author: MR. JUSTICE CLARK MR. JUSTICE UNDERWOOD,

text:
    (No. 52703.
    SAXON-WESTERN CORPORATION, Appellee, v. GEORGE E. MAHIN, Director of Revenue, et al., Appellants.

      Opinion filed, September 29, 1980.

      UNDERWOOD, J., dissenting.
    William J. Scott, Attorney General, of Springfield (Patricia Rosen, Assistant Attorney General, of Chicago, of counsel), for appellants.
    Donald L. Johnson and William Biederman, of Marks, Katz, Johnson, Randall, Weinberg & Blatt, of Chicago, for appellee.
    Thomas W. Power and Robert D. McDonald, of Power & McDonald, of Washington, D.C., for amici curiae Hardee’s Food Systems, Inc.
   MR. JUSTICE CLARK

delivered the opinion of the court:

On September 11, 1972, the plaintiff, Saxon-Western Corp., an Illinois corporation, filed a complaint in the circuit court of Cook County seeking a declaratory judgment and injunctive relief for itself and on behalf of all retail merchants similarly situated. Named as defendants were George E. Mahin, then Director of the Department of Revenue, William J. Scott, Attorney General of the State of Illinois, and Alan J. Dixon, then the State Treasurer.

The complaint sought, inter alia, to enjoin the Director of Revenue from assessing or collecting from the plaintiff or other members of the class the retailers’ occupation tax upon discount coupons as provided by the Department of Revenue’s revised Rule 46. It also requested a declaration that Rule 46 was contrary to law and violative of the constitutions of the United States and Illinois.

Initially, the trial court issued a temporary injunction preventing the Department from collecting the tax from the plaintiff. Subsequently, on the Department’s motion, the court dismissed the complaint and dissolved the injunction on the ground that the plaintiff had failed to exhaust its administrative remedies. That order was appealed and reversed and the cause remanded for further proceedings. 39 Ill. App. 3d 100.

Cross motions for summary judgment were then filed. The plaintiff’s motion requested only that Rule 46 be declared illegal and that the Department of Revenue be enjoined from collecting any tax pursuant to it. The circuit court granted the Department’s motion for summary judgment, dismissed the plaintiff’s complaint, and enjoined the Department from proceeding to collect the tax against the plaintiff pending appeal to this court. No finding as to the propriety of maintaining this action as a class action was ever made by the circuit court. The appellate court held that Rule 46 is unauthorized by the Retailers’ Occupation Tax Act and enjoined the Department of Revenue from collecting the tax. The court stated that since the relief granted would inure to the benefit of the plaintiff and all other retailers similarly situated, no useful purpose would be served by remanding the cause for a determination as to whether it was properly a class action. (78 Ill. App. 3d 125.) The defendants appealed. We allowed their petition for leave to appeal pursuant to Rule 315. 73 Ill. 2d R. 315.

The plaintiff issues discount coupons to the general public through newspaper advertising and mailing circulars. A discount coupon will typically indicate a manufacturer’s suggested retail price, the plaintiff’s nondiscount retail price, and a discount price, available upon presentation of the coupon. The discount is restricted to the specific merchandise identified in the coupon, and the coupons usually contain an expiration date. The plaintiff prints and distributes the coupons itself. The plaintiff collects the used discount coupons from each store, and the plaintiff’s advertising department makes a statistical tabulation to determine how effective each advertising campaign has been. The plaintiff does not thereafter tender the coupons to a manufacturer for a redemption. Instead all coupons are destroyed after the tabulations are complete.

The Department of Revenue’s Rule 46 was adopted in 1964 in an effort to collect a tax on retailers engaged in the business of redeeming trading stamps for tangible personal property. Rule 46 provided at that time:

“Persons who engage in the business of transferring tangible personal property upon the redemption of trading stamps shall be deemed to be engaged in the business of selling such property at retail and shall be liable for and shall pay the tax imposed by the Retailers’ Occupation Tax Act on the basis of the retail value of the property transferred upon redemption of such stamps. When merchandise is paid for partly in cash and partly by surrendering a trading stamp valued at a specific amount, the total amount (including the value of the surrendered trading stamp) is subject to retailers’ occupation tax.”

In a 1971 amendment the Department extended the rule to trading coupons stating as follows:

“The same principles apply to trading coupons. Also, it does not matter how or where the consumer obtained the coupon in the first place (ie., from a manufacturer or other supplier of the retailer, from the retailer himself or from an advertisement placed in a newspaper by such retailer or his supplier). The measure of the tax in trading coupon redemptions is the value of the merchandise transferred for the surrendered coupon, which value would normally be presumed to be the stated value of the coupon plus whatever cash receipts the retailer receives in the transaction. This is true even if the retailer absorbs all of the cost, or if the retailer absorbs a part of the cost, as where a manufacturer only partially reimburses the retailer for the value of the merchandise transferred.”

In 1972 the Department of Revenue conducted a retailer’s occupation tax audit of the plaintiff. The Department subsequently issued a notice of tax liability for the period March 15, 1971, through April 30, 1972. The plaintiff then commenced this action.

The sole issue presented on appeal is whether the non-reimbursable discount coupons distributed by the plaintiff are taxable as part of the plaintiff’s gross receipts. For the reasons stated by the appellate court, we think they are not. The Retailers’ Occupation Tax Act (Ill. Rev. Stat. 1977, ch. 120, par. 441) imposes a tax upon persons engaged in the selling of tangible personal property at retail based upon a percentage of the gross receipts from such sales. Gross receipts are defined as “the total selling price or the amount of such sales.” (Ill. Rev. Stat. 1977, ch. 120, par. 440.) That same section also defines “selling price” or the “amount of sale” as “the consideration for a sale valued in money whether received in money or otherwise, including cash, credits, property *** and services ***.” (Ill. Rev. Stat. 1977, ch. 120, par. 440.) The foregoing section was amended in 1963 to include the following provision:

“Persons who engage in the business of transferring tangible personal property upon the redemption of trading stamps shall be deemed to be engaged in the business of selling such property at retail and shall be liable for and shall pay the tax imposed by this Act on the basis of the retail value of the property transferred upon redemption of such stamps.” (Ill. Rev. Stat. 1963, ch. 120, par. 440, as amended by H.B. 576; 1963 Ill. Laws 1767, 1770.

(See Homof v. Kroger Co. (1966), 35 Ill. 2d 125, upholding the constitutionality of the amendment.)

The Department of Revenue does not contend that the 1963 amendment expressly including the retail value of trading stamps in computing a retailer’s gross receipts governs this case. It clearly does not. The Department instead argues that since the term “selling price” encompasses the consideration received for a sale valued in money whether received in money or otherwise, the face value of the plaintiff’s discount coupons is taxable under the Retailers’ Occupation Tax Act. We are compelled to disagree, however, for the reason that the face value of the plaintiff’s coupons is never received by the plaintiff. It is deducted from the selling price received by the plaintiff, not added to it. In Keystone Chevrolet Co. v. Kirk (1978), 69 Ill. 2d 483, this court stated that section 2 of the Act “imposes the tax specifically upon the seller’s gross receipts. Where those receipts are not in any way reduced, the full amount thereof is subject to the tax.” (Emphasis in original.) (69 Ill. 2d 483, 487.) The corollary to that proposition is that where a seller’s receipts are in no way increased as the result of a discount program, only so much of the seller’s gross receipts as are actually realized are taxable.

In Leslie Car Wash Corp. v. Department of Revenue (1978), 69 Ill. 2d 488, the retailer attempted to deduct from gross receipts from the sale of gasoline the value of car wash discounts given in return for the purchase of gasoline. This court held that the full gross receipts received by the retailer were taxable. No deductions were allowable on the basis of the claimed value of each car wash. The instant case represents the opposite side of the same coin. In Leslie the retailer attempted to deduct a discount from gross receipts. In the instant case, the Department of Revenue asserts that the face value of the discount coupons should be added to the plaintiff’s gross receipts. In neither case is there justification for deviating from the statutory requirement. In Leslie the retailer was obligated to pay tax on the gross receipts actually realized by him. In the same way, the plaintiff herein shall not be made to pay a tax on an amount in excess of his gross receipts. In short, where a retailer has foregone realizing cash receipts in the hope of increasing the volume of his business and also in the hope of learning the most effective means of advertising, no taxable event occurs. This result is supported by the concession made by the Department during oral argument that if the plaintiff had just placed items on sale and had not distributed coupons, a tax would be measured by the sale price, not the regular retail price. We perceive no difference between the two situations. Any incidental benefit derived from the use of the coupons is speculative, does not increase the plaintiff’s gross receipts and therefore is not susceptible to taxation.

The appellate court reached a similar conclusion in Martin Oil Service, Inc. v. Department of Revenue (1975), 30 Ill. App. 3d 927. There a gasoline retailer distributed discount stamps to customers. Upon the presentation of a book representing $2 in stamps, the customer received a discount toward the purchase of gasoline. The Department contended that the value of each stamp book redeemed by the retailer was includible in computing the retailers’ taxable gross receipts. The appellate court disagreed: “[S] ince the plaintiff never received the cash represented by the value of a redeemed coupon book, this amount should be deducted from gross receipts by which the tax in turn is measured.” 30 Ill. App. 3d 927, 932; accord, Standard Oil Co. v. State (1937), 283 Mich. 85, 276 N.W. 908.

