text:
    (No. 52587.
    THE VILLAGE OF BARRINGTON HILLS et al., Appellants, v. THE VILLAGE OF HOFFMAN ESTATES et al., Appellees.

      Opinion filed June 20, 1980.

    Rehearing denied September 26, 1980.

      Ross, Hardies, O’Keefe, Babcock & Parsons, and Friedman & Koven, of Chicago (R. Marlin Smith, Donald J. Kreger, Robert J. Rubin and Wendy U. Larsen, of counsel), for appellants.
    Richard N. Williams, of Hoffman Estates, for appellee Village of Hoffman Estates.
    Wexler, Siegel & Shaw, Ltd., and Klafter, Burke, Keane & Nathan, of Chicago (Richard L. Wexler, Stuart Smith and Edward M. Burke, of counsel), for appellees Nederlander Realty Corp. of Illinois et al.

   MR. JUSTICE UNDERWOOD

delivered the opinion of the court:

Plaintiffs, the village of Barrington Hills (Barrington Hills) and the village of South Barrington (South Barring-ton), filed a complaint challenging the adoption of particular zoning ordinances and the construction of an open-air theater against defendants, the village of Hoffman Estates (Hoffman Estates); Nederlander Realty Company of Illinois, Performance Properties, Inc., Ned Prop, RKO General, Inc. (Nederlander Group); Pioneer Bank and Trust Company; and Fred and Ethel Hansen. The circuit court of Cook County dismissed their complaint on the ground that plaintiffs lacked standing to maintain their action, and the appellate court affirmed. (75 Ill. App. 3d 461.) We granted leave to appeal.

The facts alleged in the plaintiffs’ complaint are adequately set forth in the opinion of the appellate court and need only be summarized here. The subject property consists of approximately 212 acres located in Barrington Township, Cook County, and is included in a larger tract of land bounded by the Northwest Toll way on the south, the Elgin, J oliet and Eastern Railway on the west, Higgins Road on the north, and New Sutton Road on the east. The corporate limits of Barrington Hills, a non-home-rule municipality, and South Barrington, a home rule municipality “are adjacent or in close proximity to the property”; and legal title thereto is held in trust by the Pioneer Bank and Trust Company for Fred and Ethel Hansen, the beneficial owners of the property.

It is alleged in the complaint and admitted by the motion to dismiss (Goodman v. Regional Transportation Authority (1976), 66 Ill. 2d 20) that the Nederlander Group plans to develop this real estate for an open-air music theater, to be known as the Poplar Creek Music Theater, which would contain approximately 6,000 seats in an auditorium structure and space in the open for an additional 14,000 persons. The project would also require parking spaces for 6,000 to 7,500 automobiles and would involve commercial and concession activities ancillary to the operation of the theater programs. Among the performances contemplated by the developers are rock concerts, jazz festivals, and country-and-westem musical programs, all of which would be electronically amplified.

Following a public hearing pertaining to the annexation of the subject property, Hoffman Estates on August 22, 1979, adopted three ordinances: Ordinance No. 1039-1978 authorized the execution of an annexation agreement between the defendants; Ordinance 1040-1978 authorized annexation of the real estate; and Ordinance No. 1041-1978 rezoned a portion of the property to B — 2 central business district and the remainder to F farming district to permit the construction and operation of the theater. Prior to the passage of these ordinances, the real estate was located in an unincorporated area of Cook County and was classified in the R — 1 single-family residence district under the Cook County zoning ordinance.

The subject property is located at a substantial distance from the residentially developed area of Hoffman Estates but is in close proximity to residentially developed areas within the corporate limits of Barrington Hills and South Barrington. Pursuant to zoning ordinances, both plaintiffs had adopted comprehensive plans which would restrict the use of the land in the vicinity of the subject property to low-density single-family residences and to agricultural uses.

It was further alleged that the defendant’s adoption of the zoning ordinances permitting the construction and operation of the theater denied plaintiffs due process under the Federal and State constitutions, constituted an invalid exercise of police power under the laws of this State, violated the zoning ordinances of Hoffman Estates with respect to the B — 2 central business district, and constituted a public nuisance against which temporary and injunctive relief was sought.

Plaintiffs further alleged that the annexation and zoning of the subject property for use and development of the contemplated project would occasion special injury and damage to them in their corporate capacities because of safety hazards on roads and highways within their corporate limits due to traffic congestion; the need to provide additional traffic police at an estimated annual cost to Barrington Hills of at least $42,000 and to South Barrington of not less than $24,000; the diversion of their existing police manpower from their ordinary duties to control theater crowds and to protect their residences from the disorderly activity that might result from persons attending the performances; the cost of purchasing additional squad cars for use only during the period when the proposed music theater would be in operation and of adding additional permanent police officers to their payroll; the expense of clearing from the roads and highways within their corporate limits the litter and debris which would result from crowds arriving or leaving the theater; the exhaust emissions from increased vehicular traffic which would degrade ambient air quality; the substantial increase in sound levels in the vicinity of the subject property resulting from music amplification and traffic; the adverse effects upon property values and hence tax revenues within the corporate limits of both villages; and the general impairment of the health, safety and welfare of residents of both municipalities.

The appellate court affirmance of the trial court’s dismissal of plaintiffs’ complaint was predicated upon its conclusion that plaintiffs had failed to demonstrate that they were aggrieved parties with standing to challenge Hoffman Estates’ zoning of the subject property. Under its interpretation of this court’s opinion in City of Hickory Hills v. Bridgeview (1977), 67 Ill. 2d 399, the appellate court specifically found that Barrington Hills and South Barrington had failed to demonstrate that they had a real interest in the present controversy inasmuch as they could not allege that they had been or would be required to provide services directly to the subject property.

The opinion of the appellate court is predicated on an unduly narrow reading of Hickory Hills. Since the complaining municipality in that case was obliged under a previous court order to provide water and sewage services to the subject property, this court concluded that it was an aggrieved person with a real interest in the rezoning ordinances adopted by an adjoining municipality. One ordinance rezoned a portion of the area involved from a limited-industrial district to a single-family-residence district, and the other ordinance reclassified a portion of the subject property to a planned unit development. Our recognition of that municipality’s standing to sue was based on its allegations demonstrating that it would be directly injured in its corporate capacity by the challenged ordinances. Nothing in Hickory Hills, however, indicates that the “real interest” conferring standing can arise only where the objecting municipality furnishes services directly to the subject property.

Under the rule set forth in Hickory Hills, the appellate court in City of West Chicago v. County of Du Page (1979), 67 Ill. App. 3d 924, 926, concluded that a municipality’s objection to a county ordinance permitting the construction of township offices, a garage, and other facilities within 11/2 miles of its single-family-residential district constituted a real interest sufficient to permit its intervention in an action challenging the ordinance. (See also Forrestview Homeowners Association, Inc. v. County of Cook (1974), 18 Ill. App. 3d 230.) Decisions in other jurisdictions have similarly recognized that a municipality has standing to challenge the zoning ordinances of another municipality upon showing the existence of a real interest in the subject matter of the controversy. See Borough of Cresskill v. Borough of Dumont (1954), 15 N.J. 238, 245, 104 A.2d 441, 444; Borough of Allendale v. Township Committee of the Township of Mahwah (1979), 169 N.J. Super. 34, 37, 404 A.2d 50, 51; see also Ruegg v. Board of County Commissioners (1978), 32 Or. App. 77, 79, 573 P.2d 740, 742; Annot. 49 A.L.R.3d 1126 et seq. (1973); 3 A. Rathkopf, Zoning and Planning ch. 36, sec. 1.2, at 34 (4th ed. 1979 Supp.); Comment, Standing to Appeal Zoning Determinations: The “Aggrieved Person” Requirement, 64 Mich. L. Rev. 1070, 1082 (1966).

Defendants argue that according plaintiffs standing to sue will invite chaos in the relationships between municipalities and flood the courts with zoning litigation. Our holding, however, is not so broad, since it conditions a municipality’s standing to challenge the zoning decisions of other governmental units upon a clear demonstration that it would be substantially, directly and adversely affected in its corporate capacity.

Here, as set forth in greater detail earlier in this opinion, it is admitted for purposes of the motion to dismiss that the development of the proposed project under the challenged zoning ordinances will cause Barrington Hills and South Barrington to suffer special damages in their corporate capacities in the form of a loss of municipal revenues due to a diminution in property values, an increase in municipal expenditures for the hiring of additional police manpower and squad cars to monitor vehicular congestion, the additional expense of clearing litter and debris on their roads and highways that would result from theater crowds, the degradation of ambient air quality due to vehicular exhaust and the increase in sound levels resulting from the electronic amplification of music and traffic flows. While these effects of the rezoning may appear less severe than those in Hickory Hills, they nevertheless portend direct, substantial and adverse effects upon the plaintiff municipalities in the performance of their corporate obligations, thus giving them a real interest in the subject matter of the controversy. Their complaint was therefore improperly dismissed.

The judgment of the appellate court affirming the trial court’s order dismissing the complaint of the plaintiffs is accordingly reversed, and the cause remanded for further proceedings consistent with this opinion.

Reversed and remanded.


source: Caselaw Access Project

author: MR. JUSTICE UNDERWOOD

license: Public Domain

text:
    (No. 52474.
    THE VILLAGE OF CRAINVILLE v. ARGONAUT INSURANCE COMPANY, Appellant (Lawrence Emery, et al., Appellees).

      Opinion filed May 22, 1980.

    Rehearing denied September 26, 1980.

      Bernard A. Reinert and Bradley J. Washburn, of Leritz & Reinert, P.C., of St. Louis, for appellant.
    David R. Craig, of Craig, Brandon & Murphy, of Herrin, and William J. Novick, of Fowler & Novick, of Marion, for appellees.
   MR. JUSTICE UNDERWOOD

delivered the opinion of the court:

The village of Crainville (village) entered into a contract with Freeburg Construction Company (Freeburg) for the construction of a waterworks and sewage system as specified by a municipal ordinance. The village required a performance bond and a payment bond, both of which designated Freeburg as principal, the village as obligee and Argonaut Insurance Company (Argonaut) as surety. Alleging that Freeburg had breached the construction contract and that Argonaut had failed to fulfill its obligations under the performance bond, the village filed an action in the Williamson County circuit court seeking specific performance and damages against Freeburg, Argonaut and Robert R. Callaghan, doing business as Freeburg Construction Company.

