author: Mr. Justice Daily Mr. Chief Justice HershEy,

text:
    (No. 33735.
    The City of Chicago, Appellee, vs. Equitable Life Assurance Society of the United States et al., Appellants.

      Opinion filed March 22, 1956
    Rehearing denied May 22, 1956.

      Hershey, C.J., and Bristow, J., concurring in part and dissenting in part.
    Stuart S. Ball, and William K. Batchelder, both of Chicago, (SidlEy, Austin, Burgess & Smith, and Mayer, FriEdlich, SpiEss, Tierney, Brown & Platt, both of Chicago, of counsel,) for appellants.
    John C. Melaniphy, Acting Corporation Counsel, of Chicago, (Robert J. Nolan, of counsel,) for appellee.
   Mr. Justice Daily

delivered the opinion of the court:

Eminent domain proceedings were commenced in the circuit court of Cook County by the city of Chicago, hereinafter referred to as the petitioner, to acquire for use as a public parking area certain property owned by Equitable Life Assurance Society of the United States and used by its lessee, Wieboldt Stores, Inc., as a free customer-parking lot in conjunction with its Englewood store. A cross petition was filed by these defendants in which they alleged that the taking of the parcel would seriously depreciate the value of the remaining store property and that they were entitled to additional compensation for this resulting damage. Upon trial, however, the court refused to allow the introduction of any evidence in support of the cross petition on the grounds that such was not a proper element of damage in an eminent domain proceeding. The jury thereafter fixed the value of the parking lot at $130,000 and condemnation judgment was entered accordingly. On direct appeal, the defendants’ chief contentions are (1) that they were unduly restricted in presenting proof of the condemned parcel’s value, and (2) that the trial court erred in refusing to permit evidence in support of the cross petition.

The properties in question are located in the city of Chicago near the intersection of Sixty-third and Halsted streets, the so-called hub of the Englewood shopping area. Immediately to the west and lying parallel with Halsted are, first, Green Street, and then Peoria Street, both of which run in a north and south direction. The store property faces north on Sixty-third Street between Peoria and Green and extends 250 feet back along the east side of Peoria Street to a public alley. This alley, which is 16 feet in width, extends east 125 feet from Peoria Street to a north-south alley which connects with both Green and Sixty-fourth streets. The parking lot is rectangular in shape and is bounded on the north by the public alley, on the west by Peoria Street, on the south by Sixty-fourth Street, and on the east by the north-south alley and is equipped with asphalt paving, car stops, lights, and is enclosed by a cyclone fence. For the convenience of customers, a rear entrance to the Wieboldt store opens near the public alley adjoining the parking lot.

The defendants’ contention that they were unduly restricted in presenting proof of the condemned parcel’s value is, we believe, meritorious. The record discloses that the petitioner’s expert witnesses testified that the property’s highest and best use was for a free parking lot and that in arriving at this conclusion, and also that of value, they considered such factors as location, sales of similar properties, and parking needs in this locality. Yet, the defendants were, in many instances, unable to cross-examine in regard to these factors. For example, even though Clem Mulholland testified that his opinion of value was influenced by location and sales of similar property in the general area, the trial court refused to allow the following cross-examination questions: (1) “In arriving at your opinion as to the value of this property, did you consider the proximity of this lot to a large retail store?” and (2) “Have there been any sales of areas of a size equal to this in recent years in this neighborhood?” Neither were the defendants allowed, upon direct examination, to give facts in support of their opinions as to use and value. Ronald Chinnock, a defense witness, stated that in his opinion the value of the parking lot property was $206,160. However, he was not permitted to say how he arrived at this valuation. As another example, Graham Aldis, in laying a foundation for his value opinion said: “I took into account its proximity to the business, this 63rd and Halsted retail center which I have described, its particular proximity to the Wieboldt’s store, the fact that it was very handy for anyone wishing to park, any potential customer of the area who came in from the west or from the south, because as I stated it was on the fringe of that area, and I took into account the extreme need for parking facilities in connection with such a shopping area as 63rd and Halsted.” Because he had made particular reference to the Wieboldt store, the court refused to allow this witness to proceed with his valuation. Such rulings were clearly erroneous. An expert’s opinion can best be tested by examining the facts upon which it stands. (Chicago and Northwestern Railway Co. v. Town of Cicero, 154 Ill. 656.) If this is not done, the jury has no basis, whatsoever, upon which to evaluate such testimony. Questions of this nature can not be decided in a vacuum. Additional information is necessary to give the opinion support and to clarify its meaning. This is well illustrated by the fact that although some of the petitioner’s witnesses testified that the highest use of the condemned parcel was for free parking purposes, they nevertheless said it was worth from $94,000 to $99,000. Since it is quite evident that property which can produce no income has but little value, more facts were needed to explain this apparent inconsistency.

The measure of compensation for land taken by eminent domain proceedings is its fair cash market value for the highest and best use to which it is available, even if, at the time of filing the petition, the land is not being put to such use. (Department of Public Works and Buildings v. Lambert, 411 Ill. 183; City of Chicago v. Harbecke, 409 Ill. 425; Forest Preserve Dist. v. Lehmann Estate, 388 Ill. 416.) Thus, although the condemned parcel was being presently used for free parking purposes, the owners should have been allowed to offer evidence as to its commercial use and facts in support thereof. Since the value of property depends to a great extent upon its physical location, and since along with other elements it provides the very foundation upon which an opinion is based, it was entirely proper for the defendants in this case to inquire as to whether these factors had been fully considered by the witnesses. (Dupuis v. Chicago and North Wisconsin Railway Co. 115 Ill. 97.) It is our opinion that, by denying them this right, the lower court committed reversible error.

The defendants contend that the court also erred in refusing to permit evidence in support of their cross petition. With this we cannot agree. In order to recover damages in an eminent domain proceeding for property not actually taken, it must appear that this and the condemned land are contiguous, that is, they are either physically joined as a single unit or so inseparably connected in use that the taking of one will necessarily and permanently injure the other. (People ex rel. Tyson v. Kelly, 379 Ill. 297; Stetson v. Chicago and Evanston Railroad Co. 75 Ill. 74; Kossler v. Pittsburg, Cincinnati, Chicago & St. Louis Railway Co. 208 Pa. 50, 57 Atl. 66; Peck v. Superior Short Line Line Railway Co. 36 Minn. 343, 31 N.W. 217; 6 A.L.R. 2d 1203.) The defendants admit that the store and parking properties are not physically connected, but argue that they are so interrelated as to warrant consideration under the above-mentioned rule.