The Department argues further that since the plaintiff uses the information gleaned from the use of discount coupons in determining how effective its advertising is, a service is thereby rendered. The Department proposes further that the value of that service to the retailer is the face value of the coupon. First of all, the Department does not indicate whether the taxable amount would be measured by the difference between the discounted price and the manufacturer’s suggested retail price or the lower, retailer’s regular price. In either event, however, we do not think this argument has merit, because there is no indication that the benefit the plaintiff receives from the coupons is equal to the face value reflected in the coupons. Moreover, we do not see how the information obtained by the plaintiff qualifies as a service performed by the plaintiff’s customers. The customers do not collect and perform a statistical analysis of the coupons; they simply bring them to the store. The plaintiff itself performs the service of gleaning information from the coupons.

Additionally, we emphasize that the result urged by the Department is in conflict with one of its own regulations. Article 3, section 4 (1973), provides:

“DISCOUNT
If a discount is allowed for payment in cash within a stated time, any amounts realized by sellers through failure of purchasers to take advantage of such discounts will be considered to be a part of the taxable receipts from the sale. Conversely, if the seller allows the purchaser a discount from the selling price (such as a discount for prompt payment) and the purchaser avails himself of the discount so that the seller does not receive any receipts from that source, the amount of such discount is not subject to tax.”

Clearly, the foregoing regulation excludes discounts from taxation for the reason that a retailer does not receive any receipts when he grants a discount to a customer. Contrary to the Department’s assertions, this regulation is not restricted to cash discounts only. No specific limitation is placed on those discounts of which a purchaser does avail himself. (Discounts to retail customers have been accorded the same treatment by several of our sister States: North Dakota, Washington, Indiana, Texas and Missouri; contra Connecticut, New Jersey and Massachusetts. See generally Comment, The Retail Sales Tax: Shall The Value Of Retailers’ Coupons Be Included In The Basis For Computation, 13 J. Mar. L. Rev. 717, 721 n.36 (1980).)

A final contention made by the Department is that the coupons represent a cost of doing business and as such are nondeductible under section 3 of article 3 (1974) of the Department’s regulations:

“In computing retailers’ occupation tax liability, no deductions shall be made by a taxpayer from gross receipts or selling prices on account of the cost of property sold, the cost of materials used, labor or service costs, freight or transportation costs, overhead costs, clerk hire or salesmen’s commissions, interest paid by the seller, or any other expenses whatsoever.”

This contention is devoid of merit for the reason that the plaintiff is not attempting to deduct the cost of printing or distributing the coupons. It very simply is selling its retail products for a reduced price. It need only therefore pay a tax on the gross amount it actually receives. (Keystone Chevrolet Co. v. Kirk (1978), 69 Ill. 2d 483, 487; Martin Oil Service, Inc. v. Department of Revenue (1975), 30 Ill. App. 3d 927, 932.) Therefore the Department of Revenue is enjoined from assessing or collecting a tax upon the discount coupons issued by the plaintiff because the 1971 amendment to Rule 46 is unauthorized by law. In light of the foregoing conclusion, it is not necessary to reach the constitutional contentions asserted by the plaintiff. Accordingly, for the reasons stated, the judgment of the appellate court is affirmed.

Judgment affirmed.

MR. JUSTICE UNDERWOOD,

dissenting:

I dissent because I believe the majority has simply made a mistake. In my judgment, the unequivocal statutory language mandates inclusion of the value of the retail coupons in the gross receipts subject to the retailers’ occupation tax. Under the statute, a tax is imposed on total gross receipts defined as “the total selling price ***” and “selling price” is defined as “the consideration for a sale valued in money whether received in money or otherwise, including cash, credits, property *** without any deduction on account of the cost of the property sold, the cost of the materials used, labor or service cost or any other expense whatsoever ***.” (Emphasis added.) Ill. Rev. Stat. 1977, ch. 120, par. 440.

This case is perhaps best illustrated by the following hypothetical: Plaintiff advertises that, if the reader clips and brings to plaintiff’s store the coupon in the ad, the reader may buy a $5 paint brush for $4. Without the coupon the buyer will pay $5 for the brush; by delivering the coupon to plaintiff he buys the brush for $4. To say, as the majority does, that delivery of the coupon is not a part of the “consideration for a sale” defies elementary contract principles and ignores the plain meaning of the statutory language. My colleagues seem to believe that “consideration” refers only to cash, since they say that because “the face value of the plaintiff’s coupons is never received by the plaintiff” (81 Ill. 2d at 564), that value cannot be included as. a part of the selling price. What seems to me the obvious fallacy in that reasoning is that the statute defines “selling price” as “the consideration for a sale valued in money whether received in money or otherwise ***” (Ill. Rev. Stat. 1977, ch. 120, par. 440). As was said by this court in Hornof v. Korger Co. (1966), 35 Ill. 2d 125, 130, in upholding a statute which used the retail value of the merchandise transferred as the measure of the occupation tax on the redemption of trading stamps: “The term ‘Gross receipts’ is defined as the ‘total selling price or the amount of such sales,’ i.e. sales of tangible personal property, while the phrase ‘Selling price or amount of sale’ is defined as meaning ‘the consideration for a sale valued in money whether received in money or otherwise.’ [Citation.] Thus, ‘gross receipts’ does not necessarily reflect a sale for cash, but is in effect the value placed upon the property by the seller and accepted by the buyer.” Clearly, the $1 differential in the cash payment in the above hypothetical represents the value to the retailer in having the coupon delivered to him. That value lies, at least in part, in the fact that customers are brought to his store with resulting increases in sales of other items; too, the number of coupons received enables him to guage the effectiveness of his advertising program. To say, as my colleagues do, that the value of the coupon is “speculative, does not increase the plaintiff’s gross receipts and therefore is not susceptible to taxation” (81 Ill. 2d at 565) completely ignores the statutory definitions and the Homof holding.

Further illustrating what seems to me to be my colleague’s misconception that only cash payments can be included in gross receipts is their statement that the plaintiff “very simply is selling its retail products for a reduced price” (81 Ill. 2d at 567). This misstatement is, it seems to me, the crux of the matter. Plaintiff is not simply selling its product for a reduced price — plaintiff will not sell at the reduced price without simultaneous delivery of the required coupon. Were plaintiff simply selling at a reduced price without the coupon, there would be no attempt by the Department to collect the tax for Departmental regulations in such cases explicitly measure the tax by the reduced price.

Keystone Chevrolet Co. v. Kirk (1978), 69 Ill. 2d 483, involved only the question whether a seller could deduct from his gross receipts rebates paid by a third party. It is not relevant here. Leslie Car Wash Corp. v. Department of Revenue (1978), 69 Ill. 2d 488, likewise involved the question of deductibility of the cost of free car washes and is inapposite.

While there appear to be no court decisions concerning the taxability of retailers’ discount coupons, there are a number of administrative regulations and rulings. Those regulations are not uniform, but the reasoning of those taxing the value of the coupons is applicable here. Illustratively, the Connecticut sales tax which is based on gross retail receipts allows cash discounts. (State Tax Guide (CCH) par. 60 — 295, at 6065-68.) The Bulletin of the Connecticut Tax Commissioner (July 26, 1973) states:

“Coupons used to pay part of the purchase price of retail merchandise are the same as money. Anything of value which is counted toward the purchase price of goods sold at retail is, under the law, regarded as the same as money for tax purposes. The sales tax is owed on the full purchase price of the merchandise, regardless of how much is deducted by the retailer for coupons turned in by the consumer.”

Maryland and Massachusetts have similar rules. (1 All State Sales Tax Rep. (CCH) pars. 15 — 638, 15 — 711.) Statutory provisions or administrative regulations in some States provide otherwise as noted in Comment, The Retail Sales Tax: Shall the Value of Retailers’ Coupons be Included in the Basis for Computation, 13 J. Mar. L. Rev. 717, 721 n.36 (1980).

It seems to me our statute is explicit, and requires reversal of the appellate and circuit courts, dismissal of the complaint for injunction, and a declaratory judgment including in plaintiff’s gross receipts the undiscounted value of plaintiff’s products for which coupons are required.


source: Caselaw Access Project

author: MR. JUSTICE RYAN

license: Public Domain

text:
    (No. 52639.
    THE PEOPLE OF THE STATE OF ILLINOIS, Appellant, v. KEITH DOUGLAS ROGERS, Appellee.

      Opinion filed, September 29, 1980.

    William J. Scott, Attorney General, of Springfield, and Charles R. Garnati and Robert H. Howerton, State’s Attorneys, of Marion (Donald B. Mackay, Melbourne A. Noel, Jr., and Jonathan Strauss, Assistant Attorneys General, of Chicago, and Stephen J. Maassen and Raymond F. Buckley, Jr., of the State’s Attorneys Appellate Service Commission, of Mt. Vernon, of counsel), for the People.
    John H. Reid, Deputy Defender, and Jeff M. Plesko, Assistant Defender, of the Office of the State Appellate Defender, of Mt. Vernon, for appellee.
   MR. JUSTICE RYAN

delivered the opinion of the court:

The sole issue raised by this appeal concerns the admissibility in evidence of a police composite sketch. The Williamson County circuit court permitted a photocopy of an Identi-kit composite of the offender to be admitted as corroboration of the identification testimony given by the prosecuting witness. The defendant was subsequently convicted of armed robbery. The appellate court reversed, finding that the admission of the sketch served to deprive the defendant of a fair trial. (75 Ill. App. 3d 866.) We granted the State leave to appeal under our Rule 315. 73 Ill. 2d R. 315.

