author: Mr. JUSTICE GOLDBERG

text:
    J. Joseph Corbett et al., Plaintiffs-Appellants, v. Devon Bank et al., Defendants-Appellees.
    (No. 56690;
    First District (1st Division)
    June 25, 1973.

      Fohrman, Lurie, Holstein, Sklar & Cottle, Ltd., of Chicago, (Paul M. Lurie, of counsel,) for appellants.
    McCarthy, Scheurich, Duffy & McCarthy, of Chicago, (John M. Duffy, Daniel J. McCarthy, and Stephen A. Snakard, of counsel,) for appellees.
   Mr. JUSTICE GOLDBERG

delivered the opinion of the court:

This proceeding is a class suit which seeks to halt renewal sales of Illinois motor vehicle licenses through various banks in the state, and an accounting for service charges paid to the banks. The named plaintiffs, J. Joseph Corbett, Gerald M. Penner and Charles Cohn, have appealed from an order entered by the circuit court sustaining the motions of various defendants and dismissing the suit for want of equity. Plaintiffs joined as named defendants some 34 banks doing business in Illinois. Plaintiffs also joined, as class defendants, all other banking institutions in Illinois which have collected service fees in connection with these transactions. The named defendants as well as the class defendants will be referred to as “defendants”, as they are in the pleadings. The Secretary of State of Illinois (Secretary) was also named as a defendant.

The pertinent facts appear from the properly pleaded allegations of the second amended complaint, admitted by the motions to dismiss. (Holiday Magic, Inc. v. Scott, 4 Ill.App.3d 962, 963, 282 N.E.2d 452 and cases therein cited.) The second amended complaint alleged that plaintiffs brought the suit individually and on behalf of all other persons similarly situated who have obtained Illinois motor vehicle registration plates since 1965 and who will in the future obtain such plates from defendants and who have paid and will in the future pay service charges to defendants in connection with such purchases. The defendants had entered into written agreements with the Secretary which designated them as his authorized agents for the distribution of renewal license plates for passenger cars and for the collection of the statutory fees from plaintiffs. A copy of the agreement was appended to the complaint.

It was also alleged that the only authorization for the collection of such fees and charges by defendants is that set forth in the applicable statute. The statute provides for purchase of motor vehicle licenses by the owners thereof, and for payment by them to the Secretary of annual registration fees at specified rates. (Ill. Rev. Stat. 1971, ch. 95½, par. 3— 806.) Each of the named plaintiffs had obtained license plates from the Secretary in the past and they had, after 1965, purchased these license plates from one of the named defendant banks. In each such instance, before the bank would issue the license plates, it had required payment from the named plaintiffs, and from other members of the class represented herein, of a service fee of $1 for each set of plates for each year. The second amended complaint described these charges as “unlawful.” It alleged that the Secretary had allowed and assisted such unlawful activity by furnishing the defendants with license plates for distribution.

The second count of the second amended complaint adopted the principal allegations of the first count. In addition, it alleged that all of the defendants were either state banks governed by the Illinois Banking Act (Ill. Rev. Stat. 1971, ch. 16½) or were national banks governed by the National Bank Act (Title 12, United States Code) and by regulations issued pursuant to these statutes. It further alleged that there was no authority in these statutes or regulations for defendants to distribute license plates and to profit from this service by charging fees in addition to those authorized by statute.

The second amended complaint prayed a variety of relief: a declaration that the service fees required by defendants for 1966 to 1971 inclusive were illegal and unlawful and for injunction against this practice; an accounting by defendants to plaintiffs for all charges thus wrongfully collected plus interest during the specified and subsequent years; an order segregating all funds thus wrongfully collected; injunction preventing the Secretary from furnishing license plates to defendants or otherwise assisting them in the wrongful practice; injunction restraining defendants from collecting service charges from plaintiffs; injunction against prosecution of other actions in any court involving plaintiffs in the same class and raising substantially similar issues; and, finally, allowance of reasonable attorneys fees.

The written agreements entered into between the defendants and the Secretary provided that the bank was to purchase at its own cost a machine used to validate renewals of motor vehicle licenses. The signatory banks were authorized to issue only renewal license plates for passenger automobiles. The bank agreed to send at least two employees for training by the Secretary regarding proper procedure in issuance of the plates. The bank assumed full responsibility for transporting a supply of license plates to its place of business and for returning unsold plates to the Secretary within two weeks after the last official date for purchase thereof. The bank agreed to keep all license plates safely in its custody and to indemnify the Secretary and the State of Illinois against loss of such plates and of revenues received by the bank. All such revenues were to be transmitted daily to the Secretary in Springfield. The bank assumed full responsibility for furnishing the required help. In addition, the bank was to obtain a proper bond holding the Secretary harmless against all acts or failure to act by the bank or its employees and copies of this bond were to be furnished to the Secretary.

The record shows three separate motions to dismiss the second amended complaint. One of the motions stated that Count I failed to state a cause of action because the claims of the individual plaintiffs against defendants were all separate and independent without community of interest; plaintiffs have received the full benefit of voluntary transactions and that the decision in the Remittance Agents case is dispositive of the issues raised. (Illinois Association of Remittance Agents v. Powell, 122 Ill.App.2d 322, 258 N.E.2d 827.) As to Count II, the motion set forth that no cause of action was stated because the claims of members of the purported class were distinct and independent without community of interest; the validity of transactions engaged in by the banks could not be questioned by private parties who were voluntary participants, who received the full benefit of the transactions and were not injured therefrom; and, also, that plaintiffs were not creditors, shareholders or competitors of the banks; further, that the collection of service charges by the banks was permitted by law. Similar motions to dismiss were filed by certain of the remaining banks.

In this court, plaintiffs urge that the banks have no authority to charge for this type of service. Under this heading, they contend that no such authority results from statutes or regulations; the banks cannot charge amounts in excess of that established by statute; the agreements between plaintiffs and defendants were void as against public policy and permitting recovery by plaintiffs would advance enforcement of public policy. Plaintiffs also urge that this court is not bound by the previous decision in Illinois Association of Remittance Agents v. Powell, 122 Ill.App.2d 322, 258 N.E.2d 827 (leave to appeal denied), decided in the Fourth District of this court in 1970. Plaintiffs have also argued at length that their complaint constitutes a valid class action characterized by community of interest of plaintiffs in a dominant and pervasive issue.

This court has been favored with two separate briefs expounding the theories of defendants. One bank has filed its individual brief and another brief has been filed in behalf of a great many other defendant banks. These briefs urge that service charges paid to the banks may not be recovered because they were voluntary payments. They contend that collection of these charges is not ultra vires or outside the authority of the ■ state and national banks; and, regarding completed or executed transactions, plaintiffs may not recover on the ultra vires theory. In this connection, defendants urge that the issues regarding legality of collection of the service charges have been disposed of by the Remittance Agents, case which this court is obliged to follow as precedent. Finally, defendants contend that the claims here may not be maintained as a class action since no common question of law and fact exists; there is no community of interest by plaintiffs in a dominant issue; the members of the class do not share a common interest in asserting a claimed right and plaintiffs do not fairly and adequately represent the class.

It is advisable at the outset to consider the previous decision in the Remittance Agents case cited above. The proceedings there were initiated in the circuit court of Sangamon County by the Illinois Association of Remittance Agents. The members of this association were licensed under the applicable statute which authorized them to accept payment of fees for vehicle licenses and registration fees from members of the public and to remit these funds to the Secretary. (Ill. Rev. Stat. 1969,-ch. 95½, pars. 3 — 900 to 3 — 917 inclusive.) Plaintiff sought to prevent sale of motor vehicle licenses by the Secretary acting through various banks, precisely as in the case at bar. The Secretary was the only defendant. The circuit court granted plaintiff the desired relief. This court (fourth district) held to the contrary and the decree appealed from was reversed. A number of the banks involved in the case at bar, while not parties to the suit, appeared as amici curiae. Similarly, the entire class of plaintiffs here involved also appeared in the appellate court as amici curiae. Each of these groups was represented by the same counsel which represent them respectively in the case at bar.

The first issue in this phase of the case is whether the parties to the case at bar, who appeared as friends of the court in the preceding litigation, are bound to the previous result by principles of former adjudication or res judicata (see Gudgel v. St. Louis Fire and Marine Ins. Co., 1 Ill.App.3d 765, 770, 274 N.E.2d 597) or estoppel by verdict. (Lange v. Coca-Cola Bottling Co., 44 Ill.2d 73, 75, 254 N.E.2d 467.) We do not believe that they are. It has been aptly and correctly held in this jurisdiction, in the recent case of Bee Chemical Co. v. Service Coatings, Inc., 116 Ill.App.2d 217, 226, 253 N.E.2d 512, that “An amicus curiae is not a party to the action, but is merely a friend of the court whose sole function is to advise, or make suggestions to, the court’ Clark v. Sandusky 205 F.2d 915, 917.”

The next problem is whether we are bound by the Remittance Agents decision. As a general proposition, this court is obliged to follow decisions of the Supreme Court of Illinois and of the United States Supreme Court. (Hensley v. Hensley, 62 Ill.App.2d 252, 259, 210 N.E.2d 568.) Both of these tribunals exercise appellate jurisdiction over the Appellate Court of Illinois. Quite to the contrary, since decisions of this court are not subject to review by federal courts other than the United States Supreme Court, by courts of any state other than Illinois, or by the appellate courts of other districts in the State of Illinois, we are not bound to follow the decisions of these other tribunals. (See People v. Battiste, 133 Ill.App.2d 62, 272 N.E.2d 808, citing United States ex rel. Lawrence v. Woods (7fh cir. 1970), 432 F.2d 1072, 1075.) In this regard, note also Parker v. Parker, 335 Ill.App. 293, 299, 81 N.E.2d 745, where the second district of this court did not follow a decision by the first district thereof in the absence of a decision on the precise issue by the Illinois Supreme Court. Note also Hughes v. Bandy, 336 Ill.App. 472, 477, 478, 84 N.E.2d 664; affirmed 404 Ill. 74, 87 N.E.2d 855.

