author: JUSTICE GOLDENHERSH JUSTICE SIMON,

text:
    (No. 55685.
    THE CITY OF STREATOR et al., Appellants, v. THE INDUSTRIAL COMMISSION (Patricia Lamagno et al., Appellees).

      Opinion filed October 22, 1982.

      RYAN, C.J., took no part.
    SIMON, J., specially concurring.
    Matthews, Dean, Eichmeier, Simantz & Hem, P.C., of Aurora (Roger W. Eichmeier and Stuart L. Whitt, of counsel), for appellants.

      Peter F. Ferracuti & Associates, of Ottawa (Stephen J. Heine, of counsel), for appellees.
   JUSTICE GOLDENHERSH

delivered the opinion of the court:

An arbitrator for the Industrial Commission found that while employed by respondent, the city of Streator, Ronald Lamagno sustained accidental injuries which caused his death. He awarded workmen’s compensation to petitioners, Patricia Lamagno, decedent’s widow, and to Carl Lamagno, decedent’s father, on behalf of decedent’s five minor children by prior marriages. The petitioner-widow was awarded compensation in the amount of $112 per week for 1,248 weeks and $44 for one week. The arbitrator, finding that decedent was under a legal obligation to support the five minor children he left surviving him, awarded them the maximum compensation for a fatal injury allowable under the Workmen’s Compensation Act. (Ill. Rev. Stat. 1977, ch. 48, par. 138.8.) On review the Industrial Commission affirmed the award. On certiorari the circuit court of La Salle County confirmed, and respondent appealed pursuant to Supreme Court Rule 302(a). 73 Ill. 2d R. 302(a).

It was stipulated that on May 14, 1978, decedent, while in the course of his employment as a fireman, suffered an accidental injury to his back. The testimony shows that he was hospitalized from that date until June 2, 1978. He continued to seek and receive medical care over the following weeks and was last examined by a physician on July 6, 1978. On July 15, 1978, the body of decedent was found lying in his automobile, which was parked in the garage of his home. He had apparently died from carbon-monoxide poisoning, and his death was considered a suicide. Decedent had not returned to work since his injury on May 14, 1978.

At the hearing before the arbitrator, petitioners offered into evidence the depositions of two physicians taken by respondent. The deposition of Dr. James Gottemoller, decedent’s family physician, was taken August 9, 1979. He stated that on May 5, 1978, he admitted decedent to St. Mary’s Hospital in Streator for a condition he diagnosed as anxiety neurosis with hyperventilation. Decedent was discharged May 7, 1978. Dr. Gottemoller testified that his medical history showed that approximately eight or nine years prior to this incident decedent had marital problems, and during that time was “in the hospital a couple of times under similar circumstances.” Dr. Gottemoller’s next contact with decedent was on May 14, 1978, at which time he was admitted to the emergency room at St. Mary’s Hospital. Dr. Gottemoller examined decedent the next day at the hospital, at which time he was complaining of severe back pain suffered as the result of trying to open a fire hydrant the previous day. Dr. Gottemoller performed a straight-leg-raising test on decedent and found that his responses to the test were exaggerated. At the time of the examination, Dr. Gottemoller noted in his records that decedent had historically been a high-strung, emotional, nervous individual. Dr. Gottemoller concluded from his examination that decedent had suffered a back injury, the nature, cause and extent undetermined at that point in time. On May 16, 1978, Dr. Gottemoller referred decedent for treatment to Dr. Dennis Garwacki, a neurologist, and decedent was transferred to St. Francis Hospital in Peoria. Decedent was transferred back to St. Mary’s Hospital on May 18, 1978, where he remained hospitalized until his discharge on June 2, 1978. Dr. Gottemoller stated that during this time, possibly with the exception of May 18, he was in contact with decedent every day. Following decedent’s discharge, Dr. Gottemoller again examined him on June 13, 1978, at which time he complained of stiffness and mild pain. On June 21, 1978, Dr. Gottemoller again saw decedent, who indicated that he was still having some back pain and tired easily. Dr. Gottemoller noted that decedent was gaining weight and recommended that he commence exercises, including walking and jogging on a daily basis. On June 22, 1978, decedent complained of a .sore left rib. In his records Dr. Gottemoller noted “reassurance,” which, according to Dr. Gottemoller, indicated that the patient needed reassuring that there was no difficulty such as heart or lung problems. On June 28, 1978, Dr. Gottemoller again saw decedent, at which time decedent said that he was stiff and that he thought the exercise was making him worse, but assured Dr. Gottemoller that he had been exercising daily. At this time decedent asked to be referred to Dr. Kenneth Bussey, an orthopedic surgeon at the Christie Clinic in Champaign. Dr. Gottemoller made the referral and did not see decedent again. During direct examination Dr. Gottemoller was asked a hypothetical question as to whether, based on a reasonable degree of medical certainty, he had an opinion whether or not the injury of May 14, 1978, would have or could have caused a condition in decedent which would cause him to commit suicide. After indicating that he had no such opinion, the doctor stated, “Maybe he committed suicide because his mother didn’t like him. Maybe he committed suicide because he had the backache. Maybe he committed suicide because he had a fight with his parish priest. Maybe he committed suicide because of his marital difficulties. I do not know.” On cross-examination Dr. Gottemoller indicated that if decedent had experienced severe pain, the pain could have contributed to his suicide.

Petitioners also offered into evidence the deposition of Dr. Dennis Garwacki, a neurologist, taken on July 18, 1979. Dr. Garwacki examined decedent at St. Francis Hospital in Peoria on May 16, 1978, and found muscle spasms of decedent’s lumbar muscles. Dr. Garwacki found that decedent was overreactive in his responses to minimal movement and stated that reclining seemed to cause him severe pain. Overall, decedent complained of severe lumbar pain, and Dr. Garwacki’s impression was that decedent suffered acute lumbosacral strain. Based on this diagnosis Dr. Garwacki prescribed a conservative course of treatment, including pain medication, muscle relaxants, and physical therapy. When asked a hypothetical question similar to that asked of Dr. Gottemoller concerning the cause of suicide, Dr. Garwacki indicated that he could express no such opinion. Dr. Garwacki stated that decedent had tended to be very emotional in his outbursts and considered this was important in order to understand the personality of decedent. Dr. Garwacki stated that due to the wishes of decedent and his family, decedent was transferred back to St. Mary’s Hospital on May 18, 1978. Dr. Garwacki had no further contact with him.

Petitioners also offered into evidence the deposition of Dr. Kenneth Bussey, taken by petitioner on June 20, 1979. Dr. Bussey, an orthopedic surgeon, examined decedent at the Christie Clinic in Champaign on July 6, 1978, at which time he complained of pain radiating down into his left leg to the knee when he was in a sitting position. He complained that this pain increased if he coughed or sneezed or rode in an automobile. During this examination Dr. Bussey observed that decedent experienced some mild pain when bending forward and laterally. An examination of X-ray films taken of the lumbosacral region of decedent’s spine showed a spondylolysis, a defect in a portion of the vertebrae, which the doctor considered developmental in origin. Dr. Bussey stated the significance of the finding of spondylolysis was that a patient suffering from this defect was more likely to rupture a disk than someone in the normal population. He stated that the injury of May 14 could have aggravated the spondylolysis and said that he could not rule out definitely the presence of a herniated disk. Dr. Bussey recommended that decedent be fitted with a lumbosacral corset and return for consultation in one month. Dr. Bussey never again saw decedent. No hypothetical question concerning the cause of suicide was posed to Dr. Bussey.

Patricia Lamagno, decedent’s widow, testified that she and decedent were married on May 8, 1974. Mrs. Lamagno described decedent’s personality prior to May 14, 1978, as very outgoing and his condition of health prior to that time as excellent. She stated that prior to May 14, 1978, she did not notice that decedent had. any complaints with respect to his back. Mrs. Lamagno testified that, after the back injury suffered on May 14, decedent complained constantly about the pain in his back and that decedent’s physical activity decreased. She said that he could not sit and that he basically remained lying down or in a standing position. Mrs. Lamagno testified that, approximately a week and a half to two weeks prior to decedent’s death, she and decedent separated and she moved out of the family residence. She stated that she had seen an attorney about getting a separation from decedent. She said that although she and decedent were living separately they were living “back and forth” between the two residences. On July 14, 1978, Mrs. Lamagno returned to the family residence to prepare to attend with decedent the wedding and reception of his sister, which were to take place that evening. That, afternoon Mrs. Lamagno and decedent had sexual intercourse. Mrs. Lamagno attended the wedding and reception with decedent, and during the course of the evening noticed that decedent was not very talkative or active, and that he had only one or two alcoholic drinks. After the reception Mrs. Lamagno drove decedent and his children to the family residence and then drove herself and her daughter to their residence. Decedent later stopped by her residence to pick up the clothes of one of his daughters. The next morning, July 15, 1978, Mrs. Lamagno went to the family residence and could not find decedent in the house. She then went to the garage and found decedent’s body lying in the front seat of his automobile. Decedent was dressed in the same suit he had worn to the wedding. Mrs. Lamagno went in the house and called Carl Lamagno, decedent’s father, and an ambulance. Mrs. Lamagno then went to decedent’s bedroom and on the dresser found two notes allegedly written by decedent, one of which she destroyed, and the other was given to the La Salle County coroner. Mrs. Lamagno stated the notes had not been on the dresser when she was in the bedroom the previous day. Over respondent’s objection the remaining note was admitted into evidence. The note reads as follows:

“Dear Pat
I love you and Tonya and the other kids. My parents and Carl and Art. I hope no one will be mad at me. But do [sic] to my pains and back trouble my ups and downs there is no way to go on. I really love everybody and I hope they will forgive me. The 74 Cad is yours and my pension from the firehouse.
I hope you will help take care of everything seen [sic] you know where everything is. I will always love you deeply and all of the others to [sic].
Love you all.
Ronnie”

No medical testimony was presented concerning the cause of decedent’s death, but it was stipulated that his body had an extremely high level of carbon monoxide.

The arbitrator found that decedent sustained accidental injuries arising out of and in the course of his employment with respondent on July 15, 1978, and on review the decision of the arbitrator was affirmed by the Industrial Commission. The circuit court of La Salle County found that “the suicide of Ronald Lamagno, 15 July, 1978, was not an intervening cause between the date of the injury of May 14, 1978, and his death, but was rather an intervening act; an intervening cause being one occurring entirely independent of the prior cause. The suicide was part of an unbroken chain of events from the injury to the death; therefore the suicide was an accidental injury within the meaning of the Workmen’s Compensation Act of the State of Illinois compensable thereunder. That the findings of the Industrial Commission and the arbitrator, as stated above, are not contrary to the manifest weight of the evidence and that the transcript clearly shows evidence from which said decision would reasonably be inferred and concluded.” The circuit court confirmed the award, and respondent appealed.