Argonaut subsequently filed a third-party complaint against the village trustees, and against Robert R. and Ruth Callaghan and George H. Knostman, Jr., individually and doing business as George H. Knostman, Jr., Associates, Consulting Engineers. Alleging that these individuals had been “negligent and derelict” in the performance of duties specified in village ordinances and in particular contracts, Argonaut sought indemnification from liability by those third-party defendants and subrogation to the village’s rights against them. After answers asserting affirmative defenses had been submitted to both complaints, the village trustees and Knostman filed motions for summary judgment. The trial court granted these motions and entered an order and judgment for those third-party defendants against Argonaut. In addition, Argonaut was taxed with attorney fees and costs.

The appellate court held in a Rule 23 opinion (73 Ill. App. 3d 1112) that Argonaut had acquired none of the rights and remedies of the village under the theory of subrogation, since Argonaut had refused to pay the debt according to the terms of the performance bond. Viewing payment of the debt as a condition precedent for the maintenance of a surety’s action for subrogation, the appellate court concluded that Argonaut was barred from proceeding under its third-party complaint until its obligation to the village had been met. It further held that the summary judgments entered in favor of the third-party defendants had been properly granted. We allowed leave to appeal.

Argonaut argues here that it is entitled to maintain its third-party action for anticipatory subrogation under section 25(2) of the Civil Practice Act, which provides in pertinent part:

“Within the time for filing his answer or thereafter by leave of court, a defendant may by third-party complaint bring in as a defendant a person not a party to the action who is or may be liable to him for all or part of the plaintiffs claim against him.” (Ill. Rev. Stat. 1979, ch. 110, par. 25(2).)

In an attempt to support its argument that the maintenance of the third-party action is not contingent upon its prior payment of the debt secured by the performance bond, Argonaut cites the committee comments to section 25 (2), which provide in relevant part:

“Subsection (2), in common with the third-party practice provisions in other jurisdictions, is designed to curtail multiplicity of actions by providing for assertion in one action of any claim which, by reason of the plaintiff’s claim against him, the defendant has or may have against a third party.” (Ill. Ann. Stat., ch. 110, par. 25(2), Joint Committee Comments, at 288 (Smith-Hurd 1968).)

Decisions further relied on by Argonaut have construed section 25(2) to permit a defendant other than a surety to bring a third-party action without requiring him to “wait until his liability has been determined, or until he has paid the plaintiff in whole or in part for the plaintiff’s damages.” (Embree v. DeKalb Forge Co. (1964), 49 Ill. App. 2d 85, 92, citing Blaszak v. Union Tank Car Co. (1962), 37 Ill. App. 2d 12.) These cases, however, are inapposite since the third-party plaintiffs there seeking subrogation were not sureties.

Third-party practice in Federal procedure has been similarly liberalized under Rule 14(a) (Fed. R. Civ. P. 14(a) (1966)), which, according to the following explanation, “creates no substantive rights. Thus unless there is some substantive basis for the third-party plaintiff’s claim he cannot utilize the procedure of Rule 14. The Rule does not establish a right of reimbursement, indemnity, nor contribution; ***.” (3 Moore’s Federal Practice par. 14.03 [1], at 153 (2d ed. 1979).) This frequently cited passage is representative of the construction of section 14(a) favored by the Federal courts. (Colton v. Swain (7th Cir. 1975), 527 F.2d 296, 300-01; Travelers Insurance Co. v. Busy Electric Co. (5th Cir. 1961), 294 F.2d 139, 146; Smith v. Whitmore (3d Cir. 1959), 270 F.2d 741, 745; Stratton Group, Ltd. v. Sprayregen (S.D.N.Y. 1979), 466 F. Supp. 1180, 1186; Brennan v. Emerald Renovators, Inc. (S.D.N.Y. 1975), 410 F. Supp 1057, 1063; Love v. Temple University — Of the Commonwealth System of Higher Education (E.D. Pa. 1973), 366 F. Supp. 835, 838.) In States with similar provisions governing third-party proceedings, courts have also characterized them as procedural devices which alone were not designed to create or expand substantive rights. See Savings Bank of Manchester v. Kane (1978), 35 Conn. Supp. 82, 396 A.2d 952, 955; see also Emmons v. Agricultural Insurance Co. (1963), 245 La. 411, 422, 158 So. 2d 594, 598; Sattelberger v. Telep (1954), 14 N.J. 353, 368-69, 102 A.2d 577, 585; Gustafson v. Johnson (1952), 235 Minn. 358, 365, 51 N.W.2d 108, 112; Ingerman v. Bonder (1950), 46 Del. Super. Ct. 99, 77 A.2d 591, 592.

The joint committee comments to section 25(2) reveal that it was modeled after Federal Rule 14(a) and that it was only intended to effect procedural changes. (Ill. Ann. Stat., ch. 110, par. 25(2), Joint Committee Comments, at 288 (Smith-Hurd 1968).) There is no indication that section 25 was intended to alter the substantive rights of litigants through the maintenance of third-party actions. In a previous construction of section 25(2), this court stated:

“The section is not a device for tendering a new defendant to the plaintiff, nor does it create substantive rights. Consequently, a third-party complaint will be dismissed if it fails to state a cause of action by the defendant against the third-party defendant.” (Emphasis added.) (Muhlbauer v. Kruzel (1968), 39 Ill. 2d 226, 230.)

(See Miller v. DeWitt-Amdal & Associates (1967), 37 Ill. 2d 273, 287.) It follows, accordingly, that the substantive basis of Argonaut’s claim for subrogation in the third-party proceedings here under consideration must exist independently of the procedural reform established in section 25(2).

The courts of this State have long recognized that a surety’s right to subrogation does not accrue until he has actually paid the debt. (See Elgin National Bank v. Goecke (1920), 295 Ill. 403, 408; Conwell v. McCowan (1870), 53 Ill. 363;, 365; see also Dworak v. Tempel (1959), 17 Ill. 2d 181, 190; Geneva Construction Co. v. Martin Transfer & Storage Co. (1954), 4 Ill. 2d 273, 283; City of Hillsboro ex rel. International Insurance Co. v. Springfield Mechanical Co. (1979), 75 Ill. App. 3d 154, 156; Hardware Dealers Mutual Fire Insurance Co. v. Ross (1970), 129 Ill. App. 2d 217, 223; Robbins v. Slavin (1937), 292 Ill. App. 479, 489-90.) This fundamental principle of subrogation has been widely followed by courts in other jurisdictions (see Federal Deposit Insurance Corp. v. National Surety Corp. (E.D.N.Y. 1977), 434 F. Supp. 61, 63-64; Bishoff v. Fehl (1942), 345 Pa. 539, 542-43, 29 A.2d 58, 60; Garrity v. Rural Mutual Insurance Co. (1977), 77 Wis. 2d 537, 541-45, 253 N.W.2d 512, 514-15; Savings Bank of Manchester v. Kane (1978), 35 Conn. Supp. 82, 396 A.2d 952, 954; In re Israel’s Estate (1970), 64 Misc. 2d 1035, 315 N.Y.S.2d 453, 458; 74 Am. Jur. 2d Suretyship sec. 171, at 120 (1974); 73 Am. Jur. 2d Subrogation sec. 54, at 632 (1974); 83 C.J.S. Subrogation sec. 48, at 670 (1953)), and has been generally recognized by commentators who have examined this subject matter. See 10 Williston, Contracts sec. 1269, at 857, sec. 1274, at 864-67, sec. 1275, at 875 (3d ed. 1967); Steams, Suretyship sec. 245, at 430 (3d ed. 1922), Sheldon, Subrogation sec. 127, at 190-91 (2d ed. 1893); Restatement of Security sec. 141, comment a, at 383-84 (1941); 25 R.C.L. Subrogation sec. 4, at 1315, sec. 5, at 1317 (1919).

Underlying this general rule is the strong public policy favoring protection of the reasonable expectations of the creditor to be indemnified against loss arising from breach of duty or contract by the principal. (See In re Buildice Co. (N.D. Ill. 1956), 146 F. Supp. 911, 914-15; Continental Bank & Trust Co. v. Alabama General Insurance Co. (1963), 274 Ala. 622, 625, 150 So. 2d 688, 690; Steams, Suretyship sec. 245, at 430 (3d ed. 1922), see also Restatement of Security sec. 141, comment e (1942); Note, 7 U. Pitt. L. Rev. 339, 342 (1941).) As stated in Garrity v. Rural Mutual Insurance Co. (1977), 77 Wis. 2d 537, 543, 253 N.W.2d 512, 514, quoting 10 Williston, Contracts sec. 1273, at 864 (3d ed. 1967):

“ ‘There is no equity on which to base the deprivation of the creditor of any of his legal rights for the benefit of the surety until he has been paid in full.’ ”

Providing this protection for creditors is the obligation a surety assumes upon the execution of bonds securing the performance or payment under contract. There is, in our opinion, no valid reason to depart from this soundly based rule, which conditions the surety’s right to subrogation upon the payment of the debt on which the right of subrogation is based. Inasmuch as Argonaut failed to perform this obligation, its third-party complaint for subrogation was subject to dismissal. Rather than ruling upon the propriety of the third-party defendants’ motions for summary judgment, the trial court should have construed them as motions for dismissal. The appellate court, accordingly, ought to have remanded the cause with directions to dismiss the third-party complaint.

The appellate court’s refusal to award attorney fees to the third-party defendants is not properly before us. Counsel raised this issue neither in his brief nor in oral argument, except in response to a question from the bench as to whether he intended to waive the issue. Counsel’s reply that he did not intend to waive the question is simply not sufficient to present it where it has not been briefed or otherwise referred to. Under our rules a point not argued in the briefs may not be raised in the reply brief, in oral argument, or on petition for rehearing. 73 Ill. 2d Rules 341(e)(7), 341(f); see Janssen v. City of Springfield (Mar. 28, 1980), No. 52058); see People ex rel. Davis v. Chicago Burlington & Quincy R.R. Co. (1971), 48 Ill. 2d 176, 180; Flynn v. Vancil (1968), 41 Ill. 2d 236, 241, 242.

The judgment of the appellate court is affirmed and the cause is remanded to the trial court with directions to vacate its summary judgments for third-party defendants and to dismiss the third-party complaint.

Affirmed and remanded, with directions.


author: MR. JUSTICE KLUCZYNSKI MR. CHIEF JUSTICE GOLDENHERSH,

text:
    (No. 52064.
    THE ESTATE OF THOMAS CAREY et al., Appellants, v. THE VILLAGE OF STICKNEY, Appellee.

      Opinion filed, June 20, 1980.

    Modified on denial of rehearing September 26, 1980.