However, it appears that tire decision in Remittance Agents has been reviewed by the Supreme Court of Illinois which has denied leave to appeal. It is true, as urged by plaintiffs, that it has been held that denial of a petition for leave to appeal by the Supreme Council of Illinois is not precisely equivalent to a decision by that court. But, the denial of leave to appeal means necessarily that the Supreme Court has scrutinized the decision of the appellate court and the record in accordance with the applicable rule promulgated by the Supreme Court. (Ill. Rev. Stat. 1971, ch. 110A, par. 315(a).) It therefore appears to us that the denial of a petition for leave to appeal by the Supreme Court adds to the stature and to the effect of a decision of the appellate court. The proper principle to be applied here is that denial by the Supreme Court of a petition for leave to appeal from a decision of the Appellate Court of Illinois is an approval of the decision, or of the result reached, although not necessarily an approval of the reasons expressed by the appellate court. (McCann v. Continental Cas. Co., 6 Ill.App.2d 527, 534, 535, 128 N.E.2d 624.) We, therefore, will adhere to the decision in Remittance Agents. “If the Supreme Court deems the question open to reconsideration, it can so indicate on an application for leave to appeal from this decision.” Stinson v. Edlen, 27 Ill.App.2d 425, 427, 169 N.E.2d 682.

Remittance Agents decided that the Secretary has legal power to authorize banks to handle renewals of Illinois motor vehicle licenses precisely as contracted for in the case at bar; public policy does not prohibit coUection of a service charge by the banks from buyers of licenses, and the collection of these service charges is not improper; and, finally, that it is legally proper and permissible for banks in a transaction of this kind to act in a dual capacity as agent for the Secretary of State and also, as agent for the purchaser of the renewal license. We are in complete accord with the decision in the Remittance Agents case and with the principles established therein. We will, however, give independent consideration to the remaining points raised by the parties hereto and to the authorities cited.

We will first consider whether the payments made by plaintiffs to the banks were voluntary in nature. Defendants urge that since these various service charges were paid voluntarily they cannot be recovered and therefore the named plaintiffs lack standing to maintain the action. In this regard, defendants rely chiefly upon two decisions of the Supreme Court of Illinois. In Illinois Glass Co. v. Chicago Telephone Co., 234 Ill. 535, 85 N.E.200, plaintiff complained to the telephone company about the quality of its service. The company offered an improved service at an increased but unauthorized cost, which plaintiff accepted. After several years, plaintiff sued to recover the amount of the increase. Recovery was denied. The court described the rule as “universaHy recognized”, that where monies are voluntarily paid under a claim of right, with knowledge of the facts by the person making the payment, they cannot be recovered on the ground that the claim was illegal. See 234 Ill. at 541.

Thereafter, in Mills v. Forest Preserve District, 345 Ill. 503, 178 N.E.126, the Supreme Court considered a situation in which an owner of land sold it to the condemnor even though he had contended that no legal authority existed for taking the land. After it was established that such authority did not exist, plaintiff tendered return of the purchase price and sought a reconveyance of the land. This relief was denied. The Supreme Court cited its previous decision in Illinois Glass Co. The doctrine was described as “well established” that money unlawfully demanded under a claim of authority but without any mistake of fact “* 6 * may not be recovered unless paid under such pressure as to interfere with the free enjoyment of rights of persons or property * * 345 Ill. at 512.

We also find the decision in Mills cited with approval in a subsequent decision of this court where a group of plaintiffs in a class suit sought declaratory judgment voiding all traffic ordinances of the city of Chicago as a prelude to attempted recovery of all fines imposed for traffic violations. Berg v. City of Chicago, 97 Ill.App.2d 410, 423, 240 N.E.2d 344.

Plaintiffs seek to differentiate Illinois Glass Co. on the ground that the decision was influenced by the fact that the parties were in pari delicto. We cannot agree. We believe that recovery was denied in Illinois Glass Co. on the theory that the facts of the transaction failed to establish that the payment was involuntary. (See Fisher v. City of Ottawa, 8 Ill.App.3d 553, 557, 289 N.E.2d 717.) In Fisher, the court affirmed dismissal of a class suit to recover penalties provided by ordinance and paid to the municipality for late payment of water bills. Plaintiffs failed to allege “* * * that the payments were made involuntarily as the result of compulsion or duress.” 8 Ill.App.3d at 557.

Nor does the differentiation of Illinois Glass Co. set out in Cohon v. Oscar L. Paris Co., 17 Ill.App.2d 21, 149 N.E.2d 472, affect its application here. In Cohon, this court allowed recovery in a class action by customers of a retailer who had collected and paid occupation taxes for which it was legally not liable which were actually refunded to it by the state. That situation involved not a comparison between the “innocence” of the parties, as plaintiffs here suggest, but proper action by the court to prevent unjust enrichment under equitable principles. (See 17 Ill.App.2d at 26, 27.) As we will later point out, these prime factors are entirely lacking in the case at bar.

Application of the above principle to the allegations of the second amended complaint leads to the conclusion that the payment of the service charge by plaintiffs must be classified as voluntary. This complaint brings out that each of the named plaintiffs had previously purchased renewal license plates directly from the Secretary. It alleged that before the various banks would issue renewal license plates they had “required” payment from the individual plaintiffs and other members of the class. The word “required” falls far short of an allegation of coercion of any kind. Since plaintiffs had previously purchased license plates directly from the Secretary, they knew, or should have known, that the Secretary charged only the statutory fee and no service charge. All of them could have availed themselves of the right to purchase their license plates from the office of the Secretary in Springfield by mail or by means of a personal visit to the offices of the Secretary maintained in Chicago. All of them chose voluntarily to purchase their license plates from a bank. No pressure of any kind against any person, or interference with freedom of action, is alleged in the complaint. The type of situation presented by the second amended complaint is far different from the imposition of an illegal charge by a public official or payment obtained by some type of coercion or duress.

Plaintiffs urge that the question of voluntary payment is a matter of affirmative defense. They cite Rosen v. Village of Downers Grove, 19 Ill.2d 448, 167 N.E.2d 230, which has no application here. Since the issue of voluntary payments raised by defendants expressly appears from the aUegations of plaintiffs’ own complaint, it was not an affirmative defense. This type of defect, which appears affirmatively from plaintiffs’ own pleading, is properly raised by motion to dismiss. Plaintiffs’ complaint was “substantially insufficient in law”. Ill. Rev. Stat. 1971, ch. 110, par. 45(1).

Nor can we find that the request for temporary injunction by plaintiffs was tantamount to payment under protest so as to defeat the defense of voluntary payment. The pendency of a suit praying for a temporary injunction cannot change the situation that the essence of aU these transactions, as being purely voluntary, is established from the allegations of the complaint. Plaintiffs cite decisions from other jurisdictions to the effect that notification orally or by letter that a payment is being made “with reservations” is sufficient to eliminate the defect of voluntary payment. (Bailey v. Minge, 16 Ala.App. 269, 77 So. 419; Davis v. Fowler Bros., 20 App.Div. 633, 47 N.Y.S. 221.) They then urge a fortiori, but without legal authority, that the filing of suit should also be sufficient. This argument is unavailing since plaintiffs’ second amended complaint alleges simply purchase of license plates by them from defendants in a necessarily voluntary manner.

We note also here, and we expressly approve, the theory which appears in Remittance Agents that the banks in a situation of this type acted as agents for applicants for motor vehicle license plates who sought out the services of the bank. (See 122 Ill.App.2d at 328 and 329.) This attribute of the transaction is also illustrative of its completely voluntary nature.

Plaintiffs next raise the issue of ultra vires. They urge that the defendant banks have no legal authority to engage in the transactions here involved. A question arises as to whether this argument is to be applied to that portion of the transaction in which the bank acts as agent for the Secretary in validating the renewal applications, distributing license plates, accepting the statutory fees and remitting those fees to the Secretary; or, alternatively, whether it applies to the transaction wherein the bank acts as agent for the applicant in issuing the license and in charging and accepting a fee for the services thus rendered. As yet another alternative, does the argument apply to both of these transactions? These questions remain unanswered by plaintiffs.

Upon any analysis, we cannot conclude that the transactions are ultra vires. As above shown, Remittance Agents held that in these transactions the banks properly acted in a dual capacity and performed duties as agents of the Secretary and also of the various applicants. Aside from following the authority of this former decision, we reach the same conclusion from our own independent thought and analysis. It is true, as contended by defendants, that the law approves a dual agency relationship where all of the facts are disclosed and where there are no conflicting or inconsistent interests which might possibly impel to a breach of loyalty. This appears amply from a decision of the Supreme Court cited by defendants. (Adams v. Larson, 279 Ill. 268, 277-278, 116 N.E. 658.) We will next analyze the transaction in the light of the claim of ultra vires.

