text:
    (Nos. 52787, 52788 cons.
    IRIS M. MAITER et al., Appellees, v. CHICAGO BOARD OF EDUCATION et al., Appellants.

      Opinion filed October 17, 1980.

    Rehearing denied November 26, 1980.

      Michael J. Murray, of Chicago (Christine Cheatom, of counsel), for appellants.
    Ronald S. Cope of Ancel, Clink, Diamond & Murphy, P.C., of Chicago, for appellees.
    James O. Lattumer, Joan O’Shaughnessy, Marilyn F. Johnson, and John Elston, of Chicago, for intervenorsappellants.
   MR. JUSTICE RYAN

delivered the opinion of the court:

The plaintiffs, principals in the Chicago public school system and individuals on the 1970 and 1974 eligibility lists for principal, as determined by the board of examiners (Ill. Rev. Stat. 1977, ch. 122, par. 34 — 83), filed a com-

plaint against the defendant Chicago board of education (the board of education) on June 12, 1975. The trial court permitted certain interest groups and individuals to intervene as defendants. The nature of the interests of the interveners is discussed later. The selection of the principals for the Chicago public school system is governed by section 34 — 84 of the School Code (Ill. Rev. Stat. 1977, ch. 122, par. 34 — 84), which provides that principals are to be selected “for merit only.” The plaintiffs contend this requires appointment by “rank order” as determined by the score assigned the prospective principal candidates by the board of examiners. Starting in 1970, the board of education adopted procedures establishing “nominating committees of local school councils” in order to involve local communities in the selection of school principals. The committees were established without any statutory authority, and “rank order” was no longer the sole criteria used to select principals. On December 20, 1976, pursuant to the plaintiffs’ motion for summary judgment, the trial court entered a judgment order requiring that all principals be selected by “rank order” until such time as the board of education adopted “a uniform system of community input.” The trial court order also provided that rank order need not be the sole criteria of merit. On September 28, 1976, the trial court entered an additional order permitting members of community organizations and school parents councils to intervene. The appellate court reversed the circuit court’s order providing that rank order need not be used by the board of education as the sole criteria of merit, and it remanded with directions that the board of education make appointments to the position of principal in rank order from eligibility lists prepared by the board of examiners. (77 Ill. App. 3d 389.) We granted leave to appeal.

Prior to 1917, the Chicago board of education had plenary power to determine the character and fitness of applicants for appointment as principals of the various schools. As the trial court stated, the so-called Otis Law was passed in 1917 in order to do away with favoritism, partisanship, and cronyism in the selection of principals. The Otis Law provided in part that “ [a] ppointments and promotions of teachers, principals and other educational employees shall be made for merit only ***.” (Ill. Rev. Stat. 1975, ch. 122, par. 34 — 84.) Also, a board of examiners was created to examine all applicants and to prepare and establish all necessary eligibility lists. (Ill. Rev. Stat. 1975, ch. 122, par. 34 — 83.) From 1917 until 1970, the board of education made appointments of principals and teachers in “rank order” from an eligibility list compiled pursuant to examinations given by the board of examiners.

On March 25, 1970, the board of education adopted procedures calling for the involvement of local communities in the selection of principals and established nominating committees of local school councils. Pursuant to these procedures, the committees were first only given the names of present principals who desired to transfer to the schools where there were vacancies. If all potential transferring principals were rejected by a committee, it was given a second list of candidates from the eligibility list in rank order. The committees rated the candidates in order of preference, and the board of education attempted to honor the requests. On October 14, 1970, the board of education adopted procedures whereby the rank on the eligibility list would not be considered either in presenting candidates to the nominating committees or in the assignment of principals.

This suit was filed on June 12, 1975. The plaintiffs argued that fitness to be a principal is to be determined by the board of examiners and that the board of education has purely a ministerial duty in selecting principals in rank order from the eligibility list compiled by the board of examiners. The plaintiffs sought a declaratory judgment that the rules and procedures establishing the local nominating committees were in violation of the School Code, the fourteenth amendment of the United States Constitution, and section 2 of article I of the Illinois Constitution. Pursuant to plaintiffs’ motion for summary judgment, the trial court entered its judgment order on December 20, 1976. The order reviewed the history of the applicable statutes and found that rank-order appointment of principals was abhorrent because it precluded community input. However, the trial court ordered that principals were to be selected by rank order until such time as the board of education was able to establish a uniform system of community input. The court stated:

“2. That rank order on the principals’ eligibility examination need not be used by the Board as the sole criteria of merit in the appointment of principals to individual schools, provided however, that until a uniform system of community input is established appointments to principals shall be in rank order commencing with appointments in rank order from the oldest existing principal list (1970).”

The interveners appealed from that portion of the order requiring the board of education to appoint principals in rank order until such time as a uniform system of community input was established. On April 13, 1977, the board of education, in an attempt to comply with the trial court’s order, adopted Board Report 77 — 156—46, which established uniform procedures for community participation in the principal-selection process. The interveners ’ appeal was dismissed by the appellate court because of mootness.

The plaintiffs appealed from the portion of the trial court’s order providing that “rank order” need not be the sole criteria of merit in the appointment of principals, and from the order of September 28, 1976, permitting the members of community organizations and school parents councils to intervene. Before this case was heard by the appellate court, the Illinois legislature added section 34 — 8.2 to the School Code for cities of over 500,000 inhabitants. (Ill. Rev. Stat. 1979, ch. 122, par. 34 — 8.2.) This provision specifically provides for the use of local nominating committees in the selection of principals and is set out and considered later in this opinion. Section 34 — 84 of the Code, requiring appointment “for merit only,” remained unchanged. The appellate court held that section 34 — 8.2 of the School Code did not repeal or amend the requirement of rank-order appointment as contained in section 34 — 84, and that it was possible for local nominating committees to coexist with a system of rank-order selection.

The first issue presented for review is whether the trial court erred in permitting members of community organizations, school parents councils and individual school parents to intervene in this suit. The intervention statute (Ill. Rev. Stat. 1975, ch. 110, par. 26.1) provided that anyone shall be permitted as of right to intervene whenever the representation of his interests by existing parties may be inadeequate and he may be bound by any judgment, decree or order entered in the action. It also permits intervention in the discretion of the trial court. Here, the trial court permitted the groups and parents to intervene pursuant to section 26.1(2)(b) of the Civil Practice Act, which provides :

“Upon timely application anyone may in the discretion of the court be permitted to intervene in an action *** (b) when an applicant’s claim or defense and the main action have a question of law or fact in common.” (Ill. Rev. Stat. 1975, ch. 110, par. 26.1(2)(b).)

