author: MR. JUSTICE WARD MR. JUSTICE CLARK,

text:
    (Nos. 52455, 52530 cons.
    WILLIE CROSS et al., Appellants, v. WELLS FARGO ALARM SERVICES et al., Appellees.

      Opinion filed September 29, 1980.

    Rehearing denied November 26, 1980.

    CLARK, J., specially concurring.

      John D. Hayes & Associates, Ltd., of Chicago (John D. Hayes and William L. Barr, Jr., of counsel), for appellants Willie and Minnie Cross.
    Jacobs, Williams & Montgomery, Ltd., of Chicago (Barry L. Kroll, Donald E. Stellato and David A. Novoselsky, of counsel), for appellant Chicago Housing Authority.
    Frank Glazer, Ltd., of Chicago (Frank Glazer, of counsel), for appellee.
   MR. JUSTICE WARD

delivered the opinion of the court:

On December 21, 1971, at about 1:15 a.m. plaintiff Willie Cross was severely beaten and injured by several unknown men as he was waiting for an elevator in the lobby of the Governor Henry Horner Housing Project located in Chicago. Cross and his wife filed suit in the circuit court of Cook County against the Chicago Housing Authority (CHA), a municipal corporation which owned and operated the project, and Wells Fargo Alarm Services, Inc., a security service that had contracted with the CHA to provide guard services at the project. The trial court dismissed the counts of the complaint against the CHA, holding that a cause of action was not stated, but denied a motion to dismiss as to Wells Fargo. The plaintiffs and Wells Fargo appealed, and the appellate court reversed as to both appellants. (74 Ill. App. 3d 921.) This had the effect of reinstating the complaint against the CHA and dismissing the complaint as to Wells Fargo. We granted the plaintiffs’ petition and the CHA’s cross-petition for leave to appeal and consolidated the appeals. 73 Ill. 2d R. 315.

On June 16, 1970, Wells Fargo and the CHA entered into an agreement which, in part, stated:

“WHEREAS, the Contractor is engaged in the business of furnishing armed guard watchmen and other protective services for the purpose of guarding the property and the protection of persons; and
WHEREAS, the Authority is desirous of securing such services for the purpose of guarding the property and protecting persons in the area located in and around the Henry Homer Homes, a housing development of the Authority;
THEREFORE, IT IS MUTUALLY AGREED by and between the parties hereto for the consideration stated herein and other good and valuable consideration as follows:
I. Contractor agrees to furnish uniformed and armed guards in and around the Henry Horner Homes in such numbers as set forth in Schedule “A” which is attached hereto and made a part of this Agreement, and as needed to meet the Authority’s requirements at hours and with duty assignments consistent therewith. Authority shall have the right to increase or reduce any schedule of guard service within the limitations set forth in Schedule “A” or any Amendment thereto mutually agreed upon. ***
***
5. The Contractor will evaluate the security needs of the Authority on a continuing basis and will assign a project supervisory officer who will maintain a liason between the Authority and the Contractor on a day to day basis. ***”

On the day of the attack on Gross, Wells Fargo was providing protection service at the project, as the CHA and it had agreed, between 9 a.m. and 1 a.m. When he was assaulted at 1:15 a.m., the guards had left the project.

The plaintiffs’ complaint against the CHA alleged that having part-time security service at the project had the effect of substantially increasing the incidence of crime after 1 a.m., thereby increasing the personal danger to tenants and their guests; that the CHA was aware of the increased criminal activity but took no steps to inform Cross of this danger; and that the CHA’s negligence in failing to provide other protective measures or adequate warnings to Cross was the proximate cause of his injuries.

The complaint made similar allegations against Wells Fargo. In addition, citing section 5 of the service contract, the complaint alleged that by failing to inform the CHA not only of the increased criminal activity in and around the housing project after 1 a.m. but also of the inherently dangerous situation which was generated by removing the guards at that hour, such omission on the part of Wells Fargo proximately caused the Cross’ injuries.

The CHA states that the appellate court erred in imposing too broad a duty upon the CHA, and, citing this court’s recent decision in Pippin v. Chicago Housing Authority (1979), 78 Ill. 2d 204, argues that the only duty upon the CHA appearing under these facts was to exercise reasonable care in hiring Wells Fargo to guard the project’s premises.

In support of the appellate court’s judgment, Wells Fargo maintains that its duties were limited by the agreement and that since it had contracted to provide services only between 9 a.m. and 1 a.m. it had no duty to evaluate the security needs beyond that time. Even assuming such a duty, Wells Fargo points out that the CHA was under no obligation to follow any recommendation of Wells Fargo to expand the hours of service or to add to the secuirty measures provided at the project and therefore had no liability under the provision for evaluation. At the time of the appellate court’s decision this court had not handed down its decision in Pippin v. Chicago Housing Authority (1979), 78 Ill. 2d 204. In that case a wrongful death action was brought against the CHA and Interstate Service Corporation for failure to protect the plaintiff’s son from a criminal assault by a tenant in a housing development owned, operated, and maintained by the CHA. The tenant, Loretta Haywood, had initially requested the guards on duty to remove Pippin from her apartment but they refused, saying that only the Chicago Police Department had that authority. Several minutes later Haywood and Pippin started arguing in the lobby and, before the guards could separate them, Haywood had mortally wounded Pippin.

This court stated that while there is no duty in Illinois or at common law upon a landlord to protect tenants or social guests from the criminal acts of third parties (78 b329-5. 2d 204, 208), by contracting with a third party to provide protection services, the CHA had voluntarily assumed certain duties. It was held that the CHA was required to use reasonable care in hiring the protection agency and thus could be held liable for any negligence in hiring Interstate. The CHA argues that, as the plaintiffs here did not make an allegation of negligent hiring, the complaint should have been dismissed.

But Pippin is not to be so narrowly read. Pippin held that the CHA’s voluntary undertaking to hire a protection agency required it to use reasonable care in hiring. The setting here is different, but the ground asserted for liability of the CHA is the same. A duty voluntarily assumed must be performed with due care or “such competence and skill as [one] possesses.” (Nelson v. Union Wire Rope Corp. (1964), 31 Ill. 2d 69, 85-86.) The CHA undertook to provide part-time guard service at the project. In providing that service it was obligated to use reasonable care not to create increased dangers to persons lawfully on its property. The complaint here alleged that the providing of part-time guard service substantially increased the incidence of crime after 1 a.m., when the guards were removed. It further charged that the CHA was aware of this upsurge in criminal activity and negligently took no steps to provide protection from it, and that as a consequence of this greater incidence of crime in the project the danger to tenants and guests was increased.

This case is of course before us only on the question of whether the complaint was subject to a motion to dismiss and therefore the plaintiffs’ allegations will be taken as true. (Johnson v. Franzen (1979), 77 Ill. 2d 513, 522; Johnson v. City of Bloomington (1979), 77 Ill. 2d 108, 111; Silver Manufacturing Co. v. General Box Co. (1979), 76 Ill. 2d 413, 416.) The complaint in substance asserted that the CHA had the duty to use reasonable care when it undertook to provide guard services to insure it did not thereby create increased dangers to persons lawfully on the CHA property. The appellate court correctly held that the trial court erred in dismissing the complaint as to the CHA.

We consider that the trial court erred, too, in denying the motion to dismiss made by Wells Fargo. The company contracted to provide protective services from 9 a.m. to 1 a.m. The hours were decided upon by the parties, obviously after a study as to the number of guards required, the hours when protective services should be provided, and what the guards’ duty assignments should be. The number of guards was to be set forth in schedule A, which is referred to in paragraph one of the contract. It is reasonable to conclude that more persons would be in public areas of the project between 9 a.m. and 1 a.m. than at any other time.

Schedule A was not made a part of the record on appeal. We do not know if risk conditions found to exist called for an equal number of guards to be supplied for each of two 8-hour shifts or whether there would be larger patrols at certain hours. It is clear, though, that Wells Fargo’s obligation to guard the project was limited to the period described.

The plaintiffs argue, however, that Wells Fargo should be liable on the basis of paragraph 5 of the contract, which has been set out. They say that Wells Fargo had an obligation to evaluate security needs at times other than from 9 a.m. to 1 a.m. We cannot say, however, that it is clear that the evaluation referred to was to be on a 24-hour basis. The CHA was aware of security problems and needs, which awareness caused it to engage Wells Fargo. The protective agency was experienced and knowledgeable in security problems. The parties decided on protective services for the 16-hour period and not for 24 hours. It is not unreasonable to interpret the provision as calling for Wells Fargo to evaluate the security requirements during that period. Evaluating security “on a continuing basis” during the agreed-upon period might have required Wells Fargo, for example, to consider whether the total number of officers serving during the 16-hour period should be increased or reduced, or whether the number of officers at various stations in the project at different hours should be changed, or whether duty stations or assignments should be changed. Even if one, arguendo, says that it was contemplated that Wells Fargo was to have personnel evaluating the area during the remaining early morning hours, we do not consider that Wells Fargo incurred liability to the plaintiffs. Wells Fargo, of itself, could not make changes in security. It had no control over the CHA premises and obviously had no authority over the CHA. Any suggestions that it might furnish to the CHA regarding the early morning hours would be purely advisory. Too, CHA had no duty to act on recommendations Wells Fargo might make, and there was no allegation in the complaint that the CHA would have acted.

We do not find persuasive the plaintiffs’ contention that we should hold Wells Fargo liable under Pippin v. Chicago Housing Authority (1979), 78 Ill. 2d 204. Section 324A of the Restatement (Second) of Torts, which was found to be apposite in Pippin, states:

“One who undertakes, gratutiously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if
(a) his failure to exercise reasonable care increases the risk of such harm, or
(b) he has undertaken to perform a duty owed by the other to the third person, or
(c) the harm is suffered because of reliance of the other or the third person upon the undertaking.” Restatement (Second) of Torts sec. 324A, at 142 (1965).

Plaintiffs urge that under section 324A(c) they should recover because of CHA’s reliance on Wells Fargo to perform security evaluations for the period for which no guards were provided. Under section 324A(a), plaintiffs say, Wells Fargo should be liable because its negligence in not making its evaluations increased the risk of harm to Cross. The complaint, however, does not make an allegation of reliance by the CHA that such evaluations would be performed. For the reasons given above, we do not consider that Wells Fargo had a duty to make the extra-hours evaluations and, thus, was not negligent. The appellate court correctly held that Wells Fargo’s motion to dismiss should have been allowed.

