text:
    MONSANTO COMPANY, Plaintiff-Appellee, v. WALTER E. HELLER & COMPANY, INC., Defendant-Appellant—(Ilikon Corporation, Defendant).
    First District (1st Division)
    No. 82—0548
    Opinion filed May 23, 1983.

      Greenberger, Krauss & Jacobs, Chartered, of Chicago (Maurice Jacobs, James T. Ryan, and Timothy R. Conway, of counsel), for appellant.
    Gardner, Carton & Douglas, of Chicago (Gordon B. Nash, Jr., David F. Heroy, and Michael P. Padden, of counsel), for appellee.
   JUSTICE O’CONNOR

delivered the opinion of the court:

Monsanto Company (Monsanto) is a Delaware corporation with its principal place of business in Missouri. During the period relevant to this litigation, Ilikon Corporation (Ilikon) was an Illinois corporation engaged in the business of manufacturing plastic tubs and cups from raw plastic resin materials. Monsanto was Ilikon’s principal or exclusive supplier of raw plastic resins. Walter E. Heller & Company, Inc. (Heller), is a national financing company based in Chicago. At the time the instant cause of action arose, Heller had several loans to Ilikon outstanding, all of which were secured by a perfected security interest under article 9 of the Uniform Commercial Code (Ill. Rev. Stat. 1981, ch. 26, par. 9 — 101 et seq.) (the Code) in all of Ilikon’s machinery, equipment, real estate, inventory including raw materials, and all existing and after-acquired accounts receivable.

Monsanto brought this action against Heller to reclaim certain goods that Monsanto had sold to Ilikon in January of 1979. Monsanto sought to reclaim the goods under four alternative theories: (1) the “cash sale” provisions of section 2 — 507(2) of the Code; (2) the “credit sale” provisions of section 2 — 702(2); (3) conversion; and (4) unjust enrichment. In addition, Monsanto sued Heller for nonpayment under a written guaranty. The trial court entered judgment for Monsanto on all counts. The guaranty was subsequently satisfied by Heller, and this appeal is taken from only that portion of the judgment relating to the goods. The crux of Heller’s argument on appeal is that Monsanto failed to satisfy the narrow statutory exceptions for reclaiming cash or credit sellers under the Code and that, in any event, Monsanto’s rights as a reclaiming seller are subordinate to Heller’s rights as a “good faith purchaser for value” by virtue of its perfected security interest in the goods. (Ill. Rev. Stat. 1981, ch. 26, par. 2 — 403(1).) Heller also contends that Monsanto should not be able to circumvent the specific statutory provisions of the Code by invoking the common law remedies of conversion and unjust enrichment.

We affirm the trial court, based on our finding that Heller, by its conduct, failed to come within the definition of “good faith purchaser” as contemplated by the Code and thus did not acquire rights superior to those of Monsanto, a reclaiming seller under either the cash or credit sale provisions of the Code. Our review of the record reveals the following relationship and course of dealings between the parties:

A. The Heller/Ilikon Relationship.

In 1973, Ilikon purchased a plant from Monsanto in Bridgeview, Illinois, which manufactured plastic containers from certain raw plastic resins. Ilikon obtained financing from Heller in connection with the purchase and operation of the plant. Ilikon sustained financial losses from that time forward, however, and in June of 1977 came under new management. As a result of this change there was a substantial restructuring of the parties’ previous loan arrangements, and by June 30, 1977, Heller had four loans outstanding to Ilikon: $1.2 million secured by all of Ilikon’s machinery, equipment and real estate; $1.22 million secured by Ilikon’s inventory; $1 million secured by Ilikon’s inventory; and a revolving loan secured by Ilikon’s accounts receivable. All four of the loans provided that the collateral for each would secure any and all indebtedness of Ilikon to Heller. Heller advanced no new funds to Ilikon against its inventory, machinery or equipment loans after June 30, 1977, and Ilikon’s only source of funds after that time was its revolving accounts receivable loan from Heller. Under the loan agreement, Ilikon’s customers remitted all funds directly to Heller at a lockbox at the La Salle National Bank (the Bank) in Chicago. From June 30, 1977, through January 26, 1979, Heller advanced sums to Ilikon pursuant to an established procedure which involved daily telephone conversations between a Heller vice-president, Michael Forte, and Thomas Detrick, treasurer of Ilikon. During these conversations, Detrick would inform Forte of the following: Ilikon’s sales of the prior day; the amount collected in Heller’s lockbox and the prior day’s balances in Ilikon’s accounts at the Bank; the amount of checks previously written by Ilikon that had not yet cleared the Bank and the amount of cash required to cover checks previously written that were to clear the Bank that day, as well as general business information concerning Ilikon and Monsanto. Forte would advise Detrick of the funds which were available to Ilikon under the formula contained in the parties’ loan agreements and the funds that Heller would agree to transmit at that time. Heller would then by wire transfer the funds to Ilikon’s accounts.

Heller monitored its loans to Ilikon by auditing Ilikon’s books and records and examining its assets and facilities from time to time. Heller also required regular written financial reports from Ilikon, including daily reports of bank balances, sales collections and accounts receivable, raw materials received and monthly inventory reports.

B. The Monsanto/Ilikon Relationship.

Monsanto was Ilikon’s principal supplier of raw plastic resins until November of 1978, when it became Ilikon’s exclusive supplier. In June of 1977, Monsanto agreed to extend Ilikon a $200,000 line of credit which was expressly induced by Heller’s $100,000 guaranty. By agreement of the parties, this credit limit had been increased to $400,000 and Heller’s guaranty to $200,000 by January of 1979. The trial court found that it was the intent of the parties that as long as Monsanto managed its credit limit of $400,000, it would at no time be exposed to a loss of more than $200,000 in connection with its sale of goods to Ilikon.

In order to insure that Ilikon was at or near its credit limit at all times, Monsanto followed a regular procedure (the Procedure) whereby its salesman, Bruce Kleinert, would regularly visit the Ilikon facility to receive orders and demand payment. The parties were unable to determine the precise dollar value of the intended shipments prior to actual shipment because the materials were charged for by the pound and the shipments were not weighed until they left Monsanto’s docks. Therefore, Ilikon would pay for the goods by tendering a check for the approximate value of the shipment ordered, which amount would be slightly more or less than the actual value of the shipment, depending on its weight. For accounting purposes, the amount was credited to and always equaled the oldest outstanding invoice for the same approximate dollar amount ordered. After receiving a check from Ilikon, Kleinert would telephone Monsanto’s home office, causing a shipment to be released to Ilikon that same day. Kleinert would then send the checks by regular mail to Monsanto’s corporate headquarters in St. Louis for eventual presentment at Ilikon’s bank in Chicago. Monsanto does not deny its knowledge that Ilikon “played the float” with its checks and that when it received the checks from Ilikon the latter did not have the funds on hand to cover them, the payment of those checks being dependent upon Ilikon’s obtaining loans from Heller. Heller, with full knowledge of Ilikon’s practice, continued furnishing funds to cover the checks when they reached the bank.

The above Procedure was followed by the parties from June 30, 1977, until January 15, 1979, during which time no check tendered by Ilikon was returned for insufficient funds. The trial court found that Monsanto regularly changed its position during this time by shipping additional goods to Ilikon in reliance on Kleinert’s receipt of checks which, Monsanto believed, would maintain the $400,000 credit limit. Heller was made aware of the Procedure through the daily telephone conversations between Detrick and Forte.

The specific transactions giving rise to Monsanto’s cause of action occurred from January 8, 1979, through January 16,1979, during which time Monsanto caused to be delivered 10 shipments of raw resins to Ilikon in the aggregate amount of $146,410.55. All of the sales were made pursuant to the Procedure: Ilikon tendered seven checks to Monsanto during this period in reliance upon which Monsanto released the goods; on January 12 Detrick informed Heller that Ilikon had written over $200,000 in checks to its suppliers which were about to be presented for payment and requested that Heller make an additional loan to cover the checks. Heller informed Ilikon of its refusal to cover the checks on January 16, knowing that they would be dishonored and returned by the Bank for insufficient funds. Heller also informed Monsanto and the Bank of its decision not to supply any additional funds to Ilikon. Five of Ilikon’s checks written to Monsanto were subsequently dishonored. The remaining checks were never presented by Monsanto for payment, but the trial court found that they would have been dishonored and returned by the Bank if they had been presented.

On January 16 Detrick also informed Monsanto’s credit manager that the checks given to Monsanto in exchange for the delivered goods would be returned, in response to which Monsanto demanded return of the delivered goods pursuant to its rights as a reclaiming seller under the Code. Monsanto also advised Heller that it was stopping all shipments to Ilikon because Ilikon’s checks were being returned by the Bank. The shipments in exchange for the bad checks had already been delivered, however.

Kleinert and other Monsanto employees repeatedly contacted Ilikon between January 17 and January 26 to demand that Ilikon not use the delivered goods and that the goods be returned, in response to which Detrick represented that the goods would be available for retrieval but that an excess accumulation of snow on January 17 at the Ilikon facility would make such retrieval physically impossible at that time. In fact, record accumulations of snow in the area would have severely hindered the return of the goods between January 16 and January 26. During that period Ilikon, with Heller’s knowledge, continued manufacturing operations, converting the delivered goods into finished plastic tubs and cups.