Respondent contends that because there was no evidence of any causal connection between decedent’s back injury and his subsequent suicide the Industrial Commission’s decision that decedent’s suicide arose out of and in the course of his employment was both contrary to the manifest weight of the evidence and erroneous as a matter of law. Relying primarily on the decisions in County of Cook v. Industrial Com. (1981), 87 Ill. 2d 204, and Harper v. Industrial Com. (1962), 24 Ill. 2d 103, respondent submits that it was the claimants’ burden to prove by competent evidence that without the compensable back injury there would have been no suicide. Respondent contends that unlike the situations in County of Cook and Harper there was no evidence here that as a result of the injury the decedent suffered great pain and severe chronic depression sufficient to drive him to suicide. Respondent points out that decedent received conservative treatment for his back injury and argues that the evidence shows that the treatment reduced his level of pain. Respondent emphasizes that' the three physicians who treated decedent for his back condition were unable to express any opinion based on a reasonable degree of medical certainty that his back injury of May 14, 1978, had any causal connection with his subsequent suicide. Respondent notes decedent’s early medical problems when confronted with marital discord and contends that the fact that decedent and his wife had sexual intercourse prior to attending the wedding and reception on July 14, 1978, and their dancing, drinking and socializing at the reception contradict a finding that decedent was suffering from great pain and severe chronic depression sufficient to drive him to take his own life. Respondent also argues that the alleged suicide note should have been excluded from evidence as inadmissible hearsay. Respondent points out that the note was undated and found on the dresser in decedent’s upstairs bedroom rather than in close proximity to his body, which was discovered in the garage. Respondent also complains that the purported suicide note was but one of two notes discovered on the dresser, and that while this one was delivered to the coroner, the other was destroyed by Mrs. Lamagno. Respondent further contends that because there was an absence of expert medical testimony linking decedent’s back injury to his suicide the determination of causation was not one of fact but one of law. Respondent argues that because petitioners failed to provide the Industrial Commission with such expert testimony, the Commission’s finding of a causal connection is erroneous as a matter of law.

Petitioners contend that the decision of the Industrial Commission is supported by the manifest weight of the evidence and is consistent with the decisions in County of Cook and Harper. Petitioners assert that they need only show that the work-related injury was a causative factor in the subsequent suicide and need not prove that the injury was the sole cause or even the principal cause of the suicide. (Leason v. Industrial Com. (1973), 55 Ill. 2d 486; Gus T. Handge & Son Painting Co. v. Industrial Com. (1965), 33 Ill. 2d 201.) Petitioners submit that the facts surrounding the reason for decedent’s suicide, including the extent of his pain from the back injury and the extent to which his marital difficulties contributed to his suicide, were disputed by the parties, and the question of causation was one of fact. Petitioners point out that the Commission had before it the objective findings of the treating doctors and that these objective findings, along with other evidence presented, were sufficient to support the determination that decedent’s reaction to pain from his back injury drove him to suicide. Petitioners contend that it would be unreasonable to require the presentation of psychiatric testimony to show a connection between the back injury and the suicide where an insubstantial period of time passed between the injury and death, and where the medical treatment sought by decedent was for the pain suffered as the result of his back injury, not his mental condition. As to the evidence presented concerning decedent’s marital difficulties and prior medical problems, petitioners point out that decedent had no history of any prior suicide attempt and that it was only after the back injury that decedent continually complained of pain and underwent a personality change. Petitioners also argue that the note written by decedent was clearly admissible into evidence under the state-of-mind exception to the hearsay rule.

The determination of whether decedent’s suicide arose out of and in the course of his employment was a question of fact for the Industrial Commission. Although the medical testimony presented was not conflicting, the inferences to be drawn from that testimony, the credibility of the witnesses, and the conclusions to be reached from an evaluation of the evidence are matters within the province of the Industrial Commission, and the Commission’s decision will not be set aside unless contrary to the manifest weight of the evidence. (Seiber v. Industrial Com. (1980), 82 Ill. 2d 87, 97; Yost v. Industrial Com. (1979), 76 Ill. 2d 548, 551; Long v. Industrial Com. (1979), 76 Ill. 2d 561, 565.) Petitioners had the burden to prove by a preponderance of competent evidence that decedent’s injury was a causative factor of his suicide. (Parsons v. Industrial Com. (1981), 84 Ill. 2d 346, 349; O’Dette v. Industrial Com. (1980), 79 Ill. 2d 249, 253.) While the injury need not have been the sole or principal cause of the suicide (Westinghouse Electric Co. v. Industrial Com. (1976), 64 Ill. 2d 244, 249; Leason v. Industrial Com. (1973), 55 Ill. 2d 486, 493; Gus T. Handge & Son Painting Co. v. Industrial Com. (1965), 33 Ill. 2d 201, 205), there must be evidence from which the inference can be drawn that the injury was a causative factor. (County of Cook v. Industrial Com. (1981), 87 Ill. 2d 204; Harper v. Industrial Com. (1962), 24 Ill. 2d 103; Annot., 15 A.L.R.3d 616, sec. 5, at 631 (1967); Annot., 15 A.L.R.3d 17, sec. 5 (1981 Supp.), and cases collected therein.) County of Cook and Harper do not require that the precise mental state of decedent be shown, and medical testimony is not required to establish causation. Westinghouse Electric Co. v. Industrial Com. (1976), 64 Ill. 2d 244, 250; Union Starch & Refining Co. v. Industrial Com. (1967), 37 Ill. 2d 139, 144.

The evidence shows that following the injury decedent’s complaints of pain were persistent and he regularly sought medical treatment for this pain. Prior to the injury of May 14, 1978, there is no evidence of preexisting back pain. It is well recognized that an employer takes his employees as he finds them (County of Cook v. Industrial Com. (1977), 69 Ill. 2d 10, 17), and thus the question here is not whether the injury would cause any other employee similar pain but whether the pain experienced by decedent as a result of the back injury drove him to commit suicide. The objective findings of the physicians treating decedent and the testimony of others in a position to observe him indicate that decedent believed he was in considerable pain from the time of his injury until his death. Following the injury he did not return to work and he became less active. While decedent’s marital difficulties had in the past affected his mental and physical well-being it was not until after the back injury that decedent made any attempt to take his life.

In support of its contention that the suicide note was improperly admitted into evidence, respondent argues that this court has ruled as a matter of law that statements of an injured employee, made prior to his death, must be excluded from evidence as inadmissible hearsay, the sole exception to this rule being declarations made by the employee to his attending physician. Petitioners submit that the evidence rules applicable to proceedings before the Industrial Commission are the same as those which generally prevail in civil cases, and contend that decedent’s statement that he could not go on due to his pains and back trouble expressed his then-existing state of mind with respect to pain and bodily health, and thus was admissible into evidence under the state-of-mind exception to the hearsay rule.

The hearsay rule is not absolute, and many exceptions are made based on necessity (see 5 Wigmore, Evidence sec. 1421 (Chadbourn rev. ed. 1974)) and circumstantial probability of trustworthiness (see 5 Wigmore, Evidence sec. 1422 (Chadbourn rev. ed. 1974)). It has long been the rule that an individual’s declarations as to his state of mind are admissible to show that state of mind and such other things as proof of a state of mind tends to establish. (La Salle County Carbon Coal Co. v. Industrial Com. (1934), 356 Ill. 421.) It is difficult to perceive that a note found under the circumstances shown here would not reflect the true state of mind and feelings of the decedent.

Asher Brothers Amusement Enterprises v. Industrial Com. (1924), 311 Ill. 258, upon which respondent relies, is clearly distinguishable. There the statements attributed to the decedent were that “his leg was sore,” “that he bumped his leg on a seat in the aisle,” and that “he bumped the same sore spot that same day.” These statements purport to state the facts relevant to an occurrence and are not descriptive of a state of mind. The arbitrator did not err in admitting the note into evidence.

For the reasons stated the judgment of the circuit court of La Salle County is affirmed.

Judgment affirmed.

CHIEF JUSTICE RYAN took no part in the consideration or decision of this case.

JUSTICE SIMON,

specially concurring:

I am troubled by the majority’s lack of attention to what I consider the basic issue in this case: whether dependents of a suicide victim must, in order to collect worker’s compensation, show more than that the suicide would not have occurred but for an accident arising out of and in the course of his employment. I believe that Harper v. Industrial Com. (1962), 24 Ill. 2d 103, and County of Cook v. Industrial Com. (1981), 87 Ill. 2d 204, require more. They require the claimant to have lost his ability to rationally choose between life and death.

I do not believe that a person injured on the job should be permitted to rationally weigh the costs and benefits of a life of pain over death, choose death, and expect his dependents to be compensated for this. Bare causality is not enough under such circumstances. A man murdered by a criminal on the street on the way to visit his doctor is not covered by worker’s compensation just because he would not have been going there if it had not been for a work-related injury. A man who is murdered by his wife because she does not like his constant complaining over the pain he is suffering as a result of a work-related injury would not be covered. Even less would one expect a worker to be who, with his wits about him, takes his own life. He made the choice knowing the consequences. He is responsible for his own conduct.

Both Harper and County of Cook go to great lengths to describe the emotional disorientation suffered by their respective decedents. In Harper, a psychiatrist testified that the decedent’s back injury caused a definite psychiatric illness with a probable diagnosis of severe chronic depression which later led to a lack of confidence in ability to perform in life situations. In County of Cook, the decedent’s pain prevented her from eating and sleeping. She cried often. She told her psychiatrist that she was angry with her husband, employer, and doctors because they did not believe she was in pain. He diagnosed her condition as severe chronic depression.

