author: ALLOY, P. J.

text:
    H.K.H. Development Corp., an Illinois Corporation, Plaintiff-Appellee, v. The Metropolitan Sanitary District of Greater Chicago, a Municipal Corporation, et al., Defendants-Appellants.
    Gen. No. 52,188.
    First Judicial District.
    June 5, 1968.
    Rehearing denied July 12,1968.

      Allen S. Lavin, of Chicago (Fred Herzog, of counsel), for appellant.
    Arvey, Hodes & Mantynband, of Chicago (Louis M. Mantynband, J. Herzl Segal, and Richard J. Troy, of counsel), for appellee.
   ALLOY, P. J.

This is an appeal from a final decree entered in an action instituted as an action for declaratory judgment to secure a judicial determination that two leases between plaintiff, H.K.H. Development Corp. (hereinafter called “H.K.H.”), as Lessee, and defendant, Metropolitan Sanitary District of Greater Chicago (hereinafter called “Sanitary District”), as Lessor, were valid and binding upon the Sanitary District. The Sanitary District in 1950 leased two parcels of land for 20 years to the Thomas McQueen Company (hereinafter referred to as “McQueen lease”). In 1961, the term of the lease was extended from 20 to 60 years, with an option to renew for 49 additional years. Such lease was contemporaneously amended to permit an additional use of the land and there was an assignment to plaintiff of the lease, as amended, which the trial court found had been consented to by the Sanitary District. At the same time in 1961, the Sanitary District leased more of its acres to the plaintiff H.K.H. (hereinafter referred to as the “H.K.H. lease”) for a period of 50 years, with an option for a further 49-year term. In May of 1963, the Board of Trustees of the Sanitary District passed an order canceling both leases and directing plaintiff to surrender possession of the premises.

In the course of the trial, the court, following a hearing, granted the H.K.H. motion for a temporary injunction restraining the Sanitary District from interfering with plaintiff’s use of the property. This Court affirmed such order on appeal (H.K.H. Development Corp. v. Metropolitan Sanitary Dist. of Greater Chicago, 47 Ill App2d 46, 196 NE2d 494). Following such affirmance, there were extensive hearings before a Master in Chancery. The Master then filed a report finding the issues in favor of plaintiff and as against the Sanitary District, and that the attempted cancellations of the leases were a nullity, and recommending the award of a permanent injunction restraining the ouster of plaintiff. The defendant Sanitary District appeals from such decree. The trial court approved the findings and conclusions of the Master in Chancery and followed the recommendations of the Master in Chancery in entering the decree in this cause. Significant conclusions of the Master in Chancery, among others, were:

(1) that the lease between the Sanitary District and the Thomas McQueen Company was validly entered into;

(2) that the amendments to the McQueen lease were prepared and approved by attorneys and agents of the Sanitary District;

(3) that such amendments were properly approved by the Board of Trustees of the Sanitary District on February 23,1961; and

(4) that the lease and amendments were valid and binding on the Sanitary District and plaintiff, by reason of the assignment by the McQueen Company to plaintiff of the McQueen lease and the acceptance by plaintiff H.K.H. of the assignment of said lease “as amended” and its agreement “to make all payments and to perform and keep all promises, covenants and agreements and to abide by the terms and conditions of the above described lease” (coupled with the consent of the Sanitary District to said assignment as amended).

The Master also concluded that the McQueen lease, as amended, on February 23, 1961, extending the lease term to October 31, 2010, in granting the lessee an option for an additional 49 years to October 31, 2059, did not amount to a conveyance of an interest in property beyond 99 years by the Sanitary District from the effective date of such amendments, and, therefore, was not in violation of 1961 Illinois Revised Statutes, chapter 42, § 327. That act specifically provided that the Sanitary District may lease to others for a period of time not to exceed 99 years, upon such terms as the Board of Trustees may determine. The Master also concluded that the H.K.H. use of the property conveyed by the McQueen Company was a proper use under the terms of said lease since the deposit of air-dried sludge as an incident to the manufacture of fertilizer was a permitted use under the amended use clause of said lease, and that H.K.H. was not in default in any of the terms and conditions of the McQueen lease.

The Master in Chancery also concluded that the lease between the H.K.H. Development Corp., as Lessee, and the Sanitary District, as Lessor, dated August 3, 1961, was validly entered into between the Sanitary District and the plaintiff pursuant to authority granted by the Board of Trustees on August 3, 1961. The Master based such conclusion in a large measure upon the finding that:

(a) the minutes of the regular meeting of the Board of Trustees of the Sanitary District on the date referred to, reflect an authorization to the Chairman of the Committee on Finance of the Board and the Clerk of said Board to enter into a lease with plaintiff H.K.H. for a definite period of time at a definite rental schedule for particular uses in accordance with the form of lease approved by the attorney for the Sanitary District, which form of lease was attached to the report to the Board of Trustees from the committee on real estate;

(b) the executed copy of the lease attached to the complaint was identical in all respects with those elements set forth in the Board authorization of August 3, 1961, with the sole exception of including within the use clause of the lease the following: “Distribution including a truck terminal and other transportation facilities”;

(c) the authorization of August 3, 1961, stated that the form of lease would be printed in a future issue and that the certificate of notary acknowledging the signatures of the Chairman of the Finance Committee of the Board and the Clerk of the Sanitary District recited that both men had acknowledged that they signed, sealed, and delivered the instrument in their respective capacities, and caused the corporate seal of the corporation to be affixed thereto pursuant to authority of the Board; and that the acts of officers of a municipal corporation are presumed to be regular and the burden is on the party seeking to establish the invalidity of the acts to prove otherwise by a preponderance of the evidence;

(d) the lease document attached to the complaint bore the approval of a number of officials of the Sanitary District including the departmental and chief engineer, the real estate manager, the attorney and assistant senior attorney and general superintendent ;

(e) a lease document identical in all respects with that which was attached to the complaint was printed in the minutes of the regular meeting of the Board of Trustees of the Sanitary District held on May 3,1962, immediately preceding the printing of said lease and contained the following legend: “Board order on said lease passed the mtg. of Aug. 3rd, 1961. See page 460 of proc.”; and

(f) at the regular meeting of the Board of Trustees of the Sanitary District held on June 14, 1962, the minutes of the meeting of May 3, 1962, were approved as printed.

The Master also found that the H.K.H. lease is not invalid by reason of the failure of either the Sanitary District as lessor or H.K.H. as lessee to obtain prior written consent of the Director of the Department of Public Works and Buildings of the State of Illinois for the leasing of Lot 133 (which is part of the H.K.H. lease) for a term in excess of five years. The statute in question (1961 Ill Rev Stats, c 42, § 327) provides that no sales ... or leases for periods in excess of five years of certain real estate should be made by any Sanitary District without approval in writing of the Director of the Department of Public Works and Buildings of the State of Illinois. The Master’s conclusion in this respect is stated to be based upon the following:

(a) that the statute does not explicitly require prior consent of the directors;

(b) that H.K.H. introduced into evidence a copy of a letter indicating that the Director of the Department of Public Works and Buildings of the State of Illinois did in fact consent to the leasing of Lot 133 in excess of five years, although such consent was subsequent to the date of the lease;

(c) that the Director of the Department of Public Works and Buildings of the State of Illinois was made a party defendant to the proceedings and was on notice of the contentions raised by the Sanitary District with respect to the lot but took no action to join in the request of the Sanitary District to declare the lease void; and

(d) that from the evidence introduced at the hearing it was evident that the Sanitary District at all times failed to adhere to a policy requiring prior written consent of the Director of the Department of Public Works and Buildings for the leasing in excess of five years of the lots mentioned in the section of the statute referred to and that no action was taken against lessees or vendees of parcels referred to in said section from which prior written consent of the Director of the Department of Public Works and Buildings had not been obtained ; and that the Sanitary District prior to the filing of the present action and even thereafter (with the exception of the position taken as to the plaintiff) did not require prior written consent of the Director of the Department of Public Works and Buildings as being a condition precedent to the validity of a lease.

The Master also concluded from the evidence that the use of a portion of the property conveyed in the H.K.H. lease, by Material Service Corporation was not a sublease by H.K.H. and that H.K.H. was not guilty of unclean hands by reason of the deposit of air-dried sludge on Lots 109 and 109A of the McQueen lease. The Master further concluded that by reason of the payment by H.K.H. of substantial rents and taxes (more than $65,000 to date) and other improvements to the property made by it, the balance of equities is in favor of H.K.H. and against the defendant Sanitary District. The Master additionally concluded that the Board order of May 9, 1963, purporting to cancel the McQueen lease as amended and the H.K.H. lease, was null and void and that the Board had no legal authority to cancel said leases unilaterally.

As indicated previously, the trial court of Cook County adopted the recommendations of the Master and ordered the issuance of a permanent injunction as against the Sanitary District enjoining interference with the peaceful possession of the premises by plaintiff under both the McQueen lease and the H.K.H. lease. The court likewise granted plaintiff H.K.H. an additional period of five years to construct certain improvements required by Article 6 of the H.K.H. lease.

On appeal in this Court, the Sanitary District challenges both leases on certain specific grounds. As to the McQueen lease, the Sanitary District contends that plaintiff breached the McQueen lease by dumping sludge on the demised premises. It is contended that the lease contained an absolute prohibition against the placing of waste materials on the land and that plaintiff failed to sustain the burden of proof that its intended use of the sludge which was placed upon the land was for the manufacture of fertilizer. In this connection it is vigorously asserted that the fertilizer story was unsound and that the witness supporting this position had been discredited so that the fertilizer manufacturing contention should have been rejected by the Master in Chancery and the trial court. It is also contended, by the Sanitary District that the McQueen lease was void upon its face as being in violation of the statutory time limitation; that is, as being in excess of 99 years under the provisions of section 327 of chapter 42, 1961 Illinois Revised Statutes. It is further asserted that the McQueen lease amendment was invalid since it was never executed and there was no consideration for such amendment. Defendant also contends that the lease required the approval of the Sanitary District’s chief engineer for depositing of any material on the land.

