author: JUSTICE KASSERMAN

text:
    HERBERT L. MAHRENHOLZ et al., Plaintiffs-Appellants, v. COUNTY BOARD OF SCHOOL TRUSTEES OF LAWRENCE COUNTY et al., Defendants-Appellees.
    Fifth District
    No. 83—177
    Opinion filed June 21, 1984.

      Roscoe D. Cunningham and Wanda Ellen Wakefield, both of Lawrenceville, for appellants.
    John F. Borden, of Gosnell, Benecki, Borden & Enloe, Ltd., of Lawrenceville, for appellee Board of Education, Community Unit School District #20, Lawrence and Crawford Counties, Illinois.
    William Strange, State’s Attorney, of Lawrenceville, for appellee County Board of School Trustees of Lawrence County, Illinois.
   JUSTICE KASSERMAN

delivered the opinion of the court:

This case involves a 1974 action to quiet title to real property located in Lawrence County, Illinois. This is the second time the case has been before this court. On the first occasion, plaintiffs, Herbert L. and Betty Mahrenholz, appealed from a judgment against them on the pleadings and in favor of defendants, County Board of School Trustees of Lawrence County and Board of Education, Community Unit School District Number 20, Lawrence and Crawford Counties. This court reversed and remanded. (Mahrenholz v. County Board of School Trustees (1981), 93 Ill. App. 3d 366, 417 N.E.2d 138.) On remand, the circuit court granted defendants’ motion for summary judgment, and plaintiffs appeal. Defendants have filed no cross-appeal.

The pertinent facts prior to this court’s 1981 remandment of this cause are sufficiently stated in the 1981 opinion of this court and need be only briefly summarized. According to the pleadings, the facts are as follows:

On March 18, 1941, W. E. and Jennie Hutton executed a warranty deed conveying certain land (hereinafter the Hutton School grounds) to the trustees of School District No. 1, the predecessors of defendants on this action. The deed provided: “This land to be used for school purposes only; otherwise to revert to Grantors herein.” Subsequently, in July 1941, the Huttons conveyed a tract of real estate including the Hutton School grounds to Earl and Madeline Jacqmain, excepting from the conveyance the tract conveyed to the school trustees on March 18, 1941. W. E. Hutton died intestate on July 18, 1951, and Jennie died intestate on February 18, 1969. Plaintiffs’ pleadings allege that W. E. and Jennie Hutton left as their only legal heir their son, Harry E. Hutton.

Defendant Community Unit School District No. 20, successor to the grantee, held classes in the Hutton School until May 30, 1973. After that date, the district has used the property for storage purposes only; however, a dispute exists as to the nature of property stored there.

By deed dated October 9, 1959, Earl and Madeline Jacqmain conveyed to plaintiffs over 390 acres of land which include the 40-acre tract from which the Hutton School grounds were taken. This deed excepted the Hutton School grounds but purported to convey the disputed future interest, as follows:

“Also, except the following tract of land which was on the 18th day of March, 1941, by the said grantors conveyed to the Trustees of Schools of District Number One (1) of the Town of Allison, in the County of Lawrence and State of Illinois, and described as follows:
[legal description]
and containing one and one-half (DA) acres, more or less; Re-versionary interest to Grantees; ***.”

By document dated May 7, 1977, and filed in the recorder’s office of Lawrence County on September 7, 1977, Harry E. Hutton conveyed to plaintiffs all of his interest in the Hutton School property. In a document dated September 6, 1977, and filed in the recorder’s office on October 4, 1977, entitled “Disclaimer and Release,” Harry E. Hutton disclaimed and released any possibility of reverter, right of entry for condition broken, or similar interest, in favor of defendant County Board of School Trustees. This document recited that it was made for the purpose of releasing and extinguishing any right Harry E. Hutton may have had in the “interest retained by W. E. Hutton and Jennie Hutton, *** in that deed to the Trustee’s of School District No. 1, Lawrence County, Illinois dated March 18, 1941, and filed on the same date ***.”

In the trial court’s order of March 21, 1979, dismissing plaintiff’s third amended complaint, the trial court concluded that the March 18, 1941, deed created a fee simple subject to a condition subsequent followed by the right of entry for condition broken, rather than a determinable fee followed by a possibility of reverter.

Plaintiff appealed, and this court reversed and remanded, concluding that what the grantors intended to create was a fee simple determinable followed by a possibility of reverter. The Illinois Supreme Court denied defendants’ petition for leave to appeal. In further proceedings before the trial court, the parties pursued discovery and defendants answered plaintiffs’ third amended complaint. Defendants moved for summary judgment on various grounds, including that there was no genuine issue as to whether defendants were using the Hutton School property for school purposes.

Accompanying defendants’ motion for summary judgment was the joint affidavit of James Courtney and William Waggoner, respectively superintendent and assistant superintendent of defendant Community Unit School District No. 20, stating that the affiants had read their respective affidavits filed in the circuit court on December 21, 1978, and that the statements of fact therein were true then and were still true.

In his 1978 affidavit, Mr. Waggoner stated that the school district used the Hutton School property for purposes other than the conducting of regular classes, “including particularly storage of furniture, building and maintenance [sic], cafeteria equipment, band risers and bulky items required by the District.” Mr. Waggoner also stated that if there is a substantial increase in the school age population in the district in the near future, the school district might again conduct classes on the Hutton School property. Mr. Waggoner also stated that building was kept locked and the lawn kept mowed. Several photographs accompanying the affidavits as exhibits were referred to in the affidavit as depicting the interior, exterior, grounds, and contents of the Hutton School building. The interior photographs show rows of desks, chairs with writing arms, and stacked construction materials.

Courtney stated in his 1978 affidavit that the school district was using most of the interior of the Hutton School building for storage, particularly of “school personal property.” Mr. Courtney also stated that the school district continued to mow the lawn and pay for utilities for the building. Mr. Courtney also confirmed Mr. Waggoner’s statements regarding the possibility of resumption of classes.

Also accompanying defendants’ motion for summary judgment was Mr. Waggoner’s “Affidavit of Inventory and Maintenance.” Therein, Mr. Waggoner stated that since May 1973, the school district had continuously used the Hutton School property for warehousing and storage, including a supply of left- and right-handed desks of various sizes, a large inventory of repair parts for desks, chairs, lockers, electrical appliances, motors and “necessary equipment,” sheets of paneling and other materials left from the remodeling of Arlington School. According to Mr. Waggoner, maintenance personnel were at the Hutton School property about 25 to 30 times per year to pick up, deliver and exchange equipment, including desks and desk parts, remodeling materials, doors, and lockers and locker parts. According to Mr. Waggoner, if the Hutton School were not available, the school district would be required to purchase or lease other storage space for warehousing cafeteria equipment, out-of-season athletic equipment, desks, chairs, office equipment, band risers, and lockers. Mr. Wag-goner stated that the roof of the Hutton School had been resurfaced twice since 1974. Included in the affidavit was a list of electricity bills and mowing expenses for the property for each school year from 1973-1974 to 1982-1983. Appended to Mr. Waggoner’s affidavit was a room-by-room inventory of the contents of Hutton School, dated November 24, 1982.

In an affidavit filed January 4, 1979, plaintiff Herbert Mahrenholz stated that defendants were storing “junk” in Hutton School as a “ruse” to avoid reverter of title. In an affidavit filed January 17, 1983, in opposition to defendants’ motion for summary judgment, Mr. Mahrenholz stated that since May 31, 1973, Hutton School had been used only for the storage of junk and surplus desks, and that since the school had closed in 1973, he and his agents had entered the building at will with a passkey.

In a joint affidavit filed January 17, 1983, in opposition to defendants’ motion for summary judgment, Frank O'Brien and Paul S. Thompson stated that they were trustees and directors of School District No. 1, Allison Township, Lawrence County, in 1941 and that the third trustee and director was now deceased. Mr. O’Brien and Mr. Thompson stated: “It was our understanding ***, and we believe that it was the understanding of Mr. & Mrs. Hutton, that school purpose meant actual holding of classes and the teaching of students in the school building ***.”

In an affidavit filed by plaintiffs the same date, affiant Warren Robeson stated that he had farmed in Allison Township, Lawrence County, for 40 years, that he now farmed in the immediate vicinity of Hutton School and that he had often gone into and about the building. According to Mr. Robeson, in 1942 or 1943 he asked W. E. Hutton what he was thinking when he gave the school board the site in the middle of his farm, and Mr. Hutton responded: “They need to have school in this area, and when they quit holding school there the land will go back to the farm.” According to Mr. Robeson, he had inspected the interior of Hutton School on January 17, 1983, and had found a few desks added to the normal supply on hand when classes were discontinued in 1973, that nothing of apparent value or utility was stored there, that most of the items could fairly be described as junk, that the roof leaked, that numerous panes of glass were broken, that the wall leading to the basement was cracked, that ceiling tiles were off, that the gymnasium floor was wet, and that the water heating system appeared to be frozen.

In an affidavit filed December 7, 1982, plaintiffs’ attorney stated that Jennie Hutton had no children but stood “in loco parentis” to Harry E. Hutton. The affidavit also purported to state the names of Jennie Hutton’s heirs.

Three discovery depositions dated August 13, 1982, also accompany the record on appeal. The deponents are Mr. Courtney, Mr. Wag-goner, and Mr. Mahrenholz.

Mr. Courtney deposed as follows: The 1973 closing of Hutton School was not pursuant to formal resolution; there was no formal characterization of the closing as permanent or temporary. Enrollment in the district had dropped from 2400 students during the 1972-1973 school year to 1800 during the 1981-1982 school year. The building was unheated; the plumbing had been drained to prevent freezing. An interior drain in the roof had been frozen and broken and had been repaired by welding. No painting had been done since the 1973 closing. The property was insured. The witness stated that while Hutton School was so far from the school district’s other schools that it was not an economical storage site, it could be reopened for classes quickly and cheaply compared to holding a referendum for a new building.