On January 18, executives of Heller, Ilikon and the Bank met to discuss the financial future of Ilikon. The following day, contrary to its previous representations, Heller advanced $11,000 to Ilikon for the purchase of color concentrate needed for its continuing manufacturing operations. The funds were transferred to a previously dormant bank account in New York rather than to Ilikon’s bank in Chicago, which would have used the funds to cover checks previously written to other suppliers, including Monsanto. On January 22 and 26 Heller also advanced substantial sums to Ilikon’s separate payroll account in Chicago for the purpose of maintaining Ilikon’s continued manufacturing operations.

On January 25, 1979, Ilikon notified Heller and Monsanto that as of 4 p.m. of the following day all of its operations would cease, its officers and directors would resign and its assets would be tendered to Heller. Heller obtained possession of Ilikon’s former assets at that time and continued operations limited to printing labels for the finished tubs and cups. On January 26 Monsanto requested that Heller return the delivered goods and any finished products of the goods. Heller failed to comply with Monsanto’s demand and, despite repeated requests by Monsanto not to proceed, on January 31 Heller began selling Ilikon’s inventory of finished products for its own accounts until restrained by court order on February 13, 1979.

The trial court dissolved the restraining order on February 20, 1979, allowing Heller to continue its sales of inventory and directed that all proceeds from the sale of inventory manufactured from the goods supplied by Monsanto be deposited in designated interest-bearing accounts at a rate of 5%% in the joint names of Monsanto and Heller. From February 20, 1979, through the date of entry of judgment, $27,127.27 had accrued at that rate on the principal sum of $146,410.55.

Trial commenced on July 13, 1981. After lengthy proceedings, during which the court heard extensive testimony by the parties, a final order was entered on February 4, 1982. The order contains numerous findings of fact and conclusions of law, including the following:

That during the period from June 30, 1977, through January 15, 1979, Monsanto’s sales to Ilikon in accordance with the Procedure were cash sales under section 2 — 507 of the Code which requires that a sale be a delivery “where payment is due and demanded” in order to be a cash sale (Ill. Rev. Stat. 1981, ch. 26, par. 2 — 507(2)) and that such was the intent of the parties; that Monsanto complied with the Code’s requirements for reclaiming cash sellers (Ill. Rev. Stat. 1981, ch. 26, par. 1 — 101 et seq.) by demanding return of the delivered goods within 10 days of their delivery and that Heller’s priority by virtue of its article 9 security interest in the inventory must fail because Heller did not act in good faith and cannot be considered to be a “good faith purchaser for value” as required by section 2 — 403 of the Code. (Ill. Rev. Stat. 1981, ch. 26, par. 2 — 403.) The court also concluded that, in the event Monsanto’s sales to Ilikon were credit sales, Ilikon received the delivered goods while insolvent and Monsanto therefore complied with all of the requirements for reclamation under the credit sales provisions of the Code. Ill. Rev. Stat. 1981, ch. 26, par. 2 — 702.

In addition, the court found that Heller’s security interest did not attach to the delivered goods because Ilikon had no “rights in the collateral” (Ill. Rev. Stat. 1981, ch. 26, par. 9 — 203(l)(c)) and because Heller did not give new value against them as required by section 9— 203 of the Code (Ill. Rev. Stat. 1981, ch. 26, par. 9 — 203(l)(b)); that Heller converted the delivered goods to its own use; that Heller would be unjustly enriched by the value of the delivered goods and that Heller is equitably estopped from asserting any rights in the delivered goods due to its and Ilikon’s course of dealings with Monsanto.

Heller first argues that the trial court’s finding that Monsanto’s sales to Ilikon in accordance with the Procedure were cash sales is against the manifest weight of the evidence because it was based on the court’s erroneous belief that payment was “due and demanded” for the goods upon their delivery within the meaning of section 2— 507(2) of the Code. (Ill. Rev. Stat. 1981, ch. 26, par. 2 — 507(2).) As Heller correctly states, this section does not afford relief to a seller who, at the time of delivery of goods, merely demands payment for other goods previously shipped. (In re Kee Lox Manufacturing Co. (E.D. Pa. 1977), 22 U.C.C. Rep. Serv. 938.) Heller argues that the evidence presented, including sales agreements between Monsanto and Ilikon drafted prior to 1977 listing “net 30 day” credit terms, the guaranty from Heller to Monsanto, the purpose of which was to cover Ilikon’s credit purchases, and the testimony of Ilikon’s chief financial officer require a contrary conclusion.

In determining whether the transactions involved were cash or credit sales, the trial court properly considered the intent of the parties. (In re Helms Veneer Corp. (W.D. Va. 1968), 287 F. Supp. 840.) There is no question but that Monsanto’s agreement to extend Ilikon an initial $200,000 line of credit on June 30, 1977, was induced by Heller’s guaranty for one-half of that amount (these amounts were later increased proportionately). The court found that the parties intended by the terms of the guaranty and Monsanto’s $400,000 credit limit that, as of June 30, 1977, Monsanto would effectively limit its exposure to a loss of not more than $200,000 in connection with its sale of goods to Ilikon. Once Ilikon had reached the credit limit, all sales were made strictly in accordance with the Procedure; by demanding payment by check prior to the release of any new shipment, Monsanto incurred no new risk in its subsequent sales to Ilikon. In the words of Monsanto’s salesman, the parties were “trading dollars for pounds.”

Heller relies principally on In re Kee Lox Manufacturing Co. (E.D. Pa. 1977), 22 U.C.C. Rep. Serv. 938; however, the facts in that case are distinctly different from the case now before us. Kee Lox involved a single, isolated transaction. There, the existing practice between the parties was the sale of goods on credit. Each month Kee Lox would send Pram, Inc., its seller, a check on account of previous purchases. Kee Lox fell behind in its payments and Pram withheld all future shipments until Kee Lox “reduced” its account. Upon receiving a check from Kee Lox, Pram shipped goods worth a substantially higher amount. When Kee Lox’ check was subsequently dishonored, Pram sought reclamation under the cash sale provisions of the Code. In rejecting Pram’s contention that the transaction involved was a cash sale, the court distinguished In re Mort Co. (E.D. Pa. 1962), 208 F. Supp. 309, a case in which Mort, the bankrupt, a credit buyer, had called a creditors’ meeting in order to effectuate a settlement. By agreement, Mort continued to operate its business, but all purchases were to be on a c.o.d. basis. Some months later, goods were delivered in exchange for a check which was subsequently dishonored. Within 10 days, the seller sought reclamation under section 2 — 507(2). As stated by the court in Kee Lox, “it is clear to us that the agreement in Mort, to pay cash for all goods received, is different from the agreement between Kee Lox and Pram, to make a payment on account of an old bill.” 22 U.C.C. Rep. Serv. 938, 941.

After hearing the evidence, the trial court found that the parties here sought to maintain an established credit limit and that this was done by strict adherence to the prescribed Procedure for a period of 20 months. The court concluded that these actions effectively made all sales by Monsanto to Ilikon during this period “cash sales.” We cannot say that the court’s conclusion is against the manifest weight of the evidence. Nevertheless, we find that even if the subject transactions were considered credit sales, Monsanto must still prevail as a reclaiming credit seller under the Code.

Heller argues that Monsanto’s credit sales reclamation remedy under section 2 — 702(2) is barred by its knowledge of Ilikon’s insolvency at the time the goods were delivered. That section provides:

“Where the seller discovers that the buyer has received goods on credit while insolvent he may reclaim the goods upon demand made within 10 days after the receipt, but if misrepresentation of solvency has been made to the particular seller in writing within 3 months before delivery the 10 day limitation does not apply. Except as provided in this subsection the seller may not base a right to reclaim goods on the buyer’s fraudulent or innocent misrepresentation of solvency or of intent to pay.” Ill. Rev. Stat. 1981, ch. 26, par. 2 — 702(2).

Monsanto does not claim that Ilikon misrepresented solvency; both parties were aware that Heller was Ilikon’s only source of cash and had absolute control of Ilikon’s cash flow on a daily basis after June 30, 1977. Heller claims that Monsanto was required to prove at trial that it first discovered Ilikon’s insolvency after the goods were delivered. The cases cited by Heller in support of this supposed requirement, however, simply state that the reclaiming seller’s demand must be made within 10 days of receipt of the goods by an insolvent credit buyer. There is no question but that Monsanto satisfied this requirement.

Heller relies on Theo. Hamm Brewing Co. v. First Trust & Savings Bank (1968), 103 Ill. App. 2d 190, 242 N.E.2d 911. In that case, Hamm, the credit seller, failed to make its demand within the 10-day limit, then claimed reliance on its buyer’s dishonored checks as “written misrepresentations of solvency” within three months of delivery in order to get around the strict 10-day requirement. The court rejected Hamm’s claim, finding that in light of Hamm’s knowledge of its buyer’s financial condition, including prior experiences in receiving bad checks, Hamm could not have relied on these checks as “written misrepresentations of solvency” under section 2 — 702(2). In explaining the necessity of the written representation and the seller’s reliance thereon, the court emphasized its concern that, without such a requirement, section 2 — 702 could be utilized to protect a seller who continues selling to a buyer he knows to be insolvent, then reclaims the property when the buyer doesn’t pay as promised or when another party appears on the scene. “[The Code] requires dealing in good faith *** and would seem to require that a seller not be able to profit by such a course of conduct.” 103 Ill. App. 2d 190, 196.

