author: Mr. JUSTICE BARRY Mr. PRESIDING JUSTICE SCOTT,

text:
    PROVIDENT FEDERAL SAVINGS AND LOAN ASSOCIATION, Plaintiff-Appellant, v. REALTY CENTRE, LTD., et al., Defendants-Appellees.
    Third District
    No. 80-540
    Opinion filed October 14, 1981.
    — Modified on denial of rehearing November 24, 1981.
    SCOTT, P. J., specially concurring.

      Eric E. Hasselberg, of Sweat & Sweat, of Peoria, for appellant.
    Rudolph J. Westphal, of Peoria, for appellee Realty Centre, Ltd.
    Randall Moon, of Peoria, for appellees Alan J. Campbell, G. Rodger Moon, and Roland D. Wilken.
   Mr. JUSTICE BARRY

delivered the opinion of the court:

In 1975 Realty Centre, Ltd., executed a promissory note to Provident Federal Savings and Loan Association for the sum of $375,000 at 10 percent interest with the note being secured by a brick office building in Peoria. The note contained the following provision:

“The terms and conditions under which this loan is made are predicated on the continued ownership by the undersigned [Realty Centre] of the real estate set forth in said mortgage and in the event the undersigned’s interest in said real estate is transferred without the consent of the Association, the Association may increase the interest rate to eight per centum (8%) [sic] per annum or declare the entire unpaid balance of this note due, or both, by giving the undersigned written notice. All of the terms and conditions of said mortgage are hereby incorporated in and made a part of this note.”

The mortgage stated generally that it was given to secure performance of the agreements in the note “which are hereby incorporated herein and made a part hereof ° ” without mentioning expressly the “due on sale” clause which is quoted above. The mortgage was recorded, but not the note.

On January 1, 1980, Realty Centre entered into an installment contract with G. Rodger Moon, Roland D. Wilken and Alan J. Campbell to sell this office building for the sum of $700,000, payable as follows: $297,337 in cash at closing; $363,626.12 at 10 percent interest payable in monthly installments of $3,410; and $39,026.88 at 9%% interest payable in monthly installments of $672.87. The purchasers assumed possession on January 10, 1980. The contract was not recorded, but a memorandum of agreement for warranty deed was recorded.

On March 13, 1980, Provident Federal notified Realty Centre that one of the conditions of the 1975 note and mortgage had been violated by the transferal of its interest in the building without the consent of Provident Federal, and that failure to cure such breach on or before April 14, 1980, might result in acceleration of all sums due on the note. Realty Centre responded on April 1, 1980, with a letter denying any violation of the agreement but also with a request that Provident Federal consent to the sale on contract of the property in question. Realty Centre pointed out that the contract purchasers were all financially secure people who would add to the value of the collateral because Realty Centre remains liable as well.

Provident Federal did not consent but rather filed a complaint for foreclosure of the mortgage on June 5,1980. Realty Centre filed a motion to dismiss the complaint, and following a hearing, the court granted the motion. The court stated two reasons for its dismissal order: (1) that the due-on-sale clause in the note is an unreasonable restraint upon the alienation of real estate; and (2) that the due-on-sale clause contained in the note was not set forth in the mortgage, which is the document of record, and therefore is not constructive notice. This appeal followed.

In Baker v. Loves Park Savings & Loan Association (1975), 61 Ill. 2d 119, 333 N.E.2d 1, the supreme court reiterated its earlier rule that restraints on alienation are void unless reasonably designed to attain or encourage accepted social or economic ends (Gale v. York Center Community Cooperative, Inc. (1960), 21 Ill. 2d 86, 171 N.E.2d 30), and then held a due-on-sale clause to be a reasonable restraint, “one for which sound and convincing reason exists.” (61 Ill. 2d 119, 125, 333 N.E.2d 1,4.) The court in Baker discussed in considerable detail the lender’s need to protect its security interest by giving it the option of preventing a subsequent sale of the security property to a person whose personal and financial qualities are unknown to the lender, and concluded this was a recognized valid purpose for which a restraint may be imposed. The court rejected a case-by-case application of a reasonableness test because such an approach would not promote the stability of real estate titles; instead, the more appropriate approach was held to be to judge the reasonableness of a restraint by the purpose sought to be obtained.

A due-on-sale clause identical to the one in the case at bar was involved in a recent case before this court. In Sleven Container Corp. v. Provident Federal Savings & Loan Association (1981), 98 Ill. App. 3d 646, 424 N.E.2d 939, the validity of the due-on-sale clause was conceded by the parties and was not an issue on appeal. Accord, First National Bank v. Brown (1980), 90 Ill. App. 3d 215, 412 N.E.2d 1078.

Here Provident Federal contends that, under the Baker ruling, this due-on-sale clause was valid and enforceable, and that the trial court erred in dismissing the foreclosure action. Provident Federal points out that in addition to protecting the lender’s security interest, the due-on-sale clause is also used to free funds for loans at higher interest rates than were charged on the original loan. In other words, where, as here, the subsequent sale occurs at a time of rising interest rates, the lender can require the loan to be renegotiated at a higher rate for its own commercial advantage, thereby preventing the original borrower-purchaser from realizing as high a profit upon the subsequent sale. The economic effect of allowing a due-on-sale clause to be used is obviously of benefit to lending institutions during a time of rising interest rates, but that benefit is at the expense of borrowers.

In other jurisdictions, some courts have concluded that enforcement of a due-on-sale clause is a reasonable restraint on alienation where the purpose is to obtain an increased rate of interest (e.g., Century Federal Savings & Loan Association v. Van Glahn (1976), 144 N.J. Super. 48, 364 A.2d 558), while others have refused to permit the lender to accelerate the due date for any purpose other than to protect its security interest. (E.g., Tucker v. Lassen Savings & Loan Association (1974), 12 Cal. 3d 629, 526 P.2d 1160, 116 Cal. Rptr. 633; Patton v. First Federal Savings & Loan Association (1978), 118 Ariz. 473, 578 P.2d 152; Nichols v. Ann Arbor Federal Savings & Loan Association (1977), 73 Mich. App. 163, 250 N.W.2d 804.) Furthermore, the Supreme Court of California has held that the burden is upon the lender in each case to demonstrate that enforcement of the due-on-sale clause is reasonably necessary to protect against impairment of security. Wellenkamp v. Bank of America (1978), 21 Cal. 3d 943, 582 P.2d 970, 48 Cal. Rptr. 379.

A balanced approach was taken by the court in First Southern Federal Savings & Loan Association v. Britton (Ala. Civ. App. 1977), 345 So. 2d 300, where the court considered a provision prohibiting a transfer of title or change of possession without the written approval of the mortgagee, violation of which prohibition would constitute a default, and at the mortgagee’s option all amounts secured by the mortgage would become due. The court said that the right to exercise the option to accelerate was not an arbitrary right, and since the terms gave no indication that the clause was for any purpose other than protection of the mortgagee’s security, the right to enforce the clause was dependent upon the sale increasing the risk of default or threat to the security. The court went on to state:

“We do not say that the mortgagee may not specifically contract for the option to accelerate in the event of sale unless the purchaser agrees to payment of increased interest up to the current rate at time of assumption of the unpaid mortgage balance. We do hold that such purpose may not be hidden behind a clause which is assumed to only provide protection for the security. If the clause is to be used to advance the financial interest of the lender through requirement of payment of a penalty or an increase in interest rate, such purpose must be openly stated and bargained for from the inception of the contract. If the condition for the approval of a sale may be hidden and be other than for the protection of the historical interest of the mortgagee, the mortgagor will be at the mercy of the mortgagee. It is therefore the opinion of this court that under the stipulation before the trial court, appellant had no justification for refusing consent to the transfer. The due-on-sale clause appearing in this mortgage may not be used as an instrument to require an increase in interest rate nor for collecting a penalty in order to prevent acceleration and foreclosure.” 345 So. 2d 300, 303-04. Contra, Tierce v. APS Co. (Ala. 1979), 382 So. 2d 485. See Dunn and Nowinski, Enforcement of Due-on-Transfer Clauses: An Update, 16 Real Prop., Prob. & Tr. J. 291 (1981).

We think the principles enunciated in First Southern are eminently sensible and fair to all parties. A lending institution may undertake to protect itself during a period of rising interest rates by means of a due-on-sale clause, but only when the clause expressly states that it is for that purpose. It is, however, for the Illinois Supreme Court to recognize any such limitation upon the right of the lender to accelerate the loan under a due-on-sale clause.

In the case before us, we reach the decision somewhat reluctantly that under the holding in Baker we are required to recognize the validity of this due-on-sale clause since its purpose is in part,-at least, to protect the lender’s security interest even though Provident acknowledges another of its purposes is to seek an increase in the interest rate. Thus the trial court erred in ruling that the due-on-sale clause was an unreasonable restraint upon alienation.

Having concluded that the due-on-sale clause contained in the note was not an unreasonable restraint on alienation, we next must consider whether the subsequent purchasers had constructive notice of the due-on-sale provision since the clause was not contained in the mortgage, but only in the unrecorded note. The mortgage stated, inter alia, that it was given “to secure performance of the other agreements in said note, which are hereby incorporated herein and made a part hereof * * (Emphasis added.)

In the case involving a bond secured by a trust deed, the test was said to be whether the language in one instrument was such as to bring its terms clearly within the provisions of the other instrument. (Oswianza v. Wengler & Mandell, Inc. (1934), 358 Ill. 302, 193 N.E. 123.) The courts of this State have long recognized that “[w]hen a note and the mortgage given to secure it mutually refer to each other, they must be construed together.” (Metropolitan Life Insurance Co. v. Kobbeman (1931), 260 Ill. App. 508, 512. See also 27 Ill. L. & Prac. Mortgages §72 (1956).) One authority says:

“It is generally conceded that an acceleration clause in a note or bond permits the acceleration of the mortgage although there is no acceleration provision in the mortgage.” 55 Am. Jur. 2d Mortgages §379 (1971).

In the instant case, the language of the mortgage quite specifically incorporates by reference the terms of the note, and subsequent purchasers would be put on inquiry as to the contents of the note so incorporated. Hence, we find that the subsequent purchasers did have constructive notice of the due-on-sale clause.

Accordingly, the dismissal order entered in the circuit court of Peoria County is reversed, and this cause is remanded for further proceedings.

Reversed and remanded.

STOUDER, J., concurs.

