text:
    Emmert Curtis, Plaintiff-Appellant, v. Doyle Johnson, et al., Defendants, Doyle Johnson, et al., Defendants-Appellees.
    Gen. No. 10,907.
    Fourth District.
    February 15, 1968.
    Rehearing denied and. opinion modified March 5, 1968.

      Glenn & Logue, of Mattoon (Thomas J. Logue, of counsel), and Robert N. Corley, of Champaign, for appellant.
    Craig and Craig, of Mattoon (Jack E. Horsley, and Richard F. Record, Jr., of counsel), for appellees.
   TRAPP, J.

Plaintiff, Emmert Curtis, appeals from an order of the Circuit Court dismissing Counts I and II of an Amended Complaint for recision and other relief based upon a contract alleged to be within the Illinois Securities Law.

Count I alleges that defendant, Kenneth L. Huston, a resident of the State of Nevada, through his agents, the defendants, Doyle Johnson and William Walborn, who are residents of the State of Illinois, did, in Coles County, Illinois, on or about January 6, 1964, sell to plaintiff a document purporting to be a trust receipt as follows:

“TRUST RECEIPT
“WHEREAS, HUSTON HOTEL CORPORATION, a Nevada corporation, Las Vegas, Nevada, has leased from PARADISE HOTEL AND HEALTH SPA CORPORATION, the hotel portion of the property consisting of 400 deluxe rooms to be constructed and completely furnished:
“AND, WHEREAS, it is contemplated for tax purposes that the HUSTON HOTEL CORPORATION will sub-lease to a Limited Partnership on the same basis it is now leasing the hotel from PARADISE HOTEL AND HEALTH SPA CORPORATION with KENNETH L. HUSTON being the General Partner and all other investors to be Limited Partners;
“AND, WHEREAS, the undersigned, KENNETH L. HUSTON as General Partner, agrees to fully consummate this transaction in his name and shall have all of the liability attached to said lease and shall keep and save harmless the Limited Partners from liability of all kinds.
“AND, WHEREAS, fractional interest in such Limited Partnership will be sold on the basis of one per cent (1%) equal to FIVE THOUSAND DOLLARS ($5,000.00) with a minimum share to any Limited Partner of 5% and a maximum share to any Limited Partner of 10%.
“AND, WHEREAS, as soon as possible, but prior to opening date of said hotel, a Partnership Agreement will be drawn and executed by the General Partner and all Limited Partners subject to the following:
“(a) All investors shall have the option at the time the Limited Partnership Agreement is ready to be executed, to enter into such partnership agreement and to become a Limited partner, or to demand and receive back from the undersigned the monies deposited hereunder;
“ (b) The undersigned shall pay to each investor who elects not to enter into said Limited Partnership, within 90 days after demand, the total amount deposited hereunder by such investor, plus accrued interest as hereinafter provided.
“NOW, THEREFORE, the undersigned, KENNETH L. HUSTON, hereby acknowledges receipt from EMMERT CURTIS of Oakland, Ill. of the sum of $5,000.00, which represents his subscription for a 1% ownership in said proposed Limited Partnership. Said amount is received by the undersigned to be held in trust for said investor upon the terms and conditions herein set forth.
“The undersigned hereby agrees to pay to said investor in quarterly installments from and after January 1st, 1964, an amount equal to 5% per annum on the amount deposited hereunder up to the date of the execution of the Limited Partnership Agreement by said investor, or up to the date his deposit is returned pursuant to demand.
“This Trust Receipt is given and the agreements and conditions hereof are made under the laws of the State of Nevada and relate to real estate located in the State of Nevada and the laws pertaining to interest rates in that state shall govern.
“Dated this 6 day of January, 1964.
S/ KENNETH L. HUSTON KENNETH L. HUSTON”

Count I alleges:

That the above described document was sold to plaintiff as a security within the definition of section 21 of the Illinois Securities Law of 1953 (Ill Rev Stats 1963, c 121½, § 137.2-1), that defendant Huston issued a promissory note payable to plaintiff which has been retained by defendants Doyle Johnson, William Walborn and others, and it alleges payment of the $5,000 to Johnson and Walborn and receipt by plaintiff of the trust receipt.

That the securities were not registered pursuant to the Illinois Securities Law (Ill Rev Stats 1963, c 121½, §§ 137.1 through 137.19) and said securities were sold in violation of said law.

That plaintiff had no knowledge that the sale was voidable by him at his election until February 17, 1965, when he consulted his attorney, Robert N. Corley, and that on March 14, 1965, plaintiff gave notice by registered mail to the defendants of his election to declare the sale void and to tender back the security and all rights thereunder and demanding payment of the sum of $5,000.

That the defendants refused to accept the tender and make the repayment, and that plaintiff continues to make tender in open court.

The Count asks that the sale be rescinded, that defendants pay plaintiff $5,000, plus interest at 5% from the sale to the decree and court costs and attorneys’ fees, and such relief as equity may require.

Count II makes the same allegations except that it does not allege the failure to register the securities under the Illinois Securities Law, and it adds the allegations that the defendants immediately prior to the sale made the following representations:

“A. That the Huston Hotel Corporation, a Nevada Corporation, Las Vegas, Nevada, had leased from Paradise Hotel and Health Spa Corporation the hotel portion of the property consisting of 400 deluxe rooms to be constructed and completely furnished.
“B. It was contemplated for tax purposes that the Huston Hotel Corporation will sublease to a limited partnership on the same basis, it is now leasing the hotel from Paradise Hotel and Health Spa Corporation with Kenneth L. Huston being the general partner and all other investors to be limited partners.
“C. That the Revlon Corporation had the lease on the Health Spa Portion of the hotel.
“D. That Doyle Johnson and Dr. Lewis E. Adkins owned a majority interest in the Huston Hotel Corporation with Kenneth L. Huston.
“E. That Kenneth L. Huston, Defendant herein, had a good financial standing and a high moral character.”

Count H alleged that each of the representations, A., B., C., D., and E., above were and are false and that each of the defendants knew the said representations were false, that the representations were made to deceive plaintiff and to induce him to purchase the security, that the representations were material and did induce plaintiff to purchase the security.

It further alleges, alternatively, that the representations were made by defendants Doyle Johnson and William Walborn knowing the representations were false, or without knowing and falsely assuming the knowledge thereof.

Plaintiff asserts purchase as a direct result of reliance on the representations.

Count II prays recision of the sale, repayment of $5,000 plus interest, court costs and attorneys’ fees.

Counsel for plaintiff assert that the sole issue is whether the trust receipt is a security within the meaning of the Illinois Security Law for the reason that if the instrument is a security, a good cause of action is stated. They state that the trial court based his decision solely upon the conclusion that the document is not a security. Counsel for defendants contend that the receipt is not a security within the meaning of the Illinois Security Law, and that the complaint fails to state a cause of action even if it is. Defense counsel assert many grounds for sustaining the trial court, in addition to the reasons given by the trial judge.

While we cannot agree with the positions taken by counsel for either party for the reason that it appears to us that certain of the representations alleged in Count II are representations of fact and could have been material inducements to a purchase, we do agree that determination whether the trust receipt was a security within the meaning of the Illinois Security Law is required, because proof could be made under either Count I or Count II if the receipt is a security.

The trial court wrote a memorandum opinion with the order dismissing the original complaint, and a second memorandum in reference to a motion to reconsider his order. Both were written before the complaint was amended, and accordingly before Count II was added. The complaint now consists of four counts, but Counts III and IV are not before us. The court entered an order that the order dismissing Counts I and II is separate and immediately appealable.

The trial court’s memorandum indicates that the court felt that the trust receipt was not a sale at all, but rather an option to purchase which gave plaintiff a right to receive the $5,000 back “pursuant to the terms of the receipt.”

The Securities Law of 1953, as amended, (Ill Rev Stats 1963, c 121½, § 137.12) makes it a violation, inter alia:

“A. To sell any security except in accordance with the provisions of this Act;
“B. To deliver to a purchaser any security required to be registered under Section 5 hereof unless accompanied or preceded by a prospectus that meets the requirements of the pertinent subsection of Section 5;
“D. To fail to file with the Secretary of State any application, report or document required to be filed under the provisions of this Act or any rule or regulation made by the Secretary of State pursuant to this Act or to fail to comply with the terms of any order of the Secretary of State issued pursuant to Secton 11 hereof; it
“G. To obtain money or property through the sale of securities by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; it 99
(Emphasis supplied.)

Count I attempts to allege a violation of A., B. and D. above, and Count II attempts to allege a violation of A. and G. above.

The Illinois Annotated Statutes, SHA, chapter 121%, Appendix pp 525-632, contain a very careful analysis of the history and interpretation of the Securities Law of 1953 as amended, by Samuel H. Young. In reference to the requirement of registration, Mr. Young suggests the following process of elimination, (p 606):

“First, is there a ‘security’ involved? Second, is there a ‘sale’ involved? Third, is the security ‘exempt’ from registration requirements by virtue of Section 137.3 ? Fourth, will the sale of the security be made in an ‘exempt transaction,’ as defined in Section 137.4, and therefore exempt from registration?”