On at least two prior occasions we have had the opportunity to consider similar statements of fact In White v. Metropolitan West Side Elevated Railroad Co. 154 Ill. 620, the appellant owned property on both sides of Tilden Street in Chieago and, although only a portion south of the street was being eondemned, he contended that since the tracts had been purchased for a common use, they were contiguous and should both be considered in the eminent domain proceedings. In refusing to accept this theory, we said: “If by the construction and operation of the railroad on the lot south of Tilden street the property of appellants lying north of that street will be specially damaged, and the damages sustained by appellants are not common to the public, they have a complete remedy, in an action at law, tO' recover all damages sustained; but where proceedings are instituted, under the Eminent Domain act, to condemn one lot or tract of land, the owner cannot bring into that proceeding another tract of land not contiguous and not connected with the land condemned, no portion of which has been taken, and recover such consequential damages as he may have sustained. But it is said, the two tracts of land were purchased to be used for one purpose, as one tract of land. Whatever may have been the intention or purpose in purchasing the two tracts of land can make no difference. The two tracts of land must be considered as they existed when the proceeding was instituted. At that time they were separated by a public street. They were in no manner connected, and never could be connected without the consent of the city, which may never be obtained. They were not used for any common purpose as one tract of land. Two tracts of land might be so connected and used as to constitute but one tract, and in such a case, in a proceeding to condemn a part, it would be proper to consider the damages to the whole. But this record presents no such case.”

A similar question arose in Metropolitan West Side Elevated Railroad Co. v. Johnson, 159 Ill. 434, where a strip was condemned for highway purposes through a residential subdivision. Again we held that, although recovery could be had for damages to contiguous property not taken, those parcels which were separated from the condemned area by public streets or alleys were not a proper subject of the eminent domain proceedings. We can see no reason why we should arrive at a different result in the present case. Here, the store and parking properties were acquired at different times, from different owners, and for different purposes. The former is used for retail merchandising while the latter is used for public parking. Whereas the condemned parcel was formerly used by Wieboldt for free customer parking, it will now be used by the city as a paid parking area. It may well be that the joint ownership of these parcels is convenient or even beneficial, yet it cannot be said that the elimination of the free parking facilities will necessarily and permanently injure the store property. This view is supported, not only by reason that other national chain stores are operating in the same vicinity without benefit of such parking facilities, but also by the fact that throughout their offer of proof and briefs, the defendants were not so much interested in the loss of the parking facilities themselves as they were concerned about the elimination of future expansion possibilities. For example, at page 28 of their brief, they state: “This means that the taking of this lot forever freezes this store to its present size, and prevents the use of this land for expansion of store functions. It also forever prevents the erection of a new retail store building on this land. Such a taking will have an obvious effect upon the fair cash market value of this adjoining land, and appellants were entitled to show it.” It is elementary that a mere intention on the part of the owner to put properties to a common use is not sufficient to allow a cross petition in a condemnation action, but such properties must be considered as they existed at the time the proceedings were commenced, (White v. Metropolitan West Side Elevated Railroad Co. 154 Ill. 620; 6 A.L.R. 2d 1203,) and whether or not the cross petition is proper is a question of law which must be decided by the court. (6 A.L.R. 2d 1207.) Under the facts and circumstances of this case, we are of the opinion that the properties in .question are not so interrelated as to warrant their consideration as a single unit.

Although many other alleged errors have been assigned by these defendants, the possibility of their recurring at a new trial is unlikely. To elaborate upon these points, therefore, would serve no useful purpose.

After careful consideration, we hold that the trial court was correct in refusing to permit evidence in support of the cross petition but erred in restricting proof of the condemned parcel’s value, and for that reason, the judgment of the circuit court of Cook County is reversed and the cause remanded to that court for further proceedings not inconsistent with this decision.

Reversed and remanded.

Mr. Chief Justice HershEy,

concurring in part and dissenting in part:

I concur in a reversal based on undue restriction of proof of value, but I also believe the trial court erred in refusing evidence in support of the cross petition.

On this record, I consider the land not taken (the store property) so close in proximity, so integrally connected, and so unified in use with the land taken (the customer parking lot), as to permit evidence of damage to the land not taken.

While it is often said that the tracts must be “contiguous,” it is generally recognized that physical touching or its lack is not conclusive. For the basic test is unity of use. (See 6 A.L.Rad 1197-1237.) To say here that the store property is used for retail merchandising while the parking property is not, strikes me as unrealistic. The lot is, of course, used for parking — but for store customers. In a crowded metropolitan area, this may be not only “convenient and beneficial” but vital. It seems clear that the parking lot is an integral part of the Wieboldt retail operation, and if as a result of condemning the parking property the market value of the store property declines, there should, in justice, be compensation for land damaged but not taken. Illinois Constitution, art. II, sec. 13.

If present use, rather than past acquisition and purposes, is determinative (as the majority seem to say, citing White v. Metropolitan West Side Elevated Railroad Co. 154 Ill. 620,) then the fact of acquisition “at different times, from different owners, and for different purposes,” is irrelevant. Moreover, future uses, such as the possible expansion referred to, appear not greatly material to a consideration of present value, as opposed to the present facts themselves showing a regular full use for parking by store customers. I note that the 16-foot alley said to preclude an interrelationship between the two tracts was at one time owned by the respondents and became a public way through their action, and it is of virtually no use to anyone except Wieboldt and its customers.

This is a case of first impression in Illinois. While the majority strongly rely upon two early railroad condemnation cases, White v. Metropolitan West Side Elevated Railroad Co. 154 Ill. 620 (1894), and Metropolitan West Side Elevated Railroad Co. v. Johnson, 159 Ill. 434 (1896), both may be distinguished.

In the White case, the owners’ sole contention was that “both tracts (the one north and the one south of Tilden Street) were purchased with the intention of using the same together as one property and one plant for a polytechnic institute.” There was no present unified use of the tracts.

The Johnson case involved residence properties. The railroad condemned a strip for right of way through a platted subdivision, and the court held it was proper to exclude evidence of damage as to all lots separated from those partly taken by streets, alleys, or lots owned by other parties.

Where there is a present, unified, business use, as in the instant case, courts generally have adopted a more liberal view. (See 6 A.L.R.2d 1227-37.) One reason for this is expressed as follows at page 1226-7 °f the annotation: “There is an outstanding difference between the properties heretofore considered and such properties as may be roughly termed business and industrial units. In the case of farms, ranches, timberlands, building lots and even residence properties, the remaining portion usually retains its intrinsic value, only incidentally impaired by the loss of the part taken and the use to which it is to be put. But when part of an industrial property is taken, the result is likely to be the destruction of the enterprise. This seems to call for a more liberal reading of the rule permitting severance damages where virtual contiguity is shown.”

Illustrative is Baetjer v. United, States, 143 F.2d 391, where the land not taken was separated by 17 nautical miles of water. The rationale of the court, stated at page 395, is convincing: “Integrated usé, not physical contiguity, therefore, is the test. Physical contiguity is important, however, in that it frequently has great bearing on the question of unity of use. Tracts physically separated from one another frequently, but we cannot say always, are not and cannot be operated as a unit, and the greater the distance between them the less is the possibility of unitary operation, but separation still remains an evidentiary, not an operative fact, that is, a subsidiary fact bearing upon but not necessarily determinative of the ultimate fact upon the answer to which the question at issue hinges.”

When this reasonable rule is applied to the facts here, there remains no doubt but that the court erred in refusing the respondents permission to introduce evidence in support of the cross petition.

