15 Ill. 2d 220), it is apparent that what the property description in a deed held by the adverse possessor excludes or includes is irrelevant to the adverse-possession issues. Schwartz v. Piper (1955), 4 Ill. 2d 488, 493.

As we earlier noted, the possession forming the claimed ownership in the present case was based upon the mistaken belief of the parties that the boundary was the tree and bush line. In these circumstances some jurisdictions have applied a subjective test, holding that the intention of the possessor is the controlling factor in determining whether possession to a mistaken boundary is hostile. Thus, if a landowner through mistake or ignorance takes possession to a boundary beyond the true line intending only to claim to the true line and not intending to claim the additional land if it should be ascertained that the boundary is not as he thought it, then such possession is not adverse or hostile. (Annot., 80 A.L.R.2d 1171, 1174 (1961).) Elsewhere, including Illinois, occupancy to a visible and ascertained boundary for the statutory period is deemed the controlling feature in determining hostility in mistaken-boundary cases. (Walter v. Jones (1958), 15 Ill. 2d 220; Cassidy v. Lenahan (1920), 294 Ill. 503; Hellman v. Roe (1916), 275 Ill. 158; Rich v. Naffziger (1911), 248 Ill. 455; Daily v. Boudreau (1907), 231 Ill. 228; Krause v. Nolte (1905), 217 Ill. 298; Hubbard v. Stearns (1877), 86 Ill. 35; Annot. 80 A.L.R.2d 1171, 1183 (1961).) The difficulty with the subjective test is that it affords no protection to the landowner who innocently and mistakenly occupies and improves land beyond his boundaries. He can never acquire title thereto. Conversely, he who deliberately sets out to steal adjacent land may succeed. Consequently, “[i]n a growing number of jurisdictions occupancy to a visible and ascertained boundary for the statutory period is deemed the controlling feature in determining hostility in mistaken boundary-line cases. Thus, it is held with increasing frequency that an open, notorious, and hostile possession of property for the statutory limitation period is sufficient for the acquisition of title by adverse possession, and the fact that the possession was taken under mistake or ignorance as to boundary lines is immaterial.” 3 Am. Jur. 2d Adverse Possession sec. 39, at 125-26 (1962).

In a case where an adverse possessor is claiming to a mistaken or disputed boundary he bears the burden of establishing by clear and convincing proof the location of the boundary. (McLeod v. Lambdin (1961), 22 Ill. 2d 232.) “The proof must be such as to establish with reasonable certainty the location of the boundaries of the tract to which the five elements of adverse possession are applied and all of the elements must extend to the tract so claimed. While it is not necessary that the land should be enclosed by a fence, the boundaries must be susceptible of specific and definite location.” (Schwartz v. Piper (1954), 4 Ill. 2d 488, 498.) Plaintiffs here have proved the existence of their claimed boundary line, supporting the survey by testimony and documentary evidence. Defendants argue that plaintiffs have not met the 20-year test since plaintiffs’ deed to their property was not recorded until 1958 and they brought suit in 1977. As we have noted, however, possession is the important feature in adverse possession, not the date of a deed or other muniment of title. It is clear that the plaintiffs went into possession of their property, including the strip west of the tree and bush line, in 1951, when they acquired equitable title under the contract of purchase.

For the reasons stated, the judgment of the appellate court is reversed and the judgment of the circuit court affirmed.

Appellate court reversed; circuit court affirmed.


text:
    (No. 53024.
    FIRST NATIONAL BANK OF SPRINGFIELD, Appellee, v. THE DEPARTMENT OF REVENUE, Appellant.

      Opinion filed March 31, 1981.

    — Rehearing denied June 4, 1981.

      William J. Scott, Attorney General, of Springfield (Patricia Rosen, Assistant Attorney General, of Chicago, of counsel), for appellant.
    Brown, Hay & Stephens, of Springfield (Harvey B. Stephens and Mark H. Ferguson, of counsel), for appellee.
   MR. JUSTICE CLARK

delivered the opinion of the court:

After an audit was conducted by defendant, the Department of Revenue, a deficiency tax assessment was asserted against the plaintiff, the First National Bank of Springfield. Liability for the deficiencies was alleged to be due under the Use Tax Act (Ill. Rev. Stat. 1977, ch. 120, pars. 439.1 to 439.22), the Retailers’ Occupation Tax Act (Ill. Rev. Stat. 1977, ch. 120, pars. 440 to 453), and the Municipal Retailers’ Occupation Tax Act (Ill. Rev. Stat. 1977, ch. 24, par. 8 — 11—1). The plaintiff protested the assessment and, after a hearing, the Department issued a final deficiency assessment in the amount of $12,131.10, including penalty and interest. The final assessment constituted a final administrative decision. The plaintiff filed a complaint for review of the Department’s final assessment in the circuit court of Sangamon County. Subsequently, the parties agreed to reduce the final assessment by the amount of taxes attributable to the sales by plaintiff of repossessed machinery. As a result, the only remaining dispute concerned the taxability under the Use Tax Act of five computer software programs purchased by plaintiff for use in Illinois. The circuit court decided, as a matter of law, that the plaintiff’s purchase of computer software programs from out-of-State, nonresident suppliers were purchases of intangible personal property and therefore not subject to the use tax. The court set aside the Department’s final assessment and entered judgment for the plaintiff. The Department moved for a direct appeal to this court under Rule 502(b) (73 Ill. 2d R. 302(b)). We allowed the Department’s motion. We affirm.

In the computer industry, computer hardware is the tangible part of the machinery itself. Software denotes the information loaded into the machine and the directions given to the machine (usually through the media of punch cards, discs or magnetic tapes) as to what it is to do and upon what command. Software also may include counseling and expert engineering assistance furnished by the seller of software, as well as flow charts and instruction manuals. (See Honeywell, Inc. v. Lithonia Lighting, Inc. (N.D. Ga. 1970), 317 F. Supp. 406, 408.) The record in this case indicates that only magnetic tapes were delivered to the bank. There is no mention of any other materials accompanying the tapes.