We believe that the reasoning applied in Hamm Brewing supports Monsanto’s position here. Unlike the seller in Hamm, Monsanto had every reason to expect payment of the January 1979 checks based on Heller’s previous conduct of covering the checks for a period of 20 months, during which time Monsanto had never received a bad check from Ilikon. By cutting off funds to Ilikon without previous notice, Heller violated a tacit understanding that Monsanto would not be exposed to more than $200,000 risk from its sales to Ilikon. Under those facts, Heller was far from the innocent third party over which the court in Hamm Brewing expressed its concern.

Even if the literal discovery of insolvency restriction urged by Monsanto were to be adopted by this court, Monsanto complied with this condition because it did not actually discover Ilikon’s “insolvency” until January 16, 1979, when it learned that the forthcoming checks would be dishonored. The Code offers a choice of definitions of insolvency:

“A person is ‘insolvent’ who either has ceased to pay his debts in the ordinary course of business or cannot pay his debts as they become due or is insolvent within the meaning of the federal bankruptcy law.” (Ill. Rev. Stat. 1981, ch. 26, par. 1— 201(23).)

The Seventh Circuit, in interpreting this section, rejected application of an absolutely literal meaning to the language of the Code and found that what is “insolvent” under the Code is not restricted by that definition, but “must rest on the facts of each transaction.” (In re Creative Buildings, Inc. (7th Cir. 1974), 498 F.2d 1, 3.) The court further stated that “[tjhere are a variety of business transactions in which for one reason or another NSF checks issue either through mistake, or miscalculation, or good faith reliance by the drawee on anticipated income.” 498 F.2d 1, 2-3.

In the instant case, both Monsanto and Ilikon operated for 20 months in reliance on Heller’s continued funding of Ilikon. The surrounding circumstances clearly show that Ilikon’s balance sheets or operating loss were irrelevant to Monsanto’s good-faith expectation of payment, and when Monsanto “discovered” Heller’s action in cutting off funds to Ilikon it acted immediately by sending the required reclamation demand. We do not believe that the language and policy behind section 2 — 702(2) require anything more.

Heller next argues that even if Monsanto met the statutory prerequisites for a reclaiming seller under either section 2 — 507(2) or 2 — 702(2), the trial court erred in giving Monsanto’s claims priority over Heller’s rights as a “good faith purchaser for value” within the meaning of section 2 — 403(1). The trial court concluded that Heller did not act in good faith and therefore was not entitled to the priority given to secured lenders under the Code. Heller contends that the Code definition of “good faith” simply requires “honesty in fact in the conduct or transaction concerned” (Ill. Rev. Stat. 1981, ch. 26, par. 1 — 201(19)), and argues that as against Monsanto, “a sophisticated party with full knowledge of the risks and benefits involved in dealing with an insolvent buyer such as Ilikon,” Heller cannot be found to have been deceptive or dishonest. Heller also argues that the good faith requirement cannot be interpreted so as to require a secured party to continue funding a “doomed enterprise.”

While we agree that a secured lender is not expected to extend unlimited credit for an indefinite period in the absence of an express agreement, “good faith” under the Code has been held expressly to require that parties engage in “reasonable commercial standards of fair dealing.” (See In re Samuels & Co. (5th Cir. 1976), 526 F.2d 1238, 1243, cert. denied (1976), 429 U.S. 834, 50 L. Ed. 2d 99, 97 S. Ct. 98.) As stated by Professor Grant Gilmore, a well-known Code scholar, good faith is an overriding purpose of the Code. (See Gilmore, The Good Faith Purchase Idea and the Uniform Commercial Code: Confessions of a Repentant Draftsman, 15 Georgia L. Rev. 605, 629 (1981).) The standard for determining “good faith” is a subjective one and rests on the facts of each case. Walter E. Heller & Co. v. Convalescent Home (1977), 49 Ill. App. 3d 213, 222, 365 N.E.2d 1285, appeal denied (1977), 66 Ill. 2d 637.

Given the course of dealing between the parties, Heller’s direct involvement with the operation of Ilikon and with Ilikon’s transactions with its suppliers, we believe that the instant case is factually distinguishable from those cases cited by Heller, and the trial court correctly concluded that Heller was not entitled to the priority of a “good faith purchaser for value” under section 2 — 403(1). Having concluded that Monsanto is entitled to reclamation under the provisions of sections 2 — 507(2) or 2 — 702(2) of the Code, we need not address the remaining common law claims of conversion and unjust enrichment.

Lastly, we find no merit in Heller’s argument that the trial court erred in entering judgment for goods not claimed in Monsanto’s reclamation demand and in awarding prejudgment interest. Monsanto demanded and is clearly entitled to recover damages in the amount of the value of all goods delivered in exchange for the dishonored checks. The undisputed invoice value of these goods totaled $146,410.55, the principal amount upon which the trial court entered judgment. Pending resolution of the dispute, the court ordered that all proceeds from the sale of Ilikon’s inventory be placed in jointly held interest-bearing accounts, and upon finding for Monsanto on its claims regarding the goods, the court entered judgment in the principal amount to be paid from this account, plus all interest actually earned on this sum at the rate of 53/4% in that account as of judgment date; and statutory interest from the judgment date, plus statutory costs. We find no error in awarding Monsanto only that interest that was actually earned on its own funds.

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

McGLOON and CAMPBELL, JJ., concur.


source: Caselaw Access Project

author: JUSTICE HARTMAN

license: Public Domain

text:
    METROPOLITAN DISTRIBUTORS, INC., Plaintiff-Appellee, v. ILLINOIS DEPARTMENT OF LABOR et al., Defendants-Appellants.
    First District (2nd Division)
    No. 82—1020
    Opinion filed May 24, 1983.

      Tyrone C. Fahner, Attorney General, of Springfield (Richard J. Puchalski, Special Assistant Attorney General, of counsel), for appellants.
    Sneider and Troy, of Chicago (James R. Sneider and Richard J. Troy, of counsel), for appellee.
   JUSTICE HARTMAN

delivered the opinion of the court:

The Illinois Department of Labor (Department) appeals from an order permanently enjoining it from conducting any further investigations into severance pay claims by former employees of Metropolitan Distributors, Inc. (Metropolitan). The issue presented for review is whether injunctive relief was properly granted under the circumstances presented.

Metropolitan’s complaint for injunctive relief asserts that it was an Illinois corporation engaged in warehousing and distributing various malt beverage products until September 4, 1981, when it went out of business. Metropolitan discharged all its employees, many of whom were members of the International Brotherhood of Teamsters, Local Union 794 (Union). The Union had entered into a collective bargaining agreement with Metropolitan which provided in relevant part that:

“Any permanent employee whose job is terminated because of *** [the discontinuance of a route,] who has more than one (1) year of employment shall be paid by his employer the average weekly earnings for the previous twelve (12) months prior to his termination, one (1) week for each year of employment up to a maximum of ten (10) weeks, same to constitute a severance allowance.”

Shortly before they were discharged, 91 of Metropolitan’s Union employees filed wage claim complaints with the Department claiming severance pay under the agreement. On January 14, 1982, the Department’s wage claim division conducted an initial hearing on the matter and scheduled another hearing for March 29, 1982. Metropolitan meanwhile brought this action to enjoin the Department’s further investigation and hearings. The Department’s motions to dismiss the complaint were denied, and the circuit court temporarily restrained the Department from conducting such further activities. An answer and affirmative defenses were filed by the Department. Certain exhibits were received by the circuit court and on April 19, 1982, the circuit court entered a permanent injunction, finding that severance pay claims are outside the purview of the Illinois Wage Payment and Collection Act (Ill. Rev. Stat. 1979, ch. 48, par. 39m — 1 et seq.) and beyond the jurisdiction of the Department to investigate.

The Department asserts, and we agree, that the initial determination of whether an agency has jurisdiction over a particular matter should be made by the agency itself. (Endicott Johnson Corp. v. Perkins (1943), 317 U.S. 501, 87 L. Ed. 424, 63 S. Ct. 339; Scott v. Association for Childbirth At Home, International (1981), 88 Ill. 2d 279, 430 N.E.2d 1012.) By substituting its judgment for that of the Department and determining that it lacked jurisdiction to conduct hearings on the severance pay claims of Metropolitan’s former employees, the circuit court exceeded its authority. The scope of judicial review before the circuit court was limited to determining whether the investigation was commenced for a lawful and authorized purpose and whether the information sought was relevant to this purpose. United States v. LaSalle National Bank (1978), 437 U.S. 298, 57 L. Ed. 2d 221, 98 S. Ct. 2357; Illinois Crime Investigating Com. v. Buccieri (1967), 36 Ill. 2d 556, 224 N.E.2d 236.