Section 26.1 has been liberally construed (Bredberg v. City of Wheaton (1962), 24 Ill. 2d 612, 623; Dowsett v. City of East Moline (1956), 8 Ill. 2d 560, 567) and is modeled after Rule 24(b) of the Federal Rules of Civil Procedure, so that the interpretation of Rule 24 is highly relevant. See Cooper v. Hinrichs (1957), 10 Ill. 2d 269, 277; Dowsett v. City of East Moline (1956), 8 Ill. 2d 560, 567; Ill. Ann. Stat., ch. 110, par. 26.1, Historical and Practice Notes, at 318 (Smith-Hurd 1968).

Permissive intervention, by definition, lies in the sound discretion of the trial court, and its judgment will not be reversed unless a clear abuse of discretion is shown. Under the intervention statute, a direct interest in the suit need not be shown (Mensik v. Smith (1960), 18 Ill. 2d 572, 590), but the applicant must have an enforceable or recognizable right and more than a general interest in the subject matter. Cooper v. Hinrichs (1957), 10 Ill. 2d 269, 277.

The facts show that the trial court acted within its discretion in permitting intervention because the intervenors have a recognizable right to participate in the selection of principals in Chicago through the use of local nominating committees. At the time the trial court allowed intervention, the authorization for nominating committees was found only in action of the board of education. Such authorization is now found, however, in the School Code. Section 34 — 8.2 of the School Code permits the Chicago board of education to use local nominating committees to screen applicants for the job of principal in local schools. Several of the individual intervenors have been members of principal-nominating committees, and several members of organizational intervenors have participated in selecting principal-nominating committees. It has been held that an organization has standing to assert the concerns of its constituents. (NAACP v. Alabama (1958), 357 U.S. 449, 2 L. Ed. 2d 1488, 78 S. Ct. 1163.) Also, the individual intervenors and the members of the organizational intervenors are parents of children in the Chicago public schools. As parents, they have a special interest in the litigation. Section 34 — 8.2 requires at least 60% of the members of local nominating committees to be “parents or guardians of children in the affected school.” (Ill. Rev. Stat. 1979, ch. 122, par. 34 — 8.2(C).) Thus, the intervenors have a vital interest in the outcome of this litigation and in the method of selecting principals for their schools. Their right to particpate as members of the nominating committees or to have local nominating committees participate in the process of selecting principals will be affected by this litigation. The intervenors have more than a “mere interest” in the general subject matter of the litigation. Their interests will be adversely affected if plaintiffs prevail. The trial court did not abuse its discretion in allowing the petition to intervene.

The issue raised by the merits of this appeal concerns the construction to be given the provision contained in section 34 — 84 of the School Code (Ill. Rev. Stat. 1977, ch. 122, par. 34 — 84) requiring that appointments be made “for merit only.” The Chicago board of education and the intervenors challenge the appellate court’s decision that merit appointment of principals requires that the board of education appoint principals according to their position of rank order on the eligibility list prepared by the board of examiners. They contend that the legislature granted the board of education the exclusive power to make appointments and promotions within its discretion. (See Ill. Rev. Stat. 1977, ch. 122, par. 34 — 8.) Requiring the board of education to make rank-order appointments pursuant to the board of examiner’s eligibility list would, according to the board of education and the intervenors, constitute usurpation of the board of education’s power to appoint.

In support of this argument, they maintain that the legislative scheme of the School Code evinces the legislative intent that the board of education have the authority to exercise broad discretion in its exclusive power to appoint principals. Specifically, they argue that the failure of the General Assembly to enact House Bill 1067 in the 79th General Assembly, the rejection of House Bill 516 in the 80th General Assembly, and the enactment of section 34 — 8.2 reflect the legislature’s affirmation of this permissibly broad power. The plaintiff-principals counter with the contention that section 34 — 8.2 neither repealed nor modified the rank-order requirement of section 34 — 84 and that the failure of the legislature to act favorably on a proposed bill can be of no consequence in legislative interpretation.

House Bill 1067 was introduced in the 79th General Assembly to amend section 34 — 84 of the School Code to define the term “for merit only” as requiring that principals or teachers be appointed in order of their standing on the eligibility list. The bill was tabled on June 25, 1975, in the House Elementary and Secondary Education Committee. The bill was reintroduced in the 80th session of the Illinois General Assembly as House Bill 516 and, on April 29, 1977, was again tabled in the Elementary and Secondary Education Committee. Prior to the rejection of House Bill 516, House Bill 1742 was approved as Public Act 80 — 879, effective October 1, 1977. (Ill. Rev. Stat. 1977, ch. 122, par. 34 — 8.2.) Under section 34 — 8.2, the board of education is legislatively authorized to impanel local nominating committees and have such committees consider, interview and nominate persons on the eligibility lists and principals who consent to be considered for a transfer. Section 34 — 8.2 provides:

“A. Before the general superintendent shall recommend or the board shall vote on the appointment of a principal, the general superintendent and board may obtain the nomination of a person or persons to fill the position of principal by a local nominating committee.
B. A local nominating committee, when authorized by board rules and regulations, may consider, interview and nominate only those persons for the position of principal who appear on the appropriate eligibility list prepared by the board of examiners or those principals who consent to be considered for a transfer. The recommendations of the local nominating committee shall not discriminate against any person based upon race, color, creed, national ancestry, sex, ethnic heritage or religious beliefs.
C. The board may adopt rules and regulations regarding the formation of and procedures to be followed by local nominating committees; these rules and regulations shall assure that at least 60% of the members of each committee shall be parents or guardians of children in the affected school.” (Ill. Rev. Stat. 1977, ch. 122, par. 34 — 8.2.)

The relevant legislative activity is thus summarized as follows: (1) House Bill 1067 requiring rank-order appointment of principals was not adopted in the 79th General Assembly in 1975; (2) section 34 — 8.2 was enacted in 1977 and; (3) House Bill 516 requiring rank-order appointment was rejected in 1977. For the reasons enumerated herein, we agree that this legislative activity and the discussion of these bills in committee reflects the intent of the General Assembly that the board of education have the authority to exercise broad discretion in the appointment of principals and not be limited to rank-order appointment.

We note initially that the failure of a committee to act favorably on a proposed bill should not be relied upon, in the absence of an indication as to the reason for the failure, to ascertain legislative intent. (Order of Railway Conductors of America v. Swan (1947), 329 U.S. 520, 529, 91 L. Ed. 471, 478, 67 S. Ct. 405, 410.) Thus, the failure of the House Elementary and Secondary Education Committee to act favorably on House Bills 1067 and 516, in and of itself, can be of no aid in construing section 34 — 8.2. However, legislative committee hearings conducted on proposed bills are matters of public record. These hearings include statements by the proponents of the rejected bills as to their purpose as well as by opponents as to the reason for their opposition. The hearings also include statements by the proponents of House Bill 1742 (now section 34 — 8.2 of the School Code). In a previous opinion, we have recognized that public statements made by those who are in a position to clarify legislative meaning carry weight and are helpful to this court. (Client Follow-Up Co. v. Hynes (1979), 75 Ill. 2d 208, 226; see 2A Sutherland, Statutes Sc Statutory Construction sec. 48.10, at 209-10 (4th ed. 1973).) We find that the statements made during the legislative committee hearing on these bills are helpful in our determination of legislative intent insofar as they reflect the conflict between the rejected bills and House Bill 1742 (section 34-8.2).