In the same Appendix (p 557), in his introduction to the discussion of the Illinois Securities Law of 1953, Mr. Young says:

“In determining whether or not the sale of any security should be registered under the Securities Law of 1953, the general premise should be that the sale of every security in the State of Illinois must be registered unless exempt. The next determination should be whether or not the security is of a type which is expressly ‘exempt.’ ”

Over a considerable period of time the Illinois Legislature has continued to broaden the definition of security until the law applicable at the time of this sale reads as follows: (Ill Rev Stats 1963, e 121½, § 137.2-1):

“ ‘Security’ means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, investment fund share, face-amount certificate, voting-trust certificate, fractional undivided interest in oil, gas, or other mineral lease, right, or royalty, or, in general, any interest or instrument commonly known as a security, or any certificate of deposit for, certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.” (Emphasis supplied.)

The trust receipt in question could certainly be described as a form of “debenture,” or as “evidence of indebtedness,” or as a “certificate of interest or participation in a profit sharing agreement.” It partakes of the nature of a preorganization agreement or subscription, unless one reads into the statute a further limitation applying these terms strictly to a corporation.

The term “investment contract” has been (as pointed out by Mr. Young, Illinois Annotated Statutes, SHA, chapter 121%, Appendix p 580), defined by the Secretary of State of Illinois, under Rule 130 of General Rules and Regulations to include “any interest or participation in a contract, transaction, scheme, common enterprise, or profit seeking venture whereby the investor transfers capital to the promoter or promoters thereof, or invests therein, and looks to such promoter or promoters for the success of the venture.” Mr. Young points out that this definition is based upon judicial interpretation of the term “investment” contract by the United States Supreme Court in two landmark cases under the Federal Securities Act of 1933. (Securities and Exchange Commission v. W. J. Howey Co., 328 US 293, 90 L Ed 1244, 66 S Ct 1100, 163 ALR 1043; and Securities and Exchange Commission v. C. M. Joiner Leasing Corp., 320 US 344, 88 L Ed 88, 64 S Ct 120.)

Certainly the instrument in question falls within the meaning of any instrument commonly known as a security. It is a certificate of deposit. It is a certificate of interest or participation. It is a temporary or interim certificate. It is a receipt. It is a warrant or right to subscribe for. an interest. Neither of the parties has made any point of it, but by the language upon the face, the minimum share as a limited partner is 5%. If 1% equals $5,000 and all investors, other than Huston, must become limited partners to remain investors, then a receipt holder may be required to deposit an additional $20,000 to become a limited partner. Accordingly, it would appear to be a right to become a limited partner, rather than an actual limited partner’s present interest.

The mere fact that the trust receipt provides for a redemption or repayment under certain conditions and at times selected by the promoters, i. e., at such time as “. . . the Limited Partnership Agreement is ready to be executed, . . .” does not make it any less a certificate of indebtedness, a certificate of interest, an investment contract, or an instrument commonly known as a security, receipt or the like. See Sire Plan Portfolios, Inc. v. Carpentier, 8 Ill App2d 354 on p 356, 132 NE2d 78.

The second inquiry is whether a sale of a security has been alleged. There is no doubt that a sale has been alleged. The only question is whether the right to refuse the final form of the security, which may be said to convert the document to an option or a right to subscribe, keeps it from being a sale.

First, the mere fact that a “right to subscribe” is itself a security which may be “sold” should answer the question. However, we are not left to speculate upon the meaning of “sale” within the Illinois Securities Law.

Illinois Revised Statutes 1963, chapter 121%, § 137.2-5, is as follows:

“ ‘Sale’ or ‘sell’ shall have the full meaning of that term as applied by or accepted in courts of law or equity, and shall include every disposition, or attempt to d/ispose, of a security for value. ‘Sale’ or ‘sell’ shall also include a contract to sell, an exchange, an attempt or an offer to sell, an option of sale or a solicitation of an offer to buy, directly or indirectly; . . . .” (Emphasis supplied.)

The instrument in question is clearly not an exempt security within § 137.3, nor an exempt transaction within § 137.4 of chapter 121½, Ill Rev Stats 1963.

Defendants’ counsel contend that notwithstanding that there is no specific exclusion of the security here involved from the operation of the Illinois Securities Law, there is a well understood and judicially recognized exception to the Illinois Securities Law in the matter of purchase of an interest in a joint venture or partnership, including a limited partnership.

If this case should fall within the category of a joint venture, then it would not be a sale of a security within the Illinois Securities Law under the holding of Polikoff v. Levy, 55 Ill App2d 229, 204 NE2d 807, certiorari denied 382 US 903, 15 L Ed2d 156. There defendant wrote plaintiff that a group of persons limited to friends and relatives were going into a new venture. He wrote, “We have purchased a parcel of real estate in Springfield, Illinois, and are contemplating building a super deluxe motel which the City is in dire need of. We are selling units of $10,000.00 each and we still have available about 15 units or $150,000.00.” There was enclosed a letter giving detailed capital requirements with a total capital of $665,-000.00. Plaintiff agreed to invest $50,000.00, and sent this in two payments of $25,000.00 at different times as well as a later payment of $7,500.00 to be plaintiff’s proportionate share of a parking lot adjoining. When plaintiff was asked to accept stock in a corporation he refused and sued to recover his money on the ground that the sale of the “units” was a sale of securities under the Illinois Security Law.

The court in the Polikoff case found that the whole transaction constituted a “joint venture” to buy and improve real estate, and that plaintiff and the others had “equal rights of management and control of the enterprise.” The court stated that a security is a transaction whereby one person invests money on the theory that he expects to receive profits “solely from the efforts of others.”

It is contended by defendants’ counsel that the intended formation of a “Limited Partnership” is the equivalent of a joint venture, and thus some control is vested in the limited partners. Nevada has adopted the Uniform Limited Partnership Act which is the law which applies to such arrangements in Illinois. Generally speaking, the rights of the limited partner are confined to the right to have full information, a share of the income and to have the same rights as a general partner in reference to dissolution and winding up by a decree of court.

Under the plan here set forth, the general partner would have the management of the business and be responsible for the making of profits for distribution. We do not think that certain formal controls such as those possessed by limited partners prevent the enterprise from being one in which the investor expects to receive his profits “solely from the efforts of others.” The substance of this proposed enterprise is such that profits would come solely from such efforts of others. Here no real estate would be owned by the enterprise, but only a lease of a proposed hotel. The profits would obviously be dependent on the management of the general partner.

We think this situation is not analogous to the case of Polikoff v. Levy, 55 Ill App2d 229, 204 NE2d 807, but is directly analogous to Sire Plan Portfolios, Inc. v. Carpentier, 8 Ill App2d 354, 132 NE2d 78. In that case nominal units of ownership in a New York Apartment building were sold to “tenants in common.” Profits from a lease were to be paid to co-owners who were represented by a trustee. It was contended that since the owners of 60% of the unit owners could remove the trustee, there was some control in the owners. The court said, p 359:

“Plaintiff further suggests that the right granted to the owners of 60 per cent or more of the units of ownership to remove the trustees, appoint new trustees or terminate the trust, is evidence of a control of the management and operation of the enterprise not present in the cases hereinbefore discussed. This control is illusory, not real. The situation of the holders of units of ownership is not unlike the plight of the widely scattered holders of small beneficial interests or shares of stock in reorganized corporate owners of apartment buildings following foreclosure.
“The profits and income, if any, resulting from the Sire plan are produced by the efforts of Sire and its nominees in managing its properties, purchased with the money of many distant investors in small fractional undivided interests, without real control of the enterprise. It is an investment contract within the Illinois Securities Law of 1953, and the order is affirmed.”

There is no question that agreements to form a limited partnership may be securities under the Illinois Securities Law. Wood v. Meyer, 240 Ill App 100. The attitude of the Illinois courts in reference to resolution of doubts in favor of the purchaser of the “security” is clearly evidenced by Foreman v. Holsman, 10 Ill2d 551, 141 NE2d 31; Silverman v. Chicago Ramada Inn, Inc., 63 Ill App2d 96, 211 NE2d 596, and Meihsner v. Runyon, 23 Ill App2d 446, 163 NE2d 236.

We hold that the trust receipt in question, and the transactions alleged in connection therewith, constituted the sale of a security within the meaning of the Illinois Security Law.

The defendants contend that there are no factual allegations to support a cause of action. Holding as we do that the allegation of the execution and delivery of this trust receipt and the payment of money for it is the sale of a security, the only other facts necessary to be alleged are, the failure to register the security, an election to avoid the sale, and the tender of the security. Since it is alleged that tender was refused and a continuing offer to return is made, no further allegation in these respects would appear to be necessary.

It is contended that there is no sufficient allegation that the plaintiff lacked knowledge of the voidability of the sale until February 17, 1965, at which time he ascertained this fact from his attorney. The statute is as follows (Ill Rev Stats 1963, c 121½, § 137.13) :

“B. Notice of any election provided for in subsection A of this Section shall be given by the purchaser, within 6 months after the purchaser shall have knowledge that the sale of the securities to him is voidable, to each person from whom recovery will be sought, by registered letter addressed to the person to be notified at his last known address with proper postage affixed, or by personal service;

99

Knowledge that the sale is “voidable” is a mixed question of fact and law on which a layman is entitled to acquire his first knowledge from an attorney. We think the allegation is sufficient and that it is subject to answer.

Since the transaction was a sale of a security, refusal to return the money paid with interest would invoke § 137.13A regarding attorneys’ fees.