A service station in Marion was robbed on November 15, 1976, at approximately 8:45 p.m. The station’s assistant manager, Hubert Edward Moake, was on duty that evening. According to Moake, the offender carried a handgun and took $119 in cash from the service station. Moake assisted the police in making a composite sketch later that evening. Approximately DA weeks after the commission of the offense, Moake tentatively identified the defendant, Keith Rogers, from a group of photographs, stating that he would have to see the individual in person to be certain. As a result, a lineup was conducted and Moake positively identified the defendant as being the man who robbed him. Thereafter, the defendant was charged by information with armed robbery in violation of section 18 — 2 of the Criminal Code of 1961 (Ill. Rev. Stat. 1975, ch. 38, par. 18 — 2). The defendant filed a pretrial motion, seeking the suppression of testimony relating to the lineup and the suppression of an in-court identification of the defendant. The court granted the motion to suppress the lineup identification, finding that defendant’s sixth amendment right to counsel had been violated. A hearing was then conducted in order to ascertain the prosecuting witness’ ability to make an identification of the offender independent of the lineup. At the conclusion of the hearing, the court found there to be sufficient evidence, independent of the illegally conducted lineup, from which the witness could identify the offender. The court, therefore, denied the defendant’s motion to suppress an in-court identification, and the defendant was subsequently convicted.

At the trial of this case, Moake testified as to his ability to observe the defendant before and during the robbery. After he related the details of the incident, Moake, over the defendant’s objection, identified the defendant as being the man who robbed him. Moake testified that he met with Detective Gary Ashman of the Illinois State Police on the night of the robbery for the purpose of making a composite sketch of the offender. Counsel for the defendant objected to the admission of the photocopy of the composite on the grounds that “it would add nothing to the case and it would be in violation of the best evidence rule.” The circuit court overruled this objection, stating that any evidence tending to show the credibility of a witness would be admissible. Moake then testified that the photocopy of the Identi-kit composite accurately and correctly portrayed the composite that was made and, as such, portrayed the man who robbed him. Moake did state, however, that the small, dark, thin mustache in the sketch should have been light-colored and thin to more accurately portray the offender. During cross-examination, defense counsel asked Moake about the lineup, thereby waiving the suppression of the lineup identification. Thus, on redirect examination, Moake was able to state that he positively identified the defendant in the lineup as being the man who robbed the service station on November 14, 1976.

Detective Ashman testified that Moake described the robber as being between the ages of 20 and 24, standing 5 feet 10 inches or 5 feet 11 inches tall, weighing 135 to 140 pounds, with light brown hair, glasses and a moustache. The description was given for the purpose of making a composite sketch. Detective Ashman stated that he utilized an Identi-kit for the making of the composite. He testified that the photocopy admitted in evidence accurately and correctly depicted the composite he prepared. The detective then, in the presence of the jury, reconstructed the composite originally made and depicted in the photocopy.

On review, the State conceded that the composite constituted hearsay evidence, but that its admission was harmless error. The appellate court reversed defendant’s conviction, finding the admission of the composite to have denied the defendant a fair trial. The sole issue before this court is whether the admission of the composite sketch was erroneous and, if so, of such magnitude as to deprive the defendant of a fair trial.

An Identi-kit consists of several transparent overlays. On each overlay is a printed variation of a facial feature. The eyewitness selects the variation of each feature which most closely matches that of the offender. Since each overlay is numbered, the composite can be easily duplicated. (See Annot., 42 A.L.R.3d 1217, 1220 (1972).) The Identikit composite is an extrajudicial identification; that is, it is an identification made prior to or outside of the trial in which the evidence of the identification is sought to be introduced. (Annot., 71 A.L.R.2d 449, 452 (1960); Note, Admissibility of Extrajudicial Identifications, 32 Okla. L. Rev. 462, 462-63 (1979).) The admissibility of such evidence may be challenged on two grounds. First, it may be alleged that the surrounding circumstances under which the identification was obtained were unnecessarily suggestive. Then, on constitutional grounds, the extrajudicial identification evidence will be barred from use at trial. (See, e.g., Gilbert v. California (1967), 388 U.S. 263, 18 L. Ed. 2d 1178, 87 S. Ct. 1951 (in-court identification must be free from taint of illegal lineup).) It is the second ground, concerning evidentiary rules, upon which the defendant claims that the trial court erred in admitting the Identi-kit composite sketch in our case. Citing People v. Turner (1968), 91 Ill. App. 2d 436, and People v. Fair (1977), 45 Ill. App. 3d 301, defendant asserts that the identification constituted impermissible hearsay. He also argues that the composite, admitted through the testimony of the prosecuting witness, was no more than a prior consistent statement which cannot be introduced to bolster the witness’ testimony in the absence of impeachment. The State also premises its argument first on hearsay principles, stating that the extrajudicial identification should be admissible as substantive evidence of prior identification since the declarant was available for cross-examination at trial and the identity of the defendant was a critical issue in dispute. The State also asserts that the prohibition against the admission of prior consistent statements is inapplicable in situations where identification evidence is involved.

Several jurisdictions have addressed the issue concerning the propriety of permitting evidence of an extrajudicial identification in a trial where the identity of the accused is an issue. Some courts have allowed the prior identification to be admitted as corroboration testimony, stating that the evidence relates to the weight and sufficiency of the in-court identification rather than to its admissibility. (State v. Childs (1967), 198 Kan. 4, 422 P.2d 898 (photograph identification); Judy v. State (1958), 218 Md. 168, 146 A.2d 29 (photograph).) Other courts hold the extrajudicial identification to be admissible as independent substantive evidence of identity. (People v. Gould (1960), 54 Cal. 2d 621, 254 P.2d865, 7 Cal. Rptr. 273 (photograph identification).) Another court has ruled that although the Identi-kit composite itself was inadmissible, the preparing police officer could testify as to the operation of the Identi-kit. (Butler v. State (1970), 226 Ga. 56, 172 S.E.2d 399.) Other jurisdictions have held, pursuant to statute, that evidence of prior identification is permissible as either corroboration of impeached identification testimony (State v. Lancaster (1971), 25 Ohio St. 2d 83, 267 N.E.2d 291 (police artist sketch)) or as substantive proof of identity where the identifier is subject to cross-examination and the evidence is fair and reliable (State v. Ginardi (1970), Ill N.J. Super. 435, 268 A.2d 534 (Identi-kit composite sketch)). For a list of States which have adopted evidence rules providing for the admissibility of prior identifications, see 11 Moore’s Federal Practice, section 801.41 [4.-2], at VIII — 40 (2d ed. 1976). On the other hand, several jurisdictions have held evidence of prior identification to be inadmissible hearsay and have refused its admission in evidence unless the evidence falls within an exception to the hearsay rule. See, e.g., People v. Coffey (1962), 11 N.Y.2d 142, 182 N.E.2d 92, 227 N.Y.S.2d 412 (police artist sketch); Commonwealth v. Rothlisberger (1962), 197 Pa. Super. 451, 178 A.2d 853 (artist sketch); Commonwealth v. McKenna (1969), 355 Mass. 313, 244 N.E.2d 560.

From these cases it is apparent that the courts generally consider sketches and Identi-kit composites as out-of-court identifications and the use of them to be governed by the rules applicable to the admission of evidence concerning out-of-court identifications. The applications of these rules in the cases usually involve a discussion of the hearsay rule.

It appears that no single facet of the law has been productive of as much confusion as has the application of the hearsay evidence rule. The varied treatment given evidence of pretrial identification in the cases discussed amply demonstrates this assertion. The definition of hearsay itself is deceptively simple and is generally accepted to be testimony of an out-of-court statement offered to establish the truth of the matter asserted therein, and resting for its value upon the credibility of the out-of-court asserter. (People v. Carpenter (1963), 28 Ill. 2d 116, 121; McCormick, Evidence sec. 246, at 584 (2d ed. 1972).) The confusion arises, as is often the case, in the application of the definition. Often, a broad, sweeping generalization is made in the reported decisions and by attorneys that all extrajudicial statements made out of the presence of a defendant are hearsay and therefore not admissible. However, in many situations, testimony may be offered of an out-of-court assertion to prove the facts of the matter asserted, and yet the reason for the exclusion of hearsay evidence will be absent. We find the facts now before us to constitute such a situation.

The reason for excluding such evidence is found in the last phrase of the definition stated above: “[A]nd resting for its value upon the credibility of the out-of-court asserter.” The basis for excluding evidence under the hearsay rule lies in the fact that an opportunity to ascertain the veracity of the testimony is absent (29 Am. Jur. 2d, Evidence sec. 493, at 552 (1967)), and not that the evidence offered may technically fall within the definition of the term. Thus, the essential requirement of the testimonial offering is the opportunity for cross-examination of the party whose assertions are offered to prove the truth of the fact asserted. People v. Robinson (1978), 73 Ill. 2d 192, 200; People v. Clark (1972), 52 Ill. 2d 374, 389; People v. Cook (1965), 33 Ill. 2d 363, 370; People v. Carpenter (1963), 28 Ill. 2d 116, 121.

This court, in the past, has approved the giving of testimony that the victim of a crime has identified the defendant from a photograph or from a lineup. (People v. Cook (1965), 33 Ill. 2d 363, 371; People v. Miller (1963), 27 Ill. 2d 336; People v. Gray (1962), 24 Ill. 2d 229; People v. Brown (1959), 16 Ill. 2d 482.) Although in these cases the witness was permitted to testify as to his out-of-court identification as corroboration of his in-court identification, this accepted evidence of out-of-court statements was in no case admitted as substantive evidence, even though the one who made the statements is present in court and subject to cross-examination. See People v. Spicer (1979), 79 Ill. 2d 173, 179; People v. Bailey (1975), 60 Ill. 2d 37, 43; People v. Cook (1965), 33 Ill. 2d 363, 371; People v. Moretti (1928), 330 Ill. 422, 424; People v. Scott (1921), 296 Ill. 268, 273.