There are two basic types of software programs. An operational program controls the hardware and actually makes the machine operate. It is fundamental and necessary to the functioning of the hardware. An applicational program is designed to perform specific functions once the programming information is fed into the computer. See Commerce Union Bank v. Tidwell (Tenn. 1976), 538 S.W.2d 405, 406.

In the instant case, the programs involved were applicational. Larry Thomson, an assistant vice president and manager of data processing at the plaintiff bank, testified that the bank purchased five applicational programs from five different sources. The programs purchased were a customer information file from the National City Bank of Cleveland which would enable the bank to compile information from all of the bank’s accounting ledgers and make it available at one source. Another program computed installment-loan payments, while a third program computed commercial-loan payments. A fourth program, a programmer’s information and index program, is, according to Thomson, “commonly known as a librarian system whereby [the bank] could take other programs, such as the National City program, place it on that library and use that as a method of keeping track of the program, making changes to it.” The last program, an audit program, contained a set of instructions used to accumulate requested information from all other programs. Thomson also testified that the programs were delivered on magnetic tapes. The programs were then taken off the magnetic tapes and put into a library, where necessary modifications were made to the programs to accommodate the bank’s particular needs. After the information was removed from the tapes and stored elsewhere, the tapes could either be used again or discarded. Thomson stated further that those instructions could have been conveyed to the bank through discs, punch cards or over the telephone.

Section 3 of the Use Tax Act provides:

“A tax is imposed upon the privilege of using in this State tangible personal property *** purchased at retail from a retailer.” (Ill. Rev. Stat. 1977, ch. 120, par. 439.3.)

Thus, the issue in this case is whether computer software is tangible personal property and is therefore taxable under the Use Tax Act.

The plaintiff contends that the magnetic tapes in question here constituted intangible personal property, because they were, in essence, merely a means of conveying programming instructions. The plaintiff argues that software primarily represents intangible services and not tangible goods. The Department, on the contrary, contends that the physical qualities of the tapes predominate over the information contained on them. The Department compares the tapes to films, phonograph records and books. All three examples, the Department argues, represent the physical manifestation of intangible ideas and artistic achievement, yet all three are taxable as tangible personal property.

Taxing statutes are to be strictly construed, and their language is not to be extended or enlarged by implication beyond its clear import, but in cases of doubt such laws are construed most strongly against the government and in favor of the taxpayer. Ingersoll Milling Machine Co. v. Department of Revenue (1950), 405 Ill. 367, 373; Mahon v. Nudelman (1941), 377 Ill. 331, 335.

In our opinion, computer software, such as the instant magnetic tapes, is more properly characterized as intangible, than tangible, personal property. The Use Tax Act does not define the word “tangible,” but this court abided by the following definition in Farrand Coal Co. v. Halpin (1957), 10 Ill. 2d 507, 511:

“An examination of the statute in question and the objectives intended to be accomplished thereby clearly indicates that the General Assembly when using the word tangible in referring to personal property had in mind the ordinary and popularly understood meaning of such term as indicated in Webster’s first definition thereof, which is ‘Capable of being touched; also, perceptible to the touch; tactile; palpable.’ Webster’s New International Dictionary, Second Edition, Unabridged, 1946.”

Yet the foregoing definition does not altogether resolve this issue.

In Time, Inc. v. Hulman (1964), 31 Ill. 2d 344, this court decided that magazines are tangible personal property and that the proceeds from their sale would be subject to the retailers’ occupation tax were it not for an exclusion afforded to newspapers and other materials “such as” newsprint. (31 Ill. 2d 344, 351-52.) In discussing whether magazines are tangible personal property, it was said:

“The sale of a magazine is essentially not different from the sale of a loaf of bread, or an automobile. While it is true that the utility or value of plaintiffs’ magazines is in their content and not the paper and ink with which they are printed, the taxability of the transaction is not determined by weighing the value of the intangible properties of the item of sale, such as form, organization and design, against the value of its tangible properties, such as weight, size and texture. The test is, where tangible personal property is transferred, as the parties agree occurs in the transactions here involved, whether the transfer is the substance of the transaction or merely incidental to a service. In selling magazines by subscriptions, plaintiffs act as retailers of tangible personal property and as such are liable for retailers’ occupation tax, if not otherwise exempt.” (Emphasis added.) 31 Ill. 2d 344, 350.

In Commerce Union Bank v. Tidwell (Tenn. 1976), 538 S.W.2d 405, the Supreme Court of Tennessee held that computer software in the form of magnetic tapes or punch cards is intangible personal property and therefore not subject to that State’s sales and use tax. The court reasoned that only information was being created and sold, “and the magnetic tapes which contain this information are only a method of transmitting these intellectual creations from the originator to the user. It is merely incidental that these intangibles are transmitted by way of a tangible reel of tape that is not even retained by the user.” 538 S.W.2d 405, 407.

The case of First National Bank v. Bullock (Tex. Civ. App. 1979), 584 S.W.2d 548, is nearly on all fours with this case. The bank in that case obtained licenses to use four programs, that is, software, which instructed the bank’s computer to perform deposit and lending functions and process general accounting. The information was contained, as here, on magnetic tapes. The court stated that it would look to the “essence of the transaction” to determine whether the property purchased was tangible or intangible. (584 S.W.2d 548, 550.) The court held that, since the information on the tapes could have been communicated in several different ways, and the computer could even have been programmed over the telephone or by hand, the essence of the purchase was not the tapes, but the process which enabled the computer to function. The software was therefore in essence intangible personal property and the bank was not required to pay a sales and use tax for the licenses it purchased. (584 S.W.2d 548, 551.) That court was not persuaded to make a distinction between custom and pre-written software and, while the Department urges us to do so, we also refuse to draw such an artificial distinction.