The Department also contends that the legislature intended to include severance pay claims among those which it authorized the Department to investigate and, if possible, amicably resolve under the Elinois Wage Payment and Collection Act (Ill. Rev. Stat. 1979, ch. 48, par. 39m — 1 et seq.) (present act). A brief review of the legislative history will be helpful, since it appears that this question is one of first impression in Elinois. The Act’s predecessor statute, the wage payment act of 1937 (Ill. Rev. Stat. 1959, ch. 48, pars. 39g through 39m) (1937 act) had been interpreted by the supreme court in Conlon-Moore Corp. v. Johnston (1961), 23 Ill. 2d 341, 178 N.E.2d 336, to exclude vacation pay from within the ambit of the statute, since the legislature had not defined the term “wages.” The court refused to construe wages to include vacation pay because the statutory language seemed to refer only to those sums “due and payable at regular intervals.” The court went on to say that if the term had been more broadly defined to include “every form of remuneration for personal services,” as defined in the Unemployment Compensation Act (Ill. Rev. Stat. 1959, ch. 48, par. 344), it might have concluded otherwise.

In April 1971, the Commission on Labor Laws (Commission) submitted a report to the General Assembly suggesting the revision of the 1937 act. Among the proposed revisions was that the term “wages” be broadly defined to include a variety of benefits, including vacation pay. The Commission’s proposals in this regard appear to have been accepted by the legislature. “Wages” are now defined as “compensation for labor or services rendered, whether the amount is determined on a time, task, piece, or any other basis of calculation.” (Ill. Rev. Stat. 1979, ch. 48, par. 39m — 2.) In addition, any contributions to an employee benefit, trust, or fund, which an employer is legally required to make under the terms of a collective bargaining agreement, are to be considered “wages” as well. (Ill. Rev. Stat. 1979, ch. 48, par. 39m — 8.) “Final compensation” is defined as “wages, salaries, earned commissions, earned bonuses, and the monetary equivalent of earned vacation and earned holidays.” (Ill. Rev. Stat. 1979, ch. 48, par. 39m — 2.) The statute directs the Department “to assist any employee *** in the collection of wages or final compensation due him ***.” (Ill. Rev. Stat. 1979, ch. 48, par. 39m — 6.) From the sweep of the foregoing provisions, the Department argues that severance pay claims should have been construed to fall within the purview of the statute.

In contraposition, Metropolitan insists that the foregoing statutory provisions demonstrate the absence of Department jurisdiction, citing statutory construction principles to the effect that the enumeration of certain things in a statute conclusively implies the exclusion of all others, citing People v. Dublin (1978), 63 Ill. App. 3d 387, 380 N.E.2d 31, People v. Schaffra (1975), 30 Ill. App. 3d 600, 332 N.E.2d 163, and In re Estate of Leichtenberg (1956), 7 Ill. 2d 545, 131 N.E.2d 487. Metropolitan also relies on In re Sneed (1977), 48 Ill. App. 3d 364, 363 N.E.2d 37, for the proposition that courts must accept the plain and ordinary meaning of words found in a statute and must reject a forced construction which would not give effect to the intent of the legislature. For those reasons, Metropolitan maintains that the legislature did not intend severance pay claims to come within purview of the statute. We disagree.

In Conlon-Moore Corp. v. Johnston (1961), 23 Ill. 2d 341, the supreme court considered the question of whether the term “wages” as used in the 1937 act included “vacation pay” within its meaning and purpose. The court noted, first, the absence of an express definition of wages in the 1937 act. Further, the court observed that since the statute was concerned with prompt payment of wages due and payable, vacation pay was excluded, because it was cumulated until the vacation period arrived and then paid to the employee. In contrast, the present statute not only expressly includes vacation pay and final compensation within its terms, but defines wages broadly as “compensation for labor or services rendered,” as determined on “any * * * basis of calculation” in addition to “time, task [or] piece.” (Emphasis added.) “Final compensation” of employees, is defined to include wages and salaries, among other forms of compensation which have been earned. (Ill. Rev. Stat. 1979, ch. 48, par. 39m — 2.) The statute authorizes the Department and its directors to assist any employee or class of employees “*** in the collection of wages or final compensation due ***.” (Ill. Rev. Stat. 1979, ch. 48, par. 39m — 6.) Unlike the 1937 act, therefore, the comprehensiveness of the present act demonstrates a legislative intent to include broad classes of compensation due employees within the responsibility of the Department. We hold that severance pay as provided for in the instant agreement constitutes either wages or final compensation under the statute. Accordingly, the circuit court’s finding to the contrary was erroneous and must be reversed.

Metropolitan urges a contrary result, relying upon McGowan v. Administrator, Unemployment Compensation Act (1966), 153 Conn. 691, 220 A.2d 284, and Department of Labor ex rel. Commons v. Green Giant Co. (Del. Super. Ct. 1978), 394 A.2d 753, as authorities' for the proposition that the statutory term “wages” cannot include nonrecurrent benefits such as severance pay. The approach taken by a majority of other jurisdictions is more persuasive. In this regard, Owens v. Press Publishing Co. (1956), 20 N.J. 537, 120 A.2d 442, has been most often cited and followed. In Owens, discharged employees sued their employer to recover severance pay which they claimed was due them under an expired collective bargaining agreement. In its consideration of the contentions raised by the parties, the New Jersey Supreme Court stated:

“Severance pay is terminal compensation measured by the service given during the subsistence of the contract, in this case the collective bargaining agreement, payable on discharge from the employment not induced by misconduct, according to the prescribed formula, a means of recompense for the economic exigencies and privations and detriments resulting from the permanent separation of the employee from service for no fault of his own. In a real sense it is remuneration for service rendered during the period covered by the agreement.” (Emphasis added.) (20 N.J. 537, 545-46, 120 A.2d 442, 446.)

(To the same effect are Feola v. Valmont Industries, Inc. (1981), 208 Neb. 527, 304 N.W.2d 377; Compton v. Shopko Stores, Inc. (1980), 93 Wis. 2d 613, 287 N.W.2d 720; Scoa Industries, Inc. v. Bracken (Del. 1977), 374 A. 2d 263; Globe-Democrat Publishing Co. v. Industrial Com. (Mo. App. 1957), 301 S.W.2d 846; Chase v. Warren Petroleum Corp. (La. App. 1964), 168 So. 2d 861; Montefalcone v. Banco Di Napoli Trust Co. (1945), 268 App. Div. 636, 52 N.Y.S.2d 655; see also Bolta Products Division v. Director of Employment Security (1970), 356 Mass. 684, 255 N.E.2d 357.) In Chase v. Warren Petroleum Corp., the Louisiana court of appeals observed (168 So. 2d 861, 864-65): “It is perhaps superfluous to note that in other jurisdictions severance pay or retirement benefits have been considered to be in the nature of wages earned and not as gratuities dependent upon the arbitrary will of the employer.” (Emphasis added.) In other contexts, severance pay has been treated as part of an employee’s wages. (In re Public Ledger, Inc. (3d Cir. 1947), 161 F.2d 762 (severance pay constituted wages wholly earned and accrued and thereby entitled to priority under section 64(a)(2) of the Bankruptcy Act (11 U.S.C. sec. 104(a)(2)); McCloskey v. Division of Labor Law Enforcement (9th Cir. 1952), 200 F.2d 402 (same); see also Annot., 40 A.L.R.2d 1044 (1955); Annot., 17 A.L.R.3d 374, 384 (1968).) The agreement between the Union and Metropolitan, providing for a severance allowance based upon one week of average weekly earnings for each year of employment up to a maximum of 10 weeks, is clearly final compensation for services rendered based upon previously earned wages as contemplated by the Act. Therefore, the Department had the right to investigate and assist claimants in securing such compensation as authorized by the Act. Ill. Rev. Stat. 1979, ch. 48, pars. 39m — 6, 39m — 11(a).

Metropolitan nevertheless maintains its right to an injunction bottomed upon the supposition that should the Department proceed with its investigation and hearings, and should it decide to render assistance to Union employees, either or both the Department or employees may proceed to file legal actions seeking criminal and civil sanctions. Such sanctions, if brought, Metropolitan insists, would be contrary to the grievance and arbitration procedures contained within the collective bargaining agreement and would then violate Metropolitan’s constitutional due process and equal protection rights. We decline to join in this conjectural excursion as to potential future actions by the parties. Furthermore, not every dispute is exclusively subject to binding arbitrable resolution, particularly when statutory rights guarantying minimum substantive remedies to individual workers may be at issue. (Barrentine v. Arkansas-Best Freight System, Inc. (1981), 450 U.S. 728, 737, 67 L. Ed. 2d 641, 651, 101 S. Ct. 1437, 1443; Alexander v. Gardner-Denver Co. (1974), 415 U.S. 36, 50, 39 L. Ed. 2d 147, 159, 94 S. Ct. 1011, 1020.) These issues were not decided by the circuit court and no reference is made thereto in the order from which this appeal was taken. They are not properly before this court on review.