In People v. Clark (1972), 52 Ill. 2d 374, 388-90, this court noted the general rule that although the witness may be present in court and subject to cross-examination, he may not testify as to statements he made out of court for the purpose of corroborating his testimony given at trial relative to the same subject, except to rebut a charge or inference that the witness is motivated to testify falsely or that his testimony is of recent fabrication. This general rule does not, however, apply to statements of identification. The justification for this exception is based on the notion that, by the time of trial, the witness’ mind has become so conditioned that there is little likelihood that he would not identify the person in court. The exception has been explained thus:

“The psychology of the situation is practically the same as when recent contrivance is alleged. To corroborate the witness, therefore, it is entirely proper *** to prove that at a former time, when the suggestions of others could not have intervened to create a fancied recognition in the witness’ mind, he recognized and declared the present accused to be the person.” (Emphasis in original.) (4 Wig-more, Evidence sec. 1130, at 277 (Chadboum rev. ed. 1972).)

Although this exception in favor of identification testimony is widely acknowledged, it has not been applied by the courts in a uniform manner. See Annot., 71 A.L.R.2d 449 (1957).

To resolve the uncertainty as to the law in this State concerning evidence of out-of-court identification, we set forth herein the rules that should govern the admissibility of such evidence. If a third person were to testify that he saw or heard A identify B as the person who committed the offense, that would obviously and clearly be hearsay testimony and would not be admissible. However, if A testifies that he previously identified B and his veracity is tested by cross-examination, the reason for excluding the third person’s testimony has been removed. The third person should then be permitted to testify that he heard or saw A identify B because both A and the third person would be subject to cross-examination concerning the out-of-court identification. Evidence of such out-of-court identification by both A and the third person should be admissible but should be used only in corroboration of in-court identifications and not as substantive evidence. Before the third person is permitted to testify as to A’s identification of B, A should first testify as to his out-of-court identification.

In this case, Moake testified, under oath, as to his statement concerning the description of the robber which he gave to Detective Ashman. Moake also testified as to the authenticity of the photocopy of the Identi-kit composite sketch. The jury was able to observe Moake’s demeanor, and, more importantly, Moake was subject to cross-examination and was, in fact, cross-examined. Under these facts alone, we would hold that the admission of the sketch did not constitute error. The additional fact that Detective Ashman testified at the trial supports our decision; the officer’s testimony served to authenticate the photocopy and to establish the veracity of Moake’s testimony. We therefore hold that the hearsay rule does not operate to bar the admission of the extrajudicial identification.

As hereinbefore stated, the composite and testimony concerning the production thereof constituted extrajudicial statements of identification. We have long permitted the admission of authenticated prior identification evidence where the identifier is present at trial and available for cross-examination. (See, e.g., People v. Wilson (1953), 1 Ill. 2d 178, 188-89, cert, denied (1954), 347 U.S. 928, 98 L. Ed. 1080, 74 S. Ct. 530; see generally McCormick, Evidence sec. 251, at 603 (2d ed. 1972); Comment,Hearsay Witnesses’ Prior Statements, and Criminal Justice in Illinois, 1974 U. Ill. L.F. 675 (1974).) In People v. Cook (1965), 33 Ill. 2d 363, 371, we recognized the significance of identification evidence:

“We have consistently approved and regarded as convincing evidence the fact that the victim of a crime has identified the defendant from a photograph or a police line-up.”

We find equally convincing the evidence of a description given to the police shortly after the commission of the crime and the sketch produced therefrom.

We therefore hold that the trial court did not err in its admission in evidence of the composite sketch. The identification evidence did not constitute impermissible hearsay evidence; the identifying witness Moake testified under oath and was subject to cross-examination as to his out-of-court statements. Furthermore, the evidence was not admitted as substantive evidence but as prior identification evidence to corroborate the prosecuting witness’ in-court identification of the defendant. As such, it was properly admitted. We reject defendant’s assertion that the discrepancies in the physical description Moake gave to the police shortly after the crime rendered the sketch unreliable. These matters did not concern the admissibility of the evidence, but, rather, concerned the credibility of Moake and the weight to be given the identification evidence.

We are not unmindful of the cases in our appellate courts wherein the admission of a police composite sketch was held to constitute either reversible error (People v. Turner (1968), 91 Ill. App. 2d 436; People v. Fair (1977), 45 Ill. App. 3d 301; People v. Slago (1978), 58 Ill. App. 3d 1009), or were held to be harmless error (People v. Jones (1975), 34 Ill. App. 3d 103, cert, denied (1976), 426 U.S. 953, 49 L. Ed. 2d 1192, 96 S. Gt. 3179; People v. Castillo (1976), 40 Ill. App. 3d 413). The above decisions were premised on the notion that the sketches were inadmissible as either hearsay or as a prior statement consistent with a witness’ testimony. We have rejected both of these assumptions.

We note that, pursuant to rule, the Federal courts do not deem extrajudicial identification evidence to constitute hearsay evidence. Rule 801 provides, in pertinent part:

“(d) Statements which are not hearsay. A statement is not hearsay if—
(1) Prior statement by witness. The declarant testifies at the trial or hearing and is subject to cross-examination concerning the statement, and the statement is *** (C) one of identification of a person made after perceiving him ***.” (Fed. R. Evid. 801(d)(1)(C).)

Thus, pretrial photograph identifications, descriptions and composite sketches have been held admissible by the Federal courts. (See, e.g., United States v. Moskowitz (2d Gir. 1978), 581 F.2d 14, cert. denied (1978), 439 U.S. 871, 58 L. Ed. 2d 184, 99 S. Ct. 204.) Further, the rule has been construed as permitting the introduction of such evidence, not merely for corroboration, but as substantive proof of the issue of identity. (See, e.g., United States v. Marchand (2d Cir. 1977), 564 F.2d 983, 996-97, cert, denied (1978), 434 U.S. 1015, 54 L. Ed. 2d 760, 98 S. Ct. 732.) (See generally Comment, The Use of Prior Identification Evidence in Criminal Trials Under the Federal Rules of Evidence, 66 J. Grim. L. & Criminology 240 (1975).) While we do not hold such evidence to constitute substantive proof of identity, we find the Federal law to be supportive of our holding that prior identification evidence is admissible where the declarant is available for cross-examination and the evidence satisfies constitutional and other evidentiary requirements.

In conclusion, we hold that the trial court correctly admitted the composite sketch and Moake’s description in evidence as corroboration of his in-court identification of the defendant. Accordingly, the judgment of the appellate court is reversed and the judgment of the circuit court of Williamson County is affirmed.

Appellate court reversed; circuit court affirmed.


author: MR. JUSTICE MORAN

text:
    (Nos. 52931, 52967 cons.
    CATERPILLAR TRACTOR COMPANY, Appellant, v. THE INDUSTRIAL COMMISSION et al. (Raymond G. Ribbe, Appellee).

      Opinion filed September 29, 1980.

      Robert F. Fahey, of Peoria, for appellant.
    Kenneth L. Ott and James R. Carter, of Peoria, for appellee.
   MR. JUSTICE MORAN

delivered the opinion of the court:

An arbitrator awarded compensation to claimant, Raymond G. Ribbe, for 30% permanent and complete loss of use of the right leg and 5% loss of use of the left leg. The loss, claimant asserts, resulted from an accidental back injury which arose out of and in the course of his employment with the respondent, Caterpillar Tractor Company. After receiving additional evidence, the Industrial Commission sustained the arbitrator’s decision. The circuit court of McLean County confirmed the award and also affirmed the Commission’s denial of respondent’s motion to reopen proofs on review. Respondent now appeals, raising only the claim that the Commission’s finding is against the manifest weight of the evidence, whereas claimant counters that the circuit court was without jurisdiction to entertain respondent’s appeal.

The only testimony adduced at trial was that of the claimant. He stated that on October 15, 1975, while lifting 85- to 90-pound pieces of machinery and moving them from a conveyor to a heater three feet away, he felt a pain in his back. Later that day, as the pain increased, he went to the first-aid station, where, according to his testimony, he was given muscle relax ants and aspirins. Although the pain in his back persisted, claimant continued to work. He testified that he received treatment for his back at respondent’s first-aid station from October 15, 1975, through February of 1976. On February 13, 1976, upon returning home after work, claimant took his dog out and experienced a back pain so severe that he was unable to straighten up. He was taken to the office of Dr. A. E. Livingston, where he was examined by Dr. Virgil D. Short, who recommended he not return to work. On February 19, 1976, claimant was treated by Dr. Livingston, who subsequently referred him to Dr. John L. Wright. Dr. Wright hospitalized claimant from March 31, 1976, through April 14, 1976, and did not release claimant for return to work. Claimant was, in fact, readmitted to the hospital on August 16, 1976, a myleogram was administered, and he was again discharged on August 19, 1976. In December of 1976, he was readmitted to the hospital for a partial hemilaminectomy. Claimant was released for return to work on April 2, 1977, and has worked continuously from that date.

The respondent’s first-aid “Log of Injuries and Illnesses” was admitted into evidence by claimant. It showed that claimant had reported to the first-aid station on October 25, 1975, 10 days after the alleged back injury. The log also showed that claimant was treated on December 22, 1975, when he “refused muscle relax shot” but was given medication. The log records first-aid visits by claimant on January 8, 1976, January 16, 1976, and February 5, 1976. A notation dated February 6, 1976, indicated that claimant sought treatment for chronic back pain which, he claimed, started “about Thanksgiving time, *** eased off at Xmas vacation time but now bothers [him] again.”