As to the H.K.H. lease, the Sanitary District contends that the lease was never approved by the District Board of Trustees and is, therefore, invalid; that it is also invalid because it encompasses within its scope Lot 133 which could not be leased by the District without the written approval of the Director of the Department of Public Works and Buildings of the State of Illinois; and that plaintiff subleased part of the premises to Material Service Corporation in violation of the lease. It is also contended that the final decree changed the provisions of the lease agreement by postponing the performance of certain lease terms and that plaintiff was not entitled to equitable relief in the action generally.

As a Court of review, we are not justified in setting aside the report of a Master in Chancery when approved by the trial court and the court’s decree unless the findings and conclusions are contrary to the manifest weight of the evidence (Ginther v. Duginger, 6 Ill2d 474, 485, 129 NE2d 147; La Salle Nat. Bank v. Village of Skokie, 62 Ill App2d 82, 89, 210 NE2d 578). The record before us, while conflicting in many areas and subject to contrary interpretations, is such that we cannot conclude that the substantial findings and conclusions of the Master and the trial court are contrary to the manifest weight of the evidence. It is not a question of whether or not we would come to the same conclusions as we view the record on appeal.

In giving consideration to the questions relating to the McQueen lease, the first issue is whether the storage of air-dried sludge as raw material ostensibly for a fertilizer manufacturing plant or process, constituted a breach of the terms of the McQueen lease. As we indicated previously (H.K.H. Development Corp. v. Metropolitan Sanitary Dist. of Greater Chicago, 47 Ill App2d 46, 196 NE2d 494), the Sanitary District took the position that the storage or dumping of the sludge violated the lease and forcibly prevented further storage or dumping. Under the use provisions in the original lease at Article 3.05, there was an absolute prohibition against the dumping of “waste.” This was superseded by an amendment which permitted the “storage of dry and liquid materials” on the demised premises. It was contended by plaintiff, and evidence was offered in support of such contention, that such material was not dumped to be deposited on a permanent basis, but was temporarily placed and stored until ready for use as an incident to a manufacturing purpose. The amendment to the lease expanded the right of lessee to authorize the use of the property for manufacturing purposes and to permit the storage of dry and liquid materials, and was broad enough to encompass plaintiff’s activities (H.K.H. Development Corp. v. Metropolitan Sanitary Dist. of Greater Chicago, 47 Ill App2d 46, 52, 196 NE2d 494). While such prior opinion was based simply on plaintiff’s pleadings, this issue has now been resolved through the introduction of evidence in this cause and through the finding of the Master in Chancery and the trial court and the approval thereof by the trial court. Since the Master had the benefit of hearing and observing all of the witnesses who testified and was in a far better position to determine disputed questions of fact than is a court of review, we cannot, in view of the record, state that such finding approved by the trial court was contrary to the manifest weight of the evidence. There was evidence that H.K.H. intended to use the air-dried sludge as a fertilizer ingredient. The Sanitary District has vigorously contended that this plan was a “sham.” The Sanitary District theorized that the acquisition of the leases in an area to be traversed by the projected Southwest Expressway, coupled with the fact that one or more of the principals in H.K.H. was interested in removal of air-dried sludge to a nearby location on the McQueen lots in aid of the contractor’s obligation to clear areas for the Southwest Expressway, were the real motivating factors rather than any other considerations.

There was evidence introduced both supporting and attacking the program of the use of air-dried sludge as a fertilizer ingredient, and there was serious question as to whether a fertilizer plant of the type referred to by plaintiff could be successful. This, however, is not a matter which can be determined on appeal, since the issue which is before us is whether the Master in Chancery was justified in his determination of such issue, as a question of fact. The only question was whether plaintiff in good faith placed air-dried sludge on Lots 109 and 109A with the intention of using the material as an ingredient for the manufacture of fertilizer. The Master, following the hearings, which were quite extensive, found specifically that, at the time it deposited the air-dried sludge on the lots, plaintiff intended to use the air-dried sludge as a basic ingredient for the manufaeture of fertilizer, and that the action taken by plaintiff furthering its fertilizer operation, after the issuance of the temporary injunction and following the recommendation of the Master in Chancery, was indicative of such continued intention to use the air-dried sludge for a fertilizer manufacturing purpose. While the issue was not free from doubt, the evidence was conflicting and this Court, under established appellate procedures, is not justified in substituting its judgment for that of the Master in Chancery and the trial court on such issues. Similarly, we would not be justified in characterizing the testimony of the witness McCormick as completely valueless, since this also would principally be a matter of judgment for the Master, and on the basis of the record as filed in this Court, this Court could not say, as the Sanitary District requests, that the Master should have disregarded the testimony in its entirety.

Some evidence in the record showed that the fertilizer project of H.K.H. was under study some time before the sludge deposit operations were commenced. Following the issuance of the temporary injunction, the Chancellor required a progress report on the fertilizer venture. There was evidence in the record that the fertilizer possibility was first discussed in the early summer of 1963 and the first samples of sludge were taken prior to August 19, 1963, and an analysis was made of such sludge. We had discussed this aspect of the case in some detail in the previous opinion (H.K.H. Development Corp. v. Metropolitan Sanitary Dist. of Greater Chicago, 47 Ill App2d 46, 52, 196 NE2d 494). The sludge depositing operations were begun again after the issuance of the temporary injunction by the trial court on October 1, 1963. We cannot, on the basis of the record before us, find that the decree of the trial court based on the Master’s report was contrary to the manifest weight of the evidence on the issue relating to the deposit of sludge on the McQueen lots.

The appellant contends in this cause that in computing the duration of the lease term granted in the McQueen lease by the Board of Trustees and the February 23, 1961, amendment, the total time of the extended term plus the option period (that is February 23, 1961, to October 31, 2059 — 98 years, 8 months, 5 days) must be added to the portion of the lease which had already expired, that is, 10 years, 3 months, 23 days, at the time of such amendment. This is the only basis upon which the District claims that the lease is actually for 109 years and not within the limited period of 99 years. This particular issue raising the question of the claimed invalidity of the McQueen lease amendment while not asserted as a basis for termination of the lease, was raised by the District after its presumed cancellation of the lease in pleadings in this cause. The order of the Board of Trustees on May 9, 1963, which attempted to cancel the McQueen lease was adopted without specific reasons asserted for such cancellation and no notice was given to the plaintiff of any default in the lease as required by the terms of the lease. The McQueen lease term at the time of the extension and amendment was subject to the terms of the statutory provision (1959 Ill Rev Stats, c 42, §327). There is no question as to the power of the Sanitary District at such time, in the event such lease was terminated, to again lease the premises for a period not to exceed 99 years. Under the terms of the lease amendment of February 23, 1961, the expiration date of the basic lease was changed from November 1, 1970, to October 31, 2010, and the lessee was given an option to renew for an additional 49 years. The effect of the transaction was that the McQueen lease was modified, H.K.H. became the promisee, and there was a new undertaking. The Master might have concluded that the conduct of the parties indicated that a novation was intended (Printing Mach. Maintenance, Inc. v. Carton Products Co., 15 Ill App2d 543, 554-557, 147 NE2d 443). The lessor would certainly have had the right to release a lessee from a previously executed lease and to modify the lease with the new lessee or grant a new lease for the same property. Approval of the amendment and the assignment was contemporaneous. The assignment purported to terminate the obligations of the original lessee.

The trial judge had approved the finding of the Master that at the time the McQueen lease was amended extending the term and granting the lessee an option for an additional period of time, the Sanitary District did not thereby convey an interest in property beyond 99 years from the effective date of such amendments, and was, therefore, not in violation of the statute referred to. We find no basis in the evidence for concluding that such determination is unsound. We note the fact that the procedure referred to was. approved as to form and legality by the attorneys for the District. All parties assumed that the extended term plus the option did not exceed the statutory period. Under such circumstances, we observe that the Master concluded that the modification was made by the parties hereto so as to convey the maximum leasehold estate which was authorized by law at such time. Even if the attempt to grant a greater estate than was authorized by the act under such circumstances was improper, the lease would still be effective for the 99-year limitation period and the court would be justified in reforming the lease to make it consistent with the intention of the parties; that is, to recast such lease as an entirely new lease so that it comes within the 99 year limitation (Smyth v. Kaspar American State Bank, 6 Ill App2d 64, 78, 127 NE2d 149; Culbertson v. City of Fulton, 127 Ill 30, 38, 18 NE 781; Mahon v. State Farm Mut. Automobile Ins. Co., 36 Ill App2d 368, 377, 184 NE2d 718).

It is a further contention of the Sanitary District that the lease was never executed and that there was no consideration for it. It is noted that on or before February 23, 1961, the McQueen Company requested that the lease be modified specifically to grant the extension of time and also to grant the further option for 49 years and likewise requested a modification in the use provisions to include the storage of dry and liquid materials as hereinbefore noted. The Board of Trustees by order dated February 23,1961, ordered that the lease be modified and amended as requested by the McQueen Company. The Board also specifically authorized the Chairman of the Committee on Finance and the Clerk of the Sanitary District to execute the consent to the assignment agreement on behalf of the Sanitary District. The orders and ordinances of the Board of Trustees are by statute received in evidence without further proof (1961 Ill Rev Stats, c 42, § 325). On the basis of the record before us, the approval by the Sanitary District of the amendment and the assignment was presumptively shown by the orders. In the record before us, the assignment of the lease bears the signatures not only of the assignor and assignee but of the Sanitary District as well. The assignment incorporates the amendment by reference (Johnston v. Messinger, 226 Ill App 397). Any requirements of the Statute of Frauds were satisfied as a result of the execution which incorporated the lease modifications (Western Metals Co. v. Hartman Ingot Metal Co., 303 Ill 479, 135 NE 744). As to the issue of consideration, the agreement by the lessee H.K.H. to be bound for an additional forty years was adequate consideration for the modification of the use clause referred to.

The contention that the approval of the chief engineer was required for the deposit of any material on the land was previously considered in H.K.H. Development Corp. v. Metropolitan Sanitary Dist. of Greater Chicago, 47 Ill App2d 46, 53, 196 NE2d 494, where we said:

“The District calls attention to a provision in the lease which requires the approval of the District’s chief engineer as to whether materials deposited on the premises were ‘suitable for fill,’ and points out that plaintiff did not obtain and does not allege having obtained such approval. The District, however, overlooks the uncontradicted allegation in the supplemental complaint that the material was being placed on the land for manufacturing purposes, and not for fill.”