      GOLDENHERSH, C.J., and UNDERWOOD and WARD, JJ., dissenting.
    Carey, Filter & White, of Chicago (Edward M. White, of counsel), for appellants.
    Donald J. Kreger, of Chicago (Friedman & Koven, of counsel), for appellee.
   MR. JUSTICE KLUCZYNSKI

delivered the opinion of the court:

Plaintiffs, the estate of Thomas Carey and Suburban Downs, Inc., conduct, respectively, horse- and hamessracing meets in the defendant village of Stickney under licenses issued by the Illinois Racing Board. Plaintiffs brought this declaratory judgment action, seeking the invalidation of a 1974 Stickney tax ordinance which requires racetrack licensees to pay 10 cents to Stickney “for each person entering the grounds or enclosures of the licensee upon a ticket of admission” (Stickney Municipal Code of 1965, ch. 18A, sec. 18A.02). The ordinance allows but does not require licensees to collect the amount of the tax from each ticket holder. Plaintiffs have refused to pay the tax and contend that they have not collected the tax from ticket holders. Defendant contests plaintiffs' claim that the tax has not been collected from ticket holders.

The circuit court held, in the wake of our then recent decision in Town of Cicero v. Fox Valley Trotting Club, Inc. (1976), 65 Ill. 2d 10, that the Stickney tax is a tax upon occupations which a home rule unit may not impose without authorization by the General Assembly (Ill. Const. 1970, art. VII, sec. 6(e)(2)). The circuit court further ruled that there existed no just reason for delay of enforcement or appeal but that it would retain jurisdiction “for the purpose of determining whether a fund has been created by coUection of the tax held invalid and determining the proper distribution of such fund, if any, in the event of affirmance of this Court’s order.” The appeHate court, relying on its interpretation of the Cicero case, reversed the judgment of the circuit court and held that the Stickney tax is not an occupation tax but rather represents a valid exercise of Stickney’s home rule taxing power. (69 Ill. App. 3d 539.) We allowed plaintiffs’ petition for leave to appeal, and we now reverse.

Under the Illinois Constitution of 1970, home rule units such as the defendant village of Stickney are granted broad authority in matters “pertaining to its government and affairs including, but not limited to, the power *** to tax *** .” (Ill. Const. 1970, art. VII, sec. 6(a).) There are few limitations placed upon the taxing authority of home rule units, but they are prohibited from imposing “taxes *** upon occupations” unless authorized by the General Assembly. (Ill. Const. 1970, art. VII, sec. 6(e).) In defining a tax “upon occupations,” we have looked to cases involving the imposition of occupation taxes by the General Assembly under the Constitution of 1870. (Ill. Const. 1870, art. IX, sec. 1; see Town of Cicero v. Fox Valley Trotting Club, Inc. (1976), 65 Ill. 2d 10, 21; Paper Supply Co. v. City of Chicago (1974), 57 Ill. 2d 553, 565-66.) The case most frequently cited, Reif v. Barrett (1933), 355 Ill. 104, 109, defines “occupation tax” as one designed “to regulate and control a given business or occupation, or to impose a tax for the privilege of exercising, undertaking or operating a given occupation, trade or profession. Its effect is to license a person engaged in a given calling or occupation. A license in form may not be issued to a taxpayer but the payment of the tax is the license *** to engage in such occupation. Regulation is not a necessary adjunct of an occupation tax. It may or it may not be. The payment of the tax itself is a condition precedent to the privilege of carrying on a business or occupation. The payment of the tax is made mandatory by the act creating it upon the right of the individual to follow the given occupation.” In a purported exercise of its constitutional authorization to impose taxes as a home rule unit, the defendant village of Stickney, in 1974, enacted the ordinance here under attack. The ordinance provides, in pertinent part:

“Any licensee operating a race track for horse racing purposes within the Village of Stickney shall pay to the Village the sum of TEN CENTS (10<¿) for each person entering the grounds or enclosures of the licensee upon a ticket of admission. If tickets are issued for more than one day, then the said sum of TEN CENTS (10^) shall be paid for each person using such ticket on each day that the same shall be used. Providing, however, that no charge shall be made on tickets of admission issued to and in the name of directors, officers, agents or employees of the licensee, or to owners, trainers, jockeys and their employees or to any person or persons entering the grounds or enclosure for the transaction of business in connection with race meetings or operations. The licensee may, if it desires, collect such amount from each ticket holder in addition to the amount or amounts charged for such ticket of admission.” Stickney Municipal Code of 1965, ch. 18A, sec. 18A.02.

Defendant Stickney argues initially, in reliance on the Illinois Municipal Code, that its tax was expressly authorized by the General Assembly’s grant to municipalities of the power to tax amusements (Ill. Rev. Stat. 1975, ch. 24, par. 11 — 42—5). The provision upon which defendant relies, however, was expressly inapplicable to racetrack licensees such as plaintiffs at the time here relevant. (Ill. Rev. Stat. 1975, ch. 8, par. 37j1.) The imposition of the tax therefore can be considered valid only if such action was within defendant’s general home rule taxing authority (Ill. Const. 1970, art. VII, sec. 6(a)). The parties do agree that the type of tax here challenged is now, by virtue of the General Assembly’s amendment of the Illinois Horse Racing Act of 1975, expressly authorized, effective January 1, 1976 (Ill. Rev. Stat. 1977, ch. 8, par. 37 — 27(f)). We are therefore concerned with the validity of defendant’s ordinance only insofar as it seeks to impose a tax upon plaintiffs from the effective date of the ordinance, November 24, 1974, through 1975.

In holding that the Stickney tax is not a tax upon occupations, the appellate court stated that its conclusion was compelled by our decision in Town of Cicero v. Fox Valley Trotting Club, Inc. (1976), 65 Ill. 2d 10. We do not agree, however, that the Cicero case requires that the Stickney tax likewise be upheld.

At issue in Cicero was an ordinance imposing a tax on all amusements in the town of Cicero, and the court there held that such a tax is not an occupation tax, since it “is not confined to those who are engaged in businesses for profit.” (65 Ill. 2d 10, 22.) In explaining its holding, the court reasoned that one who conducts an amusement is not necessarily in the occupation of conducting that amusement. (65 Ill. 2d 10, 22.) The court acknowledged that “some of those who are taxed by the Ordinance may be said to be engaged in the occupation of presenting or conducting amusements.” (65 Ill. 2d 10, 23.) The court held, however, in keeping with Reifv. Barrett (1933), 355 Ill. 104, 109, that a tax is not an occupation tax unless it is designed to impose and, in fact, imposes a tax upon given occupations. (Town of Cicero v. Fox Valley Trotting Club, Inc. (1976), 65 Ill. 2d 10, 23.) Because imposition of the Cicero tax was not limited to “occupations,” as that word is commonly used to mean profit-motivated, on-going concerns (Reif v. Barrett (1933), 355 Ill. 104, 122-23), the court held that it was not an occupation tax and was within the home rule taxing authority of Cicero.

In the present case, as contrasted with Cicero, it is indisputable that the tax is designed to impose and does impose a tax upon a given occupation, those licensed to conduct racing meetings. The tax is therefore an occupation tax. (Heyman v. Mahin (1971), 49 Ill. 2d 284, 288 (tax on cigarette retailers); Mutual Tobacco Co. v. Halpin (1953), 414 Ill. 226, 229 (tax on cigarette distributors); Reif v. Barrett (1933), 355 Ill. 104, 116-18 (tax on sellers of tangible personal property).) The fact that the amount of the tax may be passed on to those holding tickets does not change the nature of the tax; it remains an occupation tax. (Winter v. Barrett (1933), 352 Ill. 441, 455-57.) The legal incidence of the tax, rather than the actual burden, controls. (First National Bank v. Jones (1971), 48 Ill. 2d 282, 288; National Bank v. Isaacs (1963), 27 Ill. 2d 205, 207.) On this point, S. Bloom, Inc. v. Korshak (1972), 52 Ill. 2d 56, 62-63, Mulligan v. Dunne (1975), 61 Ill. 2d 544, 551-52, and our recent decision in Kerasotes Rialto Theatre Corp. v. City of Peoria (1979), 77 Ill. 2d 491, 500, are distinguishable, since each involved a tax in which the legal incidence was expressly placed on the consumer.

The remaining issue to be decided is whether money collected from ticket holders, if any, is to be returned to the ticket holders, retained by plaintiffs, or remitted to defendant. Plaintiffs admit that they have refused to pay the tax to defendant, but the parties are in dispute as to whether plaintiffs coEected the 10-cent charge from ticket holders. Plaintiffs claim that they did not; defendant argues to the contrary. The circuit court, by the terms of its order, retained jurisdiction to resolve this factual issue in the event that its judgment, declaring the Stickney tax invalid, was affirmed. Having affirmed that judgment, we remand the cause to the circuit court to allow it to enter its finding on whether plaintiffs collected the amount of the tax from ticket holders. If the circuit court should find that ticket holders were not so charged, no further order would be necessary. If the circuit court should find, however, that ticket holders were so charged, the court should further order that money collected by plaintiffs be refunded “to those of their customers who bore the burden of the tax.” (Consolidated Distilled Products, Inc. v. Mahin (1973), 56 Ill. 2d 110, 119, citing Benzoline Motor Fuel Co. v. Bollinger (1933), 353 Ill. 600, 608.) If it is impractical to determine exactly which customers paid the tax, the circuit court should devise some equitable plan for distributing the fund. In no event should plaintiffs be entitled to keep any money collected from ticket holders under this illegal tax; the State’s policy against unjust enrichment forbids such a result. Consolidated Distilled Products, Inc. v. Mahin (1973), 56 Ill. 2d 110, 118-19.

For the foregoing reasons, the judgment of the appellate court is reversed, the judgment of the circuit court is affirmed, and the cause is remanded to the circuit court for further proceedings in accordance with the views expressed herein.

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

MR. CHIEF JUSTICE GOLDENHERSH,

dissenting:

I dissent and would affirm the judgment of the appellate court. Under the authorities, the tax imposed by the ordinance is clearly an amusement tax, the enactment of which is authorized under the defendant’s home rule powers and is not a tax proscribed by article VII, section 6(e), of the Constitution of 1970.