Mr. Waggoner testified as follows: Hutton School was visited by school district personnel for dropping off or picking up equipment less than once a week on average. The district had no other unallocated storage space. Many broken windows had been replaced with plywood; the building had been recently cleaned; some ceiling tiles had fallen; the roof had been sealed twice in 1973; and the district had erected “no trespassing” signs.

Plaintiff Herbert Mahrenholz testified that he was “in possession” of the Hutton School property about two years ago for a period in excess of six months, as shown by the fact that his hired man had put glue in the gate locks, and that no one had bothered the locks during that time; the witness had mowed the property four or five times, once on request of the school board, on which occasion he was paid with a check he never cashed.

Regarding plaintiffs’ contention that the trial court erred in concluding as a matter of law that the Hutton School property was still being used for “school purpose,” we must first address the parties’ disagreement as to the matters which should properly be considered in making that determination. Plaintiffs urge that the O’Brien, Thompson, and Robeson affidavits show that the grantors intended by “school purpose” the actual teaching of classes. Defendants respond that such extrinsic evidence of intent would not be admissible at a trial and that only the language of the deed should be considered.

The parol evidence rule requires that the nature and extent of the estate granted be determined, as a matter of law, from the deed itself. Parol evidence may be received to apply the deed to the subject matter, not to change its legal effect. While the court will receive evidence of the surrounding circumstances and collateral facts, so as to place itself in the situation of the parties at the time of executing the instrument, if there still remains incurable and hopeless uncertainty, it cannot be cured by extrinsic evidence. A deed speaks for itself; the only purpose of construction is to find out what it means, and that depends upon the language used. (Rockford Trust Co. v. Moon (1938), 370 Ill. 250, 253-54, 18 N.E.2d 447, 449.) The intention to be considered is that which is apparent and manifest from the instrument itself. In arriving at that intention it is not permissible to go beyond the four corners of the deed, and any words used by the grantor which have come to have a definite legal significance will be construed by the court strictly according to their legal effect, even though the grantor’s intention is thereby frustrated. The same license permitted in the construction of wills is not permitted in construing deeds. (Duffield v. Duffield (1920), 293 Ill. 300, 303, 127 N.E. 709, 710.) Where doubt arises as to the intended meaning of the words used by the grantor in the deed, such doubt must be resolved in favor of the grantee and against the grantor. Williams v. Swango (1937), 365 Ill. 549, 555, 7 N.E.2d 306, 309.

Plaintiffs argue, and we agree, that the phrase “school purpose” as used in the 1941 deed is inherently ambiguous. However, the O’Brien, Thompson, and Robeson affidavits may not be considered in resolving this ambiguity. Under the parol evidence rule, the statements in these affidavits as to what the grantors intended may not be used to limit the estate granted to a greater extent than the words in the deed indicate. Thus, to the extent that these affidavits do so, the affidavits may not be considered. (See Jackson v. O’Connell (1961), 23 Ill. 2d 52, 55, 177 N.E.2d 194, 195.) To the extent that the affidavits are consistent with the words used in the deed, the affidavits are merely cumulative.

Accordingly, we turn to the limiting phrase as being most indicative of the grantors’ intention. “Purpose” has been defined as “something that one sets before himself as an object to be attained: an end or aim to be kept in view in any plan, measure, exertion, or operation ***.” (Webster’s Third New International Dictionary 1847 (1971).) In light of this definition, it appears that if the grantors had intended the school board’s estate to end when classes ceased, as plaintiffs contend, a less ambiguous expression of that intent could have been employed, e.g., “so long as classes are held upon the property.” We find the parties’ failure to use such a phrase as strongly supporting the conclusion that the grant was not dependent on the actual continuous holding of classes. See McCullough v. Swifton Consolidated School District (1941), 202 Ark. 1074, 1076, 155 S.W.2d 353, 354.

We find no Illinois cases defining “school purpose” in the context of a deed. Elsewhere, in Ballantyne v. Nedrose Public School District No. 4, Ward County (N.E. 1970), 177 N.W.2d 551, the court concluded that the school board’s use of an old building for storage of some of the school board’s equipment and supplies evinced an intention to continue to use the building and land for “school purposes,” as required in the deed in question, and did not amount to an abandonment of the property for such purposes. Ballantyne supports the proposition that something less than the holding of classes, such as the storage of equipment and supplies, may be a “school purpose.”

In Craig v. Unknown Heirs (Okla. 1961), 358 P.2d 835, the deed stated that the property was to be used for a “School House site only” and would revert if used for any other purpose. The schoolhouse was used for storage of seats. The court concluded that no intention to use the property for a public school had been shown. The deed in Craig is more restrictive than the instant deed, as the latter does not expressly require a “school house” (“a building used as a school” (Webster’s Third New International Dictionary 2031 (1971))).

The deed in Putney v. School District No. 4 (1934), 215 Wis. 539, 255 N.W. 76, provided for reverter when the property was no longer wanted for “school purposes.” The court found that the school district had abandoned the property by erecting a new building elsewhere and by removal from the property in question of all school paraphernalia, furniture and equipment except for a few articles of inconsequential value. By contrast, in the instant case, even Mr. Robeson’s affidavit, filed on behalf of plaintiffs, establishes that the Hutton School building is used for storage of a large number of desks.

We have discussed the above cases because this court cited them without analysis in the opinion on the first appeal of this cause and because the parties differ in their interpretation of these authorities. The following authorities also support the view that “school purpose” may encompass something less than the actual holding of classes: Koonz v. Joint School District No. 4 (1950), 256 Wis. 456, 41 N.W.2d 616 (deed specified “school purposes only,” otherwise to revert; held, no reverter where building was left with all equipment and books, a coal supply, and was insured); McCullough v. Swifton Consolidated School District (1941), 202 Ark. 1074, 155 S.W.2d 353 (deed specified “school purposes only,” to revert if abandoned by school district; held, where the property was to be used for school bus waiting station, bus “turnaround,” and gymnasium, the school district has not abandoned it for school purposes); and Board of Education v. Hunter (1940), 190 Ga. 767, 10 S.E. 2d 749 (deed specified “school purposes,” and reversion if the property ceased to be used for “educational purposes”; held, board’s constructing a larger school nearby did not suffice to show abandonment for school or educational purposes).

Parenthetically, we note that the phrase “school purposes” is often used in statutes of this State today (e.g., Ill. Rev. Stat. 1981, ch. 122, pars. 5 — 17, 5 — 21, 5 — 30, 10 — 22.12), as it was at the time of the 1941 deed (e.g., Ill. Rev. Stat. 1939, ch. 122, pars. 39, 327.41, 327.51, 327.57, 346). However, there appears to have been no litigation concerning the meaning of the phrase as used in the statutes, and the context in which the phrase is used is, so far as we can determine, not helpful in the present inquiry.

Upon consideration of the question of law as to the extent of the estate conveyed by the 1941 deed, we are of the opinion that, as the phrase is used in the instant deed, the term “school purpose” does not require the actual holding of classes. Rather, we agree with the trial court that some alternate use is permissible that would still be within the realm of “school purpose” as that term is used in the deed. However, we deem it to be impossible to ascertain whether defendants’ use constituted use for school purposes in view of the conflicts in the affidavits and depositions of record. To the contrary, we conclude that those conflicts raise a genuine issue of material fact upon the issue of whether the Hutton School property is being used for “school purpose,” which prevents disposition of this cause by summary judgment.

The affidavits and depositions of Mr. Waggoner and Mr. Courtney indicate that the Hutton School building is visited almost weekly, is maintained insofar as is practicable, and is used to house a variety of school-related equipment, which could be stored elsewhere only with difficulty and inconvenience and at extra expense. On the other hand, the affidavit of Mr. Robeson indicates that the building is housing nothing of value other than a few more chairs that were needed when Hutton School was used for classes. Summary judgment is appropriate if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that movant is entitled to judgment as a matter of law. (Ill. Rev. Stat. 1981, ch. 110, par. 2 — 1005(c).) The right of the moving party to summary judgment must be free from doubt. Sanders v. Frost (1969), 112 Ill. App. 2d 234, 238, 251 N.E.2d 105, 106.

Our conclusion that a genuine issue of material fact exists in this case requires that we address defendants’ alternative contention that the judgment of the circuit court should be affirmed on other grounds, grounds which the trial court found moot and did not rule upon. Plaintiffs urge that defendants as appellees were required to cross-appeal to raise those issues. We do not agree. The appellee may advance any argument supported by the record to sustain the judgment of the circuit court. (Peterson v. Norfolk & Western Ry. Co. (1976), 42 Ill. App. 3d 570, 573, 356 N.E.2d 391, 393.) In the two cases relied upon by plaintiffs in this regard, the appellees were seeking additional relief on review, which does require cross-appeal, not mere affirmance of the judgment. Bryant v. Lakeside Galleries, Inc. (1949), 402 Ill. 466, 84 N.E.2d 412; De Phillips v. Mortgage Associates, Inc. (1972), 8 Ill. App. 3d 759, 291 N.E.2d 329.

Defendants alternatively argue that plaintiffs cannot have title quieted in themselves because defendants are in possession of the property. Defendants contend that plaintiffs should have filed an action in ejectment instead.

Generally, as a prerequisite to maintaining a suit to quiet title, it must be shown that the land in controversy was either in the possession of the plaintiffs or unoccupied when the action started. (McCookey v. Winter (1943), 381 Ill. 516, 526, 46 N.E.2d 84, 89.) Plaintiffs urge that they have shown sufficient possession to avoid summary judgment upon that issue. We agree in view of Mr. Mahrenholz’ statement that he has entered at will by passkey since 1973, and Mr. Robeson’s implicitly corroborative statement that he viewed the interior of the building prior to making his affidavit in plaintiffs’ behalf. In any event, if there were no genuine issue of fact as to possession, summary judgment may not be affirmed on the grounds that plaintiffs lacked possession or failed to establish that the premises were unoccupied because denial of relief to plaintiffs on that ground would not necessarily preclude their filing an ejectment action. See McGookey v. Winter (1943), 381 Ill. 516, 527, 46 N.E.2d 84, 90.