Considering first application of the argument to national banks here involved, they are creations of and necessarily limited by the provisions of the National Bank Act. (12 U.S.C. sec. 24.) The gist of the matter lies in construction of the wording of the statute granting to national banks “* * * all such incidental powers as shall be necessary to carry on the business of banking * * Plaintiffs are correct in the statement that the grant of incidental powers may not be used to enlarge granted powers or to create powers which are withheld either expressly or by reasonable implication. (Kimen v. Atlas Exchange National Bank of Chicago (7th cir. 1937), 92 F.2d 615.) A recent decision of the United States Court of Appeals for the first circuit, cited by plaintiffs, throws light upon this problem. (Arnold Tours Inc. v. Camp (1st cir. 1972), 472 F.2d 427.) In that case, the Comptroller of the Currency issued a regulation permitting national banks to engage in the travel agency business. The Court of Appeals held that this regulation was beyond the power of the Comptroller and of national banks. The case directly involved construction of the language of the statute above cited concerning “incidental powers”. After carefully reviewing a number of pertinent decisions, the court held (472 F.2d at 432):

“In our opinion, these decisions amply demonstrate that a national bank’s activity is authorized as an incidental power, necessary to carry on the business of banking,’ within the meaning of 12 U.S.C. § 24, Seventh, if it is convenient or useful in connection with the performance of one of the bank’s established activities pursuant to its express powers under the National Bank Act. If this connection between an incidental activity and an express power does not exist, the activity is not authorized as an incidental power.”

The court pointed out that the operation of a travel agency is indeed a highly complex activity. In our opinion, the situation presented by Arnold Tours is diametrically opposite to that in the case at bar. In acting as a travel agent, a bank necessarily is obliged to enter a highly competitive business, completely unrelated to banking, for the purpose of making additional profits. Quite to the contrary, in the case at bar, the banks are assisting in the performance of a public service, a large part of which is intimately connected with the ordinary and traditional banking function of collecting and remitting funds for other parties. Furthermore, the banks perform this function not for the possibility of direct profit, but to attract persons to become familiar with their premises in the hope of expanding their goodwill and thereby their banking business. The activity here involved is in effect akin to advertising, which is no more than an effort to increase goodwill and public acceptance; and, in this manner, to augment the usual business of the bank. In this regard, the activity is convenient and useful to the banks in connection with performance of a recognized and established bank activity pursuant to its express statutory powers. (472 F.2d at 432. See also 9 C.J.S. 1209 on Banks and Banking.) We conclude that the bank activity in the case at bar is not ultra vires and not beyond the statutory functions of the national banks.

As regards the state banks here involved, their powers are established and governed by the Illinois Banking Act. (Ill. Rev. Stat. 1971, ch. 16½, par. 101 et seq.) The statute authorizes the formation of banks for the purpose of “doing a general banking business.” (Par. 103.) The statute also enumerates the general corporate powers of Illinois state banks. (Par. 105.) The crucial words are those used in the phrase “doing a general banking business.” These words “are to be used in their common and ordinary sense.” (People v. Wiersema State Bank, 361 Ill. 75, 88, 197 N.E. 537.) In Illinois, some 35 years ago, our Supreme Court recognized that the trend of “modern decisions” was toward an expansion of the functions of banking. (Watt v. Cecil, 368 Ill. 510, 513, 15 N.E.2d 292.) It seems logical from the above analysis regarding national banks that the same result should follow concerning state banks. As above stated, the transactions here are incidental and germane to the carrying on of a general banking business. The transactions here are not ultra vires as regards the state banks.

The same result and holding are inherent in the Remittance Agents decision. The opinion, there, does not use the term ultra vires. However, it clearly holds that the Secretary may authorize banks to engage in these transactions; collection of the service charges by the banks is not violative of public policy or improper and the activities of the banks as agents for the Secretary are not improper. This result was reached by the court after the consideration of extended arguments on the propositions of legality and ultra vires advanced by the same attorneys for the amici curiae in the former case who are the identical parties, both plaintiffs and defendants, here involved.

There is an additional reason for rejection of this argument of plaintiffs. Defendants have cited persuasive and convincing authority that parties to an executed transaction may not set it aside by use of the theory of ultra vires. As regards the national banks, a helpful decision is National Bank of Xenia v. Stewart, 107 U.S. 676, 2 S.Ct. 778, 27 L.Ed. 592. The Supreme Court, there, denied relief to the administrator of a deceased pledgor who had used shares of the bank’s own stock as security for a loan. The authority for application of this principle to the state banks is McNulta v. Corn Belt Bank, 164 Ill. 427, 45 N.E. 954. There, the court denied relief to an officer of a bank who sued to recover fees from the bank based upon an illegal contract and also denied a counterclaim of the bank for sums previously paid under the void agreement. This principle should be applied to prevent recovery by plaintiffs of all sums heretofore paid to the banks in completely executed transactions. See People v. Wiersema State Bank, 361 Ill. 75, 94, 197 N.E. 537.

In a number of places in the argument, plaintiffs discuss the principle of in pari delicto. This ancient phrase may be freely translated as meaning in equal fault; or, alternatively, equally culpable. (Black’s Law Dictionary, 4th Edition, 898.) Plaintiffs argue that they cannot be in pari delicto with the banks because the latter are regulated companies with knowledge of the law which the general public usually lacks. (Watertown Fire Insurance Co. v. Rust, 141 Ill. 85, 30 N.E. 772.) Plaintiffs further contend that where the parties are in pari delicto the courts will not assist either; but that where transactions are void because of violation of public policy established to regulate one class of citizens for the protection of another, the courts will assist the innocent party.

This type of argument is totally unavailing to plaintiffs. As we will show, and as the court expressly held in Remittance Agents, the agreement between the banks and the Secretary and the transactions between the banks and various plaintiffs did not violate the public policy of Illinois in any manner. Further, as above pointed out, the regulated companies, the banks, have not violated the law in any respect in their dealings with the Secretary or with the general public. It should also be apparent that no member of the class, which the named plaintiffs purport to represent, has been guilty of any violation of law. Thus, there is no blame, culpability or illegal conduct on either side of the transactions in question. The theory of in pari delicto has no application here.

One further thought should be expressed in this regard. Plaintiffs here seek equitable relief. In effect, they seek rescission of all executed transactions between themselves and the banks. Plaintiffs wish to be restored to status quo by refund to them of all monies previously paid to the banks. A party who seeks to rescind a contract in this manner must return, or offer to return, the entire consideration which he received under the contract so that the other party may be placed in the same position in which he was before the contract was entered into. (Jackson v. Anderson, 355 Ill. 550, 555, 189 N.E. 924.) A rescission must be in toto; a party cannot affirm a contract in part and repudiate it in part; he cannot accept the benefits on the one hand while he shirks its disadvantages on the other. (Downing v. Harris Trust & Savings Bank, 318 Ill. 323, 326, 149 N.E. 256.) There is no method by which plaintiffs can do equity by restoring the defendant banks to status quo. Basic equitable principles thus prohibit the granting of this portion of the requested relief.

Plaintiffs attempt to make the situation at bar appear as though strong equities favor recovery by plaintiffs and that, conversely, it would be inequitable for the banks to retain the sums paid to them. We find no equities in support of plaintiffs’ position and no equitable considerations which would condemn the conduct of the banks or which would prevent their retention of monies received. Plaintiffs and all members of the class they describe acted in good faith and voluntarily. The purchase of license plates from banks has steadily increased. During 1969, approximately 1,000,000 license plates were sold through Illinois banks. Apparently the convenience of this method of obtaining plates has met with public approval and acceptance.

Plaintiffs and members of the class were beneficiaries of this convenience in return for the nominal fee they paid the banks. Now, without the ability of placing the banks in status quo and returning that which they were given in good faith, this litigation seeks in effect to rescind these transactions and to recover the entire consideration. On the other hand, the banks purchased the necessary validating machine, sent employees to the Secretary for training, expended some considerable time and effort in obtaining and distributing license plates and collecting and remitting the necessary funds. There is no allegation by plaintiffs that the banks have made any profit from these transactions and no claim or allegation that the amount charged was excessive. It would be highly inequitable to require the banks to refund the service charges received by them.

Plaintiffs urge that the agreements between them and various banks for payment of a service charge were void as contrary to public policy and that granting of recovery to plaintiffs by this court would advance the enforcement of public policy. “The public policy of a State is to be found embodied in its constitution and its statutes. When these are silent upon the subject, then in the decisions of its courts.” (People v. Wiersema State Bank, 361 Ill. 75, 86, 197 N.E. 537. See also Balasa v. Balasa, 11 Ill.App.2d 103, 108, 136 N.E.2d 594.) Undoubtedly it is of paramount importance that this public policy, once ascertained, should be protected and furthered by the courts whenever possible. The issue here, however, is whether this type of transaction between the banks and the plaintiffs is contrary to public policy.

It would seem that the public policy of Illinois does not require that the sale of renewal license plates for passenger motor vehicles should be confined and restricted to the Secretary himself. On the contrary, the legislature of Illinois has created a system whereby these license plates may be sold by remittance agents duly licensed and acting under the authority of the Secretary. The statute specifically gives the Secretary the right to prescribe the maximum service charge which may be imposed upon an applicant for renewal of a motor vehicle registration by any person authorized by law to receive renewal applications and fees. (Ill. Rev. Stat. 1971, ch. 95½, par. 3 — 821(b).) The agreements entered into between the Secretary and the banks contain regulatory provisions quite similar to the statutory requirements for remittance agents. Since the Secretary is expressly authorized to delegate to remittance agents the authority to issue renewals and receive service charges, it would logically seem that delegation of a similar duty under similar safeguards to duly constituted banks operating under state or federal supervision and regulation would be in accordance with public policy.

In addition, we revert once more to the holding of the Remittance Agents case. There, the court expressly held that the type of agreement involved in the case at bar can properly be entered into by the Secretary, “* * * since it is not prohibited by law and no public policy we are aware of positions it beyond the pale.” (122 Ill.App.2d at 327.) The court further pointed out that the fees charged by the banks to the applicants are proper because the bank when charging its nominal fee does so as an agent of the applicant who is the one who pays these charges. The court pointed out that tire Secretary and his employees are expressly prohibited from charging any applicant more than the statutory amount but that, “* * * these prohibitions are as nothing to a bank when charging a fee of an applicant for its services as his agent in processing his application for plates.” See 122 Ill.App.2d at 328.