For the reasons given, the judgment of the appellate court is affirmed.

Judgment affirmed.

MR. JUSTICE CLARK,

specially concurring:

I concur in the judgment of the court. I disagree with the majority opinion only as to its conclusion that Wells Fargo did not owe a duty to the plaintiff. In my opinion the same issue was decided precisely to the contrary in Pippin v. Chicago Housing Authority (1979), 78 Ill. 2d 204. In Pippin we specifically concluded that an action, sounding in tort, will lie where a security agency contractually agrees to protect persons lawfully on the premises of a housing authority and the agency fails to exercise reasonable care in performing its obligation. (78 Ill. 2d 204, 212.) The duty owed to the plaintiff is measured by the terms of the contractual obligation. Whether the security agency failed to exercise reasonable care in the performance of its contractual obligation and thus whether the duty has been breached is “for the trier of fact to determine.” 78 Ill. 2d 204, 212.

In the instant case, the majority has itself determined, as a matter of fact, that Wells Fargo’s promise to evaluate the security needs of the housing authority did not include evaluating whether guards should have been posted between the hours of 1 a.m. and 9 a.m. “It is not unreasonable to interpret the provision as calling for Wells Fargo to evaluate the security requirements during that period [from 9 a.m. to 1 a.m.].” (82 Ill. 2d at 319.) It seems just as reasonable to interpret the evaluation provision to require Wells Fargo to make a judgment as to whether security guards would, due to changing circumstances, need to be added between the lonely and ominous hours of 1 a.m. and 9 a.m. Whether either interpretation is more reasonable is for a trier of fact to determine based on evidence as to what the parties intended when they entered into the contract. I do not think the majority should summarily decide, on the basis of no evidence whatsoever, that Wells Fargo’s contractual obligation was so limited. To be consistent with. Pippin, whether the duty owed by Wells Fargo to the plaintiff was breached is a matter to be decided by the trier of fact.

I do agree with the majority that since Wells Fargo’s suggestions were purely advisory, proximate cause is not established on this record. The housing authority could have disregarded the recommendations even if they had been made. Thus, the plaintiff would be unable to allege that were it not for Wells Fargo’s failure to make the recommendations, he would not have been injured.


source: Caselaw Access Project

author: MR. JUSTICE KLUCZYNSKI

license: Public Domain

text:
    (No. 52386.
    PETER BEJDA et al., Appellees, v. SGL INDUSTRIES, INC., et al., Appellants.

      Opinion filed September 15, 1980.

    Rehearing denied November 26, 1980.

      Baker & McKenzie, of Chicago (Francis D. Morrissey, Thomas R. Nelson, Edward J. Zulkey, and Richard H. Donohue, of counsel), for appellant Gerbing Manufacturing Corporation.
    Joseph M. Tobias & Associates, Ltd., of Chicago (Joseph M. Tobias, of counsel), for appellees.
   MR. JUSTICE KLUCZYNSKI

delivered the opinion of the court:

On December 13, 1972, plaintiff Peter Bejda was an employee of Goltra Industries, Inc., Barrington. He was operating a grinding machine when its grinding wheel disintegrated and pieces of the wheel struck him. On March 8, 1974, Bejda and his wife, Kazimera, filed suit for the injuries resulting therefrom, naming defendant Gerbing Manufacturing Company as one of several defendants.

On motion by Gerbing, alleging that plaintiffs failed to file a sufficient bill of particulars, the circuit court of Cook County dismissed plaintiffs’ product liability action. The appellate court reversed and directed the circuit court to consider sanctions less drastic than dismissal. (73 Ill. App. 3d 484.) We allowed - Gerbing leave to appeal. Because of the nature of the issue presented, a detailed recitation of the facts and procedural history is necessary.

Plaintiffs seek to hold Gerbing liable on the theories (1) that a component of the grinding machine, a so-called “variable pitch pulley and drive belt,” was designed, manufactured and sold by Gerbing in an unreasonably dangerous defective condition which allowed the grinding wheel to spin at an excessively high rate of speed, thereby causing the wheel to disintegrate; and (2) that the component, as manufactured, was in an unreasonably dangerous defective condition because it contained no warning of its inability to control the speed of the wheel. Gerbing was not named as a defendant in plaintiffs’ original complaint nor in either of plaintiffs’ first two amended complaints but was added as a defendant in plaintiffs’ third amended complaint, filed on December 12, 1974. On February 10, 1975, Gerbing moved to strike plaintiffs’ third amended complaint, insofar as it related to Gerbing, for failure to state a cause of action. On February 26, the motion to strike was granted, and plaintiffs were allowed seven days to amend.

On March 17, 1975, plaintiffs were granted leave to file their fourth amended complaint instanter. On April 2, 1975, Gerbing again filed a motion to strike, alleging that plaintiffs’ fourth amended complaint failed to apprise Gerbing of the nature of the alleged defect in its pulley and drive belt and that the complaint failed to allege that Gerbing manufactured the product in an unreasonably dangerous condition. In response to the motion to strike, plaintiffs explained that they had not yet obtained an expert’s evaluation of Gerbing’s pulley and drive belt so as to enable plaintiffs to describe the alleged defect in more specific, technical terms, and the court denied Gerbing’s motion to strike.

On February 10, 1976, Gerbing filed a demand for a bill of particulars. It claims that it filed the demand because it had determined that plaintiffs’ answers to Gerbing’s interrogatories were insufficient and because plaintiffs had failed to comply with Gerbing’s request for production of documents. The demand for a bill of particulars requested, inter alia, that plaintiffs “[i] temize each defect in the ‘drive system or installation’ which permitted *** the grinding wheel to run at a speed in excess of tolerable limits and to disintegrate.” The demand also asked that plaintiffs explain how they knew that Gerbing designed, manufactured and sold the drive system.

On February 18, 1976, the hearing on Gerbing’s motion was continued to March 2, and though not appearing of record, Gerbing claims that this was done at the request of plaintiffs. On March 2, plaintiffs presented additional answers to Gerbing’s interrogatories and a response to the request for production of documents, and the motion was thereupon continued to March 18 to enable Gerbing to assess the sufficiency of the materials presented.

On March 15, 1976, Gerbing sent plaintiffs a letter requesting production of certain items and reminding plaintiffs that they had not responded to Gerbing’s demand for a bill of particulars. To allow plaintiffs time to respond to the letter, the hearing on Gerbing’s motion to dismiss was continued to April 15.

The motion did not appear on the court call for April 15 and was rescheduled for April 26. Defendant did not present its motion on the latter date, and it claims that it did not do so because of the representations of plaintiffs that they would respond to the production request and the demand for a bill of particulars within 21 days after April 26.

When Gerbing received no further response, it again filed a motion to dismiss on June 9, 1976, for plaintiffs’ failure to supply the requested bill of particulars and documents. The motion was entered and continued to June 23, and when plaintiffs’ attorney failed to appear that day, Gerbing’s motion to dismiss was granted.

On June 29, 1976, plaintiffs’ attorney moved to vacate the June 23 order of dismissal, explaining that he was detained on another matter that day and arrived in court 15 minutes late and found the order of dismissal already had been entered. The motion to vacate the order of dismissal was granted.

Also on June 29, 1976, plaintiffs filed a response to Gerbing’s demand for a bill of particulars. Plaintiffs stated therein that the pulley and drive belt in question has a nameplate with the name “Gerbing” on it; that plaintiffs were informed, and the nameplate would indicate, that Gerbing designed, manufactured and sold that pulley and drive belt; that the pulley-and-drive-belt system was defective in that it allowed the grinding wheel to spin at an excessive rate of speed, thereby causing the wheel to disintegrate; that the exact nature of the defect which caused the wheel to run out of control was then unknown; and that the pulley-and-drive-belt system was also defective because of the absence of a warning that the wheel would spin at an excessive rate of speed. Gerbing felt that plaintiffs’ response failed to establish a relationship between the grinding wheel and Gerbing’s manufacture and sale of the pulley and drive belt, and it moved for an order striking plaintiffs’ bill as nonresponsive. The motion was granted on July 26, 1976, and plaintiffs were granted 5 6 days in which to file an amended bill.

On January 31, 1977, Gerbing moved to dismiss, alleging the failure of plaintiffs to file an amended bill. The court denied the motion and granted plaintiffs an additional 14 days to file an amended bill, and the matter was continued to February 16. For reasons which do not appear of record, the court heard the motion on February 15 rather than the 16th, and it dismissed plaintiffs’ action as against Gerbing. Upon being informed of the court’s February 15 order of dismissal, plaintiffs moved to vacate the order, alleging (1) that the order was entered without notice to them, since the matter was not scheduled for that day; and (2) that their complaint stated a cause of action against Gerbing, and the alleged defect could not be further particularized. On March 3, the court granted plaintiffs’ motion to vacate and allowed plaintiffs 84 days to file an amended bill. In its order, the court stated that it would not entertain further requests by plaintiffs for extensions.

On September 26, 1977, Gerbing filed a motion to dismiss with prejudice because plaintiffs had not yet filed an amended bill of particulars. Although Gerbing therein alleged prior difficulties in obtaining discovery from plaintiffs, it prayed for dismissal only on the ground that plaintiffs failed to file an amended bill. The court granted plaintiffs 14 days to file an amended bill, and on October 11 plaintiffs refiled the bill previously stricken. On October 12, the court entered an order stating that plaintiffs had failed to comply with the court’s previous order to file an amended bill, and it set Gerbing’s motion to dismiss for hearing on October 14. On that day, the court granted the motion to dismiss and certified the case for appeal. Since the court’s order does not specify otherwise, we assume, as Rule 273 requires, that the court intended the dismissal to operate as an adjudication upon the merits, i.e., with prejudice. 73 Ill. 2d R. 273.

The sole issue presented is whether the circuit court was authorized in dismissing plaintiffs’ complaint with prejudice as a sanction for the failure to provide a sufficient bill of particulars. Gerbing argues initially that such a dismissal is authorized by section 37 of the Civil Practice Act. We do not agree. That section provides:

“If the party unreasonably neglects to furnish a bill of particulars, or if the bill of particulars delivered is insufficient, the court may in its discretion strike the pleading, allow further time to furnish the bill of particulars or require a more particular bill to be delivered.” (Ill. Rev. Stat. 1977, ch. 110, par. 37(2).)