Defendants also argue that the attempt by W. E. and Jennie Hutton to convey their reversionary interest in the Hutton School property to the Jacqmains extinguished the possibility of reverter. While various jurisdictions do follow the rule that attempted conveyance of a naked possibility of reverter destroys it, Illinois is not among them. Pure Oil Co. v. Miller-McFarland Drilling Co. (1941), 376 Ill. 486, 498, 34 N.E.2d 854, 859.

Defendants argue that the 1977 purported conveyance of the property by Harry Hutton to plaintiffs was “champertous and void” as an attempt to sell a dormant or pretended title to land held adversely by another. Conveyances of land by a title holder not in possession are not contrary to present Illinois law. 7 Ill. L. & Prac. Champerty and Maintenance Sec. 5 (1954); City of Chicago v. Vulcan Iron Works (1879), 93 Ill. 222, 224-25.

Defendants contend that the 1977 deed from Harry E. Hutton conveyed nothing to plaintiffs because W. E. and Jennie Hutton’s possibility of reverter was held by them in joint tenancy, Jennie having survived W. E. and the affidavits showing (contrary to the pleadings) that Harry E. Hutton was neither Jennie’s son or her heir, but rather her stepson. Defendants reason that on Jennie’s death the possibility of reverter devolved to Jennie’s heirs, not to Harry E. Hutton. Plaintiffs respond in their reply brief that there exists a question of fact as to whether the grantors held title in joint tenancy as shown by certain deeds in favor of W. E. and Jennie Hutton which are not asserted to be in the record on appeal and which we do not find included there. Plaintiffs also urge that even if their claim depends on the claims of the heirs of Jennie, deeds from all of those heirs to the plaintiffs “are attached hereto and were furnished to opposing counsel, January 3, 1983.”

Attachments to briefs not otherwise of record are nof^ properly before the reviewing court and cannot be used to supplement,-^ the record. (Tomlen Group, Ltd. v. Goldfarb (1981), 101 Ill. App. 3d 154, 157, 427 N.E.2d 1047, 1049.) However, the affidavit in opposition of summary judgment states in pertinent part: “Plaintiffs have deed^ix of conveyance of described real property from each of the other heirs' at law of Jennie Hutton as hereinafter set forth.” This sworn statement, taken together with plaintiffs’ attorney’s affidavit of heirship, establishes the existence of said deeds in the context of opposing a motion for summary judgment. Therefore, the affidavit introduces the issue into this cause and thereby precludes the award of summary judgment.

The record discloses no issue of fact as to whether W. E. and Jennie Hutton owned the possibility of reverter as joint tenants or as tenants in common. Included among the exhibits accompanying defendants’ motion for summary judgment is a copy of a 1931 warranty deed, including the tract out of which the Hutton School property was later carved, from the St. Louis Joint Stock Land Bank to W. E. and Jennie Hutton “as joint tenants and not as tenants in common ***.”

Defendants further contend that the instant possibility of reverter could not have been conveyed by the heirs of Jennie Hutton, because a possibility of reverter is neither alienable nor devisable (Ill. Rev. Stat. 1981, ch. 30, par. 37b), although it descends to the grantors’ heirs. (Pure Oil Co. v. Miller-McFarland Drilling Co. (1941), 376 Ill. 486, 492-93, 34 N.E.2d 854, 857.) However, plaintiffs herein have raised the issue, so far as it pertains to their opposition of defendants’ motion for summary judgment, that an event occurred in 1973 which caused defendants’ title to cease. If such be true, defendants’ fee simple determinable would have been extinguished, and the original grantors’ heirs, alleged to be the plaintiffs herein and their predecessors in title, became vested with fee simple title to the land unless the possibility of reverter itself was destroyed prior to termination of the estate granted to defendants’ predecessors in title. (376 Ill. 486, 494-95, 34 N.E.2d 854, 858.) Thus, plaintiffs have conveyed to plaintiffs not a mere possibility of reverter but rather fee simple title to the tract in question.

Defendants also argue that any claim derived by plaintiffs from the heirs of Jennie Hutton would be barred because suit was not brought within seven years of the termination of defendants’ estate. (Ill. Rev. Stat. 1977, ch. 83, par. 1b.) In this regard, we note that plaintiffs’ suit was instituted in 1977 and alleged that defendants’ estate had terminated in 1973. Statutes of limitation are designed to m-event recovery on stale demands. The purpose of such statutes is to provide a defendant with sufficient opportunity to investigate the fac'rs upon which liability may be based while such evidence is still as- ■ "tamable. (Brehm v. Sargent & Lundy (1978), 66 Ill. App. 3d 472, 4.5, 384 N.E.2d 55, 56-57.) Neither the letter of the statute of limitations nor its purpose is inconsistent with plaintiffs’ maintaining this suit.

We conclude, therefore, that genuine issues of material fact exist which preclude disposition of the instant case by summary judgment and that it was error for the trial court to enter summary judgment for defendants.

For the foregoing reasons, the judgment of the circuit court of Lawrence County is reversed, and this cause is remanded for further proceedings consistent with the views expressed herein.

Reversed and remanded.

JONES and HARRISON, JJ., concur.


source: Caselaw Access Project

author: JUSTICE EARNS

license: Public Domain

text:
    EDWARD FISHER et al., Plaintiffs-Appellees, v. FIDELITY AND DEPOSIT COMPANY OF MARYLAND, Defendant-Appellant (Mid-Central Asphalt Company, Defendant).
    Fifth District
    No. 5-83-0510
    Opinion filed June 27, 1984.

      Edward P. McNeela and Neal R. Novak, both of McNeela and Griffin, Ltd., of Chicago, for appellant.
    David O. Hesi, of Wiseman, Shaikewitz, McGivern & Wahl, P.C., of Alton, for appellees.
   JUSTICE EARNS

delivered the opinion of the court:

Fidelity and Deposit Company of Maryland (Fidelity), a surety, appeals from the judgment of the circuit court of Madison County which, following a bench trial, found Fidelity liable to Edward and Christina Fisher, d/b/a C&E Productions (Fisher), for damages arising from the breach by Fidelity’s principal, Mid-Central Asphalt Company (Mid-Central), of a construction contract to build a recording studio for Fisher.

On December 2, 1973, Fisher and Mid-Central entered into a contract for the construction of a recording studio and office, 30 feet by 50 feet. Fisher provided sketches which indicated that the building was to be 35 feet by 50 feet and that a large interior window was to be built between the studio and control room. On two diagrams the window was shown as 10 feet wide, but on a third it was originally marked as “Approx 8’ x 4’ ” and then changed to “10’ x 4’.” The change was not initialed or dated. The contract price was $14,589.55.

All funding for the construction came from a Small Business Administration (SBA) loan of $50,000 to Fisher and C&E Productions. Only $14,600 of the loan was authorized for construction. The SBA required Mid-Central to secure bonding. In completing the application for a bond from Fidelity, Mid-Central wrote in “Performance” above the word “Contract” and indicated that the amount of the bond was $14,595.55, the full contract price for a 50 feet by 35 feet block building. Mid-Central was to begin immediately and complete the work in 90 days, receiving a 20% advance payment of $2,918 and other payments on a “progressive” basis. The application form supplied by Fidelity stated that Fidelity was “authorized but not required” to take possession of the work, contract for its completion, or settle any claim upon the bond in the event its principal abandoned or breached its contract. On January 18, 1974, Fidelity executed its bond in the amount of $14,595.55, with Mid-Central as principal and the SBA as the owner.

The face of the bond stated:

“WHEREAS, the Principal has entered into a certain written agreement, dated the 18th day of January 1974, with the Owner for Construction of 50’ X 35’ Block Building, consisting of an office, recording studio, rehearsal room, bath and toilet, Located at 6330 Church Road, Centreville, Illinois which agreement is or may be attached hereto for reference.
NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION IS SUCH, That, if the Principal shall well and truly perform and carry out the covenants, terms and conditions of said agreement, then this obligation to be void; otherwise to remain in full force and effect.”

The agreement between Fisher and Mid-Central provided that changes could be effected only upon “prior written approval and acceptance of Mr. Eddie Fisher.” No such written approval of any change was ever made. Mid-Central agreed to pay all bills prior to delinquency, to bear the cost of work which exceeded the contract price for any reason, to claim no payment for extras unless specified in a written order executed by both Fisher and Mid-Central. In the event of default by Mid-Central, Fisher had the option upon 48 hours’ written notice of taking over part or all of the work in “whatever method it deems expedient.” The contract then stated that Mid-Central “shall than [sic] not be entitled to receive any further payment until the work is finished, and if the unpaid balance of the contract price exceeds *** [Fisher’s] expenses of completion of the work such excess shall be paid to the sub-contractor. If expenses exceeds [sic] the unpaid balance, sub-contractor shall pay the difference to the contractor within 60 days after request by contractor.”

The SBA set up an escrow account at Edgemont Bank where funds were held until SBA authorized their transfer to Fisher’s business account. Checks from that account were made jointly to C&E Productions and Mid-Central but were to be issued only in exchange for receipts and lien waivers. On January 4, 1974, a check for $2,920 was authorized. This was the first payment to Mid-Central. Mid-Central began work on concrete footings but stopped in February 1974 because it had no money. On February 28, 1974, SBA authorized a check for $1,178.77 payable to C&E and Mid-Central. No other checks were issued jointly to C&E and Mid-Central because SBA authorized Fisher to make direct payments to suppliers. In March 1974, Fisher paid F. G. McGraw for work done on Mid-Central’s order in February but not paid for. Work continued until April 1974 with both Fisher and Quinn, Mid-Central’s president, on the site, but McGraw said he was on the site 80% of the time in February and March and saw Quinn only once. Fisher testified that he did not order materials or supervise the work but only paid for the work as Quinn directed.