It is apparent that the approval of the engineer as to material suitable for fill would have no application, if the material is not to be used as a fill but is to be used in a manufacturing process. On the basis of the record before us, we cannot say that the Master in Chancery and the trial court made a finding contrary to the manifest weight of the evidence that such material was not to be used as fill. The approval of the chief engineer, therefore, was not required in view of the record and finding that the material was not deposited as a fill.

We now turn to a consideration of the H.K.H. lease. There was evidence to support the plaintiff’s contention that the H.K.H. lease was approved by the Board of Trustees; that it was properly executed and printed in the official minutes of the Board. In the Board order which purported to cancel the H.K.H. lease, the Board recited the alleged failure to obtain the consent of the State for the leasing of Lot 133 as a basis for its action. After the case was pending before the Master, and after a certain amount of testimony had been heard, the Sanitary District with leave of court filed an amended and supplemental answer which set forth the additional grounds for cancellation to the effect that the lease was never approved by the Board of Trustees, and also that H.K.H. had granted an illegal sublease. There was evidence in the record that the officers of H.K.H. had conferred with a representative of the District in late 1960 or 1961 as to the availability of the property which subsequently became the demised premises under the H.K.H. lease. On August 3, 1961, the Board of Trustees of the District passed an order approving the leasing of the premises to H.K.H. The order recited the legal description of the property, the term of the lease plus option, the amount of rent to be paid therefor and the manner of computing future rents and the uses permitted under the lease. In the printed minutes of the Board of August 3, 1961, there appeared the following recital: “Form of said lease will be printed in a future issue.” During August of 1961 the President of H.K.H. received from the representative of the District a document consisting of Thermofax copies of a proposed lease along with certain other attachments. The document was forwarded to an attorney for opinion and suggestion. Thereafter, conferences were held in the Sanitary District offices concerning certain changes, and in a letter to the District dated December 18, 1961, H.K.H. summarized the changes sought by it. Thereafter, a conference was held in the District office to resolve the matter which was attended by Sanitary District attorneys and representatives. Certain changes suggested by H.K.H. were accepted and others were rejected. The H.K.H. lease thereafter was executed on behalf of the District by the Chairman of the Committee on Finance of the Board of Trustees and was approved by the departmental engineer and chief engineer, real estate manager and the attorney and senior assistant attorney, as well as the general superintendent. It was printed in the minutes of the meeting of the Board of Trustees of May 3, 1962, as we have previously indicated with the legend: “Board order on said lease passed mtg. of Aug. 3rd, 1961. See page 460 of proc.” The minutes of the meeting of May 3, 1962, were approved “as printed on June 14,1962.” The circumstance that certain changes could have been made after August 3, 1961, would not, as contended by Sanitary District, operate to invalidate the lease. It is obvious that the parties intended, that, if the Board approved, a final draft of the lease would be worked out, the lease would be executed and the finished lease published in the minutes at a later date with the minutes to be approved as printed. When the final draft was executed it was printed in the minutes with reference to the prior Board order. This apparently was standard procedure established by the District. The statute which authorizes lease or conveyance of land by the Sanitary District (1961 Ill Rev Stats, c 42, § 323) did not specify with particularity the manner in which it is to be done. It is apparent from the record that the conclusion of the Master in Chancery and the trial court that the lease was executed and concluded in a fair and reasonable way, and that the circumstance that the completed document was spread of record in the minutes, the official journal of the Board, and approved as printed, was sufficient to make such lease valid and binding on the District.

The record indicates that Lot 133 could not be leased without the written approval of the Director of the Department of Public Works and Buildings (1961 Ill Rev Stats, c 42, § 327). This consent in writing was in fact obtained and was requisite to a lease of a period in excess of five years. The contention is made that the consent is invalid because the lessee H.K.H. rather than the District requested the consent, and also because the consent was not obtained prior to the granting of the lease. We find nothing in the statute which requires the prior approval of the Director of the Department of Public Works and Buildings of the State of Illinois, and the lease obviously would be subject and subordinate to the rights of the State and voidable at the instance of the Director until consented to. The consent, however, was obtained, and the time of its issuance under the record in this case, would not be a circumstance which would operate to invalidate such lease. We also find nothing in the record which justifies the conclusion that the consent of the Director of the Department of Public Works and Buildings must be requested by the Sanitary District. The fact that the consent was given is sufficient and effective for the purpose of complying with the statute. The record discloses that 12 leases and one sale of property by the District were subject to the same statutory restriction as was Lot 133, and that no consent prior or subsequent to such transactions was ever obtained in five of the leases and one sale. In the case of two of the leases, consent was obtained after the term was commenced. In one case, additionally, consent was given for a 50-year lease only although the lease also contained an option for an additional 49 years. As indicated in People v. Fidelity & Casualty Co., 153 Ill 25, 39, 38 NE 752, in construing a statute of the character which we have under consideration, the court will regard and adopt, in doubtful cases, construction acted upon by the Department of Public Works and Buildings of the State of Illinois and the District. The uniform interpretation of this statute by actions of both the Sanitary District and the Director of the Department of Public Works and Buildings should be followed (Barrett v. Reuter, 289 Ill App 221,230, 7 NE2d 774).

The record does not disclose a lease with Material Service Corporation of any kind or any consideration received by H.K.H. from Material Service Corporation as a result of Material Service Corporation’s activity in storing and unloading sand or materials upon a portion of the premises. A representative of H.K.H. testified, that, because of the questioned status of H.K.H. following the notice of termination of the lease, it did not feel that it could either grant permission or deny permission, and that under the circumstances if Material Service Corporation got permission from the Sanitary District, H.K.H. could see no reason why it could object to the Sanitary District granting such permission. There was no evidence that Material Service Corporation obtained permission from the Sanitary District and if it had such permission it would have been a use acquiesced in by the District. If it had no such permission, the use thereof was not authorized either by H.K.H. or the Sanitary District and certainly such unauthorized use would not be a basis for a termination of the lease of H.K.H.

In Article 6.01 of the H.K.H. lease, lessee was required to construct an improvement on the demised premises within five years of the commencement of the term. The lease was dated August 3, 1961, but was actually signed on December 29, 1961. It was printed in the minutes May 3, 1962, and the minutes were approved June 14, 1962. Only 11 months later on May 9, 1963, the District purported to cancel the lease. Continuously since that time the validity of the lease had been in litigation and its validity was vigorously contested by the Sanitary District. When the final decree in this cause was signed in the court below on January 24, 1967, the five years within which the improvements were to be constructed had elapsed. Since the activities of the Sanitary District in seeking to enforce cancellation caused or contributed to the delay, a time provision or limitation should not be enforced when it is unconscionable to do so (Witherstine v. Snyder, 225 Ill App 189, 194; Pfaff v. Petrie, 396 Ill 44, 56, 71 NE2d 345; City of Chicago v. Chicago & W. I. R. Co., 105 Ill 73). In view of the fact that the complaint prayed for equitable relief, and since H.K.H. because of the litigation resulting from Sanitary District action had not completed the improvements required under Article 6.01 of the lease, it was a proper exercise of equitable powers for the trial court to postpone the performance of that condition of the contract for a further period of five years. Even if no such extension of time was granted at the time of the entry of this decree, an extension of such character would have been granted upon application of plaintiff in a supplementary proceeding addressed to the equitable powers of the court. It, therefore, appears to us that it is in the best interest of the parties hereto that such determination be made in conjunction with the disposition of other related issues.

The Sanitary District sought forfeiture of both of the leases of H.K.H., including the McQueen lease. There was evidence that there had been substantial expenditures of time and money on the part of H.K.H. in developing the site. When the McQueen lease was first obtained, a portion of it was low and marshy and contained a lake. It was also overflowed by the Des Plaines River. H.K.H. evicted squatters on the premises, removed old trees and junk, graded and filled the terrain, and filled in a lake. Payment of rents and taxes in excess of $65,000 were paid, and some efforts, so far as the record discloses, were made to develop a fertilizer usage. Under all such circumstances, we cannot conclude that the finding of the Master that the balance of equities favored H.K.H. was contrary to the manifest weight of the evidence.

Defendant asserts that even if the decree was justified, it goes too far in its permanent injunction since the parties will have a future continuing relationship and since plaintiff might be guilty in the future of a lease violation. These observations have a sound basis, but do not require a modification of the decree at this time. The court retains the power to modify the injunction when future acts or conditions require such modification or determination (Material Service Corp. v. Hollingsworth, 415 Ill 284, 287-288, 112 NE2d 703). There is a broad inherent power to modify injunctions in light of changing conditions. This power to modify is basic and essential so that injunctions would not themselves become instruments of inequity. Defendant may always apply to the court for relief if a future violation or condition justifies such relief.

In the state of the record before us, acting within the scope of the powers granted to a court of review in an action of the nature before us, we would not be justified in reversing this cause. The judgment of the Circuit Court of Cook County will, therefore, be affirmed.

Affirmed.

STOUDER and CULBERTSON, JJ., concur.


source: Caselaw Access Project

author: MR. PRESIDING JUSTICE DEMPSEY

license: Public Domain

text:
    The People of the State of Illinois on the Relation of Merle Symonds, et al., Plaintiffs-Appellants, v. James V. Gualano, Defendant-Appellee.
    Gen. No. 52,502.
    First District, Third Division.
    June 6, 1968.
    Rehearing denied September 11,1968.

      Jeremiah Marsh, of Chicago (Hackbert, Rooks, Pitts, Fullagar & Poust, of counsel), for appellants.
    Bernard J. Hennessy, of Chicago (Schultz, Hennessy & McGrath, of counsel), for appellee.
   MR. PRESIDING JUSTICE DEMPSEY

delivered the opinion of the court.

The question presented in this appeal is whether an individual who has been convicted of the crime of using the mails to defraud is ineligible to hold public office in this state.

The respondent-defendant is presently serving a four-year term as president of the Village of Justice, having been elected to that office in April of 1965. He is also a member and acting chairman of the village’s Zoning Board of Appeals and is the treasurer of the Justice-Willow Springs Water Commission.