Mr. Justice Bristow joins in the foregoing concurring and dissenting opinion.


source: Caselaw Access Project

author: Mr. Justice Schaeeer

license: Public Domain

text:
    (No. 33745.
    August A. Bauer et al., Appellees, vs. P. W. Sawyer et al.—(P. W. Sawyer, Appellant.)

      Opinion filed March 22, 1956
    Rehearing denied May 22, 1956.

      Werner W. Schroeder, of Chicago, Eva L. Minor, and Maynard R. BissonnETTE, both of Kankakee, for appellant.
    BuTz, Blanice & Stith, of Kankakee, for appellees.
   Mr. Justice Schaeeer

delivered the opinion of the court:

All of the parties to this action are doctors. Prior to March 31, 1954, they were associated together in a medical partnership known as the Kankakee Clinic. On that date Dr. P. W. Sawyer, the principal defendant, withdrew from the partnership and in May of 1954 he opened offices for the practice of medicine and surgery in the city of Kankakee. Five of the eleven remaining partners instituted this action, alleging that the partnership agreement prohibited a retiring partner from practicing medicine in the city of Kankakee and seeking an injunction to restrain Dr. Sawyer from violating the agreement. The other six remaining partners were joined as defendants. They admitted the allegations of the complaint, but sought no relief against Dr. Sawyer. Dr. Sawyer also admitted the allegations of the complaint, but defended on the ground that the partnership agreement contemplated that a withdrawing partner had the alternative right to perform the agreement or to pay liquidated damages. The case was submitted upon the pleadings and a stipulation of facts. The circuit court entered a decree dismissing the complaint. The Appellate Court reversed, (6 Ill. App. 2d 178,) and we granted leave to appeal.

The partnership agreement provides that the interest of an individual partner may be terminated by retirement based on physical incapacity, by voluntary withdrawal, or by expulsion for unprofessional conduct or for failure to carry out the provisions of the agreement. In each instance the remaining partners are to purchase the interest of the outgoing partner at a stated percentage of its value as shown on the partnership books: 100 per cent.in case of retirement for incapacity, 80 per cent in case of voluntary withdrawal, and 75 per cent in case of expulsion. By the agreement each partner covenants that after the termination of his interest he will not engage in the practice of medicine, surgery or radiology within a radius of 25 miles of Kankakee for a period of five years. The agreement also provides that if the former partner violates this covenant, he shall forfeit any unpaid portion of the purchase price of his interest. In the case of a partner withdrawing voluntarily, one half the purchase price is payable 30 days after withdrawal and the other half is to be evidenced by notes payable in one year which are to be delivered to an escrow agent, who is directed to cancel the notes upon certification by the remaining partners that the former partner has resumed practice. At the time of his withdrawal from the firm Dr. Sawyer was paid 40 per cent of the value of his partnership interest, and a note for the remaining 40 per cent was turned over to an escrow agent in accordance with the agreement. ,

Although Dr. Sawyer admits that he resumed practice in Kankakee in violation of the contract, he contends that the contract ought not to be specifically enforced against him, (1) because it is an unreasonable restraint of trade and contrary to public policy, and (2) because it contains a provision for liquidated damages which bars specific enforcement.

The principles governing cases of this kind were stated in Ryan v. Hamilton, 205 Ill. 191, 197, in which a contract by a physician not to engage in practice in a specified community was enforced by injunction: “That contracts in general restraint of trade are generally held to be illegal is beyond controversy. But the rule admits of well defined exceptions, and among the exceptions are contracts of the kind and character presented in this case. Contracts of this class, where the limitation as to territory is reasonable and there exists a legal consideration for the restraint, are valid and enforceable in equity, and in such cases relief by injunction is customary and proper.” (See also Storer v. Brock, 351 Ill. 643; Linn v. Sigsbee, 67 Ill. 75.) In determining whether a restraint is reasonable it is necessary to consider whether enforcement will be injurious to the public or cause undue hardship to the promisor, and whether the restraint imposed is greater than is necessary to protect the promisee. Hursen v. Gavin, 162 Ill. 377; Restatement of the Law, Contracts, secs. 515, 516.

In this case the interest of the public is in having adequate medical protection, and it is of course true, as suggested by Dr. Sawyer, that if the injunction is granted the number of doctors available in the Kankakee community will be reduced. A stipulation entered into by the parties, however, shows that there are now 70 doctors serving the area. We are unable to say that the reduction of this number by one will cause such injury to the public as to justify us in refusing to enforce this contract. In any case, there is no reason why Dr. Sawyer cannot serve the public interest equally well by practicing in another community. No special hardship to Dr. Sawyer appears which would justify the denial of relief in this case. He may resume practice in Kankakee after five years and in the meantime he may practice elsewhere. The territorial limitation to the city of Kankakee and the surrounding area is not, we think, unreasonable in the light of modern methods of transportation and communication. (Granger v. Craven, 159 Minn. 296, 52 A.L.R. 1356.) Agreements unlimited in time have heretofore been enforced, (Storer v. Brock, 351 Ill. 643; Ryan v. Hamilton, 205 Ill. 191; Linn v. Sigsbee, 67 Ill. 75,) although other authorities hold that the restraint must be limited in time as well as space. (Hursen v. Gavin, 162 Ill. 377; Lewis v. Krueger, Hutchison & Overton Clinic, 153 Tex. 363, 269 S.W.2d 798; Brecker v. Brown, 235 Iowa, 627, 17 N.W.2d 377.) We need not here consider whether a time limitation is essential, because in any event the present five-year period does not appear unreasonable. Shaleen v. Stratte, 188 Minn. 219, 246 N.W. 744.

It thus appears that the agreement is not contrary to public policy by the tests that have heretofore been employed. Dr. Sawyer contends, however, that the prior cases decided by this and other courts are distinguishable because they involved either the sale of an established practice or the taking of a newcomer into an established practice, as employee or partner. Pointing out that in this case there was no express sale of the practice of any of the partners, and each of the partners was a practicing physician when the agreement was entered into, he argues that “If there is no established practice sold and no newcomer as a potential usurper, there is no need for the restraint being enforced by injunction.”

With this contention we do not agree. No case is cited which holds that the members of a partnership may not by their agreement reasonably protect themselves against the competition of an outgoing partner. Indeed such agreements are classic illustrations of reasonable restraints of trade. “A legitimate method of enhancing the good will of continuing partners in professional, as well as commercial, partnerships is to secure forbearance from competition by a retired partner. He may agree not to compete, within reasonable limits as to time and space, and such an undertaking will be enforced by injunction.” (Crane on Partnerships, sec. 84.) “The contract of a partner not to compete with the partnership either directly or indirectly is not opposed to public policy; blit such an agreement must be ancillary to the relation or contract of partnership or to a contract by which a partner disposes of his interest.” (5 Williston on Contracts, sec. 1644; Restatement of the Law, Contracts, sec. 516, comment (f).) Our own decision in Storer v. Brock, 351 Ill. 643, enforced an agreement, entered into between two doctors upon the dissolution of their partnership, which restricted the future practice of the retiring partner. The distinction attempted to be drawn is without merit.