When work stopped altogether in April 1974, Fisher had spent more than $13,000 on the job, with $4,098 going to Mid-Central. After work stopped, Fisher went to Quinn’s office but it was closed. Fisher next contacted the SBA, which advised him to contact Fidelity. Fidelity refused to undertake completion of the building as Fisher asked, pointing out that Fisher was not shown as owner on the bond contract. On April 17, 1974, the SBA demanded payment of the face value of the bond. Fidelity advised the SBA it was making a prompt inquiry of its principal. On April 29, 1974, Fidelity wrote to Quinn and other indemnitors that it had “been advised of a claim of default under the contract and the bond.” Another letter of the same date to Quinn as president of Mid-Central requested a statement of Quinn’s position with “regard to the allegations of default ***” so that Fidelity could respond to the SBA. Business records from Fidelity’s files show that the inquiry continued through December 1974.

Although Fisher’s attorney recognized in 1974 that “unless something is done quickly, the damages may become very large,” the case moved slowly. On June 18, 1974, Fisher filed suit in Federal Court against Mid-Central, Fidelity, and the SBA alleging default by Mid-Central and Fidelity. He asked that Mid-Central and Fidelity be ordered to complete the work and supply funds or that the SBA be required to fund the work. In December 1975, the Federal Court reformed the bond to substitute Fisher for the SBA as owner. In April 1976, upon Fisher’s motion, the Federal Court dismissed the cause without prejudice. The complaint filed in State court on February 1, 1976, prayed that Fidelity be required to complete the work or pay for the completion up to the amount of the bond. In count II Fisher alleged Fidelity’s bad faith in issuing the bond, Fidelity’s delay and denial of amounts due under the bond as the proximate cause of “physical, mental, emotional distress and discomfort ***,” and Fidelity’s intent to cause emotional distress as justifying punitive damages. Fidelity answered Fisher and cross-claimed against Mid-Central in April 1976. A year later Fisher was granted leave to file a reply to Fidelity’s answer. Fisher denied that the work was substantially completed or that he had blocked Mid-Central’s completion of the work. This was Fisher’s last filing until 1981, when he sought reinstatement after the cause had been dismissed for want of prosecution. In the interim Fidelity filed a third-party complaint against Quinn and other individual indemnitors. In 1979 Fidelity moved for a default against the indemnitors because they had failed to appear.

In 1981 Fisher’s cause was reinstated and set for trial on October 7. On October 22 the complaint was amended to include count III alleging that Fidelity’s failure to act had caused the loss of contracts and “large sums of money” as well as preventing Fisher from repaying the SBA interest. On Fidelity’s motion, all of count III and paragraph 33 of count II seeking damages for emotional distress were dismissed because loss of profits from a new business was not recoverable and damages for emotional stress were contrary to law. On January 31, 1983, Fisher amended the complaint to add count IV, which realleged count III and added two paragraphs seeking fees, costs, and damages allowed under the Elinois Insurance Code (Ill. Rev. Stat. 1983, ch. 73, par. 767) for vexatious and unreasonable delay. Fisher also specifically sought damages for interest due on the SEA loan, taxes paid on the property, and lost profits. Fidelity moved for summary judgment on the issue of vexatious delay, alleging that Fidelity had made a settlement offer of $15,000 on February 24, 1982. The motion was taken under advisement.

Over continuing objections of Fidelity’s attorney, the court heard evidence that Fisher owed the SEA $50,000 principal and more than $31,000 in interest but that his loan was at that time considered un-collectible; that it would cost $44,175 to complete the building in 1983 if certain necessary additions to the original plan were made; and that Fisher had lost $16,700 in net rental income between 1974 and 1983. No evidence was produced to show that taxes on the property had been paid. No evidence of emotional distress was offered.

Fidelity contended that Fisher had made changes in the building design which materially altered its risk, so that it should be discharged from its bond obligation. It appeared that an exterior window had been omitted and that a proposed interior window had been enlarged. A contract between F. G. McGraw and Fisher stated the height of the building to be 13’4” instead of the original 12’. McGraw received no additional pay for the larger building.

The court denied Fidelity’s motion for judgment at the close of all the evidence. On June 28, 1983, after reviewing all the testimony and post-trial memoranda by both parties, the court found that Fidelity bound itself to carry out all the terms and conditions of Mid-Central’s contract, that Mid-Central had abandoned the project, that Fisher had paid the costs under Mid-Central’s direction and had substantially performed at the time of Mid-Central’s breach. The court determined it was unnecessary to address Fidelity’s contentions that Fisher had breached the contract in failing to notify Fidelity in writing of Fisher’s intention to take over the work and in deviating from the contract specification without written orders, but it found nevertheless that the change in the method of payment did not enlarge the surety’s risk and there was no deviation from the contract which im creased the cost. The court found that Fidelity’s tender of $15,000 in 1982 was a waiver of defenses and an admission of liability and that Fidelity’s eight-year delay in admitting liability showed its conduct to be “vexatious, unreasonable, malicious and oppressive.” Judgment was entered in favor of Fisher for $14,595.55 plus prejudgment interest from July 1, 1974, $21,813.95 in lost net rental income, $7,122.29 in fees and costs pursuant to section 155 of the Illinois Insurance Code (Ill. Rev. Stat. 1983, ch. 73, par. 767), $5,000 for vexatious conduct under the same provision, and $25,000 in punitive damages for Fidelity’s malicious handling of the claim. This appeal followed.

Fidelity presents the following issues for review: (1) whether counts II and IV of the complaint state causes of action; (2) whether the court erred in finding that Fidelity had tendered the bond penalty and in refusing to consider Fidelity’s defenses; (3) whether Fisher breached the contract; (4) whether it was reversible error to award lost net rental income, punitive damages, recovery under section 155 and prejudgment interest from July 1, 1974. Fidelity seeks reversal or a new trial. We affirm in part and reverse in part.

We agree with the trial court’s determination that Mid-Central had abandoned the work and that Fisher had substantially performed the contract in paying for men and materials at Quinn’s direction. Lien waivers and cancelled checks show that Mid-Central continued to order materials and a Mid-Central employee continued on the job into late March. Everyone agreed work stopped finally in April, after which Quinn could not be found at his office. It is clear that Fisher’s personal visit to Fidelity and SBA’s demand as well as other communications between the parties gave Fidelity proper notice of a claim of default by Mid-Central very shortly after work stopped. The change in the method of paying for the work, the omission of one exterior window, a slight increase in the height of the building, and a written adjustment in the size of an interior window which was never installed do not constitute a material alteration in the contract sufficient to discharge the surety’s liability. (Claude Southern Corp. v. Henry’s Drive-In, Inc. (1964), 51 Ill. App. 2d 289, 201 N.E.2d 127.) Because we find the record supports the trial court’s determination that Mid-Central was in breach of its contract and that Fidelity was not discharged of its obligation under the bond, we find it unnecessary to decide whether Fidelity’s offer of $15,000 in 1982 had the effect of an admission of liability. Our view of this case makes it unnecessary to decide whether it was error to admit Fidelity’s business records for the limited purpose of showing good faith investigation of Fisher’s claim. Although Fidelity objects to the admission of conversations between Fisher and McCoy, an agent of Fidelity who died prior to trial, we fail to see what prejudice Fidelity is claiming. The remaining issues concern the nature and extent of Fidelity’s liability to Fisher.

Fidelity claims that the court erroneously determined that the bond was a performance bond which obligated Fidelity to complete the building, rebid it or pay the face amount of the bond. It is clear from Mid-Central’s application to Fidelity that it was seeking a performance bond and that Fidelity issued its bond on the basis of the application. In Fidelity’s motion to dismiss count III of the complaint, Fidelity identifies the bond as a performance bond, and at trial the claims attorney for Fidelity testified that Fidelity had written a performance bond. No objection was raised by the defense when the term “performance bond” was repeatedly used to describe the contract between Mid-Central and Fidelity.

Fidelity contends that it had no obligation to take over the job but only to pay the face value of the bond once it had received notice of default and Fisher had incurred expenses in excess of the contract price. Indeed, Fidelity argues that Fisher was obliged to go forward with the work. However, the contract with Mid-Central stated that taking over the work was only an option which Fisher might choose if he thought it expedient. Fisher did not breach the contract by failing to proceed with the work himself. The face of the bond shows $14,595.55 as the limit of Fidelity’s liability, but it also refers to the agreement between Fisher and Mid-Central and conditions Fidelity’s obligation on its principal’s failure to carry out the terms of the agreement, thus incorporating the agreement by reference. When the bond incorporates by reference the construction contract, the provisions of the contract are provisions of the bond. (Lake View Trust & Savings Bank v. Filmore Construction Co. (1979), 74 Ill. App. 3d 755, 393 N.E.2d 714.) Neither the contract nor bond states that Fidelity is required to complete the work.

In Lake View the court distinguished between the surety’s obligation under a performance bond to guarantee completion by the bonded contractor and its obligation under an indemnity bond where the owner must actually incur expenses before bringing suit on the bond. Where a bond guarantees performance, “the obligation of the contractor in legal effect becomes the obligation of the surety and the obligee need not actually incur expenses or correct deficient performance of the contract in order to be entitled to recover against the surety.” (Lake View Trust & Savings Bank v. Filmore Construction Co. (1979), 74 Ill. App. 3d 755, 758, 393 N.E.2d 714, 717.) In Lake View the owner gave written notice of the contractor’s failure to perform and demanded corrections. The surety failed to comply. The court determined that the right to recover damages from the surety as well as the contractor arose at the time of the contractor’s breach.