Plaintiffs urge that in some manner their suit is a vehicle for social justice and for vindication and enforcement of public policy. We cannot find in this record any basis for such an argument. Other than tire named plaintiffs, the general public seems to approve and to make use of the privilege of obtaining their vehicle licenses from banking outlets. We see no legal, equitable, social or moral wrong resulting from serving public convenience in this manner.

All counsel on both sides of this controversy have assisted the court with ably written briefs citing literally scores of decisions. Not only would we be unable to deal with each of these precedents in an opinion of reasonable length, but we find this to be unnecessary in view of the analysis and conclusions above set forth.

Point IV in plaintiffs’ reply brief raised for the first time the contention that the activities of the Secretary in authorizing issuance of licenses by the banks violate the fourteenth amendment to the Constitution of the United States, and Article II, sec. 1, as well as Article V, sec. 16 of the Illinois Constitution of 1970. These issues were not raised by plaintiffs in their initial briefs in this court. This practice is contrary to the rules. (Ill. Rev. Stat. 1971, ch. 110A, par. 341(g).) In addition, we may not consider these constitutional questions because they were never presented to and decided by the trial court. (Holiday Magic, Inc. v. Scott, 4 Ill.App.3d 962, 970, 282 N.E.2d 452 (leave to appeal denied September 28, 1972) and authorities therein cited.) For this reason, it is unnecessary for us to entertain the motion made by defendants to strike this portion of the reply brief of plaintiffs.

All parties have devoted considerable time and effort in connection with the discussion of cases bearing upon the right of plaintiffs to maintain this suit as a class action. Since we have held that plaintiffs have no individual cause of action, it would follow necessarily that any attempted class action must fail. See De Phillips v. Mortgage Associates, Inc., 8 Ill.App.3d 759, 764, 291 N.E.2d 329.

We conclude that the trial court properly dismissed this suit with prejudice.

Judgment affirmed.

EGAN and HALLETT, JJ., concur.


source: Caselaw Access Project

author: Mr. JUSTICE HAYES

license: Public Domain

text:
    The People of the State of Illinois, Plaintiff-Appellee, v. Victor Bellamy, Defendant-Appellant.
    (No. 57275;
    First District (2nd Division)
    June 26, 1973.

      Charles A. Boyle, of Chicago, for appellant.
    Bernard Carey, State’s Attorney, of Chicago, for the People.
   Mr. JUSTICE HAYES

delivered the opinion of the court;

Defendant, Victor Bellamy, was charged with a burglary allegedly committed on 8 June 1954. (Ill. Rev. Stat. 1953, ch. 38, sec. 84.) The indictment also charged that he had been previously convicted of burglary, which brought him within the Habitual Criminal Act. (Ill. Rev. Stat. 1953, ch. 38, sec. 602.) He was found guüty by a jury and judgment was entered on the verdict and defendant sentenced to the Illinois State Penitentiary “for the term of life”, as required by section 602.

On this late appeal (the facts with respect to which appear in the latter half of this opinion), defendant argues: (1) the mandatory life sentence was unconstitutional; (2) the court failed to give limiting instructions to the jury, which denied him a fair trial; and (3) the State’s closing argument was so prejudicial that it denied him a fair trial.

The evidence showed that the complaining witness, Mrs. Burton, returned home in the early afternoon to find defendant lying face down on the floor in her bedroom; she then left the apartment by the back steps, where she saw the janitor and his 18 year old son. When defendant came down the back steps, shortly thereafter, she pointed him out to the janitor and his son, who gave chase. Mrs. Burton later picked, the defendant out of a four-man lineup and was present when he confessed his guüt to the arresting pohce officer. Defendant also took the stand and openly admitted the burglary in question and his previous conviction for burglary in 1951, reciting in some detail his previous prison experiences to explain to the jury his state of mind when he committed the second burglary.

The prosecutor, during his argument, referred to defendant as “that sick man, that mentally sick man”; defendant objected and the court ordered it stricken. The prosecutor also discussed defendant’s telling the judge that he didn’t want the public defender as his counsel; that a Chicago Bar Association lawyer was then appointed but was refused by defendant; and that his current counsel (who represented him at trial only during the presentation of the State’s case in chief) then was appointed. Defendant frequently interrupted the prosecutor’s closing argument.

In respect of defendant’s first contention, it is well settled that the penalty to be attached to criminal behavior is a matter for the legislature. (People v. Smith (1958), 14 Ill.2d 95, 150 N.E.2d 815.) The States are free to enact habitual criminal statutes designed to deal with recidivism: “The rate of recidivism is acknowledged to be high, a wide variety of methods of dealing with the problem exists, and experimentation is in progress.” Spencer v. Texas (1967), 385 U.S. 554, 566.

The issue is the constitutionality of the Habitual Criminal Act and not its wisdom. The latter has been called into serious question. As the Illinois Supreme Court, in again upholding the constitutionality of the Act, said (People v. Lamphear (1955), 6 Ill.2d 346, 350-351, 128 N.E.2d 892):

“In People v. Manning, 397 Ill. 358, this court did express misgiving as to the procedure established in section 602, stating at page 361: ‘It is conceivable that the introduction of such fact [die prior conviction] might influence a jury as to the character of the defendant and cause it to conclude that if he had been formerly convicted of a felony, there was a strong probability that he was guilty of the second offense. The requirements of the law as to the degree and character of proof required to establish the principal offense are not changed and the fact that evidence of the former conviction might create an adverse impression with the jury is not, in view of the requirements of the act, a denial of due process of law.’ It is reasonably apparent that the evidence of the prior conviction, properly related only to the matter of punishment, might affect the jury’s determination of guilt or innocence.
Likewise, other features of the statute are subject to reasonable criticism. The provision that on the subsequent conviction the maximum penalty be imposed, does not permit any flexibility in adjusting the punishment to the particular violation or allow for any mitigation, however much justified in an individual case. In addition, the maximum penalty may be unduly severe, especially where a life sentence is mandatory, as in the instant case.
In all of these respects our statute follows the form of the earlier habitual criminal acts. Dissatisfaction with their operation has resulted in widespread legislative modification. (See U. Chi. Law Revision Series, No. 1, p. 16ff.) The constitutionality of our statute has, however, been sustained. (People v. Lawrence, 390 Ill. 499; People v. Manning, 397 Ill. 358; People v. Kirkrand, 397 Ill. 588.) Correction of defects in the statute which experience had brought to light is a matter for the General Assembly.”

Defendant’s second contention is that the failure of the court to give limiting instructions was error. He is correct in this contention, but the record does not show that he offered such an instruction or objected to the instructions given, so the point has not been preserved for review. In any event, the error is harmless since defendant made a judicial confession of his commission of the second burglary.

As to defendant’s third contention, while the arguments of the prosecutor here were not altogether temperate, they were partly the result of defendant’s constant interruptions of the prosecutor (at that stage of the trial, defendant was acting pro se). In any event, in view of the overwhelming evidence of defendant’s guilt, the prosecutor’s argument was harmless. People v. Stahl (1962), 26 Ill.2d 403, 186 N.E.2d 349.

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

We must now deal with an issue which defendant did not raise in this appeal, but which has developed during the pendency of the appeal owing to the enactment of the new Unified Code of Corrections (Ill. Rev. Stat. (1972 Supp.), ch. 38, secs. 1001 — 1 — 1 et seq.) which became effective on 1 January 1973. (Ill. Rev. Stat. (1972 Supp.), ch. 38, sec. 1008 — 6 — 1.) The issue is whether the sentencing provisions of the new Code apply to defendant and, if so, how they shall be applied to his mandatory life sentence imposed under the provisions of the Habitual Criminal Act. To deal with that issue requires the recitation of additional facts which were not relevant to our decision to affirm the judgment of conviction. Those additional facts with the applicable law are as follows.

Defendant was convicted of a first burglary in 1951. On 8 February 1954, having served out his sentence, he was discharged from the Illinois State Penitentiary. On 8 June 1954, defendant committed the instant second burglary. His indictment therefor included the recitation of his first conviction of burglary and thus laid the proper foundation for a sentence, if convicted, under the Habitual Criminal Act. (Ill. Rev. Stat. 1953, ch. 38, sec. 602.) That act did not create a new criminal offense of being an habitual criminal, but was solely a sentencing statute (People v. Lamphear (1955), 6 Ill.2d 346, 128 N.E.2d 892) which, in part, mandated the imposition of the maximum sentence then statutorily authorized upon conviction of the second of the specified crimes to which the Act applied. Burglary was one of those specified crimes. After a jury trial, defendant was convicted of the second burglary on 14 October 1954. Acting under the mandate of the Habitual Criminal Act, the trial court imposed the maximum sentence then statutorily authorized for the offense of burglary, namely, life imprisonment in the Illinois State Penitentiary. Ill. Rev. Stat. 1953, ch. 38, sec. 84.

Effective 1 January 1964, the Habitual Criminal Act was specifically repealed. (Ill. Rev. Stat. 1965, ch. 38, sec. 126 — 1.) Since it was solely a sentencing statute, the sentencing provisions of the Criminal Code of 1961 thereupon became applicable to the offense of burglary. (Ill. Rev. Stat. 1965, ch. 38, sec. 1 — 7 and specifically sec. 1 — 7(e).) Under those provisions, the authorized sentence for burglary was an indeterminate sentence, but not less than one year. Ill. Rev. Stat. 1965, ch. 38, sec. 19 — 1(b).