In 1935, after pleading guilty to two counts of mail fraud, the respondent was sentenced to serve one year and a day in the penitentiary and fined $500 on each count by the United States District Court for the District of Colorado. In 1943 he entered a plea of guilty to several counts of mail fraud and was sentenced, by the Federal District Court for the Southern District of Indiana, to a term of 18 months in the penitentiary and fined $1,000. The court suspended the sentence for three years and placed him on probation for that period.

The relators-plaintiffs are residents, taxpayers, voters and trustees of the Village of Justice. One of their number, Merle Symonds, was the respondent’s political opponent for the office of president in the 1965 election. Prior to the commencement of this quo warranto action the relators complied with the prescribed statutory procedure and requested the attorney general of Illinois and the state’s attorney of Cook County to bring a similar suit against the respondent. These requests were refused. The relators then instituted the present action seeking to oust the respondent from the positions held by him on the ground that the offense of using the mails to defraud is an infamous crime under Illinois law.

There was no dispute as to the facts and both sides moved for summary judgment. The trial court found that the crime of mail fraud is not infamous and denied the relators’ motion. Judgment was entered in favor of the respondent.

The relators’ suit is based upon the Illinois constitution and a statute which implements it:

“No person who has been, or hereafter shall be, convicted of bribery, perjury, or other infamous crime, nor any person who has been or may be a collector or holder of public moneys, who shall not have accounted for and paid over, according to law, all such moneys due from him, shall be eligible to the general assembly, or to any office of profit or trust in this state.” Constitution of Ill, 1870, art IV, § 4.
“A person convicted of an infamous crime shall forever thereafter be rendered incapable of holding any office of honor, trust or profit, or voting at any election, or serving as a juror, unless he or she is again restored to such rights by the terms of a pardon for the offense or otherwise according to the law.” Ill Rev Stats 1965, c 38, par 124-2(a).

The respondent’s defense is based upon the statute which catalogues infamous crimes:

“ ‘Infamous crimes’ are the offenses of arson, bigamy, bribery, burglary, deviate sexual assault, forgery, incest or aggravated incest, indecent liberties with a child, kidnapping or aggravated kidnapping, murder, perjury, rape, robbery, sale of narcotic drugs, subornation of perjury, and theft if the punishment imposed is imprisonment in the penitentiary.” Ill Rev Stats 1965, c 38, par 124-1.

The respondent maintains that the legislature has exclusive authority to designate the crimes which are infamous and that an offense not enumerated in the statute is not infamous. This position is not without support for it has been held that whether a crime is infamous depends upon the statute and not upon the court’s view of its moral aspects or the common law. People v. Kirkpatrick, 413 Ill 595, 110 NE2d 519 (1953); People v. Green, 292 Ill 351, 127 NE 50 (1920); People v. Russell, 245 Ill 268, 91 NE 1075 (1910); Christie v. People, 206 Ill 337, 69 NE 33 (1903). For example, in People v. Russell the court said:

“Whether or not a crime is infamous in this State depends, not upon the common law but upon the statute. The constitution does not define, or restrict the legislature in defining, infamous crimes, and the power has always been exercised and recognized.”

However, such pronouncements were disavowed in People ex rel. Keenan v. McGuane, 13 Ill2d 520, 150 NE2d 168 (1958) — a case involving a question similar to that presented here. The court there said:

“ [W] e conclude that the determination of what constitutes an infamous crime, insofar as it effects a vacancy in office, is not an exclusive legislative function, but is subject to judicial decision in the light of the common law as it existed when the constitution was adopted in 1870. We therefore conclude that the cases of Christie v. People and People v. Russell, and similar decisions, are not controlling of the case at bar.”

In Keenan the petitioner was convicted of federal income tax evasion while serving as assessor of Cook County. On advice of the state’s attorney the Board of County Commissioners dismissed him from office and appointed a successor. The ousted official then filed an original petition for mandamus in the Supreme Court seeking to be reinstated. The court, in rejecting the petitioner’s contention that he had not been convicted of an infamous crime and that only the offenses enumerated in the statute could render a person ineligible for office, stated:

“For the purpose of effecting a vacancy in office, we hold a felony to be infamous within the concept of the common law, if it is inconsistent with commonly accepted principles of honesty and decency, or involves moral turpitude. We find that the crime of which the petitioner stands convicted was federally denominated as felonious and infamous and that it falls within this classification.”

The crime of mail fraud, to which the respondent in the present case twice pleaded guilty, is also “federally denominated as felonious and infamous.” The essence of the crime is the formation of a scheme with the intent to defraud and the use of the mails in furtherance of that scheme (United States v. White, 355 F2d 909 (7th Cir 1966)) and the crime is a felony under federal law where all such crimes are considered infamous. 18 USCA, § 1; 18 USCA, § 1341; Falconi v. United States, 280 F 766 (6th Cir 1922).

In People ex rel. Ward v. Tomek, 54 Ill App2d 197, 203 NE2d 744 (1964) the court sustained an order which ousted from office five officials of Stickney Township who had been convicted of conspiring to defraud the township. The court declared that the determination of what is an infamous crime, insofar as it affects forfeiture of office, is not exclusively the function of the legislature.

The respondent points out that Keenan and Tomek involved officials who were convicted while they were holding positions of honor and trust and argues that these cases cannot be considered as governing the situation where a person has been convicted prior to being elected to office.

Although the Keenan and Tomek cases can be distinguished from the present one in that the officials in those cases were in office at the time of their convictions while the respondent was not, this is a distinction without a difference. The constitution bars anyone from holding office who has been found guilty of an infamous crime and the statute states that a person so convicted shall forever thereafter be incapable of holding office. The determinative question is not when the conviction takes place but whether the conviction is for an infamous crime. In this, we must follow the standard promulgated in Keenan in deciding whether or not the crime of mail fraud is infamous under Article IV, section 4. The conclusion must be that it is for it falls within the general classification of being inconsistent with commonly accepted principles of honesty and decency. It also is a crime involving moral turpitude. In re Needham, 364 Ill 65, 4 NE2d 19 (1936). The statute (c 38, par 124-1) is not controlling, for the legislature in listing the crimes which will disqualify an individual from holding a position of honor, trust or profit, legislated beyond the boundaries of its authority into an area which is subject to judicial interpretation. The authority of the judiciary to interpret infamous crimes for purposes of disqualification extends to the situation where the individual has been convicted prior to assuming his position as well as to the situation where the conviction is obtained while he holds office.

The respondent’s last conviction took place a quarter of a century ago, his probation was satisfactorily discharged and, presumptively, his life during the intervening years merited the trust the citizens of the Village of Justice imposed in him. However, the language of the constitution is absolute and makes no provision for a mitigation of its prohibition with the passage of time. The statute provides for the restoration of the rights of citizenship if there is an appropriate pardon. But the respondent has not been pardoned and his rehabilitation, which deserves commendation, does not redound to his favor insofar as the right to hold public office is concerned.

The trial court incorrectly held that the crime of mail fraud is not infamous. The judgment in favor of the respondent is reversed and the cause remanded with directions to grant the plaintiffs’ motion for summary judgment.

Reversed and remanded with directions.

SCHWARTZ and SULLIVAN, JJ., concur.


author: MR. PRESIDING JUSTICE BURMAN

text:
    People of the State of Illinois, Plaintiff-Appellee, v. Robert Lewis, Defendant-Appellant.
    Gen. No. 51,493.
    First District, First Division.
    June 10, 1968.

      Gerald W. Getty, Public Defender of Cook County, of Chicago (Norman W. Fishman and James J. Doherty, Assistant Public Defenders, of counsel), for appellant.
    John J. Stamos, State’s Attorney of Cook County, of Chicago (Emer C. Kissane and Alan Gersh, Assistant State’s Attorneys, of counsel), for appellee.
   MR. PRESIDING JUSTICE BURMAN

delivered the opinion of the court.

The defendant, Robert Lewis, and David Smith were charged in an indictment with having committed the offense of burglary on January 9, 1966, in that they, without authority, knowingly entered the office and warehouse of Marcella, Inc., with the intent to commit the crime of theft therein, in violation of chapter 38, section 19-1 of the Illinois Revised Statutes (1963). The defendant, Robert Lewis, waived trial by jury, and after a bench trial was found guilty, as charged, and judgment was entered on said finding. He was sentenced to a term of not less than one nor more than two years and one day in the Illinois State Penitentiary, whereupon judgment was entered on the sentence. Defendant has appealed, contending that he was not proved guilty beyond a reasonable doubt.

The record shows that Marcella, Inc., a weather stripping and storm window business firm, was burglarized on Sunday, January 9, 1966. A glass block had been broken to allow entrance into the building and a door had been broken open from the inside. We summarize the evidence offered against this defendant.

James Neli, a police officer for the City of Chicago, testified that on January 9, 1966, he received a call on his car radio at 8:25 a. m. to proceed to 2140 West 79th Street, in Chicago, to investigate a truck parked in a lot located at that address. When he received the call Neli was located at the intersection of 84th and Halsted Streets. Neli proceeded west on 79th Street. As he approached the intersection of 79th and Hamilton he observed “a colored man with a cane” about sixty feet from the intersection walking east on 79th Street. He “disregarded” this man who he later identified as the defendant. Neli made a right turn on Hamilton and turned into an alley behind 2140 W. 79th St. He didn’t find the truck in the lot behind the 2140 building. However, as he headed back towards 79th Street, he observed a red panel truck parked on the south side of 79th, in front of Marcella, Inc., which is located at 2141 West 79th Street. Neli parked directly in front of the truck and got out. He looked into the truck and saw David Smith sitting inside. Neli ordered Smith out of the truck and held him at gunpoint. Police Officer Ed Williams then arrived on the scene and he held Smith in custody while Neli investigated the building. As Neli approached the door of the Marcella building a man, later identified as James Russell, came running out of the building. While Neli watched over Smith, Officer Williams took off on foot after Russell.