Mr. PRESIDING JUSTICE SCOTT,

specially concurring:

My concurrence is mandated in light of our supreme court’s decision in Baker v. Loves Park Savings & Loan Association (1975), 61 Ill. 2d 119, 333 N.E.2d 1. It should be noted with interest, however, that in Baker, while the court held a “due on sale” provision to be a permissible restraint on the alienation of property, the real issue to be determined in Baker was whether a provision in a note providing for an increase in interest of 1 percent above the original rate was permissible. The original interest rate in Baker was 6 percent per annum. Baker was decided prior to the present inflationary era of our economy. The imposition of results which were just and not prohibitory in pre-inflation times might well not be so easily reached and imposed in the atmosphere of our present economy. The citation in the majority opinion of the case of Sleven Container Corp. v. Provident Federal Savings & Loan Association (1981), 98 Ill. App. 3d 646, adds little if anything to the majority opinion as to the validity of a “due on sale” clause, since such question was not an issue in the case.

In the instant case, Provident acknowledges that one of the purposes in enforcing the “due bn sale” clause is to seek an increase in its interest rate. Illinois as yet has not addressed the issue of whether a bank can validly accelerate a mortgage debt pursuant to a due-on-sale clause solely for the purpose of increasing the interest rates in its mortgage portfolio. When a mortgagee’s security is not jeopardized, then in my opinion a due-on-sale clause should be inoperative when the reason for enforcing the clause is to obtain for the mortgagee higher interest rates which are currently in effect. See “Due on Sale Clauses in Illinois,” authored by David L. Higgs, Southern Illinois University Law School, published in volume 5, page 35, The Illinois Fund Concept (Attorneys Title Guaranty Fund Inc. 1981).

A solution of the problems and in my opinion the alleviation of the injustices which in many instances result by enforcement of due-on-sale clauses in our present economy will hopefully be considered by our supreme court or receive the attention of our General Assembly.


source: Caselaw Access Project

author: Mr. JUSTICE LINDBERG

license: Public Domain

text:
    FIRST NATIONAL BANK OF BARRINGTON, TRUST NO. 11-1317, et al., Plaintiffs-Appellants, v. WILLIAM OLDENBURG et al., Defendants-Appellees.
    Second District
    No. 81-172
    Opinion filed October 27, 1981.
    Alfred L. O’Connor, of Waukegan, for appellants.
    No brief filed for appellees.
   Mr. JUSTICE LINDBERG

delivered the opinion of the court:

The plaintiffs-sellers, Louis and Laura Langpop, appeal from an order of the Circuit Court of Lake County which granted the motion for summary judgment of the defendants-purchasers, William Oldenburg and Marlene Oldenburg, and denied their own motion for summary judgment to enforce the liquidated damages clause of a real estate sale contract and to recover, as liquidated damages, earnest money in the sum of $13,450. We reverse.

The record in this cause reveals that title to certain real estate, designated as Unit T-222, 470 Old Barn Road, Lake Barrington Shores, Barrington, Illinois, was held by the First National Bank of Barrington, as trustee under a land trust dated July 10, 1977, and identified as Trust No. 11-1317. Under this agreement, the Langpops and Linda Maas were listed as beneficiaries and, as such, were entitled to receive the proceeds from the sale of the real estate. The Langpops, in particular, were given the power to direct the trustee in the management and control of the property and to direct the trustee to make deeds, mortgages, or trust deeds for the sale of the property or otherwise to deal with the title to the realty. In addition, the land trust agreement granted the beneficiaries control of the selling of the trust res.

Apparently, in the spring of 1979, the plaintiffs decided to dispose of the real estate held in trust and listed with J. S. James and Company, Inc. (James), a Barrington real estate broker. On May 22,1979, Louis Langpop appointed Byron Cohen as his attorney for the purpose of executing a real estate contract for the property. Attorney Cohen, in an affidavit appended as part of the plaintiffs’ motion for summary judgment, stated that he acted as the agent of the Langpops throughout the course of the real estate transaction. On June 2, 1979, the defendants, as purchasers executed a real estate sale contract, which identified the seller as “Trust 11-1317 First National [Bank] of Barrington,” by which they agreed to purchase the property held in trust. The following words appear in the spaces provided for the signature of the seller: “Trust No. 11-1317 First National Bank of Barrington, Byron N. Cohen, agent for L. G. Langpop, beneficiary.” Cohen also indicated in his affidavit that he accepted the contract on behalf of Mr. Langpop. The sale price was $134,500, and the contract stated that the defendants had deposited $1,000 as earnest money, which was held in escrow by James, and would pay, within 18 days, the additional sum of $12,450 as earnest money for a total of $13,450. Paragraph five of the “Conditions and Stipulations” of the contract of sale specified that, upon termination of the contract by the fault of the purchasers, then at the option of the seller and upon notice to the purchasers, the earnest money shall be forfeited and retained by the seller as liquidated damages. In addition, the seller agreed “to convey or cause to be conveyed” to the purchasers or their nominees “a recordable trustees deed” to the property.

On June 23, 1979, the defendants addressed a letter to James informing it that due to circumstances beyond their control, namely that they were being transferred out of the area, they must cancel the real estate contract in question. They requested that the real estate company contact attorney Cohen for the release of their $1,000 money deposit. Later that same day, attorney Cohen, upon being informed of the intended cancellation, wrote to the defendants pointing out to them that they had not tendered the additional $12,450 in earnest money by June 20, as required by the contract, and also informed them that the seller, Trust No. 11-1317, First National Bank of Barrington, declared them to be in default of the contract. Shortly thereafter, on July 2, 1979, Cohen informed the defendants that demand was being made upon them and the James Realty Co. for the payment of the $1,000 held in escrow and for the balance of $12,450 earnest money still due under the contract. Approximately two weeks later on July 17, the defendants wrote to Cohen and offered to pay the $1,000 earnest money deposit held in escrow as a total settlement and release of the defendants’ liability under the contract. On October 30, 1979, Cohen wrote to the defendants, on behalf of his client “the beneficiary of Trust No. 11-1317,” and accepted their settlement offer of $1,000. This letter of settlement requested that the defendants sign and return to Cohen a letter of direction, which was enclosed as part of the settlement letter, authorizing or directing James to pay the $1,000 earnest money deposit to the order of Louis Langpop, “the beneficiary of the above trust.” On November 15, 1979, Mrs. Oldenburg wrote directly to Mr. Langpop, in which communication she stated that “she had several telephone conversations with your attorney, Byron Cohen, concerning our mutual real estate contract.” She stated that, in light of the fact that the plaintiffs had sold the property in question to another purchaser at a higher price and at an earlier closing date than provided under the original contract of sale with the Oldenburgs, the defendants felt that a 50-50 split of the $1,000 deposit was fair and just.

Subsequently, on November 19, 1979, attorney Cohen filed the present action on behalf of “First National Bank of Barrington, Trust No. 11-1317,” to recover payment of the full amount of earnest money pursuant to the liquidated damages clause of the real estate contract. After this action was commenced, defendants sent Cohen by certified mail in an envelope postmarked December 6, 1979, an executed letter of direction to James, dated October 30, 1979, which Cohen had previously sent to defendants. Mrs. Oldenburg’s discovery deposition indicates that the defendants executed the letter of direction sometime after she had signed the letter of November 15, in which the defendant offered to settle the matter for $500.

On appeal, plaintiffs contend that the trial court erred in entering summary judgment against them and in favor of the defendants, because the court below incorrectly concluded that there was no valid contract between the parties. They also maintain on review they are entitled to judgment against the defendants in the sum of $13,450, the total amount of the earnest money agreed to in the contract plus interest and costs. They request this court enter judgment in favor of the plaintiffs in accordance with their prayer for relief.

Although the defendants have not filed a brief on appeal, this court may nonetheless consider the plaintiffs’ contentions on the merits. First Capitol Mortgage Corp. v. Talandis Construction Corp. (1976), 63 Ill. 2d 128, 133, 345 N.E.2d 493; Super v. Armstrong (1980), 83 Ill. App. 3d 1062, 1063-64, 404 N.E.2d 1008.

Plaintiffs first assert on appeal that the trial court erred in determining that they could not enforce the real estate contract in question against the defendants. In its memorandum of opinion the trial court concluded that the contract at issue was invalid and unenforceable. The court based its conclusion on the holding in Schneider v. Pioneer Trust and Savings Bank (1960), 26 Ill. App. 2d 463, 168 N.E.2d 808, which it felt controlled the present case. The trial court was reluctant to follow Schneider, but stated that it felt bound to do so because it is not “the prerogative of a trial court to lay Schneider to rest.” In determining that the contract in the present case was unenforceable, the trial court reasoned that if, under Schneider, a beneficiary of a land trust cannot accept an offer made to a trustee, then it would appear that, in the present case, an agent of a beneficiary cannot accept an offer made to a trust, that is, Trust 11-1317, First National Bank of Barrington. We conclude that Schneider does not control the facts at hand and the trial court’s conclusion that the real estate contract in question is invalid is erroneous.

Before addressing Schneider and its effect, if any, on the present case, we first describe briefly the basic nature and substance of an Illinois land trust agreement and the powers accorded a beneficiary of such trust. By statute (Ill. Rev. Stat. 1979, ch. 29, par. 8.31), a land trust agreement vests title, both legal and equitable, to the real property in the trustee while the interest of the beneficiary of the trust is personal property. Thus, the trustee is absolute owner of the real estate. (In re Estate of McGaughey (1978), 60 Ill. App. 3d 150, 153, 376 N.E.2d 259, 262.) Furthermore, as the trust agreement in the present case reflects, the beneficiary has the exclusive power to direct or control the trustee in dealing with the title and has the exclusive control, inter alia, of the selling of the trust property. (Ill. Rev. Stat. 1979, ch. 29, par. 8.31; Dorman v. Central National Bank (1981), 97 Ill. App. 3d 429, 432, 422 N.E.2d 1019, 1021.) Although it has been stated that the beneficiary of a land trust can neither contract to sell real estate nor accept an offer to purchase it (Marshall Savings & Loan Association v. Chicago National Bank (1965), 56 Ill. App. 2d 372, 379, 206 N.E.2d 117, 120; see In re Application of County Treasurer (1969), 113 Ill. App. 2d 50, 53, 251 N.E.2d 757), it has also been observed that this broad declaration of the law does not find support in the cases cited as authority for the proposition (Madigan v. Buehr (1970), 125 Ill. App. 2d 8, 12, 260 N.E.2d 431, 433). More narrowly, it has been held (1) that a beneficiary cannot accept an offer of sale and enter into a valid and enforceable contract of sale where the offer is made solely to the land trustee (Schneider v. Pioneer Trust & Savings Bank (1960), 26 Ill. App. 2d 463, 466, 168 N.E.2d 808, 809), and (2) that if a beneficiary of a land trust deals with the property as if no trust existed and contracts as owner of the property, the contract is void as exceeding the beneficiary’s power to act. (Jacobs v. Carroll (1977), 46 Ill. App. 3d 74, 79, 360 N.E.2d 136, 139; Madigan v. Buehr (1970), 125 Ill. App. 2d 8, 16, 260 N.E.2d 431, 434.) Nevertheless, as will be discussed in some detail subsequently, a beneficiary of a conventional land trust may enter into a valid contract to convey title to the trust property, when acting in his capacity as beneficiary, if the trust agreement vests in him the sole right to direct the trustee to convey title. Kurek v. State Oil Co. (1981), 98 Ill. App. 3d 6, 9, 424 N.E.2d 56, 59; Page v. Fosco (1980), 90 Ill. App. 3d 1113, 1115-16, 414 N.E.2d 89, 90; Rizakos v. Kekos (1977), 56 Ill. App. 3d 404, 405, 371 N.E.2d 896, 897; Jacobs v. Carroll (1977), 46 Ill. App. 3d 74, 79, 360 N.E.2d 136, 141; Seaberg v. American National Bank & Trust Co. (1976), 35 Ill. App. 3d 1065, 1069-70, 342 N.E.2d 751, 754; Madigan v. Buehr (1970), 125 Ill. App. 2d 8, 16-17, 260 N.E.2d 431, 435; see Lampinen v. Hicks (1979), 73 Ill. App. 3d 376, 377-79, 391 N.E.2d 1105,1107-08.