This court has previously held that where a service of skill was rendered in the manufacture of a special milling machine for the particular and exclusive use of a purchaser, the sale of the product was not taxable where it was merely incidental to the service. (Ingersoll Milling Machine Co. v. Department of Revenue (1950), 405 Ill. 367, 372-73.) The instant case is of a similar vein. The plaintiff bank purchased, in substance, the means of programming its computer so that it could perform functions the bank needed to have performed. The bank did not desire to spend the money or time to formulate the programs through its own data-processing staff. Therefore it purchased instruction programs from other sources. It simply happened that, for the sake of convenience and easy handling, the programs were recorded on magnetic tapes. The tapes were certainly not the only medium through which the information could be transferred. In this way, the tapes differ from a movie film, a phonograph record or a book, whereby the media used are the only practicable ways of preserving those articles. Thus, while those articles and the tapes are similar in that they physically represent the transfer of ideas or artistic processes, a more significant distinction is that those articles are inseparable from the ideas or processes, whereas computer programs are separable from the tapes. Not only may software information be conveyed any number of ways, but it may even be copied off of the tapes and stored, using another medium. (See Bryant & Mather, Property Taxation of Computer Software, 18 N.Y.L.F. 59, 67 (1972).) In short, it is not the tapes which are the substance of the transaction, it is the information. We, therefore, hold that the sale of computer software in the instant transaction is, in substance, the transfer of intangible personal property and, as such, is not taxable under the Illinois Use Tax Act. Accord: First National Bank v. Bullock (Tex. Civ. App. 1979), 584 S.W.2d 548, 551; Janesville Data Center, Inc. v. Wisconsin Department of Revenue (1978), 84 Wis. 341, 347, 267 N.W.2d 656, 659; Honeywell Information Systems, Inc. v. Maricopa County (1978), 118 Ariz. 171, 173, 575 P.2d 801, 803; State v. Central Computer Services, Inc. (Ala. 1977), 349 So. 2d 1160, 1162; Commerce Union Bank v. Tidwell (Tenn. 1976), 538 S.W.2d 405, 408; District of Columbia v. Universal Computer Associates, Inc. (D.C. Cir. 1972), 465 F.2d 615, 618; County of Sacramento v. Assessment Appeals Board No. 2 (1973), 32 Cal. App. 3d 654, 670-71, 108 Cal. Rptr. 434, 446, and the legislative treatment of this issue, which subjects operational software to property taxation, but exempts applicational software: Cal. Revenue & Tax Code secs. 995, 995.1, 995.2 (West. Supp. 1974); see also Honeywell, Inc. v. Lithonia Lighting, Inc. (N.D. Ga. 1970), 317 F. Supp. 406, 411; but see Greyhound Computer Corp. v. State Department of Assessments & Taxation (1974), 271 Md. 674, 678-79, 320 A.2d 52, 55 (holding that only so much of software as consists of services is intangible and not taxable); see generally Martin, The Revolt Against the Property Tax on Software: An Unnecessary Conflict Growing Out of Unbundling (1974), 9 Suffolk Univ. L. Rev. 118; Bryant & Mather, Property Taxation of Computer Software, 18 N.Y.L.F. 59 (1972).

Accordingly, for the reasons stated, the judgment of the circuit court is affirmed.

Judgment affirmed.

MR. JUSTICE SIMON took no part in the consideration or decision of this case.


text:
    (No. 53336.
    THE PEOPLE OF THE STATE OF ILLINOIS, Appellant, v. RICHARD CRAMER, Appellee.

      Opinion filed March 31, 1981.

    — Rehearing denied June 4, 1981.

      Tyrone C. Fahner and William J. Scott, Attorneys General, of Springfield, and Michael M. Mihm, State’s Attorney, of Peoria (John X. Breslin and Gary F. Gnidovec, of the State’s Attorneys Appellate Service Commission, of Ottawa, of counsel), for the People.

      Robert Agostinelli, Deputy Defender, and Peter A. Carusona, Assistant Defender, of the Office of the State Appellate Defender, of Ottawa, for appellee.
   MR. JUSTICE CLARK

delivered the opinion of the court:

This case involves the propriety of refusing a jury instruction tendered by defendant on the ground that it was not based on an offense included within the charged offense. The tendered instruction was refused by the trial court, and defendant was convicted in the circuit court of Peoria County of the offense of theft of property having a value in excess of $150. On appeal the appellate court reversed the judgment of the circuit court and remanded the cause for anew trial. (81 Ill. App. 3d 525.) We granted the State leave to appeal and we now reverse.

The facts on which defendant was convicted were fully summarized in the appellate court and can be briefly restated. The indictment charged defendant with violating section 16 — 1(a)(1) of the Criminal Code of 1961 (Ill. Rev. Stat. 1977, ch. 38, par. 16 — 1(a)(1)), in that “he did knowingly exert unauthorized control over property of T. R. Bonds, said property being, a Chevrolet truck having a total value in excess of $150, with the intent to permanently deprive the owner of the use and benefit of said property.”

The evidence was clearly sufficient to support a theft conviction, for the defendant admitted that he took the truck and drove it, although there was evidence from which the jury could have inferred that defendant did not intend to permanently deprive the owner of the use and benefit of the truck. Theft of property with a value in excess of $150 is a Class 3 felony. (Ill. Rev. Stat. 1977, ch. 38, par. 16 — 1(e)(3).) Defendant tendered a jury instruction based upon section 4 — 103(a) of the Illinois Vehicle Code (Ill. Rev. Stat. 1977, ch. 95½, par. 4 — 103(a)) a Class 4 felony (Ill. Rev. Stat. 1977, ch. 9514, par. 4 — 108(b)), contending that the statutory provision was an included offense in theft and that the conflict engendered regarding defendant’s mental state justified giving this instruction. As previously noted, the trial court refused to give the instruction and the appellate court held this refusal erroneous.

Despite the lack of a rule comparable to Rule 31(c) of the Federal Rules of Criminal Procedure (Fed. R. Crim. Proc. 31(c)) and the apparent lack of a prior case of this court on the issue, both sides agree that if the tendered instruction here were based on an offense included in theft, defendant was entitled to have the instruction given. As the United States Supreme Court has stated:

“Although the lesser included offense doctrine developed at common law to assist the prosecution in cases where the evidence failed to establish some element of the offense originally charged, it is now beyond dispute that the defendant is entitled to an instruction on a lesser included offense if the evidence would permit a jury rationally to find him guilty of the lesser offense and acquit him of the greater.” (Keeble v. United States (1973), 412 U.S. 205, 208, 36 L. Ed. 2d 844, 847, 93 S. Ct. 1993, 1995.)