The most significant of the two remaining contentions of the defendant relates to the effect of the forfeiture clause. Under the partnership agreement the purchase price to be paid to an outgoing partner is payable in equal annual installments. In the event of a retirement for incapacity, there is one installment; if there is voluntary withdrawal, as in this case, there are two installments, and in the case of an ouster there are three installments. The first installment is payable thirty days after the withdrawal and notes are issued for the other installments. Interest is payable on the outstanding balance, and the partners have the privilege of prepayment. The notes are to be deposited with an escrow agent, who is directed to deliver them to the outgoing partner on the due date, unless the remaining partners have certified that the outgoing partner has breached the conditions of the agreement limiting his subsequent practice of medicine. If the remaining partners make such a certification, the agreement provides that the “escrow agent shall turn over and deliver the remaining unpaid notes to the makers thereof for cancellation, it being the intention of the parties hereto that the retiring or withdrawing Partner who has breached the [said] provisions * * *, shall thereby forfeit a portion of the value of his Partnership interest.”

Dr. Sawyer claims that the contract gave him the option to resume practice by giving up the unpaid portion of the value of his partnership interest, in this case $7451, which he characterizes as liquidated damages. Of course an agreement may be so formulated as to give an option to perform the contract or pay the stipulated damages. That was the case in Davis v. Eisenstein, 257 Ill. 260, where the agreement provided that “Upon payment thereof [of the stipulated liquidated damages] this contract is to become null and void.” That agreement was held to give an option to each party to perform the contract or to pay the stipulated damages. There is no similar language in the present contract. On the contrary, the entire agreement indicates the intention of the parties that the covenant restricting the future activiies of a former partner was intended to be enforced.

Upon the assumption that the provision contemplates liquidated damages, it is also argued that the existence of the liquidated damage clause bars the issuance of an injunction, and in support of the argument, Bartholomae & Roesing Brewing and Malting Co. v. Modzelewski, 269 Ill. 539, 547, is relied upon. That case was decided upon many grounds. Its statements to the effect that a provision for liquidated damages operates as a bar to an injunction have been sharply criticized. (Britton, Injunction to Restrain Breach of Negative Covenants, 1 Ill. Law Bulletin 56; Pomeroy, Specific Performance of Contracts in Illinois, 1 Ill. Law Bulletin 117.) In accordance with our earlier and later decisions and with the weight of authority elsewhere, (Lyman v. Gedney, 114 Ill. 388; Koch v. Streuter, 218 Ill. 546; Gronowski v. Jozefowicz, 291 Ill. 266, 275; Mackie v. Schoenstadt, 307 Ill. 398; see Restatement of the Law, Contracts, sec. 378,) we hold that even if the provision in question is construed as one for liquidated damages the right to an injunction is not barred. To the extent that the Modzelewski case may be thought to hold otherwise, it is overruled.

While this case was under advisement in the Appellate Court, the continuing partners, including the plaintiffs, certified to the escrow agent that the condition as to subsequent practice had been breached by Dr. Sawyer. Under the agreement the escrow agent was required to return the notes to the makers for cancellation. Dr. Sawyer contends that liquidated damages have been collected, and that it would therefore be inequitable to enforce performance of the agreement by injunction. Plaintiffs argue that their certification was made with the thought that the clause was a penalty, and that the certification so stated. They say that the penalty cannot be enforced in its face amount and that they are still liable to Dr. Sawyer for $7451, the amount of the notes, less such actual damages as may have been sustained by the partnership.

“An agreement, made in advance of breach, fixing the damages therefor, is not enforceable as a contract and does not affect the damages recoverable for the breach, unless (a) the amount so fixed is a reasonable forecast of just compensation for the harm that is caused by the breach, and (b) the harm that is caused by the breach is one that is incapable or very difficult of accurate estimation.” Restatement of the Law, Contracts, sec. 339, subsection (1).

In the present case it is not disputed that damages are difficult to ascertain. Indeed, plaintiffs’ complaint so alleges. The more difficult question is whether the parties intended to forecast and fix the probable damages which would result from a breach. We think that they did not, and that they intended the clause as an additional sanction, by way of penalty, to enforce performance of the covenant not to re-engage in practice. In determining intent the language used by the parties is significant. Here, the parties speak not in the language of damages, but in terms of forfeiture. Although it is not controlling, the use of the word “forfeit” tends to exclude the idea of liquidated damages. (Steer v. Brown, 106 Ill. App. 361, 365.) So, too, the method of payment suggests that the purpose of the parties was to secure performance rather than to settle damages. The money is withheld, in this instance for a year, in the case of an excluded partner for two years. If settlement of damages alone had been intended, it would have been sufficient to have provided for initial payment of the value of the partnership interest, and for subsequent recovery of the stipulated amount of damages in the event of breach.

There are other indications that the purpose of the clause was not to fix the amount of damages. Although the covenant not to re-engage in practice runs for five years, the clause in question covers only one year in the case of a withdrawing partner and only two years in the case of an expelled partner. No satisfactory reason explains why the provision, if it is for liquidated damages, does not cover the entire period of the restraint. Nor, assuming that the clause is a liquidated damage provision, is there any satisfactory explanation of what is to happen if a breach occurs after the escrow agent has delivered the notes to the outgoing partner. It can hardly be assumed that no damages at all were intended. The suggestion of defendant that the plaintiffs would then be entitled to an injunction, or to actual damages, as assessed by a court or jury, has no support in the language of the clause.

Nor does the clause fulfill the requirement that the amount of damages fixed be a reasonable forecast of just compensation for the harm caused by the breach. The defendant suggests that a percentage of the value of the partnership interest is probably as good a measure of damages as any test which could be devised by a court or jury. Assuming that, no reason appears for the discrimination between withdrawing and expelled partners. If a breach occurs during the first year, an expelled partner loses 50 per cent of the value of his interest in the partnership, while a withdrawing partner loses only 40 per cent. If a breach occurs during the second year an expelled partner would lose 25 per cent, while a withdrawing partner would presumably be liable for actual damages, whether they were greater or less than 25 per cent of the value of his interest. These differences seem to us impossible to explain on the assumption that the clause was intended as a forecast of just compensation for the harm caused by a breach. The reason for this discrimination does not appear to be that there would be greater damage in the case of a breach by an expelled partner, but rather that there was thought to be greater likelihood of a breach. Accordingly, more stringent sanctions to secure performance were inserted.

Defendant Sawyer argues that the failure to provide damages for a breach occurring in the second and following years, in the case of a withdrawing partner, may be explained on the ground that a physician’s goodwill would be largely lost if he remained out of practice for a year, and damages in that situation would be negligible. But even if we assume that a withdrawing physician’s goodwill is as perishable as defendant suggests, we are unable to understand why an expelled physician’s goodwill would last longer.