In Schneider v. Pioneer Trust & Savings Bank (1960), 26 Ill. App. 2d 463, 168 N.E.2d 808, Harmon, the beneficiary of a land trust, contracted to sell to the Schneiders certain land which formed the trust res; the trustee, Pioneer Bank, held title to the real estate. The Schneiders addressed their offer to purchase the property to the bank and deposited in escrow at the bank $2,000 earnest money. Harmon, contending that he was the real owner of the property with the authority to sell, never informed the trustee of the offer and attempted to accept it himself. Harmon withdrew the money from the escrow account, and the purchaser sued to recover the down payment. Resting its decision on basic contract principles, the court held that only the bank as trustee was entitled to accept the offer, and since it had not done so, there was no valid contract. The court stated that Harmon attempted to accept the offer addressed to the bank as trustee, which he could not do given the fact that an acceptance must conform exactly to the offer. 26 Ill. App. 2d 463, 465-66, 168 N.E.2d 808, 808-09.

On appeal plaintiffs attempt to distinguish Schneider on the ground that, unlike that case the contract in the present case does not list the trustee as the offeree-seller but rather identifies the offeree as Trust 11-1317, First National Bank of Barrington. While this argument may have surface appeal, we are not persuaded. Schneider was grounded on the rationale that the entity to whom the offer was made was not the same as the person who attempted to accept the contract as seller. Similarly, here the offeree, Trust 11-1317, is different from Byron Cohen, who signed the contract in the space provided for the signature of the seller with the notation “agent for L. G. Langpop, beneficiary.”

Although plaintiffs fail in their attempt to distinguish Schneider, nonetheless Schneider does not govern the facts of the present case. The record in this case clearly supports the conclusion that the purchasers were dealing throughout the real estate transaction with the attorney representing the beneficiaries; that purchasers attempted to enter into a contract with the beneficiaries; and that they did not deal with, attempt to enter into a contract with, or actually enter into a contract with the Bank, as trustee, for the purchase of the trust property. While the trustee bank is identified as the seller in the contract, it is apparent that it was not the real offeree nor a party to the agreement.

Louis Langpop gave Byron Cohen the power of attorney to execute the real estate contract for the subject property; Cohen executed the contract on behalf of Mr. Langpop and acted as the agent of the Langpops throughout the course of the real estate transaction, including communicating and negotiating with the defendants regarding the cancellation of the contract and the controversy about the amount of earnest money which the plaintiff Langpops were entitled to keep. The letter, which Cohen wrote to the defendants on October 30, 1979, states that he is acting on behalf of his client, the beneficiary of the trust. The accompanying letter of direction identified Louis Langpop as the beneficiary of the land trust agreement. Furthermore, Mrs. Oldenburg, one of the defendants, wrote directly to Mr. Langpop and communicated that she had several telephone conversations with his attorney, Byron Cohen, concerning their mutual real estate contract. The trial court’s implicit determination that the beneficiaries were not the offerees is against the manifest weight of the evidence since the contrary conclusion is clearly evident (Telander v. Posejpal (1981), 94 Ill. App. 3d 616, 621, 418 N.E.2d 444, 449-50). The mere listing in the contract of the trust, or trustee, as the offeree does not preclude this court from recognizing, based on the conduct and dealings of the parties prior to and subsequent to the formation of the contract, that the beneficiaries were the actual offerees. Thus, in contradistinction to Schneider, the purchasers in the present case offered to enter into a contract with the beneficiaries as sellers, rather than the trustee, and the offer was accepted by the agent of one of the beneficiaries. Therefore, Schneider is inapposite.

The contract between the parties was valid and enforceable. In Madigan v. Buehr (1970), 125 Ill. App. 2d 8, 16-17, 260 N.E.2d 431, 435, the court determined that a beneficiary of a land trust could not enforce a contract and recover damages for the buyers’ breach of contract where the contract of sale did not disclose either that the property was held in trust or that she was the beneficiary, because she had contracted as the owner of the property which was beyond her power as beneficiary. While the holding in Madigan is inapposite on the facts in the present case because (1) the contract at issue here discloses the property was held in trust as is evidenced by the statement that the seller agreed to “cause to be conveyed” to the purchasers “a recordable trustee’s deed” (emphasis added) and (2) Mr. Langpop was listed as beneficiary after the signature of attorney Cohen as agent, the case is nevertheless important due to the following remarks, in the form of dicta, which the court made on that occasion:

* * it cannot be said that a beneficiary can never contract to sell the trust property. He may do so under appropriate circumstances, not because he has power to convey title or to execute a deed, or because he is the agent of the trustee or stands in its stead, but because the trust agreement gives him ‘control of the selling’ and the right to direct the trustee to convey title to whomever he designates. Since he has the power to designate conveyance he may contract to exercise that power. If the sales contract is one in which this power is explicitly exercised, or if it is one which, because of the disclosure of the trust and the beneficiary’s status, can be construed as exercising this power, the contract is enforceable against both the beneficiary and the purchaser. To permit the beneficiary to contract in this manner does not encroach upon the jurisdiction of the trustee nor its functions; it does not infringe upon the protection afforded a purchaser who deals with the trustee, nor does it expand the beneficiary’s liability or change his status. His legal interest in the trust remains personal property; but allowing him to climax negotiations for the sale of the real estate by agreeing to have it conveyed removes some of the make-believe which hovers over land trusts and permits a realistic approach to the disposition of trust property.” (Madigan v. Buehr (1970), 125 Ill. App. 2d 8, 16-17, 260 N.E.2d 431, 435.)

This statement of the law has been cited approvingly and relied upon in subsequent decisions: Lampinen v. Hicks (1979), 73 Ill. App. 3d 376, 378, 391 N.E.2d 1105, 1107; Jacobs v. Carroll (1977), 46 Ill. App. 3d 74, 79-80, 360 N.E.2d 136, 139; Rizakos v. Kekos (1977), 56 Ill. App. 3d 404, 405, 371 N.E.2d 896, 897; see Page v. Fosco (1980), 90 Ill. App. 3d 1113, 1114-15, 414 N.E.2d 89, 89-90; Seaberg v. American National Bank and Trust Co. (1976), 35 Ill. App. 3d 1065, 1069-70, 342 N.E.2d 751,754; House of Realty, Inc. v. Ziff (1972), 9 Ill. App. 3d 419, 421-22, 292 N.E.2d 71, 73-74.

In particular the result reached in Lampinen v. Hicks controls the case at bar. In Lampinen the purchasers entered into a contract of sale with Lampinen, the sole beneficiary of a land trust. The purchasers directed their offer to Lampinen personally, and he accepted the offer as seller. As here, the contract in Lampinen provided that the seller agreed to cause title to be conveyed and that he would provide an appropriate deed if the property was in trust. Furthermore, as in the present case, the land trust agreement there stated that the beneficiary shall have control of the selling of the trust property. Relying on the language in the above instruments and the court’s statements in Madigan, this court in Lampinen concluded that a valid and binding contract existed between the beneficiary, as seller, and the purchasers. In upholding the contract, the court reasoned that Lampinen, the beneficiary-seller was explicitly exercising his power under the trust agreement. The Lampinen court was satisfied that the beneficiary had not asserted he was the owner or title holder but agreed only to cause the property to be conveyed and to provide an appropriate trustee’s deed. (73 Ill. App. 3d 376, 378-79, 391 N.E.2d 1105, 1107.) The facts of .the present case are similar to those presented to the court in Lampinen. The same conclusions and result reached there should obtain in the case at bar.

Additional support for the conclusion that the beneficiaries in the present case may enforce the contract against the defendants as purchasers is found in Jacobs v. Carroll (1977), 46 Ill. App. 3d 74, 80-81, 360 N.E.2d 136, 140, and House of Realty, Inc. v. Ziff (1972), 9 Ill. App. 3d 419, 421-22, 292 N.E.2d 71, 73-74, cases in which the court has determined that the beneficiary of a land trust, as seller, could enforce a contract against the purchaser. This court in Jacobs based its decision on the fact that the purchaser knew of the land trust prior to or on the date the contract was executed and the seller was acting as beneficiary and not as owner. In Z iff, the court held that the seller-beneficiary could enforce the contract because she had styled herself as beneficiary in the contract, thereby demonstrating to all concerned that she was not dealing with the property as the legal title holder, and, more importantly, because she had contracted expressly to “cause title to be conveyed,” thereby obligating herself to effect a transfer of title.

In Page v. Fosco (1980), 90 Ill. App. 3d 1113, 1115-16, 414 N.E.2d 89, 90, and in Rizakos v. Kekos (1977), 56 Ill. App. 3d 404, 405-06, 371 N.E.2d 896, 897, the court held that the purchasers could enforce a contract of sale against the sellers, who were beneficiaries under a land trust agreement, in factual settings similar to that presented to the court in this case. While those cases determined that purchasers, as opposed to sellers in the case at bar, could enforce a contract involving the sale of property held in a land trust, they nevertheless are a persuasive authority in support of the conclusion that the parties in the present case entered into a valid and binding contract which the sellers should be able to enforce against the buyers.

Based on the above analysis and the cases adjudicating the enforceability of contracts of sale between purchasers and sellers who are also beneficiaries under a land trust agreement, we conclude that the trial court erroneously determined that the present contract was invalid and hence unenforceable by plaintiffs-sellers.

The beneficiaries also contend that they are entitled to payment, as liquidated damages, of the full amount of the earnest money ($13,450) set forth in the contract. In effect they ask this court to enter summary judgment in their favor and against the defendants in the amount of the earnest money plus interest and costs. In denying the beneficiaries’ motion for summary judgment on the basis that no valid contract existed, the trial court expressly declined to rule on these issues.