For the aforestated reasons, the order of injunction entered by the circuit court of Cook County must be reversed and the cause remanded with directions to vacate the permanent injunction entered therein. The Department thereby shall be permitted to proceed with its responsibilities under the Illinois Wage Payment and Collection Act. Ill. Rev. Stat. 1979, ch. 48, pars. 39m — 1 through 39m — 15.

Reversed and remanded with directions.

STAMOS and PERLIN, JJ., concur.


author: JUSTICE NASH

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellant, v. MARK A. RIPA, Defendant-Appellee.
    Second District
    No. 82—292
    Opinion filed May 20, 1983.

      J. Michael Fitzsimmons, State’s Attorney, of Wheaton (Barbara A. Preiner, Assistant State’s Attorney, and Phyllis J. Perko, of State’s Attorneys Appellate Service Commission, of counsel), for the People.
    Thomas A. Callum, of Callum, Anderson and Deitsch, of Wheaton, for appellee.
   JUSTICE NASH

presented the opinion of the court:

The State appeals from an order of the circuit court of Du Page County discharging defendant, Mark A. Ripa, from custody pursuant to his petition brought under the Habeas Corpus Act (Ill. Rev. Stat. 1981, ch. 65, par. 1 et seq.).

On February 14, 1978, defendant was convicted of offenses under the Cannabis Control Act and the Illinois Controlled Substances Act (Ill. Rev. Stat. 1977, ch. 56V2, pars. 704(e), 705, 1204(d)) and on June 15, 1978, was sentenced to concurrent terms of two years’ imprisonment and ordered to pay a fine of $5,000. Defendant was remanded to the custody of the Department of Corrections on that same day; however, in August 1978, execution of sentence was stayed and he was released on an appeal bond. This court thereafter affirmed the convictions (People v. Ripa (1980), 80 Ill. App. 3d 674, 399 N.E.2d 1000), and our mandate was filed in the circuit court on July 9, 1980.

Defendant thereafter remained free on his appeal bond and on January 27, 1982, the State’s Attorney filed a motion in the trial court for an order directing that he surrender in court to commence service of the sentence. The trial court granted the motion and directed defendant to appear on February 10, 1982; he appeared as ordered and subsequently filed a petition for habeas corpus relief. Defendant did not there challenge the validity of the judgments of conviction or sentence, but alleged there had been substantial changes in his life and that to require him to return the penitentiary to complete service of his sentence after the lSVa-month delay between the issuance of the mandate and the order to surrender himself was prejudicial and that he was entitled to discharge.

At the hearing of the petition held March 12, 1982, defendant testified he was then 28 years old and had been 22 years of age when he was charged in 1976. After his conviction he served about two months of his sentence before being released on the appeal bond. When his conviction was affirmed he was so informed by his attorney, who also told him that he would receive a letter advising when to surrender to complete his sentence. In January 1982 defendant did receive a letter from his attorney telling him that he must surrender himself and he had no other communication to that effect after the July 9, 1980, denial of his appeal.

Defendant further testified he had been employed by the Marconi-Bond Paving Company in 1977, where he still worked as a truck driver and laborer, and had lived at the same address for two years with his wife Deborah. He stated he had known Deborah for over three years and they were married in February 1982; she was four month’s pregnant at the time of the hearing and employed at a restaurant. Defendant and his wife have no other sources of income than their employment. He further testified he has not been arrested for anything else since the 1976 charges for which he was sentenced nor has he been in any trouble.

Defendant’s wife, Deborah, testified that her father had died in April 1980 and that her sister was killed in 1981. She and her mother, Patricia Taylor, required psychological treatment as a result of the emotional trauma and defendant was very supportive. He took charge of family affairs and insisted the mother live with them after the sister’s death. Defendant’s wife testified it would be difficult after losing her father and sister to also lose her husband. Patricia Taylor also testified corroborating Deborah’s testimony.

Caesar Marconi, president of the company for which defendant was employed, testified he had known defendant for five years since hiring him in 1977. Marconi stated defendant was a conscientious, dependable and diligent worker who had originally been employed as temporary help and is now one of their finest employees. Marconi further testified defendant had changed his life style and is not involved with drugs or his prior associates.

The trial judge found that defendant had experienced substantial changes in his life and life style during the 18-month period in which enforcement of the mandate was delayed and that the interests of justice would not be served by enforcing the balance of the sentence. Defendant was thereupon discharged, and the State has appealed.

Section 10 — 124(2) of the Code of Civil Procedure provides:

“Causes for discharge when in custody on process of court. If it appears that the prisoner is in custody by virtue of process from any court legally constituted, he or she may be discharged only for one or more of the following causes:
* * *
(2) Where, though the original imprisonment was lawful, nevertheless, by some act, omission or event which has subsequently taken place, the party has become entitled to be discharged.” Ill. Rev. Stat. 1981, ch. 110, par. 10 — 124(2).

The State agrees there are circumstances under which a delay in enforcement of a sentence may provide a basis for habeas corpus relief, but argues that it lies only where the delay is attributable to the judiciary rather than to the State’s Attorney as in this case. It relies primarily upon People ex rel. Farrell v. Pate (1968), 39 Ill. 2d 469, 472, 236 N.E.2d 722, and People ex rel. Ellis v. Babb (1952), 412 Ill. 601, 107 N.E.2d 793. The State contends alternately that the circumstances shown here are insufficient to entitle defendant to discharge in any event. Defendant asserts that there is no distinction between a delay caused by a judiciary in execution of a sentence or that caused by law enforcement officials, citing People ex rel. Millet v. Woods (1973), 55 Ill. 2d 1, 302 N.E.2d 32, People ex rel. Rudin v. Ruddell (1970), 46 Ill. 2d 248, 263 N.E.2d 48, and People ex rel. Powers v. Shattuck (1916), 274 Ill. 491, 113 N.E. 921. Defendant further argues the circumstance shown by the evidence require his discharge.

The cases relied upon by the respective parties are difficult to satisfactorily reconcile; we conclude, however, that the standards set forth in People ex rel. Millet v. Woods are dispositive. There the court stated that the “reasonableness of a delay and adequacy of its explanation must rest upon examination of the circumstances of each case.” (55 Ill. 2d 1, 4.) The court rejected any notion that the appeal process initiated by a defendant could be considered delay, and did not refer to the statements in the earlier cases relied upon by the State, in which a distinction was suggested where delay in carrying out a sentence was caused by the court or was caused by law enforcement officials.

In Millet, as in the present case, after conviction and sentence defendant was released on bond pending disposition of his appeal. The appellate court affirmed the conviction and the supreme court denied leave to appeal and issued its mandate to the appellate court. Almost five years then elapsed, however, before the appellate court’s mandate was spread of record in the circuit court and proceedings undertaken by the State to cause defendant to commence service of his sentence. During that five-year period defendant led a law-abiding and producfive life. The supreme court found there was no reasonable explanation for the delay in filing the mandate and a lack of diligence on the part of the State. It concluded defendant’s incarceration at that late date would serve neither the principles of justice nor his rehabilitation and affirmed the judgment discharging him. See also People ex rel. Rudin v. Ruddell (1970), 46 Ill. 2d 248, 263 N.E.2d 48.

The factual similarities of the present case to Millet are striking, the only notable difference being in the length of the delay. The State has not offered any explanation for the 1872 month delay and has not sought to rebut the evidence defendant has during that period changed his life style and become a responsible, law-abiding citizen. Nor does the State suggest defendant had an independent obligation to surrender himself under the terms of his appeal bond. The evidence is that defendant was prepared to do so on learning his appeal was denied, but on the advice of his attorney waited to be notified by the State, apparently in conformance with a local practice. See People ex rel. Millet v. Woods (1973), 55 Ill. 2d 1, 4-5, 302 N.E.2d 32.

Accordingly, the judgment of the circuit court is affirmed.

Affirmed.

SEIDENFELD, P.J., and LINDBERG, J., concur.


author: JUSTICE VAN DEUSEN

text:
    HOMER G. DICKSON AND COMPANY, INC., Plaintiff-Appellee, v. JUAN BARRAZA, Defendant-Appellant.
    Second District
    No. 82—632
    Opinion filed May 20, 1983.

      Manuel Barbosa and Randy Johnson, both of Miller, Feda & Barbosa, of Elgin, for appellant.
    Daniel J. Kramer, of Yorkville, for appellee.
   JUSTICE VAN DEUSEN

delivered the opinion of the court:

The defendant, Juan Barraza, appeals from an order of the trial court which entered judgment on the pleadings against him and in favor of the plaintiff, Homer G. Dickson and Company, Inc. (Dickson), in the amount of $24,765 (plus costs) for an account stated between the parties.

The defendant contends on appeal that the trial court erred when it entered judgment on the pleadings in the sum of $24,765 (plus costs) in favor of Dickson and against Barraza for an account stated between the parties under count II of the plaintiff’s complaint. In particular, the defendant maintains that the trial court incorrectly concluded that his failure to file a response to the plaintiff’s request for admission of facts constituted an admission by the defendant of facts demonstrating, as a matter of law, the existence of an account stated between the parties. While admitting that he did not specifically file an answer or an objection to the plaintiff’s request for admission of facts, Barraza nonetheless claims that his answer to the plaintiff’s complaint, which, inter alia, denied the material allegations of count II of the complaint, constituted, in effect, a proper response to the request to admit facts.