The timing of the introduction of these bills as they relate to this litigation is also worthy of consideration. The complaint in this case was filed on June 12, 1975. House Bill 1067, which would have defined “for merit only” as used in section 34 — 84 of the School Code as requiring that appointments be made in order of standing on the eligibility list, was introduced in the House of Representatives on March 26, 1975. The bill was tabled on June 25, 1975. The trial court entered its order holding that rank order on the eligibility list need not be the sole criteria in the appointment of principals on December 20, 1976. Thereafter House Bill 1742 (now section 34 — 8.2) was introduced, as was House Bill 516 (again defining “for merit only” as requiring appointments of principals to be made in order of rank on the eligibility list). House Bill 1742 was reported favorably out of committee. A few days later the same committee considered House Bill 516. It is plain from the comments made during the committee hearings that these bills were inspired by and were in response to this litigation and the December 20, 1976, order of the circuit court of Cook County in this case.

Ronald Cope, who represents plaintiffs in this case, testified before the Elementary and Secondary Education Committee in favor of House Bill 516. In opposition to the adoption of the bill, Representative Madison stated:

“I would like to call to the committee’s attention the fact that just last week we voted on House Bill 1742. And we voted that bill out of here on a vote of 17 to 3 and that bill in essence gave the Chicago School Board the authority to allow local nominating committees to get involved in principal selection. *** This particular bill if passed by the committee would completely contravene the *** effects upon 1742 because it defines for merit only as an order of standing and at the present time for merit takes into consideration several factors including the community’s standing on the principal selection.”

Dr. Arthur Lehne, assistant superintendent of the Chicago board of education, also testified in opposition to House Bill 516. He agreed with Representative Madison that House Bill 516 “would negate 1742.” Representative Levin, who had been a sponsor of House Bill 1742, advocated the advisory role of the community in the selection of principals as provided in the newly adopted House Bill 1742:

“[T] he ultimate decision under our bill is still with the Board of Education. We are just talking about an advisory role, so that the community could have some role (unintelligible) in those schools where parents and community are most involved you get the best quality education. So it would be very hard in those schools where there is hostility between the principal and the community to really have a good operation going on.”

The above statements concerning House Bill 516 indicate that the provision of that bill defining “for merit only” as rank-order appointment was viewed as being in direct opposition to the newly enacted bill authorizing the board’s creation of local nominating committees. An examination of the legislative floor debates preceding the enactment of House Bill 1742 supports this conclusion. According to Representative Levin, the underlying purpose of the bill was to clarify the power of the board of education to create community advisory committees. He stated:

“ [T] his Bill was introduced because there was litigation pending *** in which the Circuit Court of Cook County *** confused the issue as to whether or not the board had the authority to have these advisory council [s]. This is meant to clarify the legal authority.” (House Debates on House Bill 1742, June 26, 1977, at 72.)

This discussion refers to the order entered by the circuit court in this case. Thus, according to Representative Levin, House Bill 1742 would affirm the power of the board of education to appoint local nominating committees to assist the board in the determination of meritorious candidates for principalships. Representative Gaines spoke of the value of community input in the selection of principals:

“[The amendment] is very much needed to take away from the Board of Education their excuse for not listening to community participation. This is the only district where the board members are not elected. And the only opportunity that the community has to have their expressions of interest heard is through these groups. *** Only when you have this kind of community participation, can you have good quality education.” House Debates on House Bill 1742, June 26, 1977, at 76.

We conclude that the legislative history of House Bill 1742 of the 80th General Assembly (section 34 — 8.2), House Bill 1067 of the 79th General Assembly, and House Bill 516 of the 80th General Assembly, as well as the clear language of House Bill 1742, clearly indicate that the legislature intended that the board of education not be bound by the candidates’ standing on the board of examiners’ eligibility list in appointing persons to serve as principals.

The legislature would not have granted the board of education the authority to create local nominating committees if those groups were to have no input in the appointment process. If the board were to be confined to the eligibility list, any recommendation by the local committee would be without weight. Thus the statute authorizing the creation of the community committees would be meaningless. This court will not assume that

the legislature engaged in a meaningless act. (Lopez v. Fitzgerald (1979), 76 Ill. 2d 107, 117; Pinkstaff v. Pennsylvania R.R. Co. (1964), 31 Pennsylvania R.R. . 2d 518, 524.) Thus, the presumption is that “the lawmaker has a definite purpose in every enactment and has adapted and formulated the subsidiary provisions in harmony with that purpose ***.” (2A Sutherland, Statutes and Statutory Construction sec. 46.05, at 57 (4th ed. 1973).) The existence of community input is clearly inconsistent with an interpretation of a rank-order-of-appointment requirement. The sections of the School Code are in pari materia, and they must be construed with reference to one another in order to give harmonious meaning to the act as a whole. (See, e.g., Galvin v. Galvin (1978), 72 Ill. 2d 113, 118.) We therefore do not construe the requirement of section 34 — 84 that principals be appointed “for merit only” to mean that the board of education make such appointments pursuant to the order of rank appearing on the eligibility list prepared by the board of examiners. Instead, in conjunction with section 34 — 8.2, we construe the merit requirement as permitting the board of education discretion in its duty to appoint, which discretion may include the creation of community groups to participate in the appointment procedure. Under section 34 — 8.2, the local nominating committees may nominate for the consideration of the board of education any person whose name appears on the board of examiners’ eligibility list.

The appellate court used the rule of contemporaneous construction in its analysis of the term “for merit only.” We do not find that rule of construction to be applicable here. We have determined herein that the definition of that term pursuant to section 34 — 8.2 does not include a requirement that the board of education appoint principals by rank order. We need not ascertain, however, the meaning of that term prior to the adoption of section 34 — 8.2. Although the statute did not become effective until September 1, 1977, we hold, for reasons stated below, that provision and our interpretation thereof to be controlling in this case.