As previously stated the defendants admitted that they unilaterally canceled the contract. The contract provided in pertinent part that it should become null and void, thereby relieving the purchasers of liability, if either of two conditions occur: (1) the buyers were unable to procure a commitment for a loan within 28 days; and (2) the sellers were unable to secure a release or waiver of any option of first refusal or other preemptive rights created by the declaration of condominium. The reason which the defendants gave the plaintiffs for cancelling the contract, transfer out of the area, does not fall within the ambit of those conditions releasing the purchasers from liability. Thus it is apparent that the defendants unlawfully canceled the contract, and therefore the liquidated damages clause should be given effect. We conclude that a remandment on the issue of damages is unnecessary (see Able & Associates, Inc. v. Orchard Hill Farms of Illinois, Inc. (1979), 77 Ill. App. 3d 375, 383, 395 N.E.2d 1138, 1142-43), and this court enters summary judgment in favor of the plaintiff for $13,450 together with interest at 9 percent per annum from the date of the breach being June 23, 1979, and costs of suit and appeal. It is axiomatic that where, as here, the buyers default on a contract, the sellers may retain the full amount of the earnest money without reference to the amount of actual damages which the sellers may have suffered as a result of the purchasers’ default. (Wilfong v. W. A. Schickedanz Agency, Inc. (1980), 85 Ill. App. 3d 333, 340, 406 N.E.2d 828, 833; Bamberg v. Griffin (1979), 76 Ill. App. 3d 138, 144, 394 N.E.2d 910, 914-15; Curtin v. Ogborn (1979), 75 Ill. App. 3d 549, 555, 394 N.E.2d 593, 598-99; Pruett v. La Salceda, Inc. (1977), 45 Ill. App. 3d 243, 247, 359 N.E.2d 776, 779; Linster v. Regan (1969), 108 Ill. App. 2d 459, 463, 248 N.E.2d 751, 753.) The record discloses that while settlement negotiations occurred including offers and counteroffers no settlement was achieved. Accordingly, the judgment of the Circuit Court of Lake County is reversed and summary judgment is entered for the plaintiff and against the defendant in the amount of the earnest money contracted for being $13,450, together with interest at the rate of 9 percent per annum from the date of the original breach of the contract, June 23,1979, and costs of suit and appeal. Execution thereon shall issue forthwith.

Reversed.

SEIDENFELD, P. J., and HOPE, J., concur.

       The complaint in this cause as well as subsequent pleadings and documents of record, indicate that the original plaintiff in this action was “First National Bank of Barrington, Trust No. 11-1317.” On November 21, 1980, the appearance of the First National Bank of Barrington as trustee was entered. On December 11, 1980, a motion was filed to amend the complaint and all other pleadings to substitute the Langpops as plaintiffs in lieu of First National Bank of Barrington, Trust No. 11-1317. The court granted the motion that same day. It appears the court agreed that the Langpops were the real parties in interest in the lawsuit and in the contract and that, since the real estate involved in the contract was no longer held in trust because it had been sold to another purchaser, the caption in the pleadings should be amended to reflect this situation. Accordingly, the Langpops will be referred to as the plaintiffs.


author: Mr. JUSTICE NASH

text:
    ANGIE J. ASHLEY, Plaintiff-Appellant, v. IDA HILL et al., Defendants.—(NESTER PAUL JOVANOVIC, a/k/a Paul Jovanovic, Defendant-Appellee.)
    Second District
    No. 80-972
    Opinion filed October 29, 1981.
    — Rehearing denied December 4, 1981.

      William L. Barr, Jr., of Steinberg, Polacek and Goodman, of Chicago, for appellant.
    Michael K. Noonan, of Sullivan, Smith, Hauser and Noonan, of Waukegan, for appellee.
   Mr. JUSTICE NASH

delivered the opinion of the court:

Plaintiff, Angie J. Ashley, appeals from an order of the circuit court of Lake County dismissing Nester P. Jovanovic as a defendant on grounds the statute of limitations barred this action against him.

On April 28, 1976, plaintiff executed a written lease of an apartment at 521 North County in Waukegan. The lessor of the property, as identified in the lease, was Paul Jovanovic of 2915 Enoch in Zion, Illinois, and it was signed by Robert E. York as agent for the owner. Defendant Nester P. Jovanovic and his wife were purchasing the property on a contract for deed executed in 1971 from defendants Ida and Leo J. Hill; this transaction was not recorded, however, and the Hills were the owners of record at the time of the relevant circumstances of this case.

Plaintiff suffered physical injury on her leased premises on November 28,1976, and she filed a complaint on November 27,1978, joining as parties-defendants Ida and Leo J. Hill and Paul Jovanovic, alleging they negligently maintained the property. Summons was issued directing that Paul Jovanovic be served with process at 2915 Enoch in Zion, but it was returned unserved December 28, 1978, with the notation that Paul Jovanovic was deceased. Plaintiff caused an alias summons to issue for the same-named person at the Zion address on July 27, 1979; it too was returned bearing a notation Paul Jovanovic was deceased.

Thereafter on November 9, 1979 plaintiff presented an ex parte motion to amend her complaint on grounds of misnomer as to Paul Jovanovic and for leave to bring her action against Nester P. Jovanovic. The trial court granted the motion, and the complaint was amended and defendant served November 12, 1979, by substituted service on his mother at his residence at 32220 Forest Drive in Grayslake, Illinois.

Defendant thereupon moved to dismiss plaintiff’s action on the grounds he had been joined as a defendant after the two-year statute of limitations had expired. In response, plaintiff presented an affidavit in which she stated that she at all times intended to sue Nester P. Jovanovic but merely misnamed him. In support thereof she attached a copy of the lease which named Paul Jovanovic as her landlord and further stated that Nester P. Jovanovic had collected her rent each month and that he was known to her as Paul Jovanovic.

Defendant acknowledged that his deceased father was named Paul Jovanovic but that contrary to plaintiff’s assertion he had no knowledge of anyone ever referring to him (Nester) as “Paul.” Defendant’s immigration and naturalization papers named him as Nester Pavle Jovanovic, but he denied his middle name actually was Paul. He asserted he had a middle initial “P” under a Serbian custom whereby persons use the first letter of their father’s name as an initial and that the name Pavle was given to him by immigration officials who insisted he have a full middle name.

The circuit court granted defendant’s motion to dismiss, determining the case did not involve a misnomer and that the statute of limitations had run prior to service upon defendant. The court found there was no just reason to delay enforcement or appeal, and plaintiff filed a timely notice of appeal.

Plaintiff contends this case presents only a misnomer in that she at all times intended to sue Nester P. Jovanovic. She refers to her affidavit in which she stated she intended to sue defendant, the fact that Paul Jovanovic was named as lessor in her lease and that she knew the person who collected her rent by the name “Paul.” Defendant contends, however, the case is one of mistaken identity, not misnomer, and argues plaintiff’s affidavit expressing her subjective intention is self-serving and cannot be considered controlling.

Misnomer of a party is not a ground for dismissal of an action, and the name of a party may be corrected upon motion and proper proof. (Ill. Rev. Stat. 1979, ch. 110, par. 21(2); A-Z Equipment Co. v. Moody (1980), 88 Ill. App. 3d 187, 189, 410 N.E.2d 438, 440.) The misnomer rule is narrow, however, and applies only where an action is brought and summons served upon a party intended to be made a defendant (thus giving actual notice of the lawsuit against the real party-in-interest), but the process and complaint do not refer to the person by his correct name. (Janove v. Bacon (1955), 6 Ill. 2d 245, 250, 128 N.E.2d 706, 709; Ingram v. MFA Insurance Co. (1974), 18 Ill. App. 3d 560, 566, 309 N.E.2d 690, 695, appeal denied (1974), 56 Ill. 2d 587.) The courts of this State have long distinguished the misnomer rule, which is applicable only to correctly joined and served but misnamed parties, from those cases where due to mistaken identity the wrong person is joined and served. (E.g., Proctor v. Wells Brothers Co. of New York (1914), 262 Ill. 77, 104 N.E. 186, affg (1913), 181 Ill. App. 468; Cigan v. St. Regis House Hotel (1979), 72 Ill. App. 3d 884, 391 N.E.2d 197.) The determination of whether a case involves misnomer or mistaken identity depends on the intent of the parties, but the subjective intention of plaintiff as to who he intended to sue has not been held controlling in the face of objective manifestations indicating an intent to sue another. Proctor v. Wells Brothers Co. (1914), 262 Ill. 77, 80-81, 104 N.E. 186, 187.

Plaintiff asserts that because her lease named Paul Jovanovic as lessor and she knew Nester, who collected her rent, as Paul, these factors establish she intended to sue Nester. In Proctor v. Wells Brothers Co. the court discussed similar circumstances which had led the plaintiff to name and serve the wrong party and fail to amend and serve the proper defendant within the statute of limitations. The court concluded the factors urged did not tend to show objectively that the plaintiff intended to sue defendant before the statute ran but, instead, did no more than explain the mistake in identity. (262 Ill. 77, 81, 104 N.E. 186, 187.) Here also the factors plaintiff sets forth do no more than explain her mistake in identifying the defendant she actually sought to sue.

Plaintiff made no effort to join or serve the proper defendant, Nester, within the statute of limitations. Rather, plaintiff sought only to serve Paul Jovanovic, once by alias summons after having been notified by return of the initial process that Paul was deceased. This circumstance suggests that at all times prior to November 9,1979, when she first sought to amend her complaint and direct summons to Nester, plaintiff’s objective intention was to sue a person named Paul Jovanovic residing in Zion who she mistakenly believed was the real party-in-interest.

Plaintiff’s authorities present factual situations applying the rule of misnomer, but they must be distinguished from this case. In Borkoski v. Tumilty (1977), 52 Ill. App. 3d 839, 368 N.E.2d 136, appeal denied (1978), 67 Ill. 2d 591, plaintiff sued the real party-in-interest and served it with process within the statute of limitations so that it had notice it was being sued; however, as the defendant was misnamed in the pleadings and summons, plaintiff was allowed to amend. Here defendant was not sued and served within the statute of limitations; the wrong party was sued and attempted to be served due to a mistake in identity. Nor does Schultz v. Gerstein (1977), 50 Ill. App. 3d 586, 365 N.E.2d 1128, dictate a different conclusion. The court there was presented with objective manifestations that plaintiff intended to sue and had sued, but not actually served, the son rather than his father. The complaint had been directed to Donald Gerstein in his proper name but without mention of whether it was Jr. or Sr. who was to be the defendant. After Donald, Sr., answered to the complaint, plaintiff attempted service upon the son, the real party-in-interest, on three dates within the statute of limitations.