Professor Larson divides the States into two categories with regard to the compensability of suicide. Both sets of States, however, use a rule that requires the decedent’s suicide to be the result of some mental disturbance. He stated, “Suicide under the majority rule [under which he includes Illinois based upon Harper v. Industrial Commission] is compensable if the injury produces mental derangement and the mental derangement produces suicide. The minority rule is that suicide is not compensable unless [it is a] direct result of a work-connected injury [and] insanity of such severity as to cause the victim to take his own life through an uncontrollable impulse or in a delirium of frenzy without conscious volition to produce death.” (1A Larson, The Law of Workmen’s Compensation sec. 36.00 (1979).) he goes on to say that under the majority rule there remains some room for uncertainty on precisely how deranged the decedent’s mind must be. (See Soileau v. Travelers Insurance Co. (La. App. 1967), 198 So. 2d 543 (“despondency” is not sufficient); Franzoni v. Loew’s Theatre & Realty Corp. (1964), 22 App. Div. 2d 741, 253 N.Y.S.2d 505 (depression is not enough).) But the possibility of recovery without any lapse in rationality has apparently never been acknowledged by any court.

While I acknowledge that it is not always necessary to have expert testimony to establish a breakdown in a decedent’s capacity for rational thought, some evidence of mental impairment is necessary. I am confident that the Industrial Commission was aware of this requirement and based its conclusion on a finding in this case that there was mental impairment which resulted from the injury. Although the evidence on this point is not overwhelming, it is still sufficient so that such a finding would not be against the manifest weight of the evidence. I therefore concur in the result which the court has reached.


source: Caselaw Access Project

author: JUSTICE CLARK

license: Public Domain

text:
    (No. 55877.
    ROHN HEBEL, Appellee, v. SHERMAN EQUIPMENT, Appellant.

      Opinion filed October 22, 1982.

      Wildman, Harrold, Allen & Dixon, of Chicago (Howard T. Brinton, William J. Rogers, and Ruth E. Van Demark, of counsel), for appellant.
    Braun, Lynch, Smith & Strobel, Ltd., of Chicago (James W. Ford, of counsel), for appellee.
   JUSTICE CLARK

delivered the opinion of the court:

In this products liability action, summary judgment for the defendant, Sherman Equipment (Sherman), was entered by the circuit court of Cook County. A divided appellate court reversed. (100 Ill. App. 3d 1054.) We granted Sherman’s petition for leave to appeal, and we now reverse the appellate court.

The following is a summary of the salient facts. On February 22, 1976, plaintiff, Rohn Hebei, then 16 years old, was working at the Glenbrook Standard Service Station and Car Wash in Northbrook -when his foot was caught in the car conveyor and mangled by the convey- or’s drive chain. Hebei’s amended complaint, alleging that the “car washing machine” at the Glenbrook Standard Station had been designed, manufactured and sold by Sherman and that it was in a defective and unreasonably dangerous condition, was filed on July 31,1978.

The Glenbrook Standard Station purchased its car- ' washing equipment in 1971 from Haverberg Auto Laundry Equipment Company in Chicago. Haverberg (which is sometimes referred to in the pleadings by its trade name, Flapan Car Wash Equipment Company) is primarily engaged in selling, installing and servicing automatic car-washing equipment, but it also manufactures some car-washing equipment itself. Haverberg is a distributor for Sherman Industries, Inc. (the actual corporate name of Sherman Equipment), a New Jersey-based manufacturer of automatic car-washing machinery. Apart from the conveyor, nearly all of the equipment purchased by Glenbrook from Haverberg was manufactured by Sherman. This included a large washer, shaped like an inverted “U,” with enormous brushes, of the kind commonly seen at a tunnel-type car wash, as well as a similarly shaped rinser, dryer, and “wax actuator.” Each of these machines prominently displayed Sherman’s trade name and rather distinctive logo (“Sherman Supersonic Systems, Palmyra, N.J.”). The conveyor — an 80-foot-long track with rollers that emerge from beneath the floor to push automobiles along under the various washing and rinsing units — bore no identifying name or serial number. Hebei admits in his brief that the conveyor was designed and manufactured by Haverberg, not by Sherman.

Sherman moved for summary judgment in the circuit court on the ground that it did not manufacture, design or sell the allegedly defective conveyor that injured the plaintiff. It supported the motion with the affidavits of employees of Sherman and Haverberg stating that Haverberg, not Sherman, designed and manufactured the conveyor. Hebei’s response to the motion asserted that Sherman “had held itself out to be the manufacturer of the automatic car washing system” at the Glen-brook Standard Station, including the defective conveyor which was a “component of the system,” and that Sherman was therefore liable as though it were the actual manufacturer. The appellate court, in reversing the summary judgment, found that a factual issue existed as to whether Sherman held itself out as the manufacturer of the conveyor, apparently on the basis of evidence from which the court thought it could be inferred that Sherman had authorized Haverberg’s use of its name in advertising the conveyor. 100 Ill. App. 3d 1054, 1059-60.

Decision of this case requires us first to examine the “holding out” or “apparent manufacturer” doctrine. The imposition of tort liability based on a defendant’s status as the “apparent manufacturer” of a harm-causing product predates by some years the advent of the doctrine of strict liability in tort of suppliers of unreasonably unsafe chattels. The rule evolved in cases in which a retailer or distributor of a product manufactured by another was found to have held itself out to the public as the product’s manufacturer, and therefore to be subject to the same liability as the actual manufacturer. (2 Hursh & Bailey, American Law of Products Liability sec. 7:2 (2d ed. 1974), and cases there cited.) The rationale for imposing liability on the apparent manufacturer was a species of estoppel: the vendor who, through its labeling or advertising of a product, caused the public to believe that it was the manufacturer and to buy the product in reliance on the vendor’s reputation and care in making it, was held to have assumed the obligations of a manufacturer and to be estopped to deny its identity as the manufacturer. (Davidson v. Montgomery Ward & Co. (1912), 171 Ill. App. 355, 367, 369; Burkhardt v. Armour & Co. (1932), 115 Conn. 249, 264-65, 161 A. 385, 391.) The Restatement (Second) of Torts formulation of the rule states: “One who puts out as his own product a chattel manufactured by another is subject to the same liability as though he were its manufacturer.” (Restatement (Second) of Torts sec. 400 (1965).) According to the Restatement comment: “The actor puts out a chattel as his own product in two types of cases. The first is where the actor appears to be the manufacturer of the chattel. The second is where the chattel appears to have been made particularly for the actor. In the first type of case the actor frequently causes the chattel to be used in reliance upon his care in making it; in the second, he frequently causes the chattel to be used in reliance upon a belief that he has required it to be made properly for him and that the actor’s reputation is an assurance to the user of the quality of the product. *** Thus, one puts out a chattel as his own product when he puts it out under his name or affixes to it his trade name or trademark. When such identification is referred to on the label as an indication of the quality or wholesomeness of the chattel, there is an added emphasis that the user can rely upon the reputation of the person so identified.” (Restatement (Second) of Torts sec. 400, comment d (1965).) Another justification sometimes given for the rule is that where a defendant puts out a product as its own, the purchaser has no means of ascertaining the identity of the true manufacturer, and it is thus fair to impose liability on the party whose actions effectively conceal the true manufacturer’s identity. Burkhardt v. Armour & Co. (1932), 115 Conn. 249, 264-65, 161 A. 385, 391; Dudley Sports Co. v. Schmitt (1972), 151 Ind. App. 217, 224-25, 279 N.E.2d 266, 273.

“Holding out” cases usually involve either (a) a defendant’s labeling or affixing to the product its own name, trade name, or trademark; or (b) advertising identifying the defendant as the maker of the product. Representative examples are: Lill v. Murphy Door Bed Co. (1937), 290 Ill. App. 328 (defendant sold the “Murphy In-A-Dor Bed” to building owner, who installed it in plaintiff’s apartment; bed was made by Simmons Company, but defendant’s name was engraved on bed’s metal castings; further, defendant’s catalog and brochures declared that it was the maker of the bed, that the bed was sturdy and the castings were of “iron that does not break”; defendant was liable for negligence in manufacture, leading to plaintiff’s injury when bed frame broke); Davidson v. Montgomery Ward & Co. (1912), 171 Ill. App. 355 (plaintiff was injured when balance wheel on wood-saw frame, ordered from defendant’s catalog, burst; catalog stated that defendant was a manufacturer, that implements were shipped directly from the factory, and that all implements were “thoroughly tested” and known by defendant’s reputation to be “the best made”; saw frame also bore defendant’s initials, and there was no indication that frame had been made by another; held, defendant intended public to believe it was manufacturer of the saw frame and to act on such belief, and therefore held to assume all obligations and responsibilities of a manufacturer); Sears, Roebuck & Co. v. Morris (1961), 273 Ala. 218, 136 So. 2d 883 (retailer which sold a boat trailer under its trade name “Elgin” had a manufacturer’s liability for injury when metal wheel disintegrated as plaintiff was inflating tire); Burckhardt v. Armour & Co. (1932), 115 Conn. 249, 161 A. 385 (plaintiff sustained injury resulting in death from jagged piece of tin in canned corned beef; product had been packed by Argentine corporation under agreement with defendant distributor; legend on label, “Armour Veribest Products,” was exclusive trademark of defendant, and label did not identify actual packer, so that reasonable purchaser would infer that defendant was packer; defendant, by selling product under its own name, held to have put it out as its own). See cases cited 2 Hursh & Bailey, American Law of Products Liability sec. 7:2 (2d ed. 1974); Annot., 51 A.L.R.3d 1344, 1361-63 (1973).

It is noteworthy that the apparent-manufacturer doctrine was developed in the context of suits by consumers against sellers of dangerous chattels. Nearly all the cases imposing liability on this basis involve defendants who were retailers or distributors. The aim of the doctrine clearly was to provide a remedy for consumers injured by unsafe products. Today, of course, this objective is achieved by the doctrine of strict products liability; all sellers of dangerously defective chattels are now strictly liable to injured purchasers — that is, they have the same liability as the manufacturer — without regard to whether or not they held themselves out to the public as the maker of the product. (Dunham v. Vaughan & Bushnell Manufacturing Co. (1969), 42 Ill. 2d 339.) The function of the apparent-manufacturer doctrine has, as it were, been absorbed by the theory of sellers’ strict liability in tort for injuries caused by unreasonably unsafe products.

Two questions thus arise: first, whether anything remains of the apparent-manufacturer rule; and, second, whether the rule applies to a defendant who, like Sherman, neither manufactured nor sold the product that injured the plaintiff. The doctrine, as noted above, was fashioned with reference to sellers; we have found only two cases in which it was applied to a nonseller. (Rubbo v. Hughes Provision Co. (1941), 138 Ohio St. 178, 34 N.E.2d 202; Gizzi v. Texaco, Inc. (3d Cir. 1971), 437 F.2d 308; see 2 Hursh & Bailey, American Law of Products Liability sec. 11:4, at 500-01 (2d ed. 1974).) Even if we assume, however, that the apparent-manufacturer doctrine is properly applicable to Sherman, we find that the pleadings, depositions, affidavits and other materials introduced on the motion for summary judgment, considered in the light most favorable to the plaintiff, fail to reveal facts that amount to Sherman’s holding itself out to the public as the manufacturer of Haverberg’s conveyor.