Steven Walter Zamiar, who was employed at the Hoyne Shell Service Station, testified that at around 8:30 a. m. on January 9, 1966, he went to the back of the service station to inspect his car. The gas station is located across the street from Marcella, Inc. at 2100 West 79th Street. Located at the rear of the gas station is a shed which is about four by five feet and about seven feet high. The employees at the service station used it for storing tires and batteries. While Zamiar was checking out his car he saw a dark hand reaching out of the door of the shed, pulling the door shut, and then a cane was extended from the inside to hold the door in place. Shortly thereafter, Zamiar flagged down a police car that was passing by the station and asked the officer in the car, Edward McKillop, if he was looking for a “colored man.” When the officer responded affirmatively, Zamiar directed the officer to the shed.

Sergeant Edward McKillop testified that at around 8:3Q a. m., he arrived at 2141 West 79th Street, pursuant to a call he received over his car radio. Officer Williams told him that they were looking for a suspect involved in the burglary of Marcella, Inc. Sergeant McKillop got back in his car and began to “cruise” around the area. At this point he was flagged down by Zamiar. When McKillop looked inside the shed he saw the defendant crouched down on the floor holding the door shut with a cane. McKillop ordered the defendant to come out, which he did. McKillop further testified that at the time he apprehended the defendant none of the materials taken in the burglary were found in the vicinity of the shed. The defendant was completely alone at the time he was taken into custody, and no tools or weapons were found on his person.

The defendant, taking the stand in his own defense, testified that he had never seen the codefendant, David Smith, prior to his arrest on January 9th, and that he had not participated in the burglary of Marcella. He further testified that on the night of January 8th, he had gone to a party in Robbins, Rlinois, and had left the party at about 7:00 a. m. The defendant took a bus back into the city and got off at 79th Street and Western. He waited for another bus, but when one didn’t arrive he started walking east on 79th Street. He couldn’t walk fast because he had half of his stomach and a kidney removed. When the defendant arrived at the corner of 79th and Hoyne he walked into the gas station and asked Zamiar if he could use the washroom. He was told that it was out of order. The defendant then decided to use the shed in the back of the station as a latrine. When he was arrested he was crouched down with his pants down.

We have carefully reviewed the evidence and find that it was insufficient to establish defendant’s guilt beyond a reasonable doubt of the offense charged. At the most, the State’s evidence established that defendant was in the vicinity of the crime shortly after its commission and was hiding in a shed (although this latter fact is disputed by defendant). These facts do not constitute sufficient indicia of guilt to warrant the trier of fact in finding him guilty of the burglary of the Marcella business establishment. Defendant was not seen in the immediate vicinity of the Marcella building, nor was he seen fleeing from the scene of the crime. Indeed, he was seen by Officer Neli walking east on 79th Street at a time during which the crime was, in all probability, taking place. Defendant denied the charge against him. Furthermore, no incriminating evidence was found either on his person or in the vicinity of the shed where he was taken into custody. Mere presence at or around the scene of a crime is insufficient to establish guilt. People v. Boyd, 17 Ill2d 321, 161 NE2d 311. Moreover, for a conclusion based upon circumstantial evidence to be upheld the evidence relied upon must produce a reasonable and moral certainty that the accused is guilty of the crime charged. People v. Garrett, 49 Ill App2d 296, 200 NE2d 7. The presumption of innocence is not overcome by speculation, for the burden, in a criminal case, rests upon the state to prove its case beyond a reasonable doubt. People v. Johnson, 31 Ill2d 321, 201 NE2d 367. Assuming the fact that the defendant was, indeed, hiding in the shed, we cannot say, in the absence of the submission of other facts to connect him with the burglary, that this fact standing alone can be considered sufficient to produce a reasonable and moral certainty that he committed the offense charged in the indictment.

The state cites People v. Ray, 80 Ill App2d 310, 225 NE2d 467, in support of its contention that the defendant’s explanation of his behavior in the instant case was so unbelievable that the trial judge was justified in finding that he had participated in the burglary. In Ray, the defendant was charged with burglary after police having stopped him for a traffic violation, discovered some of the property taken from the recently burglarized establishment in defendant’s automobile. When police questioned the defendant about the merchandise he answered that he had no knowledge of “where it came from or how it got in the car.”

The basis of our holding in Ray, wherein we upheld the defendant’s conviction, was that the defendant’s unexplained, exclusive possession of the property recently stolen in the burglary could give rise to an inference of guilt sufficient in itself to sustain the finding of guilty, and that the defendant’s explanation of his behavior presented solely a question of credibility for the resolution of the trial judge. In the instant case, the defendant’s explanation of his hiding in the shed presented a question of credibility. However, the state, unlike the situation in Ray, has not produced sufficient evidence to justify a finding that the defendant participated in the burglary. Neither burglary tools nor stolen property were found in the defendant’s possession.

If a conviction is to be sustained, it must rest on the strength of the state’s case and not on the weakness of the defendant’s; and a reasonable doubt as to the defendant’s guilt, such as exists in the case at bar, is produced by the insufficiency of the People’s evidence. People v. Coulson, 13 Ill2d 290,149 NE2d 96.

The judgment of conviction is, therefore, reversed.

Judgment reversed.

ADESKO and MURPHY, JJ., concur.


text:
    People of the State of Illinois, Plaintiff-Appellee, v. William Trigg, Otherwise Called William Brady (Impleaded), Defendant-Appellant.
    Gen. No. 51,613.
    First District, First Division.
    June 10, 1968.

      Gerald W. Getty, Public Defender of Cook County, of Chicago (Marshall J. Hartman and James J. Doherty, Assistant Public Defenders, of counsel), for appellant.
    John J. Stamos, State’s Attorney of Cook County, of Chicago (Elmer C. Kissane and Francis T. Carey, Assistant State’s Attorneys, of counsel), for appellee.
   MR. PRESIDING JUSTICE BURMAN

delivered the opinion of the court.

The defendant, William Trigg, and Emil Bratu were charged jointly in an indictment filed on January 18, 1965, with having “committed the offense of sale of purported narcotic drug, in that they unlawfully offered to sell a narcotic drug to Stephen R. Hnatt for lawful money of the United States of America, and then sold to Stephen R. Hnatt a quantity ... of a non-narcotic substance, otherwise than as authorized in the Uniform Narcotic Drug Act of said State of Illinois then in force and effect, in violation of Chapter 38, Section 22-40, of the Illinois Revised Statutes 1963. . . .” The defendant, William Trigg, pleaded not guilty and after a trial was found guilty by a jury. The Court sentenced him to a term of not less than seven nor more than ten years in the State Penitentiary. The defendant has appealed from the finding of guilty and the judgment entered thereon.

The defendant contends on appeal: (1) that section 22-40 does not charge a public offense because said section is headed “Penalties” thereby not adequately apprising a prospective defendant as to what conduct on his part will render him criminally liable for its violation; (2) that section 22-40 is violative of article IV, section 13 of the Illinois Constitution in that the title of the section and its subject matter relate to different matters; (3) that the failure of the trial court to grant defendant’s motion for a severance was an abuse of discretion thus denying defendant a fair trial; and (4) that the evidence adduced at trial clearly left a reasonable doubt as to his guilt.

On September 8, 1964, after a meeting arranged by a department informer, Stephen R. Hnatt, an inspector in the Division of Narcotic Control of the State of Illinois, and one Walter Brown, they drove to the intersection of Wellington and Sacramento in Chicago. Brown got out of the car and met with Emil Bratu who was waiting on the corner. After he engaged in a short conversation with Bratu, Brown returned to the car and handed Hnatt a cigarette package containing heroin. Later, on that same day, Hnatt and Brown again drove to the intersection of Wellington and Sacramento. On this particular occasion Bratu threw a bag containing heroin onto the seat next to Hnatt and said, “Can you take more next time ? I don’t like to go through this for just one.” Hnatt replied that if he was satisfied with the heroin he would purchase more the next time, and he handed Bratu $700 in payment.

On September 27, 1964, Hnatt met with Bratu at the Awe-Com-On-Inn at 2165 North Clybourne. Hnatt asked Bratu if the latter could sell him one-half kilogram of heroin. Bratu replied that he could.

On September 29,1964, Hnatt again met with Bratu at the Awe-Com-On-Inn. Bratu requested Hnatt to advance him the money for the heroin, but Hnatt refused to do so. On the same date, Charles Adams, another inspector for the Division of Narcotic Control, who had Bratu under surveillance, observed Bratu leaving a green and white 1958 Buick in front of 3040 West Wellington.

On the evening of September 30, 1964, Hnatt met with Bratu at the latter’s apartment which was located at 3040 West Wellington. Bratu attempted to call his “man,” referring to his source of supply, but failed to get an answer. Later in the evening Bratu received a phone call. After a short conversation, Bratu told Hnatt that he was supposed to meet his “man” on the corner at ten o’clock that evening. He described his supplier as being a man named Bill, a Negro, who lived with a white girl named Audrey at around 84th and Rhodes. After Bill had failed to appear when Bratu thought he was supposed to, Bratu told Hnatt that he had been mistaken and the meeting was set for ten o’clock in the morning.

On the morning of the following day, October 1st, Hnatt and Adams prepared a list of $5,750 in official advance funds at division headquarters, and Hnatt took the money with him on his way to meet Bratu. That same morning Inspector Adams observed the aforementioned Buick in the vicinity of Wellington and Whipple streets; the car appeared to be “cruising” in the area, and was being driven by William Trigg, defendant, with Bratu as a passenger. When Hnatt arrived at Bratu’s apartment the latter told him that he had heard from Bill and he was to meet his supplier in a short time. Whereupon he left the apartment, returning in about fifteen minutes. During the fifteen minutes’ interlude Bratu and Trigg were observed by several division inspectors. They were seen together, driving around the area in the Buick and conversing with each other. After Bratu returned to his apartment he told Hnatt that the arrangements had been completed, and that he was to meet his “man” at 3:00 p. m. at the 50th On The Lake Motel, located at 50th and South Shore Drive on Chicago’s south side. Hnatt agreed to pick Bratu up and to pay half of the money in advance. Bratu gave Hnatt a bottle of opium and an envelope of heroin. He told Hnatt to pay him later in the evening.