We conclude this is a case of mistaken identity rather than misnomer, and as defendant was not joined and served within the statute of limitations the trial court was correct in dismissing the action against him. See Cooney v. McGillivry (1978), 65 Ill. App. 3d 735, 382 N.E.2d 711; Stevens v. Yonker (1973), 12 Ill. App. 3d 233, 298 N.E.2d 395.

Section 46(4) of the Civil Practice Act (Ill. Rev. Stat. 1979, ch. 110, par. 46(4)) affords the only relief where a plaintiff has brought his action against the wrong party, due to mistaken identity, and seeks to name the correct party after expiration of the statute of limitations. Plaintiff does not contend, however, that the requirements of section 46(4) have been met in this case. See Solone v. Reck (1965), 55 Ill. App. 2d 282, 204 N.E.2d 614, appeal denied (1965), 31 Ill. 2d 631.

Accordingly, the order of the circuit court of Lake County will be affirmed.

Affirmed.

HOPE and LINDBERG, JJ„ concur.


text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellant, v. RICHARD T. PIPER, Defendant-Appellee.
    Second District
    No. 80-902
    Opinion filed October 30, 1981.

      J. Michael Fitzsimmons, State’s Attorney, of Wheaton (Robert L. Thompson and Barbara A. Preiner, Assistant State’s Attorneys, of counsel), for the People.

      Edwin T. Simpson, of Wheaton, for appellee.
   Mr. JUSTICE LINDBERG

delivered the opinion of the court:

The question raised by this appeal is whether opening the door of a vehicle by police to examine the vehicle identification number on the door post in the course of a routine accident investigation without asking permission of the driver constitutes an illegal search.

Defendant was charged by complaint in the Circuit Court of Du Page County with three offenses arising from the discovery by police of weapons in his truck during the course of a routine traffic accident investigation: (1) unlawful use of weapons in that he knowingly carried a loaded . firearm in his vehicle (Ill. Rev. Stat. 1979, ch. 38, par. 24 — l(a)(10)); (2) unlawful use of weapons in that he knowingly possessed a bludgeon (Ill. Rev. Stat. 1979, ch. 38, par. 24 — 1(a)(1)); and (3) possession of a firearm without the requisite firearm owners identification card (Ill. Rev. Stat. 1979, ch. 38, par. 83 — 2). After a hearing, defendant’s motion to suppress the weapons evidence as the product of an illegal search was granted by the trial court. The State appeals. Defendant filed an appearance in this court, but did not submit a brief.

Defendant Piper was involved in a traffic accident at the intersection of Gary Mill Road and Roosevelt Road in West Chicago. Defendant hailed a passing squad car which stopped to investigate the accident. Both of the vehicles involved in the accident were apparently parked at the side of the road, and the squad car pulled up behind the second vehicle.

Two deputy sheriffs, Prunty and Horan, were in their squad car. Defendant, his wife and the driver of the second vehicle were summoned to the squad car where they answered routine questions addressed to them by Deputy Prunty concerning the accident. During this time, Deputy Horan was outside the police car recording the license plate numbers, the make and model of the vehicles and the vehicle identification numbers (VIN) of the vehicles involved in the accident.

Approaching defendant’s truck, Deputy Horan looked through the windshield in an effort to find the VIN on the dashboard. Unable to locate the number, and without asking defendant, he proceeded to open the door and found the VIN on the door post. As Officer Horan copied the VIN he observed a revolver in a holster draped over the side and secured to the back of the seat which was not visible from outside the truck. After unloading the weapon, Horan looked under the front seat and located a knife, and several clubs.

At a preliminary hearing, Piper moved to suppress the weapons seized as a result of Deputy Horan’s search of his vehicle. The trial court granted the motion finding that defendant had a right of privacy within the cab of his vehicle; that the cab could be searched pursuant to a search warrant or if the driver of the vehicle is unable to produce any identification for the vehicle; and that because the deputy sheriff in this case did not request the information prior to searching the vehicle, his opening of the truck’s door constituted an illegal search. The trial court granted defendant’s motion to suppress and we affirm.

The State would justify the investigation which yielded the weapons on two alternative grounds: first, that opening the door of a vehicle in the course of a routine traffic accident to find the VIN is not a “search” within the protective scope of the fourth amendment to the United States Constitution; and second, if this be deemed a search, it is not constitutionally unreasonable.

In City of Decatur v. Kushmer (1969), 43 Ill. 2d 334, 338, 253 N.E.2d 425, 428, our supreme court observed:

“A search implies a prying into hidden places for that which is concealed, and it is not a search to observe that which is open to view. A search implies an invasion and quest with some sort of force either actual or constructive. [Citations.]” Accord, People v. Crowder (1981), 99 Ill. App. 3d 500.

In People v. Wolf (1975), 60 Ill. 2d 230, 326 N.E.2d 766, the supreme court noted that the courts of some jurisdictions have held that examining a VIN by opening the car door or lifting the hood is not a search within the scope of fourth amendment protection where there is a legitimate reason for doing so. However, the court in Wolf stopped short of adopting this approach for Illinois.

The argument favoring this view was fully expounded in United States v. Polk (5th Cir. 1970), 433 F.2d 644, 647-48:

“The rationale * * * is that an automobile owner can have no reasonable expectation of privacy with respect to the car’s VIN.
# # e
Vehicle identification numbers are put on automobiles by the manufacturers to aid in identifying the vehicles. There are so many similar cars that individual vehicles can be identified only through the use of such individual numbering. State laws contain many requirements for disclosing and recording such VIN’s, showing a generally accepted mode of disclosure and the lack of any reasonable expectation of privacy with respect to the numbers.
Most states require that automobiles be registered with a state agency to establish a record of car ownership. The registration, which must be carried in the car, identifies the car by its VIN. These requirements proceed from a purpose to keep track of the ownership of potential instruments of personal and property injury, so that drivers in automobile accidents can be traced and so that compulsory insurance requirements can be enforced. * * * License plates are not sufficient for these purposes because of their easy removability.
It is routine practice for policemen stopping cars in traffic control operations to ask for the automobile registration papers in addition to the driver’s license. Viewing registration papers is part of the accepted regulatory scheme.
VIN’s are typically disclosed to private parties also. Automobile purchase and sale documents usually identify the car by its VIN. Automobile insurance policies also identify cars by their VIN’s. There can therefore be no reasonable expectation of privacy with respect to the identity of the VIN. Opening the car door, looking under the hood, or crawling under the car to inspect the rear axle does not independently bring an inspection of the VIN within the scope of the Fourth Amendment.
# <* t>
Thus the VIN on the rear axle or on the car frame are outside any reasonable expectations of privacy. Those that may be seen only by opening the car door or hood are no more private: doors and hoods are continually opened to the eyes of observers. Although opening the door of a car may involve a technical trespass, such action does not invade any expectations of privacy.”

This view, however, has been criticized. (See generally 1 W. LaFave, Search and Seizure §2.5 (1978).) LaFave argues persuasively that the adoption of such a rule would mean that police would be free to enter “any particular car on a whim and that they could make wholesale entries of cars on nothing more than a hope that one of them might turn out to be stolen.” While it is true that the United States Supreme Court has held that one has a “lesser expectation of privacy in a motor vehicle because its function is transportation and it seldom serves as one’s residence or as the repository of personal effects” (Cardwell v. Lewis (1974), 417 U.S. 583, 590, 41 L. Ed. 2d 325, 335, 94 S. Ct. 2464, 2469), the court was careful to add that “[t]his is not to say that no part of the interior of an automobile has Fourth Amendment protection; the exercise of a desire to be mobile does not, of course, waive one’s right to be free of unreasonable government intrusion.” 417 U.S. 583, 591, 41 L. Ed. 2d 325, 335, 94 S. Ct. 2464, 2470. However, emphasis upon the quasi-public nature of identification numbers like the VIN may be somewhat misplaced. In United States v. Johnson (5th Cir. 1970), 431 F.2d 441, 447, Judge Godbold, writing in dissent, observed:

“An argument can be constructed that there is a difference where the police invasion is to seek identification numbers. I.e., because identification numbers, secret and otherwise, are for identification purposes the citizen can have no reasonable expectation of their remaining private — they are for identification, ergo, the citizen must expect them to be available to the police for the purpose for which intended. But the function of being an identification device does not exempt the device itself, or the instrumentality it identifies, from the Fourth Amendment. In our increasingly complex world our motor vehicles are not the only things numbered for identification. So are such tangible effects as household appliances, lawn mowers, outboard motors, and even the watches on our wrists. Add to the list such papers and documents kept in home, safe deposit box or on the person, as bank checks, drivers’ licenses, social security cards, credit cards, insurance policies, securities, and deeds and mortgages, and the automobile registration papers often carried in the glove compartment of the car. All of these items have primary or secondary qualities of identification, but this does not subject them, when not in plain view, to being sought out by police action beyond the reach of the Fourth Amendment.”

In other words, the analysis of whether a police investigation should be deemed a search and therefore subject to fourth amendment restraints must weigh the reasonableness of one’s privacy interest in the instrumentality, and the particular area of the instrumentality upon which the VIN is inscribed, and not just the reasonableness of the privacy interest in the number itself. Thus, while the examination of a VIN, inscribed on the dashboard of a car which is in plain view of a policeman (or anyone else) looking through the windshield from outside would not be a fourth amendment search because it is not a “prying into hidden places for that which is concealed” (Kushmer, 43 Ill. 2d 334, 338), by the same standard the examination of a VIN which can be observed only when a policeman has opened the door may well constitute a search of that portion of the vehicle otherwise concealed from public view. Although one’s expectation of privacy in the number may be no different, it is surely a matter of common sense that one’s expectation of privacy in that which can be seen from outside the car is significantly different from that which can be seen only when the door has been opened. Otherwise, why bother to put things in the glove compartment, under the seat, or, as here, behind the seat and out of the view of passers-by?

We therefore reject the State’s contention that one can have no reasonable expectation of privacy in a VIN, regardless of its location on, or in, the vehicle, or the circumstances of the police investigation. Where, as here, the VIN can be seen by the policeman only when he himself has opened the door to the vehicle, a search has begun.

Viewing this as a search, the inquiry then shifts to whether the circumstances here fall within one of the exceptions of the warrant requirement. In Katz v. United States (1967), 389 U.S. 347, 357, 19 L. Ed. 2d 576, 585, 88 S. Ct. 507, 514, the Supreme Court held that warrantless searches are “per se unreasonable under the Fourth Amendment — subject only to a few specifically established and well-delineated exceptions.” As the State points out, among these exceptions is the so-called “automobile exception” which arose because of the exigency which confronted police in connection with searching vehicles where “the opportunity to search is fleeting since a car is readily movable.” (Chambers v. Maroney (1970), 399 U.S. 42, 51, 26 L. Ed. 2d 419, 428, 90 S. Ct. 1975, 1981.) In Cardwell v. Lewis, 417 U.S. 583, 590, 41 L. Ed. 2d 325, 335, 94 S. Ct. 2464, 2469, the court noted that such “fleeting” opportunity to search, and therefore the need for a less stringent warrant requirement, is “strikingly true where the automobile’s owner is alerted to police intentions and, as a consequence, the motivation to remove evidence from official grasp is heightened.”