Supreme Court Rule 216(a) provides that “[a] party may serve on any other party a written request for the admission by the latter of the truth of any specified relevant fact set forth in the request.” (87 Ill. 2d R. 216(a).) Under Rule 216(c), factual matters included in the request for admissions stand admitted unless the party receiving the request avails himself, within 28 days after service, of one of the alternatives set forth in the statute. The alternatives available to the receiving party are either to deny the matters sought to be admitted, to explain why the matters cannot be truthfully admitted or denied, or to present written objections that the contents of the requested admissions are privileged, irrelevant or otherwise improper. 87 Ill. 2d R. 216(c).

This court has adopted the position that a request to admit facts is a discovery procedure, and, therefore, the trial court has wide discretion in controlling it. (Bluestein v. Upjohn Co. (1981), 102 Ill. App. 3d 672, 677-78; Illinois State Toll Highway Authority v. Humphrey Estate (1978), 62 Ill. App. 3d 316, 326.) The requirements of Rule 216(c) are strictly applied in situations where the party to whom the request was directed did not file either a response, denial or objection; in those cases the courts have concluded that, because of the failure to comply with the provisions of Supreme Court Rule 216(c), the facts included in the request for admissions were deemed admitted. E.g., City of Champaign v. Roseman (1958), 15 Ill. 2d 363, 365; Kothe v. Jefferson (1982), 109 Ill. App. 3d 247, 249; Bullock v. Adams (1981), 102 Ill. App. 3d 379, 380, cert. denied (1982), 457 U.S. 1134, 73 L. Ed. 2d 1351, 102 S. Ct. 2961; F. J. Pechman, Inc. v. Oldham (1980), 86 Ill. App. 3d 1018, 1021; Chapman v. Foggy (1978), 59 Ill. App. 3d 552, 557-58; West Central Utilities Service Co. v. Central Illinois Public Service Co. (1976), 42 Ill. App. 3d 5, 6; Banks v. United Insurance Co. of America (1975), 28 Ill. App. 3d 60, 62-63; Crum v. Gulf Oil Corp. (1973), 12 Ill. App. 3d 988, 990; Iversen v. Iversen (1960), 28 Ill. App. 2d 45, 54-55.

In the case at bar, count II of the plaintiff’s complaint alleged the existence of an account stated between the parties. (See Protestant Hospital Builders Club v. Goedde (1981), 98 Ill. App. 3d 1028, 1032.) Although the defendant filed an answer to the complaint on April 15, 1982, after the court had granted him leave to do so, he did not file a response to the request for admission of facts. Thus, the request for admissions was neither specifically denied nor objected to in any way. See, e.g., West Central Utilities Service Co. v. Central Illinois Public Service Co. (1976), 42 Ill. App. 3d 5, 6.

The defendant argues on appeal, as he did in the court below, that the trial court should have viewed his answer to the complaint, which, among other things, denied the material allegations of count II of the complaint, as a response to the request for admission of facts and a specific denial of the facts set forth in the request.

The trial court rejected that analysis as do we. Defendant’s pleading is denominated as an answer to the complaint and appears to be just that. More importantly, the specific factual matters which were articulated in the request to admit facts were not contained in the plaintiff’s complaint; therefore, it is incongruous that the defendant’s answer denying the material allegations of count II of the complaint could also be viewed as an answer to the request to admit facts and a denial of the particular facts stated in the request. To permit defendant’s answer to the complaint to stand as a specific denial of the matters for which admissions were, requested would be to abort the plain intent of Supreme Court Rule 216 (87 Ill. 2d R. 216). In light of the defendant’s failure to file an answer to the plaintiff's request to admit facts, the trial court did not abuse its discretion in treating the requested facts as admitted. See Iversen v. Iversen (1960), 28 Ill. App. 2d 45, 54-55.

Because the defendant’s failure to respond to the request to admit facts is deemed an admission on his part of the facts included in the request and since the admitted facts established, as a matter of law, that there was an account stated between the parties, the trial court properly entered judgment on the pleadings for the plaintiff and against the defendant, for no question of fact existed for the court’s consideration. City of Champaign v. Roseman (1958), 15 Ill. 2d 363, 365.

Parenthetically, we note that the defendant asserts on appeal that the plaintiff’s motion for judgment on the pleadings was actually a motion for summary judgment. The statements of both the plaintiff and the defendant in the trial court belie that assertion, as does the order of the court below. It is manifest that the plaintiff moved for judgment on the pleadings pursuant to section 45(5) of the Civil Practice Act (Ill. Rev. Stat. 1981, ch. 110, par. 45(5), which has been re-codified as section 2 — 615(e) of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 2 — 615(e)), and that the trial court granted judgment on the pleadings. Even if the summary judgment procedure had been employed in this case, the trial court’s entry of summary judgment would have been proper given the lack of a triable issue of fact in light of the defendant’s admission of facts which established that an account stated existed between the parties. See F. J. Pechman, Inc. v. Oldham (1980), 86 Ill. App. 3d 1018, 1021-22; West Central Utilities Service Co. v. Central Illinois Public Service Co. (1976), 42 Ill. App. 3d 5, 6.

The judgment of the trial court is affirmed.

Affirmed.

LINDBERG and REINBARD, JJ., concur.


author: JUSTICE TRAPP

text:
    LONNIE R. POPEJOY, Plaintiff-Appellee, v. JAMES B. ZAGEL, Defendant Appellant.
    Fourth District
    No. 4—82—0552
    Opinion filed May 26, 1983.

      Tyrone C. Fahner, Attorney General, of Springfield (Jon E. Tweedt, Assistant Attorney General, of counsel), for appellant.
    Edward G. Coleman, of Springfield, for appellee.
   JUSTICE TRAPP

delivered the opinion of the court:

On September 16, 1980, Lonnie Popejoy (plaintiff) was promoted from the rank of trooper to the rank of corporal in the Division of State Police of the Illinois Department of Law Enforcement. He was returned to rank of trooper by order of the Director of the Department of Law Enforcement (defendant) on August 1, 1981. Plaintiff brought action for a writ of mandamus to compel his reinstatement to the rank of corporal. The trial court issued the writ and defendant now appeals.

The question before this court is whether defendant could properly reduce plaintiff’s rank absent compliance with the provision regulating demotions under “An Act in relation to the State Police” (the Act) (Ill. Rev. Stat. 1981, ch. 121, par. 307.1 et seq.). The resolution of this question requires an inquiry into the validity of Department of Law Enforcement Merit Board Rule 4 — 4, which purports to establish a one-year period of probation for all promotions within the State police with the language:

“PROMOTION PROBATIONARY PERIOD: All promotions shall be for a probationary period of one year during which time the Director may return the officer to that officer’s prior rank.”

A written communication, dated July 24,1981, advised Popejoy:

“OFFICIAL PERSONNEL ACTION
On September 16, 1980, you were promoted to the rank of Corporal with the condition that you serve a one year probationary period. I find that you have failed to satisfactorily complete this probationary period. By that authority vested in me under Department of Law Enforcement Merit Board Rule 4-4, I hereby order you reduced in rank from Corporal to Trooper to become effective August 1,1981.
Is! James B. Zagel.”

Demotions in the State police are governed by section 14 of the Act (Ill Rev. Stat. 1981, ch. 121, par. 307.14), which provides in pertinent part:

“Except as is otherwise provided in this Act, no Department of Law Enforcement officer shall be removed, demoted or suspended except for cause, upon written charges filed with the
Board [Department of Law Enforcement Merit Board] by the Director and a hearing before the Board thereon upon not less than 10 days’ notice at a place to be designated by the chairman thereof. At such hearing, the accused shall be afforded full opportunity to be heard in his own defense and to produce proof in his defense.
* * *
*** If the charges against an accused are established by a preponderance of evidence, the Board shall make a finding of guilty and order either removal, demotion, suspension for a period of not more than 180 days, or such other disciplinary punishment as may be prescribed by the rules and regulations of the Board which, in the opinion of the members thereof, the offense merits. Thereupon the Director shall direct such removal or other punishment as ordered by the Board.” Ill. Rev. Stat. 1981, ch. 121, par. 307.14.

The Act establishes certain rule-making authority in the Board. Section 8 of the Act (Ill. Rev. Stat. 1981, ch. 121, par. 307.8) provides in pertinent part:

“The Board shall exercise jurisdiction over the certification for appointment and promotion, and over the discipline, removal, demotion and suspension of Department of Law Enforcement officers. Pursuant to recognized merit principles of public employment, the Board shall formulate, adopt, and put into effect rules, regulations and procedures for its operation and the transaction of its business.” Ill. Rev. Stat. 1981, ch. 121, par. 307.8.

Popejoy contends that his demotion to the rank of trooper was ineffective because the defendant failed to comply with the procedures set forth in section 14 of the Act (Ill. Rev. Stat. 1981, ch. 121, par. 307.14). He argues that Rule 4-4 is an invalid exercise of the Merit Board’s rule-making power, because the rule operates to abrogate the procedures for demotion under the Act. We agree.