Under the section, the most severe sanction authorized is the striking of the pleading to which the bill of particulars relates. A dismissal of a complaint, as in the present case, cannot be equated with a striking of that pleading, since there exists “a marked difference between an order striking a case from the docket, which is not final [citation] and an order dismissing the suit *** ” (Doner v. Phoenix Joint Stock Land Bank (1942), 381 Ill. 106, 108-09). This distinction is a substantial one and a distinction that has long been recognized in Illinois. In Frederick v. Connecticut River Savings Bank (1883), 106 Ill. 147, 149-50, the court held that no appeal or writ of error would lie from the striking of a bill in equity, and the court there stated:

“If it be said that the order striking the ‘suit’ from the docket is *** a final order, it may be answered that such order concluded no one or any thing. On a proper application the cause could be reinstated, and progress to a final hearing and decree. And were plaintiff in error to file a bill similar to this, can any one suppose that the order under consideration could be pleaded to bar a recovery? Surely not, because there has been no trial on the merits, either on demurrer or proofs. There must be a final hearing before the decree can be pleaded as a bar. The striking of the case from the docket was not the equivalent of dismissing the bill for the want of equity. ”

(See also Ridgely v. Central Pipe Line Co. (1951), 409 Ill. 46, 49; Calkin v. Roberts Park Fire Protection District (1949), 402 Ill. 579, 580.) We therefore conclude that section 37 does not authorize the dismissal of a complaint.

Although the circuit court’s dismissal of plaintiffs’ action is not authorized by section 37, the dismissal could nonetheless be upheld as within the court’s inherent authority to control its business. A plaintiff’s failure to take any action as ordered by the court evidences want of prosecution by that party (Leonard v. Garland (1911), 252 Ill. 300, 303), and as the court said in Epley v. Epley (1928), 328 Ill. 582, 585, “The trial court may dismiss a suit for failure of complainant to prosecute it with due diligence where no sufficient cause is presented, and this power exists independent of any statute.” It has therefore been recognized by various authorities, including our appellate court (American Rolling Mill Corp. v. Ohio Iron & Metal Co. (1904), 120 Ill. App. 614), that “a failure to file *** a bill [of particulars] in disobedience of the order of the court may be a ground [for dismissal] within the sound discretion of the court.” (27 C.J.S. Dismissal & Nonsuit sec. 64, at 425 (1959), citing Botkins v. Sorter (W.D. La. 1939), 29 F. Supp. 991, McCarthy v. Thames Dyeing & Bleaching Co. (1944), 130 Conn. 652, 36 A.2d 739; Nickerson v. Glines (1915), 220 Mass. 333, 107 N.E. 942.) In some instances, dismissal is authorized by statute or rule as in the McCarthy and Nickerson cases above cited, but the authority to dismiss for failure to provide a bill of particulars is also an authority recognized at common law to be inherent in the courts. (Gross v. Clark (1881), 87 N.Y. 272, 276.) Section 37 of the Civil Practice Act does not purport to expressly limit this common law authority, and we therefore find unchallenged the idea that the authority is viable.

Notwithstanding the general authority of the court to dismiss an action, we conclude that dismissal of plaintiffs’ action was not proper. A bill of particulars need not “state more than the party is bound to prove” (71 C.J.S. Pleading sec. 398, at 831 (1951)), and in Suvada v. White Motor Co. (1965), 32 Ill. 2d 612, 623, the court said that plaintiffs in a product liability case “must prove that their injury or damage resulted from a condition of the product, that the condition was an unreasonably dangerous one and that the condition existed at the time it left the manufacturer’s control.” As our appellate court has said, “This language does not indicate that proof of the specific defect which causes the product to be in an unreasonably dangerous condition is necessary.” (Bollmeier v. Ford Motor Co. (1970), 130 Ill. App. 2d 844, 849. See also Erzrumly v. Dominick’s Finer Foods, Inc. (1977), 50 Ill. App. 3d 359, 363; Frisch v. International Harvester Co. (1975), 33 Ill. App. 3d 507, 515.) “A prima facie case that a product was defective and that the defect existed when it left the manufacturer’s control is made by proof that in the absence of abnormal use or reasonable secondary causes the product failed ‘to perform in the manner reasonably to be expected in light of [its] nature and intended function.’ (See Annot., 51 A.L.R.3d 8 (1973); Rhinegold, Proof of Defect in Product Liability Cases, 38 Tenn. L. Rev. 325, 337 (1971).)” (Tweedy v.Wright Ford Sales, Inc. (1976), 64 Ill. 2d 570, 574.) These matters may be proved inferentially, whether by direct or circumstantial evidence. (64 Ill. 2d 570, 575.) We therefore conclude that the circuit court abused its discretion by ordering plaintiffs to “positively” state the defect in Gerbing’s pulley and drive belt. If plaintiffs wish to do so, they may attempt to prove their case by inference. Henningsen v. Bloomfield Motors, Inc. (1960), 32 N.J. 358, 410, 161 A.2d 69, 97-98.

For the foregoing reasons, the judgment of the appellate court is affirmed insofar as it reversed the circuit court’s order of dismissal, and it is reversed insofar as it remanded the cause for the imposition of a lesser sanction. The order of the circuit court is reversed, and the cause is remanded to that court for further proceedings.

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


author: MR. JUSTICE RYAN

text:
    (No. 52942.
    EAGLE DISCOUNT SUPERMARKET, Appellant, v. THE INDUSTRIAL COMMISSION et al. (James Day, Appellee).

      Opinion filed September 29, 1980.

    Rehearing denied November 26, 1980.

      Henry D. Noetzel & Associates, Ltd., of Peoria (John E. Mitchell, of counsel), for appellant.
    Allen, Clark & Cullinan, Ltd., of Peoria (Gary L. Clark, of counsel), for appellee.
   MR. JUSTICE RYAN

delivered the opinion of the court:

This workmen’s compensation case concerns the compensability of injuries sustained in a recreational activity occurring on the employer’s premises during the employee’s lunch hour. The employer, Eagle Discount Supermarket (hereinafter Eagle), appeals directly to this court under our Rule 302(a) (73 Ill. 2d R. 302(a)) from an order of the Peoria County circuit court. The only issue involved in this appeal is whether the claimant, James Day, Jr., sustained an accidental injury arising out of and in the course of his employment. The arbitrator found that he had. This finding was affirmed by the Industrial Commission, and the circuit court of Peoria County confirmed the decision of the Commission. No question is raised on appeal as to the nature and extent of the injury.

Claimant was employed as a shelf stocker at the Eagle store located on Glen Avenue in Peoria. He worked the third shift, which began at 10 p.m. and ended at 6:30 a.m. He was permitted a lunch break at some time between 1:30 and 2:30 a.m. Since the time taken for lunch was without pay, he was required to punch out for lunch on a time clock. The employees were not restricted to the employer’s premises during their lunch break. However, since the store was closed during the third shift and only the night manager had keys, the employees had to request that the night manager unlock the door before they could leave the building. When the weather permitted, the night crew manager would unlock the door of the store to let the employees eat their lunch outside. On such occasions he would also turn on the parking lot lights so that the employees would have sufficient light in which to play catch with either a softball or a plastic disc commonly referred to as a frisbee.

On September 15, 1976, claimant reported to work. He punched out on the time clock for his lunch break and went outside for lunch; the night manager had unlocked the door and turned on the parking lot lights for the employees. After he ate, the claimant played frisbee. While engaged in this activity, he tripped and fell. Claimant was taken to St. Francis Hospital emergency room by a coemployee. It was there determined that claimant had fractured his right ankle.

Claimant filed an application for adjustment of claim. He was the only witness to testify at the hearing before the arbitrator. In addition to the above recitation of facts, claimant stated that the night manager, William Collie, had not only unlocked the door and turned on the lights, but also had participated in the recreational activity on the morning that claimant was injured. Claimant further testified as to the surgical procedures he underwent, the period during which he was unable to work, the receipt of unemployment and group insurance benefits, his present job, and the pain he continued to experience due to the fracture. Medical reports of claimant’s treating physician, Dr. Jerome P. Kraft, were admitted at the hearing before the arbitrator. These reports verified that claimant had indeed sustained a fracture of the distal right fibula. Based upon the above, the arbitrator concluded that claimant had sustained accidental injuries arising out of and in the course of employment. Accordingly, the arbitrator entered an award for medical expenses, temporary total disability, and for 75% permanent and complete loss of use of the right foot.

On review, Eagle first presented Michael Miller as a witness. Miller testified that he was employed as a backup night crew chief and that he worked the third shift. He stated that he was in charge of the night crew on September 15, 1976, and that Collie was not present. Miller stated that company policy did not dictate where or how the employees took their lunch breaks. He recalled that he unlocked and opened the door for the employees. He did not prohibit them from participating in a game of catch; nor did he attempt to restrict their activities in any way. He was aware that they had played frisbee in the parking lot during their lunch break on prior occasions and that they were so engaged at the time claimant sustained his injury.

Eagle also presented Kevin Collie as a witness at the hearing before the Commission. Collie testified that he was employed as a night crew chief for Eagle. He indicated, however, that he was not at work on the date that claimant was injured. No additional witnesses were presented, and disability and medical benefit checks were submitted into evidence. At the close of the proofs, the Industrial Commission affirmed the arbitrator’s finding that claimant sustained a work-related, compensable injury, but modified the amount recovered for permanent disability to 25%. The Peoria County circuit court confirmed the Commission’s decision but reduced the amount of the temporary total disability to be recovered.

On appeal to this court, Eagle urges that that part of the Peoria County circuit court judgment which upheld the Commission’s finding that claimant sustained his injury in an accident arising out of and in the course of his employment be reversed. Eagle initially states in its brief that there exists no dispute of the pertinent facts. Thus, according to Eagle, this court is in no way bound by the decision of the Industrial Commission since the case presents a question of law rather than of fact. Eagle next presents four distinct theories in support of its argument that the injury was not sustained in an accident arising out of and in the course of employment: (1) The claimant’s “parking lot” injury is noncompensable since there was no showing that there existed a hazard other than that to which the general public would be exposed; (2) the injury is a noncompensable “recreational” injury since there was no evidence of employer organization, sponsorship, coercion to participate and benefits derived; (3) the injury, which was sustained during an unpaid and unrestricted lunch break, was not sustained in an activity sufficiently related to the employment; (4) the “personal comfort” doctrine precludes recovery since there was no showing that the employment created an increased risk of injury.