Defendants made the contention that the suit is filed in equity and therefore deprives defendants of a jury trial, and should have been dismissed for this reason. In reference to the judgment on the motion dismissing Counts I and II, we are not presented with any question as to whether defendants have been deprived of a right of trial by jury. We note that in their motion to dismiss, defendants alternatively demanded a trial by jury. Under Ill Rev Stats chapter 110, §§31 and 44, and Rule 132 of the Supreme Court Rules, improper designation of a cause is not jurisdictional.

We hold that Counts I and II of the second amended complaint state a cause of action.

The cause is reversed and remanded for proceedings in accordance with the views expressed in this opinion.

Reversed and remanded.

SMITH, P. J. and CRAVEN, J„ concur.


source: Caselaw Access Project

author: MR. JUSTICE SULLIVAN

license: Public Domain

text:
    People of the State of Illinois, Appellee, v. James Staes, Appellant
    Gen. No. 52,038.
    First District, Third Division.
    February 15, 1968.
    Ventrella & Witous, of Oak Lawn, for appellant.
    John J. Stamos, State’s Attorney of Cook County, of Chicago (Elmer C. Kissane and Oliver D. Ferguson, Assistant State’s Attorneys, of counsel), for appellee.
   MR. JUSTICE SULLIVAN

delivered the opinion of the court.

Defendant was indicted on October 11, 1965, for the offense of gambling, in that he knowingly owned and possessed books, instruments and apparatus by means of which bets and wagers are made, recorded and registered, in violation of chapter 38, section 28-1 (a-5) of the Illinois statutes (Ill Rev Stats 1965, c 38, §28-l(a-5)). He was thereafter found guilty and sentenced to two years probation and fined $500. $260 was confiscated from the defendant by order of court.

Before the trial, which was heard by the court without a jury, the defendant filed a motion to suppress evidence on the grounds that the search warrant was legally insufficient. After hearing the trial court denied the motion to suppress evidence and proceeded to trial.

The defendant on appeal contends that the search warrant was invalid and that under it the police were not justified in arresting and searching him.

Section 6 of Article II of the Illinois Constitution provides as follows:

“The right of the people to be secure in their persons, houses, papers and effects, against unreasonable searches and seizures, shall not be violated: and no warrant shall issue without probable, cause, supported by affidavit, particularly describing the place to be searched, and the persons or things to be seized.”

Chapter 38, section 108-7 (Ill Rev Stats 1965, c 38, § 108-7) reads as follows:

“Sec 108-7. Command of Search Warrant.) The warrant shall command the person directed to execute the same to search the place or person particularly described in the warrant and to seize the instruments, articles or things particularly described in the warrant.”

The material portion of the search warrant in this case read as follows:

“SEARCH WARRANT
“ON THIS DAY Donald T. Shaw, COMPLAINANT, HAS SUBSCRIBED and sworn to a complaint for search warrant before me. Upon examination of the complaint I find that it states facts sufficient to show probable cause and I therefore command that (the person of John Doe and) 1958 Pontiac parked to rear of 13023 S. Western, Blue Island, Illinois, be searched and the following instrument, articles and things which have been used in the commission of, or which constitute evidence of, the offense of Gambling be seized therefrom: All gaming instruments, implements and apparatus kept and provided for to be used in unlawful gambling.
“I further command that a return of anything so seized shall be made without unnecessary delay before me or before Judge.....or before any court of competent jurisdiction.
Anton A. Smigiel, Judge”

The complaint for search warrant described the person to be searched as follows:

“. . . the person observed carrying the betslips to the vehicle is described as a white male middle 40’s having a hair lip (sic) and wearing a gold signet ring bearing the name Jim, on ring finger of left hand.”

It was brought out at the hearing that on the afternoon of October 11, 1965, officers of the Cook County Sheriff’s Police conducted a gambling raid at the Forest Lounge, located at 13023 South Western Avenue, Blue Island, Illinois. Officer Donald Shaw, who had previously on the same date subscribed and sworn to a Complaint for Search Warrant, had in his possession, both the search warrant and the complaint upon which it was issued. At the direction of Officer Shaw, Officer Richard Lundgren apprehended the defendant, James Staes, as he was about to leave the tavern. Officer Shaw then served the warrant on the defendant. The search of defendant’s person produced approximately $1,740 in cash and horse bet slips. It is not contended by the State that defendant on that occasion had been observed committing any offense or attempting to commit an offense.

The issue to be determined is whether in the warrant the person to be searched has been particularly described as required by both section 6 of Article II of the Illinois Constitution and the Illinois statute heretofore mentioned.

The defendant has called our attention to the case of West v. Cabell, 153 US 78, wherein one Vandy M. West filed a civil suit against United States Marshal William L. Cabell. A deputy of Cabell signed a complaint against one James West for the crime of murder. Vandy M. West was arrested on the warrant naming James West as the defendant. The case was dismissed when it was ascertained that Vandy M. West was not the person involved. The court on page 86 of that case, in discussing an arrest warrant, said,the following:

“The principle of the common law, by which warrants of arrest, in cases criminal or civil, must specifically name or describe the person to be arrested, has been affirmed in the American Constitutions; and by the great weight of authority in this country a warrant that does not do so will not justify the officer making the arrest.”

That court cited Commonwealth v. Crotty, 10 Allen 403, in which Grotty and others were indicted and convicted for a riot in resisting the arrest of Grotty upon a warrant commanding the arrest of “John Doe or Richard Roe, whose other or true name is to your complainant unknown.” The Supreme Judicial Court of Massachusetts set aside the conviction upon the grounds that the warrant was insufficient, illegal, and void, because it did not contain Grotty’s name, nor any description or designation by which he could be known and identified as the person against whom it was issued, and was in effect a general warrant, upon which any other person might as well have been arrested.

In People v. Martens, 338 Ill 170, 171, 170 NE 275, the court said the following regarding the specificity required in a search warrant:

“It is not a debatable question in this State that a search warrant must contain a description of the premises to be searched so specific and accurate as to avoid any unreasonable or unauthorized invasion of the right of security, and that it must identify the premises to be searched, in such manner as to leave the officer in no doubt, and no discretion must be left him, as to the premises to be searched, and that any evidence obtained under an unreasonable and unlawful search and seizure is not competent.”

There can be little doubt that a search warrant for a person must describe the person to be searched as specifically and accurately as that required for the search of a place.

In People v. Smith, 20 Ill2d 345, 169 NE2d 777, the court said on page 349:

“A search warrant must contain a description of the premises to be searched so specifically and accurately as to avoid any unnecessary or unauthorized invasion of the right of security. It should identify the premises in such manner as to leave the officer no doubt and no discretion as to the premises to be searched. (People v. Martens, 338 Ill 170; People v. Bishop, 225 Ill App 610.)”

The foregoing quotation would apply with equal force to the person to be searched as it does to the premises to be searched.

The State takes the position that the complaint for the search warrant contained a sufficiently particular description of the defendant and that the complaint was incorporated by reference into the warrant. The State further contends that since the complaint was in the possession of the officer serving the warrant at the time of service, there was full compliance with both constitutional and statutory requirements. The State cites People v. Cain, 35 Ill2d 184, 220 NE2d 195, in support of its argument; however, we cannot see relevance to this case because in the Cain case the person to be searched was described with particularity in the warrant itself.

The State also contends that the description in the complaint is incorporated in the warrant and cites cases of other states which hold, in effect, that where the affidavit is attached to the warrant and the description in the affidavit is incorporated in the warrant by proper reference, the description is a part of the search warrant.

The State cites O’Brien v. State, 158 Tenn 400, 14 SW2d 51, a Supreme Court of Tennessee case, in support of the proposition that where the affidavit is attached to the warrant and the description of the affidavit is incorporated in the warrant by proper reference, the warrant is sufficient. The court in that case said:

“While the description in a detached affidavit cannot, without proper reference, be used to aid an insufficient description in the warrant (Cornelius, Search & Seizure, p 331), a different rule prevails where the affidavit is attached to the warrant and the description of the affidavit is incorporated in the warrant by proper reference.”

The facts of this case do not disclose that the complaint for search warrant was in any way attached to the warrant, nor that the complaint was incorporated in the warrant by proper reference.

The State also refers to the case of Minton v. State, 186 Tenn 541, 212 SW2d 373, another Tennessee case. On page 374 the court said:

“The affidavit is not a part of the warrant. Hampton v. State, 148 Tenn 155, 252 SW 1007. Constitutional rights are involved and the requirements of the statute should in every material detail be held mandatory. The warrant under consideration did not expressly adopt the description in the affidavit.”

In the case before us the warrant did not expressly adopt the description in the complaint for search warrant.