The defendant was observed by division inspectors arriving at the motel at about 2:30 p. m. in the green and white Buick which he parked. He seated himself in the motel’s coffee shop and was joined at his table by one Edward Tishel. Around three o’clock Bratu and Hnatt arrived at the motel in the latter’s car and Hnatt parked the car at the rear of the motel’s restaurant, at a spot which could not be seen from the coffee shop. The defendant and Tishel got up. They went outside and seated themselves in the Buick. Shortly thereafter, Bratu, who had already been given the prerecorded funds by Hnatt, walked over and got into the Buick with the other two men. Bratu and the defendant talked for a while. Bratu then got out of the Buick carrying a package wrapped in newspaper under his arm. The defendant sped away. Bratu walked back to Hnatt’s car and gave Hnatt the package he was carrying. He said, “Here’s the thing, man. Bill decided not to rent a room.” Bratu was then placed under arrest. In the meantime, the defendant’s car had been curbed by several Division of Narcotic Control Inspectors. The defendant emerged from the car holding $3,700 of the prerecorded funds in his hand and was arrested. Bratu was found to have $2,050 in his possession.

The package that Bratu handed to Hnatt was found to contain a white nonnarcotic powder. After Trigg had been arrested and taken to the division headquarters, Inspector Paul Hemphill stated to Trigg, “I thought you wasn’t dealing in dope.” Trigg answered, “All they got is a big fat turkey, just wait until they put the acid to it and you’ll see.” Trigg then explained to the inspector that the reason he had sold Hnatt a nonnarcotic substance, referred to as a “turkey,” was that he knew something “was not right,” and that he was “running it through” first to see what would happen.

The first contention raised by the defendant is that the section of the Criminal Code under which he was convicted inadequately informed him that the behavior in which he was engaging was subject to criminal sanctions. The relevant portions of the section in question are as follows:

§ 22-40. Penalties . . .
Whoever agrees, consents, or in any manner offers to unlawfully sell, prescribe, administer, transport, dispense or give any narcotic drugs to any person, or offers, arranges, or negotiates to have any narcotic drugs unlawfully sold, prescribed, administered, transported, dispensed or given, and then sells, prescribes, administers, transports, dispenses or gives, or offers, arranges, or negotiates to have sold, delivered, transported, furnished, administered, dispensed or given to any person any non-narcotic liquid, substance or material shall be imprisoned in the penitentiary for any term from 1 year to 10 years. (Ill Rev Stats 1963, c 38, § 22-40.)

Defendant’s basic argument is twofold: in the first place, he contends that because the section is headed penalties one must assume that it deals only with the subject matter announced in its heading, and therefore, it does not set forth any provisions of substantive law that can be violated; and secondly, he asserts that the provisions of the section under which he was convicted (the second paragraph of section 22-40) are void for uncertainty and vagueness because the heading of the section did not inform him of what behavior he would be held criminally liable for. As to the defendant’s first point, it is obvious, in spite of it’s heading, that section 22-40 does contain provisions of substantive law, and does not deal only with the subject of penalties. In the interpretation of the meaning of a particular section the plain meaning of the substantive provisions of the section cannot be limited by its heading. Railroad Trainmen v. B. & O. R. Co., 331 US 519. The plain language of the section clearly sets forth a public offense.

Nor can we agree with the second part of defendant’s argument. The second paragraph of section 22-40 is directly related to the overall purpose of the Uniform Narcotic Drug Act, within which it is located, i. e., the control of illicit traffic in narcotics; and the meaning of the section is clear, adequately describing the practices to be avoided. People v. Calcaterra, 33 H12d 541, 213 NE2d 270. Therefore, neither the language nor purpose of the second paragraph of section 22-40 were so vague as to fail to inform the defendant of what behavior would be unlawful.

Defendant’s second contention, that section 22-40 is violative of article IV, section 13 of the Illinois Constitution, was raised before our Supreme Court in People v. Calcaterra, 33 Ill2d 541, 213 NE2d 270. In Calcaterra the court held that the purpose of section 22-40 was reasonably related to the purpose of the Uniform Narcotic Drug Act and therefore, section 22-40 was not unconstitutional.

Thirdly, the defendant contends that the trial court’s denial of his motion for severance, made prior to trial, was an abuse of discretion “because of the admission of evidence and exhibits of other crimes, of a different nature and classification from the one charged in the indictment, allegedly committed by the co-defendant Bratu solely, at a time directly remote from the date of the indictment.” In particular, defendant objects to the introduction in evidence of various exhibits pertaining to narcotic sales consummated between Bratu and Hnatt, as well as to statements made by Bratu outside the presence of defendant which tended to implicate him as Bratu’s supplier.

Persons jointly indicted may be tried together, and the granting of a severance is largely discretionary with the trial court. People v. Henderson, 37 Ill2d 489, 229 NE2d 519. In assessing the trial judge’s exercise of discretion the primary question is whether or not the defenses of the several defendants were so antagonistic that their being tried together denied one of them a fair trial. People v. Connolly, 33 Ill2d 128, 210 NE2d 523. In the instant case, both the defendant and Bratu pleaded not guilty, and neither man testified. No confessions by either man implicating his codefendant were introduced. Therefore, the trial judge did not abuse his discretion in denying defendant’s motion for a severance. See People v. Grilec, 2 Ill2d 538,119 NE2d 232.

The defendant argues, however, that the State’s proof of its case against Bratu by its very nature made it impossible for him to receive a fair trial when tried along with Bratu. At trial the State introduced into evidence the narcotics sold by Bratu to Hnatt on September 8th along with those to be paid for later given to Hnatt on the morning of October 1st. The trial judge, at the close of the State’s case, instructed the jury to disregard the State’s exhibits pertaining to the sales of September 8th as to the defendant, but he allowed them to consider the evidence from October 1st as to him. The defendant contends that the court erred in allowing the jury to consider the evidence of the October 1st sale as to him, and by not instructing the jury to disregard evidence of the September 8th sale as to him when it was first introduced. He further contends that this evidence tended, in the eyes of the jury, to prove him guilty of Bratu’s earlier sales, and that he was prejudiced thereby.

The essence of the State’s case against the defendant lay in the proof of a partnership existing between him and Bratu for the purpose of selling a purported narcotic, with the defendant as the supplier and Bratu as the party responsible for finding prospective customers. Where the proof of a conspiracy depends upon isolated acts and events the acts of one of the conspirators may be admitted in evidence before sufficient proof of the conspiracy has been given pending the future production by the State of adequate evidence to show the conspiracy’s existence. Spies v. People, 122 Ill 1, 12 NE 865. Therefore, the trial judge in the case at bar did not err in withholding his ruling on defendant’s objections to the admission of evidence of Bratu’s earlier sales until he could determine whether the State could prove the existence of a partnership between the defendant and Bratu to sell a purported narcotic.

At trial, the State did show the existence of such a conspiracy. Both the defendant and Bratu used the same car and were seen conversing in it. Bratu referred to his supplier as a man named Bill, a Negro, who lived with a white girl named Audrey at 84th and Rhodes. The defendant’s name is Bill, he is a Negro, and evidence was introduced tending to show that he lived with a white girl named Audrey at 84th and Rhodes. When the transfer of the purported narcotic was effected Bratu entered the Buick where the defendant was waiting and got out carrying a package containing a nonnarcotic substance. When the two men were arrested both possessed a portion of the prerecorded money, clearly indicating some sort of financial partnership. Under these circumstances the trial judge was justified in finding at the close of the State’s case that the State had established by testimony concerning isolated facts and events that a conspiracy did exist between the defendant and Bratu.

Once a conspiracy has been shown evidence of other crimes committed by one of the conspirators in furtherance of the common purpose of the conspiracy is admissible against the other conspirators. People v. Novotny, 371 Ill 58, 20 NE2d 34. Proof of such other crimes may tend to show the intent of the conspirators. ILP, Criminal Law, § 441. In the instant case the evidence of Bratu’s earlier sales of narcotics was admissible against the coconspirators as a way of showing a course of conduct designed to convince Hnatt that he was receiving real narcotics on October 1st; the deceit of Bratu and the defendant was a principal element of the offense with which they were charged. People v. Steele, 22 Ill2d 142, 174 NE2d 848. The trial judge ruled correctly in allowing the jury to consider the evidence of narcotics given by Bratu to Hnatt on October 1st for the State’s other evidence had established the existence of a conspiracy between the defendant and Bratu by that time.

Defendant cites People v. Baxter, 74 Ill App 2d 437, 221 NE2d 16, in support of his proposition that evidence of Bratu’s earlier narcotic sales prejudiced his case before the jury. In Baxter, the defendant was indicted for the sale, and conspiracy to sell, narcotic drugs. The court held therein that testimony of the party who purchased the drugs from the defendant, that he had also purchased narcotics from the defendant on pri- or occasions, was prejudicial because it had no other purpose than to show defendant’s propensity to commit the crime charged. The court pointed out, however, citing the Steele case, that the evidence complained of did not show a design on the part of the defendant, which would have brought it within a recognized exception to the rule which generally excludes evidence of past offenses. In the instant case the defendant was not indicted for unlawful sale of narcotics, but rather he was charged with the sale of a purported narcotic drug. Under these circumstances, as pointed out in Steele, evidence of prior sales may be admissible as a means of showing a plan to deceive a prospective customer. Moreover, in the case at bar, the evidence of Bratu’s earlier sales was admissible to demonstrate the purpose of the conspiracy in which both he and the defendant were involved.

Defendant also contends that the court erred in admitting into evidence conversations between Hnatt and Bratu held outside of his presence in violation of the hearsay rule, and that “these conversations were prejudicial and inflammatory, and their admission constituted reversible error.” In particular he objects to a conversation between Hnatt and Bratu held on September 30th, at which time Bratu stated that his “man” was named Bill, and that he was a Negro living with a white girl named Audrey at 84th and Rhodes.

The declarations or admissions of one of the members of a conspiracy made in the furtherance of the common purpose is admissible against the other members even though a conspiracy is not alleged in the indictment. People v. Parson, 27 Ill2d 263, 189 NE2d 311. The statements made by Bratu to Hnatt concerning the identity of his supplier were all admissible against the defendant because they were made in furtherance of the conspiracy in that they were designed to deceive Hnatt into believing that he was dealing with an established partnership whose sole purpose was the procurement and sale of actual narcotics; whereas, in reality, the purpose of the conspiracy was to “set up” Hnatt for the sale of a purported narcotic.