In absence of express language declaring otherwise, an amendatory act is ordinarily construed as being prospective in its operation. (Wilson-Raymond Constructors Co. v. Industrial Com. (1980), 79 Ill. 2d 45, 54-55; General Motors Corp. v. Industrial Com. (1975), 62 Ill. 2d 106, 111; People ex rel. American Federation of State Employees v. Walker (1975), 61 Ill. 2d 112, 118; People ex rel. Baylor v. Bell Mutual Casualty Co. (1973), 54 Ill. 2d 433, 440; New York Life Insurance Co. v. Murphy (1944), 388 Ill. 316, 324.) This general rule is based upon the principle that the legislature may not impair the obligation of contracts (A.S.S. Wrecking Co. v. Guaranty Bank & Trust Co. (1972), 53 Ill. 2d 249, 253-54) or interfere with vested substantive rights. (Hogan v. Bleeker (1963), 29 Ill. 2d 181.) However, in the absence of a saving clause, an amendatory act may be retroactively applied where the legislature so intended and where the statute affects the remedy or matters of procedure. When a change of law merely affects the remedy or law of procedure, all rights of action will be enforceable under the new procedure, without regard to whether they accrued before or after such change of law and without regard to whether or not the action has been instituted, unless there is a saving clause as to existing litigation. (34 Ill. L. & Prac. Statutes secs. 194, 195, at 156-57 (1958).) (See also Orlicki v. McCarthy (1954), 4 Ill. 2d 342; Dworak v. Tempel (1959), 17 Ill. 2d 181, 187; Steinberg v. Chicago Medical School (1977), 69 Ill. 2d 320, 337; Grigsby v. Industrial Com. (1979), 76 Ill. 2d 528, 532.) (See generally 1A Sutherland, Statutes and Statutory Construction sec. 22.36, at 200 (4th ed. 1972); 82 C.J.S. Statutes sec. 432, at 1006-07 (1953).) Changes in procedure or existing remedies will not be applied retrospectively, however, where a vested, constitutionally protected right will be deprived by such application. Hogan v. Bleeker (1963), 29 Ill. 2d 181, 187.

With the above principles in mind, we find the 1977 amendment to the School Code to be controlling in this case and, therefore, applicable to the pending applications for the principal positions. There exists no vested right in any particular mode of procedure. (Winter v. Barrett (1933), 352 Ill. 441, 466; see 73 Am. Jur. 2d Statutes sec. 388, at 507 (1974); 16A Am. Jur. 2d Constitutional Law sec. 675, at 661 (1979).) Furthermore, we do not deem there to be a property right inherent in holding a public office; that is, the persons whose names appear on the eligibility list have no vested right in a principalship. Although we are not bound by the Federal courts’ decisions, we are in agreement with the Seventh Circuit’s conclusion that a candidate possessing a valid certificate from the board of examiners does not have an entitlement to a principalship. (Webster v. Redmond (7th Cir. 1979), 599 F.2d 793.) The amendment may, therefore, be retroactively applied.

Finally, the plaintiffs assert that the term “for merit only” has, at all times, required rank-order appointment and that section 34 — 8.2 neither amended nor modified the School Code’s rank-order requirement. As stated above, section 34 — 8.2 concerns the procedural aspect of a nonvested right and is therefore to be retrospective in its application. Thus, we need not decide whether the law prior to the addition of section 34 — 8.2 mandated appointment by rank order on the eligibility list. However, even if the prior law did require appointment of principals by rank order, we would find section 34 — 8.2 to have amended, by implication, this requirement.

An implied amendment is an act which purports to be independent of, but which in substance actually modifies or adds to a prior act. (1A Sutherland, Statutes and Statutory Construction sec. 22.13, at 139 (4th ed. 1972).) The implied amendment arises out of the inconsistency or repugnancy between the two acts. (People ex rel. Coffman v. Illinois Central R.R. Co. (1924), 314 Ill. 339, 342.) This court has stated on more than one occasion that although implied amendments are not favored, they are not constitutionally prohibited. (People ex rel. Nordstrom v. Chicago & North Western Ry. Co. (1959), 16 Ill. 2d 264, 268; Jordan v. Metropolitan Sanitary District (1958), 15 Ill. 2d 369, 378; Starch v. Chicago & North Western Ry. Co. (1955), 4 Ill. 2d 611, 617.) We have previously identified the inconsistency between a rank-order appointment requirement and a procedure utilizing community input through local nominating committees. Thus, if rank-order appointment was indeed mandated prior to October 1, 1977, such a procedure would be amended by implication by the enactment of section 34-8.2.

In conclusion, we hold that the requirement under the School Code that principals be appointed “for merit only” does not mandate that the board of education appoint persons to serve as principals solely according to the rank order of appearance on the eligibility list prepared by the board of examiners. The legislative scheme evinces an intent that the board of education have great discretion in such appointments. This intent is aptly reflected in section 34 — 8.2, which is to be retroactively applied.

The judgment of the appellate court is reversed, and the judgment of the circuit court is affirmed, except insofar as it required appointments in rank order “until a uniform system of community input is established.”

Appellate court reversed; circuit court affirmed in part and reversed in part.


source: Caselaw Access Project

author: MR. JUSTICE WARD MR. JUSTICE UNDERWOOD,

license: Public Domain

text:
    (No. 51950, 51953 cons.
    PHILLIP A. DETHLOFF et al., Appellants, v. ZEIGLER COAL CO., Appellee.

      Opinion filed October 17, 1980.

    Rehearing denied November 26, 1980.

      CLARK, J., took no part.
    UNDERWOOD and RYAN, JJ., concurring in part and dissenting in part.
    Leonard M. Ring, of Chicago (Leonard M. Ring & Associates; Arnold F. Blockman and Brian L. McPheters, of Hatch, Nicol, Blockman &McPheters, of Champaign; and Raymond Lee, Jr., of Tuscola, of counsel), for appellants.
    Craig & Craig, of Mattoon (John H. Armstrong and Richard F. Record, Jr., of counsel), Baker & McKenzie, of Chicago (Francis D. Morrissey, Edward J. Zulkey and George H. Olsen, of counsel), and Latchford, Rice & O’Brien, of Chicago (James B. Rice, of counsel), for appellee.
   MR. JUSTICE WARD

delivered the opinion of the court:

On June 29, 1976, Phillip and Dorothy Dethloff filed a complaint in the circuit court of Douglas County alleging that the defendant, the Zeigler Coal Company (Zeigler), had unlawfully entered the plaintiffs’ land in January of 1976 and mined coal which it later converted. Counts I and II of the complaint asked for compensatory and punitive damages for trespass and conversion. Count III sought a declaratory judgment that the leasing agreement entered into by each party’s predecessor in title and interest had expired by its terms on June 20, 1970. The trial court held in the plaintiffs’ favor on count III but granted Zeigler’s motion for summary judgment on count II on the issue of punitive damages. Count I was submitted to a jury, which returned a verdict of $4,019,867.08 in compensatory damages.

The appellate court affirmed. (69 Ill. App. 3d 133.) It judged, however, that the trial court’s holding that the defendant was not, as a matter of law, a trespasser in good faith was an issue of fact which should have been submitted to the jury. The court reduced the judgment to $1,573,455.57, saying it did so to avoid the necessity of remanding the cause for a new trial. The plaintiffs consented to the remittitur. (See 73 Ill. 2d R. 366(b)(2)(ii).) The petitions for leave to appeal of the defendant and the plaintiffs were granted by us and the appeals consolidated. 73 Ill. 2d R. 315.