However, there are limitations upon this exception. In Coolidge v. New Hampshire (1971), 403 U.S. 443, 461, 29 L. Ed. 2d 564, 580, 91 S. Ct. 2022, 2035, the Supreme Court observed: “The word ‘automobile’ is not a talisman in whose presence the Fourth Amendment fades away and disappears.” Coolidge struck down a warrantless automobile search as outside the ambit of the “automobile exception” because there were no exigent circumstances which would have relieved the police of the necessity to secure a warrant. The court stated:

“[Tjhere is nothing in this case to invoke the meaning and purpose of the rule of Carroll v. United States [the font of the ‘automobile exception’] — no alerted criminal bent on flight, no fleeting opportunity on an open highway after a hazardous chase, no contraband or stolen goods or weapons, no confederates waiting to move the evidence, not even the inconvenience of a special police detail to guard the immobilized automobile. In short, by no possible stretch of the legal imagination can this be made into a case where ‘it is not practicable to secure a warrant,’ Carroll [v. United States (1925), 267 U.S. 132, 153, 69 L. Ed. 543, 551, 45 S. Ct. 280, 285], and the ‘automobile exception,’ despite its label, is simply irrelevant.” (403 U.S. 443, 462, 29 L. Ed. 2d 564, 580, 91 S. Ct. 2022, 2035.)

Clearly then, the warrantless search of a vehicle in the course of a routine accident investigation cannot be justified on the basis of the “automobile exception,” for there is no exigency apart from the need to remove any injured passengers and damaged vehicles from the roadway. And these exigencies, if they are present (they were not in our case), are entirely unrelated to the inspection of the interior of a vehicle solely for the purpose of finding its VIN.

Rather, the justification, if any, for this type of search must be sought in those cases which define the permissible scope of State authority to regulate vehicle use. (See generally 3 W. LaFave, Search and Seizure §10.8 (1978).) These cases employ the balancing test set forth in Camara v. Municipal Court (1967), 387 U.S. 523, 18 L. Ed. 2d 930, 87 S. Ct. 1727, whereby the need of the State to search is weighed against the invasion of privacy which the particular search entails. Applying this test, the Supreme Court in the recent case of Delaware v. Prouse (1979), 440 U.S. 648, 59 L. Ed. 2d 660, 99 S. Ct. 1391, declared unconstitutional the practice of randomly stopping vehicles for the purpose of checking driver’s licenses and vehicle registrations. Conceding that the State’s interest in enforcing highway safety was important, the court nevertheless doubted:

0 ° whether in the service of these important ends the discretionary spot check is a sufficiently productive mechanism to justify the intrusion upon Fourth Amendment interests which stops entail. * ° ° Given the alternative mechanisms available 0 0 0 we are unconvinced that the incremental contribution to highway safety of the random spot check justifies the practice under the Fourth Amendment.” 440 U.S. 648, 659, 59 L. Ed. 2d 660, 671, 99 S. Ct. 1391, 1399.

In Prouse, the court was concerned with the unbridled discretion of the police in randomly selecting vehicles for license and registration checks. Yet its discussion of this problem (440 U.S. 648, 662, 59 L. Ed. 2d 660, 672-73, 99 S. Ct. 1391, 1400) is also apropos of the case at bar:

“The ‘grave danger’ of abuse of discretion, United States v. Martinez-Fuerte [(1976), 428 U.S. 543, 559, 49 L. Ed. 2d 1116, 1129, 96 S. Ct. 3074, 3083] does not disappear simply because the automobile is subject to state regulation resulting in numerous instances of police-citizen contact. Cady v. Dombrowski [(1973), 413 U.S. 433, 441, 37 L. Ed. 2d 706, 715, 93 S. Ct. 2523, 2528.] Only last Term we pointed out that ‘if the government intrudes ° ° e the privacy interest suffers whether the government’s motivation is to investigate violations of criminal laws or breaches of other statutory or regulatory standards.’ Marshall v. Barlow’s Inc. [(1978), 436 U.S. 307, 312-313, 56 L. Ed. 2d 305, 311, 98 S. Ct. 1816, 1821.] There are certain ‘relatively unique circumstances’ [436 U.S. 307, 313, 56 L. Ed. 2d 305, 311, 98 S. Ct. 1816, 1821,] in which consent to regulatory restrictions is presumptively concurrent with participation in the regulated enterprise. See United States v. Biswell (1972), 406 U.S. 311, 32 L. Ed. 2d 87, 92 S. Ct. 1593 (federal regulation of firearms); Colonnade Catering Corp. v. United States (1970), 397 U.S. 72, 25 L. Ed. 2d 60, 90 S. Ct. 774 (federal regulation of liquor). Otherwise, regulatory inspections unaccompanied by any quantum of individualized, articulable suspicion must be undertaken pursuant to previously specified ‘neutral criteria.’ Marshall v. Barlows Inc. [(1978), 436 U.S. 307, 323, 56 L. Ed. 2d 305, 318, 98 S. Ct. 1816, 1826.]”

In our case, the State has made no attempt to identify the “neutral criteria” which are to guide police in deciding whether to open the doors of vehicles in search of VIN. Instead, the State reiterates the purposes for VIN recited by the Illinois Supreme Court in People v. Wolf (1975), 60 Ill. 2d 230, 233, 326 N.E.2d 766, 768, “to permit transfers and other transactions involving motor vehicles and to protect this highly mobile type of property from theft or other misappropriation.” Manifestly, these purposes have no bearing whatever upon routine traffic accidents where there is no suspicion of theft, nor any intention to transfer title.

In Wolf, police had stopped a car being driven with only one headlight in violation of the Illinois Motor Vehicle Code. Although examinations of the suspect’s driver’s license, license plates, and “passenger car identification card” checked out, the police officer became suspicious when he noticed that the plates were fastened to the car by wire. Seeking further identification of the vehicle, the officer opened the car door to examine the VIN inscribed on the door post, and in so doing detected the smell of marijuana. Affirming the denial of his motion to suppress, the supreme court, “[assuming, arguendo, that the opening of a car door to examine the registration number does amount to a search,” ruled that the search was not an unreasonable one under the circumstances. People v. Wolf (1975), 60 Ill. 2d 230, 232.

Wolf is distinguishable from our case. The suspect in Wolf was initially stopped for an offense for which he was subject to arrest (Ill. Rev. Stat. 1971, ch. 95½, par. 12 — 201(a)), a factor which the United States Supreme Court in Prouse noted would justify the police demand to see the driver’s license and registration. Second, our supreme court in Wolf placed great weight upon the fact that the license plates had been wired in place, which provided an articulable basis for the police officer’s suspicion that the car may have been stolen. Third, the driver’s “car identification card” apparently did not reveal the vehicle’s identification number. Finally, the court note.d that VIN plate affixed to the car provided the “most authoritative identification of the vehicle,” a significant factor where there are grounds to suspect that a car has been stolen.

The defendant in our case was not stopped for an offense; indeed, it , was the defendant who hailed the police car to assist in investigating the accident.' There was nothing in the behavior of the defendant, the nature of the accident or the appearance of his vehicle which aroused any suspicion in Deputy Horan that the defendant had broken the law or was being other than fully cooperative with the investigation. There is no evidence that the deputy used his search for the VIN as a pretext to search for other contraband in the vehicle. Nor was there any reason for him to suspect that defendant would provide him with a false vehicle title or registration card upon which the VIN is printed had the deputy asked to see them. Ill. Rev. Stat. 1979, ch. 95½, par. 3 — 107(a)(5).

In the absence of any articulable facts upon which the police might reasonably suspect that the car was stolen, there would not seem to be any sound policy interest which would justify the intrusion of opening a vehicle door to ascertain the VIN in these circumstances. It has been suggested elsewhere (United States v. Polk) that checking the VIN assists in tracing the whereabouts of drivers involved in traffic collisions so that compulsory insurance requirements can be enforced. However, in the absence of evidence to the contrary, there is no reason to believe that such information cannot reliably be obtained by less intrusive means such as recording the data from a driver’s license, vehicle title or registration. The importance of a VIN for this purpose in any event may be questioned. Section 11 — 403 of the Illinois Vehicle Code, entitled, “Duty to give information and render aid,” requires only that a driver involved in an accident provide the driver or passenger of the other vehicle his name, address, registration number and driver’s license. (Ill. Rev. Stat. 1979, ch. 95K, par. 11 — 403.) By this statute, the legislature would appear to have acknowledged that this information would ordinarily be sufficient to trace the driver’s whereabouts.

The order of the Circuit Court of Du Page County suppressing the evidence of this search is affirmed.

Affirmed.

VAN DEUSEN and NASH, JJ., concur.


author: Mr. JUSTICE REINHARD

text:
      In re MARRIAGE OF DIANE MARIE PADIAK, a/k/a Diane Marie Pope, Petitioner-Appellant, and JOSEPH PADIAK, Respondent-Appellee.
    Second District
    No. 81-11
    Opinion filed November 3, 1981.

      Peter M. Donat, of Donat and Donat, of Batavia, for appellant.
    Linda Sue Kegan and Howard W. Broecker, both of Geneva, for appellee.
   Mr. JUSTICE REINHARD

delivered the opinion of the court:

This appeal arises from a judgment modifying the custody of Gwendolyn Padiak, who was seven years old at the time of the hearing, from her mother, Diane Marie Padiak, a/k/a Diane Marie Pope (Diane), to her father, Joseph Padiak (Joseph). Upon their divorce, Diane was awarded custody of the child in 1975. In 1978, Diane filed a petition requesting permission to remove Gwendolyn from the State. (Ill. Rev. Stat. 1979, ch. 40, par. 609.) Joseph then filed a counterpetition seeking a modification of custody under section 610 of the Illinois Marriage and Dissolution of Marriage Act (Ill. Rev. Stat. 1979, ch. 40, par. 610). Subsequently, the petition to remove the child from the State was withdrawn and the hearing proceeded on Joseph’s petition to modify custody.

Diane Pope appeals from the court’s order modifying custody and alleges that the trial court erred (1) in changing custody of the child without proof of any actual, tangible harm in making its determination that the child’s present environment endangered seriously her physical, moral, or emotional health; (2) in refusing to consider the child’s preference as to her custodian or to interview the child; (3) in taking judicial notice, on its own, of a record in another case and using that record in formulating its decision in the case at bar; and (4) in making findings not supported by the evidence and drawing unwarranted inferences from certain evidence.