In Reif v. Barrett (1933), 355 Ill. 104, upon which the majority relies for its definition of “occupation tax,” the court said:

“[A]n occupation tax has one of two missions: either to regulate and control a given business or occupation, or to impose a tax for the privilege of exercising, undertaking or operating a given occupation, trade or profession. Its effect is to license a person engaged in a given calling or occupation. A license in form may not be issued to a taxpayer but the payment of the tax is the license under the authority of the State to engage in such occupation. Regulation is not a necessary adjunct of an occupation tax. It may or it may not be. The payment of the tax itself is a condition precedent to the privilege of carrying on a business or occupation. The payment of the tax is made mandatory by the act creating it upon the right of the individual to follow the given occupation. An occupation tax may be levied under the general police powers of the State, where its purpose is to regulate or control a given occupation, or it may be levied under the general sovereign powers of the State, where its sole purpose is to raise revenue. Under which power it is levied makes no difference as to the character of the tax. The type of tax is not changed by any name that may be given it under the law through which it is enacted, neither is the test as to whether or not the occupation tax is the sole revenue or only a part of the revenue of the State.” 355 Ill. 104, 109-10.

Clearly the defendant was without authority to license or regulate the activity of operating a racetrack, and the tax here involved was not of the type contemplated in Reif. That the tax levied by the defendant village is an amusement tax and not a tax on an occupation is demonstrated by the fact that section 27 of the Illinois Horse Racing Act of 1975 (Ill. Rev. Stat. 1977, ch. 8, par. 37 — 27(f)), which now specifically authorizes the tax, provides:

“[A]ny municipality that has a Racing Board licensed horse race meeting at a race track wholly within its corporate boundaries may charge a local amusement tax not to exceed 10¢ per admission to such horse race meeting by the enactment of an ordinance.”

This tax is precisely like that which was upheld in Town of Cicero v. Fox Valley Trotting Club, Inc. (1976), 65 Ill. 2d 10, the only difference being that its applicability is limited to those who seek amusement by attending horse-race meetings. Further, it is indistinguishable from the tax upheld in Greater Chicago Indoor Tennis Clubs, Inc. v. Village of Willowbrook (1976), 63 Ill. 2d 400, which imposed an amusement tax on indoor tennis clubs.

Section 6(m) of article VII of the 1970 Constitution provides that the “Powers and functions of home rule units shall be construed liberally” and any doubts should be resolved in favor of a broad interpretation of defendant’s taxing power. To hold, as does the majority here, is to directly contravene the constitutional mandate.

UNDERWOOD and WARD, JJ., join in this dissent.


author: MR. JUSTICE WARD

text:
    (No. 52748.
    CATERPILLAR TRACTOR COMPANY, Appellee, v. THE INDUSTRIAL COMMISSION et al. (Hattie B. Daugherty, Appellant).

      Opinion filed, September 15, 1980.

    Harvey & Stuckel, Chartered, of Peoria (David W. Stuckel, of counsel), for appellant.
    Forrest D. Serblin, of Peoria, for appellee.
   MR. JUSTICE WARD

delivered the opinion of the court:

Hattie Daugherty filed a claim under the Workmen’s Compensation Act (Ill. Rev. Stat. 1973, ch. 48, par. 138.1 et seq.) for an injury to her right thumb which she allegedly sustained on November 21, 1974, while employed at the Caterpillar Tractor Company in East Peoria. An arbitrator held in her favor and made an award which included compensation for the permanent loss of 80% of the use of her right thumb. The Industrial Commission affirmed after making a slight modification as to attorney fees, but the circuit court of Peoria County reversed the Commission’s decision as contrary to the manifest weight of the evidence. The claimant appealed directly to this court under Rule 302(a)(2). 73 Ill. 2d R. 302(a)(2).

When the claimant began her employment with Caterpillar Tractor in April of 1974 she was assigned to lift metal cores of varying sizes from a conveyor line. The weights of these cores according to the record ranged from 5 to 85 pounds. The claimant testified that she removed between 100 and 200 cores each half hour depending upon their weight and size. She stated that on November 21, 1974, when pulling down a “big core” from the conveyor belt, she struck her right hand against the line and injured her thumb. She said she received permission from her foreman to visit the first-aid room. The claimant received aspirin from a company nurse and was allegedly told to schedule an appointment with her own doctor. Three weeks later, on December 12, she visited Dr. G. G. Spano, who advised her that her right thumb was dislocated. He sent the claimant to Proctor Community Hospital for X rays and later referred her to Dr. Jay Alameda, who had her admitted to St. Francis Hospital. On January 10, 1975, he performed an arthrodesis on her right thumb and placed it in a cast in an attempt to heal what he described as a fracture of the metacarpal phalangeal joint. The cast was changed several times and was finally removed on March 4. The claimant returned to work in April 1975 and resumed her duties as a core handler. Several months later she returned to Dr. Alameda complaining again of pain in the right thumb. Dr. Alameda found that the healing which had taken place while her thumb was in a cast had “dissolved,” as his report puts it. A re-arthrodesis of the fractured joint was scheduled. The claimant entered the hospital on May 7, 1976, and the surgery was performed the following day. On this occasion a small screw was inserted for a better fusion. The final cast was removed on June 18, but because of continued swelling the claimant was not able to return to work until August. Following an examination by the company doctor, Dr. J. R. Barron, she was placed on lighter duty in another department.

She continued in this assignment with no apparent problems until October, when she requested an appointment with Dr. Barron. In his medical report he states:

“Examination today (10-21-76) reveals a deformation in size and shape at the level of the MP joint of the right hand thumb. Grip is good and strong on both hands. With the fingers extended and the thumb pressed against the side of the hand, she could extend the thumb upward and this movement is limited on the right to 45°, in comparison with 90° in the left.”

She was again referred to Dr. Alameda, who determined that the second arthrodesis had been unsuccessful. His suggestion of a third operation was rejected by the claimant, who sought a second opinion from Dr. David Connor. Dr. Connor agreed with Dr. Alameda’s recommendation, and after receiving the claimant’s consent he performed a pseudoarthrosis on her thumb on January 17, 1977. During this procedure Dr. Connor attempted to fuse the metacarpal phalangeal joint of the right thumb with a bone grafted from the right iliac crest of the claimant’s pelvis. She returned to work in June, where she resumed her duties in the wire room. The claimant still complains of stiffness in her right thumb and that it lacks full mobility.

In support of the circuit court’s reversal of the Commission’s award the respondent advances several contentions. It argues that the evidence shows that the claimant did not notify it of an alleged accident on November 21, 1974, and that she did not show a causal connection between this “incident” and the resulting problem with her right thumb. The respondent relies heavily on the claimant’s testimony before the arbitrator that her injury did not arise from an accident at work but from an earlier fall in 1972 before she was employed by the respondent.

The respondent also refers to an insurance form which was signed by the claimant. In response to one of the questions she wrote that she was first disabled by “this sickness or injury” on January 9, 1975. She also responded “no” to the question of whether an accidental injury was involved.

The respondent notes, too, that though most of the reports which discuss the claimant’s medical history show that the injury was caused by an accident at work the records of Dr. Alameda indicate that the condition of her thumb was caused by a “fall” in November of 1974. Finally, the respondent says that it has no record that the claimant ever visited its first-aid station in November or December of 1974, thus questioning whether the claimant notified the respondent within the required statutory period of 45 days. Ill. Rev. Stat. 1973, ch. 48, par. 138.6(e).

The record does show apparent inconsistencies in the claimant’s testimony. On cross-examination she was asked about her conversation with the foreman, whom she said she had notified upon injuring her thumb. She described the conversation: “He asked me what was the matter with my thumb and I told him I fell a couple of years ago and injured it.” She also told Dr. Spano, Dr. Alameda and the company nurse of having injured her thumb in a fall.

The claimant acknowledges there are some contradictory or ambiguous statements, but she argues that the award by the Industrial Commission was not contrary to the manifest weight of the evidence. This is indeed the pivotal question. The claimant answers the claim that her injury was due to the non-work-related fall in 1972 by noting she also testified that the accident in 1972 was minor and did not require any medical attention. She points out that a physical examination conducted by the respondent company before she was hired did not reveal any defect or problem with her right hand or thumb. She also argues that the uncontradicted medical finding of an unhealed fracture of her right thumb long after she was employed by the respondent shows that an accidental injury occurred at work and not in a fall two years prior to her employment by Caterpillar Tractor.

In response to the respondent’s relying on the absence of a record of a visit to the first-aid station in November or December of 1974 the claimant calls attention to the nurse’s testimony before the Commission that no permanent record of any accident is kept unless an employee is examined by the company’s doctor. As the claimant was not referred to Dr. Barron, the respondent’s physician, in November of 1974 no permanent record of the visit to the station would appear in the respondent’s files. She also observes that all of the medical reports in evidence except one set out a medical history which unequivocally describes the claimant’s injury as having been received in a work-related accident. The exception is the above-mentioned report of Dr. Alameda referring to the claimant’s being injured in a fall in November 1974. Dr. Alameda was making reference to a case history taken earlier by a medical resident, and it is not unreasonable to assume that the report refers to the claimant’s earlier fall in 1972, which has been discussed.

The claimant argues that, though the respondent claims it never received notice of the claimant’s injury, significantly it did not seek to rebut her testimony that she received permission from a foreman named “Dick” to visit the first-aid station on November 21, 1974.

The claimant’s negative response to the question on the company’s insurance form as to whether she had suffered an accidental injury is not, she argues, to be judged decisive on the issue of causation. She observes that this court has held that such evidence is but a factor for the Commission to consider in evaluating an employee’s claim of a compensable injury. Atlantic & Pacific Tea Co. v. Industrial Com. (1977), 67 Ill. 2d 137, 141; Thrall Car Manufacturing Co. v. Industrial Com. (1976), 64 Ill. 2d 459, 464.

There was conflicting evidence as to the causation of the claimant’s injury, and the circuit court certainly did not act arbitrarily in setting aside the finding of the Industrial Commission. The question is not an easy one to decide, but we have concluded our holding must be that the Commission’s finding was not contrary to the manifest weight of the evidence. It is axiomatic that the Commission has the first responsibility of resolving conflicts of evidence. A court, including this one, will not set aside a finding of the Commission unless it is contrary to the manifest weight of the evidence. This is so even though the court might have drawn different inferences and reached a conclusion different from the Commission’s. Phelps v. Industrial Com. (1979), 77 Ill. 2d 72; A. O. Smith Corp. v. Industrial Com. (1977), 69 Ill. 2d 240.

Particularly persuasive here is the evidence of the physical examination of the claimant prior to being accepted for employment, which did not disclose any physical disability or limitation, and her being given the physically demanding assignment of handling metal cores weighing up to 85 pounds. She worked at this assignment from April until November 27, 1974, when she testified she injured her thumb when pulling down a “big core.” She testified without contradiction that she physically lifted 100 to 200 cores every half hour or, presumably, 1,600 to 3,200 cores each day. The Industrial Commission well may have regarded all of this as convincing evidence that the fracture and dislocation of the claimant’s thumb was sustained at her employment and not, for example, in the earlier fall.