As noted above, on 1 January 1973, the new Unified Code of Corree-tions became effective,.and repealed sec. 1 — 7. (Ill. Rev. Stat. (1972 Supp.), ch. 38, sec. 1008 — 5 — 1.) Under the companion amendments to the Criminal Code, burglary is a Class 2 felony. (Ill. Rev. Stat. (1972 Supp.), ch. 38, sec. 19 — 1.) The statutorily authorized maximum term for a Class 2 felony is any term in excess of one year not exceeding 20 years. (Ill. Rev. Stat. (1972 Supp.), ch. 38, sec. 1005 — 8 — 1(b)(3).) The minimum term for a Class 2 felony is one year with authority to the court to set a higher minimum term under certain circumstances up to one-third of the maximum term actually imposed. Ill. Rev. Stat. (1972 Supp.), ch. 38, sec. 1005 — 8 — 1(c)(3).

This case is before us on a direct appeal from the 1954 conviction of the second burglary. The record shows that:

(a) on 3 November 1958, defendant filed his application for a Writ of Error;
(b) the Bill of Exceptions was filed on 2 May 1960;
(c) on 27 May 1970, the Supreme Court entered its order No. 43219, granting defendant leave to appeal as a poor person, and ordered the preparation of the record. That order was then filed in the circuit court of Cook County on 15 June 1970.

This case, therefore, has not yet been “finally adjudicated”. People v. Harvey (1973), 53 Ill.2d 585, 294 N.E.2d 269.

Under the new Code of Corrections, where a case has not been “finally adjudicated” on the effective date of the Code, the sentencing provisions of the Code are applicable, if they are more favorable to de-. fendant. (Ill. Rev. Stat. (1972 Supp.), ch. 38, sec. 1008 — 2 — 4.) Such is the case here. People v. Harvey, supra.

Hence, while we affirm the judgment of conviction, we set aside the life sentence and remand the cause to the circuit court of Cook County with directions to hold a hearing in Aggravation and Mitigation and then to re-sentence defendant in accord with the views herein expressed. The time already served by defendant under his original sentence is, of course, to be credited to defendant under his new sentence.

The hearing in Aggravation and Mitigation is necessary in this case for three reasons:

(1) Since defendant’s fife sentence under the Habitual Criminal Act was mandatory, so that no exercise of discretion by the trial court was possible, the record shows that no such hearing was in fact held;
(2) The Code of Corrections now requires such a hearing (Ill. Rev. Stat. (1972 Supp.) ch. 38, sec. 1005 — 4 — 1(a)); and
(3) The Code of Corrections permits the trial court, in determining the minimum term of the indeterminate sentence for a class 2 felony, to exceed the minimum statutorily authorized term if in its judgment the circumstances of the case so dictate, subject to a ceiling of one-third of the maximum term actually imposed (Ill. Rev. Stat. (1972 Supp.) ch. 38, sec. 1005 — 8 — 1(c)(3)).

Judgment of conviction affirmed. Sentence of life imprisonment set aside, and cause remanded with directions.

STAMOS, P. J., and LEIGHTON, J., concur.


text:
    The People of the State of Illinois, Plaintiff-Appellee, v. Robert Ewing Hines, Defendant-Appellant.
    (No. 56433;
    First District (2nd Division)
    June 26, 1973.

      Robert J. Hauser and Geoffrey G. Gilbert, both of Chicago, for appellant.
    Edward V. Hanrahan, State’s Attorney, of Chicago, (Elmer C. Kissane and Stephen J. Connolly, Assistant State’s Attorneys, of counsel,) for the People.
   Mr. JUSTICE HAYES

delivered the opinion of the court:

Defendant-appellant (hereafter defendant) was charged with the offense of theft of lost or mislaid property. (Ill. Rev. Stat. 1989, ch. 38, sec. 16 — 2.) Defendant moved to suppress his warrantless arrest, which had occurred on 14 April 1971. After a hearing on his motion on 28 April 1971, the motion was denied and defendant’s bench trial began immediately. Defendant had pleaded not guilty and had waived a jury trial. Defendant was found guilty and was sentenced to pay a fine of $500 and no costs. Defendant appeals.

To facilitate an understanding of the issues raised by defendant on this appéal, we begin with the record of the hearing on defendant’s pretrial motion to suppress his warrantless arrest. The sole witness at that hearing was the arresting officer. He testified that in the late morning of 14 April 1971, he had been told by a person unknown to him (described by the State in its brief as a citizen informer) that one Robert Hines, also unknown to the officer, had two checks which did not belong to Mr. Hines, but which Mr. Hines was trying to cash. The trial court later said that the officer had also been supplied by the informer with a description of Robert Hines. The officer made no attempt to secure an arrest warrant for Robert Hines. Instead, the officer and his partner proceeded to the routine patrol of their area in a marked squad car, and the officer, inter alia, kept an eye out for a man matching the description of Robert Hines. At 3:00 P.M. that afternoon, the officer, who was driving the squad car, saw such a man standing on a public sidewalk talking with another young person. The officer testified that at that time the man was not doing anything in violation of any law. Curbing the squad car across the street from the man, the officer called to the man to come over to the squad car. At that point, a bus passed on the street between the officer and the man, and the officer got out of the squad car and began to cross the street. When the bus had passed, the officer saw the man putting something into a litter basket on the sidewalk. The officer retrieved the things and found them to be two checks made payable to persons other than Robert Hines with the address of each payee also on the respective check. Thereupon the officer, arrested Robert Hines (the defendant), who was later charged with the instant offense.

When the officer first testified as to what he had been told by the unknown informer, defendant’s appointed counsel objected to the testimony as hearsay. The court overruled the objection on the ground that the hearsay was not being offered as substantive proof of the offense charged but solely to establish the reasonableness of defendant’s war-rantless arrest, for which limited purpose it was admissible. At the con-elusion of the officer’s testimony, the court denied defendant’s motion to suppress the arrest.

Immediately thereafter, the bench trial began with a request by the prosecutor to defense counsel to stipulate, as evidence in the State’s case in chief, to all the testimony of the arresting officer which had just been given at the hearing on defendant’s motion to suppress the arrest. The colloquy went as follows:

“Prosecutor: I was asking for a stipulation of testimony at this point, Mr. Public Defender.

Public Defender: There are some additional factors I like [sic] to find from the officer. I’ll stipulate to all of the explanation.

The Court: You stipulate to testimony already adduced on motion to suppress [to be] same testimony introduced by the State on the case in chief?

Public Defender: I would like to have additional cross-examination.

The Court: Otherwise you stipulate?

Public Defender: Yes.”

Thereupon the arresting officer testified as a witness for the State and merely added that he had advised defendant of defendant’s constitutional rights. On cross-examination, he admitted that defendant had given him an oral statement at the time of the arrest; he added that the place of arrest was about three miles away from the addresses on the checks (which were tax refund checks); that about two minutes elapsed between the time he first saw defendant and the time of arrest; that he did not see anything handed between defendant and the other person who was standing talking to defendant; that defendant and the other person were standing about two feet away from the litter basket; that he did not know what happened to the other person, because he was after defendant and not the other person.

The payee-addressee of one of the checks then testified that she did not know defendant, had not given him permission to possess the check, and had not seen the check before, though she usually looked for it in September. Testimony by the partner of the arresting officer, essentially corroborative of the testimony of the arresting officer, completed the State’s case in chief.

Defendant then testified in his own behalf. At 3:00 P.M. on 14 April 1971, he had just come out of a store and was standing on the public sidewalk at the corner of 43rd Street and Ellis Avenue in Chicago. He was then approached by a person who handed him the two checks and asked him whether he could do anything with them. He had had the checks in his possession for about ten seconds when the arresting officer had called him over to the squad car. As he started to respond, the bus passed between him and the arresting officer. At that time he tried to return the checks to the boy, but the boy did not accept them and started to walk away. It was then that he had thrown the checks in the litter basket. Almost immediately, the arresting officer had grabbed him, pulled him over to the litter basket, retrieved the checks, arrested him, and walked him over to the squad car. He had immediately told the arresting officer that the other person, who was still walking away had just handed him the two checks. He suspected something was wrong with the checks, but he had not had any time in which to take steps to return them to the payee-addressees.

Opinion

The issues which defendant presents on this appeal are as follows:

1. Defendant was unlawfully stopped, so that his arrest and the seizure of the checks as evidence against him were inadmissible as the fruits of the illegality.
2. Defendant was denied due process of law under the Fourteenth Amendment of the Constitution of the United States because he was denied his Sixth Amendment right of confrontation and an opportunity for cross-examination of the unknown citizen informer whose testimony was stipulated into the State’s case in chief in order to prove the substantive truth of the offense charged.
3. Defendant was not proved guilty beyond a reasonable doubt of all of the essential elements of the offense charged.

Issues two and three are closely interrelated, and the substance of the point being made by these issues was, owing to the stipulation, never brought to the attention of the trial court, Despite that fact, we are authorized by Supreme Court Rule 615(a) to note “plain errors or defects affecting substantial rights”. In this case, we feel obligated to do so, because the only evidence supporting one essential element of the offense charged was the hearsay evidence of the unknown citizen informer, and that evidence was expressly contradicted by the testimony of. defendant.

On defendant’s own testimony, he had obtained control over the checks for ten seconds. That length of time would be sufficient to enable defendant to learn the identity of the owner, whose name and address was on the face of each check. Moreover, defendant conceded that he suspected something was wrong with the checks. Again, on defendant’s own testimony, his very act of deliberately throwing the checks into a litter basket on a public sidewalk is adequate evidence of an intent permanently to deprive the owner of the use or benefit of the property. There is no statutory requirement that this intent be for his own use or benefit. But, on defendant’s own testimony, it is clear that control of the checks for ten seconds would make it impossible for defendant to have failed to take reasonable measures to restore the property to the owner, which is an essential element of the offense charged.