In Beck v. Alabama (1980), 447 U.S. 625, 636 n.12, 65 L. Ed. 2d 392, 402 n.12, 100 S. Ct. 2382, 2388-89 n.12, it was observed that “[a]lthough the states vary in their descriptions of the quantum of proof necessary to give rise to a right to a lesser included offense instruction, they agree that it must be given when supported by the evidence.” Cited in support are decisions of 46 jurisdictions, including a decision of our appellate court (People v. Simpson (1978), 57 Ill. App. 3d 442) that so held, extracting the principle from cases like People v. Joyner (1972), 50 Ill. 2d 302, in which a defendant charged with murder was allowed to have the jury instructed on manslaughter. Accord, People v. Taylor (1967), 36 Ill. 2d 483; People v. Latimer (1966), 35 Ill. 2d 178.

The circumstances under which an included-offense jury instruction should be given, and the reasons for the rule, were articulated in Keeble v. United States (1973), 412 U.S. 205, 36 L. Ed. 2d 844, 93 S. Ct. 1993. There, an Indian charged with the commission, on an Indian reservation, of a crime enumerated in the Major Crimes Act of 1885 (Major Crimes Act, ch. 341, par. 9, 23 Stat. 385 (1885) (current version at 18 U.S.C. secs. 1153, 3242)) was denied a jury instruction on a lesser included offense because that offense was not one of the crimes enumerated in the Act. The government conceded that the instruction tendered was a lesser included offense, but argued that there was no jurisdiction to try the defendant for the included offense, and, furthermore, that the defendant might be better off without a right to the tendered instruction because the jury, if the evidence did not warrant conviction of the crime charged, would acquit him. The court responded:

“[I]t is no answer to petitioner’s demand for a jury instruction on a lesser offense to argue that a defendant may be better off without such an instruction. True, if the prosecution has not established beyond a reasonable doubt every element of the offense charged, and if no lesser offense instruction is offered, the jury must, as a theoretical matter, return a verdict of acquittal. But a defendant is entitled to a lesser offense instruction — in this context or any other — precisely because he should not be exposed to the substantial risk that the jury’s practice will diverge from theory. Where one of the elements of the offense charged remains in doubt, but the defendant is plainly guilty of some offense, the jury is likely to resolve its doubts in favor of conviction. In the case before us, for example, an intent to commit serious bodily injury is a necessary element of the crime with which petitioner was charged, but not of the crime of simple assault. Since the nature of petitioner’s intent was very much in dispute at trial, the jury could rationally have convicted him of simple assault if that option had been presented. But the jury was presented with only two options: convicting the defendant of assault with intent to commit great bodily injury, or acquitting him outright. We cannot say that the availability of a third option — convicting the defendant of simple assault — could not have resulted in a different verdict. Indeed, while we have never explicitly held that the Due Process Clause of the Fifth Amendment guarantees the right of a defendant to have the jury instructed on a lesser included offense, it is nevertheless clear that a construction of the Major Crimes Act to preclude such an instruction would raise difficult constitutional questions. In view of our interpretation of the Act, those are questions that we need not face.” (Emphasis in original.) (412 U.S. 205, 212-13, 36 L. Ed. 2d 844, 850, 93 S. Ct. 1993, 1997-98.)

See also Beck v. Alabama (1980), 447 U.S. 625, 633-35, 65 L. Ed. 2d 392, 400-01, 100 S. Ct. 2382, 2387-88.

In view of the foregoing, we believe that the principle agreed upon by the parties is sound. “Thus, ‘[i]n a case where some of the elements of the crime charged themselves constitute a lesser crime, the defendant, if the evidence justifiefs] it, *** [is] entitled to an instruction which would permit a finding of guilt of the lesser offense.’ [Citations.] ” (Emphasis added.) (Sansone v. United States (1965), 380 U.S. 343, 349, 13 L. Ed. 2d 882, 887-88, 85 S. Ct. 1004, 1009; see also Ill. Rev. Stat. 1977, ch. 38, par. 2 — 9.) The United States Supreme Court has never analyzed the included-offense doctrine, when applied to a defendant’s request for an included-offense jury instruction, from the perspective of a comparison of the abstract elements of the statutes under which the crime was charged and the statute on which defendant grounded the tendered instruction, the perspective the State urges us to adopt in the instant case. In fact, the court has never even discussed that test as articulated in Blockburger v. United States (1932), 284 U.S. 299, 76 L. Ed. 306, 52 S. Ct. 180, or even cited that opinion or its progeny in the context of the issue presented here. Rather, as can be seen from the excerpt of Sansone quoted above, the analysis has focused upon the crime charged in order to determine whether the offense upon which an instruction is sought is included within it. (See also People v. Lewis (1966), 34 Ill. 2d 199; Comment, Jury Instructions on Lesser Included Offenses 57 Nw. U.L. Rev. 62, 62-65 (1962).) We intimate no view here upon whether the evidence as adduced at trial could support a defendant’s tendered instruction where the terms of the indictment could not.

Nevertheless, the included-offense doctrine does not apply where the two offenses in a particular case involve the same issues of disputed fact. (Berra v. United States (1966), 351 U.S. 131, 100 L. Ed. 1013, 76 S. Ct. 685; Sansone v. United States (1966), 380 U.S. 3643, 13 L. Ed. 2d 882, 85 S. Ct. 1004.) In Berra, the defendant was charged with violating section 145(b) of the Internal Revenue Code (Int. Rev. Code of 1939 sec. 145(b), 53 Stat. 63 (now I.R.C. sec. 7201)), which made it an offense to wilfully defeat the imposition of a tax. Section 3616(a) of the Code (Int. Rev. Code of 1939 sec. 3616(a), 53 Stat. 440 (now I.R.C. sec. 7207)) made it a crime for any person to deliver a false statement to the collector with the intent to defeat or evade the proper payment of a tax. The defendant, not charged with violating section 3616(a), nevertheless tendered an instruction premised upon it. Both sections 3616(a) and 145(b) were deemed applicable to the filing of false tax returns for purposes of the case, but the court held that defendant was not entitled to his tendered instruction:

“[H]ere the method of evasion charged was the filing of a false return, and it is apparent that the facts necessary to prove that petitioner ‘willfully’ attempted to evade taxes by filing a false return (sec. 145(b)) were identical with those required to prove that he delivered a false return with ‘intent’ to evade taxes (sec. 3616(a)). ***
The role of the jury in a federal criminal case is to decide only the issues of fact, taking the law as given by the court. *** Here, whether section 145(b) or section 3616(a) be deemed to govern, the factual issues to be submitted to the jury were the same; the instruction requested by petitioner would not have added any other such issue for the jury’s determination.” (351 U.S. 131, 134-38, 100 L. Ed. 1013, 1018, 76 S. Ct. 685, 688.)