We conclude that the provision is a penalty and that the partners therefore remain liable to Dr. Sawyer in the amount of the outstanding unpaid balance. Plaintiffs’ conduct was not, we think, inequitable or inconsistent with their theory of recovery and does not bar injunctive relief. The issuance of an injunction need not await the assessment of interim damages and the determination of a net balance.

Dr. Sawyer’s final contention is that the Appellate Court lacked jurisdiction to reverse the trial court, because the trial court was composed of three judges and therefore lacked jurisdiction to enter a valid final judgment. The record shows that because of the importance of the questions presented by this case the three judges of the Twelfth Judicial Circuit decided to hear the case en banc. We are of the opinion that if there was error in the organization of the court, it was waived by the defendant’s failure to raise the objection in the trial court. People v. Link, 365 Ill. 266; People ex rel. McCollum v. Board of Education, 396 Ill. 14.

The judgment of the Appellate Court, reversing the decree of the trial court and remanding the cause with directions to issue the injunction, is affirmed, with further directions to proceed in accordance with the views expressed herein. '

Judgment affirmed.


author: Mr. ChiEE Justice Hershey

text:
    (No. 33754.
    Edward A. Miller, Appellant, vs. Blanche Conrad Siwicki et al.—(Blanche Conrad Siwicki, Appellee.)

      Opinion filed March 22, 1956
    Rehearing denied May 22, 1956.

      Kellam Foster, of Chicago, for appellant.
    Charles F. Grimes, and William B. Garrett, both of Chicago, (Albert Hassell, of counsel,) for appellee.
   Mr. ChiEE Justice Hershey

delivered the opinion of the court:

The plaintiff-appellant, Edward A. Miller, appeals from a judgment of the superior court of Cook County, which denied him relief in ejectment and set aside a deed by which he claimed title to the property. A freehold being involved, the case comes to us on direct appeal.

The property, comprising two lots and located at 3332-4 South Morgan Street in Chicago, was acquired by Onufry Iwaszkiewicz in 1909. In 1918, White Eagle Brewing Company obtained a $1360 judgment against him in the superior court of Cook County, which he never paid. He died intestate in 1922, and his estate was administered in the probate court of Cook County. This property was inventoried as an asset of the estate.

On December 12, 1924, before administration was completed, White Eagle Brewing Company filed in the probate court a notice of its unpaid judgment and asserted a lien against the property. The notice recited that the administrator and his attorney had been notified of the brewing company’s intention to levy upon and sell this real estate to satisfy the judgment. On the same day, an alias execution was issued.

White Eagle Brewing Company assigned its judgment to Leo S. Mallek on April 7, 1925. On that date, the sheriff sold the property to Mallek at public vendue for $1903.02 and returned the execution satisfied. The execution bore conflicting returns, one reporting a levy upon the property and the other stating no property of Onufry Iwaszkiewicz had been found in the county. Written on the execution and dated April 14, 1925, is Mallek’s receipt in satisfaction of the execution. Thereafter Mallek obtained a certificate of sale, and on September 30, 1926, he received a sheriff’s deed.

Mallek then made arrangements with Martin Gorski, an attorney, to have the latter take possession of the property and manage it for him. Gorski collected rents, spent money for repairs and generally supervised the property until his death in 1949. At various times during this period, however, there were tax receivership proceedings, with tax receivers appointed who collected rents, paid bills and made repairs to the property.

On February 23, 1945, Mallek conveyed the property to the defendant-appellee, Blanche Conrad Siwicki. On December 11, 1947, the plaintiff obtained a quitclaim deed to the property from Harriet Iwaszkiewicz, who- was sole surviving heir of Onufry Iwaszkiewicz. The plaintiff paid Harriet Iwaszkiewicz $300 for this deed, which also conveyed a parcel of real estate across the street from the property in question.

The plaintiff filed his ejectment suit on December 1, 1948, claiming title by virtue of his deed from Harriet Iwaszkiewicz. The defendant based her claim of ownership on her deed from Mallek. The defendant also alleged that the plaintiff’s suit was barred by limitations and laches, and by counterclaim asked the court to set aside his quitclaim deed as a cloud on her title.

The cause was referred to a master. He died before all evidence was in; but by stipulation a transcript of the testimony before him was received in evidence, and the trial court heard the other witnesses.

The court found the issues for the defendant, denying the plaintiff relief in ejectment and setting aside his deed as a cloud on the defendant’s title.

In his brief, the plaintiff relies mainly upon certain alleged defects in the proceedings which preceded the issuance of the sheriff’s deed to Mallek in 1926. He contends that the deed was void because the record fails to show service upon the administrator of the estate of Onufry Iwaszkiewicz or notice in writing of the existence of the judgment as provided by statute and also because the levy was made under an execution which was returned “no property found and no part satisfied.”

In our opinion, however, it is not necessary to determine these questions, for we believe the plaintiff is barred by laches from attacking the validity of that deed. The defendant pleaded laches as a special defense, and this, even though an equitable defense, can be interposed in an ejectment action. Cf. Stein v. Green, 6 Ill.2d 234; Horner v. Jamieson, 394 Ill. 222.

In a long line of cases we have held that one who challenges the title to real property must be diligent both in discovering that which will invalidate the title and in applying for relief. (Freymark v. Handke, 415 Ill. 360; Stoke v. Wheeler, 391 Ill. 429; McKey v. McKean, 384 Ill. 112; Capper v. Poulsen, 321 Ill. 480; Oakley v. Hurlbut, 100 Ill. 204; Prather v. Hill, 36 Ill. 402.) The question of laches does not turn merely upon the passage of time, however, but depends upon whether, under all the circumstances of the particular case, the plaintiff is chargeable with want of due diligence in failing to institute proceedings before he did. Whenever there is such a change in the relations of the parties or the subject matter as to render it inequitable to grant relief, it will be refused without reference to the statutory period of limitations. (McKey v. McKean, 384 Ill. 112.) Reasons for invoking the doctrine of laches were expressed as follows in Dempster v. Rosehill Cemetery Co. 206 Ill. 261 at page 263: “By reason of the lapse of time the memories of men have failed; death has intervened; records and accounts that, when inspected by those who made them, could have been understood and readily explained from the current history contained in them, have by flight of time and the death of those acquainted with the details, from the barrenness of their statements and the imperfect manner in which they were kept, become of doubtful value and uncertain indices of the transactions they were intended to preserve.”

In the instant case, the defendant’s predecessor acquired his deed in 1926 and immediately took possession of the property through an agent. The record does not disclose whether any of the heirs of Onufry Iwaszkiewicz had actual knowledge of this deed, but actual knowledge is not necessary to charge them and their grantees with laches. For if the circumstances are such as to put them upon inquiry, neglect or failure to check available records may charge them with laches the same as if they had known the facts. The notice in the probate court was of public record and for the parties constituted constructive notice. (Stoke v. Wheeler, 391 Ill. 429.) Likewise, when Mallek recorded the deed in 1926, the existence of the deed became a matter of public record. In spite of the constructive notice effected by these public records, no action was taken to set aside the deed until twenty-two years had elapsed, more than the statutory period of limitations. In addition, there is uncontradicted evidence in the record that Harriet Iwaszkiewicz, the plaintiff’s grantor, lived across the street from the property in question for at least a portion of this time and voiced no protest.