Claimant initially contests Eagle’s characterization of the issue presented as being one of law. According to the claimant, the finding that this was a compensable accident was a question of fact and the decision of the Commission was not contrary to the manifest weight of the evidence. Claimant next asserts that this case can only be characterized as falling within the “personal comfort” line of cases. As such, according to the claimant, the injury was compensable since the conditions of employment necessitated the recreational activity in order to refresh the employees.

We first address Eagle’s argument that the issue presented is one of law to be determined by this court. The only disputed fact concerns the identification of the night manager employed during the shift wherein claimant was injured. The material facts are undisputed. Where undisputed facts upon an issue permit more than a single inference to be drawn therefrom, the determination of such issue presents a question of fact and the conclusion of the Commission will not be disturbed on review unless it is contrary to the manifest weight of the evidence. (Scheffler Greenhouses, Inc. v. Industrial Com. (1977), 66 Ill. 2d 361, 366; Union Starch v. Industrial Com. (1974), 56 Ill. 2d 272, 275.) Since more than one inference can be drawn from the undisputed facts concerning the issue on appeal, we reject Eagle’s contention that this case presents an issue of law to be determined by the reviewing court and we will decline to reverse the decision below unless we find it to be contrary to the manifest weight of the evidence.

This court has repeatedly defined the dual requirements for compensability under the Act: the injury must both “arise out of” and be sustained while “in the course of” employment. (See, e.g., Bloom v. Industrial Com. (1975), 61 Ill. 2d 248, 250; Technical Tape Corp. v. Industrial Com. (1974), 58 Ill. 2d 226, 230; Union Starch v. Industrial Com. (1974), 56 Ill. 2d 272, 275.) (See generally I. Greenfield, Injuries Arising Out of and in the Course of the Employment, 1957 U. Ill. L.F. 191.) The phrase “arising out of the employment” refers to the requisite causal connection between the employment and the injury; that is, the injury must have had its origins in some risk incidental to the employment. (Technical Tape Corp. v. Industrial Com. (1974), 58 Ill. 2d 226, 230.) The phrase “in the course of employment” refers to the time, place and circumstances of the injury. (Fire King Oil Co. v. Industrial Com. (1976), 62 Ill. 2d 293, 294.) If the injury occurs within the time period of employment, at a place where the employee can reasonably be expected to be in the performance of his duties and while he is performing those duties or doing something incidental thereto, the injury is deemed to have occurred in the course of employment. Segler v. Industrial Com. (1980), 81 Ill. 2d 125, 128.

We note that claimant sustained his injury while engaged in a recreational activity occurring on the premises during an authorized lunch break. Eagle suggests in its brief that this court employ the analysis applicable to the line of cases falling within the recreational activities cases. (See, e.g., Minnesota Mining & Manufacturing Co. v. Industrial Com. (1979), 78 Ill. 2d 182.) If we were to categorize this case as such, however, we would be compelled to find sufficient employer sponsorship to render the activity incidental to the employment; that is, the recreational activity was an accepted, regular and normal one which occurred on the premises during an authorized lunch break. (See 1A A. Larson, Workmen’s Compensation secs. 22.00 to 22.12, at 5—71 through 5—78 (1979).) However, this court stated as recently as last term that the mere fact that a recreational activity is involved does not necessarily trigger the analysis employed in the recreational activities cases. (Board of Education v. Industrial Com. (1980), 81 Ill. 2d 17, 20.) We believe, instead, that these facts present a combination of problems which are found not only in the “recreational activities” cases but also in the “lunch hour” and the “personal comfort” cases.

In the lunch hour cases, the most critical factor in determining whether the accident arose out of and in the course of employment is the location of the occurrence. Thus, where the employee sustains an injury during the lunch break and is still on the employer’s premises, the act of procuring lunch has been held to be reasonably incidental to the employment. (Mt. Olive & Staunton Coal Co. v. Industrial Com. (1934), 355 Ill. 222; Humphrey v. Industrial Com. (1918), 285 Ill. 372.) (See I. Greenfield, Injuries Arising Out of and in the Course of the Employment, 1957 U. Ill. L.F. 191, 206-08.) This rule remains true even where the injury was not actually caused by a hazard of the employment. (See F. Wiedner, The Workmen’s Compensation Act, 1967 U. Ill. L.F. 21, 36-37.) The rule is also unchanged by the fact that the employee receives no pay for the lunch break and is not under the employer’s control, being free to leave the premises. (1A A. Larson, Workmen’s Compensation sec. 21.21(a), at 5—5 (1979); F. Wiedner, The Workmen’s Compensation Act, 1967 U. Ill. L.F. 21, 36-37.) See generally Comment, Workmen’s Compensation: The Personal Comfort Doctrine, 1960 Wis. L. Rev. 91, 91-98; Note, Workmen’s Compensation: Personal Comfort in Practical Perspective, 1917 Law and Soc. Ord. 823, 829-30.

Since eating is deemed to be an act of personal comfort, the personal comfort doctrine has been applied to cases involving lunchtime injuries. Under the personal comfort doctrine, the course of employment is not considered broken by certain acts relating to the personal comfort of the employee. (See generally, 1A A. Larson, Workmen’s Compensation secs. 21.00 to 21.84, at 5—4 through 5 — 70 (1979).) Other acts during a break time in the employment besides the act of eating have also been held to be acts of personal comfort. (See, e.g., Sparks Milling Co. v. Industrial Com. (1920), 293 Ill. 350 (getting fresh air); Union Starch v. Industrial Com. (1974), 56 Ill. 2d 272 (seeking relief from heat); Scheffler Greenhouses, Inc. v. Industrial Com. (1977), 66 Ill. 2d 361 (seeking relief from heat and humidity); Chicago Extruded Metals v. Industrial Com. (1979), 77 Ill. 2d 81 (showering in locker room provided by employer).) However, if the employee voluntarily and in an unexpected manner exposes himself to a risk outside any reasonable exercise of his duties, the resultant injury will not be deemed to have occurred within the course of the employment. (Segler v. Industrial Com. (1979), 81 Ill. 2d 125, 128.) The employer may, nevertheless, still be held liable for injuries resulting from an unreasonable and unnecessary risk if the employer has knowledge of or has acquiesced in the practice or custom. Union Starch v. Industrial Com. (1974), 56 Ill. 2d 272, 277.

Applying these principles to the case at bar, we cannot say that the Industrial Commission’s finding that the claimant sustained an accidental injury arising out of and in the course of employment was contrary to the manifest weight of the evidence. Claimant was injured while participating in a recreational activity on the premises during an authorized lunch break. The Commission could reasonably infer that the activity falls within the personal comfort doctrine. That claimant voluntarily remained on the premises and was not paid for the lunch break will not serve to defeat an award under the Act. Finally, we do not believe that claimant exposed himself to an unnecessary and unreasonable risk. Even if the converse were true, the Commission could still find the injury to have occurred within the course of employment, since Eagle knew, acquiesced and possibly participated in the employees’ routine games. Accordingly, the judgment of the Peoria County circuit court is affirmed.

Judgment affirmed.


text:
    (No. 52645.
    A. J. JOHNSON PAVING COMPANY, Appellant, v. THE INDUSTRIAL COMMISSION et al. (R. H. DeMarr Asphalt Sales et al., Appellees).

      Opinion filed September 29, 1980.

    Rehearing denied November 26, 1980.

      Jonathan Kurasch, of Discipio, Martay & Caruso, of Chicago, for appellant.
    Braun, Lynch, Smith & Strobel, of Chicago (John A. Strobel, of counsel), for appellees.
   MR. JUSTICE RYAN

delivered the opinion of the court:

This appeal involves the loaned- or borrowed-employee issue under the Workmen’s Compensation Act (Ill. Rev. Stat. 1973, ch. 48, par. 138.1 et seq.). Claimant, Ray Wolf-gram, filed an application for adjustment of claim against R. H. DeMarr Asphalt Sales. The application was subsequently amended to reflect the inclusion of an additional respondent, A. J. Johnson Paving Company (hereafter Johnson). DeMarr also filed a cross-petition naming Johnson and/or claimant as respondents. Claimant was removed as respondent in the cross-petition upon DeMarr’s motion at the arbitration proceeding. After consideration of the facts surrounding both amended applications, the arbitrator entered an award for temporary total disability, 25% permanent loss of use of the left arm, 15% loss of use of the right arm, and for necessary medical expenses. The award was entered against Johnson, based on the arbitrator’s finding that Johnson was claimant’s borrowing employer. No additional evidence was presented on review, and the arbitrator’s decision was affirmed in full by the Industrial Commission. Subsequent to Johnson’s refusal to pay the award, DeMarr, as the loaning employer and pursuant to section 1(a)(4) of the Act (Ill. Rev. Stat. 1973, ch. 48, par. 138.1(a)(4)), paid the benefits awarded claimant. The decision of the Commission was thereafter confirmed by the Cook County circuit court. Johnson appeals directly to this court under our Rule 302(a). (73 Ill. 2d R. 302(a).) The primary issue presented by this appeal concerns the finding that there existed an employer-employee relationship between claimant and J ohnson at the time of the injury.

The facts pertinent to this appeal are basically undisputed. At the time of the arbitration hearing, claimant had worked as a heavy equipment operator for 18 years. He had been employed by R. H. DeMarr Asphalt Sales for 6 years prior to the date of the accident; that is, he was paid by DeMarr; Federal and State withholding taxes and social security payments were withheld from his checks by DeMarr; DeMarr kept track of the number of hours claimant worked; DeMarr determined when and where claimant worked; claimant’s right to take a vacation or time off from work was subject to DeMarr’s approval; in the event of illness, claimant would call DeMarr; DeMarr had the authority to lay off or discharge claimant; and a portion of claimant’s group health insurance provided through a union was subsidized by DeMarr. Robert H. DeMarr was the owner and president of R. H. DeMarr Asphalt Sales. He owned four asphalt paving machines, one for each of the operators employed by his asphalt sales company. In the event that an order for asphalt exceeded a certain tonnage, Mr. DeMarr would provide the purchaser, free of additional charge, with an asphalt paving machine and an operator for the laying of the asphalt.