The State cites also the case of Hackerman v. State, 189 Tenn 130, 223 SW2d 194, wherein the search warrant set forth “that Marcus Hackerman unlawfully has in his possession certain slot machine (s) or gaming device (s) employed and used for gaming, contrary to the laws of Tennessee, concealed in the premises described in said affidavit and also hereafter described in said warrant, which said affidavit is based upon information which Affiant has received from a reputable and reliable person whose name and identity has been disclosed to the undersigned Judge, and which information is set forth in said affidavit.” The Tennessee court in that case considered the words italicized in the warrant to be a sufficient incorporation by reference of the description. In the instant case the warrant names the person to be searched as John Doe. John Doe was not the name of the defendant. The warrant does not describe the person to be searched with particularity or otherwise. This is the type of warrant, the use of which is enjoined by our constitution and statute for the protection of the people of Illinois. The officer serving the warrant can be given no latitude under the law. If such a warrant were held to be valid the officer would be justified in searching anyone. Even if the rule in Illinois could be stretched as far as the courts of Tennessee, namely, that a description set forth in the complaint for search warrant could be incorporated into the search warrant by proper reference, it could give no comfort to the State because the warrant in this case did not incorporate the description of the defendant by express reference to the complaint or otherwise. Furthermore, adverting to People v. Smith, supra, the court stated in that case that the premises should be identified in such a manner as to leave the officer no doubt or discretion as to the premises to be searched. The search warrant in this case amounted to a general warrant giving the officer latitude or a discretion as to the person to be searched by merely containing the description of the person as John Doe.

The search warrant in this case violated both the Constitution of the State of Illinois and the Illinois statute heretofore cited.

This case is reversed and remanded to the trial court with instructions to sustain the motion to suppress the evidence.

Reversed, and remanded with directions.

DEMPSEY, P. J. and SCHWARTZ, J., concur.


author: MR. PRESIDING JUSTICE DEMPSEY

text:
    Industrial Commodity Corporation, a Corporation, Plaintiff-Appellee, v. E. J. Brach & Sons, a Corporation, Defendant-Appellant.
    Gen. No. 52,228.
    First District, Third Division.
    February 15, 1968.
    Rehearing denied March 15, 1968.

      Hinshaw, Culbertson, Moelmann & Hoban, of Chicago (Jerome A. Frazel, Jr. and Roy C. Palmer, of counsel), for appellant.
    Teller, Levit & Silvertrust, of Chicago (Leo H. Feldman, of counsel), for appellee.
   MR. PRESIDING JUSTICE DEMPSEY

delivered the opinion of the court.

This action was brought for damages resulting from an alleged breach of contract. The trial court entered judgment for the plaintiff on the pleadings and the defendant appealed.

On August 18, 1965, the plaintiff, Industrial Commodity Corporation, and the defendant, E. J. Brach & Sons, entered into an agreement prepared by the plaintiff which provided that it would render forecasting services concerning the price of cocoa, and the defendant would pay $800 per month for these services. The term of the agreement was as follows:

“The term of this arrangement is for at least six months, beginning August 18, 1965. This contract will continue for another six months, unless and until terminated by not less than sixty (60) days in advance of the renewal date, written notice to the effect given by either party to the other. Thereafter, in the second and subsequent years, this contract will continue from year to year unless and until terminated by not less than ninety (90) days in advance of the anniversary date, August 18, written notice to the effect given by either party to the other.”

Neither party cancelled the contract sixty days or more prior to the expiration of the first six months, and the contract was therefore renewed on February 18, 1966, for a second term of six months. Thereafter, on June 2, 1966, during the second six-month term, the defendant gave the plaintiff the following notice of termination:

“Under the terms of our Purchase Order No. 383-65, dated August 18, 1965, we reserve the right to cancel your service on 60-day written notice. Please accept this letter as our prior written notice of cancellation. The effective date of above mentioned cancellation shall be August 17, 1966.”

On the basis of this notice, the defendant refused to accept the plaintiff’s services after August 18, 1966. In December 1966, the plaintiff filed the present action, charged that the defendant breached the contract and claimed damages of $800 per month for the period of August 18, 1966, to August 18, 1967. The defendant answered, denied that it broke the agreement and asserted that the contract was cancelled by proper notice. The plaintiff filed a reply and a motion for judgment on the pleadings. In its reply the plaintiff maintained that the defendant’s notice was not in compliance with the terms of the contract. Its motion for judgment was granted and a judgment for $9,600 was entered against the defendant.

The dispute concerns the interpretation of the cancellation provision of the contract. The plaintiff contends that in order to cancel the contract as of August 18, 1966, the first anniversary of the contract, the defendant had to give ninety days’ notice. In contrast, the defendant contends that the agreement made no provision regarding cancellation at the end of the second six-month term, which was August 18, 1966, and that the giving of sixty days’ notice in advance of that date was adequate and effectively cancelled the agreement.

In construing a contract, the determining factor, if not violative of some positive rule of law or of public policy, is the intention of the parties. Olson v. Rossetter, 399 Ill 232, 77 NE2d 652 (1948); Illinois State Toll Highway Commission v. M. J. Boyle & Co., 38 Ill App2d 38, 186 NE2d 390 (1962). The intention of the parties to a contract must be determined from the language employed in the contract and where there is no ambiguity, from such language alone. Harrison v. Harrison, 326 Ill App 678, 63 NE2d 283 (1942); Hlinois State Toll Highway Commission v. M. J. Boyle & Co., supra.

We find no ambiguity in the contract. The intention of the parties concerning the termination of the agreement is expressed in a simple paragraph consisting of three sentences. The first sentence provides that the agreement will continue for no less than six months. The second sentence provides that the agreement will continue for an additional six-month period, unless a notice to terminate is sent sixty days prior to the expiration of the first six-month period. The third sentence provides that once into the second year the agreement will continue from year to year until terminated by at least a ninety-day notice in advance of the anniversary date, August 18.

The third sentence which is the crux of the controversy bears repetition:

“Thereafter, in the second and subsequent years, the contract will continue from year to year unless and until terminated by not less than ninety (90) days in advance of the anniversary date, August 18, written notice to the effect given by either party to the other.”

The plaintiff construes the ninety-day notice requirement as applying to August 18, 1966. It arrives at this construction by treating as surplusage the phrase “in the second and subsequent years.” If this phrase were surplusage the ninety-day requirement would apply to 1966 as well as to 1967 and subsequent years. But, if possible, every provision and word in a contract must be given meaning and effect because it is assumed that everything in a contract is inserted deliberately and for a purpose. DeTienne v. S. N. Nielsen Co., 45 Ill App2d 231, 195 NE2d 240 (1963); O’Fallon Development Co. v. Rheinbold, 69 Ill App2d 169, 216 NE2d 9 (1966). The words “in the second and subsequent years” cannot be ignored; they plainly mean that the ninety-day provision takes effect in the second year of the contract, and the second year is the year ending in August 1967. The contract does not say that ninety days’ notice shall be given at the end of the first year or at the start of the second year, but rather that this shall be done after the contract is in the second year. The anniversary date, August 18, does not mean, therefore, the first anniversary of the contract but those anniversaries which occur after the contract has entered into its second year. As we have said, we perceive no ambiguity in this phraseology, but if it were otherwise the same result would be reached for the rule is that a contract must be construed most strongly against its author. Dixon v. Montgomery Ward & Co., Inc., 351 Ill App 75, 114 NE2d 44 (1953).

Since the contract contains no provision for cancellation at the end of the first year, the defendant was entitled to cancel it as of the first anniversary date, August 18,1966, by giving reasonable notice prior to that date. The sixty-day notice was a reasonable one and effectively cancelled the agreement, and the defendant thereafter had the right to refuse the plaintiff’s services.

The judgment in favor of the plaintiff will be reversed and the cause remanded with directions to enter judgment for the defendant.

Reversed and remanded with directions.

SCHWARTZ and SULLIVAN, JJ., concur.


author: MR. JUSTICE SCHWARTZ

text:
    People of the State of Illinois, Plaintiff-Appellee, v. Richard L. Brouilette, Defendant-Appellant.
    Gen. No. 52,304.
    First District, Third Division.
    February 15, 1968.

      Allan A. Ackerman, of Chicago, for appellant.
    John J. Stamos, State’s Attorney of Cook County, of Chicago (Elmer C. Kissane and Oliver D. Ferguson, Assistant State’s Attorneys, of counsel), for appellee.
   MR. JUSTICE SCHWARTZ

delivered the opinion of the court.

In a non jury trial the defendant was found guilty of conspiracy to commit theft and sentenced to serve five years on probation, the first six months thereof to be served in the County Jail. He appealed to the Supreme Court of Illinois and the cause was subsequently transferred to this court. The order of transfer noted defendant’s contentions as follows: that the indictment was insufficient to charge the crime of conspiracy, largely on the ground that the overt acts charged in the indictment constituted crimes in themselves; that defendant cannot be convicted of conspiracy to commit a crime and of the commission of the crime itself; and that the evidence was insufficient to establish his guilt. The Supreme Court concluded that the case did not present a substantial constitutional question. The facts follow.

On February 26, 1965, the Grand Jury returned a nine-count indictment against Brouilette and one Edward Kuhn. Count I charged that Brouilette and Kuhn committed the offense of conspiracy in that each agreed with the other to commit offenses of theft and that in furtherance of such conspiracy they performed eight specific overt acts. The recital in Count I with respect to each one of the eight overt acts sets forth that the defendants obtained and exerted unauthorized control over automobiles belonging to other persons. The remaining eight counts of the indictment charged them with the theft of each of the eight automobiles referred to in Count I.