Further, during the intervening years in which the plaintiff and his predecessors neglected to take any action to set aside the deed, many of the records with respect to the improvements made upon the property by Hállele were lost or destroyed, and Gorslci, the one person who would have been in the best position to testify with respect to such improvements, had died. And in addition to the loss of evidence by reason of the long delay, injustice would result from the fact that the original judgment has been barred by limitations and can no longer be revived.

The trial court was correct in holding that the plaintiff was barred by laches from contesting the defendant’s title. For that reason we find it unnecessary to decide whether the sheriff’s deed would have been subject to attack had suit been instituted in apt time, nor is it necessary to consider the other special defense of adverse possession.

The judgment of the superior court of Cook County is affirmed.

Judgment affirmed.


author: Mr. Justice Kringbiee

text:
    (No. 33919.
    L. D. Bean, Appellant, vs. McDonough County Hospital District et al., Appellees.

      Opinion filed April 23, 1956.

      Hunter & Warden, of Quincy, for appellant.
    James C. Gumbart, of Macomb, for appellees.
   Mr. Justice Kringbiee

delivered the opinion of the court :

L. D. Bean, for himself and other owners of taxable property in McDonough County Hospital District, filed suit in the circuit court of that county seeking to restrain the district and its officers from issuing certain bonds. A motion by defendants to dismiss was granted, and plaintiff elected to stand on the complaint, appealing to- this court from the decree dismissing the suit.

The hospital district is a municipal corporation having boundaries coterminous with those of the county. Its board of directors, without holding a special election, authorized the issuance of general obligation bonds in the amount of $1,680,000. The complaint then alleges that iRá per cent of the value of the taxable property in the district amounts to $1,689,778.77; that the county owns and operates a tuberculosis sanitarium; that under applicable statutes the district is obligated to take over the sanitarium and reimburse the county for its expenditures in acquiring the facilities; and that if the hospital district issues the aforesaid bonds, the amount thereof together with the undetermined sum payable to the county for the sanitarium facilities will be greatly in excess of per cent of the value of the taxable property in the district, contrary to- law.

Section 21 of the Hospital District Law (Ill. Rev. Stat. 1955, chap. 23, par. 163.50,) declares that a district may finance part or all of the cost of hospital facilities by issuing bonds. The permissible amount of such bonds is limited to 1 y per cent of the value of taxable property in the district unless the issuance of bonds is approved at a special election, in which case the limit is 5 per cent.

Section 23 of the Hospital District Law (Ill. Rev. Stat. 1955, chap. 23, par. 163.52,) provides that in case a district is coterminous with “any pre-existing public agency authorized to own, operate and maintain a public hospital,” then such public agency shall cease to exercise any power in respect to- hospitals within the district “from and after the date that it receives written notice from the Director of Public Health.” Such notice is to be given only after the Director has ascertained that the district has placed its hospital facilities in operation. Provisions then follow relating to- reimbursement by the district, within designated periods of time, for the expenditures made by a “pre-existing public agency” in acquiring “hospital facilities” which it may then be operating within the corporate limits of the hospital district.

To reverse the decree plaintiffs contend that the county tuberculosis sanitarium is a public hospital within the meaning of the act, that its ownership and operation by the county gives rise to a present debt of the hospital district, and that the amount of such debt, together with the proposed bonded indebtedness, exceeds the lawful limit of iy2 per cent of the value of taxable property in the district. The position is untenable for the reason, inter alia, that there is no present indebtedness of the district. That section 23 does not ipso facto create a debt is evident not only from the requirement that notice to the “pre-existing public agency” must first be given by the Director of Public Health but from the obvious fact that the amount of any possible future indebtedness is not yet ascertained. It is well established that prior to the extension of credit to a municipality for the cost of public improvements or facilities, and in the absence of a showing that the municipality is not ready to raise the amount by taxation, no debt is created therefor. (See People ex rel. Toman v. Crane, 372 Ill. 228, 232-233; Jacksonville Railway Co. v. City of Jacksonville, 114 Ill. 562, 567-568.) The fact that under the statute the hospital district may in the future become obligated to take over and pay for the sanitarium, in the event statutory steps are taken, does not show a presently existing indebtedness. More is required than mere possibilities or expressions of intention. (See People v. City of Chicago, 349 Ill. 304, 337.) Even a formal resolution or election authorizing the issuance of bonds establishes no indebtedness of itself. The indebtedness is created only when the instruments are in fact issued and delivered. (Austin v. Healy, 376 Ill. 633.) A fortiori, the obligation contemplated by section 23 cannot exist until the statutory steps have been taken and the amount to be paid has been determined.

The contention of plaintiffs is further refuted by the language of section 21, which places a limit only on the amount of “bonds” that may be issued. Manifestly there are forms of indebtedness other than bonds, and section 23 makes no reference to bonds. There is no reason to believe that this difference in terminology was intended to be without significance. Moreover, limitations on indebtedness may contemplate that the liability to pay be voluntarily incurred, (see City of Springfield v. Edwards, 84 Ill. 626, 632,) thus presenting the question, which we find unnecessary to the present decision, whether the payment contemplated by section 23, if postponed, would in any event be included for limitation purposes. Other questions are presented a discussion of which is likewise unnecessary.

The proposed bond issue is within the limitation prescribed by statute, and the circuit court was therefore correct in dismissing the suit. The decree is affirmed.

Decree affirmed.


author: Mr. Chief Justice Hershey

text:
    (No. 33823.
    Effie Sellers et al., Appellants, vs. William Howard Archer et al., Appellees.

      Opinion filed March 22, 1956
    Rehearing denied May 22, 1956.

    Joseph H. Horwich, of Chicago, for appellants.
    Henry E. Sasso, of Chicago-, (William PellicorE, of counsel,) for appellee Hazel Tabb Jackson.
   Mr. Chief Justice Hershey

delivered the opinion of the court:

This appeal from the circuit court of Cook County raises a narrow future interest question — whether the grant of a life estate to an unmarried boy of 15, with remainder over to “the heirs of his body,” violates the rule against perpetuities.

The issue arose on complaint for partition by certain collateral heirs of Frost Sellers, the testator. They asked the court to construe the following provisions of his will and to declare void the remainder interests therein created:

“Second: I give, devise and bequeath unto my stepdaughter, Hazel Tabb Jackson, now past the age of her majority and married, a life estate in and to all of my property real, personal and mixed.
“Third: I give, devise and bequeath unto my stepdaughter, Hazel Tabb Jackson, the premises known and described as: [here the legal description of two parcels was inserted], for her natural life and at her death to James Phil Robinson, her son, for his natural life, and at his death, to the heirs of his body.”

At the time of the testator’s death in August, 1953, the beneficiaries, Hazel Tabb Jackson and James Phil Robinson, were living, the latter then being 15 years old and unmarried.

On motion of defendant Hazel Tabb Jackson, the trial court dismissed the complaint.