It is axiomatic that the authority of an administrative agency to adopt rules and regulations is defined by the statute creating that authority, and such rules and regulations must be in accord with the standards and policies set forth in the statute. (Pye v. Marco (1973), 13 Ill. App. 3d 923, 926, 301 N.E.2d 63, 65.) An administrative body cannot extend or alter the operation of a statute by exercise of its rule-making powers. (Northern Illinois Automobile Wreckers & Rebuilders Association v. Dixon (1979), 75 Ill. 2d 53, 60, 387 N.E.2d 320, 324; Illinois Bell Telephone Co. v. Illinois Commerce Com. (1953), 414 Ill. 275, 279, 111 N.E.2d 329, 332.) To the extent that any such rule or regulation is in conflict with the statute, it is invalid. Aurora East Public School District No. 131 v. Cronin (1981), 92 Ill. App. 3d 1010, 1014, 415 N.E.2d 1372, 1376; Montgomery Ward Life Insurance Co. v. Department of Local Government Affairs (1980), 89 Ill. App. 3d 292, 302, 411 N.E.2d 973, 980; Pye.

We find that Rule 4-4 of the Department of Law Enforcement Merit Board is in conflict with section 14 of the Act, and it is therefore invalid. Section 14 states in mandatory and absolute terms that no officer shall be demoted except for cause, upon written charges, with notice, hearing, and opportunity to produce evidence in his defense. Rule 4-4 purports to abrogate those statutory protections by creating a one-year period of promotional probation during which the statutory procedures for demotion would not apply. Although section 8 of the Act authorizes the Merit Board to enact rules relating to the transaction of the Board’s business, the scope of this rule-making power does not extend to abrogation of mandatory requirements set forth in section 14. The conflict between the rule and the statute is clear and irreconcilable. As such, the rule must be declared invalid.

It is argued in behalf of the Department that its Rule 4-4 is in accord with “[t]he commonly accepted and understood recognized ‘merit’ principles,” and there is citation of the Secretary of State Merit Employment Code (Ill. Rev. Stat. 1981, ch. 124, par. 101 et seq.)] “An Act to create the State Universities Civil Service System” (Ill. Rev. Stat. 1981, ch. 241/2, par. 38b9); the Sheriff’s Merit System Act (Ill. Rev. Stat. 1981, ch. 125, par. 151 et seq.)] the Personnel Code (Ill. Rev. Stat. 1981, ch. 127, par. 63bl01 et seq.)] and “An Act in relation to the Cook County Police and Corrections Merit Board” (Ill. Rev. Stat. 1981, ch. 125, par. 51 et seq.). Without reciting the several sections of the respective acts, we find that in addition to creating authority to make rules by a board or commission, each of the statutes provided categorically that promotion or elevation to a higher classification shall be for a probationary period during which the person appointed may be demoted to a former classification without the filing of charges. While the statutory language of the several acts is not uniform, it is explicitly stated that there may be demotion during the probationary period. As an example, section 10b.6 of the Secretary of State Merit Employment Code (Ill. Rev. Stat. 1981, ch. 124, par. 110b.6) provides “[f]or a period of probation not to exceed six months before appointment or promotion is complete, and during which period a probationer may *** be discharged or reduced in class or rank, or replaced on the eligible list.”

Whether by design or otherwise, the language of “An Act in relation to the State Police” (Ill. Rev. Stat. 1981, ch. 121, par. 307.1 et seq.) is clearly more restricted. Section 9 describes the qualifications for applicants to the police and provides that “[a]ll appointees shall serve a probationary period of 12 months from the date of appointment and during that period may be discharged at the will of the Director.” There is no reference to probation as a step in promotion.

While the argument presented by the Department upon theories of merit service has a substantial rationale, the legislature has not yet stated that such rationale should be applied to State police. We conclude that this court cannot constitutionally enlarge the language adopted by the legislature.

Defendant does not contend that Popejoy’s demotion was preceded by any of the procedural steps outlined in section 14, and the record contains no evidence of such compliance. Instead, defendant has sought to justify Popejoy’s summary demotion solely on the basis of the disputed rule. Inasmuch as we find that rule to be invalid, it is clear that Popejoy’s demotion to the rank of trooper was ineffective, for defendant failed to comply with the requirements of section 14 of the Act. Accordingly, we affirm the judgment of the trial court.

Affirmed.

WEBBER, P.J., and GREEN, J., concur.


author:
JUSTICE TRAPP
      PRESIDING JUSTICE WEBBER,

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. LARRY RAY TOOLATE, Defendant-Appellant.
    Fourth District
    No. 4—82—0683
    Opinion filed May 26, 1983.

      WEBBER, P.J., dissenting.
    Daniel D. Yuhas and Gary R. Peterson, both of State Appellate Defender’s Office, of Springfield, for appellant.
    Anthony B. Cameron, State’s Attorney, of Quincy (Robert J. Biderman and John M. Wood, both of State’s Attorneys Appellate Service Commission, of counsel), for the People.
   JUSTICE TRAPP

delivered the opinion of the court:

After a jury trial, defendant Larry Toolate was convicted of residential burglary with intent to commit rape (Ill. Rev. Stat. 1981, ch. 38, par. 19 — 3(a)) and upon consideration of his criminal record was sentenced to a term of 12 years’ imprisonment. While defendant presented some evidence of alibi, the single issue argued upon appeal is whether or not the evidence sufficiently proved that the entry by defendant was made with the intent to commit rape.

The record discloses the following pertinent facts. Complainant, a single woman with two children, testified that on the night of June 16, 1982, she put her children to bed in her bed sometime after midnight. Before retiring, she lowered the window next to the front door, leaving it open about two inches, and checked the screen lock on the window. She closed the curtains and checked the double locks on both downstairs doors. She fell asleep around 2 a.m.

At about 3 a.m. she was awakened by a hand pulling on her left side. She was sleeping on the side of the bed furthest from the bedroom door. There was a foot and one-half between the bed and the wall on that side. She looked up thinking it was her five-year-old pulling her, but the child was not standing there. She reached across the bed and felt the two-year-old next to her and the five-year-old on the opposite side. There was a lamp on the night stand at her bedside. She had left the bottom portion of the lamp on. This light was off and, thinking the bulb was burned out, she tried the switch. It did not work. She then thought that someone was in the apartment.

She lifted the sleeping two-year-old and slid to the middle of the bed, placing the two-year-old at the head of the bed closest to the door. She picked the five-year-old up, asking her whether she had to go the bathroom and telling her she would take her to the bathroom. She continued talking as she walked and turned on the bedroom light, hall light, and bathroom light. She put the child down behind her in the bathroom and turned to face the bedroom.

She then saw a face looking over the side of the bed. She took several steps toward the bedroom. A man, identified as the defendant, stood up. She said, “I knew somebody else was in here with us.” He stood up and responded, “That makes two of us that knows that now, doesn’t it?” She said, “You get out of here; you get out of our apartment now.” He looked both ways and said, “I’m going. I’m going. I’m gone.” He jumped over the bed and ran down the steps, passing within three inches of the complaining witness. She looked to make sure the children were all right and then ran down the steps behind him telling him to get out and leave them alone. He ran out the kitchen door and slammed it.

Police were called to the apartment. The screen on the window next to the front door had been cut. Certain bedroom furnishings had been moved after the complaining witness had gone to bed. A stand from beneath a window and a hope chest from the end of the bed had been moved to close off the foot-and-one-half-wide space between the bed and the wall opposite the bedroom door. The night stand lamp at the head of that space had been unplugged.

The complaining witness was able to give police a positive identification because she had seen the defendant riding a motorcycle around her neighborhood at different times. He had spoken to her five-year-old when the complaining witness and the child were outside at about 3 p.m. that day.

The complaining witness testified that, as the defendant ran from her bedroom, she observed he was wearing a navy blue lightweight baseball-type jacket, zipped closed, white pants and tennis shoes. Police arrested the defendant about one hour after they answered the call, and less than an hour and one-half after the incident. He was arrested at the residence of Kevin Weiss about eight blocks from the apartment of the complaining witness.

When placed under arrest and told to dress, he put on a pair of white pants, which were lying next to him, a shirt and tennis shoes. Weiss testified that when he saw the defendant at about 2 a.m., the defendant was wearing tan or off-white jeans, a blue short-sleeved mesh shirt, tennis shoes, and a blue jogging-type sweat jacket with his nickname “Tool” printed on the back in large white letters.

The State rested its case.

Marilyn Weerts testified on behalf of the defendant. She stated that on the night of June 16, 1982, defendant was with her at her home from sometime after 2 a.m. until she drove him to the Weiss residence at about 3 or 3:15 a.m. The drive took about eight minutes. She saw him open the back door to enter.