Although Fidelity was immediately notified of Mid-Central’s departure from the jobsite, the question of the contractor’s breach was not quickly settled. In 1976 Fidelity denied liability because Fisher had taken control of the project and abandoned it. Letters and memo-randa from Fidelity’s own records show that the investigation leading to this conclusion stopped in December 1974. Even after Fisher was substituted for the SBA, Fidelity made no effort to settle the matter, although it knew the building was incomplete. Not until October 1981 did Fidelity file a notice for a deposition of Fisher. In response to Fidelity’s motion to produce, Fisher supplied documentation of his payments to Mid-Central, a $43,000 bid for completion of the building, and evidence that Fisher’s business was damaged by the unavailability of the recording studio. In February 1982 Fidelity wrote a letter to Fisher, offering to settle the matter for $15,000. Fisher refused the offer as too little, too late. The evidence adduced at the 1983 trial fairly established that Mid-Central had abandoned the work and was in breach.

Fisher sought damages for Fidelity’s delay in settling the claim. Count II of Fisher’s complaint sought $5,000 in compensatory damages and $10,000 in punitive damages plus costs for emotional distress resulting from Fidelity’s bad faith delay and denial. It is clear that Illinois law does not permit the award of punitive damages for the intentional infliction of emotional distress. (Knierim v. Izzo (1961), 22 Ill. 2d 73, 174 N.E.2d 157.) Therefore, count II fails to state a cause of action against Fidelity to the extent it seeks such punitive damages. Paragraph 33 of count II, which contains the demand for compensatory damages for physical, mental and emotional distress and attorney fees, was dismissed by Judge Day on February 1, 1982. He reaffirmed the dismissal on June 14, 1982. No damages could be awarded on the dismissed paragraph. In any event, no evidence of physical or emotional distress was offered at trial.

Count IV realleges count III, which had also been dismissed by Judge Day, and enlarges it to include a claim for damages provided by the Illinois Insurance Code (Ill. Rev. Stat. 1983, ch. 73, par. 767) for vexatious and unreasonable delay in handling claims. Contracts of compensated suretyship are treated as contracts of insurance. (Town of City of Peoria v. Rauschkolb (1948), 333 Ill. App. 411, 78 N.E.2d 123.) Insurers have a duty of good faith and fair dealing in handling claims, but they are entitled to insist on their “legal rights in a permissible way ***.” (Eckenrode v. Life of America Insurance Co. (7th Cir. 1972), 470 F.2d 1, 5.) A cause of action for vexatious and unreasonable delay must allege facts showing conduct by the surety which is “willful, wanton, malicious, reckless, intentional or in bad faith ***.” (Tobolt v. Allstate Insurance Co. (1979), 75 Ill. App. 3d 57, 71, 393 N.E.2d 1171, 1181.) The court must consider the totality of the circumstances in determining vexatious delay. (Deverman v. Country Mutual Insurance Co. (1977), 56 Ill. App. 3d 122, 371 N.E.2d 1147.) In adopting section 155 of the Illinois Insurance Code (Ill. Rev. Stat. 1983, ch. 73, par. 155), the legislature preempted the field for recovery for punitive damages for refusal to pay, barring the common law action for such remedies. (Tobolt v. Allstate Insurance Co. (1979), 75 Ill. App. 3d 57, 393 N.E.2d 1171; see also Robertson v. Travelers Insurance Co. (1983), 95 Ill. 2d 441, 448 N.E.2d 866.) The trial court found that Fidelity’s delay in handling Fisher’s claim was vexatious and unreasonable. Such a finding will not be disturbed on appeal unless it shows abuse of judicial discretion. (Deverman v. Country Mutual Insurance Co. (1977), 56 Ill. App. 3d 122, 371 N.E.2d 1147.) Considering the total circumstances of this case, we find no abuse of discretion. Fidelity’s lackadaisical attitude toward determining its principal’s conduct and its own liability even after two years of legal action by Fisher and repeated requests for action does not demonstrate the good faith expected of a surety.

Fidelity contends that the award of fair market lost net rental income is improper as a measure of damages in the present case. We agree. Fisher relies on Board of Library Trustees v. Fidelity & Deposit Co. (1981), 101 Ill. App. 3d 1141, 429 N.E.2d 203. In Fountaindale the court allowed damages for lost rental during a period of delay. (Lindberg v. Brandt (1953), 350 Ill. App. 317, 112 N.E.2d 746; D. Dobbs, Remedies sec. 12.21, at 903 (1973); Restatement (Second) of Contracts sec. 348(1), comment b, at 120 (1979).) In Fisher’s case there was no limited period of delay but a complete cessation of activity with regard to the property by both owner and contractor. We do not understand that the remedy for delay applies to such an open-ended situation.

Fisher is entitled to compensation but not a windfall. (Community Consolidated School District No. 169 v. Meneley Construction Co. (1980), 86 Ill. App. 3d 1101, 409 N.E.2d 66.) In Ross v. Danter (1968), 102 Ill. App. 2d 354, 242 N.E.2d 330, the court provided an example to illustrate the proper measure of damages:

“Suppose a contractor has agreed to build a building for an owner for $400,000.00. Suppose further the contractor has partially constructed the building and has received $200,000.00 and at this point refuses or is unable to continue the contract and is hence in breach of contract. Suppose also that at this point the reasonable cost of completing the building would be $300,000.00. In determining the damages sustained by the owner, the cost of performance would be first the amount paid to the contractor, $200,000.00 plus the cost of completion, $300,000.00 or a total of $500,000.00. The difference between this amount, $500,000.00 and the contract price $400,000.00 or $100,000.00 would be the damages sustained by the owner. *** The rule as so applied gives due effect to the partial performance by both contractor and owner ***.”

In Yonan v. Oak Park Federal Savings & Loan Association (1975), 27 Ill. App. 3d 967, 326 N.E.2d 773, the cost of construction at the time of entry of the decree was properly considered in applying the rule established in Ross, although at least six years had passed between the breach and the decree. In the present case, Fisher paid out more than $13,000 at Mid-Central’s direction. A contractor estimated that the 1983 cost of completion was approximately $44,000. Although it is not clear whether $44,000 includes items not contemplated in the original contract, it is apparent that the 1983 cost of completion will exceed the contract price. We therefore remand for a determination of the completion cost of the building Mid-Central agreed to build for Fisher and the extent of Fisher’s damages.

The partially completed building has deteriorated, and materials have disappeared from the site. Fidelity contends that Fisher may recover nothing because he failed to mitigate his damages by securing or preserving the property. However, the rule in Illinois is that the plaintiff may not increase the measure of damages by his failure to mitigate the harm to his property. (Montefusco v. Cecon Construction Co. (1979), 74 Ill. App. 3d 319, 392 N.E.2d 1103.) Failure to mitigate damages is an affirmative defense and must be pleaded and proved by the defendant. Having failed to plead this affirmative defense, Fidelity cannot now complain of Fisher’s conduct. Rozny v. Marnul (1969), 43 Ill. 2d 54, 250 N.E.2d 656.

Should Fisher’s damages exceed the amount of the bond, Fidelity’s liability is nevertheless limited to the terms of its undertaking. In Turk v. United States Fidelity & Guaranty Co. (1935), 361 Ill. 206, 197 N.E. 765, the contractor agreed to move a building belonging to Turk. The contractor obtained a performance bond in the full amount of the contract. The underlying contract gave the owner the right to complete the work, making the contractor liable for any or all damages beyond the contract price. But the surety’s liability did not include any or all damages. The court determined that "[t]he liability of the defendant as surety, within the limit of the principal sum of the bond, is coextensive with that of the contractor. ***.” (Emphasis added.) (Turk v. United States Fidelity & Guaranty Co. (1935), 361 Ill. 206, 212, 197 N.E. 765, 767.) More recently, in a suit upon a performance bond, the extent of the surety’s liability was limited to the penal sum even when the principal’s liability was greater. Griffin Wellpoint Corp. v. Engelhardt, Inc. (1980), 92 Ill. App. 3d 252, 414 N.E.2d 941. See also United Mail Order, Warehouse & Retail Employees Union, Local 20 v. Montgomery Ward & Co. (1956), 9 Ill. 2d 101, 137 N.E.2d 47, cert, denied (1957), 352 U.S. 1002,1 L. Ed. 2d 546, 77 S. Ct. 558.

It was not error to award prejudgment interest to Fisher. Where there is suit upon a bond it is sufficient to show that it was a bond sued upon and that the money was due. Interest is properly allowed from the date of suit. (Griffin Wellpoint Corp. v. Engelhardt, Inc. (1980), 92 Ill. App. 3d 252, 414 N.E.2d 941; County of Will v. Woodhill Enterprises, Inc. (1971), 4 Ill. App. 3d 68, 274 N.E.2d 476.) In this case, Fisher’s suit as obligee on the bond against Fidelity was filed on February 1, 1976.

For all the reasons stated above, we affirm the trial court’s judgment as to Fidelity’s liability and award of prejudgment interest as well as damages pursuant to section 155 of the Illinois Insurance Code (Ill. Rev. Stat. 1983, ch. 73, par. 767) but reverse the award of lost net rental income and $25,000 in punitive damages. We remand for a determination of Fisher’s damages and prejudgment interest in accordance with the views expressed herein.

Affirmed in part; reversed in part; remanded.

WELCH, P.J., and KASSERMAN, J., concur.


author: JUSTICE JONES

text:
    PJS ENTERPRISES, Plaintiff-Appellee, v. PAUL KLINCAR, Chairman of the Board of Illinois Prisoner Review Board, Defendant-Appellee (Jessie Donald Sumner, Intervenor-Appellant).
    Fifth District
    No. 5—83—0609
    Opinion filed July 6, 1984.