The plaintiffs’ position on this appeal is summarized in the following quotation from their brief: “A grant of a life estate to an unmarried boy of 15, with remainder over to ‘the heirs of his body,’ is void in that it violates the rule against accumulation and the rule or statute against perpetuities, for the reason that at the time the estate was created — the date the will was admitted to probate — he had no ‘heirs of his body’ and the likelihood of the estate not vesting within a life or lives in being and 21 years thereafter is great, for he may never marry and consequently will never have any ‘heirs of his body.’ ”

As regards the plaintiffs’ reference to the rule against accumulations, it is sufficient to note that neither clause of the will requires any income to be accumulated. Hence, there obviously could be no violation of the statute against accumulations.

Nor is there a violation of the rule against perpetuities. The remainder interests will vest, if at all, no later than the death of a life in being, James Phil Robinson. But the plaintiffs speculate that “he may never marry and consequently will never have any ‘heirs of his body.’ ” That possibility has no bearing upon the application of the rule against perpetuities. Indeed, in every case where the interest is not presently vested, there is some uncertainty as to whether it will ever become vested. The rule against perpetuities is designed merely to insure that the vesting in title, if and when it happens, takes place within the time fixed by the rule.

Por the reasons stated, the action of plaintiffs in asking for partition was premature, and the trial court properly dismissed their complaint. Hill v. Sangamon Loan and Trust Co. 295 Ill. 619.

The decree of the circuit court of Cook County is affirmed.

Decree affirmed.


author: Mr. Justice Bristow

text:
    (No. 33700.
    In re James P. Moore, an Attorney, Respondent.

      Opinion filed March 22, 1956
    Rehearing denied May 22, 1956.

      Reynolds M. Everett, of Galva, for commissioners.
    John E. ToomEy, of Chicago, for respondent.
   Mr. Justice Bristow

delivered the opinion of the court:

This disciplinary proceeding is heard upon the exceptions of respondent James P. Moore to the findings and recommendations of the Board of Governors of the Illinois State Bar Association sitting as commissioners of this court.

The sole issue is whether the commissioners’ findings that respondent was guilty of the charges of solicitation and advancement of funds to a client were supported by clear and convincing proof and warranted his suspension from practice for one year.

From the record it appears that respondent was admitted to practice law in Illinois in 1934, and was employed in the legal departments of the Aetna Surety and Lumbermen’s Mutual Insurance companies until September, 1949, when he entered the private practice of law in Waukegan, which practice was predominantly in the personal injury field. On December 1, 1949, respondent was appointed public administrator of Lake County and held office until his resignation in February, 1953. On March 20, 1953, the vice-president of the Lake County Bar Association received a letter sent by a Mississippi attorney to the judge of the probate court of Lake County protesting that respondent was acting as public administrator for the estate of Exer Coggins, a resident of Lake County who formerly lived in Mississippi. Thereafter the Illinois State Bar Association was asked to make an inquiry.

The original complaint was filed on October 17, 1953, by the inquiry division of the Illinois State Bar Association and contained three counts. Although two additional counts were filed, the Board of Governors on reviewing the report of the committee on grievances sustained only counts 2 and 5, hereinafter referred to as the Harbin and Williams counts, relating to the offenses of solicitation and advancement of funds, and recommended suspension from practice for one year.

With reference to the Harbin count, it appears that respondent, as public administrator, was charged with the administration of the estate of Exer Coggins, who was killed in an automobile accident in Wisconsin. Respondent assigned Don Sherman to' investigate the accident and secure data relating to Coggins’s heirs. Sherman interviewed Harbin, a passenger in Coggins’s car and the only eyewitness to the accident, at the hospital. According to Harbin’s testimony Sherman introduced himself as respondent and said that he would like to help Harbin, who replied that he wanted to turn the case over to an attorney in Mississippi. Sherman left with Harbin a portion of respondent’s letter head, on which the name Don Sherman was written. After remaining at the hospital for four days, Harbin went to the home of his brother in Zion, Illinois, where, according to his testimony, Don Sherman visited him again and explained that he was told by the Mississippi attorney that it would be all right for him to have Harbin’s case, and that, at the instance of Sherman, Harbin signed a written contract for respondent to handle the case. No such written contract was offered in evidence, and Harbin admitted that some 12 days after the accident he telephoned Sherman and went down to the office where he found respondent, and retained him after he found out who respondent was. Harbin testified further that respondent advanced him approximately $700 during the pendency of his case.

In rebuttal respondent testified that he had asked Sherman tO' investigate the accident involving Coggins and obtain information of heirship. The investigation involved two trips to Mississippi, for which Sherman was paid $250 based upon a daily rate of $35 a day and travelling expenses. Respondent testified further that he first met Harbin in his office in October, 1953; that he was asked by Harbin if he were handling the case for the Coggins family and if he would handle his case also; that there was no written contract but only an oral agreement between the parties. He explained that the advances to Harbin amounted to some $400 and were given to pay local Wisconsin counsel to get Harbin out of a Kenosha jail where he was held on a robbery charge, to help him at the time of his marriage, and when his car was taken from him for lack of payment. Respondent stated that the advances were made because Harbin was the only surviving witness to an accident in which respondent’s other clients were involved, and consequently he felt that he had to treat Harbin carefully and the latter knew it.

With reference to the Williams count it appears that Matt Williams, a 50-year-old iron molder employed by the Nash-Kelvinator Company, was injured in an automobile accident on October 6, 1950, and was hospitalized at the St. Therese’s Hospital in Waukegan for some three days, after which he went to a friend’s home. According to Williams’s testimony, respondent called him on the phone to ask for his case, and later came to the home where he was staying and asked him if he wanted a good lawyer, stating that he could get him more money than he ever had in his life.

Complainant also offered the testimony of Joseph Kaufer, a lawyer, who testified at length as to matters that took place outside the presence of respondent, involving a conversation with Kaufer’s client who was injured in the same accident as Williams, from which Kaufer deduced that respondent solicited the Williams case. Kaufer also related how he took Williams to respondent’s office and accused him of misconduct. Respondent not only failed to deny or explain his solicitation but promptly offered to relinquish his interest in the Williams case. This bore a strong implication of guilt.

In rebuttal respondent explained that on a Sunday afternoon, in the company of his wife, he stopped to see Williams to collect a hospital bill for the St. Therese’s Hospital, which he represented. He gave Williams his card, informed Williams that he represented the hospital, and asked Williams to assign the hospitalization insurance carried by Nash-Kelvinator employees to the hospital, since in many cases such insurance, payable to- the individual, was not paid over to- the hospital. Williams agreed to go to the hospital to execute the assignment. In his testimony, moreover, Williams admitted that respondent stated that he represented the hospital and did ask Williams to assign his insurance. Furthermore, after respondent settled the case for $600 and paid the hospital bill, he refunded to Williams the amount of the hospitalization check which had been assigned.

Respondent’s wife corroborated his testimony and stated that she went with him to North Chicago in October, 1950, to see two colored gentlemen, and that a conversation took place beside the open door of their car between her husband and Williams with reference to the payment of the hospital bill.