Accordingly, the judgment of the circuit court of Peoria County is reversed.

Judgment reversed; award reinstated.


text:
    (No. 52830.
    WILLIAM D. CROWELL, Appellee, v. MICHAEL A. BILANDIC, Mayor, et al., Appellants.

      Opinion filed September 15, 1980.

      William R. Quinlan, Corporation Counsel, of Chicago (Robert Retke and Edmund Hatfield, Assistant Corporation Counsel, of counsel), for appellants.
    Charles Locker, of Chicago (Leo T. McGonigal, of counsel), for appellee.
   MR. JUSTICE UNDERWOOD

delivered the opinion of the court:

Plaintiff, William D. Crowell, a patrolman in the Chicago Police Department, was charged in a complaint filed before the Chicago Police Board (Board) with attempting to obstruct a departmental investigation into a complaint that plaintiff had solicited a bribe. Following an extensive hearing before a hearing officer designated by the Board, that officer and the Board on January 18, 1973, unanimously discharged plaintiff, concluding that he made “several attempts to impede, influence and obstruct said investigation by personally contacting William K. Neal [complainant] and attempting to persuade him not to cooperate with the Departmental Investigation and in furtherance of his attempts to impede the investigation he did execute a written note wherein it stated in substance that William K. Neal notified Director Conrad of the Internal Affairs Division of the Chicago Police Department that the Respondent was not the officer involved in his complaint, and Respondent urged Neal to present same either verbally or in writing to the Department, thereby impeding the Department’s efforts of achieving its goal of maintaining honesty and integrity within the Department.”

On July 17 the circuit court of Cook County, acting on administrative review, affirmed the Board’s decision discharging plaintiff and on May 15, 1974, denied plaintiff’s motion for a rehearing. The appellate court affirmed [Crowell v. Police Board (1975), 32 Ill. App. 3d 552), and this court denied leave to appeal.

On March 10, 1977, plaintiff filed a petition pursuant to section 72 of the Civil Practice Act (Ill. Rev. Stat. 1977, ch. 110, par. 72) to vacate the circuit court judgment. He alleged that on December 15, 1976, he first discovered that Morgan Murphy, one of the members of the Board ordering plaintiff’s discharge, was the uncle of William Murphy, one of plaintiff’s superior officers and deputy chief of the third patrol area to which plaintiff had been assigned. It is clear that William Murphy’s name had appeared on the original list of witnesses prior to the initial hearing, but he did not testify. However, the complaining witness, William K. Neal, on direct and cross-examination, testified that he had received a telephone call from William Murphy concerning Neal’s complaint against plaintiff. Apparently the $200 which Neal stated he had paid plaintiff to avoid a drug charge had been repaid to Neal, and he was reluctant to pursue his complaint. The purpose of Murphy’s call had been to urge Neal’s cooperation with departmental officials in the prosecution. There was no mention made of William Murphy in plaintiff’s testimony, and there does not appear to have been any additional reference to him during the hearing other than on a copy of a statement, presented as an exhibit, which was made by Neal to Sergeant William Hines and which referred to Neal’s conversation with William Murphy.

In his section 72 petition plaintiff also alleged that William Murphy was “one of the chief investigative officers in his case, and one of his superiors who had a substantial interest in the matter, a substantial prejudice against him and, was the moving force or at least one of the persons primarily responsible for the bringing of charges.” Plaintiff also alleged that William Murphy had rejected the recommendation of Julius Watson, commander of the seventh district, to dismiss the case as “unfounded” or “not sustained,” and had initiated his own investigation of the charges, ordering plaintiff to appear before the Office of Internal Affairs Division of the Chicago police department. It was further alleged “[t]hat ‘bad blood’ or a personality conflict existed between Plaintiff and William Murphy” as illustrated by allegedly unfair investigations ordered by Murphy regarding plaintiff’s mistaken use of tear gas to effect an arrest and his failure to notify the station or his partner of his absence due to illness. Plaintiff also alleged that William Murphy attempted to transfer him after plaintiff refused to serve as Murphy’s confidential informant on corruption in the third area, and that Murphy then stated “that there were only two (2) kinds of patrolmen, to-wit: ‘those in my club and those out of my club. You are now out.’ ” Plaintiff cited our Rule 67 providing for the disqualification of a judge in any case in which a close relative, including a nephew, “is a party, has an interest, or appears as counsel.” (73 Ill. 2d R. 67.) Asserting that Rule 67 applies- also to members of a police board, plaintiff alleged that William Murphy’s involvement in the department’s investigation of plaintiff required Morgan Murphy to disqualify himself from participation in the Board action. Morgan Murphy’s failure to do so, plaintiff alleged, denied him due process and equal protection despite the unanimous decision of the five-member board and the hearing officer. Plaintiff accordingly sought reversal of that decision and reinstatement with full pay and allowances.

Apparently no testimony was taken at the hearing on the section 72 petition. The trial court denied defendants’ motion to dismiss on the ground that the petition had not been filed within the 2-year limitation period. It found that William Murphy had instituted disciplinary action against plaintiff and that he was actively engaged in the investigation and prosecution of charges against the plaintiff. It also concluded that Supreme Court Rule 67 applied to the police board proceedings. Finding that William Murphy’s uncle, Morgan Murphy, participated in those proceedings, the court vacated the Board’s decision, ordered the reinstatement of plaintiff with full pay and allowances from the date of his suspension, and noted that “[n] othing contained herein shall be construed as barring the Superintendent of Police from proceeding anew before the Police Board on the charges previously made against Plaintiff.” The court indicated that its decision did “not imply that it found that undue influence was present but rather that the decision of the Police Board was tainted by the participation of Morgan Murphy in its deliberations and decision in light of Morgan Murphy’s relationship to William Murphy.” On appeal to the appellate court, that court held a section 72 petition to be addressed to the sound discretion of the trial court and found no abuse in that court’s exercise of its discretion. The appellate court, however, reversed the trial court’s reinstatement of plaintiff with full back pay, holding the proper remedy was to remand to the police board for a new hearing on the charges. 77 Ill. App. 3d 162.

Petitions filed pursuant to section 72 are subject to the following time limitations:

“(1) Relief from final orders and judgments, after 30 days from the entry thereof, may be had upon petition as provided in this Section. ***
***
(3) The petition must be filed not later than 2 years after the entry of the order or judgment. Time during which the person seeking relief is under legal disability or duress or the ground for relief is fraudulently concealed shall be excluded in computing the period of 2 years.” (Ill. Rev. Stat. 1977, ch. 110, par. 72.)

As earlier noted, the trial court’s final order, affirming the police board’s dismissal of plaintiff, was entered on July 17, 1973, and plaintiff’s motion for a rehearing was denied on May 15, 1974. Plaintiff’s section 72 petition, however, was not filed until March 10, 1977. It is accordingly clear that plaintiff’s petition was not filed within the 2-year limitation period. In that petition, plaintiff neither referred to the time limitation nor alleged any of the grounds provided in section 72 for tolling it. While the trial judge gave no reason for regarding the petition as timely, the appellate court, despite the absence of any reference by petitioner to the question of his petition’s timeliness, found its allegations sufficient to support a finding of fraudulent concealment and therefore concluded that the trial court’s determination was not an abuse of discretion.

We believe, however, that the 2-year limitation mandated by section 72 must be adhered to in the absence of a clear showing that “the person seeking relief is under legal disability or duress or the ground for relief is fraudulently concealed ***.” (See People v. Berland (1978), 74 Ill. 2d 286, 317; People v. Colletti (1971), 48 Ill. 2d 135, 137; Agorianitis v. Ress (1977), 55 Ill. App. 3d 325, 328; Marin v. Grimm (1976), 37 Ill. App. 3d 979.) The purpose of this section’s time limitation is a salutary one — to establish necessary stability and finality in judicial proceedings. (See 51 Am. Jur. 2d Limitation of Actions sec. 18 (1970); 53 C.J.S. Limitation of Actions sec. 1 (1948).) Even if we were to adopt the generous construction given plaintiff’s petition by the appellate court, the allegations of that petition do not support a finding of fraudulent concealment. It is well established that fraudulent concealment sufficient to toll a statute of limitations requires affirmative acts or representations designed to prevent discovery of the cause of action or ground for relief. (Chicago Park District, v. Kenroy, Inc. (1980), 78 Ill. 2d 555, 561; Skrodzki v. Sherman State Bank (1932), 348 Ill. 403, 407; Lancaster v. Springer (1909), 239 Ill. 472, 482; Schmitz v. Hoffmann (1978), 61 Ill. App. 3d 130, 132; Johnson v. Hawkins (1972), 4 Ill. App. 3d 29, 32-33; Bush v. Continental Casualty Co. (1969), 116 Ill. App. 2d 94, 100.) In Kenroy we emphasized that “[s] ilence alone on the part of the defendant, accompanied by the failure of the plaintiff to discover the cause of action, ordinarily does not constitute fraudulent concealment.” (78 Ill. 2d 555, 561.) There, while discussing fraudulent concealment in the context of section 22 of the Limitations Act (Ill. Rev. Stat. 1975, ch. 83, par. 23), we followed a widely recognized exception to this general rule in those instances when the existence of a fiduciary relationship is clearly established. (Annot., 173 A.L.R. 576, 588 (1948); see Vigus v. O’Bannon (1886), 118 Ill. 334, 346; County of Cook v. Barrett (1975), 36 Ill. App. 3d 623, 635; see also Emmett v. Eastern Dispensary & Casualty Hospital (D.C. Cir. 1967), 396 F.2d 931, 937-38 n.33; Sheets v. Burman (5th Cir. 1963), 322 F.2d 277, 279-80; Rowen v. Le Mars Mutual Insurance Co. (Iowa 1979), 282 N.W.2d 639, 646-47; Laventhol, Krekstein, Horwath & Horwath v. Tuckman (Del. 1976), 372 A.2d 168, 170-71; Higbee v. Walsh (1940), 229 Iowa 408, 423-24, 294 N.W. 597, 605-06; 51 Am. Jur. 2d Limitation of Actions sec. 149 (1979).) Here, however, plaintiff has alleged neither the existence of a fiduciary relationship nor that the defendant engaged in affirmative acts or representations calculated to prevent discovery of the asserted ground for relief. In the absence of such allegations, plaintiff’s petition was effectively barred by the 2-year limitation in section 72.

Rule 67, by its terms, does not apply to administrative agencies, and we do not reach the question whether a Board member’s participation in the proceedings under these circumstances would be objectionable under ordinary due process considerations. We hold only that, under the circumstances present here, plaintiff’s section 72 petition" was barred by the 2-year limitation period.