Several doctors’ reports and physicians’ records were admitted into evidence by claimant. A hospital admission record signed by claimant’s physician, Dr. J. L. Wright, dated March 31, 1976, stated, under “case history,” that the patient had been well until mid-February, when he experienced severe pain while playing with his dog. However, the “past history” portion contained the phrase, “No trouble with the back at all until on this new job, which he has been at Caterpillar recently.”

Although a letter from the claimant’s physician,. Dr. Livingston, dated October 25, 1976, stated that he had “No record of any injury as such,” the letter also states that claimant was first examined on February 16, 1976. “At that time he stated that he had some back pain off and on for three or four months.” This would coincide with the period during which claimant experienced his alleged back injury. The record of hospital consultant, Dr. H. McMenamin, dated April 1, 1976, related:

“[T] his twenty-seven year old man complains of sharp pain in the low back and down the right leg since 2/13/76. *** He states that his low back has hurt for 6-8 months.”

At respondent’s request, claimant was examined by Dr. Floyd S. Barringer on September 9, 1976. His report states that claimant had no trouble with his back until about November 1975, when his job at Caterpillar changed slightly. He then began to experience back pain intermittently. On November 14, 1977, claimant was examined by Dr. Bok Y. Choi at the request of respondent. Dr. Choi’s report relates that “According to the patient, he was well until 1975, when he felt a tingling in his lower back, while he was picking up pieces weighing one hundred pounds from a conveyor.”

The claimant contends that, because respondent failed to insure that a proper and complete record was on file with the circuit court, it failed to perfect the jurisdiction of the court to entertain review.

The record shows that the respondent filed his appeal within the prescribed time. Because of a clerical error made in numbering the transcripts, the appropriate record was not before the circuit court within 60 days from the filing of the writs of certiorari, as required by section 19 of the Workmen’s Compensation Act (Ill. Rev. Stat. 1975, ch. 48, par. 138.19). A Commission letter dated October 31, 1979, acknowledged this error, which was corrected by the Commission before judicial review. The established rule is that a party who seeks review and in good faith complies with the direction of the law will not be prejudiced by clerical errors or omissions which are later corrected. (Lumbermen’s Mutual Casualty Co. v. Industrial Com. (1922), 303 Ill. 364, 369.) The court has the inherent power to allow the removal of the record so that clerical errors may be corrected in order to assure that the record before it on review speaks the truth. (Heckard v. Industrial Com. (1933), 353 Ill. 197, 200.) We therefore find that the clerical error did not affect the jurisdiction of the circuit court to entertain review.

The respondent claims that the decision of the Industrial Commission is against the manifest weight of the evidence since the doctor and hospital records point to an injury occurring on February 13, 1976, while defendant was out playing with his dog.

Resolution of conflicting evidence, such as that here present, is within the realm of the Commission. It is also within the province of the Commission to weigh the evidence and draw reasonable inferences from the evidence. Only when the decision of the Commission is against the manifest weight of the evidence will this court interfere. (A.O. Smith Corp. v. Industrial Com. (1977), 69 Ill. 2d 240, 246; County of Cook v. Industrial Com. (1977), 68 Ill. 2d 24, 30.) We have examined the record before us and have found that the decision of the Commission is not contrary to the manifest weight of the evidence.

The judgment of the circuit court is affirmed.

Judgment affirmed.


author: MR. JUSTICE WARD

text:
    (No. 52975 .

      In re PERRY G. CALLAS, Attorney, Respondent.

      Opinion filed September 29, 1980.

      CLARK, J., took no part.
    Disciplinary proceeding.
    John C. O’Malley, of Chicago, for the Adminstrator of the Attorney Registration and Disciplinary Commission.
    Friedman & Koven, of Chicago, and Shea & Hett, Ltd., of Berwyn (Robert E. Kolek, Thomas A. Hett, and Gerald W. Shea, of counsel), for respondent.
   MR. JUSTICE WARD

delivered the opinion of the court:

Perry Callas was admitted to the bar of Illinois in 1951 and engaged in the private practice of law from 1952 until 1962, when he became associated with the American National Bank of Chicago (the Bank) as a trust officer. He resigned from the Bank’s service in 1978, at which time he was a senior vice-president and deputy head of the trust department. He is now engaged in private practice.

In January 1978 Callas pleaded guilty in the United States District Court for the Northern District of Illinois to a criminal information charging embezzlement and conversion of funds entrusted to the Bank. He was fined $1,000 and placed on probation for one year. A hearing panel of the Attorney Registration and Disciplinary Commission found that his conduct brought the legal profession into disrepute and recommended that he be suspended from the practice of law for a period of 18 months and until further order of this court. The Review Board of the Commission affirmed the recommendation.

In January 1969 the circuit court of Cook County appointed the Bank as trustee to hold and to disburse certain sales tax funds which had been paid under protest pursuant to a statute which was later held to be unconstitutional. The Bank designated the respondent to handle this account, which developed into a fund of some $34 million. Because of the magnitude and complexity of the funding procedure it was determined that an independent computer service was required. On the recommendation of the respondent, the Bank in April 1969, retained the Mid-America Computer Corporation (MAC). In 1970 the respondent was named as head of the corporate trust department of the Bank and a Mr. Guthrie was placed in immediate charge of the refunding program. Guthrie would act under the general supervisory authority of Callas.

The respondent became interested in MAC as an investment and in April 1971 purchased a one-third stock interest in the company for approximately $26,700. He never served as an officer, director or employee and did not receive any compensation, fees or other remuneration from MAC.

Callas had agreed earlier to serve as a guarantor or surety on a $30,000 loan obtained from another bank by his brother. When the brother defaulted in 1974 the respondent borrowed $25,000 from MAC and used the proceeds of the loan, together with $5,000 of his personal funds, to satisfy his obligation on the brother’s loan. The loan by MAC was made on June 27, 1974, and the respondent gave a demand note to MAC calling for interest at 1414%. At the hearing before the Commission he testified that he intended to repay the loan from his share of the proceeds of an expected sale of MAC to Shick-Reedy, a company which had made an offer of $1 million for MAC. The sale was not completed in 1974, as contemplated, because of litigation instituted by a stockholder of Shick-Reedy. Eight days after making the loan to the respondent, MAC, by its president, Pros, on July 5, 1974, requested Callas to arrange a $25,000 advance from the Bank, which Pros said was made necessary by the expense of handling the large number of claims filed in April and May. The advance was to be repaid by debiting future billings of the Bank by MAC for its services. This procedure had been followed on three previous occasions when MAC received advances from the tax accounts in the Bank. The largest of the earlier advances had been for about $16,000, and it had been repaid in six months from subsequent billings. Guthrie was out of town the day the respondent received the request from Pros for the advance, and the respondent testified that after making certain that the Bank had more than $25,000 in uninvested cash in the tax accounts he authorized the advance of $25,000. The respondent told Guthrie what he had done the day after the advance and asked, “Do you have any problem with this?” Guthrie replied that he did not as long as the advance would be credited against future billings. The respondent ordered three trust-department checks to be prepared on three tax-refund accounts being administered by the Bank, the service-occupation-tax account, the tobacco-tax account, and the cigarette-tax account. Guthrie normally signed checks drawn on these accounts, but the respondent told Guthrie he would sign the checks “so that there would never be a question of who authorized the advance.”

The respondent testified that he heard that MAC had made loans to certain of its employees at interest rates ranging from 4% to 6% in contrast to his loan at 1414% and that he complained to Pros. The loan to him had been made on June 27, 1974, and at Pros’ request the respondent, on July 8, did send a check to MAC in the amount of $69.27, representing one week’s interest. The respondent said that because of a dispute which developed concerning the interest rate no other payments of interest were made by him. When the principal indebtedness to MAC was repaid in January 1977, as will be described later in this opinion, the respondent said he received a receipt for repayment of the $25,000 but did not get back the promissory note. This was, he said, because of the unresolved question of how much interest he owed.

For a period of about three months from July 5, 1974, the date of the advance, to October 16, 1974, no fees were paid by the Bank to MAC for its services. Guthrie was holding up payments on the invoices MAC submitted pursuant to the arrangement to repay the advance of $25,000. Pros, however, then spoke to the respondent and asked if the Bank would pay the June to October 1974 invoices, as MAC was having a serious cash-flow problem. The respondent told Guthrie that MAC would like to extend the advance for a little while, and he asked Guthrie if the Bank could pay the invoices submitted from June to October. As a result the Bank did pay MAC in October 1974 for its outstanding invoices.

In a statement the respondent filed with the Commission prior to the hearing he stated that Guthrie thereafter, on three or four occasions, asked him to question Pros about repayment of the advance. He talked each time to Pros, who asked him to defer holding up payment because of MAC’s cash position. Callas said he felt, and he so advised Guthrie, that at the time the tax accounts were to be closed there would be much work remaining to be performed by MAC, and that the advance could be credited against the closing billings by MAC if the advance had not been satisfied by that time. He said that Guthrie did not object when the respondent explained this to him and said that prepayment of the advance would not be in jeopardy. He said he told Guthrie that he was the account administrator and should do as he wished. The Bank did not hold up MAC’s billings, and the $25,000 advance was carried by the Bank until it was repaid in 1977.