(See also People v. Buffalo Confectionery Co. (1980), 78 Ill. 2d 447, 458 (prosecutorial discretion to charge more serious offense if same facts establish two violations).) The court reaffirmed this holding in Sansone v. United States (1966), 380 U.S. 343, 349-50, 13 L. Ed. 2d 882, 888, 85 S. Ct. 1004, 1009:

“[A] lesser-offense charge is not proper where, on the evidence presented, the factual issues to be resolved by the jury are the same as to both the lesser and greater offenses. [Citations.] In other words, the lesser offense must be included within but not, on the facts of the case, be completely encompassed by the greater. A lesser-included offense instruction is only proper where the charged greater offense requires the jury to find a disputed factual element which is not required for conviction of the lesser-included offense.”

Applying this principle to the instant case, it is clear why the trial court’s refusal of the tendered instruction was correct. The indictment, as noted, charged defendant with theft of a truck having a value of more than $150. The tendered defense instruction mirrored section 4 — 103(a) of the Illinois Vehicle Code (Ill. Rev. Stat. 1977, ch. 9514, par. 4 — 103(a)), which states in pertinent part:

“It is a violation of this chapter for:
(a) A person not entitled to the possession of a vehicle to receive, possess, conceal, sell or dispose of it, knowing it to have been stolen or converted.”

Whether an instruction containing only the element of conversion would be proper in a similar case is an issue we need not now reach, because defendant’s tendered instruction would have allowed the jury to convict defendant of violating section 4 — 103(a), on the same facts necessary to convict him of theft.

Here, there was no evidence that the vehicle had been taken by another person. Thus defendant could be convicted of violating section 4 — 103(a) only if he possessed the vehicle, without authorization, knowing it to have been stolen or converted. The word “stolen” here obviously refers to a theft. Accordingly, defendant would have to know he had stolen or converted the truck, i.e., he would have had to have stolen or converted it, before he could be found guilty. He could not, under these facts, be found guilty of violating this section on the basis of unauthorized possession of the truck, as defendant urges. Although defendant’s intent was a disputed issue here, the tendered instruction did not require the jury to convict him of the lesser offense on the basis that he had no intent to permanently deprive the owner of the truck. Rather, a jury conviction under section 4 — 103(a) would be an inconclusive finding of fact about defendant’s mental state, since it would not be clear whether the jury found the defendant knew that he converted it or whether he knew that he had stolen it.

Accordingly, the appellate court judgment reversing this conviction is reversed, and the judgment of the circuit court is affirmed.

Appellate court reversed; circuit court affirmed.


author: MR. JUSTICE MORAN

text:
    (No. 53723.
    THE CITY OF EVANSTON, Appellee, v. CREATE, INC., Appellant.

      Opinion filed April 17, 1981.

    — Rehearing denied June 4, 1981.

      Samuel W. Witwer, J. Alfred Moran, and Samuel W. Witwer, Jr., of Witwer, Moran, Burlage & Atkinson, of Chicago (Donald W. Kahn, of Skokie, of counsel), for appellant.
    Jack M. Siegel, City of Evanston Corporation Counsel, of Chicago, for appellee.
   MR. JUSTICE MORAN

delivered the opinion of the court:

Plaintiff, the city of Evanston (City), filed a complaint in the circuit court of Cook County seeking declaratory and injunctive relief against Create, Inc. (defendant), a real estate broker and management firm, for its violation of Evanston’s Residential Landlord and Tenant Ordinance (Ordinance). Defendant moved to dismiss the action claiming that the Ordinance was an invalid exercise of home rule power under article VII, section 6(a), of the Illinois Constitution of 1970 (Ill. Const. 1970, art. VII, sec. 6(a)). The circuit court granted summary judgment in favor of the City and issued a writ of injunction against further violations of the Ordinance by the defendant. On appeal, the appellate court affirmed. (84 Ill. App. 3d 752.) We allowed defendant’s petition for leave to appeal.

This case presents one question: Is an ordinance of a home rule unit of government valid if it imposes certain conditions upon a rental lease agreement negotiated between a landlord and tenant? Defendant claims that “An Act to revise the law in relation to landlord and tenant” (Ill. Rev. Stat. 1979, ch. 80, par. 1 et seq.), passed by the General Assembly, prevents a home rule unit from legislating in the area of landlord-tenant relations. It argues that this area is one of far-reaching statewide interest which requires exclusive State control. Defendant also asserts that the Ordinance impermissibly interferes with the rights of private parties to contract, places a burden on the administration of justice, and has extraterritorial effect.

The goals sought to be achieved by the City in enacting the Ordinance are expressed in section 2314 — 1.102, where it states:

“It is the purpose of this Ordinance and the policy of the City of Evanston, in order to protect and promote the public health, safety and welfare of the citizens in the City, to establish rights and obligations of the landlord and the tenant in the rental of dwelling units and to encourage the landlord and the tenant to maintain and improve the quality of housing.”