The judgments of the circuit court of Cook County and of the appellate court are accordingly reversed.

Judgments reversed.


author: MR. JUSTICE MORAN

text:
    (No. 52644.
    MILLEDGE S. DIXON et al., Appellants, v. CITY NATIONAL BANK OF METROPOLIS, Appellee.

      Opinion filed September 15, 1980.

      E. Charles Geittmann, of Geittmann & Jackson, of Metropolis, for appellants.
    Joseph J. Neely, of Neely & Neely, of Metropolis, for appellee.
   MR. JUSTICE MORAN

delivered the opinion of the court:

The purchasers of real property at an execution sale, later held void, brought this action to recover the amount of the purchase price from the judgment creditor. The circuit court of Massac County dismissed the complaint for failure to state a cause of action. The appellate court affirmed (76 Ill. App. 3d 822), and we granted plaintiffs leave to appeal.

The defendant bank obtained a judgment against Roy Moller, who was indebted to defendant. Defendant had the sheriff levy on the judgment debtor’s undivided one-half interest in certain real property. Plaintiffs, Milledge and Irene Dixon, purchased the debtor’s interest in the property for $4,201 at an execution sale. The proceeds were delivered to defendant in partial satisfaction of its judgment. Upon expiration of the period of redemption, a sheriff’s deed was issued to plaintiffs. In a partition suit thereafter filed by plaintiffs, the judgment debtor intervened seeking to set aside the sheriffs sale. The execution sale was held void in Dixon v. Moller (1976), 42 Ill. App. 3d 688, for the sheriffs failure to set off the judgment debtor’s $5,000 homestead exemption. (See Ill. Rev. Stat. 1967, ch. 52, par. 1.) While the partition suit was pending, plaintiffs filed a third-party complaint (the instant action) against defendant for repayment of the purchase price plus interest. Both the circuit court’s dismissal and the appellate court’s affirmance were based upon the doctrine of caveat emptor.

In this State, it has long been established that, at an execution sale, the doctrine of caveat emptor applies; where title fails, the purchaser is not entitled to a return from the judgment creditor of the amount paid. In England v. Clark (1843), 5 Ill. 486, a leading case which has frequently been cited, a purchaser at an execution sale purchased property which did not belong to the judgment debtor, and the title owner recovered the property from the purchaser. The court held that, under the doctrine of caveat emptor, the purchaser could not recover the amount paid from the judgment creditor, absent fraud or some other act. (5 Ill. 486, 493.) A concurring opinion stated that to allow the purchaser to recover from the judgment creditor would make the latter answerable for the acts of the sheriff or other officer who conducted the execution and sale. This separate opinion continued:

“Litigation should have an end as soon as the object of its institution is accomplished; but if years after a [judgment creditor] has received his debt, through the agency of the law, he can be made to refund, because of some neglect or mistake on the part of its officers, he can never know when he is safe, or at the end of the law.” (5 Ill. 486, 494 (Wilson, C.J., concurring).)

The doctrine was reiterated in Conwell v. Watkins (1874), 71 Ill. 488, 492, Tilley v. Bridges (1883), 105 Ill. 336, 339, Joliet Stove Works v. Kiep (1907), 230 Ill. 550, 557, andHutson v. Wood (1914), 263 Ill. 376, 387-88.

We are aware of only two jurisdictions in which, under the common law and in situations similar to that here, it has been held that the purchaser may recover the amount paid from the judgment creditor. (Martel v. Bearce (Me. 1973), 311 A.2d 540, 546-47; Dresser v. Kronberg (1911), 108 Me. 423, 81 A. 487; Danner v. Muman (1920), 43 S.D. 289, 292-93, 178 N.W. 987, 988-89.) The prevailing view is that, where title fails, the purchaser should not be allowed to recover from the judgment creditor. See Barth v. A. & B. Schuster Co. (1923), 25 Ariz. 546, 550, 220 P. 391, 392-93; Copper Belle Mining Co. v. Gleeson (1913), 14 Ariz. 548, 552-55, 134 P. 285, 287-88; Kreps v. Webster (1929), 85 Colo. 572, 277 P. 471; Milam v. Adams (1960), 216 Ga. 440, 117 S.E.2d 343; Lewark v. Carter (1889), 117 Ind. 206, 20 N.E. 119; Tonge v. Radford (1931), 103 Pa. Super. 131, 156 A. 814.

We note that our appellate court has held, in like circumstances, that if the purchaser has not yet paid his bid at the time the sale is declared void, he is not bound to do so. (Wilson v. Hilligoss (1935), 278 Ill. App. 564, 574; Thrift v. Frittz (1880), 7 Ill. App. 55, 58.) Irrespective of our view of the soundness of these decisions, they are not controlling in a situation in which, as here, the purchase money has been paid and applied by the judgment creditor to the judgment.

Conflicting policy considerations are involved in this dispute. On the one hand it may be said that to allow the purchaser to recover from the judgment creditor would prevent the creditor, who has had the debt owed to him satisfied to the extent of the amount realized at the execution sale, from benefiting at the expense of the purchaser, who gets nothing for the money he has paid. If the judgment creditor must return the money to the purchaser, the judgment creditor has lost nothing to which he is entitled. He may still seek recovery from the judgment debtor or his property. All parties, in effect, would be returned to their respective positions prior to the sale. On the other hand, to allow the purchaser to recover from the judgment creditor would render the latter answerable for the acts of the sheriff who conducts the levy and execution sale. It would perpetually subject the judgment creditor to the threat of having to refund money received and used to satisfy the debt of the judgment debtor. In Checkley & Co. v. Citizens National Bank (1969), 43 Ill. 2d 347, 350, this court reiterated the policy in favor of giving permanency and stability to judicial sales. The court also reaffirmed the long-standing general rule in this State and the majority of jurisdictions elsewhere that, absent fraud, misrepresentation or mistake of fact, none of which apply here, the doctrine of caveat emptor prevents the purchaser from recovering his purchase money from the judgment creditor. 43 Ill. 2d 347, 349.

Defendant asserts that, should we decide in its favor, plaintiffs will not be left without a remedy for the reason that they may seek recovery of the amount paid from the judgment debtor by way of subrogation to the rights of defendant. Plaintiffs respond to this assertion by merely stating that the doctrine of subrogation is not involved in this case. While not directly in issue here, we note that, according to the great weight of authority (30 Am Jur. 2d Executions sec. 472 (1967); 83 C.J.S. Subrogation sec. 35, at 643 (1953)), subrogation could have been available to plaintiffs herein, although its availability is not entirely clear under existing Illinois law. Compare Bruschke v. Wright (1897), 166 Ill. 183, 194-97, McHany v. Schenk (1878), 88 Ill. 357, 361, Kinney v. Knoebel (1868), 51 Ill. 112, 126, and Warner v. Helm (1844), 6 Ill. 220, 234, with Leininger v. Reichle (1925), 317 Ill. 625, 635-36, and cases cited therein.

In sum, plaintiffs have not presented any persuasive reasons for us to depart from the law which has stood for so long in this State. Other than tax sales, which are covered by statute (Ill. Rev. Stat. 1979, ch. 120, par. 741), caveat emptor applies at judicial sales, and, in this case, it preeludes plaintiffs’ recovery from defendant. Accordingly, the judgment of the appellate court is affirmed.

Judgment affirmed.


author: MR. JUSTICE KLUCZYNSKI

text:
    (No. 52287.
    INTERSTATE CONTRACTORS et al., Appellees, v. THE INDUSTRIAL COMMISSION et al. (Jerry Kennedy, Appellant).

      Opinion filed September 15, 1980.

      Robert E. Cleveland, of Chicago, for appellant.
    Discipio, Martay & Caruso, of Chicago (William H. Martay, of counsel), for appellees.
   MR. JUSTICE KLUCZYNSKI

delivered the opinion of the court:

In an ex parte hearing conducted on March 31, 1975, under the provisions of the Workmen’s Compensation Act (Ill. Rev. Stat. 1973, ch. 48, par. 138.1 et seq.), an arbitrator for the Industrial Commission found that claimant, Jerry Kennedy, had sustained accidental injuries arising out of and in the course of his employment with respondent, Interstate Contractors. Claimant was president of respondent at the time he allegedly sustained the injuries, and the hearing was conducted on an ex parte basis due to the failure of claimant to correctly specify the address of respondent in his application for adjustment of claim and the resulting failure to effect service upon respondent. The arbitrator awarded claimant compensation of $109.90 per week for a period of 7 weeks temporary total disability, compensation of $80.90 per week for a period of 117)4 weeks for the permanent and complete loss of the use of the right arm to the extent of 50% thereof, and $277 for reasonable medical expenses incurred. No proceeding for review was taken from this award. On November 4, 1975, in proceedings under section 19(k) of the Act (Ill. Rev. Stat. 1973, ch. 48, par. 138.19(k)), the Commission found that there had been an unreasonable and vexatious delay in the payment of compensation and awarded claimant additional compensation, $5,106.03, equal to 50% of the award.

On May 4, 1976, Aetna Life and Casualty Company (Aetna), workmen’s compensation insurer for respondent, was added as a party respondent pursuant to section 4(g) of the Act (Ill. Rev. Stat. 1973, ch. 48, par. 138.4(g)). Aetna thereafter filed a motion before the Commission to set aside the original award of the arbitrator and the section 19(k) award of the Commission, alleging that these decisions were void for lack of personal jurisdiction over respondent Interstate Contractors. Respondent submitted in support of its motion the affidavit of Julian S. Ceiply, staff counsel for Aetna. Ceiply stated in his affidavit that he personally examined the Industrial Commission’s file in the cause and that the file contained two envelopes that indicated an addressee as “Interstate Contractors, 1800 Shermer Road, Northbrook, Illinois.” The first envelope, to which was attached the original application for adjustment of claim, was returned to the Commission bearing the notation “Addressee Unknown” and “Addressee Not At This Address.” The second envelope, mailed January 23, 1976, bore the same notations and was stamped “Received January 28, 1976, Industrial Commission, Illinois.” Claimant admitted that the correspondence was incorrectly addressed. Claimant objected, however, to the jurisdiction of the Commission, contending that the period for review of these decisions had expired. The Commission denied respondent’s motion to vacate its prior decisions.

Respondent thereafter filed a timely petition for review of this order in the circuit court of Cook County. Claimant filed a special and limited appearance objecting to the jurisdiction of the circuit court, once again contending that the period for review of the decisions had expired. The circuit court reversed the order of the Commission and ruled that the decisions of the Commission were void for lack of in personam jurisdiction over respondent Interstate Contractors and remanded the cause to the Commission for a full and complete hearing with proper notice.