Diane Pope, the first witness at the hearing, was called under section 60 of the Civil Practice Act (Ill. Rev. Stat. 1979, ch. 110, par. 60) and testified as follows. She presently resides in Batavia, Illinois, with Gwendolyn Padiak and Donald Pope III. Since her divorce from petitioner, she was subsequently remarried to Donald Pope, Jr., in 1977, but this marriage was also terminated by divorce. Custody of Donald Pope III, the child of Diane’s marriage to Donald Pope, Jr., was awarded to Diane at the time of that divorce.

Diane testified to living at a number of different residences since her divorce from Joseph Padiak. At one time, she had lived in an apartment complex in Elgin, Illinois, although she could not recall the exact address. On two occasions while she lived in Elgin, men had broken into her apartment and attempted to rape her. On a third occasion, a man attempted to rape her while she was sitting, in the front yard of her apartment building. Diane indicated that she did not report any of these incidents to the police.

Diane also testified that while she was living with her former husband, Donald Pope, Jr., she had had arguments with him. On one such occasion, a neighbor became upset and called the police. Diane indicated that Pope was arrested and jailed on three separate occasions for driving while under the influence of alcohol. On one occasion, he was incarcerated for a period of seven days. Diane also stated that, at one time, both she and Pope had possessed guns.

Diane then testified that a man named Dan DeHaeseleer lives directly opposite of her present apartment. DeHaeseleer had given her $150 on one occasion and $130 on another. She had been seeing DeHaeseleer socially for about eight months but the relationship had “cooled” recently. Diane related that one evening, after she and DeHaeseleer had returned from a Halloween party, she had been raped by another man who lived next door to her. She notified the police but did not make a written report because “I didn’t want to endanger my family over convicting somebody.”

Diane later testified that her present source of income is welfare and child-support payments from Joseph Padiak. She also admitted to her use of marijuana “a couple of times a month.”

She then related an incident which occurred during the time that she was living with Donald Pope, Jr. She stated that Gwendolyn had approached Mr. Pope and attempted to unzip his pants. She testified that she notified Joseph Padiak of this incident the same day. Diane stated that Gwendolyn had attempted the same thing with other male visitors.

Jim Forrester, who has known Joseph Padiak and his wife Mary Padiak “for the past three or four years” then testified that he had been on a vacation with Joseph, Mary, and Gwendolyn Padiak. He stated that Joseph and Gwendolyn had a “[ljoving, father-daughter relationship.” Forrester described Gwendolyn and Mary’s relationship as follows: “Its a friendly relationship. Yet its more of a motherly relationship, that what Mary says goes and Gwen needs this.” On cross-examination, Forrester testified that from his observation of Gwendolyn, she appeared normal, healthy, and well-adjusted.

Joseph Padiak’s present wife, Mary Padiak, testified that she and Joseph have been married since May 20, 1978, and they have one child, Justin Joseph, who was born on June 18, 1980. She characterized her relationship with Gwendolyn as “excellent” and described many of the activities that she engages in with Gwendolyn and Joseph.

Joseph Padiak then testified on direct examination. He is employed by Pools Unlimited as a service manager. He had visited Diane Pope at her apartment in Elgin and described it as a “dirty,” “low-income” neighborhood, and he felt that it was not a proper place for Gwendolyn to live.

Joseph also testified to one occasion where he visited Gwendolyn at Diane’s apartment at “Cumberland Green.” Joseph stated that a gun was lying on a chair in the living room in Gwendolyn’s presence while Diane and Donald Pope were on the upper floor of the apartment. He also stated that he felt that Gwendolyn was not always adequately dressed considering the amount of money that Diane Pope was receiving in the form of child-support payments. He testified that he had not heard about Gwendolyn’s attempt to unzip Donald Pope’s pants from Diane and was upset as a father that he learned of it much later from a third party.

Donna Capocasa, a neighbor of Diane Pope who has known her for eight months, then testified. Capocasa is familiar with Gwendolyn and visits Diane Pope’s apartment approximately once a week. She stated that Gwendolyn shares a bedroom with “Donnie,” the child from Diane’s marriage to Donald Pope, and described the apartment as “clean” and “nice.”

Capocasa also testified to a conversation that she had with Gwendolyn. Capocasa stated that Gwendolyn was crying and upset about the possibility of having to move in with her father. Gwendolyn indicated to Capocasa that she did not want to live with her father. The witness further testified that Gwendolyn was a “good girl” and “very mature for her age.”

Florence Martin, Diane Pope’s mother, testified that Diane had lived with her for a period of five or six months in 1978. Martin stated that on one occasion when Joseph Padiak failed to call and inform Diane that he would be exercising his visitation rights, Diane made other plans for Gwendolyn. Martin testified that when Padiak arrived at her home, he pounded so hard on the door that she called the police. The witness indicated that, on a previous occasion, Joseph Padiak had broken down her front door.

Janis Larsen, Diane Pope’s sister, testified that she frequently “babysat” for Gwendolyn during a period of 17 months in 1978 and 1979. Larsen stated that on one such occasion Gwendolyn “got up on the couch and she laid on her back and bent her legs and her knees and spread her legs apart and then asked my son David to come over and to blow on her butt

Larsen then related another incident concerning Joseph Padiak which occurred at a church in St. Charles, Illinois. Larsen had taken Gwendolyn to Sunday school in the morning and, when she returned to pick Gwendolyn up, Joseph Padiak was present. According to Larsen, Joseph “threw himself into a violent and frightening rage” and he was “screaming and yelling so loudly and so incoherently, [she] couldn’t.understand what he was saying.” Larsen stated that this display frightened Gwendolyn and that she began to cry.

Dorothy Miller, a social worker employed at the Sunnyridge Family Center in Wheaton, Illinois, also testified at the hearing. Miller described the Sunnyridge Family Center as “a multi-service agency providing residential treatment to adolescent boys, adoption, foster-care services, family life education, and out-patient counseling.” The Center had been contacted in order to make a custody recommendation regarding Gwendolyn Padiak. Miller had interviewed Diane Pope, Joseph Padiak, and Gwendolyn Padiak.

In her interview with Diane Pope, Diane expressed concern over the effect the custody dispute was having on Gwendolyn. Miller’s impression of the parenting aptitude of Diane Pope was that “she was aware of the needs of the child and was attempting to —to meet them in the best possible manner.”

Miller testified that during her interview with Joseph Padiak, he “had covertly accused [Diane Pope] of sexual liasons outside of the marriage, but again there was no substantiation of this.” Miller concluded that she felt that Joseph was not particularly receptive to Gwendolyn’s needs or feelings.

Miller stated that she was asked to make another evaluation since Joseph and Mary Padiak were not pleased with her initial recommendation. Miller’s opinion, however, did not change based on the second interview. Miller stated that her opinion based on the two interviews was that Diane Pope should retain custody of Gwendolyn.

Diane Pope then testified again on direct examination that Gwendolyn was not aware of the rape that occurred in her apartment building in Batavia. She also stated that although she had spent some nights at Dan DeHaeseleer’s apartment when Gwendolyn was with her father, Gwendolyn was also unaware of these occasions.

Dr. Harry E. Gunn, a clinical psychologist, testified that he had conducted interviews and various psychological tests on Diane Pope, Joseph Padiak, Mary Padiak, and Gwendolyn Padiak.

With reference to his testing of Diane Pope, Gunn stated that “there was a superficiality of warmth so that this would not be an individual, I felt, who could easily invest herself deeply with other people and be concerned about their needs.” Gunn further described Pope as sexually “seductive” and indicated that Gwendolyn could be inclined to imitate that kind of behavior.

As to his examination of Gwendolyn, Gunn stated that she appeared to have been “tutored as to what to say at the time of testing.” Gwendolyn made many spontaneous statements among which was “I like mommy better.” Gunn testified that although Gwendolyn was not psychotic, she was beginning to develop signs of “neurotic types of conflicts.” Gunn related that Gwendolyn was having trouble developing a self-concept and of formulating an idea of how to relate to other people.

The doctor then testified in reference to his examination of Joseph Padiak. Gunn stated that Padiak was “very up front, who comes with his conflicts out in the open, and consequently someone that one can find it relatively easy to relate to.” Gunn further indicated that Padiak would relate to Gwendolyn “with warmth” and that he showed a strong desire for Gwendolyn’s growth and development. Gunn then summarized his observations of Mary Padiak as “an ideally nurturing and mature person.” Finally, Dr. Gunn indicated “unequivocally” the father’s home was better suited for the nurturing of Gwendolyn. Gunn also stated that remaining with her mother presents an emotional endangerment to Gwendolyn.

A modification of custody pursuant to section 610(b) of the Illinois Marriage and Dissolution of Marriage Act (Ill. Rev. Stat. 1979, ch. 40, par. 610(b)) requires a showing that the child’s present environment endangers seriously his physical, mental, moral or emotional health. Diane contends that the court erred in modifying custody without any proof of actual harm to the child. Section 610(b) provides in pertinent part:

“The court shall not modify a prior custody judgment unless it finds, upon the basis of facts that have arisen since the prior judgment or that were unknown to the court at the time of entry of the prior judgment, that a change has occurred in the circumstances of the child or his custodian and that the modification is necessary to serve the best interest of the child. In applying these standards the court shall retain the custodian appointed pursuant to the prior judgment unless:
# # »
(3) the child’s present environment endangers seriously his physical, mental, moral or emotional health and the harm likely to be caused by a change of environment is outweighed by its advantages to him.” (Ill. Rev. Stat. 1979, ch. 40, par. 610(b).)

Further, section 610(b) reflects an underlying policy favoring the finality of child custody judgments and making their modification more difficult. (In re Custody of Harne (1979), 77 Ill. 2d 414, 420, 396 N.E.2d 499.) This section further creates a presumption in favor of the present custodian in order to promote stability and continuity in the child’s custodial and environmental relationships which is not to be lightly overturned. In re Harne; In re Marriage of Gunter (1981), 93 Ill. App. 3d 1043, 1048, 418 N.E.2d 149.

Initially, it must be noted, that the testimony of Dr. Harry Gunn indicated that Gwendolyn’s present environment endangered seriously her moral and emotional well-being. Gunn stated that Gwendolyn was “showing signs of beginning some neurotic types of conflicts” and that she was having difficulty in developing a self-concept and in knowing how to relate to other people. Gunn also testified that the “mother’s seductivity may be stimulating Gwen in directions that Gwen cannot handle at the present time.” In response to the question of whether Gwendolyn’s present environment constitutes actual emotional endangerment, Gunn responded, “absolutely.” It is clear, therefore, that Diane is mistaken in her argument that the record is devoid of any evidence of actual emotional harm to the child.