      James B. Roberts, of Legal Clinic, Southern Illinois University, of Car-bondale, for appellant.
    McConnell, Kennedy, Quinn & Johnston, Chartered, of Peoria (Rebecca S. Riddell, of counsel), for appellee PJS Enterprises.
   JUSTICE JONES

delivered the opinion of the court:

Jessie Donald Sumner, incarcerated at Menard Correctional Center, appeals from the trial court’s denial of his “motion” for leave to intervene in a suit brought by PJS Enterprises, the owner of the Peoria Journal Star, which is a daily newspaper of general circulation. The suit was brought against Paul Klincar, chairman of the board of the Illinois Prisoner Review Board.

On March 9, 1983, the plaintiff sought and obtained a temporary restraining order forbidding the defendant from prohibiting the presence of the plaintiff at the parole hearing of Jessie Donald Sumner, which was scheduled to be held on that day. The plaintiff had sought the temporary restraining order as a result of having learned that one of its reporters would not be allowed to attend the parole hearing of Jessie Sumner if Sumner should request that his parole hearing be closed. Plaintiff maintained that to prohibit plaintiff’s attendance at the parole hearing would be a violation of the provisions of the Open Meetings Act (Ill. Rev. Stat. 1983, ch. 102, par. 41 et seq.) because “the hearing portion of the parole hearing * * * is a public meeting.”

The plaintiff subsequently sought preliminary and permanent in-junctive relief. Following a hearing the trial court issued a preliminary injunction on March 21,1983, that restrained and enjoined

“the Defendant, PAUL KLINCAR, as Chairman of the Board and each of the other members of the Board of the Illinois Prisoner Review Board, and their agents and employees from doing or taking, or causing to be done or taken, any action to prohibit the Plaintiff, or any agents or employees of the Plaintiff, or other members of the news media or the general public, from being present at any parole hearing, including but not limited to the parole hearing of Jesse [sic] Donald Sumner.”

The trial court found “[t]hat this Order should issue because to prohibit the attendance and presence of the Plaintiff at parole hearings would be in violation of the provisions of the Illinois Open Meetings Act.”

A schedule for the submission of briefs concerning the permanent injunction called for the filing of a reply brief on June 24, 1983. On June 10, 1983, Jessie Sumner filed a “motion” for leave to intervene as a matter of right (Ill. Rev. Stat. 1983, ch. 110, par. 2 — 408). On the same date he filed a motion for enlargement of time in which to respond to the plaintiff’s petition for injunctive relief and proposed orders. In his motion for leave to intervene Jessie Sumner set forth the procedural details of the present case and stated that “[u]pon being advised of the restraining order, [he] had refused to testify” at the parole hearing, that the temporary restraining order had bound him as well as the defendant, that “the representation of [his] interest by the parties is inadequate,” and that he was entitled to intervene as a matter of right in order to represent his own interests adequately. He asked to be allowed to file an answer to the plaintiff’s petition for injunctive relief.

On July 13, 1983, a hearing was held on the motion to intervene. At that time the intervenor, through his attorney, argued that his rights to a fair and proper parole hearing were affected by the action of the trial court, that his interest in the case was greater than that of the general public, and that the Attorney General, on behalf of the defendant, could not adequately represent the intervenor’s interest inasmuch as “the interest of the Prisoner Review Board, which is charged with protecting the public interest^] and the interest of the potential parole leader [sic], are simply not the same and cannot be represented by the Attorney General’s Office especially given the fact that the Attorney General’s Office represented the Prisoner Review Board when prisoners sue the Prisoner Review Board concerning irregularities or problems in their parole hearing.” The intervenor stated that he should be allowed to “present his interest to the Court so that an adequate determination as to whether or not the merits of this case should allow the press to be present at his hearing.” The in-tervenor argued further that the plaintiff, by its objections to his intervention, was asking him to relitigate the same issues in a second suit. He continued by saying:

“There are exceptions to the Open Meetings Act, and it is our position that exceptions are proper in this case. We are not in a position here to go into all the merits. There are factors we think must be brought to the Court’s attention that have not as yet. There are facts that should be brought to the Court’s attention concerning these type [sic] of things before we allow this sweeping type of order to bar the prisoner’s rights from deciding whether or not the press should be present at their hearing. *** It is our position that these are the exact issues that this Court needs to have before them [sic] and that the intervenor is the only one that can bring them before this Court. The facts again that point out the interest of the intervenor and the fact that the intervenor is not adequately represented by the defendant we believe are set out in the plaintiff’s own affidavits where they explain that the inter-venor did not want the press and refused to proceed with the press there, and we feel that there are plenty of facts to show the interest of the intervenor and he should be allowed to present the whole picture to the Court so the Court can make a formal decision in this matter.”

There followed this colloquy between the trial court and counsel for the intervenor:

“THE COURT: I still am at a loss as to what Mr. Sumner wants litigated in this case. I haven’t heard anything except that he wants to intervene. I would like to know what is his position here that he feels that needs to be litigated beyond what this present case in its present state would decide one way or the other.
[Counsel for the intervenor]: I understand your request, Your Honor.
THE COURT: The Open Meetings Act, I don’t know if you are going to attack it on a constitutional basis or whether it is some kind of an exception. I haven’t heard anything other than really that he wants to intervene. He naturally is going to be affected, and so are all the other prisoners who come before the Prisoner Review Board will be affected by this decision. I understand that.
[Counsel for intervenor]: Your Honor, there are factors in this matter that affect Mr. Sumner's interest in ways that don’t affect every other prisoner, I believe, and we would like, if the Court feels that these matters should be brought forward at this time, we would be willing to do that, but we would like to do it, instead of doing it in open Court we would like to do it in a closed proceeding.”

Counsel explained that the intervenor’s request for a closed hearing arose out of concerns for his own safety and apparently that of others, adding, “We were hoping we wouldn’t have to bring this to the Court’s attention today, we were hoping for a different time, but I can understand the Court’s interest in knowing exactly what kind of issues we want to raise in this matter, so we would prefer to raise them in this manner if we could.” The trial court responded, “Well, I don’t know what this all means. I understand what you are getting at.” Later the trial court stated:

“I question the timeliness of the Motion to Intervene to start off with. I think in view of the situation that has developed here, there is no basis for intervention on the part of Jessie Donald Sumner from the facts that have been stated in this motion. I think the Court can only rule on the matters before it and that are relevant to this case, and if you people feel that Jessie Sumner has got some special kind of situation that warrants a closed hearing before the Board or some kind of a protective order that certain information that would come out not be revealed because of how he might directly be affected, then I think it is your obligation to file some other kind of action to protect him, because I do think that what the paper has done here, the plaintiff in this case, the newspaper has brought an action to clarify interest in the lawsuit that has been a question mark over this section as to whether or not this agency is in compliance with the Open Meetings Act.”

The trial court concluded that the parties to the case should not be “burdened” at that point in the proceedings with the “area of protective orders” concerning the intervener and denied the motion to intervene. On August 3, 1983, the trial court ordered that there was no just cause to delay enforcement or appeal of the order denying the motion for leave to intervene.

On August 16, 1983, the defendant filed a consent to entry of judgment against him “for the relief sought to the extent that such Order pertains only to public evidentiary hearings and not to the deliberations of the Prisoner Review Board.” On August 29, 1983, the trial court issued an order for a permanent injunction in the matter. This appeal is taken from the order entered denying the motion for leave to intervene and presents the question whether the trial court abused its discretion in denying the motion.

Section 2 — 408(a)(2) of the Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, par. 2 — 408(a)(2)) provides:

“(a) Upon timely application anyone shall be permitted as of right to intervene in an action *** (2) when the representation of the applicant’s interest by existing parties is or may be inadequate and the applicant will or may be bound by an order or judgment in the action ***.”

Section 2 — 408(e) of the Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, par. 2 — 408(e)) provides that “[a] person desiring to intervene shall present a petition setting forth the grounds for intervention, accompanied by the initial pleading or motion which he or she proposes to file.”

Intervention is a matter within the sound discretion of the trial court, and its judgment will not be reversed unless a clear abuse of discretion is shown. (University Square, Ltd. v. City of Chicago (1979), 73 Ill. App. 3d 872, 392 N.E.2d 136; Ackmann v. Clayton (1976), 39 Ill. App. 3d 1013, 350 N.E.2d 824; Hagen v. Ruby Construction Co. (1973), 13 Ill. App. 3d 725, 301 N.E.2d 311.) The purpose of intervention is to expedite litigation by disposing of an entire controversy in one action among the persons involved in order to prevent a multiplicity of actions. (Bishop v. Village of Brookfield (1981), 99 Ill. App. 3d 483, 425 N.E.2d 1113.) A petition to intervene must allege specific facts that demonstrate that the petitioner has a right to intervene, and averments that are merely conclusions and recite the statutory language are not sufficient to meet the requirements of the intervention statute. (People ex rel. Thomas v. Village of Sleepy Hollow (1981), 94 Ill. App. 3d 492, 418 N.E.2d 466.) To intervene the applicant must set forth facts demonstrating his interest in the subject matter of the litigation. University Square, Ltd. v. City of Chicago (1979), 73 Ill. App. 3d 872, 392 N.E.2d 136.

In the case at bar, although we appreciate counsel’s caution and concern for the safety and welfare of his client, the intervener did not identify for the trial court the issue or issues he would raise if he were permitted to intervene in this lawsuit. The petition, or “motion,” itself is insufficient to meet the requirements of the intervention statute because the relevant averments there are essentially con-clusory and merely recite the statutory language. Although at the hearing the intervener expressed the belief that he falls within an exception to the Open Meetings Act, he did not suggest which one. Similarly, although he indicated at the hearing that he wanted a protective order, he did not give a reason sufficient in law as to why such an order should issue. Under the circumstances we cannot say that the trial court abused its discretion in refusing to permit intervention here.