On August 21, 1974, Mr. DeMarr received a telephone call from a representative of Johnson, a paving company. He and Johnson had entered into numerous business agreements in the past. In fact, Robert DeMarr stored his equipment, when not in use, in space rented from Johnson. Thus, during the winter months, DeMarr’s employees worked on the equipment while on Johnson’s premises. In the course of the August 21, 1974, phone call, Mr. DeMarr was requested to provide a certain amount of asphalt and a paving machine for a particular job site, a savings and loan association’s parking lot located at Harlem and Foster Avenues in Chicago. Since the amount of asphalt requested exceeded a certain tonnage, Mr. DeMarr agreed to supply the paving machine and lay the asphalt without additional charge. He reached claimant at his residence by telephone and directed claimant to report to the Johnson job site the following morning. He also told claimant what equipment would be on the site and the quantity of asphalt to be laid.

On August 22, 1974, claimant, as directed, went to the location. The DeMarr paving machine was transported to the job site by a truck which was owned by Johnson; DeMarr was not charged for this service. No DeMarr employees, other than claimant, were present at the job site, and claimant reported to the job foreman, Roger Hardt, a Johnson employee. Claimant asked Hardt where he should start laying the asphalt, and the foreman directed claimant to an area under an overhang in the savings and loan association parking lot. The foreman advised claimant as to the desirable thickness of the asphalt to be laid; thereafter, claimant received no further instructions from the Johnson foreman. Claimant, in full control of the operation of the paving machine, was assisted by laborers who were employed by Johnson. One of the Johnson employees was assigned to operate the thickness-control screws located on the rear portion of the paving machine. Claimant did not have the authority to direct the Johnson employees as to their job performance. Hardt, however, was empowered to determine the work hours and breaks to be taken by the employees. Claimant customarily took his breaks with the Johnson employees since he needed aid in operating the thickness control on the paving machine. Claimant also reported to work and was dismissed for the day when directed by the job foreman. While Hardt did not have control over the actual operation or maintenance of the equipment, he was empowered to direct claimant to start or stop the paving machine. In the event that Hardt was not satisfied with the laying of a portion of the asphalt, he could order the operator to relay the asphalt.

As stated above, claimant reported to the Johnson job site at approximately 7 a.m. on August 22, 1974. He sustained injuries shortly after commencing the paving operation. The parties do not dispute the nature or extent of the disability award. However, Johnson contests the finding that it was claimant’s borrowing employer, and therefore liable under the Act. Johnson also asserts that the arbitrator erred in refusing to consider evidence of an agreement between Johnson and DeMarr providing that DeMarr would pay workmen’s compensation benefits in the event of a compensable injury.

An employee in the general employment of one person may be loaned to another for the performance of special work and become the employee of the person to whom he is loaned while performing the special service. (See Saldana v. Wirtz Cartage Co. (1978), 74 Ill. 2d 379.) Whether such a transfer of employment occurs depends on whether the special or borrowing employer has the right to control the employee with respect to the work performed. (See 56 C.J.S. Master and Servant sec. 2(d)(2) (1948).) As stated in Saldana, “The main criterion for determining when a worker becomes a loaned employee is whether the special employer has control of the employee’s services.” 74 Ill. 2d 379, 389.

We have long recognized the borrowed-employee doctrine as being applicable to cases arising under the Workmen’s Compensation Act. (American Stevedores Co. v. Industrial Com. (1951), 408 Ill. 449, 453-54; Fransen Construction Co. v. Industrial Com. (1943), 384 Ill. 616, 624-25; Forest Preserve District v. Industrial Com. (1934), 357 Ill. 389, 394-95; Allen-Garcia Co. v. Industrial Com. (1929), 334 Ill. 390, 394.) (See Comment, Workmen’s Compensation — Borrowed Servant Doctrine — Liability of the General and Special Employers (Illinois), 1951 U. Ill. L.F. 502 (1951); Note, Survey of Illinois Law for the Year 1950-51, 30 Chi-Kent L. Rev. 1, 7-8 (1951).) (See generally Note, The Borrowed Employee Doctrine in Workmen’s Compensation, 21 Drake L. Rev. 176 (1971); Annot., 152 A.L.R. 816 (1944).) In so recognizing we have also deemed in compensation cases the most dominant circumstance in identifying the employer of a loaned employee to be the right to control the manner in which the work is to be done. (Raymond Concrete Pile Co. v. Industrial Com. (1967), 37 Ill. 2d 512, 516-17.) The loaned-employee concept was specifically incorporated into our workmen’s compensation statutory scheme by the inclusion of section 1(a)(4), effective July 11, 1957. (1957 Ill. Laws 2610; Ill. Rev. Stat. 1973, ch. 48, par. 138.1(a)(4).) (See Keefe, Changes in the Workmen’s Compensation and Occupational Diseases Acts, 47 Ill. B.J. 52, 52 (1958); Ropiequet & Keefe, Coverage of the Illinois Workmen’s Compensation Act, 1957 U. Ill. L.F. 169, 187-88 (1957).) Following the amendment, the primary factor considered in the determination of whether an employee was loaned continued to be the right to control the manner in which the work is to be done. (See, e.g., M & M Electric Co. v. Industrial Com. (1974), 57 Ill. 2d 113, 116-17.) Also, this court has recognized that the loaned-employee concept, as applied to cases under the Act, requires the existence of a contract of hire, either express or implied, between the employee and the special employer before such employer may be held liable for compensation. (McHugh-Brighton v. Industrial Com. (1969), 42 Ill. 2d 52, 56; M & M Electric Co. v. Industrial Com. (1974), 57 Ill. 2d 113, 119.) (See 1C A. Larson, Workmen’s Compensation sec. 48.10, at 8 — 317 to 8 — 318 (1980).) The inquiry required for the determination of the existence of the loaned-employee status is, therefore, two-fold: (1) whether the special employer, Johnson, had the right to direct and control the manner in which claimant performed the work; and (2) whether there existed a contract of hire between claimant and Johnson. The existence of the loaned-servant situation is generally a question of fact to be determined by the Industrial Commission. We will not disturb the Commission’s finding on the question unless contrary to the manifest weight of the evidence. M & M Electric Co. v. Industrial Com. (1974), 57 Ill. 2d 113, 117; M.W.M. Trucking Co. v. Industrial Com. (1976), 62 Ill. 2d 245, 255-56.

Johnson contends that, since the evidence is not in dispute, the question becomes one of law which the court may determine. However, if the undisputed facts upon any issue permit more than one reasonable inference to be drawn therefrom, the determination of the issue presents a question of fact. Only if the undisputed facts permit but a single inference can the question be characterized as one of law. (M & M Electric Co. v. Industrial Com. (1974), 57 Ill. 2d 113, 117.) We cannot say that it is not possible to draw more than one reasonable inference from the facts of this case bearing on the existence of an employer-employee relationship between Johnson and the claimant.

After a review of the record, we conclude that the Commission’s finding that there existed an employer-employee relationship was not contrary to the manifest weight of the evidence. First, there was sufficient evidence for the Commission to infer that Johnson had the right to control the manner of the work performed. Claimant worked the same hours as the Johnson laborers; he received instructions from Hardt, the Johnson foreman; no supervisors from DeMarr were present; claimant was assisted by laborers employed by Johnson; and Hardt was empowered to direct the claimant when to start, stop or repave. The fact that claimant’s skill as an operator allowed him to exercise control over the paving machine and the technical details of the paving operation was insufficient to preclude a finding that Johnson had the right to control the manner of the work. (See 1C A. Larson, Workmen’s Compensation sec. 48.30, at 8—387 (1980).) Nor do we deem relevant the fact that claimant received his salary from DeMarr Asphalt. The mere fact that the employee does not receive his wages from the special employer will not defeat the finding of a loaned-employee situation. (Allen-Garcia Co. v. Industrial Com. (1929), 334 Ill. 390, 397.) (See 1C A. Larson, Workmen’s Compensation sec. 48.30, at 8—388 to 8—390 (1980).) In addition to finding control over the method of claimant’s work, the Commission could properly infer that DeMarr Asphalt relinquished control over its equipment to Johnson. The paving machine was delivered to the site by a Johnson-owned truck, and claimant was the only DeMarr employee sent to the job site to operate the machine. In M.W.M. Trucking Co. v. Industrial Com. (1976), 62 Ill. 2d 245, 255, the fact that control of the equipment was surrendered to the special employer was deemed to be an important factor in upholding the Commission’s finding that there existed a loaned-employee relationship. Thus, the Commission could properly infer that DeMarr relinquished control over both the manner of doing work and the equipment to Johnson.

Essential to the employer-employee relationship between Johnson and the claimant is the existence of an employment contract, express or implied. In order to establish such a contract there must be at least an implied acquiescence by the employee in the relationship. (McHugh-Brighton v. Industrial Com. (1969), 42 Ill. 2d 52.) This acquiescence can be established by the fact that the claimant here was aware that the paving job was being performed by Johnson and by the fact that he accepted Johnson’s control over the work in that he complied with the foreman’s instructions with regard to starting, stopping and break times, as well as instructions as to where to start paving and other incidental directions as to the performance of the work. (1C A. Larson, Workmen’s Compensation sec. 48.10, at 8—331 to 8—332 (1980).) We therefore conclude that the Commission’s finding that there existed a loaning-borrowing employer relationship between DeMarr and Johnson was not contrary to the manifest weight of the evidence.

Finally, we find no merit to Johnson’s argument that the arbitrator erred in excluding evidence of an agreement between the employers with respect to liability under the Act. We have previously determined that the borrowing employer is primarily liable and the loaning employer is secondarily liable by virtue of section 1(a)(4) (Ill. Rev. Stat. 1973, ch. 48, par. 138.1(a)(4)). (Chicago’s Finest Workers Co. v. Industrial Com. (1975), 61 Ill. 2d 340, 344-45; Albert Mojonnier, Inc. v. Industrial Com. (1968), 41 Ill. 2d 128.) Section 1(a)(4) provides, in part:

“[A]s to such employee the liability of such loaning and borrowing employers is joint and several, provided that such loaning employer is in the absence of agreement to the contrary entitled to receive from such borrowing employer full reimbursement for all sums paid or incurred pursuant to this paragraph together with reasonable attorneys’ fees and expenses in any hearings before the Industrial Commission or in any action to secure such reimbursement.” (Emphasis added.) (Ill. Rev. Stat. 1973, ch. 48, par. 138.1(a) (4).)