In People v. Brown, 83 Ill App2d 457, 228 NE2d 505, cited by defendant, the accused was indicted for the sale of narcotics. The court there held that certain statements of a third party damaging to the accused and made outside of his presence were improperly admitted in that they constituted hearsay and were highly prejudicial. Whereas in Brown no issue as to a conspiracy was raised, in the instant case, the admissibility of statements made outside of the presence of the accused depends upon their being made in furtherance of a conspiracy. Therefore, we find Brown to be distinguishable.

The defendant’s final contention is that he was not proved guilty of the offense charged beyond a reasonable doubt. He argues that because the State did not prove by direct evidence the actual physical transfer of the purported narcotic between him and Bratu, his conviction cannot stand, arguing that “mere presence at the scene of a crime is not sufficient to constitute one a principal.” While we are in accord with this latter point we cannot agree that it is applicable to the facts in the instant case.

The evidence clearly revealed that the defendant who was under constant surveillance waited in the coffee shop of the motel for Bratu and Hnatt to arrive. After their arrival, the defendant went outside and entered his car. Bratu, who had already received the prerecorded funds from Hnatt, came over empty-handed and entered the Buick; and after a short conversation with the defendant, Bratu got out of the car carrying a nonnarcotic substance wrapped in a newspaper which he gave to Hnatt. At this point, defendant drove rapidly away. After his arrest, the defendant emerged from the Buick clutching a portion of the prerecorded funds in his hand. Furthermore, defendant admitted, after his arrest, that Hnatt had been sold a “turkey” because he wanted to test Hnatt’s identity as a bona fide purchaser. The foregoing facts conclusively established that the defendant had actively participated in a planned violation of section 22-40. Therefore, the jury’s finding that defendant had been proved guilty beyond a reasonable doubt of selling a purported narcotic was justified.

The judgment of the Criminal Division of the Circuit Court of Cook County is affirmed.

Judgment affirmed.

ADESKO and MURPHY, JJ., concur.


author: MR. JUSTICE MURPHY

text:
    Earl H. Gromer, Individually, and as Trustee, and Quentin K. Ford, Plaintiff and Counterdefendant, Counterdefendant, Appellants, v. Irma L. Hahn, Defendant and Counterplaintiff for Herself and as Administratrix of the Estate of Herman Hahn, Appellee. Irma L. Hahn, Defendant and Counterplaintiff for Herself and as Administratrix of the Estate of Herman Hahn, Cross-Appellant, v. Earl H. Gromer, Individually, and as Trustee, and Quentin K. Ford, Plaintiff and Counterdefendant, Counterdefendant, CrossAppellees.
    Gen. No. 52,050.
    First District, First Division.
    June 10, 1968.

      Mitchell Kilanowski, of Chicago, for appellants.
    Jackson L. Boughner and Carl A. Gorski, of Chicago, for appellees.
   MR. JUSTICE MURPHY

delivered the opinion of the court.

Plaintiff, Earl H. Gromer, an attorney, by way of a complaint to foreclose a trust deed, sought to collect a $2,000 balance on a $12,249.76 note executed and delivered to him on May 4, 1959, by his clients, Herman F. Hahn (deceased) and defendant Irma L. Hahn, his wife. Mrs. Hahn, individually and as administratrix of the estate of her deceased husband, answered and filed six counterclaims against Gromer and Quentin K. Ford, an accountant.

In sum, in 1956 the Hahns were the owners and operators of two laundry and dry cleaning corporations in Arlington Heights, Illinois — Park Lane Launderers and Cleaners, Inc., and Grove Laundry and Cleaners, Inc. Plaintiff and counterdefendant Earl H. Gromer was their attorney, and counterdefendant Quentin K. Ford was their accountant. Financial difficulties resulted in the format tion of new corporations, transfer of assets, and bookkeeping maneuvering, in which both Gromer and Ford participated. Hahn died on May 17, 1959. In July 1959, Gromer and Ford transferred all of the assets of the previous corporations to Dryden Cleaners, Inc., the last of the corporations formed. On January 30,1962, Gromer and Ford sold their Dryden stock for $22,000. Mrs. Hahn, as a minority stockholder of Dryden, received nothing. On December 21, 1962, Gromer filed the instant complaint to collect the alleged balance of $2,000 on the note of May 4, 1959. Mrs. Hahn answered and counterclaimed as aforesaid.

After an extended trial, a decree was entered which made 51 findings. The orders of the decree include: (1) that the complaint to foreclose be dismissed and defendant Gromer was ordered to release the trust deed and cancel the note of May 4, 1959; (2) that counterplaintiff Irma Hahn individually recover from counterdefendant Earl H. Gromer $1,564.16, with costs; (3) that counter-plaintiff Hahn, as administratrix, recover from counter-defendants, Gromer and Ford, $12,754.42; and (4) that counterplaintiff take nothing by her counterclaim Two.

Plaintiff Gromer appeals from the order dismissing his complaint to foreclose and the $1,564.16 judgment against him in favor of counterplaintiff Hahn. Counterdefendants, Gromer and Ford, appeal from the $12,754.42 judgment against them and in favor of counterplaintiff Hahn, as administratrix.

Defendant and counterplaintiff, Irma L. Hahn, cross-appeals from that part of the decree which found against her on her counterclaim Two, in which she sought, as administratrix, to recover from defendants Gromer and Ford, $22,000, the proceeds of sale of stock of Dryden Cleaners, Inc., allegedly held by them as nominees for her deceased husband.

As noted, in 1956 both Park Lane and Grove were in financial difficulties. In February 1956, a new corporation, Heights Equipment Company, was formed, and the stockholders were Herman Hahn, Irma Hahn, and Earl Gromer. Heights Equipment acquired all of the machinery and equipment used by Park Lane and Grove. Then Heights leased the equipment back to Park Lane and Grove, the two operating companies. At that time Heights assumed certain liabilities to Herman Hahn, which by 1959 amounted to $12,754.42.

By July 1957, Park Lane and Grove had ceased doing business. On July 1, 1957, a new operating company, Arlington Launderers and Cleaners, Inc., was formed. Herman Hahn, Irma Hahn, and Earl Gromer were the stockholders. On July 5, 1957, Arlington leased all the machinery and equipment which had been leased to Park Lane and Grove and took over the operation of the dry cleaning business in Arlington Heights which had been conducted by these two corporations. The machinery and equipment continued to be the property of Heights Equipment Company.

In November 1958, Arlington was having financial troubles and was facing bankruptcy. A new corporation, Dryden Cleaners, Inc., was formed and incorporated on or about November 26, 1958, and initially stock was issued only to Gromer and Ford. Dryden entered into a lease with Heights for the machinery and continued to conduct the dry cleaning business on the same premises, using the same machinery and equipment and handling the same business that Arlington had handled.

On December 29, 1958, Arlington filed a petition in bankruptcy, and it was represented in that proceeding by Earl Gromer. During the winter and spring of 1959, Herman Hahn operated Dryden Cleaners, leasing the machinery and equipment from Heights. The trustee in bankruptcy discovered a conditional sales contract executed by Heights Equipment and Arlington. He took the position, after an examination of the books and records, that the affairs of these two corporations were completely commingled, and that this machinery and equipment rightly belonged to Arlington and should be turned over to the trustee in bankruptcy and sold for the benefit of the Arlington creditors. He cited Ford, Gromer and Herman Hahn into court and made this demand. As the continuation of the cleaning business conducted by Dryden was dependent upon the retention of the disputed machinery and equipment, negotiations were entered into with the trustee, and he agreed to settle his claim of ownership for $4,000.

In May 1959, Gromer drew up a list of all sums previously owed to him by the Hahns, which totaled about $8,000, and added an item of $4,000 as a loan to be used to satisfy the claim of the trustees in bankruptcy. Gromer prepared a trust deed and a promissory note for $12,249.76, dated May 4, 1959, which were signed by Herman and Irma Hahn. It is on this trust deed and promissory note that Gromer filed his complaint to foreclose.

On May 17, 1959, Herman Hahn died. In June 1959, Irma Hahn delivered to Gromer $22,001.74, proceeds of insurance policies on her deceased husband, to be used to pay off miscellaneous claims. $1,495.20 was returned to Mrs. Hahn, and a statement indicates that Mrs. Hahn still owed Gromer $2,000 secured by a mortgage on her home, the amount sought to be collected by Gromer in the instant suit.

At this point the machinery and equipment still belonged to Heights Equipment and was being used by Dryden. Later, in July 1959, the machinery and equipment appeared on the books of Dryden as its property.

The complaint to collect the $2,000 balance on the note of May 4, 1959, was filed on December 21, 1962. The answer of Irma Hahn denied any liability on the note. In substance, the allegations of the six counterclaims filed by her were as follows.

The first counterclaim alleged that neither of the Hahns received the $4,000 excess of the face amount of the note of May 4, 1959, and that the trust deed and note should be canceled and judgment entered against the counterdefendant Gromer in the amount of $1,730.88. The court found for Irma Hahn on this counterclaim in the sum of $1,564.16 (findings 41 and 48).

The second counterclaim was for the selling price of stock of Dryden Cleaners, Inc. Gromer and Ford held a majority of the stock and received $22,000 on the sale. Irma Hahn claimed that this stock was held by Gromer and Ford as nominees for her husband and, as administratrix, she was entitled to the $22,000. On this counterclaim the court found against counterplaintiff, and she cross-appeals from this part of the decree.

The third, fourth, fifth and sixth counterclaims were brought against Gromer and Ford by Mrs. Hahn as administratrix. Summarized, these claims alleged that Herman Hahn was an unsecured creditor of Heights Equipment Company in the amount of $12,754.42, and that Gromer and Ford misappropriated the assets of the company without providing for this debt. The court found that the estate of Herman Hahn had been damaged in the amount of the $12,754.42 and gave judgment against counterdefendants Gromer and Ford in that amount.

The findings of the decree which disposed of the first, third, fourth, fifth and sixth counterclaims are as follows:

30. Finds that in July of 1959, the Estate of Herman Hahn was the sole unsecured creditor of Heights Equipment Co. in the amount of $12,754.42, as reflected in the books of that corporation.