The predecessors of the parties in title and interest, that is, the original lessors and lessee, entered into a leasing agreement on June 20, 1945, whereby the lessee was given the right to mine all of the subsurface coal contained within the lessor’s 40-acre tract of land located in Douglas County. This parcel was but one of many such properties in the area whose owners, through leasing agreements, had extended similar, if not identical, mining rights to those now held by Zeigler. The habendum clause of the lease here provided in part:

“This lease shall be and continue for the term of twenty-five (25) years from and after the date hereof, and for so long thereafter as shall in the opinion of Lessee be necessary to mine and remove all of the coal in and under the above described leased lands and other lands in the vicinity thereof, or included in the block of leased coal hereinafter referred to, unless this lease is sooner terminated as hereinafter provided and unless in the opinion of the Lessee the coal which can be economically mined in accordance with good and accepted mining practices from said lands shall be sooner exhausted.”

In October of 1969, the Dethloffs, the plaintiffs in this case, acquired their 40-acre tract from Mr. and Mrs. Joseph Taylor. A title search revealed the existence of the coal-leasing rights held by Zeigler. The defendant was not informed of the conveyance to the plaintiffs, and it continued to forward the annual rental fee of $80 to the Taylors. It was only when the Taylors returned the rental payment for 1971 that Zeigler became aware that the Dethloffs were the new owners of the tract.

When the defendant tendered this rental payment to the plaintiffs in October of 1971 their attorney wrote to the defendant stating that the lease had expired according to its own terms on June 20, 1970. The letter did indicate, however, that the Dethloffs were interested in renegotiating a new lease and, in particular, in renegotiating the royalty payment provision. During the 26-year period from June 20, 1945, until October of 1971 no coal had been taken or mined from the plaintiffs property by the defendant or its predecessor in interest.

Upon rejection of the rental payment by the plaintiffs Zeigler said it would exercise its right under the lease to withhold further payments of rent pending resolution of any disputed questions as to the rights of the parties. The defendant did not respond, however, to the plaintiffs’ repeated overtures to renegotiate the lease. Negotiations were again attempted in 1975 by the plaintiffs after they became aware that Zeigler was planning to commence mining operations on the land either that fall or in the spring of 1976. Mining operations were commenced in January 1976, almost 31 years after the leasing agreement was executed.

A check for the royalty payment for coal mined in January and February was delivered to the plaintiffs in March of that year. The Dethloffs reacted with a demand that Zeigler discontinue operations on their land. Though the Dethloffs filed suit that June, defendant continued its mining operation until December of 1976, when all of the coal that could be subterraneanly mined from the plaintiffs’ land had been removed. The record shows that royalty checks delivered every month to the plaintiffs through December 1976 were not cashed but were retained by them in a safety deposit box as evidence of the amount of coal mined each month.

As the parties generally agree, the central question is the interpretation to be given to the mining lease. More specifically, the issue is whether the lease automatically expired by its provisions on June 20, 1970, after the 25-year term had expired, or whether it remained in effect until December of 1976, when defendant completed the removal of all of the subsurface coal from the plaintiffs’ property.

Though the legal and economic interests as well as exploratory and extraction techniques involved in hard-mineral and coal production differ from those pertaining to fugacious substances such as oil and gas (see, e.g., Norvell, The Coal and Lignite Lease Compared to the Oil and Gas Lease, 31 Ark. L. Rev. 420 (1977)), coal-mining leases closely resemble oil and gas leasing agreements. As a result, the body of the law and rules of construction used to interpret the latter instruments have been applied to coal-mining leases like the one here. See Fremont Lumber Co. v. Starrell Petroleum Co. (1961), 228 Or. 180, 364 P.2d 773; Fletcher, Mining Leases and Gas Leases— Different Breeds, 24 Rocky Mtn. Min. L. Inst. 309 (1978).

The habendum clause in the lease executed on June 20, 1945, is of the standard form found in oil and gas leases. It provides that the agreement to mine coal shall be in effect for “the term of twenty-five (25) years from and after the date hereof [June 20, 1945], and for so long thereafter as shall in the opinion of Lessee be necessary to mine and remove all the coal in and under the above described leased lands ***.” (Emphasis added.)

The purpose of the habendum clause in a lease is to define and measure the duration of the lessee’s interest in the property to be developed. (See H. Williams, Oil and Gas sec. 604 (1977); 2 W. Summers, Oil and Gas secs. 281 through 307 (1959).) Typically, the clause is in two parts. The first part, or primary term, defines the time period within which production or removal must begin. The second part, or “thereafter” clause, extends the lessee’s right to mine for an indefinite duration beyond the term of years, usually for as long as it is profitable to continue production or, in the terms of this lease, as long as “the coal *** can be economically mined in accordance with good and accepted mining practices ***.” (See Freeland v. Edwards (1957), 11 Ill. 2d 395.) The “indefinite duration” clause does not come into effect, however, until production operations have begun within the primary term or period of the lease. Habendum clauses of this type generally have been interpreted as vesting the lessee with an interest subject to this special limitation that mining operations must commence within the primary period of the lease. Thus, if no production or significant mining operations have been initiated within the primary period the lease automatically terminates at the end of that period or term. (See Fremont Lumber Co. v. Starrell Petroleum Co. (1961), 228 Or. 180, 364 P.2d 773; Brown v. Haight (1969), 435 Pa, 12, 255 A.2d 508.) See also Guffey v. Smith (1915), 237 U.S. 101, 59 L. Ed. 856, 35 S. Ct. 526; H. Williams, Oil and Gas sec. 604 (1977).

Both the trial and appellate courts held that Zeigler’s failure to mine coal from the Dethloffs’ property within the lease’s primary term of 25 years resulted in the automatic forfeiture or termination of all of the defendant’s mining rights and that it was liable for trespass and conversion.

The defendant presents several contentions basically to the effect that the interpretation given the lease by the trial and appellate courts was erroneous. The company first submits that the leasing agreement did not convey a leasehold estate subject to a special limitation but instead granted “a freehold estate or interest” subject to a condition subsequent. Under this theory the lessee’s interest in mining the coal would not terminate automatically upon a breach by it but only when the lessor had taken affirmative action by either demanding performance by the defendant or by extinguishing its interest through a forfeiture proceeding. Since no such action was taken by the Dethloffs, Zeigler contends that its mining rights under the lease continued until all the coal was removed from the plaintiffs’ land in December of 1976.

This court has uniformly held that mining leases which contain a primary term requiring exploration or development within a stated period, followed by a “thereafter” clause, are to be construed as conveying a freehold estate or interest, in the sense that unlike an estate strictly for a term of years the lessee’s right to mine under certain circumstances may continue for an indefinite period. (See Jilek v. Chicago, Wilmington & Franklin Coal Co. (1943), 382 Ill. 241; Daughetee v. Ohio Oil Co. (1914), 263 Ill. 518; Poe v. Ulrey (1908), 233 Ill. 56; see also Fowler v. Marion Pittsburgh Coal Co. (1924), 315 Ill. 312; Dabney v. Edwards (1935), 5 Cal. 2d 1, 53 P.2d 962.) These cited holdings do not support a conclusion, as the defendant contends, that such freehold interests are always subject to a condition subsequent.