However, there was also substantial evidence presented that indicated that, if Gwendolyn remained in the custody of her mother, there was a strong possibility of future endangerment. Dr. Gunn testified as follows in response to a question pertaining to the long-term effects that retaining custody in the mother might have upon Gwendolyn:

“I would feel that Gwen would run the risk of being quite superficial in terms of how she relates to key family members, and of course to people who are going to become family members, boyfriends and so forth.
Secondly, it is my judgment that the mother has not been one who has experienced joy, affection, pleasure sexually, and I believe that Gwen runs a risk of going in the same direction.
Thirdly, I feel there is a danger of Gwen learning to manipulate other people, to create false impressions, to act one way to get an infantile type of attention.
Fourth, I see a danger in not expressing emotion directly, but going round about.
And fifthly, I would feel there is the risk of Gwen’s development being arrested so that she doesn’t move in the direction of becoming a mature, responsible, reality relating type of individual.”

Testimony at the hearing also established that Diane Pope was unemployed and had been unemployed for a substantial period of time prior to the hearing, had a volatile and unsuccessful marriage to Donald Pope, had maintained numerous residences after the termination of her marriage to Joseph Padiak and had herself been subject to sexual attack on several occasions. Such an unstable Situation can only be seen as an indication of an environment detrimental to the emotional development of the child. See In re Custody of Russell (1979), 80 Ill. App. 3d 41, 45, 399 N.E.2d 212.

Diane has cited no authority for the proposition that the court may only consider present actual harm to the child as opposed to the likelihood of future endangerment. In fact, there is language in some recent Illinois decisions that suggests the opposite proposition. For example, in In re Custody of Nodot (1980), 81 Ill. App. 3d 883, 401 N.E.2d 1189, the court stated:

“As contemplated in the statute, a serious present endangerment to physical, mental, moral or emotional health is not necessarily one which, if realized, must be manifested at once or within a certain discernible period of time; the long-range as well as immediate interests and welfare of the child are the subject of section 610(b). (See, e.g., Harne, 77 Ill. 2d 414, 422.)” (81 Ill. App. 3d 883, 892, 401 N.E.2d 1189.)

Similarly, in De Franco v. De Franco (1978), 67 Ill. App. 3d 760, 384 N.E.2d 997, where the issue was the effect of the custodial parent’s adulterous relationship upon the child, the court stated:

“The tie between an adulterous relationship and its effect upon minor children does not lend itself to precise, empirical proof. Such an overly technical construction of the language ‘conduct ” 0 0 that does not affect his relationship to the child,’ as asserted by petitioner, would be inconsistent with the statutory mandate that custody be modified where ‘the child’s present environment endangers seriously his * * * mental, moral or emotional health.’ Ill. Rev. Stat. 1977, ch. 40, par. 610(b)(3).” (67 Ill. App. 3d 760, 767, 384 N.E.2d 997.)

Also, in Jarrett v. Jarrett (1979), 78 Ill. 2d 337, 400 N.E.2d 421, our supreme court said the following in response to the mother’s contention that section 610 of the Marriage and Dissolution of Marriage Act requires the trial court to refrain from modifying custody unless it finds that the children have suffered “actual tangible harm”:

“The statute, however, directs the trial court to determine whether ‘the child’s present environment endangers seriously his physical, mental, moral or emotional health.’ (Emphasis added.) (Ill. Rev. Stat. 1977, ch. 40, par. 610(b)(3).) In some cases, particularly those involving physical harm, it may be appropriate for the trial court to determine whether the child is endangered by considering evidence of actual harm. In cases such as this one, however, such a narrow interpretation of the statute would defeat its purpose. * 0 * To wait until later years to determine whether Jacqueline had inculcated her moral values in the children would be to await a demonstration that the very harm which the statute seeks to avoid had occurred. Measures to safeguard the moral well-being of children, whose lives have already been disrupted by the divorce of their parents, cannot have been intended to be delayed until there are tangible manifestations of damage to their character.” 78 Ill. 2d 337, 348-49, 400 N.E.2d 421.

We considér this language both persuasive and determinative of the issue presented here. This is particularly so in view of Dr. Gunn’s testimony of seven-year-old Gwendolyn’s present manifestation of neurotic types of conflicts and testimony about Gwendolyn’s inappropriate comments about sex on several occasions. Often, it is difficult to present evidence showing present, objective effects that a custodial parent’s conduct and environment would have on a minor child as the subjective effects resulting from such an environment may make their presence known at a future time. (Gehn v. Gehn (1977), 51 Ill. App. 3d 946, 949, 367 N.E.2d 508.) We therefore, do not construe section 610(b)(3) to require that there must be actual harm to the physical, mental, moral or emotional health of the child before a change in custody can be awarded. Rather, the statute in expressly prescribing that “the child’s present environment endangers seriously his physical, mental, moral or emotional health” contemplates potential harm as well as present harm as a result of the child’s present environment.

The traditional rule in regard to modification of custody is that the decision rests within the sound discretion of the trial court and will not be disturbed on appeal unless it is contrary to the manifest weight of the evidence. (In re Custody of Scott (1979), 75 Ill. App. 3d 710, 714, 394 N.E.2d 779.) After a careful review of the record, we believe there is sufficient evidence to support the trial court’s decision to change custody of the minor child, and we further find that the modification was consistent with the statutory requirements and purposes of section 610(b).

Diane also suggests that, in a proceeding for modification of a custody decree, the court should not consider conduct of a parent of which the child is unaware. Although section 602(b) of the Act provides that, in determining the best interest of the child, the court shall not consider the conduct of the present or proposed custodian that does not affect his relationship to the child (Ill. Rev. Stat. 1979, ch. 40, par 602(b)), this section does not go so far as to say that any parental transgression, if kept from the knowledge of the child, cannot be considered by the trial judge. Such would be an overly broad interpretation of this provision. Countless situations can be imagined where, although the custodial parent’s conduct is harmful and presents an endangerment to the child, the child is still unaware of such conduct. The “best interest of the child” may necessitate removing the child from the potentially harmful environment irrespective of his state of knowledge.

Diane next asserts that it was error for the trial court to refuse to consider the child’s preference as to her custodian and to refuse to interview the child. Section 604 of the Marriage and Dissolution of Marriage Act provides that “[t]he court may interview the child in chambers to ascertain the child’s wishes as to his custodian and as to visitation.” (Ill. Rev. Stat. 1979, ch. 40, par. 604(a).) The use of the word “may” in section 604 indicates that the choice of whether or not to conduct an interview is a matter within the discretion of the trial court. (DeYoung v. DeYoung (1978), 62 Ill. App. 3d 837, 841, 379 N.E.2d 396; see also Ill. Ann. Stat., ch. 40, par. 604, Historical and Practice Notes, at 56 (Smith-Hurd 1980).) Courts in other jurisdictions have interpreted this provision of the Uniform Marriage and Divorce Act in a similar manner. (See, e. g., Easton v. Easton (Mont. 1978), 574 P.2d 989; In re Marriage of Davis (Colo. App. 1979), 602 P.2d 904.) On the record before us, it does not appear that the trial judge abused his discretion in refusing to interview Gwendolyn. During the hearing in the present cause, counsel for Diane Pope made a motion for the court to interview Gwendolyn. The court reserved ruling on the motion until the close of all of the evidence. At the close of all the evidence, the court indicated that, in light of all the foregoing testimony, an interview with Gwendolyn would not be of aid to the court’s decision. Gwendolyn was seven years old at the time of the hearing, and the record shows that the court felt that she was not of “sufficient maturity to intelligently express a preference” that would aid in the court’s decision. (De Franco v. De Franco (1978), 67 Ill. App. 3d 760, 771, 384 N.E.2d 997.) We find no abuse of discretion in the court’s refusal to interview Gwendolyn.

Diane Pope next contends that it was error for the trial court to take judicial notice of a record in a previous case. In its written judgment, the court described the conditions of Diane’s marriage to Donald Pope, Jr., and made the following comment:

“For the most part the foregoing describes the background of the current hearing, all of which may be found in court files of this case and case 79-D-14519 entitled ‘In re the marriage of Diane Marie Pope and Donald D. Pope, Jr.’ ”

Although Illinois courts have recently announced a more liberal policy with regard to the taking of judicial notice of records of other proceedings in other courts (see, e.g., People v. Davis (1976), 65 Ill. 2d 157, 357 N.E.2d 792, and Filrep, S.A. v. Barry (1980), 88 Ill. App. 3d 935, 410 N.E.2d 1137), we believe that it was error for the court to do so here. Neither party had requested the court to take judicial notice of the records of these proceedings; hence, there was no opportunity to be heard as to the propriety of taking such notice.

However, not all error mandates reversal, and we must determine whether this error operated to the prejudice of the appellant. (In re Estate of Weisberg (1978), 62 Ill. App. 3d 578, 586, 378 N.E.2d 1152.) During trial, respondent was extensively questioned about her marriage and subsequent divorce from Donald Pope, Jr., and it does not appear that the court’s consideration of the record of Diane and Donald Pope, Jr.’s, divorce influenced its decision. As the court intimated, the evidence adduced at trial in the present case merely repeated what the record in the prior case disclosed. Since the consideration of that record did not effect the disposition of this case, it cannot be considered as prejudicial • to require reversal.

Diane’s final contention is that the trial court made certain findings not supported by the record and drew unwarranted inferences from certain evidence. We agree that the record does not support several of the conclusions presented by the trial court in its written decision, particularly the inference that Diane Pope was “[p]aid for sex” by Dan DeHaeseleer. Although Diane testified that DeHaeseleer had given her a total of $280 and that the two did have sexual relations, there is no indication in the record that one was paid in consideration for the other. However, we do not find this statement, nor the others complained of by Diane in her brief, to be sufficient to warrant reversal.

Although the court may have made unwarranted inferences, these were not by any means the only basis for its decision. The court noted the instability of the environment provided by the mother, her frequent changes in residence, her unsuccessful remarriage, her poor choice of male companions who associated with her in the presence of Gwendolyn, the fact that she is unemployed and the opinions of Dr. Gunn. The court compared these factors with the environment provided by the father, which was characterized as follows:

“A stable family relationship of the father, long steadily employed, a new wife, a new child in his family and a newly built home with a stepmother with whom the child already has a good relationship and who wants to have this child as part of her family * *

Since there was sufficient other evidence in the record to indicate that the best interest of the child would be served by a modification of custody to the father, the fact that the trial court may have made certain unwarranted inferences is not prejudicial error.

Accordingly, the judgment of the circuit court of Kane County is affirmed.

Affirmed.

VAN DEUSEN and UNVERZAGT, JJ., concur.