On remand, before an arbitrator for the Commission, claimant continued to object to the jurisdiction of the Commission and refused to participate in the new hearing. The arbitrator dismissed the cause for want of prosecution, and this decision was affirmed on review before the Industrial Commission. On certiorari, the circuit court of Cook County confirmed the decision of the Industrial Commission, and claimant appealed to this court pursuant to Rule 302(a) (73 Ill. 2d R. 302(a)).

Claimant argues in this court, assuming that respondent Interstate Contractors had not received notice of the proceedings below, that “review” of a decision of the Commission can be obtained only in the manner prescribed by section 19 of the Act (Ill. Rev. Stat. 1973, ch. 48, pars. 138.19(b), (f)). Claimant contends that neither the Commission nor the circuit court was vested with the authority to inquire into the validity of the decisions rendered by the Commission as the period for review had expired. Claimant argues in the alternative that in his capacity as president of Interstate Contractors “he received and would have been aware of such notices and proceedings” and that in personam jurisdiction had therefore been acquired over respondent Interstate Contractors. We are not persuaded by the arguments advanced by claimant.

While it is generally true that a party cannot indirectly attack an award of the Commission in a collateral proceeding where no review had been taken in the manner provided by statute (City of Chicago v. Industrial Com. (1976), 63 Ill. 2d 99, 103), section 19 of the Act does not authorize the entry of a decision in violation of the principles of due process. A similar question was presented in City of Chicago v. Fair Employment Practices Com. (1976), 65 Ill. 2d 108, wherein an order of the Commission was attacked in a collateral proceeding after the expiration of the time for review provided in the Administrative Review Act (Ill. Rev. Stat. 1973, ch. 110, par. 267). The court determined that the jurisdiction of the Fair Employment Practices Commission is analogous to that of courts of limited jurisdiction existing in our pre-1964 judicial system, and it stated: “In the context of cases involving the validity of orders or judgments of those courts, this court has said: ‘A judgment, order or decree entered by a court which lacks jurisdiction of the parties or of the subject matter, or which lacks the inherent power to make or enter the particular order involved, is void, and may be attacked at any time or in any court, either directly or collaterally.’ ” (Emphasis removed.) (City of Chicago v. Fair Employment Practices Com. (1976), 65 Ill. 2d 108, 112, quoting Barnard v. Michael (1945), 392 Ill. 130, 135.) We therefore hold that both the Industrial Commission and the circuit court are vested with the power to examine the validity of the decisions entered in the proceedings below and empowered to determine whether they are void for lack of jurisdiction over the parties.

Claimant’s contention that as president of Interstate Contractors “he received and would have been aware of such notices and proceedings” and that this would satisfy the requisites of due process is equally without merit. The record in the cause does not support the conclusion that claimant had in fact received correspondence from the Commission in his capacity as an officer of the respondent corporation. The original application for adjustment of claim listed an incorrect address for respondent Interstate Contractors, and the affidavit of Julian Ceiply indicates that correspondence was mailed to the incorrect address as late as January 23, 1976, well after the decisions at issue had been entered. Notice of the arbitrator’s decision, and of the section 19 (k) award, were also mailed to the incorrect address, and it was not until Aetna was made a party that the Commission became aware of this error. We therefore hold that the judgment of the circuit court, that the decisions below were void for lack of jurisdiction over the parties, was correct.

For the reasons stated, the judgment of the circuit court, dismissing claimant’s cause for want of prosecution, is affirmed.

Judgment affirmed.


author: MR. JUSTICE CLARK

text:
    (No. 52620.
    H. CECIL NEELY et al., Appellees, v. LYNDELL COFFEY et al., Appellants.

      Opinion filed September 15, 1980.

      Earl S. Hendricks, Jr., of Hendricks, Watt & Grace, Ltd., of Murphysboro, for appellants.
    Edward L. Choate, of Carterville, for appellees.
   MR. JUSTICE CLARK

delivered the opinion of the court:

The plaintiffs, H. Cecil Neely, Lela Mae Neely, John T. Clark and Rebecca Clark, filed a complaint in equity in the circuit court of Williamson County. The prayer of the complaint requested the court to enjoin the defendants, Lyndell Coffey and Marie Lee Coffey, from obstructing a roadway leading to the plaintiffs’ property and to declare that, alternatively, either a public easement by prescription, a private easement by prescription, or a private easement by implication had been created in the roadway. The defendants counterclaimed, seeking a mandatory injunction ordering plaintiffs John T. and Rebecca Clark to remove a sewer line which had been constructed partially by the city of Crainville and partially by the Clarks for use by the Clarks. Approximately 100 feet of the sewer line ran underneath the surface of the roadway claimed to be owned by the defendants.

The trial court, after a hearing, concluded that the plaintiffs were entitled to a private easement by prescription and an implied easement on severance of the tenements. Furthermore, the court enjoined the defendants from interfering with the use of the roadway by the plaintiffs. Finally the court decided that the sewer line constituted a trespass on property owned by the defendants, but that damages, and not a mandatory injunction, were the proper remedy. The court ordered a hearing for the presentation of evidence on damages. The defendants declined to present any evidence on that issue. The court then awarded nominal damages of $10 to the defendants.

On appeal to the Appellate Court for the Fifth District, the court decided that the plaintiffs were entitled to use the roadway because they possessed a private easement by implication on severance of the tenements. The court further held that the sewer line did indeed constitute a trespass, but that, through the application of equitable principles, money damages would be awarded, not a mandatory injunction. The appellate court approved the trial court’s award of $10 damages. (76 Ill. App. 3d 37.) We granted the defendants’ petition for leave to appeal.

The factual setting of this litigation was ably and exhaustively set forth in the appellate court opinion. The only facts which need to be repeated follow. Troy Felts, the original grantor of all the property involved herein, built a north-south road in the 1920’s in order to transport farm equipment into his fields. The roadway was 469 feet long and 12 feet wide. It was widened to 31 feet in 1931 when the New Block Coal Company obtained a leasehold interest from Felts. From 1936, when the coal company ceased operating, to 1977, when the action commenced, the roadway was available to be used by the general public and was used in various capacities. (See 76 Ill. App. 3d 37, 40-41.) In May 1977 plaintiffs John and Rebecca Clark purchased five acres from plaintiffs Cecil Neely and his wife. The Clarks’ property is southeast of the roadway; the Neelys’ land is located directly to the south. The only route of access to either the Clark or Neely property is by means of the roadway. In June and July of 1977 the Clarks obtained permission from the city of Crainville to have a sewer hookup with the Crainville sewer line. The line runs underneath 100 feet of the roadway and is several feet in depth. Troy Felts had never conveyed title to the roadway during his lifetime. Sometime in August 1977 and after construction of the sewer line was completed, Lyndell Coffey obtained quitclaim deeds from Felt’s heirs conveying title to the roadway to Coffey. On September 16, Coffey then constructed a fence on the northern end of the roadway, thereby preventing the plaintiffs access to their property. Plaintiffs thereupon brought this action.

The issues presented concern the precise nature of the roadway easement and the appropriate remedy when a continuous trespass is committed beneath such an easement. Where a roadway has been shown to have been openly and notoriously used by the public in a free and unrestricted manner for 15 years or more, it will be considered a public highway. (Stevenson v. Meyer (1957), 10 Ill. 2d 335, 337-38; Verh v. Morris (1951), 410 Ill. 206, 211; Mudge v. Wagoner (1926), 320 Ill. 357, 362; Ill. Rev. Stat. 1977, ch. 121, par. 2 — 202.) Once such a public use has been shown, the burden is on the party who denies the existence of a public highway to show that the use was under some license or indulgence inconsistent with a claim of right by the public. (Stevenson v. Meyer (1957), 10 Ill. 2d 335, 338.) Considerable testimony was adduced at the hearing in this cause to the effect that the roadway was traveled from the 1920’s onward by many persons and that they did so as a matter of public right. There was only one instance where, on several weekend nights during the 1930’s, the coal company closed the roadway off to the public in order to prevent the theft of gasoline it stored near the mine shaft. At all other times anyone could make use of the roadway. We think that, through the roadway’s open and notorious use for over 15 years by members of the public, a public highway easement by prescription must be presumed (Taylor v. Wentz (1958), 15 Ill. 2d 83, 89; Stevenson v. Meyer (1957), 10 Ill. 2d 335, 338), and that the defendants have not in any way rebutted such a presumption. Accordingly, we hold that a public highway easement by prescription has been created and that any rights which the Coffeys acquired by means of the quitclaim deeds are subject to the highway easement. The Coffeys thus have no right to prevent the plaintiffs from using the roadway to gain access to their homes, nor may the Coffeys obstruct the public’s use of the roadway. The issuance of an injunction to prevent such interference was proper.

With regard to the sewer line constructed by plaintiffs John and Rebecca Clark, since it exceeded the scope of the highway easement (Dickman v. Madison County Light & Power Co. (1922), 304 Ill. 470, 482; Marlatt v. Peoria Water Works Co. (1969), 114 Ill. App. 2d 11, 14), it clearly constituted a continuing trespass and an encroachment. (See Cammers v. Marion Cablevision (1976), 64 Ill. 2d 97, 104.) In Cammers a mandatory injunction was sought to compel a cable television company to remove cable installed two to three feet underground along the entire length of the plaintiff’s property which was adjacent to a public highway. It was stated there that while a mandatory injunction may issue to compel removal of private encroachments on another’s land, even though the encroachment is slight, “a mandatory injunction is ordinarily inappropriate where the alleged encroachment lies within a highway right-of-way.” (64 Ill. 2d 97, 102.) The appropriate remedy in this analogous context also is not a mandatory injunction, but substitutionary relief in the form of damages. This conclusion is supported by Leitch v. Sanitary District (1944), 386 Ill. 433, wherein a mandatory injunction was sought to compel the defendants to remove a sewer 13.69 feet below the surface of the west arm of the south branch of the Chicago river. This court stated:

“It seems clear that to require the removal or lowering of the sewer by the Sanitary District, which, by the admission of appellants, leaves sufficient water depth for such boats as at the present time wish to use the west arm, or to require the city of Chicago to remove the water main, would result in no benefit to appellants, since the bridge spanning the river at Thirty-ninth street would still constitute a permanent obstruction to any and all water craft having a beam over 24 feet in width or a vertical height of 11.5 or greater. As herein pointed out, the city has no authority to remove or change the level of the bridge and neither the State nor its Department of Public Works and Buildings is a party here. It is a well-recognized rule that equity will not require the performance of a useless act. *** [Ejquity will not do that which will be of no benefit to the party asking it, and which will work an injury to others. *** So, in this case, the result of a decree such as appellants seek would afford them no relief, while imposing substantial hardship on appellees.” (386 Ill. 433, 440-41.)