If, however, defendant had been in control of the checks for over three hours, which was the hearsay testimony stipulated into the State’s case in chief to prove the substantive truth of the State’s case, then, and then only, was there any evidence on behalf of the State to support the essential element of defendant’s failure to take reasonable measures to restore the property to the owner. The erroneous admission of hearsay evidence to prove the substantive truth of an essential element of the State’s case is not necessarily reversible error, as, for example, in a case in which the hearsay evidence is merely cumulative. (People v. Thompson (1970), 128 Ill.App.2d 420, 263 N.E.2d 124.) But where the hearsay evidence, as here, is the only evidence as to an essential element of the State’s case, we think that its admission cannot faH to constitute reversible error as a violation of defendant’s Sixth Amendment right (Bruton v. United States (1968), 391 U.S. 123, 88 S.Ct. 1620, 20 L.Ed.2d 476), even if there has been no objection in the trial court to the admission of the hearsay. People v. Wright (1965), 65 Ill.App.2d 23, 212 N.E.2d 126.

Nor will it do to say that the failure of defendant to object to his counsel’s stipulation of the hearsay evidence, made in his presence, which hearsay evidence then turns out to be the only evidence supporting one of the essential elements of the State’s case, precludes him from raising the issue on appeal, either on a theory of waiver of a constitutional right or on a theory of being bound by the acts of counsel done in his presence without objection. The prosecutor’s request for the stipulation and defense counsel’s consent thereto are routine incidents in a criminal proceeding, the crucial significance of which in the instant case was apparently not appreciated by either counsel at the time, with the result that there was nothing to alert the trial judge either. Nor is there anything in the record to suggest that defense counsel's stipulation was a matter of trial strategy; it was simply an honest mistake. (Henry v. Mississippi (1965), 379 U.S. 443; 85 S.Ct. 564, 13 L.Ed.2d 408; People v. Williams (1966), 36 Ill.2d 194, 222 N.E.2d 321.) And if this inadvertent but fatal mistake was not apparent to the professional personnel involved, how much less so could it have been to defendant himself. We conclude that under the circumstances of this case, fundamental fairness requires that we discard any theory of waiver by defendant or of defendant’s being bound by act of his counsel done in his presence without objection.

Since we must remand for a new trial, we will deal with defendant’s first contention on this appeal. While it is clear, as the State points out, that the arresting officer’s mere calling for defendant to come over to the squad car did not amount to an arrest (Ill. Rev. Stat. 1969, ch. 38, sec. 102 — 5), it may not be quite as clear that it did not amount to a seizure in violation of defendant’s Fourth Amendment right. We think that it did not, because, as we read (Terry v. Ohio (1968), 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889, and Adams v. Williams (1972), 407 U.S. 143, 92 S.Ct. 1921, 32 L.Ed.2d 612,) there must be some element of force or of threatened force in order to constitute the restraint on the freedom to walk away, which is the essence of a seizure. For want of that element in the present case at the time of the calling over, there was no restraint suggested to constitute a seizure. (People v. Howlett (1971), 1 Ill.App.3d 906, 274 N.E.2d 885.) In any event, in order to constitute a Fourth Amendment violation, the seizure must be unreasonable. In Terry v. Ohio supra, it was recognized that seizures may be reasonable where they are made on the basis of reasonable suspicion short of probable cause. And reasonable suspicion (like probable cause) may be established by hearsay Adams v. Williams supra, especially where the information comes from a citizen informer. (People v. Hester (1968), 39 Ill.2d 489, 514, 237 N.E.2d 466, 481.) Nor, at a pretrial hearing challenging the legality of a stop or a seizure or an arrest, does the accused have a right to confront or cross-examine citizen informers reporting suspicious conduct to the police, at least where such informers are not themselves participants in the crime. People v. Thompson (1972), 3 Ill.App.3d 470, 278 N.E.2d 462.

We hold, therefore, that the on-street stop of defendant was reasonable under the provisions of Ill. Rev. Stat. 1969, ch. 38, sec. 107— 14, and that the hearsay testimony of the unknown citizen informer was properly admitted at the hearing on defendant’s motion to suppress his arrest, because it was admitted at that hearing solely for the limited purpose of explaining the reasonableness of the on-street stop.

Reversed and remanded for a new trial.

LEIGHTON and SCHWARTZ, JJ., concur.


author: Mr. JUSTICE McNAMARA

text:
    First National Bank of Skokie, as Trustee, Plaintiff-Appellee, v. The Village of Morton Grove, Defendant-Appellant.
    (No. 56801;
    First District (3rd Division)
    June 28, 1973.

      Rehearing denied July 26, 1973.

      Pedersen & Houpt, of Chicago, (Richard V. Houpt, Herbert J. Linn, and James K. Stucko, of counsel,) for appellant.
    Leonard Bosgraf, of Chicago, for appellee.
   Mr. JUSTICE McNAMARA

delivered the opinion of the court:

Plaintiff, First National Bank of Skokie, as trustee of certain realty, brought a declaratory judgment action in the circuit court of Cook County against the defendant, Village of Morton Grove, seeking a declaration that defendant’s zoning ordinance was unconstitutional and void as applied to plaintiff’s property. After hearing evidence, the trial court entered judgment declaring defendant’s zoning ordinance to be invalid as it prevented the development of the property as proposed by plaintiff. On appeal, defendant contends that plaintiff failed to sustain its burden of proving the invalidity of defendant’s zoning ordinance as applied to the subject property, and that plaintiff failed to sustain its burden of proving that defendant acted unreasonably and arbitrarily in refusing to rezone plaintiff’s property so as to permit plaintiff’s proposed use as an automobile service station.

The property in question is located at the southeast comer of Lincoln and Austin Avenues in the Village of Morton Grove. It has a 50 foot frontage on Lincoln and 125 foot frontage on Austin. Both Austin and Lincoln are four-lane streets, and the intersection is controlled by traffic lights.

The plaintiff also holds title to the two lots immediately to the east of the subject property, and it proposes the use of those two lots and the subject property as the site for the gasoline service station. Plaintiff had entered into a contingent contract with the Clark Oil and Refining Corporation providing that if plaintiff succeeded in obtaining a zoning change which would permit the development of the subject property, along with the two lots to the east, as an automobile service station, Clark would purchase the site for $50,000. The beneficial owners, William and Natoma Little, had acquired the subject property, the two lots to the east and other property on the block in 1965 for $60,000.

The subject property is zoned R-2, a single family residence classification, while the two adjacent lots to the east are zoned B-2, a sendee business district classification. A portion of the subject property is improved with a single family residence.

Plaintiff petitioned defendant for the rezoning of the subject property from R-2 tó B-2. When the petition was denied, plaintiff brought this action. At the time plaintiff filed the petition, automobile service stations were permitted under B-2. Subsequently the zoning ordinance was amended making such stations a special use under B2.

The two blocks east of the subject property on Lincoln are zoned B-2 on both the north and south sides of the street. Immediately east of the subject property is a parking lot. As we have noted, it is owned by the Littles, and constitutes part of the site for the proposed Clark station. East of the parking lot and extending the rest of the block to Mason Avenue is a building, also owned by the Littles, housing a graphic arts business on the ground floor with a multiple family residence above.

On the block east of Mason on the south side of Lincoln are located a heating and air conditioning service and an auto parts store. East of these is a single family residence. The next block contains multiple family residences.

The north side of Lincoln for two blocks to the east and for over six blocks to the west is also zoned B-2. Directly across from the subject property, on the northeast corner of Lincoln and Austin, there is a Marathon Gas Station. Directly north of this service station is an auto tire and supply company, and directly east is another automotive supply company. East of the automotive supply company is a multiple family residence.

The next block to the east on the north side of Lincoln contains a multiple family residence, a florist shop and a small shopping center. In the shopping center, along with parking space, are a barber shop, a cleaner, a food mart, a chicken store and a laundromat.

An Arco service station is located diagonally from the subject property at the northwest comer of Lincoln and Austin. To the west of the Arco station, a 27 unit condominium was being constructed at the time of trial. Further west, at the northwest corner of Lincoln and Morton Avenues, is a one store medical office building. The next block west on the north side of Lincoln contains a television service shop and single family residences.

On the south side of Lincoln, the block directly west of Austin is zoned R-2 for single family use. However this block does contain a wholesale liquor company as a non-conforming use. The subject property is the only property in the block in which it is located which is restricted to a single-family use.

Immediately south of the subject property is an alley, 16 feet in width, which runs between Austin and Mason Avenues, the next street to the east. South of this alley in an area zoned R-2, are single family residences. One block southeast of the subject property is an industrial district which extends into the ViUage of Niles; this area is zoned M, a limited manufacturing classification.

The following pertinent testimony was adduced at trial. WiUiam Little, the retired manager of the Graphic Arts business located in the same block as the subject property, testified that he and his wife were the beneficial owners of all of the property on the south side of Lincoln Avenue between Austin and Mason Avenues. Since the purchase, he had improved the residence located on the subject property and was receiving $200 per month rent. He further testified that in previous years the residence had been used for a butter and egg business. He and his wife had made extensive efforts to sell the property.

Natoma Little testified that for the last several years she and her husband had been offering the proposed gas station site for sale. They had received inquiries concerning multiple family development, but defendant had opposed such development. In prior years the residence on the subject property had been used by a cheese and egg business and later as a naprapath’s office.