It is undisputed that the greater part of the car-washing equipment in use at the Glenbrook Standard Station was manufactured by Sherman and was labeled with Sherman’s name and logo, and that the allegedly defective conveyor, manufactured by Haverberg, bore no identifying insignia. The appellate court found that the reasonable person in plaintiff’s position would view the entire assemblage at the Glenbrook car wash as one “system” and would infer that Sherman manufactured all of its “component parts,” including the conveyor, and that this inference amounts to Sherman’s holding itself out as the conveyor’s manufacturer. We think that this belief, reasonable or not, has no bearing on the issue. The primary rationale for imposing liability on the apparent manufacturer of a defective product is that it has induced the purchasing public to believe that it is the actual manufacturer, and to act on this belief — that is, to purchase the product in reliance on the apparent manufacturer’s reputation and skill in making it. (Restatement (Second) of Torts sec. 400, comment d (1965); Davidson v. Montgomery Ward & Co. (1912), 171 Ill. App. 355, 367; Carney v. Sears, Roebuck & Co. (4th Cir. 1962), 309 F.2d 300, 304-05 (Virginia law).) It is thus apparent that whether a holding out has occurred must be judged from the viewpoint of the purchasing public, and in light of circumstances as of the time of purchase. It is clear, and plaintiff does not seriously dispute, that the various car-washing machines made by Sherman, as well as the conveyor made by Haverberg, were individual pieces of equipment which were purchased and sold as separate items, and apparently also were operated independently of one another. That a casual observer, viewing the machines after their purchase and installation, might think otherwise does not mean that a reasonable purchaser of car-washing equipment, such as Glenbrook, would rely on such an impression. This is not a case in which the defendant manufactures and sells a single machine that contains a defective component part not manufactured by it (compare Penn v. Inferno Manufacturing Corp. (La. App. 1967), 199 So. 2d 210 (defendant, manufacturer of fluid, level gauge, had manufacturer’s liability for injuries caused by explosion of sight glass; though sight glass manufactured by another, defendant held itself out as manufacturer by labeling gauge with its name and also labeling box in which separate glasses were shipped, and failing to indicate that glass had been manufactured by another)). The mere fact that Sherman’s machines, which bore its name, were sold by Haverberg and used by Glenbrook in conjunction with a separate, unlabeled piece of equipment does not, we think, identify Sherman in the mind of the reasonable purchaser as the maker of the unlabeled machine, or render Sherman liable for injuries caused by it under the apparent-manufacturer rule.

We next consider plaintiff’s contention that the use of Sherman’s name on a promotional flyer, issued by Haverberg, advertising the conveyor amounted to Sherman’s holding itself out as manufacturer of the conveyor.

Sherman prepared and issued a number of flyers advertising the equipment it made. Each of these one-page flyers describes one of its car-washing machines. On the front, each flyer has a photograph of the unit, on which the Sherman Supersonic Systems logo is clearly visible, with the name and model number of the unit at the top of the page. Text on both sides describes the machine’s features and specifications. The name Sherman Car Wash Equipment Company (which was Sherman’s official name prior to 1976), the name Sherman Industries, Inc., the Sherman Supersonic Systems logo, and Sherman’s New Jersey address and phone number appear in large type at the bottom of each side of the page.

The brochure on which plaintiff seeks to base liability was prepared by Haverberg. At the top of one side in large type is printed “Jack Flapan’s HAVERBERG Equipment Company”; the name “Haverberg” is on a separate line and is in print larger than the other wording. The reverse has text extolling the conveyor and describing its features. On both sides of the flyer appear two photos of the conveyor track and mechanism with no designation on the conveyor as to its manufacturer. At the bottom of the side of the sheet with the text is the single word “Sherman,” followed on the next line by the name “Haverberg Auto Laundry Equipment Company, Inc.” and Haverberg’s Chicago address and phone number. As discussed above, a defendant that advertises itself as the maker of a product may be found to have held itself out to the public as the manufacturer, if the advertising was such as to lead a reasonable purchaser to believe that the defendant, and not some other party, was the actual manufacturer. (Burkhardt v. Armour & Co. (1932), 115 Conn. 249, 264-65, 161 A. 385, 391; Carney v. Sears, Roebuck & Co. (4th Cir. 1962), 309 F.2d 300, 304-05.) We doubt, in the first place, whether Haverberg’s flyer would mislead the reasonable purchaser of car-washing machinery as to the identity of the manufacturer. Its identification of Sherman was weak at best, and it also clearly identified Haverberg, the true manufacturer. (Plaintiff does not argue that Glenbrook was misled; the Glenbrook-Haverberg contract for sale' of the car-washing equipment lists, as the first of 12 items, “1 Haverberg 80’ hookless on demand conveyor with 26 dollies triple track.”) More important, however, is the fact that the flyer was undisputedly prepared by Haverberg, not by Sherman. We have found no case in' which a defendant was held to have a manufacturer’s liability based on another party’s representations in its advertising that defendant was the manufacturer.

The plaintiff argues, however, that Sherman should be liable if found to have authorized Haverberg’s use of its name in promoting sales of its conveyor. Plaintiff relies primarily on Connelly v. Uniroyal, Inc. (1979), 75 Ill. 2d 393. In Connelly, this court considered the issue of the liability of a licensor (Uniroyal) for injuries caused by a defective tire bearing the Uniroyal trademark which had been manufactured by the licensee — a Belgian corpor ration indirectly controlled by Uniroyal — under a licensing agreement pursuant to which Uniroyal provided the licensee with the plans, specifications and other technical know-how needed to produce the tires, authorized the licensee’s use of the Uniroyal name and trademark in advertising, and in consideration received quarterly payments from the licensee. The court held that Uniroyal was strictly liable in tort, although it had neither manufactured nor sold the tire that injured the plaintiff.

The basis for the imposition of strict liability in Connelly was the defendant’s integral involvement in the overall producing and marketing enterprise 'that placed the dangerous product in the stream of commerce, and its participation in the profits from the distribution of the product. (75 Ill. 2d 393, 411.) This “enterprise theory” of liability has been recognized in a growing number of decisions dealing with trademark licensing and franchising agreements. (Sandrock, Tort Liability of a Non-Manufacturing Franchisor for Acts of its Franchisee, 48 U. Cin. L. Rev. 699 (1979).) One factor leading to the imposition of strict tort liability on the nonmanufacturing trademark owner in these cases is that the licensee’s use of the trademark in advertising the product creates the public impression that the licensor is the actual maker and induces consumers to- rely on the appearance that the trademark owner is responsible for the product and stands behind it. (Kosters v. Seven-Up Co. (6th Cir. 1979), 595 F.2d 347, 353 (Michigan law).) However, the inducement of consumer reliance is not the only consideration in imposing strict liability. Rather, the decisions emphasize that liability arises from the same combination of considerations that underlie the doctrine of strict products liability generally: that the loss caused by unsafe products should be borne by those who create the risk of harm by participating in the manufacture, marketing and distribution of unsafe products; who derive economic benefit from placing them in the stream of commerce; and who are in a position to eliminate the unsafe character of the product and prevent the loss. (Connelly v. Uniroyal (1979), 75 Ill. 2d 393, 411; Kosters v. Seven-Up Co. (6th Cir. 1979), 595 F.2d 347, 353.) As stated in the seminal case of Kasel v. Remington Arms, Inc. (1972), 24 Cal. App. 3d 711, 101 Cal. Rptr. 314, strict liability arises, not because of the defendant’s legal relationship with the manufacturer or with other entities in the manufacturing-marketing system, but because of its “participatory connection, for [its] personal profit or other benefit, with the injury-producing product and with the enterprise that created consumer demand for and reliance upon the product.” 24 Cal. App. 3d 711, 725, 101 Cal. Rptr. 314, 323. The instant case does not come within the rule of Connelly. Comparing the facts of the two cases, it is evident that the circumstances that persuaded us that Uniroyal should be responsible for defective products manufactured by its licensee are absent here. Uniroyal specifically authorized its licensee to place the Uniroyal trademark, strongly identified with Uniroyal, on its tires and to use it in promoting sales — actions calculated to produce the impression in the purchaser’s mind that the tires were a Uniroyal product. Uniroyal set up the arrangement and received both direct payments and indirect economic benefits from it. Haverberg, by contrast, did not place the “Sherman Supersonic Systems” trade name or logo on its conveyor or its promotional material but made what might almost be called incidental use of the name “Sherman” in conjunction with its own name — perhaps with some thought of suggesting its business relationship with Sherman, or trading a little on Sherman’s business goodwill. There was no evidence to suggest that Sherman authorized or permitted Haverberg to place its name on the flyer. While it might well be possible to find, even in the absence of a formal, written agreement, that a defendant had authorized another party to use its name or trademark, there was no evidence here of even an informal understanding between Sherman and Haverberg as to Haverberg’s advertising of Haverberg’s products. Sherman did not receive payment from Haverberg for the use of its name, or any part of Haverberg’s profit from the sales of the conveyor. In short, we do not find that Sherman had the kind of participatory connection with the enterprise that produced and marketed the conveyor, or the economic benefit from placing it in the stream of commerce, that led to the imposition of strict liability in Connelly. While that opinion did state that a defendant’s participation in the chain of distribution was not an essential element for strict liability to apply (75 Ill. 2d 393, 410-11), the reference was to the fact that a defendant such as Uniroyal who is not in the direct chain of sale leading from manufacturer to consumer may nonetheless be so integrally involved in the overall producing and marketing enterprise that strict liability will follow.

For the foregoing reasons, the judgment of the appellate court is reversed, and the judgment of the circuit court of Cook County is affirmed.

Appellate court reversed; circuit court affirmed.


text:
    (No. 56093.
    THE PEOPLE OF THE STATE OF ILLINOIS, Appellant, v. DENNIS HOLLOWAY, Appellee.

      Opinion filed October 22, 1982.