(Accord, Beloit Foundry Co. v. Ryan (1963), 28 Ill. 2d 379.) Applying the same equitable principles to this case, the defendants are foreclosed from receiving a mandatory injunction. We especially are convinced that a mandatory injunction would be inequitable under these facts, since the defendants deliberately endeavored to obtain title to the roadway after the sewer hookup had been installed. Plaintiff John Clark testified that, during construction of the sewer hookup, he told Lyndell Coffey of it, apologized for any inconvenience to Coffey, and offered to share the cost of repaving the entire roadway. Therefore, the defendants took title to the land with prior, actual knowledge of the encroachment. In addition, since the defendants declined to present evidence on the issue of damages, when presented with the opportunity to do so, the trial court’s award of $10 nominal damages will be sustained.

Finally, although it may be true, as pointed out in the prescient dissent in Cammers v. Marion Cablevision (1976), 64 Ill. 2d 97, 107 (Ryan, J., dissenting), that the consent of highway authorities should be obtained under section 9 — 113 of the Illinois Highway Code (Ill. Rev. Stat. 1977, ch. 121, par. 9 — 113) prior to construction of a sewer line, the legal effect of such failure is not in issue before this court. The plaintiffs did, however, obtain written permission and physical assistance from the city of Crainville when installing the sewer, thereby dispelling any notion that the plaintiffs acted with disregard for the public’s rights in the roadway.

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

Judgment affirmed.


author: MR. CHIEF JUSTICE GOLDENHERSH

text:
    (No. 52973.

      In re SEYMOUR HAROLD PATT, Attorney, Respondent.

      Opinion filed September 15, 1980.

      John C. O’Malley, of Chicago, for the Administrator of the Attorney Registration and Disciplinary Commission.
    Seymour H. Patt, of Reno, Nevada, pro se.

   MR. CHIEF JUSTICE GOLDENHERSH

delivered the opinion of the court:

• On August 20, 1975, respondent, Seymour Harold Patt, who was admitted to the bar of Illinois on November 21, 1960, was convicted of the offense of embezzlement in a jury trial in the Second Judicial District Court, Washoe County, Nevada. On October 15, 1975, respondent was sentenced to a term of imprisonment for three years, but execution of the sentence was stayed and he was admitted to probation for one year. On May 25, 1976, pursuant to Supreme Court Rule 761 (73 Ill. 2d R. 761), because of the Nevada conviction, this court suspended respondent from the practice of law until the further order of the court.

On October 15, 1976, respondent was discharged from probation, and pursuant to Nevada Revised Statutes, section 176.225, the sentencing court entered an order changing the finding of guilty to not guilty and dismissing the information. Section 176.225 provided in part:

“1. Every defendant who:
(a) Has fulfilled the conditions of his probation for the entire period thereof;
***
(c) *** may at any time thereafter be permitted by the court to withdraw his plea of guilty or nolo contendere and enter a plea of not guilty; or, if he has been convicted after a plea of not guilty, the court may set aside the verdict of guilty; and in either case, the court shall thereupon dismiss the indictment or information against such defendant, who shall thereafter be released from all penalties and disabilities resulting from the offense or crime of which he has been convicted.
***
3. *** [I] n any subsequent prosecution of the defendant for any other offense, such prior conviction may be pleaded and proved and shall have the same effect as if probation had not been granted or the indictment or information had not been dismissed.”

On December 6, 1978, the Administrator of the Illinois Attorney Registration and Disciplinary Commission moved that a hearing be held to determine the nature of the discipline to be imposed on respondent. At a hearing held on January 22, 1979, before a panel of the Hearing Board, respondent failed to appear. The Hearing Board concluded that respondent’s actions tended to bring the legal profession into disrepute and recommended that he be disbarred effective nunc pro tunc as of May 25, 1976. Respondent filed exceptions to the recommendation, and the Review Board recommended that respondent be disbarred.

Respondent contends that because the Nevada conviction upon which the original suspension was based was vacated “there no longer exists a valid conviction upon which the recommendation of disbarment can be based” and there can be no further disciplinary action by this court. We do not agree. In In re Browning (1961), 23 Ill. 2d 483, the respondent had been acquitted of the charge of accessory after the fact to the crime of embezzlement. In a disciplinary proceeding based on the same conduct it was held that the acquittal did not bar the disciplinary proceeding and that the significance of an acquittal must be determined on the facts of each case. Having determined that an acquittal does not, per se, serve to bar a disciplinary proceeding, it follows that the vacating of a finding of guilty under the circumstances shown here should not be held to do so.

The only evidence adduced by the Administrator before the Hearing Board was the record of the Nevada conviction, and respondent adduced no evidence. It is therefore necessary to consider whether the conviction, set aside under the circumstances shown here, is sufficient to make out a prima facie case for the imposition of discipline. In considering the import in a disciplinary proceeding of a criminal conviction the court in In re Andros (1976), 64 Ill. 2d 419, 423, said:

“The rule has developed historically that, if an attorney is convicted of a crime involving moral turpitude, the conviction is conclusive evidence of his guilt and is grounds for the imposition of discipline. This court has held that even in the event of a subsequent pardon for the crime, ‘the pardon could not efface the moral turpitude involved in the crime. It could not obliterate the moral stain upon his character.’ (People ex rel. Johnson v. George, 186 Ill. 122, 128.) Thus, in crimes involving moral turpitude this court has refused to go behind the record of conviction in a disciplinary proceeding and has considered the conviction as conclusively establishing that grounds for discipline exist. *** In re Browning, 23 Ill. 2d 483, 491; In re Crane, 23 Ill. 2d 398; In re Greenberg, 21 Ill. 2d 170; In re Eaton, 14 Ill. 2d 338; In re Teitelbaum, 12 Ill. 2d 586; In re Needham, 364 Ill. 65; People ex rel. Johnson v. George, 186 Ill. 122.”

Prior to August 2, 1976, there was no statute in this jurisdiction similar to the Nevada statute, and the provision now in effect is inapplicable to persons charged with a felony. (See Ill. Rev. Stat. 1979, ch. 38, pars. 1005 — 1—21, 1005 — 6—1(c).) This court has not previously considered a similar statute, nor are we aware of any authorities which have construed the Nevada statute insofar as it affects the discipline of attorneys. The Supreme Court of California, considering a statute similar to the Nevada provision, in rejecting a contention like that made by respondent here, in In re Phillips (1941), 17 Cal. 2d 55, 61, 109 P.2d 344, 347-48, said:

“The power of the court to reward a convicted defendant who satisfactorily completes his period of probation by setting aside the verdict and dismissing the action operates to mitigate his punishment by restoring certain rights and removing certain disabilities. But it cannot be assumed that the legislature intended that such action by the trial court under section 1203.4 should be considered as obliterating the fact that defendant had been finally adjudged guilty of a crime. This is made clear by the provision that the fact of the defendant’s conviction can be used against him in any later prosecution, despite dismissal of the action under section 1203.4. In brief, action in mitigation of the defendant’s punishment should not affect the fact that his guilt has been finally determined according to law.”

That respondent’s conviction was later vacated and the charge dismissed pursuant to a statutory provision pertaining to probation does not alter the fact that there has been an adjudication which finally determined that respondent committed an act of embezzlement, a crime involving moral turpitude. It is this conduct which gives rise to the need for discipline, the purpose of which is to safeguard the public and maintain the integrity of the profession. (In re Levin (1979), 77 Ill. 2d 215, 211; In re Wigoda (1979), 77 Ill. 2d 154, 164.) The Nevada conviction for embezzlement conclusively establishes grounds for disciplining respondent, and there remains only the determination of the extent of discipline appropriate to the facts in this case.

Respondent, citing In re Crane (1961), 23 Ill. 2d 398, contends that, prior to recommending discipline, the Review Board was under a duty to inquire into the facts and circumstances surrounding his conviction. He asserts that certain mitigating factors were present which, if considered by the Review Board, would militate against disbarment.

In Crane, this court said that “a consideration of the actual conduct of the respondent is not only proper, but may be indispensable, to an informed appraisal of the appropriate disciplinary action.” (23 Ill. 2d 398, 401.) However, contrary to respondent’s contention, Crane and its progeny do not require that the Hearing and Review Boards seek out evidence of the circumstances surrounding a conviction. The holding of Crane was simply that an attorney may not be prevented from offering such evidence. Respondent did not appear before the Hearing Board and presented no evidence. Proof of conviction of a crime involving moral turpitude established a prima facie case constituting grounds for discipline (In re O’Hallaren (1976), 64 Ill. 2d 426, 432) and the burden was on respondent to adduce evidence of mitigating circumstances surrounding the conviction.

In his brief, respondent calls attention to other facts in mitigation which he contends were before the Review Board. He states that he had successfully completed probation, that he had been appointed a trustee in bankruptcy for the United States District Court for the District of Nevada, and that he had been endorsed for reinstatement to the bar of Nevada. Finally respondent states that he was reinstated to the bar of Nevada and that this fact, because it occurred after the hearing, was not before the Hearing and Review Boards. An order of the Supreme Court of Nevada ordering respondent’s conditional reinstatement to the bar was filed as an exhibit to a supplement to respondent’s exceptions to the report and recommendation of the Review Board. The order provides for a probationary period of one year, supervision by two members of the Nevada bar, and further review by the court of respondent’s behavior.

The determination of an appropriate disciplinary sanction is an extremely difficult task. As we said in In re Andros (1976), 64 Ill. 2d 419, 425-26, “While a degree of uniformity in the application of attorney discipline is desirable, each case must still be determined on its own merits.” The embezzlement or conversion of a client’s funds is an act involving moral turpitude and is a gross violation of the attorney’s oath which warrants disbarment in the absence of mitigating circumstances. (In re Stillo (1977), 68 Ill. 2d 49, 54; In re Royal (1963), 29 Ill. 2d 458, 464; In re Ahem (1962), 26 Ill. 2d 104, 110.) Since respondent offered no evidence before the Hearing Board, the record discloses no facts sufficient to mitigate the seriousness of respondent’s offense. We do not find that the conditional reinstatement in Nevada warrants the imposition of a sanction less than disbarment. We therefore conclude that, as recommended by the Hearing and Review Boards, disbarment is an appropriate sanction. It is the order of this court that respondent be disbarred, effective as of May 25, 1976. See In re Cook (1977), 67 Ill. 2d 26.

Respondent disbarred.