In Albert Mojonnier, Inc. v. Industrial Com. (1968), 41 Ill. 2d 128, this court declined to determine the effect on the employers’ liability of the phrase, “in the absence of agreement to the contrary.” The refusal to consider- the issue was premised on the fact that there was a failure to establish the existence of such an agreement at trial. For similar reasons, we decline to interpret the phrase here.

Johnson contends that the arbitrator erred in excluding his offer of proof on the question of whether there was an “agreement to the contrary.” Actually, the record shows that the arbitrator did not exclude the offer of proof. On direct examination, Johnson was questioned about an oral agreement between him and Robert DeMarr made in 1957 concerning the general provisions covering the transactions between them. This line of questioning was objected to for the reason that what happened in 1957 would not be relevant to an occurrence nearly 20 years later. The arbitrator then instructed Johnson’s attorney to confine the testimony to the present. Following a further exchange between counsel, the attorney for DeMarr stated that he didn’t see the relevance of this testimony to the issues in this case. The arbitrator stated “I don’t either, at this moment. Sustained.” Johnson’s counsel then stated he was making an offer of proof that, if Johnson were permitted to answer, his testimony would show that the oral agreement with Robert DeMarr in 1957 was to the effect that DeMarr Asphalt was to furnish asphalt at a set charge per ton, was to furnish the equipment to lay the asphalt, was to furnish an operator for the operation of the equipment and was to carry workmen’s compensation insuring the operator. Without concluding the offer, or obtaining a ruling thereon, the attorney returned to his questioning of Johnson by asking if, after the oral agreement was made in 1957, it continued to the present time, and if it was in existence on August 22, 1974. Both questions were answered in the affirmative. What Johnson now contends was an offer of proof was nothing more than a lengthy leading question preparatory to the eliciting of the two affirmative answers by Johnson referred to above. With the record in this condition, it cannot be said that Johnson was not permitted to testify as to an earlier oral agreement made in 1957, which was purportedly in effect on the day of the injury. We must assume that the arbitrator and the Commission considered this evidence along with all the other evidence in reaching this determination. There was no request for a special finding on any issue. A general finding by the Commission for one party is, in effect, a favorable finding on each special matter necessary to support the general finding. (Garbowicz v. Industrial Com. (1940), 373 Ill. 268, 270.) We must therefore conclude that the Commission in this case found that there was no “agreement to the contrary” concerning the respondent for the payment of workmen’s compensation to the loaned employee pursuant to the Act. Such a finding was within the province of the Commission, which we hold not to be against the manifest weight of the evidence.

Accordingly, the judgment of .the Cook County circuit court, confirming the decision of the Industrial Commission, is affirmed.

Judgment affirmed.


author: MR. JUSTICE WARD

text:
    (No. 52050.
    JOSEPH A. LUBY, Appellee and Cross-Appellant, v. THE INDUSTRIAL COMMISSION et al. (Frank C. Abt, Appellant and Cross-Appellee).

      Opinion filed September 15, 1980.

    Rehearing denied November 26, 1980.

      Lee C. Korbakes, of Chicago, for appellant.
    James Lewis Kaplan, of Kaplan, Sorosky, Hoffman & Buffen, Ltd., of Chicago, for appellee.
   MR. JUSTICE WARD

delivered the opinion of the court:

The claimant, J oseph A. Luby, filed an application for adjustment of claim with the Industrial Commission seeking compensation from the respondent, Frank C. Abt, doing business as Lake View Ice Cream Company, for the fracture of a hip in an accident on June 18, 1975. The arbitrator made an award in favor of the claimant. On review the Commission, without hearing additional testimony, set aside the award. It expressly found that the relationship of employee and employer existed between the claimant and the respondent at the time of the accident, but that the claimant had failed to prove that his injury had been sustained in the course of employment. The circuit court of Cook County reversed the Commission’s decision and reinstated the award. The respondent has appealed pursuant to Rule 302(a) (73 Ill. 2d R. 302(a)), and the claimant has cross-appealed.

The respondent contends that the Commission’s finding that the claimant was an employee of the respondent was contrary to the manifest weight of the evidence. The claimant challenges, on the same ground, the Commission’s finding that no compensable accident occurred. We turn first to the question of the claimant’s status.

The respondent is a Chicago distributor of ice cream products. He testified to his manner of operation as follows: The products sold by the respondent consist of ice cream bars of various kinds, referred to collectively as “ice cream novelties,” which are sold to the public through individual vendors operating pedal-driven carts along city streets. All of the respondent’s products are marketed in this manner. The carts are owned by the respondent. The respondent testified that they do not bear the name of Lake View Ice Cream Company, but this was disputed by the claimant.

In 1975 the respondent’s vendors numbered about 180. The respondent did not engage a person as a vendor in advance, nor for any fixed period of time. The vendor was engaged on a daily basis to sell ice cream during that day, and there was no commitment by either the respondent or the vendors that the latter would work any given number of days a week. The respondent testified that many vendors worked only one day a week, and the claimant testified that he himself operated a cart only one or two days a week.

The working hours during the day were likewise not rigidly prescribed by the respondent. The respondent requested vendors to arrive at his place of business between 10 a.m. and 2 p.m. to pick up their carts, and they were also asked to return before nightfall, but conformity to these hours was not insisted upon. The respondent had only some 40 carts, however, so that a vendor who reported for work late in the day would run the risk of being unable to work that day.

When a person applied to the respondent to be taken on as a vendor for the first time he was handed a document captioned “Consignment Agreement,” which he was required to sign before being given a cart. The respondent offered into evidence 152 copies of such agreements which had been signed in 1975 by vendors who first worked for the respondent during that year. The respondent was unable to locate in his files any such agreement signed by the claimant. The latter testified, however, that he had seen this document or one similar to it when he first came to work for the respondent in 1973, and that he had signed it.

The agreement purports to grant the vendor the privilege of obtaining the respondent’s products “on consignment.” It provides that all merchandise shall be paid for on the day received, but that unsold merchandise may be returned with the vendor being credited for the purchase price; that the purchase price will be “our current wholesale price”; that the respondent will rent the vendor a cart at a charge of 10 cents a day. The agreement closes with the following statement:

“You are to vend or dispose of the merchandise consigned to you.
We are not to be liable for damages or injuries to you or to third persons; you shall not hold yourself out to the public as an employee of this Company, and no employment of you by us has ever been made or contemplated.”

When a vendor arrived at the respondent’s place of business for work he would stock his cart with an assortment of various ice cream novelties, the selection being left to him. A record was made of the number of each item taken, and the vendor was debited for each item taken at a price set by the respondent. The vendor was also informed of the price at which the respondent suggested each item be sold to the public. These prices also appeared on the cart. Vendors were not instructed to follow any particular route or to confine their operations to any specific part of the city.

Upon returning at the close of the day to the respondent’s office each vendor would turn in his unsold merchandise to the respondent, and would be credited for each item at its wholesale price. He was required to turn over to the respondent 70% of the proceeds received from sales, retaining 30% for himself. These figures were arrived at by the respondent on the assumption that the vendor had made all his sales at the suggested resale price. The claimant testified that in 1975 the daily amount which he received ran from $10 to $15. Vendors received no further compensation from the respondent, and no income tax or social security payment was withheld from their share of the proceeds.

This court has not hitherto had occasion to consider whether a street vendor or peddler is to be treated as an independent contractor or as an employee for purposes of the Workmen’s Compensation Act. That question also does not seem to have been frequently considered elsewhere, but the claimant does call our attention to a few cases from other jurisdictions, and in each of them an injury to the claimant has been held compensable under comparable statutes. Florio v. Assael (1949), 274 App. Div. 1082, 85 N.Y.S.2d 624; Saittav. Namar, Inc. (1961), 14 App. Div. 2d 954, 221 N.Y.S.2d 147; Seals v. Zollo (1959), 205 Tenn. 463, 327 S.W.2d 41.

In general, employment status is determined upon consideration of a number of factors, such as “the right to control the manner in which the work is done, the method of payment, the right to discharge, the skill required in the work to be done, and who provides tools, materials, or equipment.” (Morgan Cab Co. v. Industrial Com. (1975), 60 Ill. 2d 92, 97.) The significance of these and other criteria will of course vary according to the kind of work concerned. With one or two minor exceptions there is no conflict in testimony here, and the decision turns on the inference to be drawn from the undisputed facts. The inference drawn by the Commission was that the claimant was an employee, and unless a contrary inference is the only one which could be reasonably drawn, the Commission’s decision must be upheld. Kirkwood Brothers Construction v. Industrial Com. (1978), 72 Ill. 2d 454, 459.

As was said of the evidence in the Kirkwood Brothers case (72 Ill. 2d 454, 460-61), none of those aspects of the relationship between the claimant and the respondent which were touched upon in the testimony is incompatible with the status of an employee. Several, on the contrary, would be inconsistent with that of an independent contractor. The respondent owns and supplies the cart used by the vendor, a point which serves to distinguish this case from Bauer v. Industrial Com. (1972), 51 Ill. 2d 169, relied on by the respondent; the vendor receives no compensation beyond his share of the proceeds of his sales; and he has the right to return unsold merchandise. Although the respondent withholds no income tax or social security, that factor has not been found significant. See Kirkwood Brothers Construction v. Industrial Com. (1978), 72 Ill. 2d 454, 460; Mastercraft Co. v. Industrial Com. (1974), 58 Ill. 2d 155, 158; Greenberg v. Industrial Com. (1961), 23 Ill. 2d 106, 107.

The respondent leans heavily on the “Consignment Agreement” prepared by him, particularly on its last paragraph. Leaving aside the question whether the claimant signed an agreement containing that language, a statement by the respondent that he did not employ the claimant cannot, of course, foreclose inquiry into whether the engagement of the claimant did constitute the latter an employee within the meaning of the Act.

The respondent asserts that the claimant’s freedom with respect to his hours of work, the area in which he was to operate, and the particular varieties of ice cream products to stock in his cart shows an absence of control by the respondent which is inconsistent with the status of employee. In each of these respects the claimant was subject to control in a practical sense, however, since his remuneration depended on the amount of his sales, and since a major deficiency in a vendor’s sales could lead to his discharge, as the respondent admitted in his testimony.