      Tyrone C. Fahner, Attorney General, of Springfield, and L. Patrick Power, State’s Attorney, of Kankakee (John X. Breslin, of the State’s Attorneys Appellate Service Commission, of Ottawa, of counsel), for the People.
    G. Joseph Weller, Deputy Defender, of the Office of the State Appellate Defender, of Elgin, for appellee.
   JUSTICE CLARK

delivered the opinion of the court:

On December 17, 1979, the defendant, Dennis Holloway, was charged with the alleged burglary on December 9, 1979, of a building in the care, custody and control of Charles June, in his capacity as director of the Kankakee County Housing Authority. At a bench trial in the circuit court of Kankakee County the defendant was convicted and sentenced to a term of five years’ imprisonment.

Charles June testified that the building the defendant was accused of burglarizing at 380 North Wildwood in Kankakee was divided into two portions: a day-care center in the front and a maintenance shop in the back. Mr. June indicated that the Kankakee County Housing Authority had no responsibility for the day-care center which was the part of the building burglarized. Although the housing authority owned the building, the back portion was leased to the Kankakee Community Action Program.

The defendant appealed the conviction and the appellate court reversed. The court held that the Kankakee County Housing Authority had no possessory interest in the burglarized portion of the building. (90 Ill. App. 3d 1098.) The State did not appeal that reversal of the conviction by the appellate court. Since that judgment is not before us, we are not in a position to consider the merits of that opinion. We do, however, feel it necessary to point out that since the time of that judgment we have issued our opinion in People v. Rothermel (1982), 88 Ill. 2d 541, in which we held that a daughter’s possession of a key to her mother’s house was sufficient to demonstrate an interest greater than that of the defendant and was therefore an adequate allegation of a possessory interest in an indictment for burglary.

The defendant in the case at bar was subsequently reindicted on March 23, 1981. The indictment alleged that he entered, without authority, the building in the care, custody, and control of Arementa Ervin in her capacity as supervisor of the Head Start Day Care Center, with the intent to commit a theft. The defendant moved to dismiss the indictment, and the trial court granted the dismissal.

In a Rule 23 order (73 Ill. 2d R. 23), the appellate court affirmed the dismissal of the indictment by the trial court, holding that section 3 — 4(b)(1) of the Criminal Code of 1961 (Ill. Rev. Stat. 1979, ch. 38, par. 3 — 4(b)(1)) barred prosecution because the defendant was previously prosecuted for the same offense based on different facts; the prior proceeding resulted in a conviction, and the subsequent prosecution was for an offense with which the defendant should have been charged on the former prosecution. (101 Ill. App. 3d 1200.) We granted the People’s petition for leave to appeal, and we now reverse.

Section 3 — 4(b)(1) provides in pertinent part:

“(b) A prosecution is barred if the defendant was formerly prosecuted for a different offense, or for the same offense based upon different facts, if such former prosecution:
(1) Resulted in either a conviction or an acquittal, and the subsequent prosecution is for an offense of which the defendant could have been convicted on the former prosecution; or was for an offense with which the defendant should have been charged on the former prosecution, as provided in Section 3 — 3 of this Code (unless the court ordered a separate trial of such charge); or was for an offense which involves the same conduct, unless each prosecution requires proof of a fact not required on the other prosecution, or the offense was not consummated when the former trial began.” Ill. Rev. Stat. 1979, ch. 38, par. 3—4(b)(1).

To determine whether the subsequent prosecution was proper or the charge is one that should have been brought on the prior prosecution, we look to the provisions of section 3 — 3 of the Criminal Code of 1961. It provides:

“Sec. 3 — 3. Multiple Prosecutions for Same Act.
(a) When the same conduct of a defendant may establish the commission of more than one offense, the defendant may be prosecuted for each such offense.
(b) If the several offenses are known to the proper prosecuting officer at the time of commencing the prosecution and are within the jurisdiction of a single court, they must be prosecuted in a single prosecution, except as provided in Subsection (c), if they are based on the same act.” Ill. Rev. Stat. 1979, ch. 38, par. 3—3.

The defendant contends that section 3 — 4(b)(1) bars prosecution on the offense of the alleged burglary of premises within the custody of Arementa Ervin because the defendant should have been charged with this offense when the former prosecution was brought. Read in conjunction with section 3 — 4(bXl), section 3 — 3(b) indicates that if several offenses are known to exist based upon the same act, then they must be prosecuted in a single prosecution unless the court in accordance with section 3 — 3(c) orders that one or more of the charges be tried separately in the interest of justice.

The defendant’s suggestion that the second charge should have been brought along with the first charge in a single prosecution fails to recognize that the State’s Attorney did not have any knowledge that any other offense could or should have been charged when Dennis Holloway was first indicted for the alleged burglary of a building in the custody of Charles June on December 17, 1979. The day that the first indictment against Dennis Holloway was returned the State’s Attorney had no reason to believe that the conduct of the defendant established any basis for the commission of any other offense. It was only subsequent to December 17 that the State’s Attorney discovered that, in the opinion of the appellate court, Charles June had no possessory interest in the premises and that to charge an offense some other party, with what the appellate court would consider to be a sufficient possessory interest, would have to be named. And while the offense charged in the second indictment does involve the same conduct of the defendant on December 7, 1979, the prosecution on the second indictment requires “proof of a fact not required on the other prosecution” (Ill. Rev. Stat. 1979, ch. 38, par. 3—4(b)(1))—that is, proof that the premises were under the control of Arementa Ervin.

The defendant cites People v. Baker (1979), 77 Ill. App. 3d 943, for support of his position that the burglary for which the defendant is now charged should have been joined with the first prosecution. In People v. Baker the appellate court affirmed the trial court’s order dismissing an indictment for unlawful possession of a controlled substance. There the defendant was arrested and then searched. Following the search incident to the arrest, the defendant was charged with illegal transportation of liquor and with unlawful possession of cannabis. After pleading guilty to those charges he faced another prosecution for unlawful possession of a controlled substance. That charge was the result of pills found during the search at the time of the defendant’s arrest. The trial court concluded, and the appellate court agreed, that the State’s Attorney had knowledge of the possession of the pills at the time the earlier prosecution was commenced and the offense of unlawful possession of a controlled substance should have been joined with the other two offenses in the first prosecution. The circumstances in Baker are significantly different from the facts of the case at bar. The opinion of the appellate court in Baker does not lend any support to the defendant’s position here.

The State’s Attorney cannot be expected to join an offense in a single prosecution when he or she had no knowledge that such an offense existed at the time the original indictment was filed. We conclude that the compulsory joinder statute (Ill. Rev. Stat. 1979, ch. 38, par. 3—3) does not apply to this case.

The defendant is correct in asserting that, if one assumes that the defendant was reindicted for the same offense, the prosecution is barred by the double jeopardy clause and by section 3 — 4(aXl) of the Criminal Code of 1961 (Ill. Rev. Stat. 1979, ch. 38, par. 3—4(a)(1)).

Clearly, the double jeopardy clause prevents retrial on the same charge where a reversal of the defendant’s conviction is based upon the insufficiency of the evidence. Tibbs v. Florida (1982), 457 U.S. 31, 72 L. Ed. 2d 652, 102 S. Ct. 2211; Burks v. United States (1978), 437 U.S. 1, 57 L. Ed. 2d 1, 98 S. Ct. 2141; Greene v. Massey (1978), 437 U.S. 19, 57 L. Ed. 2d 15, 98 S. Ct. 2151.

The prosecutor is not afforded a second opportunity to supply evidence that he or she failed to produce at the first trial on the same charge. For as Justice O’Connor, writing for the majority in Tibbs v. Florida, has said: “This prohibition, lying at the core of the Clauses’s protections, prevents the State from honing its trial strategies and perfecting its evidence through successive attempts at conviction. Repeated prosecutorial sallies would unfairly burden the defendant and create a risk of conviction through sheer governmental perseverance.” Tibbs v. Florida (1982), 457 U.S. 31, 41-42, 72 L. Ed. 2d 652, 661, 102 S. Ct. 2211, 2218.

However, to assume that the defendant was reindicted for the same offense in this case is to operate on a false assumption. The prosecution of Dennis Holloway for the alleged burglary of the premises in the custody of Arementa Ervin is a separate and distinct offense from the original charge alleging burglary of premises in the custody of Charles June. Proving a possessory interest in Arementa Ervin is different from proving a possessory interest in Charles June. While the second prosecution of Dennis Holloway involves the same conduct as the first prosecution did, the defendant is being charged with a separate offense that the State’s Attorney had no reason to believe could have been charged in the first indictment.

Thus the State’s Attorney is not barred by the double jeopardy clause or section 3 — 4(a)(1) (Ill. Rev. Stat. 1979, ch. 38, par. 3—4(a)(1)) from bringing prosecution on the second indictment.

The defendant also claims that the present indictment should be dismissed because of an unreasonable preindictment delay that caused him substantial prejudice. Since the defendant has failed to show any prejudice, the contention is without merit. We therefore reverse the judgment of the appellate court affirming the judgment of the circuit court of Kankakee County. The indictment should not have been dismissed.

Judgments reversed.


author: JUSTICE WARD

text:
    (No. 55368.
    PHILIP A. CONWAY, Appellee, v. COUNTRY CASUALTY INSURANCE COMPANY, Appellant.

      Opinion filed October 22, 1982.

    Rehearing denied November 24, 1982.

      RYAN, C.J., took no part.
    Hupp, Irion, Reagan & Hupp, P.C., of Ottawa (George C. Hupp, Sr., and Gale F. Murrin III, of counsel), for appellant.
    Herbolsheimer, Lannon, Henson, Duncan, & Reagan, P.C., of La Salle (R. J. Lannon, Jr., and Robert M. Hansen, of counsel), for appellee.
   JUSTICE WARD

delivered the opinion of the court:

On December 4, 1973, the plaintiff, Philip A. Conway, was driving an automobile that collided with a vehicle operated by Hayfa Assalley. Ms. Assalley was injured in the accident. At the time of the accident Conway was insured under a family combination insurance policy issued by the defendant, Country Casualty Insurance Company (Country Casualty). The insurance policy had a bodily injury liability limit of $10,000 for each injured person and a property damage liability limit of $5,000 per accident. Country Casualty, under an advanced payment program, began to reimburse Ms. Assalley for expenses that were a direct result of her injuries and to compensate her for lost income. She received a total of $9,736.79 through October 24, 1974, on the advanced payment program. On February 19, 1975, Ms. Assalley filed suit against Conway for personal injuries she received. On March 11, 1975, Country Casualty and Ms. Assalley, with the approval of Conway, agreed that Country Casualty would pay Ms. Assalley a total of $10,742.35, representing the bodily injury liability limit of $10,000 under the policy and property damage of $742.35. The insurer paid Ms. Assalley $900.21 that day, completing its payment of $10,742.35. However, Ms. Assalley did not execute a release in favor of Conway or Country Casualty in exchange for the payment, and her personal injury suit against Conway remained in an active status. Subsequently, Conway requested Country Casualty to defend him in the suit. When Country Casualty refused, Conway obtained his own counsel. On January 3, 1977, a settlement was reached with Ms. Assalley, and Conway paid her an additional $10,000 in exchange for a release for himself and Country Casualty. Conway was given a statement by his attorney for $2,386.95 to cover his services in defense and settlement of the suit.