31. Finds that in July of 1959, Earl H. Gromer and Quentin K. Ford, as officers and directors of Heights Equipment Co., misappropriated all of the assets of Heights Equipment Co. and converted these assets to their own use by transferring them to Dryden without making any provision for the Estate of Herman Hahn, the sole unsecured creditor of Heights Equipment Co.

32. Finds that the transfer of July 1959 whereby Earl H. Gromer and Quentin K. Ford as directors of Heights Equipment Co. distributed all of the assets of Heights Equipment Co. to Dryden was in violation of section 157.42-2, chapter 32 of the Illinois Revised Statutes.

33. Finds that the misappropriation and conversion, the conveyance and the distribution of the assets of Heights Equipment Co. by its officers and directors, Earl H. Gromer and Quentin K. Ford, was done without the knowledge and consent of and was concealed from Irma Hahn, the other officer and director and the minority shareholder of Heights Equipment Co. Irma Hahn, individually and as administratrix of the Estate of Herman Hahn, deceased, did not discover the existence of the indebtedness of Heights Equipment Co. to the Estate of Herman Hahn, deceased, until May 17, 1962; prior to that date, Earl H. Gromer and Quentin K. Ford had custody and control of all the corporate and accounting records of Heights Equipment Co. The misappropriation and conversion, the conveyance, and the distribution of the assets of Heights Equipment Co. by Earl H. Gromer and Quentin K. Ford was not discovered by Irma Hahn until October 27, 1964.

34. Finds that the misappropriation and conversion, the conveyance, and the distribution of the assets of Heights Equipment Co. rendered that corporation insolvent to the detriment of its sole unsecured creditor, the Estate of Herman Hahn, deceased.

35. Finds that in July of 1959, Earl H. Gromer and Quentin K. Ford, as officers, directors and majority shareholders of Dryden caused Dryden to stop making rental payments to Heights Equipment Co. for the use of the machinery and equipment' which Dryden had been leasing from Heights Equipment Co.; they then caused Dryden to record this machinery and equipment on its books of account as its own property in the amount of $15,077.12 with Dryden assuming only those liabilities of Heights Equipment Co. which were secured by this machinery and equipment which liabilities amounted to $12,-077.12.

36. Finds that thereafter, on September 18, 1961, Heights Equipment Co. was involuntarily dissolved in the Circuit Court of Sangamon County, Chancery No. 798-610 for nonpayment of franchise taxes.

37. Finds that on or before January 30,1962, Earl H. Gromer and Quentin K. Ford sold all of their shares in Dryden to one Barney Erickson for a total consideration of $22,000.

38. Finds that the Estate of Herman Hahn, deceased, has been damaged in the sum of $12,754.42.

41. Finds that neither Irma L. Hahn nor Herman Hahn received the $4,000 excess of the face amount of the note over the total indebtedness specified in paragraph 39, but instead Earl H. Gromer paid $3,500 thereof to Mitchell Kilanowski, who in turn paid $3,000 to Charles David Maley, Trustee in the Arlington bankruptcy and retained $500 as his fee.

42. Finds that the note was secured by a trust deed on the premises known as 415 Evergreen Street, Arlington Heights, Illinois.

44. Finds that in June of 1959, Irma Hahn at the request of Earl H- Gromer, delivered to Earl H. Gromer funds totaling $22,001.74.

45. Finds that in the final settlement between Earl H. Gromer and Irma Hahn, dated June 25,1959, Earl H. Gromer improperly charged Irma Hahn a $3,500 item labeled “Heights advance” together with interest thereon in the amount of $29.16; this $3,-500 was paid by Earl H. Gromer for the benefit of Heights Equipment Co. and ultimately for the benefit of Dryden to Mitchell Kilanowski who retained $500 as his legal fee and paid $3,000 to the Trustee in the Arlington Bankruptcy.

46. Finds that in the final settlement between Earl H. Gromer and Irma Hahn, dated June 25, 1959, Earl H. Gromer improperly charged Irma Hahn a $35 item labeled “Interest advanced to Dryden (stock taken in lieu of debt),” this $35 item was an interest charge to Irma Hahn on the $1,000 paid by Earl H. Gromer for the first fifty shares of stock in Dryden, twenty-five of which were issued to Earl H. Gromer and twenty-five to Quentin K. Ford.

47. Finds that Earl H. Gromer returned to Irma Hahn the sum of $1,495.20.

48. Finds tht Earl H. Gromer has been indebted to Irma Hahn since June 25, 1959 in the amount of $1,564.16 as provided for in paragraphs 45 and 46 of this Decree.

On appeal, Gromer and Ford contend: (1) The defendant and counterplaintiff must prove the allegations of fraud by clear and convincing evidence. (2) The elements of an action for fraud and deceit are material statements of fact which were knowingly untrue and were made for the purpose of influencing the other party, and upon which they relied. (3) An account stated is deemed conclusive evidence of the accuracy and correctness of the items thereof and of the liability of the party, both at law and in equity, unless impeached for mistake or fraud. (4) The Bulk Sales Act must be strictly construed and for a number of given reasons was improperly applied here.

Initially, we do not believe that the burden of proof to show fraud was on Mrs. Hahn, either as a defendant or as a counterplaintiff. It is not disputed that the court found that Gromer and Ford were employed by the Hahns in these matters as an attorney and as an accountant (findings 49 and 50). Their relationship with the Hahns was one of trust and confidence. Therefore, it was the burden of Gromer and Ford to prove “the perfect fairness, adequacy and equity of the transaction, and upon [their] failure to make such a proof a court of equity will treat the case as one of constructive fraud.” Warner v. Flack, 278 Ill 303, 307, 116 NE 197 (1917); Vrooman v. Hawbaker, 387 Ill 428, 435, 56 NE2d 623 (1944).

Next considered is the contention of Gromer based on the theory of “an account stated,” which primarily refers to the note of May 4, 1959. Defendant, Mrs. Hahn, states, “In this connection it should be noted that there is no allegation of an account stated in the pleadings, and hence no such issue is before the court.” We agree.

Next considered is the contention of Gromer and Ford that the Bulk Sales Act was improperly applied here. The sixth counterclaim did allege that the transfer of assets from Heights to Dryden was in violation of the Bulk Sales Act (Ill Rev Stats 1959, c 121%, § 80a). However, the decree made no findings relating to the Bulk Sales Act. It is clear that the judgment of the court was premised on the fifth counterclaim, which alleged violation of section 157.42-2 of chapter 32, Illinois Revised Statutes, “The Business Corporation Act of 1933.” The decree found that the July 1959 transfer of all the assets of Heights to Dryden by Gromer and Ford was in violation of section 157.42-2 and was made without provisions for the debt of the estate of Herman Hahn, deceased, the sole unsecured creditor of Heights, whereby the estate was “damaged in the sum of $12,754.42,” (findings 31 to 38).

We find no merit in the contentions of Gromer and Ford. After reviewing the evidence herein, we conclude the decree orders from which Gromer and Ford appeal are substantially supported by the evidence and should be affirmed.

Next considered is the cross-appeal of Mrs. Hahn from that part of the decree which ordered that “Irma Hahn, as Administratrix of the Estate of Herman Hahn, Deceased, take nothing by her Counterclaim Two and that the plaintiff and counterdefendant, Earl H. Gromer, and the counterdefendant, Quentin K. Ford go hence without day.”

On this point it is the contention of Irma Hahn that “Dryden Cleaners was formed for the benefit of her husband, Herman, and that the stock was taken in the names of Ford and Gromer as nominees for her husband, Herman Hahn. She testified that both Ford and Gromer told her after the death of her husband that they would keep the business for her and the members of her family,” and when they testified that they were not nominees for Herman Hahn or Irma Hahn “they made the completely incredible claim that they started Dryden Cleaners with the intent of going into the laundry business themselves. They explained that the Hahns were simply people who were going to run it for them,” and “we have, therefore, a conflict in the oral testimony.”

Irma Hahn argues that this case is “a pattern of operations extending over many years which indicates clearly that this was Herman Hahn’s business and that Ford and Gromer were merely his accountant and lawyer and had no personal ownership or interest in it.” Cited in support of this contention is Vrooman v. Hawbaker, 387 Ill 428, 56 NE2d 623, where the court said (p 435) :

“Where this relation of attorney and client exists and the attorney receives anything of benefit thereby, either by purchase from the client or by acquiring interests contrary to the interests of his client, the burden of proof rests upon the attorney to show the fairness of the transaction, that it was equitable and just, that it did not proceed from undue influence, and that the property so acquired does not belong constructively to the client. (Oil, Inc. v. Martin, 381 Ill 11; Masterson v. Wall, 365 Ill 102.) In short, a lawyer cannot purchase or acquire the subject matter of litigation, or any interest therein, and hold title adversely to the client. (Oil, Inc. v. Martin, 381 Ill 11.) If the attorney does so purchase, he will be deemed a trustee for his client as to the property, or the interest so purchased, for the reason the purchase of the subject matter of the litigation is forbidden as against public policy, and because it places the attorney under temptation to be unfaithful to his trust.”

After considering the evidence on counterclaim Two, we are of the opinion that the findings of the decree against Gromer and Ford represent items which basically and equitably should be credited against the $22,000 received by Gromer and Ford for their Dryden stock. Considering these items and the period of time Dryden was operated by Gromer and Ford after the death of Herman Hahn, we are not persuaded that the order of the decree on counterclaim Two is palpably contrary to the evidence. We conclude that the court’s order on counterclaim Two should be affirmed. Quist v. Streicher, 18 Ill2d 376, 380,164 NE2d 44 (1960).

Finally, Irma Hahn contends that the trial court should have allowed her interest on the sums which the court directed be paid to her by Gromer and Ford from the basic dates of the findings, and that the cause should be remanded to the trial court to enter interest on all of the amounts due Irma Hahn from the dates previously set forth. In this case, we consider the allowance of interest to be within the discretion of the trial court. We are not persuaded that the failure of the court to allow interest to Mrs. Hahn was an abuse of discretion. See 23 ILP, Interest, § 11, p 4.

For the reasons given, the decree appealed from is affirmed in its entirety.

Affirmed.

BURMAN, P. J. and ADESKO, J., concur.