The foregoing reasons aside, the trial court did not err in refusing to permit intervention for the further reason that, from what we are able to glean from the record, the issue or issues the intervenor appears to want resolved seem better addressed through an action brought by him alone. In the present case the trial court was obliged to deal with the applicability of the Open Meetings Act to the hearings of all prisoners who appear before the Illinois Prisoner Review Board. However, the record indicates that the intervenor considers his own situation unlike that of most prisoners who appear before this board. It would seem highly inexpedient for a trial court to inject into the consideration of a matter of general application to a very large number of persons, as the present case is, the special concerns of one. Although the trial court properly refused to allow Jessie Sumner to intervene in the present suit, he is not, of course, precluded or in any way foreclosed from bringing suit himself to obtain the relief he seeks.

Affirmed.

WELCH, P.J., and KASSERMAN, J., concur.


author: JUSTICE REINHARD

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. ARTURO CHACON, Defendant-Appellant.
    Second District
    No. 2—82—0480
    Opinion filed July 12, 1984.

      Edward F. Diedrich, of De Kalb, and G. Joseph Weller, John J. Barrett, and Kyle Wesendorf, all of State Appellate Defender’s Office, of Elgin, for appellant.
    Eugene Stockton, State’s Attorney, of Dixon, and Michael Simkin, of Highland Park (Phyllis J. Perko and Martin P. Moltz, both of State’s Attorneys Appellate Service Commission, of counsel) for the People.
   JUSTICE REINHARD

delivered the opinion of the court:

Defendant, Arturo Chacon, was found guilty in a jury trial of theft exceeding $150 (Ill. Rev. Stat. 1979, ch. 38, par. 16 — 1(a)(1)) and was sentenced to a 30-month term of probation which included, as conditions thereof, restitution of $39,855.06 and 12 months of periodic imprisonment in the Lee County jail.

Two issues are presented for our review: (1) whether defendant was proved guilty beyond a reasonable doubt; and (2) whether the order of restitution in the amount of $39,855.06 should be vacated as not supported by the proofs and entered without a presentencing hearing or a finding of defendant’s ability to pay restitution.

This case involves the alleged theft of funds exceeding $150 belonging to St. Mary’s Home and School Association Bingo Fund during defendant’s tenure as chairman from July 1, 1977, until July 1, 1980. We set forth the relevant facts.

Robert J. Brophy served as chairman of the St. Mary’s Home and School Association bingo operation for one year immediately prior to defendant becoming chairman. He turned over to defendant on July 1, 1977, a checking account with a balance of $2,345.38, and a savings account with a balance of $6,621.39. These precise amounts were told to him by the State’s Attorney. He also turned over a ledger in which he recorded the weekly bingo receipts, disbursements, and revenue taxes owed. Henry Cordell succeeded defendant as chairman on July 1, 1980. He received from defendant $300 starting cash in the latter part of June, and on July 4 received $105 in checks and another $27 in cash. The checking account had a balance of $67.35 and there were no other accounts. He also received a ledger book and the checkbook used by defendant, although the checkbook did not have dates for some of the checks nor to whom the checks were payable. Several witnesses testified they worked in the kitchen of the K.C. Hall where the bingo games were conducted during defendant’s chairmanship, and periodically turned over money to him earned from the sale of food.

David J. Dempsey served as president of the St. Mary’s School Board during defendant’s chairmanship of the bingo operation and served one year as president of the Home and School Association from 1979 to 1980. The purpose of the bingo operation was to raise funds for St. Mary’s School. The chairman handled all the bingo funds and periodically turned monies over to the parish priest. Defendant was to make quarterly reports to the School Board and Home and School Association, but it was very hard to get any report or accounting from defendant. It was also hard finding a volunteer who would be bingo chairman, although defendant at the end of his term wanted to serve one more year and guaranteed $18,000 profit, when prior years’ profits were about $12,000 per year.

Tracy Palermini, an officer of the City Bank and Trust Company of Dixon, identified certain checking account and savings account records at the bank in the name of the St. Mary’s Home and School Bingo Fund and other accounts of the association. She also examined the bank records for the three-year period defendant was chairman of the bingo operation to determine if there were any certified checks, cashier’s checks, bank money orders and personal money orders drawn on any of these accounts, particularly any such document payable to the Illinois Department of Revenue. She found none. Rolfe Ehrmann, the attorney for St. Patrick’s parish, in which St. Mary’s School was located, was consulted by Henry Cordell after he took over chairmanship from defendant. He went through defendant’s books and records to determine if taxes were paid and they showed taxes were paid. However, he determined that taxes totalling $9,200 were not paid and that the bingo license fee had not been paid from April 1, 1978, to March 31, 1980. He told the parish priest to turn over the records to the police.

Father Gerald Kobbeman, as the pastor of St. Patrick’s parish, oversees all the activities of the parish, including the bingo operation of the St. Mary’s Home and School Association. Upon receiving notice that the State taxes were not paid for the bingo operation and the bingo license was not current, he talked with the defendant. Defendant first said the taxes were paid by a money order from the City National Bank. He talked with City National Bank personnel and explained what the bank told him. Defendant then said the taxes were paid by cashier’s check. Father Kobbeman again checked with the bank, and when no cashier’s check was found, talked with defendant, who said he did not know why the cashier’s check couldn’t be found. Father Kobbeman also discussed with defendant several large checks which were payable to cash. Defendant said the checks were to pay bingo winners who did not want a check made to them personally. Subsequently, defendant said he cashed the checks himself and used the money as starting money for the bingo games the next Friday. Defendant also told him the bingo license was at the K.C. Hall and had been paid for. Defendant turned over certain checks to him, although a lot were missing. Defendant said some were destroyed by water damage in his basement. Some monies were supposed to be in certificates of deposit, but defendant could not remember the bank. Each year defendant turned over to Father Kobbeman $10,000, $7,700 and $12,000 respectively for each of the three years of his chairmanship. $12,000 per year was budgeted. A more formal type of bookkeeping has now been instituted, although there were no procedures existing before and during defendant’s chairmanship. Father Kobbeman turned over all the records to the police.

Lieutenant Larry Hagan of the Dixon police department investigated the matter. When he questioned the defendant, he was told that defendant alone made all deposits and withdrawals. Defendant said he used proceeds from the games to pay expenses, taxes, and St. Mary’s School. Defendant made all the decisions except that Father Kobbe-man would tell him when to pay over funds to St. Mary’s. Defendant would take receipts from the bingo games and from the periodic kitchen food payments and take them home. He would thereafter place them in his safe or deposit them in City National Bank. Hagan discussed all the checks with defendant, how expenses were paid, and went over the ledgers. Defendant said most disbursements were by check, but some were cash for small amounts. Defendant verified that the entries in the ledgers were made by him, which included tax computations in the ledgers. Defendant stated he paid the taxes by check or by bank draft quarterly. By Hagan’s computations, which were explained to the jury in detail, defendant was short money for each year of operation of the fund and Hagan asked defendant for an explanation. Defendant was surprised by Hagan’s computation and said he didn’t know where any missing money was.

John Van Osdol, a certified public accountant, conducted an audit of the St. Mary’s Home and School Association Bingo Fund for the period of 1977 through 1980. Using the bank statements, cancelled checks, and game report journals (ledgers) he reconstructed what he thought the financial statements would look like. Van Osdol used transparencies to show the actual figures and how they were obtained. He explained that after reviewing the records it was determined that as of July 1, 1977, there should have been a balance of $2,345 in the checking account and $6,621 in the savings account turned over to defendant. The interest earned on certificates of deposit and the savings account over the next three-year period was estimated to be $528. Deposits received from the kitchen fund for three years totalled $9,050. Gross receipts from bingo games listed in the game report journals from July 1977 to June 1980 were $199,486. All these figures totalled $209,064. The disbursement of monies paid to winners, taken from the game report journal, totalled $141,230. There were checks written totalling $52,386 and bank N.S.F. charges of $464. All these disbursements totalled $194,080.

At the end of the three-year period in which the defendant was bingo chairman, Van Osdol estimated there should have been the balance of receipts less disbursements of $23,950 presented to the next chairman. A total of $542 was handed to Mr. Cordell, leaving $23,408 unaccounted for. Van Osdol characterized this examination as a bookkeeping reconstruction taking the records that there were and reconstructing what the records showed. He conducted a further examination, a documentation examination, in which all checks made to cash and all checks to individuals, apparent prize winners, which he felt did not have adequate documentation, were examined. He added checks payable to cash of $4,750, checks payable to individuals of $10,690, a check payable to Maria Chacon for $225, a grocery check for $278, and $400 in debit memos for N.S.F. checks. These figures, added to the $23,408 figure, brought his estimate of the total unaccounted-for difference to $39,751. Van Osdol stated that the actual unaccounted-for difference could range anywhere from $23,000 to $60,000. He based the larger amount of up to $60,000 upon a further analytical review where he used percentages and trends of profit. The audit could not be a certified audit primarily because of the lack of documentation to support the disbursements. There was no control over the bingo payouts during Brophy’s, Cordell’s, or defendant’s tenure as chairman. Van Osdol recommended new procedures for future chairmen of the bingo operation.

For the defendant, Steve Garland, a certified public accountant, testified that he reviewed all the defendant’s records, but considered that information not to be a complete set of books. He could not determine from the records available what, if any, cash was collected and was unaccounted for because of a lack of documentation. He concluded that for the three-year period of defendant’s chairmanship over the bingo operation that there was an incomplete set of accounting records, resulting in a “weak audit trail” which made it impossible to determine any misappropriation of funds. A true and authentic audit of the records could not be made. He had no quarrel with Van Osdol’s calculations based upon the frame of reference Van Osdol started with.