On January 6, 1977, Conway brought the action involved here against Country Casualty to recover the $10,000 and for attorney fees for both the suit for reimbursement and Ms. Assalley’s suit against him. The circuit court of La Salle County, following a bench trial on a stipulation of facts, entered judgment in favor of Conway. The judgment was for $10,000, representing his settlement payment, plus $2,386.95 for attorney fees for defense of the personal injury action, and interest at the rate of 5% in the amount of $2,167.72. ($1,750 represented 5% on the additional $10,000 settlement and $417.72 represented 5% interest on the $2,386.95 of attorney fees.) The appellate court affirmed (97 Ill. App. 3d 768) and we allowed Country Casualty’s petition for leave to appeal. 73 Ill. 2d R. 315.

The questions presented are: whether the insurer’s payment to the extent of the liability limits of its policy to the claimant discharges its duty under the policy to defend its insured in the personal injury action; if not, whether the insured can recover the amount, he pays in excess of the liability limits of the policy to settle a suit by the claimant; and, if the insurer’s duty to defend is not discharged, whether the insured is entitled to interest on any part of the damages awarded.

The policy issued to Conway states that Country Casualty agrees “[t]o pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of [bodily injury or property damage] caused by accident arising out of the ownership, maintenance or use, *** of a Vehicle *** and the Company shall defend any suit alleging such bodily injury or property damage and seeking damages which are payable under the terms of this policy, even if any of the allegations of the suit are groundless, false or fraudulent; but the Company may make such investigation and settlement of any claim or suit as it deems expedient.” The next paragraph provides that “[t]he Company shall not be obligated to pay any claim or judgment or to defend any suit or prosecute or maintain any appeal after the applicable limits of the Company’s liability have been exhausted by payment of any judgments or settlements.”

In this jurisdiction an insurer’s duty to defend an action against its insured is determined by the allegations of the complaint. (Maryland Casualty Co. v. Peppers (1976), 64 Ill. 2d 187; Reis v. Aetna Casualty & Surety Co. (1978), 69 Ill. App. 3d 777.) An insurer may not justifiably refuse to defend an action against its insured unless it is clear from the face of the complaint that the allegations fail to state facts which bring the case within, or potentially within, the policy’s coverage. (Murphy v. Urso (1981), 88 Ill. 2d 444; Sheppard, Morgan & Sehwaab, Inc. v. United States Fidelity & Guaranty Co. (1976), 44 Ill. App. 3d 481; Elas v. State Farm Mutual Automobile Insurance Co. (1976), 39 Ill. App. 3d 944; Solo Cup Co. v. Federal Insurance Co. (7th Cir. 1980), 619 F.2d 1178.) Country Casualty has not questioned the sufficiency of the personal injury complaint to show potential or actual coverage. Instead, Country Casualty contends that its payment of the entire property damage, together with its payment to the extent of the policy’s bodily injury liability limit, discharges it from its duty to defend. Country Casualty argues that it would be anomalous to require it to defend an action where no further amount is payable under the terms of the policy and where it no longer has an interest in the outcome of the personal injury action.

The general holding in this State is that an insurer’s duty to defend and its duty to indemnify are separate and distinct and that the former duty is broader than the latter. (Murphy v. Urso (1981), 88 Ill. 2d 444; Aetna Casualty & Surety Co. v. Coronet Surety Co. (1976), 44 Ill. App. 3d 744; Elas v. State Farm Mutual Automobile Insurance Co. (1976), 39 Ill. App. 3d 944; Palmer v. Sunberg (1966), 71 Ill.App. 2d 22; Sims v. Illinois National Casualty Co. (1963), 43 Ill. App. 2d 184; Solo Cup Co. v. Federal Insurance Co. (7th Cir. 1980), 619 F.2d 1178; Western Chain Co. v. American Mutual Liability Insurance Co. (7th Cir. 1975), 527 F.2d 986.) Thus, since the insurer’s duty to defend its insured is not dependent upon a duty to indemnify, but arises from the undertaking to defend stated in the policy, an insurer’s payment to its policy limits, without more, does not excuse it from its duty to defend. (Maneikis v. St. Paul Insurance Co. (7th Cir. 1981), 655 F.2d 818; see also Western Chain Co. v. American Mutual Liability Insurance Co. (7th Cir. 1975), 527 F.2d 986.) It would appear that whether an insurer, which has agreed to defend any suit “seeking damages under the terms of this policy,” is discharged from its duty to defend its insured simply by the payment of the policy limits has not been expressly decided by a court in this State.

While the courts of jurisdictions where the question has been considered have not been unanimous in their decisions, we consider that the better view is that the insurer is not discharged. See Allstate Insurance Co. v. Novak (1981), 210 Neb. 184, 313 N.W.2d 636; Kocse v. Liberty Mutual Insurance Co. (1978), 159 N.J. Super. 340, 387 A.2d 1259; Ursprung v. Safeco Insurance Co. of America (Ct. App. Ky. 1973), 497 S.W.2d 726; Landando v. Bluth (N.D. Ill. 1968), 292 F. Supp. 975; Simmons v. Jeffords (E.D. Pa. 1966), 260 F. Supp. 641.

Country Casualty’s reliance on Denham v. La Salle-Madison Hotel Co. (7th Cir. 1948), 168 F.2d 576, and Oda v. Highway Insurance Co. (1963), 44 Ill. App. 2d 235, to support its contention that its duty to defend was extinguished by payment of the policy limits is misplaced. Although the court in Denham decided the case under what it deemed the law of this State to be, there had been no express decision on the question. Also, Denham is inapplicable for the additional reason that the holding was based on different policy language.

Oda, too, is distinguishable. There, the insurer defended the personal injury action against its insured and paid the plaintiff to the limits of its policy. Thereafter, a suit was filed for loss of consortium arising out of the same injury. The insurer • refused to defend the second action. The appellate court, relying on Denham, held that after the insurer had made payments to its policy’s limits it had no further duty to defend its insured. The court did not hold that the insurer was discharged from its duty to defend its insured in the original personal injury action against him. The decision was that once the insurer had defended its insured in that action, the insurer did not have to defend subsequent actions based on the same injury, having already made payment to the extent of its liability limit.

Our holding that an insurer cannot discharge its duty to its insured simply by making payments to the claimant to the extent of its policy’s limits is clearly supported by the language of the policy here. As we have noted above, the policy provided that the insurer could terminate its obligation to defend and pay by payments to the policy’s limits of “any judgments or settlements.” The insurer here, of course, made no payment pursuant to a judgment or a settlement agreement.

Turning to the question of the consequences of Country Casualty’s refusal to defend Conway, the insurer agrees that an insurer’s failure to defend, when it is under obligation to do so, makes it liable for reasonable attorney fees and the costs incurred by its insured. Conway contends that the insurer is liable for the entire judgment rendered against the insured or a settlement made by him, even if it exceeds the policy’s limits. Both the trial court and the appellate court accepted Conway’s position. In doing so, the appellate court (97 Ill. App. 3d 768, 775) quoted the following from Sims v. Illinois National Casualty Co. (1963), 43 Ill. App. 2d 184, 194-95:

“ ‘By its unjustified refusal to defend an action against the insured, an automobile liability insurer becomes subject to the following new and positive obligations: (1) liability for the amount of the judgment rendered against the insured or of the settlement made by him; (2) liability for the expenses incurred by the insured in defending- the suit; (3) liability for any additional damages traceable to its refusal to defend.
The first and most obvious of these positive obligations created by an insurer’s unjustified refusal to defend is its obligation to pay the amount of the judgment rendered against the insured or of any settlement made by the insured of the action brought against him by the injured party.’ ” (43 Ill. App. 2d 184, 194-95, quoting from 7 Am. Jur. 2d Automobile Insurance sec. 167 (now 7 Am. Jur. 2d Automobile Insurance sec. 396 (1980).)

One must, however, look at the facts in a given decision. Sims did not involve a tort judgment against the insured which exceeded the policy’s liability limits. If it had, the Sims court well might have reached a different result on the basis of the two sentences following the sentences the court did quote from 7 Am. Jur. 2d Automobile Insurance sec. 167. The omitted two sentences read: “However, this obligation of the insurer to pay the amount of judgment or settlement is not unlimited. It does not render the insurer liable for more than the amount of the policy limit, nor does it obligate the insurer to pay the amount of an unreasonable settlement or a settlement made in bad faith.” One would observe also that in Sims there was no payment made to the claimant by the insurer. Too, “[wjhile the wrongful refusal of the insurer to conduct the defense of an action based upon a claim within the coverage of the policy makes it liable, the insurer is not exposed to a greater liability to the insured than the limit of the amount stated in the policy. The failure to defend, however, does expose the defendant to the additional liability for the cost and expense which plaintiff was put to by reason of defendant’s breach of the contract and embraces reasonable attorney fees.” Gould v. Country Mutual Casualty Co. (1962), 37 Ill. App. 2d 265, 290; accord Reis v. Aetna Casualty & Surety Co. (1978), 69 Ill. App. 3d 777.

In Elas v. State Farm Mutual Automobile Insurance Co. (1976), 39 Ill. App. 3d 944, the court indicated that an insurer, unjustifiably refusing to defend its insured, would be liable for the entire settlement or judgment regardless of whether it was in excess of the policy limits. The statement though was the subject of later comment: “However, that statement was only dictum since the court limited recovery to the policy limits, the insured and injured party having entered into an agreement holding the insured harmless from any personal recovery against her. The general rule is to the contrary. The mere failure to defend does not, in the absence of bad faith, render the insurer liable for that amount of the judgment in excess of the policy limits. [Citations.] Nevertheless, damages for a breach of the duty to defend are not inexorably imprisoned within the policy limits, but are measured by the consequences proximately caused by the breach.” (Reis v. Aetna Casualty & Surety Co. (1978), 69 Ill. App. 3d 777, 790; cf. 7C Appleman, Insurance Law and Practice sec. 4689, at 209 (1979) (damages are measured by the “additional loss legally traceable to the breach”).) The $10,000 paid by Conway to Ms. Assalley cannot be said to have been proximately caused by Country Casualty’s breach absent a showing that there could have been a settlement for a lesser amount if Country Casualty had defended the action. (See 7C Appleman, Insurance Law and Practice sec. 4689 (Supp. 1981).) There was no such showing made here and it will be assumed that Conway would have been required to pay Ms. Assalley the $10,000 even had Country Casualty defended the personal injury action against him.