In its complaint, the City specifies certain provisions of the Ordinance which were violated by defendant’s lease agreement:

1. The lease did not have attached, as required, a copy of the Evanston Residential Landlord and Tenant Ordinance. (Sec. 231/2 — 5.103.)
2. Upon the giving of a general notice, the lease allows the landlord access to a tenant’s apartment within the last two months of a tenancy upon 15 minutes’ notice; otherwise, upon a 24-hour notice. (The Ordinance requires the landlord to “give the tenant at least two days notice of his intent to enter.” (Sec. 2314 — 2.103.)
3. The lease excuses the landlord from mitigating his damages in the event of abandonment or subletting by the tenant. (The Ordinance requires that the landlord “make a good faith effort to rent it at a fair rental.” Sec. 2314 — 4.103.)
4. The lease allows the landlord the right to terminate the tenancy upon giving a 30-day notice. This right is not dependent upon any breach of the lease by the tenant. The landlord is not required to notify the tenant of his lack of intent to renew the lease before the end of its term. (The Ordinance requires that, upon a material breach of the lease by the tenant, the landlord must give the tenant a 45-day notice, in writing, of his intent to terminate the lease. The Ordinance also requires the landlord to send a written notice to the tenant 30 days prior to the expiration of the term of the lease of his intent not to renew the lease.
5. The lease provides for treble damages to the landlord in the event of a holdover tenancy. (The Ordinance provides that in case of holdover a landlord may bring an action for possession and, if the tenant’s holdover is wilful, the landlord may recover either two months’ rent or twice actual damages, whichever is greater. Sec. 2314 — 4.301.)
6. The lease provides that the landlord may, upon five days’ notice to the tenant, pursue remedies for nonpayment of rent. (The Ordinance requires a 10-day notice in such situations. Sec. 2314-4.101.)
7. The lease provides for various tenant’s damages upon breach by the landlord which are not in conformity with sections 2314 — 4.203, 4.201 and 4.204 of the Ordinance. (These sections allow the tenant to recover attorney’s fees if the landlord’s breach is wilful; specifies various procedures for termination of the lease; allows the tenant to correct minor defects or to withhold rent upon the landlord’s failure to correct minor defects; and provides for reduction of monthly rent to compensate for code violations or for wrongful failure to supply essential services such as heat, water, electricity, gas, or plumbing.)

Section 6 of article VII of the 1970 Illinois Constitution creates a new concept with respect to the powers of local governmental units that are generally referred to as “home rule” powers. In introducing the report of the Local Government Committee to the delegates of the sixth Illinois constitutional convention, Delegate Parkhurst stated:

“[W] e’ve got a history in the state of Illinois that goes back 100 years, as we all know, which was described yesterday as Dillon’s Rule, and Dillon’s Rule says that whenever you’ve got any kind of a problem between whether a local governmental entity has power or not, you resolve it in favor of the state; and you only have those express powers that are given by statute * **.” (4 Record of Proceedings, Sixth Illinois Constitutional Convention 3034 (hereinafter Proceedings).)
“So the first thing we tried to do in our report is to reverse that psychology and that legal philosophy which has pervaded our state and others for, lo, these many years. So we did come to grips with Dillon’s Rule and we did try to turn it around 180 degrees.” 4 Proceedings 3024.

Similarly, this court has recognized that “[t]he concept of home rule adopted under the provisions of the 1970 constitution was designed to drastically alter the relationship which previously existed between the local and State government.” (Kanellos v. County of Cook (1972), 53 Ill. 2d 161, 166.) Thus,6 the basic grant of home rule power embodied in section 6(a) of article VII is broad and imprecise in order to allow for great flexibility:

“Except as limited by this Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs including, but not limited to, the power to regulate for the protection of the public health, safety, morals and welfare; to license; to tax; and to incur debt.” (Ill. Const. 1970, art. VII, sec. 6(a).)

To further emphasize the grant of broad home rule powers, section 6(m) of article VII mandates:

“Powers and functions of home rule units shall be construed liberally.” (Ill. Const. 1970, art. VII, sec. 6(m).)

Recognizing the necessity for legislative control of certain subjects, the delegates enacted sections 6(g) and 6(h) of article VII. Section 6(g) provides a mode by which the legislature may, by a three-fifths majority vote, deny or limit home rule powers. Under section 6(h), the legislature may “provide specifically by law for the exclusive exercise by the State of any power or function of a home rule unit.” (Ill. Const. 1970, art. VII, secs. 6(g), 6(h).) The enactment of a statute after the effective date of the 1970 Constitution does not automatically render the area one of exclusive control by the State under section 6(h) or deny home rule units the power to act under section 6(g). The statute must contain an express statement to that effect. (Stryker v. Village of Oak Park (1976), 62 Ill. 2d 523, 528; e.g., see section 2.1 of the Illinois Insurance Code (Ill. Rev. Stat. 1979, ch. 73, par. 614.1).) In the absence of such express legislation, section 6(i) of article VII states:

“Home rule units may exercise and perform concurrently with the State any power or function of a home rule unit ***.” Ill. Const. 1970, art. VII, sec. 6(i).

Defendant’s first contention is that “An Act to revise the law in relation to landlord and tenant” (Ill. Rev. Stat. 1979, ch. 80, par. 1 et seq.) is a comprehensive statutory plan that implies a statewide interest which necessarily prevents the home rule unit from adopting conflicting enactments.

We have consistently found that an ordinance enacted by a home rule unit pursuant to article VII, section 6(a), of the Constitution of 1970 supersedes a conflicting statute enacted prior to the effective date of the Constitution. (County of Cook v. John Sexton Contractors Co. (1979), 75 Ill. 2d 494, 513; Town of Cicero v. Fox Valley Trotting Club, Inc. (1976), 65 Ill. 2d 10, 18; Stryker v. Village of Oak Park (1976), 62 Ill. 2d 523, 527; Paglini v. Police Board (1975), 61 Ill. 2d 233, 235; Mulligan v. Dunne (1975), 61 Ill. 2d 544, 550; Peters v. City of Springfield (1974), 57 Ill. 2d 142, 147; Clarke v. Village of Arlington Heights (1974), 57 Ill. 2d 50, 53-54; People ex rel. Hanrahan v. Beck (1973), 54 Ill. 2d 561, 565-66; Kanellos v. County of Cook (1972), 53 Ill. 2d 161, 166-67.) “An Act to revise the law in relation to landlord and tenant” was enacted in 1873. Although minor revisions to various sections have taken place both before and after the effective date of the 1970 Constitution (July 1, 1971), we have found no action to have been taken in the landlord-tenant area by the legislature under either section 6(g) or section 6(h) of article VII to either limit or deny power to home rule units or to expressly declare the area one requiring exclusive State control.