At the trial it was stipulated that the witnesses for the State would testify that Brouilette and Kuhn went by plane to Selma, Alabama, purchased eleven sets of Alabama license plates and registration cards and returned to Chicago; that in Chicago they obtained possession of eight automobiles belonging to eight other persons; that they sold three of them; that they unsuccessfully attempted to sell two others; that they returned one to its owner, gave one away and had possession of another when arrested. Kuhn pleaded guilty to the conspiracy charge. The court then heard the case against Brouilette. On the basis of the stipulated evidence and the testimony of the law enforcement officers, the court found the defendant guilty of conspiracy as charged in Count I of the indictment. The State then moved for a nolle prosequi as to both defendants on the remaining eight counts. The court allowed the motion and proceeded to consider and pronounce sentence under Count I. That count does not allege that the value of the stolen property exceeded $150 and the court sentenced the defendant to five years probation, the first six months thereof to be served in the County Jail.

We proceed to consider the contention that the indictment did not allege a crime in that it failed to state the value of the property. Defendant contends that it was impossible for him to tell whether he was being charged with conspiracy for the theft of property valued at over $150, for which he could be sentenced to serve a term not to exceed five years in the penitentiary, Ill Rev Stats, c 38, § 8-2 (1965), or with conspiracy for the theft of property valued at less than $150, for which he could be fined and placed in the County Jail for not more than one year.

An indictment is deemed sufficient when it states the offense in the terms and language of the statute creating the offense and when the offense as charged is sufficiently definite to enable the defendant to prepare his defenses and to plead any judgment in bar of a subsequent prosecution for the same offense. People v. Beeftink, 21 Ill2d 282, 171 NE2d 632; People v. Peters, 10 Ill2d 577, 141 NE2d 9; People v. Braun, 375 Ill 284, 31 NE2d 287. In an indictment for conspiracy to commit a felony, it is not required that the felony be described with the same accuracy as would be required in an indictment for the felony itself. People v. Beeftink, supra, at 290; People v. Warfield, 261 Ill 293, 103 NE 979. In the instant case the indictment charges in the language of the statute that the defendant conspired to commit theft and did commit various overt acts in furtherance of the conspiracy. Count I of the indictment does not allege the dollar value of the property which Brouilette and Kuhn conspired to steal (the value was alleged in the eight counts of theft which were nolle prossed). Nonetheless, the allegation of value is not now essential to the sufficiency of the indictment. The Criminal Code of 1961 abolished the distinction between grand theft and petty larceny, and both are now included within the one offense of “theft.” Ill Rev Stats, c 38, § 16-1 (1965).

All that is now required to support the charge of theft is that the indictment show that a thing of value was stolen, Ill Rev Stats, c 38, § 15-1 (1965); People v. Price, 81 Ill App2d Ill, 225 NE2d 453; People v. Kelly, 66 Ill App2d 204, 214 NE2d 290. In Price the indictment charged that the value exceeded $100, but no evidence was offered to prove value. We held nevertheless that the crime had been established and that value was only relevant to the determination of punishment. In Kelly the court took judicial notice of the fact that a 1959 Chevrolet in drivable condition was a thing of value, that the taking of it constituted theft regardless of any allegation of value and that the particular value of the property relates only to the nature and extent of the penalty which may be imposed. It is clear beyond any doubt that in this case things of value were involved.

We proceed to consider the contention that the alleged overt acts done in furtherance of the conspiracy are crimes in themselves and cannot constitute the necessary acts to support a charge of conspiracy. In other words, it is contended that a defendant cannot be convicted of conspiracy to commit a crime when the purpose of the conspiracy is accomplished and the crime itself is committed. There is no basis for such contention. It has long been the law in Illinois that conspiracy is a separate offense and that it does not merge with the actual crime if that crime is committed. People v. Robertson, 284 Ill 620, 120 NE 539; People v. Moshiek, 346 Ill 154, 178 NE 337. The enactment of the Criminal Code of 1961 did not change this, but only provided that no person could be convicted of both the inchoate and the principal offense. Ill Rev Stats, c 38, § 8-5 (1965). The State did not and could not seek a conviction for the offense of theft after it had obtained a conviction on the conspiracy count. The contention as presented by the defendant is without merit.

Defendant also contends that the penalty imposed was in excess of the statutory maximum. The law provides that a person who has been found guilty of any offense, with certain exceptions not applicable here, may be admitted to probation and that the term of probation may be for any period not less than six months and not to exceed five years. Ill Rev Stats, c 38, § 117-1 (a), (b) (1965). The sentence imposed by the court fell within these limits. We note further that the testimony of Detective Edward Savage as shown by the record but not abstracted by the defendant or the State fixes the value of the automobiles in question at $19,500. The hearing in aggravation and mitigation revealed that the defendant was serving probation imposed by a federal court for a similar offense.

The sentence was most certainly on the side of leniency and there was ample evidence to support it.

Judgment affirmed.

DEMPSEY, P. J. and SULLIVAN, J., concur.


author: STOUDER, J.

text:
    The Department of Public Works and Buildings of the State of Illinois for and in Behalf of the People of the State of Illinois, Plaintiff-Appellant, v. Donald E. Oberlaender, Defendant-Appellee.
    Gen. No. 66-115.
    Third District.
    February 16, 1968.

      William G. Clark, Attorney General, of Springfield, Charles Blachinsky, of Kewanee, James J. Coryn, of Rock Island, and Richard Quinn, of Peoria, for appellant.
    Herbert M. Spector, of Rock Island, and James A. Dooley, of Chicago, for appellee.
   STOUDER, J.

The Department of Public Works and Buildings of the State of Illinois commenced this eminent domain proceeding on the 3rd day of January, 1964, in the Circuit Court of Henry County for the acquisition of land for the improvement of Interstate Route 80. The land sought to be acquired is a forty-four (44) acre tract being a part of a two hundred sixty-nine (269) acre tract owned by respondent, Donald Oberlaender. A cross petition claiming damages to property not taken was filed by respondent but withdrawn shortly before trial. Judgment of $600,000 was entered on the verdict and it is from this judgment that the State appeals.

The trial court denied the State’s motion for a new trial. In seeking to reverse such order the State contends the judgment is based on erroneous and prejudicial rulings of the trial court made during the course of the trial.

The entire tract owned by respondent and his father before him had been used as a part of a sand quarry for more than fifty years. The sand deposits are in banks or dunes requiring the removal of little overburden to secure access thereto. The thickness of the deposits varies from place to place and there is considerable conflict in the evidence concerning the quantities of the sand deposits underlying the entire tract and the part taken, the estimates of the deposits of sand underlying the land taken ranging from 1,300,000 tons to more than 3,600,000 tons. In respondent’s operation the sand may be loaded directly onto trucks and transported to the customer or it may be hauled to a railroad spur about three blocks from the property where it may be dried if required by the customer and then transported either by rail or truck.

Evidence was introduced concerning the nature and character of the sand on respondent’s property, its actual and potential uses and the ways in which the sand deposits on respondent’s property differed from those on similar property.

Evidence of a similar sale of 50 acres of land containing sand deposits near Savanna, Illinois, was introduced. Such land at the time of the sale was being used for sand quarrying and the quantity of the deposits was estimated at 1,000,000 to 1,500,000 tons.

The State’s valuation witness valued the tract taken at $56,000. The opinions of respondent’s valuation witnesses ranged from $500,000 to $625,000.

The State’s assignments of error, which we shall first consider, are those relating to rulings of the trial court concerning the State’s valuation witnesses. The first of these was William Franzan, a resident of Rockford, Illinois. He described his qualifications at length including education, licensing as an Illinois real-estate broker, membership in professional appraisal associations, and teaching in the field of appraisals at several universities. His principal occupation was that of professional appraiser and he described his experience in this field which included the appraisal of real estate of various kinds in several states and northern Illinois. Such experience included the appraisal of mineral lands in northern Illinois which were made for both private owners and governmental agencies. He described his knowledge of real estate values in the Henry County area indicating his knowledge had come from appraisals of property in the county and from information supplied by brokers, buyers and sellers. He described his inspection of the premises of respondent and the factors which he considered in arriving at his opinion of value. When asked whether he had an opinion concerning the market value of respondent’s entire tract, an objection that such question was immaterial was sustained. The witness was then asked whether he had an opinion concerning the value of the forty-four (44) acre tract taken considered as a part of the whole. An objection was interposed to this question because of insufficient foundation. Before ruling on the objection the trial judge questioned the witness concerning appraisals the witness had made in northern Illinois. Thereafter the court sustained the objection to the question.

The State argues that Franzan was a competent witness to express an opinion of value and that it was error for the trial court to exclude such opinion. The objection of respondent’s counsel was not to the form or content of the question. The nonspecific objection of insufficient foundation relates to the competence of the witness to answer the question. Neither the objection of respondent’s counsel nor the questions propounded by the trial judge indicate precisely the reasons for or the basis of the court’s ruling sustaining the objection. It does appear the trial judge was interested in ascertaining whether the appraisals of northern Illinois real estate made by the witness were based on his experience as broker, buyer or seller. Since the answers to the questions propounded by the trial judge indicated that the witness did not participate in any of the northern Illinois real estate appraisals as broker, buyer or seller we believe it can fairly be concluded that the absence of such participation was the basis for the trial court’s ruling. Indeed the parties do not seriously question this conclusion.