As previously described, this mining lease and its habendum clause are typical of those leases which require production within the primary term in order for the lessee’s rights to be extended beyond the initial period or term. In the Williams treatise on oil and gas law these leases are discussed:

“A vast majority of the courts have construed such habendum clauses as conveying an interest subject to a special limitation rather than as conveying an interest subject to a condition, power of termination or right of reentry. *** The consequences of this conceptual classification of the habendum clause as a clause of limitation is that lack of production at the end of the primary period or cessation of production after the expiration of the primary term results in an automatic termination of the lessee’s interest. The language of this clause clearly supports this construction. ***
The primary purpose of the lease clearly is to obtain production. It would, therefore, seem in accord with this objective as embodied in the language of the habendum clause that the duration of the lessee’s interest, after a period of exploration, be limited by the continued use for the purpose for which that interest was created. While the courts may be generally opposed to a construction that results in an automatic termination, the policy behind this rule is not applicable to an oil and gas lease. The special limitation placed on the duration of the lessee’s interest is not a frivolous condition or a whimsical limitation of the use of the interest.” H. Williams, Oil and Gas sec. 604 (1977).

See also Fremont Lumber Co. v. Starrell Petroleum Co. (1961), 228 Or. 180, 364 P.2d 773; King v. Garcia (Tex. Civ. App. 1941), 152 S.W.2d 918, rev’d on other grounds (1942), 139 Tex. 578, 164 S.W.2d 509; Fletcher, Mining Leases and Oil and Gas Leases — Different Breeds, 24 Rocky Mtn. Min. L. Inst. 309 (1978); Ennis, Drafting Leases and Other Documents Relating to Development of Western Coal, 21 Rocky Mtn. Min. L. Inst. 93 (1976).

To counter the claim of an automatic termination of its rights the defendant points out that the agreement contains a forfeiture clause, which states:

“It is further agreed that if at any time Lessee shall be in default in the performance of any of the covenants and agreements herein contained by it to be performed, including default in payment of any sum or sums due for rent or royalty, as aforesaid, and shall continue in such default for the period of thirty (30) days after written demand served upon it by the Lessor, the Lessee shall forfeit all right to mine or otherwise hold and enjoy said leased lands, and after such default and demand and the failure to remedy the same, as aforesaid, the Lessor may enter into the exclusive possession thereof and hold the same free and clear of every and all claims of the Lessee ***.”

Zeigler says this supports its argument that the lease is not subject to a special limitation, that is, to an automatic termination, but instead is subject to a condition subsequent that requires the lessor to first demand performance and reenter in order to terminate the lessee’s rights. The “covenants and agreements” in the lease, to which this forfeiture clause applies in the event of default by the lessee, are the covenants to pay annual rent of $ 1 per acre for the first year of the lease and $2 per acre for the years thereafter; the covenant to pay royalties of $.05 per ton of “good, clean, washed merchantable mine run coal”; and the implied undertaking or covenant to produce. Zeigler contends that the breach of any of these covenants or agreements required at a minimum that the plaintiff, in order to satisfy the condition subsequent, first demand performance before the defendant’s rights were forfeited. Since no such demand or attempt to reenter the property was made by the plaintiffs the defendant contends that the condition subsequent was not met, and the lease did not terminate automatically and thus remained in effect until December of 1976 when all the coal had been removed from the Dethloffs’ land.

This argument fails because, inter alia, it does not even relate to the facts here. First, the covenant to pay rent was never breached during the primary period of the lease. Nor had the defendant violated the covenant to pay royalties, since production did not commence until 6 years after the lease had automatically terminated. Also, the defendant could have satisfied the implied covenant to produce up until the last day of the primary term on June 20, 1970, and thus the Dethloffs would not have been within their rights as lessors to demand performance by production before that date. When the 25 years had elapsed, however, the plaintiffs certainly were no longer required to demand production, since the lease had already terminated without any requirement of notice to the defendant.

The habendum clause containing the described special limitation and the forfeiture provision imposing the condition subsequent were both part of the lease when the agreement was entered into on June 20, 1945. Had production begun within the primary term but been thereafter halted the lease would not have terminated automatically, but, instead, the plaintiffs would have been required under the terms of the lease to demand performance, and if the demand were to no avail, then to reenter the property before the defendant’s rights would have been extinguished. There was no production here in the primary term, and therefore no obligation to demand or reenter was imposed upon the Dethloffs either before or after June 20, 1970.

Also, to support its argument that the lease is subject only to a condition subsequent and not to an automatic termination Zeigler claims that the lease is of the “drill or pay” type. It says this type is in contrast to one that contains an “unless” clause, that is, one in which the lessee’s rights are terminated unless production is begun. A “drill or pay” provision requires the lessee to produce or, as an alternative, to pay rent. A provision of this type allows the lessee to pay rents as a device to keep the lease in effect though the primary period has expired. (See Fremont Lumber Co. v. Starrell Petroleum Co. (1961), 228 Or. 180, 364 P.2d 773; 2 W. Summers, Oil and Gas secs. 331 through 351 (1959); H. Williams, Oil and Gas secs. 601.5, 605 (1977).) A breach of either the provision to drill or to pay rent will not terminate the lease automatically but is considered to add a condition subsequent to the lease, thus requiring the lessor to take affirmative action in order to terminate the lessee’s rights. In the lease here the only covenants pertaining to rent are those requiring payment of the annual rental fee, which is to be credited against any subsequent royalty payments made during that year. This, however, plainly does not allow the payment of rent as a device to extend the duration of the lease beyond the term of 25 years.

Responding to the plaintiffs’ argument that Zeigler had an implied obligation to produce, the defendant says that that obligation was satisfied when mining operations were begun on adjacent lands shortly after the lease was entered into. This met, the defendant says, any requirement that production begin within 25 years. To support this contention the defendant cites language of the habendum clause which grants the lessee a right “to mine and remove all of the coal in and under the above described leased lands and other lands in the vicinity thereof, or included in the block of leased coal hereinafter referred to ***.” (Emphasis added.) By specifically referring to lands in the “vicinity” or in the “block of leased coal,” the defendant argues that once production began on the plaintiffs’ 40 acres or in lands surrounding this property the implied covenant to produce within the term of 25 years would be satisfied. That would permit, it says, the continuation of mining operations for an indefinite time, or, as here, until all the plaintiffs’ coal was mined.