Defendant argues that even if we find no express preemption enacted under section 6(h) of article VII, the long-standing and extensive regulation by the State in the area of landlord and tenant relations would cause this court to find such an overriding State interest as to require the State to retain exclusive control. Such a statewide interest, defendant argues, prevents the area from being one pertaining to plaintiff’s government and affairs.

In support of its argument, defendant cites various cases in which this court has held that the home rule unit may not act because of an overriding State concern which requires that the power of the home rule unit be either restricted or denied. In City of Chicago v. Pollution Control Board (1974), 59 Ill. 2d 484, and County of Cook v. John Sexton Contractors Co. (1979), 75 Ill. 2d 494, this court dealt respectively with a home rule unit’s power over the collection and disposal of garbage and waste and its ability to impose zoning restrictions on an Environmental Protection Agency-approved sanitary landfill project. In both cases the court found that the home rule unit could exercise concurrent power with the State legislature on environmental control. The court held, however, that the home rule power was limited in that any local legislation would have to conform with the uniform standard set by the General Assembly so as to allow the State to fulfill the mandate of article XI of the 1970 Constitution by providing “leadership and uniform standards with regard to pollution control.” (County of Cook v. John Sexton Contractors Co. (1979), 75 Ill. 2d 494, 514.) These cases are not analogous to the instant case, since we have no similar constitutional mandate in the realm of landlord-tenant relationships. See Mulligan v. Dunne (1975), 61 Ill. 2d 544, 548-49.

In Bridgman v. Korzen (1972), 54 Ill. 2d 74, the court held invalid an ordinance providing for the payment of real estate taxes in four installments which attempted to supersede the State statute requiring payment in two installments. The court found that such ordinance was beyond the scope of home rule power because the collection of taxes affected other taxing bodies in addition to that of the home rule unit. Consequently, the ordinance was not one strictly pertaining to its government and affairs. In the present case, the City of Evanston ordinance deals only with leases for property within its own borders. The Ordinance makes no attempt to control rental property outside its own boundaries.

In People ex rel. Lignoul v. City of Chicago (1977), 67 Ill. 2d 480, the court found statewide concern for the unitary control of banking to be so strong as to make the area one beyond the power of the home rule unit to regulate. Again, the 1970 Constitution in article XIII, section 8, specified that only the General Assembly could, by a three-fifths majority vote, make branch banking possible. That holding was further buttressed by the fact that the banking business was one “pervasively regulated by the State and Federal governments.” People ex rel. Lignoul v. City of Chicago (1977), 67 Ill. 2d 480, 486.

In Metropolitan Sanitary District v. City of Des Plaines (1976), 63 Ill. 2d 256, the court held invalid a home rule ordinance which sought to force the Metropolitan Sanitary District to obtain a city permit in order to build a sewage treatment plant within its borders. The court ruled that the ordinance did not pertain to “its government and affairs” in that the proposed sewage treatment plant would service six other municipalities. Consequently, the court held that the regional interest of the sanitary district precluded the power of the home rule unit. In the present case, the Ordinance does not attempt to control or interfere with the landlord-tenant activities outside its own borders.

We find that none of the above cases cited support defendant’s assertion that this is an area demanding exclusive statewide control. We note, however, that defendant’s argument has been asserted in many cases in which the court has upheld the exercise of power by the home rule unit.

In Mulligan v. Dunne (1975), 61 Ill. 2d 544, voters and various groups associated with the liquor industry challenged Cook County’s ordinance which imposed a tax on the retail sales of alcoholic beverages. They argued that the ordinance exceeded the scope of home rule powers under section 6(a) of article VII of the Illinois Constitution of 1970 in that the extensive regulation and taxation of the liquor industry by the State legislature showed that it was “one of statewide interest which does not pertain to the government and affairs of Cook County within the meaning of section 6(a).” (Mulligan v. Dunne (1975), 61 Ill. 2d 544, 548.) This court found that, although there were extensive regulations placed upon the liquor industry by the State, nowhere in the statutory scheme was there evidence of an intent by the legislature that its control be exclusive. The court ruled that, even if the ordinance were in conflict with the statutory scheme, it would nonetheless be valid since no legislation was enacted subsequent to the effective date of the 1970 Constitution to restrict or destroy home rule powers in the area.

In Peters v. City of Springfield (1974), 57 Ill. 2d 142, the defendant home rule unit adopted an ordinance reducing the mandatory retirement age of its policemen and firemen from 63 years to 60 years. Plaintiffs, firemen who were retired under the ordinance, argued that the ordinance was beyond the power of the home rule unit in that the General Assembly had enacted a statutory scheme establishing procedures and minimum standards. Plaintiffs asserted that, although the home rule unit could act concurrently with the State under section 6(i) of article VII of the Constitution, such action could not conflict with the standards set by the State. This court disagreed with plaintiffs’ contention that the area was one of overriding statewide interest. The court found no support in the act itself to show that the State had any intention to make the area of pensions for policemen and firemen one for its exclusive control.

In Stryker v. Village of Oak Park (1976), 62 Ill. 2d 523, the home rule unit enacted an ordinance altering the composition of the Board of Fire and Police Commissioners in direct conflict with a State statute on the subject. The ordinance was attacked on the grounds that it did not conform with the minimum standards established by the legislature. It was also asserted that the matter was one of statewide concern requiring that any concurrent action conform to the statute in order to provide “ ‘the best possible police protection.’ ” (Stryker v. Village of Oak Park (1976), 62 Ill. 2d 523, 527.) The court found that there was no indication in the act of any need for statewide uniformity in the area and again found no indication in the statutory scheme that it was meant to be exclusive.