Moreover, given the nature of the work performed by the claimant the Commission was not required to treat the enumerated factors as controlling. The claimant’s task was not to deliver merchandise to specific persons who had ordered it, but to make it available to any person he encountered who expressed a desire to buy. The job did not call for mastery of sales techniques or other skills. The claimant did not act as a vendor for other concerns, nor did he hold himself out as having any special qualifications to do so. The respondent, on the other hand, was not a manufacturer of ice cream bars. He was solely a distributor, and his sole method of distribution was through street vendors. His vendors, including the claimant, thus performed work which was an integral part of the respondent’s regular business. (See Kirkwood Brothers Construction Co. v. Industrial Com. (1978), 72 Ill. 2d 454, 460.) The respondent’s contention that the claimant was not an employee must therefore be rejected, and we proceed to consider whether the claimant’s injury was incurred in the course of his employment.

The claimant, who was 71 at the time of the accident in which he was allegedly injured, gave the following account of it. While engaged in selling ice cream bars, he was approached by a group of men who asked for and were given several bars, but refused to pay for them. One of the men also attempted to take additional bars out of the cart. When the claimant tried to stop him, the man grabbed him and threw him down on the pavement. The claimant immediately felt pain in his right hip. He got on his bicycle, and rode back to the respondent’s office, which was about a mile and a half away, arriving there about an hour later. He reported the accident to the respondent, and said that he had hurt his hip and couldn’t pedal anymore, and was therefore going to quit work for the day. He then rode home on his own bicycle, a distance of about 30 blocks. He testified that because of his pain he had difficulty in pedaling and had to proceed very slowly.

On June 19 the claimant worked a full day at another establishment, where he was employed on a part-time basis as a washroom attendant. He was still feeling pain in his hip. He was admitted to the hospital on June 21. The claimant also testified that he had never suffered any injury to his hip subsequent to the incident of June 18.

At the close of the claimant’s testimony he introduced in evidence hospital records relating to his treatment pursuant to section 16 of the Act (Ill. Rev. Stat. 1979, ch. 48, par. 138.16). These records were admitted without objection by the respondent. Included among them was a handwritten report, apparently prepared by a physician shortly after the claimant’s admission. The report stated that the claimant was brought to the hospital by ambulance, and it also contained the following:

“HISTORY:
As above claims 2 days ago, robbed while selling ice cream and same knocked him down in pavement and injured his lower back and right hip since was able to walk but limping. Yesterday was riding a bicycle and a car cut him off and he fell from his bike and fell in ground and re-injured his right hip. Since c/o [complains of] severe pain and can’t move his right lower extremity.”

In the proceedings before the arbitrator counsel for the respondent did not interrogate the claimant with regard to this statement or call it to the attention of the arbitrator. During the proceedings in circuit court counsel for the respondent told the judge that he had not been aware of the report when the case was before the arbitrator, stating, “It was only when I read that hospital record months later that these circumstances surrounding the second injury were brought to light. I’m sure that the arbitrator wasn’t aware of a second injury.” Although they disagree over whether the report could properly be considered, both parties agree that it was brought to the Commission’s attention during the proceedings on review.

The report and the parties’ contentions regarding it were also considered by the circuit court. The court concluded that the medical history contained in the report could not legitimately be considered by the Commission, and that without it the Commission’s finding that the claimant’s injury did not arise in the course of his employment was contrary to the only evidence of record, namely the claimant’s own testimony.

The claimant’s testimony that he fell to the ground and then felt pain in his hip, though uncontroverted, did not show that it was in this fall that the fracture of his hip — the injury for which compensation was sought— occurred. Evidence of a subsequent fall which might have caused that injury would be relevant. Because the claimant in his testimony failed to mention any subsequent fall, and because he denied that there had ever been a further injury to his hip, a statement by him that such a fall had occurred would both impeach his testimony and constitute an admission against interest. (Cuneo Press Co. v. Industrial Com. (1930), 341 Ill. 569, 572; Gray v. Industrial Com. (1979), 76 Ill. 2d 552, 560.) The Commission is always entitled, of course, to consider matters bearing on the claimant’s credibility. Forrest v. Industrial Com. (1979), 77 Ill. 2d 86; Watts v. Industrial Com. (1979), 77 Ill. 2d 30.

As this court has consistently held, it is not significant that the Commission disagreed with the arbitrator (J. J. Grady Co. v. Industrial Com. (1970), 46 Ill. 2d 471, 473; Orr v. Industrial Com. (1970), 47 Ill. 2d 242, 243; Meade v. Industrial Com. (1971), 48 Ill. 2d 215, 221; Crane v. Industrial Com. (1974), 57 Ill. 2d 158, 164; Scuderi v. Industrial Com. (1978), 73 Ill. 2d 277, 281; Forrest v. Industrial Com. (1979), 77 Ill. 2d 86, 92-93). The claimant points out, however, that the Commission had before it no testimony by the author of the hospital report that the claimant had in fact made the statement attributed to him therein. Moreover, even assuming that the statement was made, the claimant asserts that he was given no opportunity to explain it.

The fifth paragraph of section 16 of the Act (Ill. Rev. Stat. 1979, ch. 48, par. 138.16) provides:

“The records kept by a hospital, certified to as true and correct by the superintendent or other officer in charge, showing the medical and surgical treatment given an injured employee in such hospital, shall be admissible without any further proof as evidence of the medical and surgical matters stated therein, but shall not be conclusive proof of such matters.”

The claimant contends that the personal history of a patient is not part of his medical and surgical treatment, and that section 16 is therefore not applicable. Essentially the same argument was advanced in Gray v. Industrial Com., where we questioned its soundness but judged it was not necessary to address that issue. (76 Ill. 2d 552, 560-61.) Similarly it is unnecessary to consider the contention made here, since the exhibit which included the report was introduced in toto by the claimant. We do not see how he can shield the report from consideration by the Commission because of its lack of authentication. As far as an opportunity to explain away the report is concerned, if such is required, that opportunity was presented when the matter was before the Commission.

On his cross-appeal the claimant, relying on Wirth v. Industrial Com. (1976), 63 Ill. 2d 237, asserts that the circuit court should have granted his request for interest from the date of the arbitrator’s award. Our disposition of this appeal makes consideration of that claim unnecessary.

For the reasons stated in this opinion, the judgment of the circuit court reversing the decision of the Commission and reinstating the award of the arbitrator is reversed.

Judgment reversed.


author: MR. JUSTICE UNDERWOOD

text:
    (No. 52136.
    ROBERT JOE WILSON, Appellant, v. MARCEIL GREENHALGH BISHOP et al., Appellees.

      Opinion filed October 17, 1980.

      Theodore Van Winkle, of Van Winkle & Van Winkle, of McLeansboro, for appellant.
    Maurice E. Gosnell, of Gosnell, Benecki, Borden & Enloe, Ltd., of Lawrenceville, and Howard W. Campbell and Craig He din, of Campbell, Furnall, Moore & Jacobsen, of Mt. Vernon, for appellees.
   MR. JUSTICE UNDERWOOD

delivered the opinion of the court:

This litigation arose in 1976 when it was discovered that commercial quantities of oil underlay a portion of a 72-acre tract of land in White County in which the surface area is owned by plaintiff, Robert Joe Wilson. The dispute concerns ownership of an undivided one-third interest in the oil and gas, which plaintiff claims pursuant to the operation of the dormant mineral interests act (the Act) (Ill. Rev. Stat. 1975, ch. 30, pars. 197, 198). The circuit court of White County, however, held that those sections “violate the due process and contract clauses of the Constitutions of the State of Illinois and the United States.” The appeal comes directly to us pursuant to our Rule 302(a). 73 Ill. 2d R. 302(a).

Plaintiff alleged that defendant Marceil Greenhalgh Bishop, and defendants Donald B. Driscoll and Ann Driscoll, individually and as trustees under the will of Beatrice M. Driscoll, abandoned their ownership of the disputed interest by failing to file written notices in the recorder’s office of White County or by otherwise preserving their ownership as provided in the following sections of the Act:

“Sec. 1. Any interest in oil, gas, or associated hydrocarbons, liquid or gaseous, in any land owned by anyone other than the owner of the surface, which has not been devised, sold, leased, mortgaged or transferred by instrument recorded in the office of the recorder of deeds in the county where such interest is located for a period of 25 years shall, in the absence of the actual production of oil, gas or associated hydrocarbons, liquid or gaseous, from such land, or from lands covered by a lease to which such interest is subject, or from lands pooled, unitized or included in unit operations therewith, during such period of 25 years, be deemed abandoned, unless the owner thereof, within 3 years after the effective date of this Act or within 25 years after the last devise, sale, lease, mortgage or transfer of record of such interest or actual production of oil, gas or associated hydrocarbons, liquid or gaseous, from such land, or from lands covered by a lease to which such interest is subject, or from lands pooled, unitized, or included in unit operations therewith, whichever is later, records a claim of interest as provided in this Act. Any interest in oil, gas or associated hydrocarbons, liquid or gaseous, deemed abandoned as herein provided shall vest as of the date of such abandonment in the owner of the surface.”
“Sec. 2. Any interest in oil, gas or associated hydrocarbons, liquid or gaseous, referred to in this Act may be preserved by the recording within the period specified in this Act a written notice in the recorder’s office for the county where such interest is located, which notice shall be verified by oath, describe the land and the nature of the interest claimed, give the name and address of the person or persons claiming the interest, and state that such person or persons desire to preserve the interest and do not intend to abandon same. This recording of notice preserves such interest from abandonment for a period of 25 years thereafter when, if the nondormant character of the interest has not been evidenced by sale, lease, mortgage or transfer by instrument recorded in the recorder’s office for the county where such interest is located, oil, gas or associated hydrocarbons, liquid or gaseous, actually produced from those lands, or from lands covered by a lease to which such interest is subject, or from lands pooled, unitized or included in unit operations therewith, or a like notice filed, such interest shall be deemed abandoned. In the absence of prior abandonment, such interest may be preserved indefinitely by the filing of notices or by other actions evidencing nondormancy of the interest in accord with this Act at intervals of not more than 25 years.” (Ill. Rev. Stat. 1975, ch. 30, pars. 197, 198.)