Callas testified that when he had discussions of the matter with Guthrie the $25,000 was carried on the books of the Bank as an advance to MAC. He testified he was unaware that MAC showed on its books that its loan of $25,000 to Callas had been repaid. He testified that on January 7, 1977, he satisfied his loan from MAC using $25,000 that had been loaned to him by Mr. Shick of Shick-Reedy. The books of MAC were changed at that time to reflect that the loan was satisfied as of January 7, 1977, and MAC’s books were changed to reflect also that the payment to it of the $25,000 in July 1974 was an advance payment by the Bank against MAC’s future billings and not a repayment to MAC of the loan MAC made to Callas. The advance by the Bank to MAC was also repaid at this time. The loan of MAC to the respondent and the advance by the Bank were repaid at the same time at the insistence of Shick.

A Federal grand jury investigation was begun in March 1978, and Callas resigned his position at the Bank on April 12. When the investigation began, the Bank placed the respondent on a paid-leave-of-absence status, but he testified that he voluntarily resigned because it had become apparent the “somewhere down the line I would have to resign from the bank.” The Bank was not aware, until the commencement of the investigation, of MAG’s loan to Callas and that Callas had acquired an interest in MAC.

In December 1978 the United States Attorney at Chicago filed a criminal information charging that on or about July 5, 1974, Callas, with intent to defraud, had embezzled and misapplied, in an amount less than $100, moneys entrusted to the Bank from its tax accounts and did convert the money to his own use and benefit.

Callas and his attorney had conferred with the prosecutors, and his attorney told him that the prosecutors were prepared to file a one-count information charging a misdemeanor. His attorney advised him that in the event he was not prepared to plead guilty to the criminal information the likelihood was that an indictment would be returned with at least three felony counts, representing the three checks the respondent had drawn in making the $25,000 advance to MAC. The respondent entered into a plea agreement with the United States Attorney’s office and on his plea of guilty in the United States District Court in January 1979 was sentenced to pay a fine of $1,000 and placed on probation for a period of one year. He testified before the Hearing Board that despite his having pleaded guilty he did not feel that he had knowingly misapplied the funds.

At the hearing before the panel Callas testified that MAC was sold to Shick-Reedy for $1.6 million, of which Callas will receive approximately $490,000. He had received $40,000 as of the time of the hearing.

To summarize, in part: the respondent selected MAC to perform services for the Bank and later acquired the interest in MAC. On June 27, 1974, he borrowed $25,000 from MAC and executed a promissory note which provided for the payment of interest at a rate of 1414%. One week’s interest in the amount of $69.27 was paid to MAC by the respondent on July 8, 1974. No interest was paid thereafter by the respondent, and this was because, he testified, a dispute arose as to the rate of interest on his loan. On July 5, 1974, the respondent approved an advance of $25,000 to MAC at Pros’ request because of, Callas said, MAC’s difficult cash position. Days before, however, MAC had given the respondent a cash loan of $25,000. Respondent testified he was unaware until much later that MAC’s books reflected, apparently after the advance from the Bank was gotten, that the respondent’s loan had been repaid.

Callas said that he understood the charge against him when he pleaded guilty. He said that his counsel advised him that if he would plead guilty to the information charging the misdemeanor the prosecution would remain mute and not make any recommendation to the court. The respondent’s attorney advised him that if that was not to be the disposition of the case it was likely that there would be an indictment with three or more felony counts. The criminal information charged the respondent with embezzling and converting to his own use, on or about July 5, 1974, the date of the advance of $25,000 by the Bank to MAC, money entrusted to the Bank, by causing moneys to be disbursed from the three trust tax accounts. The criminal information charged that the amount involved was less than the statutory amount of $100, but it is obvious that the charge in that amount appeared because of the plea agreement which was entered into between the respondent and the prosecution. Obviously the offense charged to have been committed on July 5, 1974, involved an advance of $25,000 and not an advance of less than $100. The respondent was guilty of an offense involving $25,000 or he was not guilty at all. There was no embezzlemeht of less than $100.

In the plea agreement executed by the respondent it was stated that he was going to enter a plea of guilty “because he is in fact guilty of the charges.” The agreement said further that the respondent acknowledged that he had converted to his own use “a sum of money from certain trust accounts of the bank,” which obviously referred to the $25,000 advance. The maximum penalty under the information was a maximum jail sentence of one year and a maximum fine of $1,000. The court imposed the maximum fine and sentenced the respondent to probation for one year. The plea agreement recited the respondent’s understanding that the United States Attorney had the right to notify any Federal or State agency by whom the defendant is licensed of his conviction and that the prosecution would make no recommendation to the court of the penalty to be imposed.

When an attorney is convicted of an offense involving moral turpitude the conviction is conclusive evidence of guilt and grounds for the imposition of discipline. This court will not go behind the record of conviction. Conviction of a crime of that character “ ‘establishes that the respondent has been guilty of conduct that falls far below the standards required of members of the legal profession.’ ” (In re Andros (1976), 64 Ill. 2d 419, 423, and cases cited.) Discipline, however, is not imposed because of the fact of conviction but because of the conduct underlying it. In re Crane (1961), 23 Ill. 2d 398, 400.

The misconduct here was a serious violation of important professional responsibilities with which the respondent had been entrusted. He, a lawyer of mature and sophisticated experience, pleaded guilty to what must be considered the misapplication and conversion of $25,000 for his personal benefit. The Bank was deprived of the investment or other use of the money for 214 years. The advance, as it was termed, was not repaid from billings submitted by MAC through the action of the respondent. This nonpayment of the advance was consistent with the entry in MAG’s records indicating that its loan of $25,000 to Callas had been repaid.

We consider that the respondent’s conduct, taken in its totality, as the report and recommendation of the Review Board put it, constituted a serious professional transgression and brought the legal profession into disrepute.

We order that the respondent be suspended from the practice of law for a period of 9 months.

Respondent suspended.

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


author: MR. JUSTICE KLUCZYNSKI

text:
    (No. 52841.

      In re ESTATE OF LYMAN GOWLING, Deceased (Lyman Fleming et al., Appellants, v. Pearl Gowling et al., Appellees).

      Opinion filed September 29, 1980.

      Michael J. McDonald, of Jerseyville, for appellants Virginia Prosser and Lyman Fleming.
    Gerald J. McGivern, of Wiseman, Shaikewitz, McGivern & Wahl, P.C., of Alton, for appellees.
   MR. JUSTICE KLUCZYNSKI

delivered the opinion of the court:

This appeal presents a question of apportionment of Federal estate tax liability among recipients of the assets of the estate of testator, Lyman Cowling. The circuit court of Jersey County ruled that the taxes should be paid from probate assets, thereby excluding the remainder interests of plaintiffs Lyman Fleming and Virginia Prosser, interests acquired by deeds executed in 1963. On appeal by testator’s widow, Pearl Cowling, the appellate court reversed, holding that the tax liability should be apportioned among all assets of the estate which generated that liability (77 Ill. App. 3d 548). Lyman Fleming and Virginia Prosser would thereby be required to bear a proportionate share of the tax liability, since their remainder interests generated part of that liability, and Pearl Cowling would not be required to pay any part of the taxes, since her interest qualified for the marital deduction allowed by Federal law. We granted the petition for leave to appeal of Lyman Fleming and Virginia Prosser.

In April of 1963, testator and his spouse at that time, Nettie Cowling, deeded two parcels of farm property to Lyman Fleming, testator’s grandson, and to Virginia Prosser, testator’s daughter, reserving life estates. Nettie Cowling died in 1967, and testator thereafter married Pearl Cowling, defendant herein. On November 21, 1977, testator died, survived by Pearl. In his will, testator specified that crops growing or harvested on the land deeded to the remaindermen, Lyman Fleming and Virginia Prosser, but on which the landlord’s (testator’s) share had not been paid, should not be included in his estate and should belong to the remaindermen. Testator also bequeathed to Gene Prosser and Lois Call, share and share alike, his accounts in the Jersey Savings and Loan, and to his wife, Pearl, any remaining bank accounts. Testator provided that the residue should go to Virginia Prosser. Lyman Fleming was named executor. At testator’s death, he held various savings accounts, checking accounts and certificates of deposit in joint tenancy with his wife, Pearl, totaling $19,000.

On June 29, 1978, Lyman Fleming, in his capacity as executor, filed a petition to establish and assess Federal estate tax and debt liability. Count I of that petition relates to Federal estate taxes and is the only count of concern to us here. The allegations contained therein are as follows:

“1. The residuary estate *** is $1,211.04.
2. The will heretofore admitted to probate contains no provisions as to the payment of the federal estate taxes.
3. The total gross estate, as shown on the United States Estate Tax Return for LYMAN COWLING attached hereto and made apart hereof, is $436,943.35.
4. By specific bequests in the will, joint tenancies, previous deeds to real estate wherein a life estate was reserved by decedent, and the residuary paragraph of the will, the following individuals have received or are to receive the following amounts, comprising the total gross estate for federal estate taxes.
a. Lyman Fleming $232,600.00 or 54% of Total
b. Virginia Prosser 114,561.04 or 26% of Total
c. Pearl Cowling 71,412.03 or 16% of Total
d. Gene Prosser 9,185.14 or 2% of Total
e. Lois Call 9,185.14 or 2% of Total $436,943.35 100% of Total
5. The total amount of federal estate taxes that are to be paid are $72,142.62.
6. Pursuant to law residuary assets are to be used to pay estate taxes and debts.
7. After applying the residuary assets to the payment of federal estate taxes, there will be a balance of $70,931.58 to be paid.
8. The law applicable in Illinois is that when the will is silent as to payment of federal estate taxes, each beneficiary is to pay his or her proportionate share, using the amount of the total gross estate for federal estate taxes as the denominator.”