In essence, the defendant seeks to have this clause of the lease regarded as a unitization or pooling agreement. In Southland Royalty Co. v. Humble Oil & Refining Co. (1952), 151 Tex. 324, 328-29, 249 S.W.2d 914, 916, such agreements were described:

“Some of the legal consequences of a unitized lease as between the lessors on the one hand and the lessees on the other, in the absence of express agreement to the contrary, are as follows: the life of the lease is extended as to all included tracts beyond the primary term and for as long as oil, gas or other minerals are produced from any one of the tracts included in the lease; the commencement of a well on any one of the tracts operates to excuse the payment of delay rentals on all included tracts for the period stated in the lease; production from a well on any one of the tracts relieves the obligation to pay delay rentals, during production, on all included tracts; the lessee is relieved of the usual obligation of an implied covenant for reasonable development of each tract separately ***. As between the lessors themselves, each relinquishes his right to have his own tract separately developed ***. In short, the parties by the execution of a unitized lease agree that production of oil or gas from wells located on any tract included in the lease will be regarded during the life of the lease as production from each and all other tracts included therein.” (Emphasis added.)

See also 1 R. Myers, Pooling and Unitization secs. 3.01 through 3.03 (2d ed. 1967); L. Hoffman, Voluntary Pooling and Unitization (1954).

These agreements are found more frequently in oil and gas leases where the risks of drainage and wastes onto contiguous lands are greater, but similar provisions do appear in coal leases. (See G. Stroud, Acquisition of Coal Rights— It’s Different, 21 Rocky Mtn. Min. L. Inst. 587, 600 (1976).) There is, however, no language in the lease to support Zeigler’s assertion that the entire bed of coal in the general area, known as the Murdock Mine, was to be deemed a contiguous unit so that production on one or more parcels of land would satisfy the implied agreement to produce with respect to all of the other leased tracts, regardless of whether or not operations on the other tracts commenced within the primary period.

The only land described in the lease is the plaintiffs’ tract. There are vague references to “block” and “vicinity,” but the agreement has no language making rights and duties under the instrument depend upon mining operations on other tracts leased by Zeigler. Any want of explicitness of language is attributable to the defendant, unquestionably the drafter of the leasing instrument. We also observe that at the time the leasing agreement was executed the defendant’s predecessor in interest had already sunk a mining shaft in a nearby tract of land and thus it appeared that production was imminent. If the parties had intended that removal of coal on other parcels extending over the coal of the Murdock Mines would satisfy production performance owed to the lessors, there would hardly be reason to have provided for a primary term of 25 years in the lease.

The next issue we consider is the question of the proper measure of damages. In addressing this we must first determine whether the trial court erred, as the defendant argues it did, in holding that the defendant was a bad-faith trespasser as a matter of law. The appellate court concluded that this question should have been submitted to the jury and entered a remittitur, it said, to avoid the necessity of remanding for a new trial. To distinguish here between a good- and bad-faith trespasser is important because of the bearing the difference in status has upon the amount of damages to which the plaintiffs are entitled.

When the trial court held that Zeigler was a bad-faith trespasser it had already determined as a matter of law that it was liable to the plaintiffs, based upon the court’s earlier conclusion that the lease had expired by its own terms on June 20, 1970. The next question for the court was to decide the proper measure of damages. Courts have distinguished between innocent and wilful trespass as to damages recoverable. Broadly speaking, most jurisdictions hold that one who in good faith trespasses and converts the coal for his own use may set off certain operating expenses against the value of the coal converted, whereas a wilful trespasser may not and thus becomes liable for the coal at its market value. See Annot., 7 A.L.R. 908 (1920); Annot., 21 A.L.R.2d 380 (1952).

The refusal to allow these setoffs for labor and operational expenses has been held to be punitive in nature. (See 4 American Law of Mining sec. 21.10 (1979) and cases cited therein). Thus, while generally the measure of damages is a jury question, the issue of whether the circumstances in a particular case warrant the imposition of punitive damages is a question of law for the court. (Kelsay v. Motorola, Inc. (1978), 74 Ill. 2d 172, citing Knierim v. Izzo (1961), 22 Ill. 2d 73; Queen v. Behm (1978), 58 Ill. App. 3d 253.) The trial court here did not err in treating the question whether the defendant was a trespasser in good or bad faith as a question of law.

Further, the trial court was correct in its ruling that Zeigler was a wilful trespasser as a matter of law. The record shows that in 1971 the defendant was given actual notice that the Dethloffs were the new owners of the tract in question. Upon tendering the rental payment for 1971 to the plaintiffs it was informed by the Dethloffs that they considered the lease to have expired by its own terms on June 20, 1970, but they also expressed through their attorney a willingness to renegotiate the lease. This and other efforts to renegotiate the terms of a lease were rejected by the defendant. Mr. Dethloff later became aware that Zeigler was to commence operations in the fall of 1975 or later that spring, and he again wrote to the defendant stating that the lease had expired. After production had in fact begun in January of 1976 the plaintiff threatened suit unless operations were halted. Despite the fact that the Dethloffs filed their suit in June of 1976, five months after Zeigler began removing coal from the plaintiffs’ land, the defendant continued to mine until all of the coal in the tract had been removed in December of that year.

At no time did the company attempt to renegotiate the lease, nor did it seek a determination of the parties’ rights under the lease by filing a declaratory judgment or other action. The only stated defense for the company’s going ahead with mining operations despite its actual notice of the plaintiffs’ interest in the land and their position that the lease had expired was a claimed reliance upon legal counsel’s advice that the lease was still in effect. That claim on this record is unpersuasive. For example, it was clear to the defendant that a dispute had formally arisen as to its and the plaintiffs’ rights. The lease provided that in the event of such a dispute the defendant, as the lessee, had authority to withhold payment of rents. Here the defendant did withhold on the ground that there was a dispute. Despite this acknowledgment of a dispute as to its rights, and in disregard of the plaintiffs’ efforts to renegotiate, the defendant went ahead with its mining operations.

Considering our holding that the defendant was correctly judged a wilful trespasser the question next is whether the jury applied the proper measure of damages in awarding the plaintiffs $4,019,867.08. This amount was calculated by multiplying the value of the coal at the mouth of the mine, less lifting costs, by the total tonnage of coal and other materials removed from the plaintiffs’ land between January and December of 1976. This formula, except for the erroneously included factor of “other materials,” represents the measure of damages uniformly applied in coal conversion cases in Illinois prior to this court’s ruling in Lambach v. Town of Mason (1944), 386 Ill. 41. Decisions prior to Lambach held that regardless of whether the defendant was an innocent or wilful trespasser the measure of damages was to be the value of the coal at the mouth of the mine, less the costs of conveyance or lifting to that site. See, e.g., DeGrasse v. H.W. Gossard Co. (1908), 236 Ill. 73; Donovan v. Consolidated Coal Co. (1900), 187 Ill. 28; Illinois & St. Louis Railroad & Coal Co. v. Ogle (1879), 92 Ill. 353.