In the present case, we find no evidence of a statewide interest so compelling as to preclude home rule power. The mere existence of State interest and activity in a particular field does not alone preclude home rule activity, absent legislative action to limit or exclude home rule power or to declare it one of exclusive State control. (County of Cook v. John Sexton Contractors Co. (1979), 75 Ill. 2d 494, 510.) Moreover, allowing a home rule unit to control its unique problems regarding the relationship between landlord and tenant is consistent with the role of home rule. The report of the Local Government Committee states:

“[T] he committee believes that home-rule powers are most urgently needed by larger municipalities in the more highly urbanized areas of the state. Although the problems of urban society affect many small localities, they are felt most intensely in larger cities and villages. Dense concentrations of population and industry call for the creative use of flexible governmental powers to achieve and maintain order, social justice and a satisfactory quality of life. The renewal of old and deteriorating neighborhoods and business districts which characterize larger municipalities requires extra revenue, better planning and more efficient administration.” (7 Proceedings 1628-29.)

The city of Evanston is a densely populated and highly urbanized municipality with a large number of rental units. The City, therefore, has a strong interest in protecting both the landlord and tenant and in providing each with a detailed description of their respective rights, duties and remedies. In accordance with the goals attempted to be achieved by the creation of home rule, the local governing body can create an ordinance specifically suited for the unique needs of its residents and is keenly and uniquely aware of the needs of the community it serves. We therefore believe that the ordinance in question was one of the types contemplated in the grant of home rule powers under section 6(a) of article VII.

Defendant also argues that it is beyond the power of the home rule unit to interfere with the substantive law of contracts which, it claims was done by the Ordinance. It claims that the City is without power to interfere with contracts between private parties. The report of the Local Government Committee is relied on by defendant for this proposition:

“It is clear, however, that the powers of home-rule units relate to their own problems, not to those of the state or the nation. Their powers should not extend to such matters as divorce, real property law, trusts, contracts, etc. which are generally recognized as falling within the competence of state rather than local authorities. Thus the proposed grant of powers to local governments extends only to matters ‘pertaining to their government and affairs’. ” (Emphasis added.) (7 Proceedings 1621.)

However, the Ordinance does not alter any basic principle of contract law. The State has always had the right under police powers to impose conditions on private contractors as long as it was necessary for the public good. (Memorial Gardens Association, Inc. v. Smith (1959), 16 Ill. 2d 116, 128.) Consequently, it is beyond question that the State, acting in a reasonable manner in the exercise of its police powers, had the right to adopt statutes which impinged on the activities of private parties to a contract. Notable among such statutes are “An Act to revise the law in relation to landlord and tenant” (Ill. Rev. Stat. 1979, ch. 80, par. 1 et seq.), the Illinois Insurance Code (Ill. Rev. Stat. 1979, ch. 73, par. 613 et seq.), and the statute concerning funeral or burial funds (Ill. Rev. Stat. 1979, ch. UFA, par. 73.101 et seq.). (See Memorial Gardens Association v. Smith (1959), 16 Ill. 2d 116, upholding the validity of the latter statute as a proper exercise of police power despite its effect on private contracts.) Each of these statutes delineates various conditions which limit private contracts in order to protect the general public under the State’s police powers.

Article VII, section 6(a), of the 1970 Constitution placed in the hands of home rule units the power to act under the police power and specifically allows the home rule unit “to regulate for the protection of the public health, safety, morals and welfare.” (Ill. Const. 1970, art. VII, sec. 6(a).) Under this grant of power the home rule unit possesses the same power as the State except where those powers are specifically limited by express legislative action under sections 6(g) and 6(h) of article VII. (City of Urbana v. Houser (1977), 67 Ill. 2d 268, 273.) We have already ruled that the State has not attempted to make the realm of landlord-tenant relations one for its exclusive control. Therefore, the home rule unit of Evanston may act under its constitutionally granted police powers to pass reasonable regulations concerning the activities of landlords and tenants in order to protect the public health, safety, morals, and welfare. We find such to be the case here. The right of a private party to contract in regard to his property must be subordinate to the overriding needs to protect the interests of the public at large. City of Decatur v. Chasteen (1960), 19 Ill. 2d 204, 210-11; People v. Doe (1929), 334 Ill. 555, 561; Memorial Gardens Association, Inc. v. Smith (1959), 16 Ill. 2d 116, 128. See Woods v. Soucy (1897), 166 Ill. 407.

Defendant next contends that the instant ordinance interferes with the unified State judiciary system in that it supplants and materially modifies “An Act to revise the law in relation to landlord and tenant” (Ill. Rev. Stat. 1979, ch. 80, par. 8). Defendant relies on Ampersand, Inc. v. Finley (1975), 61 Ill. 2d 537, for the proposition that the city of Evanston ordinance impermissibly interferes with the administration of justice, a matter of exclusive State control. In Ampersand, this court invalidated a home rule county ordinance that directed the clerk of the circuit court of Cook County to collect a $2 filing fee in civil cases to support a county law library. The court held that the tax amounted to a “condition to the right to litigate in the courts” and constituted “a burden which cannot be imposed by a home rule unit.” (Ampersand, Inc. v. Finley (1975), 61 Ill. 2d 537, 547.) We find Ampersand inapposite. Here, there is no condition or barrier placed by the Ordinance upon a citizen’s access to the State’s court system. The Ordinance does not prevent either landlord or tenant from seeking relief in the courts of the State. The fact that the provisions of the ordinance here in question defines notice procedures, duties of the parties, and remedies available does not interfere with our court system. Courts are regularly called upon to enforce or interpret municipal ordinances.

Defendant’s final claim is that the Ordinance is without the powers of section 6(a) of article VII as it has extraterritorial effect. Defendant claims that contracting parties whose residence or business is outside the city boundaries will be subject to the Ordinance. The question of whether a home rule enactment has extraterritorial effect is answered by focusing on the subject being controlled. Here the Ordinance controls only rental property within the borders of the City and affects only the owners and tenants of such property. It makes no attempt to regulate properties of other local units of government.

For the reasons enumerated, the question posed in this case must be answered in the affirmative. We hold that the city of Evanston, a home rule unit, validly exercised its powers under section 6(a) of article VII of the Illinois Constitution of 1970 in enacting the challenged provisions of the Evanston Residential Landlord and Tenant Ordinance. We further find these provisions to be reasonable as an exercise of “the power to regulate for the protection of the public health, safety, morals and welfare.” Therefore, the judgment of the appellate court is affirmed.

Judgment affirmed.