The general rule is that a witness may express his opinion as to value of real estate where it appears his opinion of value is based on some peculiar competence not possessed by the general public. The ownership or the buying and selling of generally similar real estate in the area, is considered sufficient to entitle a witness to express an opinion of value. However these criteria are not the exclusive criteria for establishing the peculiar competence of a witness required by the rule. In fact respondent does not argue that ownership of or participation in sales in the area are the only criteria for determining the competence of a valuation witness, since the same objection would be applicable to at least three of respondent’s own valuation witnesses. The opinion of a professional appraiser is competent when based on his own inspection of the premises and his knowledge of the general value of real estate in the area. Department of Public Works and Buildings v. Divit, 25 Ill2d 93, 182 NE2d 749. It is the methods and principles of appraising which establish the peculiar competence of a professional appraiser and not the detailed knowledge of any particular use of the land. Respondent relies heavily on City of Chicago v. George F. Harding Collection, 70 Ill App2d 254, 217 NE2d 381 (Petition for Leave to Appeal denied, 35 Ill2d 87), in support of his contention that the general competence of the witness Franzan as a professional appraiser did not extend to a valuation of the property here involved. We approve of the reasoning in the aforementioned case but do not believe it is applicable to the instant case. In the George F. Harding Collection case the property sought to be acquired was a museum. By stipulation it was agreed that the museum property constituted a special use and that the value of the property was to be determined by its replacement cost. The witnesses testifying in behalf of the condemning authority, a construction engineer, an architect and three real-estate brokers, none of whom were professional appraisers, indicated that their opinions of replacement costs were based on the belief that a smaller building of different construction would be adequate for the museum’s needs. The court held that although such witnesses were competent to testify to the replacement costs of the building such competence did not extend to a determination of the needs of the museum.

In the instant case it is not contended that respondent’s property is a special use property nor could such contention be supported. The degree of familiarity with the uses to which land is adaptable is a matter of credibility and not of competence. We believe the trial court erred in excluding the opinion of witness Franzan.

The other valuation witness for the State was Truman Esmond. On direct examination he expressed the opinion that the value of the land taken was $56,000. On cross-examination the witness was asked whether he had told the respondent that he had appraised the tract taken at $80,000. After receiving a negative reply respondent’s counsel requested that the State be directed to produce all appraisal documents of the witness in the State’s possession. Over its objection, the State was ordered to produce such documents. Respondent’s counsel then proceeded to cross-examine the witness on the basis of such appraisal documents and it appears that some figure of $80,000 did appear in such documents. From the cross-examination relating to the appraisal reports, it does not appear the witness had appraised the tract taken for $80,000. Although a $75,000 figure is mentioned in such reports such appraisal did not relate to the value of the tract taken but included the value of buildings or some portion thereof not located on the tract taken, but which, under a possible theory of damage, might have been considered a part of the whole.

In arguing that the trial court erred in ordering the production of the appraisal reports, the State relies on City of Chicago v. Harrison-Halsted Bldg. Corp., 11 Ill2d 431, 143 NE2d 40, and contends that the principle of the aforementioned case is retained in Supreme Court Rule 201. Respondent argues that production of the documents is warranted under the authority of Monier v. Chamberlain, 35 Ill2d 351, 221 NE2d 410, decided shortly before the adoption of Rule 201. Although dealing with pretrial discovery the Monier case adopts the view that disclosure rather than nondisclosure better suits the methods and goals of a trial. In broadening the area of disclosure to include areas which theretofore might not have been deemed included, the purpose is achieved in part by reducing matters excepted from disclosure described as matters privileged against disclosure at trial. As described in the Monier case we do not believe that the reports of appraisers can be deemed the work product of an attorney. On the contrary such reports appear to us to be in the same category with the reports or statements of any other person not a party to the action possessing facts or information relevant to the issues in controversy. Accordingly we believe the trial court committed no error in ordering the production of the documents.

The assignments of error next urged by the State relate to rulings of the trial court on evidence presented by Respondent. The first of such errors relates to the materiality of the value of the entire tract owned by Respondent. This question arises in two ways. After Respondent’s valuation witnesses testified concerning their qualifications and knowledge of the land taken they were each asked whether they had an opinion of the value of the tract taken considered as a part of the whole tract. Objection was made to the question by the State on the ground the witness was incompetent or unqualified to express an opinion on the value of the part taken considered as a part of the whole in the absence of any prior testimony that the witness had knowledge of the value of the whole tract. The objection was overruled and the witness was permitted to express his opinion on the value of the tract taken considered as a part of the whole tract. On cross-examination, Respondent’s valuation witnesses were asked questions relating to their knowledge of the value of the entire tract of Respondent, objections to such questions being sustained by the trial court.

The question first arises as to the competence of the witness to express an opinion as to value under the circumstances, and secondly, whether, if the expression of value is competent, cross-examination relating to the witness’ knowledge of the value of the entire tract is properly excluded.

The “just compensation” to which the owner of property is entitled by the Constitution is that which places the owner of property in as good a position financially after the property is taken and improvement made as he was prior thereto. Where the property taken is an entire tract the fair cash market value of the property is the measure of “just compensation.” Where the property taken is less than an entire tract, other considerations arise. The highest and best use of the part taken may be as a separate and distinct piece of property unrelated to the entire property endowing such part with a fair cash market value. On the other hand the highest and best use of the part taken may be so related to the entire property that the value of the part taken for its highest and best use is dependent upon the value of the entire tract. Such relation or dependence may present an issue of fact and each party is entitled to present his theory of independent or dependent valuation. Where the value of the part taken is dependent upon or related to the value of the entire tract, the fair cash market value thereof is the portion of the value of the entire tract which our hypothetical willing buyer and seller would deem applicable to the part taken. Implicit in such apportionment are two variables. The first is the value of the entire tract and the second is the basis for determining the relation of the part to the whole. It is the nature of the relationship of the part to the whole which determines the value of the part since all parts are not necessarily equally related. Department of Public Works and Buildings v. Foreman State Trust & Savings Bank, 363 Ill 13, 1 NE2d 75. The valuation of a part of a tract, considered as a part of the entire tract, assumes that the opinion is based on knowledge of the value of the entire tract and in our opinion such knowledge is required. Although there do not appear to be any Illinois cases dealing directly with this issue we believe that the basic principle is recognized in Forest Preserve Dist. of Cook County v. Draper, 387 Ill 149, 56 NE2d 410. In the Draper case the court held it was error to exclude cross-examination concerning the value of the entire tract where the valuation witness had expressed his opinion of value of the part taken considered as a part of the entire tract. The court concluded that such cross-examination was proper to test the opinion of the witness, no question being raised concerning the competence of a witness not having such knowledge. From the principle underlying such theory of valuation we believe that not only is cross-examination relative to the value of the entire tract proper but also that knowledge of such value is an essential requirement. Moreover it should be observed that absent evidence of the value of the entire tract, no opportunity is afforded the jury or the reviewing court to consider whether the valuation of the part taken does not in effect represent damage to property not taken, even though, as in the instant case, no claim was made therefor.

The State next argues the valuation opinions of respondent’s witnesses took into account improper elements of value and hence such opinions are incompetent. There is no disagreement with the basic principle of valuation, namely that the fair cash market value of the property is its value for its highest and best use and that such use includes not only its actual use but also those uses for which the property is available or reasonably adaptable. Illinois Power & Light Co. v. Parks, 322 Ill 313, 153 NE 483. Those uses either actual or potential which reasonably affect the value of the property are appropriately considered. Where there are mineral deposits in the land, such as sand, the existence of such minerals is appropriately considered insofar as the value of the land is influenced thereby. 27 Am Jur2d, Eminent Domain, § 290. However it is not the value of the minerals which is the measure of compensation but rather the value of the land influenced by the existence of such mineral deposits. It is the future or potential exploitation of the mineral deposits which affects the value of the land since our hypothetical buyer and seller are not buying or selling specific or estimated quantities of a mineral. The present use and characteristics of the land are indeed strong factors in determining future prospects. Accordingly the quality and quantity of the sand, the actual use of the sand and the degree of such use, the ease or difficulty of extraction, transportation, and market potential all relate to the present potential for future exploitation of the sand deposits. Royalty payments which might be reasonably expected when considered with other factors affecting future exploitation are related to present value. The future exploitation of the sand as affecting present market value cannot be ascertained merely by multiplying quantities by some unit of price since the degree of exploitation depends on many other variables. The capitalization of such future expectations is ordinarily the basis upon which such future expectations affect the present value of the property.

The objections of the State to the testimony of respondent’s witnesses are based on their contention that such witnesses valued deposits of sand as a part of a business. In addition such witnesses relied on actual uses subsequent to the date of the filing of the petition and hence their opinions do not represent the value on the date of the petition.

Donald Oberlaender, Respondent, testified concerning his total production of sand for the five years preceding January 3, 1964. His production in 1959 was 34,333 tons, 1960, 36,708 tons, 1961, 29,327 tons, 1962, 23,982 tons and 1963,27,054 tons. Such production amounts included sand for all uses, foundry sand, bituminous sand and fill sand and without specification included sand from the tract taken, the part not taken, and another small pit owned by respondent located three or four miles away. Respondent, over objection of the State, also testified concerning his total production of sand for the years 1964, 1965 and the first 4% months of 1966. Such production was not in terms of specific tonnage but in percentage increases of production both with respect to total production and sales to particular customers. Respondent testified to increases in production of 12 to 28 percent, depending upon the periods compared, after January 3, 1964. Several of respondent’s customers testified concerning the uses and quality of the sand which they purchased, the price paid for the sand and the amounts purchased both prior and subsequent to January 3,1964.