Respondent also offered in rebuttal a letter from the hospital authorities stating that he had been requested by the hospital to interview Williams and direct him to make an assignment of any hospitalization insurance he carried. That letter, written by one of the Sisters, further stated: “I recall this particular matter because Mr. Joseph Kaufer called and asked if Mr. Moore had a right to call on Matt Williams. This hospital has given Mr. Moore the right to call on patients, and in many instances have advised them that Mr. Moore will contact them about their delinquent bills.”

On the basis of substantially the foregoing evidence the commissioners found respondent guilty of the charges of solicitation and advancement of funds, and of conduct that brings the legal profession into disrepute; and, therefore, recommended that he be suspended from practice for one year.

Respondent has excepted to those findings, and contends that they are not sustained by the requisite clear and convincing proof; that he did nothing but what any reasonable, practical and competent lawyer would have done under similar circumstances; that the evidence establishes that he did not solicit either of the cases, but on the contrary agreed to represent the individuals mentioned in counts 2 and 5 because their cases were intimately related to cases in which he was already representing clients, and in no respect involved a conflict of interests; and that the advancement of funds had no relation whatever to the alleged solicitation, but was injected into the commissioners’ findings only to prejudice his cause.

In determining whether the findings and recommendations of the commissioners should properly be sustained, it is established that although the canons of ethics are not laws, they do constitute a safe guide for professional conduct, and that, in the interest of protecting the public, disciplinary measures may be imposed if the canons are not observed. (In re Mitgang, 385 Ill. 311; In re Melnick, 383 Ill. 200, 206.) However, the power to discipline is not arbitrary, and must be exercised with legal discretion and caution. Proof of the charges must be established by clear and convincing evidence, and the record must be free from doubt not only as to the act charged, but as to the motive with which it was done. In re Lasecki, 358 Ill. 69; In re Donaghy, 402 Ill. 120, 123.

The charges presented against respondent herein were instituted by the Lake County Bar Association at the instigation of a Mississippi attorney, and relate to solicitation of two clients and the advancement of funds to one of those clients. Solicitation of cases, while not fraught with moral turpitude, is, nevertheless, inimical to the good reputation of the bar and likely to bring the profession into disrepute, and therefore has been deemed to warrant suspension under some circumstances. (In re Veach, 1 Ill.2d 264.) Courts, however, are reluctant to expound a fixed rule of what constitutes solicitation of legal business to warrant disbarment or suspension.

With reference to the charges relating to the Harbin case, it is clear that the employment of an investigator is not unethical per se, and it cannot be inferred from such employment that the attorney is engaged in ambulance chasing. (In re Mitgang, 385 Ill. 311; In re Donaghy, 402 Ill. 120.) Respondent’s payments to Don Sherman for his services were based upon the rates paid investigators and were paid irrespective of recovery in the case and were in no way contingent upon recovery, and therefore his employment could not of itself be deemed improper.

The evidence is controverted as to whether Sherman represented himself as Moore and asked Harbin for his case. The only evidence in support of that charge is the testimony of Harbin. In denying the charge, as hereinbefore noted, respondent explained that Sherman visited Harbin to investigate the accident in which Exer Coggins was killed, since respondent, as public administrator, represented the Coggins estate, and Harbin was the only surviving eyewitness to the accident. Under those circumstances, corroborated by the testimony of Sherman, it is apparent that it was advantageous to respondent’s client, the Coggins estate, that respondent have Harbin’s good will, and even that respondent represent Harbin. Hence, if respondent, or Sherman, on his behalf, did act aggressively in this matter, it was not done with improper motives.

Moreover, inasmuch as the paper left by Sherman on his first visit to Harbin bore Sherman’s own name on it, thereby suggesting that Sherman did not represent himself as respondent; and since Harbin admitted in his testimony that he agreed to have respondent represent him when he found out who he was, it does not appear that there was any misrepresentation or deceit practiced on Harbin. Respondent’s conduct, furthermore, in no way infringed the legal rights of any other attorney, since there was no evidence that the Mississippi lawyer ever had a contract with Harbin, written or oral.

With reference to the charge of solicitation in the Williams case, it appears that, in rebuttal of Williams’s testimony that respondent telephoned and asked for his case and then came out to see Williams, respondent offered the explanation, supported by a letter written by one of the Sisters of the St. Therese Hospital, that respondent went to see Williams at the request of the hospital authorities to ask him about the payment of his hospital bill and to procure an assignment of Williams’s hospitalization insurance. Moreover, Williams admitted that respondent informed him that he came to collect the hospital bill, and requested him to assign his hospital insurance, which he did.

Under these circumstances we cannot agree with complainant that this was an unusual course of conduct for respondent, particularly in the light of the hospital practice of demanding such assignments, since hospitalization payments made to individuals are not always forwarded to the hospital. It may be that respondent, after discussing the hospital bill, offered to accept Williams’s case since it would also be to the interest of the hospital if Williams were to recover additional funds for his injury. We cannot approve of respondent’s conduct even though his hospital ruse gave him a basis of introduction and afforded a laudable motive for proper representation so that money would become available for the payment of the bill which he had for collection. However, the instant transgression does not approach the venality and moral turpitude appearing in the Veach case so much relied upon by complainant. In that case the complainants against Veach were his former clients, and the evidence with reference to solicitation was exhaustive, rather than predicated on two instances as in the case at bar. Veach maintained no office, would neither try cases nor employ able counsel to try them, would solicit both sides of cases, and would betray clients by quick settlements far below the sum to which the clients would normally be entitled. In addition, he obtained contracts of employment from injured persons while they were in the hospital under the influence of pain relieving drugs and in no condition to transact business.

With reference to the charge of advancement of funds to Harbin during the pendency of the litigation complainant contends that such conduct violates canon 42. That canon provides: “A lawyer may not properly agree with a client that the lawyer shall pay or bear the expenses of litigation; he may in good faith advance expenses as a matter of convenience, but subject to reimbursement.”

In the instant case respondent made no practice of advancing money to clients, but loaned sums to this particular client who was also the sole eyewitness in an accident in which another client was killed. The payments were made to get the witness out of jail, to help him out at the time of his marriage, and in connection with payments on his car; they were not made as a means of soliciting the case, or in connection with any agreement to purchase an interest in the litigation. Respondent was confronted with an individual who recognized his indispensability as a witness in the principal action involving the Coggins estate, and who was not reticent in using threats and demands for money. Respondent realized that it was important that Harbin not only remain out of jail and available as a witness but that he should not become unfriendly. Under the circumstances we would deem it harsh to condemn respondent for making the advancements. Certainly such conduct is not of such discreditable character that disbarment or suspension should follow. In re Donaghy, 402 Ill. 120, 135.

On the basis of our analysis we fail to find in this record evidence of solicitation and other improper conduct of such clear and positive character that suspension should follow. Consequently the report of the commissioners must be rejected. However, we are of the opinion that respondent’s conduct warrants censure.

Respondent censured.