Nathan J. Rosenberg, the central region real estate manager for the Clark Oil and Refining Corporation, testified that the proposed location would be “very fine” for a Clark Service Station. He also noted that, although Clark stations are open twenty-four hours a day, only gas is sold; other auto service is not provided. Milk, ice or salt might also be sold at such a station. A11 lights, except at the pump and office, are extinguished at 11:00 P.M. Rosenberg also asserted that there were Clark stations with only 50 feet of frontage.

Norman Allen, construction manager for Clark, testified that the cost of construction of a Clark station at that site would be $55,000. A building containing a sales office, washrooms and a storage area would be constructed on the southeast comer of the parcel. The building would be entirely on the lots already zoned B-2; the subject property would contain the pump islands, several flood lights and display signs.

Neil King, a real estate consultant and appraiser, testified for the plaintiff. It was his opinion that the property took its character from the commercial development in the area, and that its highest and best use would bé for an automobile service station. The nature of the intersection was set by the two gas stations already present and the traffic flow at the comer was heavy. King further testified that as presently zoned and improved the subject property was worth $20,000.

William S. Lawrence, city planner and zoning consultant, test fied for the plaintiff that in his opinion Clark’s proposed use would be the highest and best use of the subject property. Noting the limited service operation of a Clark station, he believed that a zoning change would be a logical extension of the B-2 zoning of the area immediately to the east and north, and that such an extension of B-2 would not be detrimental to other property in the area. Lawrence also stated that multiple family residential development would not be a compatible use for the subject property.

Carl L. Gardner, a city planner and zoning consultant, testified for defendant that both Lincoln and Austin were local collector-distributor streets and not major thoroughfares. The proposed site was too small for a service station and such a use would have a detrimental effect on the single family residences in the area. The existing gas stations at the intersection did not fit in with the character of the area. Gardner further testified that the highest and best use of the proposed Clark site would be for multiple family residential development. Defendant had designated the subject property R-2 and the remainder of the block B-2 on Gardner’s recommendation. Gardner also testified that if he knew a business was being operated in the building on the subject property his recommendation may have been different.

Gregory Opelka, a real estate appraiser, testified for the defendant that, in his opinion plaintiff’s proposed use would have a detrimental effect on surrounding property, and that the. highest and best use of the proposed site would be multiple family residence. He estimated that under such use the property would be worth $70,000.

James E. Wolfe, a real estate broker, testified for defendant that the highest and best use for the proposed site was multiple family, specifically a six unit apartment building; He believed that an automobile service station would have a detrimental effect on surrounding residential property.

Norton J. Sprague, owner of a residence across the alley from the subject property, testified for defendant that he purchased his home in reliance on the continued residential zoning of the subject property. He estimated that the construction of a Clark station on the site would depreciate the value of his property by ten percent. He also testified that the existing gas stations were not open on Sunday and closed at 9:00 P.M. during the week and earlier on Saturday. Both stations had been there for many years.

At the conclusion of the hearing, the trial judge found that both avenues were heavily travelled thoroughfares; that single family was not the best use of the subject property; and, that as to the subject property the ordinance was arbitrary, discriminatory and bore no reasonable relation to public health, safety and morals. He held that the ordinance was unconstitutional and invalid insofar as it prohibited the use and development of the subject property with an automobile service station as proposed by plaintiff. The trial judge, apparently referring to the testimony of defendant’s expert witnesses, stated that defendant impliedly conceded that single family zoning was not proper for the subject property. The judge further observed that an apartment building could not be erected on the site without considerable variance from defendant’s code, and specifically found implausible defendant’s evidence that a multiple family residence would be worth $70,000.

Defendant first contends that plaintiff failed to establish the invalidity of defendant’s existing ordinance as applied to the subject property.

In an action to prevent the enforcement of a zoning ordinance as to a particular piece of property, the moving party has the burden of proving by clear and convincing evidence that the application of the ordinance is arbitrary and unreasonable, and that it has no substantial relation to the public health, safety and welfare. (Exchange National Bank of Chicago v. County of Cook (1962), 25 Ill.2d 434, 185 N.E.2d 250.) A presumption of validity always attaches to an existing zoning ordinance. (Jacobson v. City of Evanston (1956), 10 Ill.2d 61, 139 N.E.2d 205.) However, when it is shown that no reasonable basis of public welfare: requires the existing restriction, the ordinance fails and the presumption of validity is dissipated. (La Salle National Bank v. Village of Harwood Heights (1971), 2 Ill.App.3d 1040, 278 N.E.2d 114.) And where the testimony in a trial without a jury is contradictory, the weight to be given to that testimony is a matter for the trial court and its findings will not be disturbed unless manifestly against the weight of evidence. La Salle National Bank of Chicago v. County of Cook (1957), 12 Ill.2d 40, 145 N.E.2d 65.

We find that the trial court correctly determined that defendant’s ordinance as applied to the subject property is invalid and void. We agree with the trial judge’s observation that in submitting proof by all of its expert witnesses that the highest and best use of the subject property was for multiple family residence, the defendant tacitly conceded that the property was not properly zoned. The trial judge also accurately characterized the zoning of the subject property as unusual. In determining the validity of zoning, primary' importance should be given by the court to the conformity of the zoning restrictions on the subject property with existing uses and zoning restrictions applicable to surrounding properties. (Guaranty Bank and Trust Co. v. City of Chicago (1969), 112 Ill.App.2d 378, 251 N.E.2d 384.) The subject property is the only parcel on the entire block zoned for single family residences. It abuts two heavüy travelled streets, and the intersection is protected by traffic lights. Two of the uses closest to the subject property, sharing the same busy intersection, are automobile service stations. And it seems clear that the subject property gets its character from the many commercial and business uses in the area. And while it is true that Mr. Sprague’s nearby single family residence will suffer some depreciation as a result of the zoning change to the subject property, his property would also suffer depreciation if defendant’s proposed multiple famffy zoning were adopted.

Citing First National Bank of Lake Forest v. Village of Northbrook (1971), 2 Ill.App.3d 1082, 278 N.E.2d 533, defendant’s second contention is. that plaintiff failed to establish that defendant acted arbitrarily and unreasonably in refusing to rezone the subject property to permit plaintiff’s proposed use. It argues that plaintiff’s burden in this regard entaüed proving that other possible alternative zoning classifications would also have been unreasonable and void.

We believe, however, that after proving that an existing zoning ordinance is void as to the property in question, plaintiff’s remaining burden is to show that its proposed use is reasonable. (Sinclair Pipe Line Co. v. Richton Park (1960), 19 Ill.2d 370, 167 N.E.2d 406; Mangel & Co. v. Village of Wilmette (1969), 115 Ill.App.2d 383, 253 N.E.2d 9.) In Fiore v. City of Highland Park (1966), 76 Ill.App.2d 62, 221 N.E.2d 323, this court stated at pp. 74-76:

“What the plaintiffs are attacking in this court * * # ■ What they must challenge is the validity of existing zoning as applied to their land and not the validity or suitability of any other prior or possible alternative zoning classifications. * « * The most that a court may do after declaring an existing ordinance void as applied to certain property is to find that the specific use contemplated by the owner is reasonable and may be permitted.”

Courts must carefully avoid impinging upon the municipality’s power to determine zoning classifications. (Treadway v. Village of Rockford (1962), 24 Ill.2d 488, 182 N.E.2d 219.) We also recognize that in some circumstances a plaintiff may prove that existing zoning restrictions as applied are void, but would be unable to prove that a proposed use. is reasonable. We do not believe, however, that after determining. that an existing zoning ordinance is void, the court, in deciding whether, plaintiff’s proposed use is reasonable, must consider whether all possible alternative zoning classifications of the subject property also would be arbitrary and unconstitutional. Such an approach was considered and effectively disposed of by our Supreme Court in Sinclair Pipe Line Co. v. Richton Park, supra. At pp. 378-379, the court stated:

“Normally the land owner is interested particularly in a spécific use which he proposes, and so it is natural that he will try the case and the judge will reach his decision in terms of the reasonableness of excluding that specific use. * * *
Because zoning cases are tried in this manner, two equally undesirable consequences may ensue if * # * the property is left unzoned as the result of a decree declaring a zoning ordinance void. The municipality may rezone the property to another use classification that still excludes the one proposed, thus making further litigation necessary as to the validity of the new classification. * * * The present case illustrates the other possibility: that a decree which was induced by evidence which depicted a proposed use in. a highly favorable light would not restrict the property owner to that use, and he might thereafter use the property for an entirely different purpose.
In our opinion, it is appropriate for the court to avoid these difficulties by framing its décreé with reference to the record before it, and particularly with reference to the evidence offered at trial. In most of the cases that have come before us in recent years, a specific use was contemplatéd and the record was shaped in terms of that use. In such cases the relief awarded may guarantee that the owner will be allowed to proceed with that use without further litigation and that he will not proceed with a different use.
# e #
It is objected that by this procedure the court goes beyond the realm of adjudication and itself becomes a zoning agency. But if the validity of a zoning ordinance is challenged by mandamus to compel the issuance of a building permit, a successful plaintiff is entitled to a judgment directing the issuance of a building permit in accordance with the plans and specifications he' submitted.”

In the present case the trial court explicitly found that the existing ordinance was unconstitutional and invalid insofar as it prohibits the use and development of the subject property as an automobile service station as proposed by plaintiff. (See Schultz v. Village of Lisle (1972), 53 Ill.2d 39, 289 N.E.2d 614.) We must agree with the trial court’s finding. As we have already observed, the subject property is located at ah intersection of two highly travelled avenues. It shares that intersection with two automobile service stations already in existence. The intersection is controlled by traffic lights. Such a use of the subject property also would be in conformity with the commercial character of Lincoln Avenue and the entire general area. After the trial court correctly found that the existing zoning restrictions as applied to the subject property were invalid, there was ample evidence to support the courts determination that plaintiff's proposed use of the property as an automobile service station was reasonable and that prohibition of such use would be unreasonable.