As stated above, it has been held that an insurer is liable for the full amount of a judgment or settlement, even if it exceeds the policy limits, if the insurer acted in bad faith by refusing to defend its insured. (Reis v. Aetna Casualty & Surety Co. (1978), 69 Ill. App. 3d 777; 7C Appleman, Insurance Law and Practice sec. 4689 (1979).) Although the trial court here made no finding with regard to bad faith, the appellate court said that “the refusal of the insurer to afford a defense after paying the policy limits to the tort plaintiff in the absence of an adverse judgment or settlement, when by the very terms of the policy such action can be taken only when the policy limits are exhausted by payment of a judgment or settlement, reflects bad faith.” (97 Ill. App. 3d 768, 775-76.) The question of an insurer’s bad faith typically is one for the trial court, rather than for a court of review. We cannot say that it was demonstrated that the insurer’s declining to defend here was in bad faith. In a letter to Conway, Country Casualty stated that it had reached its decision not to defend on the holdings and language of Denham and Oda. The fact that we judge Country Casualty’s reliance on those decisions was erroneous is not, considering all of the circumstances and those decisions, translatable, without more, into a showing of bad faith. We cannot say that the trial court, in not finding bad faith on the part of the insurer, clearly erred.

Conway contends that he is entitled to recover prejudgment interest on the $10,000 settlement under section 2 of the Interest Act (Ill. Rev. Stat. 1977, ch. 74, par. 2). Section 2 states that “[cjreditors shall be allowed to receive at the rate of five (5) per centum per annum for all moneys after they become due on any bond, bill, promissory note, or other instrument of writing; on money lent or advanced for the use of another; on money due on the settlement of account from the day of liquidating accounts between the parties and ascertaining the balance; on money received to the use of another and retained without the owner’s knowledge; and on money withheld by an unreasonable and vexatious delay of payment.” Since we decide that the insurer, which unjustifiably, but not in bad faith, declined to defend its insured, is not liable in excess of its policy limits, and since Country Casualty paid the claimant to the extent of the policy’s bodily injury liability limit in advance of the filing of the personal injury suit, Conway obviously is not entitled to prejudgment interest under the statute. There was not unreasonable and vexatious delay in any required payment. The insurer does not dispute, however, that it is required to pay interest on the attorney fees from January 3, 1977, until the date of payment. January 3, 1977, was the date of the settlement and it is when the attorney fees became due and capable of exact computation. See Central National Chicago Corp. v. Lumbermens Mutual Casualty Co. (1977), 45 Ill. App. 3d 401.

For the reasons given, the portions of the judgment of the appellate court and the judgment of the circuit court of La Salle County, holding that Country Casualty was liable to the plaintiff for the amount paid by him in settlement of the suit and holding that the plaintiff was entitled to prejudgment interest on the amount of the settlement are reversed. The balance of the judgments is affirmed. The plain-tiff may recover $417.72 interest in addition to the attorney fees.

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

CHIEF JUSTICE RYAN took no part in the consideration or decision of this case.


author: JUSTICE UNDERWOOD JUSTICE SIMON,

text:
    (No. 55771.

      In re APPLICATION OF THE COUNTY TREASURER OF COOK COUNTY (Central National Bank in Chicago, Appellant; Jocelyn Congua, Appellee).

      Opinion filed October 22, 1982.

      SIMON, J., specially concurring.

      James A. Regas, of Regas & Frezados, of Chicago, for appellant.
    Herbert Lesser, of Chicago, for appellee.
   JUSTICE UNDERWOOD

delivered the opinion of the court:

Petitioner, Central National Bank, brought an action in the circuit court of Cook County under section 72 of the Civil Practice Act (Ill. Rev. Stat. 1979, ch. 110, par. 72) seeking to overturn a tax deed issued to respondent, Jocelyn Congua, to property to which petitioner had held legal title under a land trust. The circuit court granted petitioner’s motion for summary judgment and ordered that the deed be vacated. A divided appellate court reversed (100 Ill. App. 3d 534), and we granted leave to appeal. The principal issue is whether negligence by the sheriff in serving notice of the tax-deed proceedings, as a result of which petitioner was not personally served, entitles petitioner to section 72 relief.

Under section 263 of the Revenue Act of 1939 (Ill. Rev. Stat. 1977, ch. 120, par. 744) the purchaser at a tax sale must give notice of the sale and of the date of expiration of the redemption period not less than three months nor more than five months prior to the expiration of the redemption period. Section 263 requires that notice be served personally and by certified mail, return receipt requested, through the clerk of the circuit court. Unknown owners and interested parties may be given notice by publication. Prior to 1976, the tax purchaser was responsible for personally serving the property owner. In 1976, section 263 was amended to provide that “[t]he purchaser or assignee shall give the above notice by causing it to be served by a sheriff ***.” Ill. Rev. Stat. 1977, ch. 120, par. 744.

The circuit court in the tax-deed proceedings approved the method of personal service by the sheriff’s office rather than by the tax purchaser, although the tax sale occurred prior to the effective date of the 1976 amendment. On appeal from the circuit court’s decision on the section 72 petition, the appellate court held that although the 1976 amendment should not have been applied, the fact that the parties did not argue the issue and that the circuit court approved of the method of service bound the appellate court. (100 Ill. App. 3d 534, 538; relying on In re Application of County Treasurer (1974), 20 Ill. App. 3d 291.) Since the issue is not raised here we express no opinion upon it.

The property in question is a vacant lot in Cook County. It was sold to Interstate Bond Company in December 1975 for nonpayment of 1974 taxes. Central National Bank was the legal titleholder of the property under a land trust. Interstate Bond, after extending the redemption period to November 1978, filed its petition for deed in June 1978 and gave notice in July 1978, pursuant to section 263 of the Revenue Act. Notice was published on three consecutive days in the Chicago Law Bulletin; a copy of the notice was given to the.circuit clerk, along with postage for certified mail, to be mailed by the clerk; and a copy was delivered to the sheriff’s office, to be personally served upon Central National Bank. Prior to the hearing, Interstate Bond assigned its interest to Jocelyn Congua, the respondent here, who was substituted as petitioner for the tax deed.

At the hearing, Jocelyn Congua submitted an affidavit by an agent of Interstate Bond Company in which the affiant stated, inter alia, that he had caused the sheriff to serve notice upon Central National Bank. The court was shown a copy of the published notice, a return receipt signed by petitioner, dated July 26, 1978, for a copy of the notice sent by the circuit clerk, and the sheriff’s return, signed by Deputy Joseph Nodell, indicating that Central National Bank was personally served by the deputy at Central National Bank on July 12, 1978, service being made on “E. Sodergren,” also spelled “E. Rodergren.” The court found, pursuant to section 266 of the Revenue Act, that the notices required by law had been given, that the respondent had acted with diligence in attempting to serve the proper parties, and that the other requirements of the Act had been met. On November 15, 1978, the court ordered that the deed be issued.

On December 13, 1979, Central National Bank filed a petition under section 72 seeking to overturn the tax deed. It alleged that it had not had notice of the tax-deed proceedings and had learned of them in October 1979 through the beneficiary of the trust. It also alleged that it had no employee by the name of “E. Sodergren” or “E. Rodergren” and that this name was fraudulently written on the sheriff’s return in order to avoid the statutory requirement of personal service. Subsequently, Deputy Joseph Nodell was deposed, and he testified that the notice which was supposed to be served on Central National Bank had gotten mixed up with some, other papers and was mistakenly served upon Miss Sodergren, who worked at the Federal National Mortgage Association, where he had also served papers that day. Petitioner then filed a motion for summary judgment, again stating that it did not have notice of the proceedings, that the deputy’s return and the respondent’s affidavit which relied on it were false, and that the error in service was a “mistake * * * made because of a mix-up in *** papers.”

The circuit court vacated the order to issue the tax deed and declared the deed issued to Jocelyn Congua null and void. The court held that the combination of the deputy’s error and the affiant’s reliance on the return, which resulted in his statement that he had caused the sheriff to serve Central National Bank, was “tantamount to fraud.” The appellate court reversed, holding that neither the deputy’s error nor respondent’s reliance upon the return constituted fraud. That court also noted that since petitioner had actual notice of the proceeding in July 1978, as evinced by the return receipt, petitioner had not exercised due diligence in filing the section 72 petition nearly 17 months later.

The petitioner does not attempt to argue here that the deputy’s error or the respondent’s reliance upon it constitutes fraud as it has been defined by this court: “a wrongful intent — an act calculated to deceive.” (Dahlke v. Hawthorne, Lane & Co. (1966), 36 Ill. 2d 241, 245; see also Smith v. D.R.G., Inc. (1976), 63 Ill. 2d 31; Exline v. Weldon (1974), 57 Ill. 2d 105; Zeve v. Levy (1967), 37 Ill. 2d 404.) We agree with petitioner’s assessment, for there is no evidence of intentional deception on the part of either the deputy or the respondent. Petitioner asserts, however, that applying this strict definition of fraud here would tend to favor the merchantability of tax deeds over the equally important, albeit competing, goal of protecting the landowner accomplished by insistence upon strict compliance with the statutory conditions. “There is little doubt,” says petitioner, “that a purchaser who failed to effect personal service, but who nevertheless filed an affidavit indicating to the court that such service had been made, would have perpetrated such deception and fraud upon the court that any order directing the issuance of a tax deed would be subject to attack on those grounds.” The decisions of this court, however, do not support this statement. Without proof of fraud, proof that the owner did not actually receive notice, even if a statement had been made to the court that service was made, is not sufficient grounds to grant section 72 relief. (Smith v. D.R.G., Inc. (1976), 63 Ill. 2d 31, 37; Zeve v. Levy (1967), 37 Ill. 2d 404, 409-10; Urban v. Lois, Inc. (1963), 29 Ill. 2d 542, 548.) Nor do we believe that a policy of favoring the validity of tax deeds in a collateral proceeding in any way undermines the trial court’s obligation to insist upon strict compliance with the statutory requirements. This was the balance struck by the legislature in the 1951 revision of the Revenue Act of 1939 and repeatedly confirmed by decisions of this court.