Based on these allegations, the petition prayed that Federal estate tax liability be apportioned among the various recipients of the assets of the estate as follows: Lyman Fleming, $38,303.06; Virginia Prosser, $19,653.25 (representing residuary assets of $1,211.04 plus 26% of $70,931.58); Pearl Cowling, $11,349.05; Gene Prosser, $1,418.63; and Lois Call, $1,418.63.

Pearl Cowling objected to the petition, arguing that she, as surviving spouse, could not be required to contribute to the payment of Federal estate taxes because the property she received qualified for the marital deduction allowed by Federal law and therefore did not generate tax liability. Lyman Fleming, in his capacity as remainderman, and Virginia Prosser, also a remainderman, objected to the petition, arguing that the deeds of April 1963 under which they took their interests evidenced a donative intent on the part of testator and his spouse at that time, Nettie Cowling, to convey interests free of encumbrances such as Federal estate taxes.

On December 4, 1978, the circuit court conducted a hearing on the petition. The court initially found no need to appoint a special administrator for the estate even though Lyman Fleming was appearing as both executor and as a remainderman, and all parties indicated that they had no objection to this finding. After hearing arguments of the parties, the court ruled that Federal estate taxes should be paid with probate assets to the extent that such assets were sufficient to meet that liability. The court reasoned that a provision of the testator’s will, authorizing the executor to settle claims against the estate, indicated the testator’s intention that probate assets be used to settle Federal estate taxes, since amounts owed the Federal government represent a class of claims that may be asserted against the estate (Ill. Rev. Stat. 1975, ch. 3, par. 18 — 10). This reasoning was rejected in Roe v. Estate of Farrell (1978), 69 Ill. 2d 525, 530-31. Because of its disposition of the case, the circuit court found it unnecessary to address the issues of whether tax liability should be apportioned and whether the 1963 deeds to Lyman Fleming and Virginia Prosser evidenced the intent of the grantors that Lyman Fleming and Virginia Prosser be free of estate tax liability.

Pearl Cowling appealed to the appellate court, arguing that the circuit court erred in requiring her to contribute to the payment of estate taxes, since her interest qualified for the marital deduction allowed by Federal law and therefore generated no tax liability. The appellate court agreed, reversing the judgment of the circuit court. (77 Ill. App. 3d 548.) The appellate court further held that the estate tax liability should be apportioned among all recipients of estate assets, except Pearl Gowling, and the court remanded the cause to the circuit court to “determine and charge probate and nonprobate assets with that portion of the total tax obligation which is attributable to the assets received, but excluding that portion of any property which did not contribute to estate tax. The proportionate share of tax attributable to the probate assets of the estate (excluding the property qualifying for the marital deduction) shall be borne to the extent possible by the residue of those assets, and upon extinguishment of that sum shall be paid out of the remaining probate assets according to the rales on abatement.” (77 Ill. App. 3d 548, 554.) Lyman Fleming, in his capacity as remainderman, and Virginia Prosser, also a remainderman, appeal.

The authority of the States to determine how Federal estate tax liability should be apportioned in the absence of directions by the decedent was recently discussed in Roe v. Estate of Farrell (1978), 69 Ill. 2d 525, 529-30:

“Unlike our inheritance tax, which is a tax on the right of succession to the beneficial interest in the property of a decedent (In re Estate of Greiner, 412 Ill. 591, 594), the Federal estate tax is imposed on the transfer of the taxable estate as a whole (Int. Rev. Code of 1954, sec. 2001). If a decedent’s probate assets are insufficient to satisfy the Federal estate tax, persons holding non-probate assets includible by law in the Federal gross estate are liable to the extent of the value of those assets, and the tax becomes a lien against those assets if the tax is not satisfied in full. (Int. Rev. Code of 1954, sec. 6324.) There is, however, no express provision made in the Internal Revenue Code for contribution from persons acquiring non-probate assets, such as surviving tenants of jointly held property, to satisfy the estate tax, if the executor is able to satisfy all or a portion of the tax out of probate assets, except in the case of life insurance proceeds (Int. Rev. Code of 1954, sec. 2206) and property subject to appointment (Int. Rev. Code of 1954, sec. 2207).
This absence of any Federal provision for contribution by persons acquiring nonprobate assets led some to believe that it was the intent of Congress that equitable apportionment between probate and nonprobate assets to satisfy the tax should not be permitted. The Supreme Court of the United States in 1942 in Riggs v. Del Drago, 317 U.S. 95, 97-98, 87 L. Ed. 106, 110-11, 63 S. Ct. 109, 110, however, made it clear that the States were free, if they chose, to apportion the burden or ‘ultimate impact,’ as the court put it, of the estate tax. F oil owing the holding in Riggs, statutes were enacted in many States to provide upon whom the burden of the Federal estate tax would rest. (See Annot., 71 A.L.R.3d 247 (1976).) In other jurisdictions the question has been resolved by the courts. It would appear that most of those States that have considered the question have allowed some type of apportionment of the tax burden. (See Annot., 68 A.L.R.3d 714 (1976).)”

Illinois has no statute specifying who bears the burden of Federal estate taxes, and the court held in Roe that the burden should be apportioned equitably. The court, quoting from In re Estate of Van Duser (1974), 19 Ill. App. 3d 1022, 1024, stated, “ ‘[L] ogic, reason, and simple justice dictate that, unless there is a contrary intention expressed by the decedent, as in a will in testate estates, the doctrine of equitable contribution should be invoked as to nonprobate assets to fairly distribute the Federal estate tax burden.’ ” (69 Ill. 2d 525, 532.) Roe involved the question of whether Federal estate taxes should be apportioned between the probate and nonprobate assets of an intestate decedent, and the court held that, under the circumstances, such apportionment was proper, since the nonprobate assets generated a large part of the tax liability. Prior to the appellate court decision herein, no Illinois court had answered the precise questions presented now of whether Roe applies to testate estates and whether a surviving spouse can be required to contribute to the defrayment of Federal estate tax liability when the interest taken by that spouse qualifies for the marital deduction allowed by Federal law, thereby generating no tax liability. But see Farley v. United States (Ct. Cl. 1978), 581 F.2d 821, 834 (Illinois Supreme Court is likely to apply the reasoning of Roe to a testate estate and to hold that a surviving spouse whose interest qualifies for the marital deduction should not be required to contribute to the payment of Federal estate taxes).

As to the first question, we find no reason why Roe should be inapplicable to testate estates. The reasoning employed there is equally applicable here. In the absence of directions from the decedent, an apportionment of Federal estate tax liability must be made, regardless of whether the decedent has written a will. In accordance with Roe, we hold that a proportionate share of the Federal estate tax liability of the estate of Lyman Cowling should be borne by the nonprobate interests of Lyman Fleming and Virginia Prosser, since those interests generated a large part of the estate tax liability.

As to the second issue of whether the surviving spouse must contribute to the payment of taxes when her interest generates no tax liability, we agree with the court in Farley v. United States (Ct. Cl. 1978), 581 F.2d 821, that such contribution is not proper under Illinois law. Farley involved the testate estate of Marshall Field IV, an Illinois resident, and the court there was presented with the issue of whether, in light of the decision in Roe, Field’s widow would be required to bear part of the liability for Federal estate taxes even though her elective share qualified for the marital deduction. The court noted that Roe “permits or requires the equitable apportionment of the burden of federal estate taxes in accordance with the relative values of the property generating the taxes and the property that does not,” and it concluded that this court, if presented with the question, would rule that “it is inequitable to require a widow whose property generated no tax to contribute to the payment of the tax generated by property received by others.” (581 F.2d 821, 834.) In explanation of its conclusion, the court further stated, “Protection of the interest of the widow against competing claims to her husband’s estate has been a part of Illinois statutory and judicial policy since 1787” (581 F.2d 821, 834), and “Congress intended to allow a portion of the property of a decedent to pass to his surviving spouse free of the burden of federal estate tax” (581 F.2d 821, 835). We agree with this reasoning and join those courts which have held that a surviving spouse is entitled to the benefits of the marital deduction undiminished by any part of Federal estate tax liability. Estate of Whipple v. United States (6th Cir. 1969), 419 F.2d 494, 497-99 (applying Kentucky law); Dodd v. United States (3d Cir. 1965), 345 F.2d 715 (applying New Jersey law); Pitts v. Hamrick (4th Cir. 1955), 228 F.2d 486, 490 (applying South Carolina law); Robertson v. United States (N.D. Ala. 1968), 281 F. Supp. 955, 963 (applying Alabama law); In re Estate of Collins (D.D.C. 1967), 269 F. Supp. 633 (applying Federal law); First National Bank v. United States (D. Kan. 1964), 233 F. Supp. 19, 27-29 (applying Kansas law); Weyenberg v. United States (E.D. Wis. 1955), 135 F. Supp. 299, 303 (applying Wisconsin law); Byars v. Mixon (1974), 292 Ala. 657, 659-60, 299 So. 2d 259, 260-61; In re Estate of Marks (1974), 129 N.J. Super. 276, 283-85, 322 A.2d 860, 864-65; Alexandria National Bank v. Thomas (1973), 213 Va. 620, 624-26, 194 S.E.2d 723, 726-27; Clark v. South Carolina Tax Com. (1972), 259 S.C. 161, 167-70, 191 S.E.2d 23, 25-26; Stoner v. Custer (1969), 252 Ind. 661, 668, 251 N.E.2d 668, 672; In re Estate of Rosenfeld (1954), 376 Pa. 42, 101 A.2d 684; Lincoln Bank & Trust Co. v. Huber (Ky. App. 1951), 240 S.W.2d 89; see also First Trust Co. v. United States (D. Minn. 1975), 402 F. Supp. 778, 781-83 (applying Minnesota State inheritance tax law).