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

Judgment affirmed.

DEMPSEY, P. J., and McGLOON, J., concur.


author: Mr. JUSTICE JOHNSON

text:
    Tiffiny Decorating Company, Plaintiff-Appellee, v. General Accident Fire and Life Assurance Corporation, Limited, Defendant-Appellant.
    (No. 57315;
    First District (4th Division)
    June 13, 1973.

      Hinshaw, Culbertson, Moelmann, Hoban & Fuller, of Chicago, (D. Kendall Griffith, of counsel,) for appellant.
    Ruttenberg & Ruttenberg, of Chicago, (Marvin H. Ruttenberg, of counsel,) for appellee.
   Mr. JUSTICE JOHNSON

delivered the opinion of the court:

Plaintiff filed a declaratory judgment action against the defendant, by which plaintiff sought a declaration that it was covered under a combined comprehensive liability policy issued by defendant for the subject matter of a third party action brought against it by Filmore Construction Company, and that the defendant should have undertaken the defense of the third party action for plaintiff under that policy. Plaintiff also sought judgment in the amount of the attorney’s fees which it paid to protect itself from any potential liability over and above the insurance coverage of $100,000 provided under a workman’s compensation and employer’s liability policy issued by defendant and under which defendant defended the third party action for plaintiff. Both parties waived trial by jury and the case was submitted to the court on a stipulation of facts. The circuit court of Cook County entered judgment in favor of the plaintiff and the defendant appeals.

Filmore Construction Company subcontracted certain painting and decorating jobs to Tiffiny on March 19, 1966, and told Tiffiny that because scaffolding was going to be used, it required a Certificate of Insurance for scaffolding, to be issued before Tiffiny could start. Tiffiny said it had such insurance, and requested defendant’s issuance of a Certificate of Insurance to Filmore. On January 19, 1966, defendant issued to Tiffiny its combined comprehensive liability policy, limited to $250,-000, and also its workman’s compensation and employer’s liability policy, limited to $100,000. The policies were to run until January 19, 1967. On March 18, 1966, defendant issued a Certificate of Insurance to Filmore, and Tiffiny started work.

On November 15, 1966, while Tiffiny was still working as subcontractor to Filmore at Accurate Threaded Fasteners, 3550 West Pratt, Lincoln-wood, one of Tiffiny’s employees, Alexander M. Hair, while in the course of his employment, fell from a scaffold and was injured. Hair filed a personal injury suit under the Structural Work Act of Illinois, naming Filmore, the owner, and an architect as defendants. Filmore filed a third party complaint against Tiffiny s.eeking indemnity based on two theories: The active-passive theory, and breach of implied obligation to perform its work in a good, safe and workmanlike manner.

When Tiffiny was served, it tendered its defense to defendant herein. Defendant accepted the defense under the workmans compensation and employers liability policy, but stated that because the policy was only for $100,000 and the suit was for $200,000, defendant would only indemnify up to $100,000. Defendant refused to accept the defense under the combined comprehensive liability policy. Tiffiny then retained the law firm of Ruttenberg and Ruttenberg after defendant refused to accept liability under the combined comprehensive liability policy.

There is a line of cases in Illinois which holds generally that an insurer is bound to defend its insured when the allegations of the injury complaint bring the claim potentially within the coverage of the policy; or, in other words, the injury complaint must show on its face that there is no coverage before an insurance carrier can safely refuse to defend. Wheeler v. Aetna Casualty and Surety Co., (1st Dist.) No. 57607, May Term, 1973; Sims v. Illinois Nat. Casualty Co. of Springfield, 43 Ill.App. 2d 184, 193 N.E.2d 123 (3rd Dist., 1963); McFadyen v. North River Insurance Co., 62 Ill.App.2d 164, 209 N.E.2d 833 (2nd Dist., 1965).

By its unjustified refusal to defend an action against the insured, a liability insurer becomes subject to the following new and positive obligations: (1) liability for the amount of the judgment rendered against the insured or of the settlement made by him; (2) liability for the expenses incurred by the insured in defending the suit; (3) liability for any additional damage traceable to its refusal to defend. 43 Ill.App.2d 184, 193 N.E.2d 123 (3rd Dist., 1963).

On August 27, 1970, the personal injury suit brought by Hair against Filmore was settled. The defendant insurance company (General Accident) paid the entire settlement. The suit by Hair and the third party complaint by Filmore against Tiffiny were both dismissed.

This suit by Tiffiny is for $1,260, the amount of tire attorney’s fees' billed to the plaintiff, Tiffiny, by the firm of Ruttenberg and Ruttenberg.

The issue presented for review is whether the combined comprehensive liability policy issued by defendant to plaintiff, affords coverage to plaintiff for the indemnity action filed against it by Filmore. Defendant contends the policy provided no coverage because plaintiff did not by contract assume the liability of Filmore. The pertinent portions of the policy provided:

“Coverage B — Bodily Injury Liability — Except Automobile To pay on behalf of insured all sums which the insured shall become legally obligated to pay or the liability of others assumed by him under contract for damages, including damages for care and loss of services because of bodily injury, sickness or disease, including death at any time resulting therefrom sustained by any person or persons.”

By the terms of exclusion (g), the policy does not apply:

“Under Coverage B, except with respect to liability of others assumed by the insured, under contract, to bodily injury to or sickness, disease or death of any employee of the insured arising out of and in the course of his employment by the insured.”

Defendant argues that under Coverage B, two risks are incurred: (1) those which the insured shall become legally obligated to pay because of bodily injury, and (2) the liability of others assumed by it under contract for damages because of bodily injury. Exclusion (g) says that the coverage under B does not apply if the bodily injury is to an employee of the insured unless the insured assumed by contract the liability of others for such bodily injury to an employee. Defendant claims that the third party action by Filmore retains the characteristics of plaintiffs suit against Filmore and constitutes a suit to recover for bodily injury to an employee of the insured. Thus, under exclusion (g), the first risk covered by B does not apply, nor does the second risk because plaintiff did not assume the liability of Filmore under contract. The liability of plaintiff to Filmore is not founded in any indemnification agreement, but based upon theories of active-passive negligence and an implied obligation to perform the work in a good, safe and workmanlike manner, neither of which is founded upon an express indemnity.

Defendant’s argument and its rationale are contrary to the law of Illinois. It is settled in Illinois that a right to indemnity, absent an express contractual undertaking, may be implied from the terms of the contract governing job responsibility or from the relationship of the parties to the particular work being done at the time the injuries were received. It has also been held that even though there was no clear and express stipulation in the contract assuming indemnification, same did exist under the contract even absent such express provision. Thus, the right to indemnification may arise either by reason of contract or by reason of common-law indemnity principles. Parsons v. Kuhne-Simmons & Co. (1966), 76 Ill.App.2d 121, 123, 221 N.E.2d 168.

The facts have lead to the result that there was an indemnity contract between Filmore and Tiffiny. The proposal bid to Filmore from Tiffiny was dated March 17, 1966. The Certificate of Insurance which Filmore required before Tiffiny could start the job was dated March 18, 1966, and Filmore accepted Tiffiny’s bid the next day. The whole employment relationship between Filmore and Tiffiny rested upon Tiffiny’s assumption of Filmore’s liability. It is defendant’s contention, however,

that because the second count of the third party action was based upon active-passive negligence theory, Tiffiny’s liability to Filmore is by operation of law and, thus, not covered by the policy. Notwithstanding the truth of that position, the first ctiunt of the third party action is based upon a breach of an implied obligation to perform the work in a good, safe and workmanlike manner. The law in Illinois recognizes an implied contract of indemnity which is separate and apart from indemnity arising out of active-passive negligence. (Reynolds v. Illinois Bell Tel. Co. (1964), 51 Ill.App.2d 334, 337, 201 N.E.2d 322.) Defendant argues that even so, this is not a basis for coverage under the policy because it was not an express assumption of liability by Tiffiny. One look at the policy, however, shows that it does not require an express written agreement and mentions only the word contract with no modifiers. The lower court held that because the policy did not mention written contracts, defendant cannot now claim that is what it meant. It is a fundamental rule of construction that any lack of clearness in meaning of such a contract is the responsibility of the insurer, and that construction will be adopted which favors the insured and resolves uncertainty in his favor. (State Farm Fire & Casualty Co. v. MacDonald (1967), 87 Ill.App.2d. 15, 230 N.E.2d 513.) Here, there is not even any uncertainty about it. The policy merely states the word contract, and the defendant will not be allowed to contend, after a loss has occurred, that only written contracts were intended by its language.

The defendant, in its reply brief, admits that plaintiff took out two distinct policies. One was the workman’s compensation and employer’s liability policy, which covered all liability arising out of injury to an employee, except that assumed by the insured under any contract or agreement. The other was the combined comprehensive policy which did not cover any liability arising out of injury to an employee, except where insured had assumed under contract another’s liability for such injury. In its reply brief, defendant correctly concludes that “the two policies dovetail and cover all claims for either express or implied indemnity arising out of injury to an employee.”

For the reasons above and the admissions of the defendant, we conclude that there existed an indemnity contract betwen Filmore and plaintiff, which was covered by defendant’s combined comprehensive liability policy.

The trial court properly entered judgment for the plaintiff.

For the above reasons, the judgment of the circuit court of Cook County is affirmed.

Judgment affirmed.

ADESKO and DIERINGER, JJ., concur.