Relying primarily upon Guffey v. Smith (1915), 237 U.S. 101, 59 L. Ed. 856, 35 S. Ct. 526, this court, in Lambach, held for the first time that a good-faith trespasser should not be held to the same rule on damages as one who wilfully trespasses and converts. The court said that the defendant, who had mistakenly sunk an oil well on the plaintiffs land, should receive “credit for the reasonable cost and expenses of drilling, completing, equipping and operating the well and producing the oil which has been recovered therefrom, less the reasonable value of any of the equipment salvaged.” (386 Ill. 41, 56.) Lambach involved a trespass in good faith and is not relevant here. The court, in a dictum, referred to decisions prohibiting relief to bad-faith trespassers, but we need not here consider the reach of the dictum. The rule that, prior to Lambach, was applied to both innocent and wilful trespassers was applicable here to the bad-faith trespasser, that is, the measure of damages was the value of the coal at the mouth of the mine, less the lifting costs from the coal bed to that location. In other words, the only production expenses allowed the bad-faith trespasser as an offset are the expenses of conveying or “lifting” the mined coal to the mouth of the mine. The other costs of production, such as of drilling and processing the coal, must be borne by the trespasser.

As we stated, the multiplier figure used for the total amount of coal mined erroneously represented not only the coal which was actually sold but also other materials, such as slag, which had no value and were not marketed for sale. The plaintiff would have been entitled to royalty payments only for coal actually sold, and the nonsaleable materials should have been excluded. Of the 238,426 tons of material removed, the record shows that the amount of marketable coal was 215,247.40 tons. Upon recalculation from the evidence in the record, the correct measure of damages was the market value of the coal at the mouth of the mine, i.e., the value received upon sale, at $17.91 per ton, minus lifting costs of $1.05 per ton multiplied by 215,247.40 tons of coal sold, or $3,629,070.12. There is no dispute between the parties as to the figures used in these calculations.

The defendant contends that this measure of damages or compensatory formula for landowners is archaic and does not reflect economic reality. The defendant in effect would have us eliminate the distinction drawn between innocent and wilful trespassers so far as recoverable damages are concerned. We consider that the elimination of this distinction would be unsound. The rationale of refusing to allow a wilful trespasser to deduct costs of production when damages are being assessed is, of course, to discourage misconduct of that character. Courts have considered that the discouragement of these trespasses calls for what amounts to awards for punitive damages. As the court in Athens & Pomeroy Coal & Land Co. v. Tracy (1925), 22 Ohio App. 21, 33-34, 153 N.E. 240, 244, affd (1926), 115 Ohio St. 298, 152 N.E. 64, observed:

“The difference in the measure of damages allowed for an innocent and a wilful conversion lies in public policy. As a strict matter of right inter partes, the just claims of one wronged by an unlawful conversion of his goods are satisfied when such owner is fully compensated therefor. If the owner, however, were to be limited to compensation, there would be no inducement for the *** conversioner to refrain from the trespass. *** [This principle] is nothing more or less than the application of a fixed rule for exemplary damages imposed as a matter of public policy.”

It is this rationale that causes us to reject the defendant’s proposal that damages should be awarded the plaintiffs according to the royalty method of valuation. Under this formulation the plaintiffs would be entitled to a royalty payment of $.15 per ton, which represents, the defendant says, the current price being paid in the area by coal companies in leasing agreements. The Dethloffs’ total compensation or damages according to this standard would be $32,287.11. To apply this artificial standard arbitrarily would obviously allow the defendant to profit by its own wrongdoing. We observe that decisions where this measure was applied involved innocent and not bad-faith trespassers. See, e.g., McIntosh v. Ropp (1912), 233 Pa. 497, 82 A. 949; New Domain Oil & Gas Co. v. McKinney (1920), 188 Ky. 183, 221 S.W. 245.

There is no merit to the defendant’s contention that the plaintiffs were estopped from bringing their action because they failed to take any steps to prevent the defendant from commencing operations. The Dethloffs’ cause of action for trespass and conversion did not arise until January of 1976, when production operations began. Suit was brought five months later. The fact that Zeigler tendered a rental payment in October of 1971 did not require the plaintiffs to file suit, nor did this attempted payment mean that mining operations were imminent, which operations in fact did not begin until more than four years later. Too, the contention that the plaintiffs’ acceptance of checks representing royalty payments effected an accord and satisfaction does not persuade. None of the checks were cashed; they were retained in a safety deposit box by the plaintiffs only as evidence of the total number of tons of coal mined.

Also without substance is the defendant’s claim that the trial court’s denial of its motion for a change of venue was improper. The motion was presented when the court had already held in favor of the plaintiffs on count III, ruling that the lease had expired by its own terms. Since the trial court had ruled on a substantial issue prior to the motion, its denial was proper. See Gilliland v. Board of Education (1977), 67 Ill. 2d 143; Ill. Rev. Stat. 1979, ch. 110, par. 503.

Turning to a contention of the plaintiffs, we hold that the trial court was correct in denying their claim that punitive damages were warranted. As we have observed above, the harsh rule on damages applicable to a wilful trespasser and converter of coal is by its very nature punitive. The plaintiffs were awarded damages far beyond what they would have received through royalty payments, and the defendant should not be liable for what would be in effect punitive damages upon punitive damages.

Under the disposition we make it will not be necessary for us to consider the propriety of the appellate court’s use of the remittitur. See Ill. Rev. Stat. 1979, ch. 110A, par. 366; see generally C. McCormick, Damages, ch. 2, sec. 19 (1935).

For the reasons given, the judgments of the appellate and circuit courts are affirmed as to liability and reversed as to damages. The cause is remanded to the circuit court of Douglas County with directions to amend its judgment to reflect damages in the amount of $3,629,070.12.

Appellate court affirmed in part and reversed in part; circuit court affirmed in part and reversed in part; cause remanded, with directions.

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

MR. JUSTICE UNDERWOOD,

concurring in part and dissenting in part:

I agree that the lease had terminated. In my opinion, however, the appellate court correctly held the trial court should have submitted to the jury the question whether defendant was a good- or bad-faith trespasser. The company had not acted completely arbitrarily in proceeding to mine the coal; it had consulted both its house counsel and independent counsel, and both had advised that the lease was still in effect; defendant apparently knew that similar suits against it by other plaintiffs in the same county had been dismissed by the plaintiffs; and the company had reached the point in its mining operations where it either had to mine plaintiff’s coal or permanently bypass it. In these circumstances, I simply cannot say that defendant’s bad faith has been so conclusively demonstrated that the issue should have been taken from the jury.

I agree, too, with the remedy fashioned by the appellate court in the form of a remittitur in lieu of a new trial. That remittitur left plaintiffs with a judgment for the total profit realized by the company and was in an amount approximately 50 times greater than the new lease, which plaintiffs were apparently willing to negotiate, would have produced.

MR. JUSTICE RYAN joins in this partial concurrence and partial dissent.