Both parties agree the value of the property is to be determined as of January 3, 1964. Actual or specific occurrences, changes or conditions taking place or existing after the valuation date whether tending to indicate an increase or decrease in the value of the property could not have either been known or considered by our hypothetical willing seller or buyer on the valuation date and therefore such subsequent considerations are not properly considered in determining opinions of value. In our opinion neither increases nor decreases in the production of sand subsequent to January 3,1964, are proper elements of valuation for two reasons. First, as indicated before, such actual production could not have been within the contemplation of the parties valuing the property on the date of the petition and second, such production being from property not taken, it is no more relevant than would be the production of sand from any other pit supplying the Rock Island area. Accordingly we believe testimony of actual increases in production subsequent to January 3, 1964, whether offered by respondent’s customers or relied upon by valuation witnesses was improper. Nor do we believe that the price paid by respondent’s customers or received by respondent is a relevant consideration, such price involving as it does many factors such as the cost of extraction, drying, loading and transportation not related to the value of the land but rather related to the gross receipts or profits of the business. City of Chicago v. Central Nat. Bank in Chicago, 5 Ill2d 164, 125 NE2d 94.

Where, as in the instant case, compensation is to be determined with respect to a value of property as it existed some 2% years ago we recognize the benefit of hindsight is not likely to be completely ignored by valuation witnesses. However the specific details affecting such hindsight can and should not be specifically considered.

With respect to the State’s contention that the valuation testimony of W. J. Reese should have been stricken by the trial court we believe that such contention is well founded. Not only did Reese base his opinion of value on an actual increase in production of sand of 250 percent annually but it is difficult to conclude from a consideration of his entire testimony other than that he was valuing the sand as such and not the land as influenced by the existence of the sand. His testimony is somewhat contradictory, at one point in his cross-examination he indicated his opinion was based on the removal of all the sand at the time the petition was filed, at another point that the deposits of sand on the land taken would be exhausted in about twenty years, and at still another point that the diligence or lack thereof was related to the potential or prospective use of the sand.

The testimony of another valuation witness for respondent, William Chadwick, was also improper in many of the same respects. Not only does it appear from his cross-examination that he placed a dollar value on the reserves of sand to which he added the value of the land after the sand was removed, but he also characterized such sand as reserves ahead of the plant and in effect considered such reserves as a part of respondent’s business.

We believe the same objections are applicable to the testimony of Fred Davis, a valuation witness for respondent. His opinion of value is based on the sale of a sand business and the sale of the sand by a good salesman.

The State next argues that the court erred in admitting as evidence, a motion picture film and certain photographs. One of the witnesses presented by respondent was the person in charge of the construction of the improvement on Interstate 80. The primary purpose for calling this witness was to identify a motion picture of about five minutes’ duration which depicted activities on the scene during the process of construction. This motion picture was exhibited to the jury over the objection of the State, which ruling is assigned as error. Motion pictures are considered admissible on the same basis as photographs, the principle question being one of relevancy. McGoorty v. Benhart, 305 Ill App 458, 27 NE2d 289, 18 ILP, Evidence, § 231. Since one of the issues was the nature, character and condition of the sand deposits we believe that such motion picture may have had some probative value on this issue. As testified to by the witness and as depicted in the motion picture, large quantities of sand were moved as a part of the construction project. The scenes depicted in the motion picture are the same as the jury would have seen had they viewed the premises at some earlier date or dates. Accordingly we believe the trial court committed no error in permitting the exhibition of the motion picture.

Also assigned as error is the admission of photographs depicting respondent’s loading and drying facilities located near a spur track some three or four blocks from respondent’s property. We believe the trial court did not abuse its discretion in the admission of such photographs since the facilities depicted might be considered relevant in determining the highest use of the land taken and its present availability or capacity for such use. Department of Public Works and Buildings v. Chicago Title & Trust Co., 408 Ill 41, 95 NE2d 903.

This brings us to the last question namely whether the judgment should be permitted to stand despite erroneous rulings of the trial court. In Forest Preserve Dist. of Cook County v. Draper, 387 Ill 149, 56 NE2d 410, the court stated, “The rule consistently applied in this State is that where the testimony as to values is in conflict, the jury has viewed the premises, and the verdict is within the range of the testimony, the award will not be disturbed on review unless there is something in the record showing that the verdict was a clear and palpable mistake or the result of passion or prejudice, or that there was some erroneous ruling that might have misled the jury. (City of Mt. Olive v. Braje, 366 Ill 132; Dept. of Public Works and Buildings v. Foreman State Trust and Savings Bank, 363 Ill 13; Forest Preserve District v. Collins, 348 Ill 477; Forest Preserve District v. Dearlove, 337 Ill 555.) Another rule of equal importance is that in the trial of a condemnation of private property for public use, the court must give accurate rulings and correct instructions to the jury. (City of Chicago v. Lederer, 247 Ill 584.)” See also Waukegan Park Dist. v. First Nat. Bank, 22 Ill2d 238, 174 NE2d 824. We do not believe that cases such as Chicago Land Clearance Commission v. Darrow, 12 Ill2d 365, 146 NE2d 1, Department of Public Works and Buildings v. Bloomer, 28 Ill2d 267, 191 NE2d 245, or Trustees of Schools of Tp. No. 36 v. LaSalle Nat. Bank, 21 Ill2d 552, 173 NE2d 464, relied upon by respondent, support his contention that prejudicial error in the rulings of the trial court furnished no basis for the award of a new trial. Although the latter cases and their statement of the rule do not refer to prejudicial error, a review of such cases indicates that the court determined that no prejudicial error existed and the court was considering the application of the rule to the contention that the award was against the manifest weight of the evidence.

Both the respondent and the State are entitled to have just compensation determined fairly. Where there are errors which may have materially affected or influenced the award it cannot be said that the award is fairly determined. While we are not prepared to say which, if any, of the errors standing alone would be sufficient to entitle the State to a new trial we believe that the cumulative effect of such errors requires a new trial.

For the foregoing reasons the judgment of the Circuit Court of Rock Island County is reversed and remanded with directions that the State of Illinois be granted a new trial.

Judgment reversed and remanded with directions.

ALLOY, P. J., concurs.

HOFFMAN, J., dissents without opinion.


author: MR. PRESIDING JUSTICE BURMAN

text:
    National Brick Company, a Corporation, La Salle National Bank and Trust Company, Under Trust Agreement Dated July 1, 1955, Trust No. 18367, and La Salle National Bank and Trust Company, Under Trust Agreement Dated October 31, 1962, Trust No. 17525, Lawrence D. Levinson, et al., Plaintiffs-Appellants, v. City of Chicago, a Municipal Corporation, Defendant-Appellee.
    Gen. No. 50,802.
    First District, First Division.
    February 19, 1968.

      Maurice J. Nathanson, of Chicago (Marvin J. Glink, of counsel), for appellants.
    Raymond F. Simon, Corporation Counsel, of Chicago (Sydney R. Drebin, Assistant Corporation Counsel, and Harry H. Pollack, Special Assistant Corporation Counsel, of counsel), for appellee.
   MR. PRESIDING JUSTICE BURMAN

delivered the opinion of the court.

Plaintiffs, National Brick Company, La Salle National Bank and Trust Company, Lawrence D. Levinson, Esther E. Levinson, Milton Levinson and Sydell Levinson, brought an action for declaratory judgment against defendant, City of Chicago. Plaintiffs sought to have certain zoning regulations of the defendant declared void in application to property owned by them, and to have declared their legal right to erect multiple-dwelling apartment buildings on the subject property. The cause was referred to a Master in Chancery to take evidence and report the same to the court, together with conclusions of fact and of law.

The Master found, inter alia, that the zoning ordinance then in effect was an arbitrary exercise of the police power in respect to the plaintiffs’ property, and that a judgment entered some years earlier was res judicata as to the respective rights of the parties. The defendant filed objections to the Master’s Report which were substantially overruled by the Master. On May 10, 1965, the court entered an order sustaining the exceptions to the Master’s Report and dismissing the complaint and amendment to the complaint. The court entered judgment against the plaintiffs and in favor of the defendant, “. . . and that the defendant go hence without day, with its costs so wrongfully sustained.” The plaintiffs have appealed from this judgment.

The subject property consists of two parcels. Parcel 1 has a frontage on Touhy Avenue of 167 feet, and runs north for 1291 feet to a point which is approximately the south line of Jarvis Avenue, if extended westward. Parcel 2 is immediately adjacent to and north of Parcel 1. Its western boundary is an extension of the western boundary of Parcel 1. Its eastern line abuts Kedzie Avenue. Parcel 2 is 66 feet wide and runs north to Howard Avenue, a distance of 1324 feet.

Plaintiffs filed the instant suit on February 15, 1960. In 1954 National Brick Company, one of the plaintiffs in the instant action, and Franklin Weber Motors Co., Inc., filed suit to challenge the validity of the then existing zoning classification of the subject property. At the time of the 1954 action the subject property had double railroad tracks on one of its parcels and a single railroad track on another and the premises were put to industrial uses. The court in that action found that: “No part or portion of plaintiffs’ tract of land ... is suitable for family residences since to include them in said area would mean to mix them among the industries now located in the area.” The court in the 1954 action further found that: “The zoning ordinance of the City of Chicago, as it purports to restrict the plaintiffs to use of said premises for family residences bears no reasonable or rational relation to the public health, safety, comfort, morals and public welfare, and as applied to plaintiffs’ property, is a capricious and void exercise of power and is, therefore, void.” The court then entered an order enjoining the City of Chicago from interfering with the plaintiffs and all persons claiming under them, “. . . in the maintenance of uses on the premises aforesaid, in manner as aforesaid, in keeping with the spirit and intent of the findings and the order of the Court herein.”