Prior to 1951, increasing tax delinquencies were imperiling essential governmental functions. (Cherin v. R. & C. Co. (1957), 11 Ill. 2d 447, 452; People v. Muscarello (1953), 350 Ill. App. 88, 92.) In part this was due to the vulnerability of tax deeds, which, in the words of one commentator, amounted to little more than a cloud on the title of the delinquent owner. (Turano, Equitable Relief, Collateral Attack and the Illinois Tax Deed, 51 Chi.-Kent L. Rev. 725 (1975).) In order to return the properties to the tax rolls and to provide greater stability for tax deeds, the legislature substantially revised the Revenue Act in 1951. (See Waldron, Merchantable Title by Tax Deeds, 44 Chi. Bar Rec. 67 (1962); Note, 40 Chi.-Kent L. Rev. 155, 157 (1963).) Section 266 of the Act was amended to provide that the circuit court, rather than the county clerk, would determine whether the tax purchaser was entitled to the deed. (See Cherin v. R. & C. Co. (1957), 11 Ill. 2d 447, 451-53.) It also provided that tax deeds would be “incontestable” except by direct appeal or as provided under section 72 of the Civil Practice Act and that the Act “be liberally construed so that tax deeds *** shall convey merchantable title.” Ill. Rev. Stat. 1951, ch. 120, par. 747.

Subsequently this court upheld the validity of tax-deed proceedings in varying circumstances. In Southmoor Bank & Trust Co. v. Willis (1958), 15 Ill. 2d 388, the court denied section 72 relief where it was agreed that delinquent taxes had in fact not been paid by the tax purchaser, but the court in the tax-deed proceeding had found that the tax purchaser had complied with all the provisions at law entitling it to a tax deed. This court held that section 72 “cannot be used to again put in issue questions previously adjudicated by valid means.” (15 Ill. 2d 388, 395.) In Remer v. Interstate Bond Co. (1961), 21 Ill. 2d 504, the court held that, while findings of record were conclusive, the section 72 petitioner was entitled to a hearing on allegations of fraud, since those issues had not been asserted earlier. (21 Ill. 2d 504, 513-14.) In Urban v. Lois, Inc. (1963), 29 Ill. 2d 542, this court held that even though petitioner had not been personally served with notice, where no fraud was shown, the trial court’s previous finding that all notice required by law had been given could not be collaterally attacked. (29 Ill. 2d 542, 548-50.) In Dahlke v. Hawthorne, Lane & Co. (1966), 36 Ill. 2d 241, the court noted that fraud implies “a wrongful intent — an act calculated to deceive” (36 Ill. 2d 241, 245) and was not established despite the fact that not all of the occupants of the property had been served with notice. In Zeve v. Levy (1967), 37 Ill. 2d 404, this court pointed out:

“[Pjetitioner’s failure to receive notice of the tax-deed proceeding does not, per se, entitle her to have the deed set aside. (Dahlke.) Nor does the fact that respondent’s agent could have made more thorough inquiry and a more diligent search than he did necessarily establish fraud on the part of respondent in the absence of proof of wrongful intent or a pattern of deception. (Dahlke.)” (37 Ill. 2d 404, 409.)

See also Smith v. D.R.G., Inc. (1976), 63 Ill. 2d 31; Exline v. Weldon (1974), 57 Ill. 2d 105.

In 1976, apparently in recognition of the potential for fraud, the legislature amended section 263 to provide that notice of the tax-deed proceedings be served by the sheriff. Although this provision seemingly reduced the possibility of fraud, it did not eliminate the risk of the negligent error that occurred here. We are not persuaded, however, that the legislature intended to allow such errors to be raised as defenses in collateral proceedings. We note that the General Assembly deleted, in 1970, language added to section 266 in 1967 which had allowed a reviewing court to “consider defenses relating to questions of the notices required by section 263 ***.” (Compare Ill. Rev. Stat. 1967, ch. 120, par. 747, with Ill. Rev. Stat. 1971, ch. 120, par. 747; see also In re Application of County Collector (1972), 7 Ill. App. 3d 124, 128-29.) We agree with the appellate court that this deletion indicates the legislature’s intention to protect from collateral attack judgments on questions relating to notice. In light of the implication of this deletion, the legislature’s expressed intent in section 266 that tax deeds be “incontestable,” and the fact that the merchantability of tax titles would be impaired if errors by the sheriff in service of notice, without proof of fraud, were held to be sufficient grounds to afford section 72 relief, we adhere to our previous holdings that section 72 relief in tax-deed cases is limited to those cases where fraud is proved or the judgment is void.

This record does not sustain the trial court’s finding that the tax-deed proceedings were “tantamount to fraud.” The deputy’s error was inadvertent; at most it was negligence. There is no contention that respondent knew of the error at the time of the tax-deed proceedings. The 1976 amendment requires the tax purchaser to deliver a copy of the notice to the sheriff for service upon the required persons. The amendment relieves the tax purchaser from the obligation and responsibility of serving the notice himself. Once he has complied with the provision by delivering a copy to the sheriff with the required fee, he has a right to rely upon the sheriff’s return. Although petitioner had characterized the affidavit as “false” in stating that the sheriff had served petitioner, there is no evidence to support a finding of intentional deception which the term false connotes. (Webster’s Third New International Dictionary 819 (1971); Ballentine’s Law Dictionary 485 (1948).) We hold therefore that neither the error by the deputy in service of notice nor respondent’s reliance upon the sheriff’s return establishes fraud in the tax-deed proceedings. Section 72 relief is therefore inappropriate.

Moreover, we also agree with the appellate court’s view that petitioner did not proceed diligently in filing the section 72 petition. The bank had actual notice of the tax-deed hearing nearly four months before its occurrence. In Esczuk v. Chicago Transit Authority (1968), 39 Ill. 2d 464, 467, this court stated:

“[A] party may not avail himself of the remedy provided by section 72 ‘unless he shows that through no fault or negligence of his own, the error of fact or the existence of a valid defense was not made to appear to the trial court. [Citations.] Such a motion or petition is not intended to relieve a party from the consequences of his own mistake or negligence.’ (Brockmeyer v. Duncan [1960], 18 Ill. 2d 502, 505.)”

Accord, Diacou v. Palos State Bank (1976), 65 Ill. 2d 304, 310-11; cf. Smith v. D.R.G., Inc. (1976), 63 Ill. 2d 31, 39-40; Urban v. Lois, Inc. (1963), 29 Ill. 2d 542, 549-50; People v. Orth (1961), 21 Ill. 2d 205, 211; People v. O’Keefe (1960), 18 Ill. 2d 386, 392-93.) Petitioner could have presented its defense to the trial court. It did not and has made no effort to show that this failure was not due to its own negligence. The petition should have been dismissed by the trial court.

The appellate court correctly reversed the trial court, dismissed the petition and entered judgment for respondent. Its judgment is affirmed.

Judgment affirmed.

JUSTICE SIMON,

specially concurring:

My concurrence in the result is because the bank as trustee received notice of the hearing by registered mail approximately four months before it took place. Having received this notice through its trustee, petitioner could have presented its defense to the trial court. For this reason I agree with the majority that the petitioner could have had his day in court except for his own lack of diligence, and therefore he is ineligible for section 72 relief.

The majority appears, however, to be saying that even had the notice by registered mail not reached the bank, the property owner would have had no recourse unless he could establish actual fraud, that is, intentional deception, in the failure of the sheriff to make service. I do not agree with this approach, for it unilaterally exalts the rights of the purchaser at a tax sale above those of the delinquent property owner. That the majority reaches this result in the name of merchantability of tax titles does not, in my judgment, make it respectable.

The 1976 amendment to section 263 of the Revenue Act requiring that the property owner be served by the sheriff was a salutary measure designed to insure that property owners who had failed to pay taxes would not forfeit their property without knowing about it. Forfeiture for nonpayment of taxes is no less unpleasant, and in some cases no less tragic, to a property owner who loses his property without notice because of negligent errors of the sheriff’s deputy, as a court finds happened here, than because of deceit on the part of the deputy.

I do not understand why the failure of the sheriff’s deputy to make proper service in this case should not be treated in the same way as such a failure would be in any other case in which the sheriff fails to effect a service for which the law makes him responsible. Notwithstanding the General Assembly’s deletion in 1970 of language in the Revenue Act permitting “defenses relating to questions of notices required by section 263,” upon which the majority opinion seems to place strong emphasis (92 Ill. 2d at 408), section 72 is still left intact by the Revenue Act as a vehicle available to the property owner to raise questions of failure of service, as it is available to any other litigant claiming he had not received service. The historical note to section 266 of the Revenue Act indicates that the 1970 amendments to section 266 were “to clarify meaning where ambiguous.” (Ill. Ann. Stat., ch. 120, par. 747, Historical Note, at 58 (Smith-Hurd Supp. 1981).) Thus, it does not appear that these amendments were intended to take challenges to notice out of the panoply of remedies available to property owners. It is likely that the legislature feared that the separate inclusion of challenges to notice in the statute would lead to questions as to whether section 72 was a vehicle for raising such challenges.

The cases on which the majority relies to support the proposition that the delinquent must show actual fraud to prevail even where he was not served with notice are not relevant. They did not involve service required to be made by the sheriff, as the 1976 amendment to section 263 commands. Rather, they involved services predating the 1976 amendment, which were then made by the tax purchaser instead of by the sheriff.

The sanctification the majority opinion gives to the handling of the notice by the sheriff opens the door for too many irregularities. There appears to be no adequate way of policing service by the sheriff such as, for example, in this very case where at best inexcusable confusion took place. Deputy Nodell acknowledges that he was guilty of gross negligence here — leaving the notice at the wrong place because he mixed it up with some other papers which he was serving at that place. I do not think that property owners, even those who have not paid their taxes, should be left at the mercy of this type of official oversight where apparently there was no internal check upon Deputy Nodell’s performance which might have discovered it.

The intention of the 1976 amendment to section 263 was, I believe, to make it more certain that property owners would actually receive notice of a pending tax sale of their property, and to avoid abuses of the type which occurred when the law permitted the tax purchaser himself to serve notice on the property owner. The majority opinion, I fear, is a step in the direction of repeating what unfortunately has occurred too often in the past — approving tax forfeitures about which the property owner first learns after it is too late. For that reason, I would regard the failure to effect proper service on the property owner as cognizable under section 72 had the notice not been received through the registered mail.