Plaintiffs Lyman Fleming and Virginia Prosser, as remaindermen, argue that they, too, should be exempted from paying Federal estate taxes. Two grounds are asserted in support thereof. First, they argue that testator’s will evidences his intention that they take their interests unencumbered by liability for Federal estate taxes. Specifically, they point to that provision which states, “I have hereunto conveyed my farms to my daughter, VIRGINIA PROSSER, and my grandson, LYMAN E. FLEMING, reserving a life estate.” It is argued that, under In re Estate of Fairchild (1974), 21 Ill. App. 3d 459, this provision should be construed to relieve Lyman Fleming and Virginia Prosser of Federal estate tax liability. We are not persuaded by this argument and find that the court in Fairchild denied apportionment (1) because of its mistaken premise that apportionment was not appropriate in testate estates, absent legislative authorization, and (2) because of its reliance on the rule that Federal estate taxes are payable in toto from the residuary estate if that estate is sufficient to pay such taxes. 21 Ill. App. 3d 459, 461-62.

Alternatively, Lyman Fleming and Virginia Prosser argue that the deeds by which they took their interests evidence a donative intent on the part of testator and his wife at that time, Nettie Cowling, that there should be no encumbrances such as Federal estate taxes on the remainder interests thereby taken. No particular language of the deed itself is relied upon in making this argument, and we believe that the act of testator in executing the deeds does not alone support the argument made. A similar question was answered in Roe, where the court determined whether the creation of a joint tenancy evidenced the decedent’s donative intent. The court noted that the tenants, including the decedent, had contributed equally toward the purchase of the property held in joint tenancy, and it found “no basis for holding that the existence of the joint tenancy *** disclosed any donative intent of the decedent.” (Roe v. Estate of Farrell (1978), 69 Ill. 2d 525, 531.) Lyman Fleming and Virginia Prosser claim that the circuit court erred in barring testimony in support of their argument on this point, but we find no error. If the alleged donative intent could not be discerned from the instrument itself, the circuit court could properly conclude that parol evidence would be inadmissible to supply it.

In sum, we conclude that the circuit court erred in ruling that Pearl Cowling should contribute to Federal estate taxes and that Lyman Fleming and Virginia Prosser should be exempted therefrom. The appellate court properly held that Pearl Cowling should take her interest undiminished by Federal estate taxes and that Lyman Fleming and Virginia Prosser should be required to contribute thereto.

For the foregoing reasons, the judgment of the appellate court, reversing the judgment of the circuit court of Jersey County and remanding the cause to the circuit court with directions (77 Ill. App. 3d 548, 554), is affirmed.

Judgment affirmed.


text:
    (No. 52509.

      In re ESTATE OF VIRGINIA THATCHER MORGAN, Deceased (John Alden Morgan, Ex’r, Appellant, v. Continental Illinois National Bank & Trust Company of Chicago, Trustee, et al., Appellees).

      Opinion filed September 29, 1980.

      CLARK, J., took no part.
    Edward U. Notz, of Chicago, for appellant.
    Thomas J. Godfrey, Jr., of Nisen, Elliott & Meier, of Chicago, for appellee Continental Illinois National Bank & Trust Company of Chicago.
    Thomas S. Chuhak, of Chicago, guardian ad litem, pro se.

   MR. JUSTICE MORAN

delivered the opinion of the court:

John Alden Morgan, executor of the estate of Virginia Thatcher Morgan, deceased, seeks to disclaim the decedent’s interest in the estate of Dorothy O. Thatcher pursuant to the recently amended disclaimer provision of the 1975 Probate Act (Ill. Rev. Stat. 1977, ch. 1101/2, par. 2 — 7). The circuit court of Cook County denied the executor leave to disclaim, and the appellate court affirmed. (74 Ill. App. 3d 853.) We granted the executor leave to appeal.

Dorothy O. Thatcher died testate on April 7, 1977, leaving the residue of her estate, valued at approximately $160,000, to her daughter, Virginia Thatcher Morgan. The will provided, however, that if Mrs. Morgan should predecease her mother, the property was to go to Mrs. Morgan’s two daughters, Pamela A. Johnson and Diana M. Senior. Mrs. Morgan survived her mother but died on July 31, 1977. Her husband, John Alden Morgan, was appointed executor of her estate and also succeeded her as executor of her mother’s estate. By her will, Mrs. Morgan left the residue of her estate to the Continental Illinois National Bank & Trust Company of Chicago (trustee), as trustee of the Morgan trust. At that time, the Morgan trust already contained $154,000, representing the proceeds of an insurance policy on the life of Mrs. Morgan, as well as insurance policies on the life of Mr. Morgan, in the face amount of $250,000. The trust provides, in effect, that after Mr. Morgan’s death the trust property is to be held in separate trusts for the benefit of Pamela and Diana during their respective lifetimes. The trustee is given the discretion to pay to each daughter any of the trust income for each daughter’s benefit and, if the income is insufficient, to pay to each daughter so much of the principal as is required for her reasonable support or best interests. Distributions of principal, however, for other than reasonable support, are not to exceed in the aggregate 25% of the trust principal. Each daughter is given a testamentary power of appointment over her share upon her death, but such power is limited to appointment to Mrs. Morgan’s descendants. If either daughter would fail to exercise her power of appointment, that daughter’s share would go to the daughter’s descendants, but if she has no surviving descendants, then to Mrs. Morgan’s living descendants. Excluding the $160,000 in property from her mother’s estate, Mrs. Morgan’s residuary estate is valued at approximately $85,000.

On November 9, 1977, Mr. Morgan, as executor, sought to disclaim any interest of Mrs. Morgan in her mother’s estate. Pamela and Diana consented to the disclaimer. The circuit court initially allowed the disclaimer but, after discovering that the trustee had not received notice of the petition to disclaim, vacated its order. The court also appointed a guardian ad litem to represent the contingent beneficiaries of the Morgan trust, and the guardian joined the trustee in opposing the disclaimer. The circuit court thereafter denied the executor’s petition to disclaim, and, in a split decision, the appellate court affirmed.

In sum, if the executor is allowed to disclaim Mrs. Morgan’s interest in her mother’s estate, the entire $160,000 from that estate will go outright to Pamela and Diana; otherwise, the property will go into trust, with Pamela and Diana the primary beneficiaries. (Diana currently has three minor children, and Pamela has none.) If the executor is allowed to disclaim, Mrs. Morgan’s estate will apparently save approximately $28,000 in taxes, and there will be a slight reduction in trustee fees.

Section 2 — 7(a) of the Probate Act of 1975 (Ill. Rev. Stat. 1977, ch. 1101/2, par. 2 — 7(a)) provides:

“An heir, legatee, person succeeding to a disclaimed interest, beneficiary under a will or person designated to take pursuant to a power of appointment exercised by a will may disclaim in whole or in part the succession to any real or personal property or interest therein by filing a written disclaimer within the time and at the place provided in this Section. A disclaimer may be of a fractional share or of any limited interest or estate. The right to disclaim of a decedent may be exercised with leave of court by his representative.”

This last sentence was added by Public Act 80 — 549, section 1 (1977 Ill. Laws 1733), effective October 1, 1977, and has not been interpreted by this court.

At common law in Illinois, a beneficiary could disclaim his rights under a will. (Cook v. Dove (1965), 32 Ill. 2d 109, 114; Peck v. Drennan (1951), 411 Ill. 31, 41; People v. Flanagin (1928), 331 Ill. 203, 207-08.) It is not clear, however, whether a representative at common law could disclaim on the behalf of a decedent. (But cf. Rock Island Bank & Trust Co. v. First National Bank of Rock Island (1962), 26 Ill. 2d 47 (the right of a surviving spouse to renounce a will held to be statutory and personal and to die with the surviving spouse).) In any event, such right is now controlled by statute, and it is clear from the language employed by the legislature that a representative may disclaim on behalf of a decedent only with leave of court. We read the statute as giving the trial court discretion over whether to allow the representative to disclaim.

Here, Mrs. Morgan survived her mother’s death by more than three months. So surviving, it was her mother’s intent, as evidenced by her will, that Mrs. Morgan receive the property. Mrs. Morgan had a clear right, however, to disclaim such property, for any reason, but did not choose to do so. Instead, by her will, Mrs. Morgan left the residue of her estate in trust, and the property left to her by her mother became part of this residue. Had it been Mrs. Morgan’s desire that the property, which became hers upon her mother’s passing, was to go to her daughters outright, she could have disclaimed before her death. It is noted that she set up the Morgan trust in 1972, while her mother was alive and while it would have been natural for her to assume that her mother would predecease her. We view the above factors as going toward an intent that she did not wish her daughters to take outright.

Despite the tax savings which would result from a disclaimer, we cannot presume that Mrs. Morgan would have desired that the bequest from her mother be disclaimed. A disclaimer would have the effect of substantially altering the property’s disposition from that provided for in Mrs. Morgan’s will, which, by leaving the property in trust, placed substantial restrictions on its use and on the daughters’ ability to dispose of it. We conclude that the trial court’s determination was not unreasonable when considered in light of the foregoing factors and, therefore, that the court did not abuse its discretion in denying the executor’s petition to disclaim.

Accordingly, the judgment of the appellate court is affirmed.

Judgment affirmed.

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