In 1955, the subject property was zoned in a Two-Family Residence District which limited the use of the property to detached family units, permitting two families in each unit. On May 29, 1957, the city council passed a comprehensive amendment to the then existing zoning ordinance, at which time Parcel 1 was zoned R2, Single-Family Residence District, and Parcel 2 was zoned R3, General Residence District. The defendant argues in its brief that at the time of the filing of this suit the south 140 feet of Parcel 1 was zoned R3, and that during the pendency of this action this area was rezoned to B2-1, a restricted retail district. The plaintiff asserts that at the time of the filing of this suit, Parcel 1 was zoned R2. Both parties agree that the area of Parcel 1, not included in the south 140 feet has remained R2 since 1947.

On appeal the plaintiffs contend (1) that the plaintiffs have overcome the presumptive validity of the zoning ordinance; (2) that the decision of the Circuit Court in the 1954 action should be either res judicata or estoppel by verdict against the defendant in the present action; (3) that by reason of this prior litigation and the subsequent conduct of the defendant city there was no need on the part of the plaintiffs to first exhaust their administrative remedies before bringing the instant action ; (4) that they have given clear and convincing proof of the invalid application of the zoning ordinance to the subject property; (5) that the R2 and R3 zoning of the subject property is not sustained by the zoning and uses in the immediate vicinity of the subject property; (6) the findings of fact and the conclusions of law of the Master should have been sustained by the Chancellor and (7) the judgment of the Chancellor is against the manifest weight of the evidence.

The City’s theory is (1) that the plaintiffs have brought this suit prematurely in that they have failed to first exhaust their legislative remedy of seeking an amendment to the Zoning Ordinance through petition to the City Council; (2) that the trial court’s judgment dismissing the suit is proper because the Zoning Ordinance, as applied to the subject property, is not unreasonable, arbitrary, discriminatory or unconstitutional, but is in conformity with adjoining uses and zoning; and (3) that the particular circumstances of this suit show that plaintiffs have no cause to attack the Zoning Ordinance as to Parcel 2 of the subject property.

At the outset we address ourselves to the contention by defendant that plaintiffs cannot maintain this suit because they have failed to exhaust their legislative remedy before bringing it. The record reveals that the plaintiffs did not seek a reclassification of the use restriction imposed upon the subject property by petitioning the City Council of Chicago for an amendment to the Zoning Ordinance. We believe that under the facts and circumstances of the instant case the plaintiffs should first have exhausted their legislative remedy before petitioning the courts for relief. Bright v. City of Evanston, 10 Ill2d 178, 139 NE2d 270; Reilly v. The City of Chicago, 24 Ill2d 348, 181 NE2d 175.

It is strenuously urged by the plaintiffs that their failure to seek the relief provided for by the Zoning Ordinance in § 11.9-2 by seeking an amendment does not bring the Bright rule into effect because, as they contend in their brief: “It is one thing to require a property owner to seek an administrative remedy, and it is another thing when to do so would be futile. It is submitted that for the plaintiffs in the instant proceeding to have attempted to have the City Council amend the zoning restriction on the property in question would have been a futile effort in the face of the city’s overt acts.” In support of their contention the plaintiffs rely primarily on what they consider the City’s continuing failure to abide by the court’s decision in the 1954 litigation. Plaintiffs argue that the city, by zoning the subject property for residential use in 1955 and 1957, and for limited commercial use during the pendency of the instant case, has demonstrated that seeking an amendment would be a futile gesture.

As authority for their position the plaintiffs cite the case of Van Laten v. City of Chicago, 28 Ill2d 157, 190 NE2d 717, which it is claimed parallels the facts in the case at bar. We think not. In the Van Laten case the city had two opportunities to change the use classification after the filing of the action to declare the zoning classification void. The city not only failed to alter the use classification, but also acted adversely to the Master’s recommendation, twelve days after the recommendation had been filed. In the instant case the defendant has apparently brought about one minor change in the zoning of the subject property during the pendency of the proceedings. However, we take judicial notice of the fact that this change in zoning took place prior to the filing of the Master’s recommendation. Ill Rev Stats 1967, c 51, § 48b.

The fact that the city in the instant case may have acted adversely to the court’s decision in the 1954 litigation is of little import in the disposition of the instant case when we consider, as we must, the rationale behind the Supreme Court’s decision in Bright. In Bright, the court stated that the reason for the rule requiring the exhaustion of administrative remedies in zoning cases before seeking relief in the courts “. . . is found in the practical difficulty encountered by the city council in foreseeing particular instances of hardship when general restrictions are initially established for a given area.” 10 Ill2d at Page 185. The Bright rule gives the municipal authorities an opportunity to correct invalid zoning regulations before the regulations become the subject of litigation. Reilly v. City of Chicago, 24 Ill2d 348, 181 NE2d 175. “The Bright rule did not stem from legislative or constitutional command, but is no more than an expression of judicial policy prompted by the circumstances that zoning is legislative and administrative in nature, not judicial . . .” County of Lake v. MacNeal, 24 Ill2d 253, at page 259, 181 NE2d 85.

The record clearly reveals that the plaintiffs’ purpose in bringing the 1954 suit was to have a residential-use classification declared void as to the industrial uses then present on the subject property. In the instant case the city was not apprised of the plaintiffs’ desire to have the zoning regulations altered so that they might erect apartment buildings on the subject property; the city could not have foreseen the particular instance of hardship which the zoning regulations were causing the owners of the subject property. The defendant, as yet, has not shown any resistance to the plaintiffs’ desire to have the zoning regulations changed so that apartment buildings may be built. Therefore, we conclude that the plaintiffs have not shown that their petitioning for an amendment would be futile, and our disposition of the instant appeal is governed by the Bright rule and not by the Van Laten decision.

The plaintiffs further rely upon the case of Sulzberger v. County of Peoria, 29 Ill2d 532, 194 NE2d 287.

■ In Sulzberger, plaintiffs petitioned the Zoning Board of Appeals, seeking a reclassification of the subject property from residential to commercial. The Zoning Board recommended to the County Board of Supervisors that the petition be denied, and the latter body approved this recommendation. Plaintiffs then filed a complaint for declaratory judgment, and the Circuit Court declared the Zoning Ordinance unconstitutional as applied to the subject property. Subsequent to the filing of the complaint plaintiffs had entered into an agreement with certain adjoining property owners restricting the uses on the subject property, and after the Zoning Board of Appeals had submitted its recommendation certain platted streets in the subject property were vacated. The defendant contended, on appeal, that the alteration of the physical facts, i. e., the agreement entered into between plaintiffs and the adjacent property owners and the vacation of the platted streets, required the remanding of the cause so that the Zoning Board of Appeals might reconsider its original decision. The Illinois Supreme Court, in affirming the decree, held that the changes that had taken place in the subject property were not of such a fundamental or substantial nature as to require plaintiffs to resubmit the question to the legislative body: . . no useful purpose would be served by requiring reconsideration solely because of minor variations in the physical facts where the fundamental question remains unchanged. To do so would defeat one of the purposes of the Bright doctrine which was to prevent delay in the administration of justice.” 29 Ill2d, at pages 539, 540. (Citations omitted.)

In Sulzberger the question presented for review was whether the exhaustion of administrative remedies doctrine required to re-petition to the Zoning Board of Appeals after certain changes had occurred affecting the subject property. The Supreme Court concluded that the plaintiffs having already petitioned the Board were not required to do so again. In the instant case plaintiffs never submitted their petition for changes in the zoning regulations to the local legislative authorities. The 1954 litigation cannot be considered such a petition. We believe that the facts and issues presented to the court for review in Sulzberger are dissimilar from those in the case at bar, and we conclude, therefore, that the decision in that case does not represent persuasive authority for plaintiffs’ contention in the instant case that the doctrine of exhaustion of administrative remedies does not apply to them.

We have also examined the case of Westfield v. City of Chicago, 26 Ill2d 526, 187 NE2d 208, cited by plaintiffs and find that it is factually inapplicable to the case at bar.

We are not presented with a situation where the invalidity of a zoning regulation is raised as a defense to an enforcement action brought by the local authorities. See County of Lake v. MacNeal, 24 Ill2d 253, 181 NE2d 85. The plaintiffs in the instant case not only seek to have the zoning ordinance applied to the subject property declared void, but also seek permission to erect apartment buildings on the subject property. It is neither the province nor the duty of the courts to assume the role of a zoning body and determine the most appropriate or suitable zoning for a parcel of land. Fiore v. City of Highland Park, 76 Ill App2d 62, 221 NE2d 323. Plaintiffs must first seek the alteration of the zoning regulations from the local legislative authorities before asking the courts to intervene.

Without, therefore, expressing any opinion as to the merits or other points raised, we hold that under the facts of the instant case, the resort by plaintiffs to the courts was premature, and the judgment of the Circuit Court must therefore be affirmed.

Affirmed.

ADESKO and MURPHY, JJ., concur.