Residential burglary consists of entering, with or without force, any dwelling, during the day or the night, with intent to commit a felony or a theft. The gravamen of the offense is the felonious intent with which the building is entered. (People v. Maffioli (1950), 406 Ill. 315, 94 N.E.2d 191.) In this case the prosecution must prove that defendant entered the home of the complaining witness with the intention of committing rape. The defendant’s felonious intent to commit rape may be inferred from his words, actions, violence, and other conduct, and it is within the province of the trier of fact to consider all of the facts and circumstances of the case in determining the question of intent. Maffioli.

Evidence presented included a cut in the screen next to the door, and unauthorized entry to a locked apartment, and the movement of certain bedroom furnishings so that the area next to the sleeping woman was closed off. The only lamp in her reach was unplugged and, at 3 a.m., she was awakened by a hand from that closed off area pulling on her.

Nothing else in the apartment was missing or disturbed.

The acts of this case are somewhat less aggressive from those in People v. Tackett (1980), 91 Ill. App. 3d 410, 414 N.E.2d 748. In that case the defendant tried to conceal his identity and restrict the movement of the complainant. He seized her, wrestled her to the floor, placed his hand over her mouth an'd attempted to unbutton her shirt. He then departed when children in other rooms of the house began crying. See also Maffioli.

In People v. Clerk (1979), 68 Ill. App. 3d 1021, 386 N.E.2d 630, cert. denied (1979), 444 U.S. 981, 62 L. Ed. 2d 408, 100 S. Ct. 484, and People v. Tackett (1980), 91 Ill. App. 3d 410, 414 N.E.2d 748, the reviewing courts pointed out that the quantum of proof required to prove burglary with intent to commit rape is not the same as proof required where the charge is attempted rape. In each case the court, at bench trial, found the defendant not guilty of attempted rape, but guilty of burglary with the intent to commit rape.

In Clerk, it was contended that such findings were inconsistent. That opinion set out the respective statutes and stated:

“Therefore, attempt rape requires intent to commit rape and a substantial step toward commission of rape, while burglary with intent to commit rape requires entering with intent to commit rape.” (Emphasis added.) 68 Ill. App. 3d 1021, 1029, 386 N.E.2d 630, 635.

In Tacket, the court stated:

“As the trial court found, the fact that the defendant did not perform a substantial step toward the completion of the rape does not preclude a finding by the court that he intended to commit rape. The activity needed to indicate an intent to rape is less than that required to prove the completion of a substantial step toward the commission of rape necessary to establish an attempt rape. [Citation.]” 91 Ill. App. 3d 410, 413, 414 N.E.2d 748, 750.

This case is easily distinguishable from People v. Matthews (1976), 44 Ill. App. 3d 342, 358 N.E.2d 84, wherein the conviction for burglary with intent to rape was reversed. In that case, the defendant, who fixed the clothes dryer in the complainant’s home some months earlier, strolled into her home one afternoon via an unlatched screen door, and made a lewd offer. She left to call the police and he undressed from the waist down. That was how the police found him. This evidence was held insufficient to prove his intent to commit an act of intercourse through the use of force.

In weighing the evidence, the trier of fact is not required to disregard the natural inferences that flow normally from the evidence. (People v. Bell (1981), 96 Ill. App. 3d 857, 421 N.E.2d 1351.) A reviewing court will not disturb a conviction unless it is manifestly contrary to the weight of the evidence. (People v. McCombs (1968), 94 Ill. App. 2d 308, 236 N.E.2d 569.) Given the circumstances of this case, we find that the fact that defendant fled when discovered and told to leave does not require reversal of the conviction.

Affirmed.

GREEN, J., concurs.

PRESIDING JUSTICE WEBBER,

dissenting:

I respectfully dissent from the conclusion reached by my brothers that an intent to commit rape was proved beyond a reasonable doubt.

The facts demonstrate that the complainant was asleep in a bed with two children. She was awakened by someone touching her and discovered the defendant peering over the side of the bed. However bizarre the defendant’s conduct was, it falls far short of proving beyond a reasonable doubt that he entered the premises with the intent to commit rape. The origin of the touching is even subject to doubt; it might well have been caused by one of the children in the bed; even if it be assumed that it was in fact the defendant who did the touching, it is equally plausible that he was a fetishist of some sort whose quirk was to observe sleeping females and to stroke them gently. Rape is by nature forceful, and no force has been shown here.

It is true that the intent in burglary nearly always is shown by inference gleaned from the circumstances and especially by what occurs after the entry. In the case of larcenous intent the supreme court has said:

“Intent must ordinarily be proved circumstantially, by inferences drawn from conduct appraised in its factual environment. We are of the opinion that in the absence of inconsistent circumstances, proof of unlawful breaking and entry into a building which contains personal property that could be the subject of larceny gives rise to an inference that will sustain a conviction of burglary. Like other inferences, this one is grounded in human experience, which justifies the assumption that the unlawful entry was not purposeless, and, in the absence of other proof, indicates theft as the most likely purpose.” People v. Johnson (1963), 28 Ill. 2d 441, 443, 192 N.E.2d 864, 866.

“Theft as the most likely purpose” is simply a logical extension of the fact that at early common law burglary was viewed as robbery of a dwelling. Early on, this concept was expanded to include other felonies, and from the origin of this State the burglary statute included a comprehensive list. For example:

“Every person who shall, in the night time, wilfully, and maliciously, and forcibly, break and enter *** into any dwelling *** with intent to commit murder, robbery, rape, mayhem, larceny, or other felony, shall be deemed guilty of burglary ***.” Rev. Ill. Laws 1833, sec. 60, at 181-82.

The 1961 codification of the criminal law eliminated the list of offenses and substituted simply “with intent to commit therein a felony or theft.” (Ill. Rev. Stat. 1981, ch. 38, par. 19 — 1.) Thus, theft as the intent in burglary occupies a special status beginning with its common law origin down through modern times. Such cannot be said for “other felony.” I am not aware of any authority raising any presumption about any felony other than theft. It follows that the proof is more difficult when the charge is some felony other than theft, and that proof simply was not present here.

Other courts have grappled with this problem. In People v. Hutchinson (1964), 50 Ill. App. 2d 238, 200 N.E.2d 416, the defendant parked his car in broad daylight outside the premises, entered them, and remained for about five minutes. The place was not ransacked and nothing was found missing. Defendant was charged with burglary and convicted in a bench trial. The appellate court reversed, saying, “We believe there are enough ‘inconsistent circumstances’ [Johnson] here to negate the inference of an intent to commit larceny sufficient to sustain a conviction of burglary.” 50 Ill. App. 2d 238, 242, 200 N.E.2d 416, 418.

Hutchinson has been distinguished on a number of occasions (e.g., People v. Martin (1966), 77 Ill. App. 2d 183, 222 N.E.2d 180; People v. Jackson (1968), 98 Ill. App. 2d 296, 240 N.E.2d 482; People v. Williams (1969), 118 Ill. App. 2d 341, 255 N.E.2d 44; People v. Blake (1971), 1 Ill. App. 3d 689, 274 N.E.2d 499; People v. Sigman (1976), 42 Ill. App. 3d 624, 356 N.E.2d 400), but always on a factual basis. The “inconsistent circumstances” of Johnson still stands.

Nor can the failure to prove an intent to rape yield some other felonious intent sufficient to sustain the conviction. In People v. Soznowski (1961), 22 Ill. 2d 540, 177 N.E.2d 146, the defendant was charged with assault with intent to commit rape and burglary with intent to commit theft. The victim was awakened in the night by someone beating on her face. She screamed and the defendant fled and was immediately apprehended. In a bench he was found not guilty of assault with intent to commit rape but guilty of burglary with intent to steal. The supreme court reversed, saying:

“The trial judge was puzzled, as are we, with the purpose of the defendant. He apparently found in the acts of the defendant an insufficient basis for inferring an intent to commit rape and dismissed the count charging an assault with intent to commit rape. But it does not necessarily follow, as the State seems to argue, that, because the defendant did not intend rape, he must, therefore, have intended larceny.” 22 Ill. 2d 540, 544, 177 N.E.2d 146, 148.

In short, even though it may be assumed that an entry is not “purposeless” {Johnson), the purpose alleged in the charging document must be proved; and if not proved, it cannot be transmogrified into a generalized felonious purpose sufficient to sustain a conviction. That is exactly what the facts in the instant case demonstrate. All of the evidence, circumstantial and direct, inferential or otherwise, taken most favorably to the State, does not establish an intent to rape. The jury obviously took an attitude of he-was-up-to-no-good, even though it was unable to pinpoint the conduct.

In a larger sense, this case demonstrates some of the deficiencies of the burglary statute. Either the requirement of felonious intent should be eliminated, or the intent should be broadened to include any illegal act. The present statute puts both the State and the defendant in a quandry. The State must elect and prove some felonious intent, depending largely upon circumstantial evidence. The defendant may have a good defense, e.g., intent only to commit some misdemeanor, but must run the risk of taking the stand to establish it. An ancient doctrine has become so barnacled with age as to create serious legal problems; its accretions over the years, e.g., residential burglary in 1982 (Ill. Rev. Stat. 1981, ch. 38, par. 19 — 3), have created a labyrinth through which few can tread with equanimity of mind. It is high time that the legislature looked hard and long at this statute in view of present-day conditions.

I would reverse the conviction.