Defendant’s wife testified they lived in a house they purchased for $19,000, which had several mortgages. Their lifestyle had not changed in the last eight years. Defendant took the stand, but limited his brief testimony to matters after July 1, 1980. He never had any experience or training as a bookkeeper.

Defendant’s first contention is that the State failed to prove him guilty of theft beyond a reasonable doubt because there was insufficient evidence that a theft occurred and that defendant, and no one else, took the funds. He further argues that while the evidence reveals gross mismanagement of the bingo fund operations, inadequate accounting procedures, and poor judgment on the part of several individuals connected with the fund, the State failed to prove the unaccounted-for funds resulted from a theft and it was the defendant who took the funds. Defendant relies on People v. Frig (1981), 100 Ill. App. 3d 602, 426 N.E.2d 1251, as primary support for this argument. While there is some similarity in our case to some of the facts in Frig, we believe the court in Frig found insufficient evidence to convict primarily from the defendant’s therein lack of exclusive control over and access to a restitution fund over which she had charge. (100 Ill. App. 3d 602, 605-06, 426 N.E.2d 1251.) We therefore do not find that case controlling as, in the instant case, the defendant had sole control over the receipt of the funds, the disbursements, and the record keeping for the three-year period of his chairmanship of the bingo operation.

Defendant was charged with theft by knowingly exerting unauthorized control over the Bingo Fund, intending to deprive the St. Mary’s Home and School Association Bingo Fund permanently of the use or benefit of such property. (Ill. Rev. Stat. 1979, ch. 38, par. 16— 1(a)(1); see People v. Alexander (1982), 93 Ill. 2d 73, 77-78, 442 N.E.2d 887.) The State’s proofs showed that during defendant’s three-year chairmanship of the bingo operation he had exclusive control over the receipts from the bingo games, he solely maintained the records of receipts in the ledger books, and he made all disbursements and kept what records there were of these disbursements. John Van Osdol, the certified public accountant who testified for the State, using the records prepared and kept by the defendant for the three-year period, concluded that the balance of funds which should have been turned over to the next chairman was $23,950, instead of only the $542 which was given by defendant to his successor. He concluded there was $23,408 unaccounted for from his bookkeeping reconstruction of the defendant’s own records. In his testimony, defendant did not give any other explanation of this deficiency, but had expressed surprise when confronted by Lieutenant Hagan upon Hagan’s similar conclusion from his own analysis of the records. Defendant’s own certified public accountant did not dispute Van Osdol’s calculations, but stated that in his professional opinion, because of the incomplete set of accounting records, there was a “weak audit trail” which made it impossible to determine any misappropriation of funds.

Issues as to the relative credibility of the witnesses and the weight to be given to their testimony are matters for the trier of fact to determine. (People v. Manion (1977), 67 Ill. 2d 564, 578, 367 N.E.2d 1313; People v. Riggins (1958), 13 Ill. 2d 134, 139, 148 N.E.2d 450.) Other evidence indicating a consciousness of guilt was presented to the jury. When first confronted concerning payment of taxes to the Illinois Department of Revenue and the bingo license fee, defendant said the taxes were paid and the disbursements showed they were paid. However, the fact was that quarterly tax payments were not made and the license was not current. These unpaid taxes were over $9,000. Defendant also first stated that the taxes were paid by a money order from City National Bank, then later by a cashier’s check from the same bank. A witness from the bank testified there was no record of any such transaction. Defendant also told two different versions to Father Kobbeman of whom the checks payable to cash were cashed by, finally stating that some were to him for starting money before the bingo games. Defendant also expressed a strong desire to keep the chairmanship of the bingo operation and promised to make more money, even though that job was a volunteer position with little help and considerable work.

Considering the entire evidence, particularly defendant’s exclusive control over both the receipts and disbursements and all the records of the bingo operation, we conclude the evidence shows a substantial, unaccounted-for shortage in the Bingo Fund and sufficient proof that the jury could have properly found defendant guilty of felony theft. See People v. Thompson (1979), 75 Ill. App. 3d 901, 905, 394 N.E.2d 422; People v. Murphy (1978), 65 Ill. App. 3d 935, 939-41, 382 N.E.2d 1260.

Defendant next contends that the portion of his sentence which orders him to pay restitution of $39,855.06 as a condition of his probation must be vacated. One argument he makes is that no presentencing hearing was held pursuant to section 5 — 5—6(a) of the Unified Code of Corrections (Ill. Rev. Stat. 1981, ch. 38, par. 1005 — 5—6(a)) to assess the financial capacity of the defendant and to determine the amount and conditions of payment. Any right to such a hearing is waived by defendant’s failure to demand one below. (People v. Eades (1984), 123 Ill. App. 3d 113, 118-19, 462 N.E.2d 819; People v. Gibson (1982), 106 Ill. App. 3d 912, 913, 436 N.E.2d 732; People v. House (1981) , 98 Ill. App. 3d 304, 308-09, 424 N.E.2d 412.) Moreover, at both the sentencing hearing and the trial itself the amount of the alleged theft was thoroughly addressed by the State and the defendant, and any separate hearing would be duplicative. See People v. Johnson (1982) , 106 Ill. App. 3d 171, 172, 440 N.E.2d 1257.

Another argument advanced by defendant on appeal is that the trial court failed to make a “finding” of his ability to pay restitution. Defendant cites section 5 — 5—6(a) of the Unified Code of Corrections (Ill. Rev. Stat. 1981, ch. 38, par. 1005 — 5—6(a)) as authority which he argues requires a “finding” by the court of the financial capacity of the defendant to make restitution. Section 5 — 5—6 is a general restitution provision applicable where, together with some other authorized disposition, restitution to the victim is ordered. (See Ill. Rev. Stat. 1981, ch. 38, par. 1005 — 5—3.) This general restitution provision does provide that a hearing be held to assess the financial capacity of the defendant to make restitution, and there is some authority that the trial court must state that it has considered the factual basis upon which it has concluded that the defendant has the' financial capacity to make restitution even if a hearing is waived. (See People v. Johnson (1982), 106 Ill. App. 3d 171, 173, 440 N.E.2d 1257.) Here, however, restitution was ordered as a condition of probation pursuant to section 5 — 6—3(b)(9) (Ill. Rev. Stat. 1981, ch. 38, par. 1005 — 6— 3(b)(9)), which specifically provides for restitution when ordered as a condition of probation. This statutory provision does not require any “finding,” or even any inquiry, by the court of defendant’s financial capacity to make restitution. Other appellate decisions hold that section 5 — 6—3(b)(9) does not condition restitution on a defendant’s ability to pay, but the amount ordered must be “reasonable and just.” People v. Knowles (1980), 92 Ill. App. 3d 537, 540, 414 N.E.2d 1322; People v. Tidwell (1975), 33 Ill. App. 3d 232, 238, 338 N.E.2d 113.

Despite this apparent difference in sections 5 — 6—3(b)(9) and 5— 5 — 6(a), we conclude the record here adequately supports an order for defendant to make restitution under either section. (But see People v. Johnson (1982), 106 Ill. App. 3d 171, 173, 440 N.E.2d 1257, where the court held a factual basis upon which the trial court has concluded defendant has the financial capacity to pay must be stated under section 5 — 5—6(a); however, see Barry, J., dissenting in People v. Morrison (1983), 114 Ill. App. 3d 828, 833-34, 449 N.E.2d 859, where People v. Johnson is distinguished.) Defendant had been steadily employed earning $11.38 per hour, sometimes worked at two jobs, was placed on probation, which gives him the opportunity to earn income to pay restitution, and was rehired by his former employer. Additionally, considering that the purpose of restitution is to compensate for the loss to the victim of the crime caused by the conduct of the defendant, we do not believe the capacity of a defendant to make restitution at the time of sentencing must necessarily be then determined. We observe that the statute provides that the court may later impose up to an additional two-year period after probation expires to make restitution if the conditions of payment have not been satisfied. (Ill. Rev. Stat. 1981, ch. 38, par. 1005 — 6—3(b)(9); see also Ill. Rev. Stat. 1981, ch. 38, par. 1005 — 5—6(d).) Furthermore, probation shall not be revoked for failure to comply with a condition of probation which imposes a financial obligation upon the offender unless such failure is due to his wilful refusal to pay. (Ill. Rev. Stat. 1981, ch. 38, par. 1005 — 6—4(d).) On this record, we find no error in the trial court’s order that as a condition of probation defendant make restitution of the funds he stole, even though the amount is large.

However, we conclude that there was insufficient proof that $39,855.06 was the actual out-of-pocket loss proximately caused by the conduct of the defendant. Rather, we believe that the provable loss over the three-year period was $23,408, as testified to by John Van Osdol and shown in the State’s Exhibit No. 143. Essentially, this computation encompasses Van Osdol’s calculation of the beginning balances of the accounts received by defendant on July 1, 1977, the receipts and disbursements over the three-year period defendant handled the fund, and the actual balance turned over by defendant to his successor on July 1, 1980. Although Van Osdol also testified that in an analytical review based on percentages and trends the unaccounted-for difference would range from $23,408 to approximately $60,000, this method of computation of possible loss over $23,408 is too speculative for purposes of ordering restitution. In addition, the $39,855.06 restitution figure arrived at by the trial court is based upon Van Osdol’s computation that disbursements to cash and to apparent individual prize winners totalling approximately $15,000 did not have adequate documentation and therefore were added to the $23,408 loss computation. While from accounting principles these disbursements may be labeled as undocumented because not supported by evidence other than the checks themselves, an order of restitution under the facts here which includes this $15,000 calculation without a showing of actual loss cannot stand. Accordingly, we modify the order of restitution to $23,408.

For the foregoing reasons the judgment of the circuit court of Lee County is affirmed as modified.

Affirmed as modified.

SEIDENFELD, P.J., and UNVERZAGT, J., concur.