Plaintiff maintains that the statute automatically vested the disputed interest in him upon failure of defendants to comply with the statutory requirements, and that the oil and gas leases entered into between defendants and J. D. Turner in 1975 are null and void. Following a bench trial the court entered a decree which included findings that the interests of defendants Bishop and Driscoll constituted a severed freehold estate entitled to the usual rights and incidents of vested ownership, and that the quoted sections of the Act deprive defendants of their property without due process of law and impair the obligations of contract. The court accordingly declared that the oil and gas leases between defendants and Turner are valid, and ordered the impounded oil proceeds paid to defendants in proportion to their ownership interests.

In this appeal, plaintiff argues that the trial court erred in treating the rights of a severed mineral interest owner as vested property rights, in refusing to consider the Act’s effect as a statute of limitations, and in finding that plaintiff did not acquire the mineral interests of defendants. It is well established “that the constitutional guarantees of procedural due process only become operative where there is an actual or threatened impairment or deprivation of ‘life, liberty or property.’ (U.S. Const., amend. XIV; Ill. Const. 1970, art. I, sec. 2.) Therefore, the starting point in any procedural due process analysis is a determination of whether one of those protectable interests is present, for if there is not, no process is due.” (Polyvend, Inc. v. Puckorius (1979), 77 Ill. 2d 287, 293-94, appeal dismissed (1980), 444 U.S. 1062, 62 L. Ed. 2d 744, 100 S. Ct. 1001; see Memphis Light, Gas & Water Division v. Craft (1978), 436 U.S. 1, 9-10, 56 L. Ed. 2d, 30, 39, 98 S. Ct. 1554, 1560-61; Board of Regents v. Roth (1972), 408 U.S. 564, 569, 33 L. Ed. 2d 548, 556, 92 S. Ct. 2701, 2705; Perry v. Sindermann (1972), 408 U.S. 593, 599, 33 L. Ed. 2d 570, 578, 92 S. Ct. 2694, 2698.) Recognition of protected property interests requires an extraconstitutional inquiry into existing rules or provisions in State law. As the United States Supreme Court concluded in Roth:

“Property interests, of course, are not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law — rules or understandings that secure certain benefits and that support claims of entitlement to those benefits.” (408 U.S. 564, 577, 33 L. Ed. 2d 548, 561, 92 S. Ct. 2701, 2709.)

See Memphis Light, Gas & Water Division v. Craft (1978), 436 U.S. 1, 9, 56 L. Ed. 2d 30, 39, 98 S. Ct. 1554, 1560; Goss v. Lopez (1975), 419 U.S. 565, 572-73, 42 L. Ed. 2d 725, 733-34, 95 S. Ct. 729, 735; Polyvend, Inc. v. Puckorius (1979), 77 Ill. 2d 287, 294-95.

It has long been recognized in this State that a severed mineral interest is a freehold estate entitled to the customary incidents of ownership. (Pickens v. Adams (1955), 7 Ill. 2d 283; Miller v. Ridgley (1954), 2 Ill. 2d 223; Jilek v. Chicago, Wilmington & Franklin Coal Co. (1943), 382 Ill. 241.) This recognition, moreover, represents the position overwhelmingly embraced by other States. (Wheelock v. Heath (1978), 201 Neb. 835, 272 N.W.2d 768; Chicago & North Western Transportation Co. v. Pedersen (1977), 80 Wis. 2d 566, 259 N.W.2d 316; Trustees of Tufts College v. Triple R. Ranch, Inc. (Fla. 1973), 275 So. 2d 521; 1A W. Summers, Oil and Gas sec. 139 (1954); 54 Am. Jur. 2d Mines and Minerals sec. 116 (1971).) It is accordingly clear that the severed mineral interests here under consideration constitute protected property interests entitled to the procedural safeguards which due process requires.

The United States Supreme Court has emphasized that due process of law, at a minimum, prohibits the deprivation of property without providing notice and an opportunity for a hearing appropriate to the nature of the case. (Memphis Light, Gas & Water Division v. Craft (1978), 436 U.S. 1, 13-16, 56 L. Ed. 2d 30, 41-43, 98 S. Ct. 1554, 1562-63; Mullane v. Central Hanover Trust Co. (1950), 339 U.S. 306, 313, 94 L.Ed. 865, 872-73, 70 S. Ct. 652, 657.) While “the timing and content of the notice and the nature of the hearing will depend on appropriate accommodation of the competing interests involved” (Goss v. Lopez (1975), 419 U.S. 565, 579, 42 L. Ed. 2d 725, 737, 95 S. Ct. 729, 738-39, citing Cafeteria Workers v. McElroy (1961), 367 U.S. 866, 895, 6 L. Ed. 2d 1230, 1236, 81 S. Ct. 1743, 1748; Morrissey v. Brewer (1972), 408 U.S. 471, 481, 33 L. Ed. 2d 484, 494, 92 S. Ct. 2593, 2600; see Powell v. Jones (1973), 56 Ill. 2d 70, 78), something more is necessary than is here provided.

The Act declares that any severed interest in oil and gas shall be deemed abandoned unless the record owner, within a period of 25 years, engages in the actual production of oil or gas, publicly exercises specified acts of ownership by means of instruments recorded in the office of the recorder of deeds for the county wherein the interest is located, or files with the county recorder a written claim of interest within 3 years after the effective date of the Act or within 25 years from the last public act of ownership, whichever is later. If a written claim of interest is recorded, ownership of the interest is preserved only for the next 25 years. In the absence of one of the required acts, a statutory abandonment occurs and the severed interests automatically vest in the surface owners.

The statute provides no notice of any kind to record owners of oil and gas interests that they must record a statement of their interest in order to prevent the forfeiture of their property interests. While we recognize the beneficial purpose of the statute to facilitate the production of existing oil, gas and other mineral resources, particularly where ownership of the interests has become increasingly fractionalized and scattered, the record owners are vested with property interests entitled to the procedural safeguards of due process. Failure to provide those owners with adequate notice and an opportunity to be heard renders the statutory scheme unconstitutional.

When faced with similar statutes, the courts in other States have reached like conclusions. In Wheelock v. Heath

(1978), 201 Neb. 835, 272 N.W.2d 768, the statute declared that severed mineral interests would be deemed abandoned unless the record owner publicly exercised defined ownership rights within a period of 23 years or asserted his interest in an action filed within 2 years after the effective date of the statute. In Chicago & North Western Transportation Co. v. Pedersen (1977), 80 Wis. 2d 566, 259 N.W.2d 316, the statute provided for the reversion of severed mineral interests to the surface fee owner unless the owner of the mineral interests registered his ownership and paid an annual registration fee. In Contos v. Herbst (Minn. 1979), 278 N.W.2d 732, the statute provided for the forfeiture of severed mineral interests to the State unless the record owner filed a registration statement. In both Wheelock and Pedersen, the forfeiture occurred without any notice, hearing or compensation to the record owner. The statute in Contos provided for notice by publication in a legal newspaper within each county, apparently in three issues, and in two mining publications with a nationwide circulation, and it provided for compensation following forfeiture. The court, however, found that notice by publication of the statutes alone was inadequate and concluded: “We cannot imagine a more clear violation of due process than the failure to provide a hearing before forfeiture.” 278 N.W.2d 732, 743, citing Mullane v. Central Hanover Bank & Trust Co. (1949), 339 U.S. 306, 94 L. Ed. 865, 70 S. Ct. 652.

In Short v. Texaco, Inc. (1980),——Ind. ——, 406 N.E.2d 625, however, the Indiana Supreme Court upheld a statute that provided for the reversion of severed mineral interests to surface owners if, after 20 years, no specified acts of ownership had occurred or no claim of interest had been filed within two years after the effective date of the act. The court concluded that the statute comported with procedural due process upon finding that its enactment, along with the opportunity to prevent reversion of the mineral interest by filing a claim of interest, provided sufficient notice to affected owners. That court also appears to have found support for its conclusion in the fact that such owners would receive notice and an opportunity to be heard if a court should be called upon at some future time to determine whether the statutory conditions of mandatory reversion had occurred. We are unpersuaded by these reasons and others which analogized the statute to ordinary statutes of limitation. We, moreover, regard that court’s reliance on Anderson National Bank v. Luckett (1944), 321 U.S. 233, 88 L. Ed. 692, 64 S. Ct. 599, as misplaced inasmuch as the aspect of the statutes there in question did not transfer or significantly affect an owner’s rights to his property. The issue there before the court was the validity of a statutory provision requiring banks to file annually with the State a report of deposits dormant for specified numbers of years, a copy of which went to the local sheriff for posting on the courthouse door. The statute required the banks to then transfer custody of those funds to the State, from which the owner could thereafter reclaim them. The issue before the Supreme Court was “whether the procedure by which the state undertakes to acquire the depositors’ right to demand payment of the deposits was upon adequate( notice to them and opportunity for them to be heard.” (321 U.S. 233, 243, 88 L. Ed. 692, 703, 64 S. Ct. 599, 604.) The court held due process requirements satisfied, emphasizing that the owners of the transferred funds — the depositors — were not deprived of their property since they could reclaim it from the State at any time prior to, and for five years following, a judicial decree of abandonment the validity of which was neither questioned nor passed upon. Upholding a statutory provision for the transfer to the State, after posting notice, of the custody of dormant bank funds cannot, in our judgment, be viewed as authority for upholding the validity of a statute which transfers, with no notice, ownership of vested real property interests from one private party to another.

Plaintiff would have us validate the statute in question by construing it as a statute of limitations. A similar argument was rejected by the Minnesota Supreme Court in Contos v. Herbst (Minn. 1979), 278 N.W. 2d 732, 745, with respect to the statute there under consideration. It is fundamental that statutes of limitations are procedural in nature (see Orlicki v. McCarthy (1954), 4 Ill. 2d 342; Hilberg v. Industrial Com. (1942), 380 Ill. 102; see also Kalmich v. Bruno (7th Cir. 1977), 553 F.2d 549, cert. denied (1977), 434 U.S. 940, 54 L. Ed. 2d 300, 98 S. Ct. 432) and are not designed to alter substantive rights or convey property interests. The time limitations of the statute in question here, however, operate to transfer vested, freehold interests. Whether denominated a statute of limitations or otherwise, its operation is simply incompatible with the due process requirements earlier expressed.

The judgment of the circuit court of White County holding the Act unconstitutional is accordingly affirmed.

Judgment affirmed.