author: MR. PRESIDING JUSTICE McCORMICK

text:
    Wilke Metal Products, Inc., a Corporation, Plaintiff-Appellant, v. David Architectural Metals, Inc., a Corporation, Defendant-Appellee.
    Gen. No. 50,840.
    First District, Fourth Division.
    January 22, 1968.

      Rappaport, Clorfene & Rappaport, of Chicago (Hamilton Clorfene, of counsel), for appellant.
    Schwartz, Cooper, Kolb & Cohen, of Chicago (Malcolm M. Gaynor and Lloyd S. Kupferberg, of counsel), for appellee.
   MR. PRESIDING JUSTICE McCORMICK

delivered the opinion of the court.

This is an appeal from the entry of an order by the Circuit Court of Cook County, First Municipal District, on June 11, 1965, finding for the plaintiff upon the issues joined on plaintiff’s complaint, and assessing the plaintiff’s damages at the sum of $8,404.80; further finding for the defendant on the issues joined on the defendant’s counterclaim, and assessing defendant’s damages at the sum of $12,989.88; and judgment order against plaintiff and in favor of defendant in the sum of $4,585.08 and costs.

On September 12, 1961, the plaintiff, Wilke Metal Products, Inc. (hereafter referred to as Wilke), filed its complaint to recover an unpaid balance of $8,404.80 for windows sold and delivered to the defendant, David Architectural Metals (hereafter referred to as David). The complaint further alleged that there was due interest at 5 percent per annum caused by the vexatious delay of the defendant in making payment to plaintiff.

On October 19, 1961, David filed its defense and counterclaim, setting out as defense that Wilke had failed to fabricate and furnish said windows in accordance with the plans, specifications and architectural drawings agreed upon. David’s counterclaim alleged that subsequent to the installation of said windows it was determined that the windows were improperly fabricated and were not in accordance with plans, specifications and architectural drawings; that David made demand upon Wilke to correct the defect, but Wilke refused to do so, and David was required to furnish labor and materials in order to make the corrections in the windows; and that David expended the sum of $13,649.20 for such labor and materials.

On February 1, 1962, Wilke filed its reply to the defense and counterclaim, denying the allegations of defendant’s defense and defendant’s counterclaim. The reply further stated that any expenditures by David were not caused by any alleged defects in fabrication by Wilke. The case was tried by the court without a jury, and on September 26, 1963, the court entered judgment in favor of David and against Wilke in the sum of $4,585.08. From that judgment this appeal is taken.

On February 13, 1964, Wilke filed its notice of motion for leave to file its amended reply to the defense and counterclaim to conform the pleading to the proof, which motion was denied by the court on the following day.

On August 20, 1959, Wilke and David entered into an agreement whereby Wilke agreed to manufacture 4,464 aluminum window frames and screens and to sell them to David for a total price of $85,000. On April 8, 1960, a supplementary agreement was signed by the parties modifying the agreement of August 20, 1959, providing that “Wilke agrees to furnish the Windows required for the University Apartments, 55th Street and Dorchester Avenue, Chicago, Illinois, in strict accordance with Architectural Drawing ‘WINDOW-SKETCH’ dated March 25, 1960 and revised March 26, 1960, except that the horizontal leg of the head and jamb sections may be set back y1Q"”; that Wilke agreed to furnish a minimum of 50 window frames by April 25, 1960, and a minimum of 50 window frames per day thereafter. To expedite delivery the parties agreed that the first 500 window frames should be made by the welding process in accordance with a shop drawing made by plaintiff on March 31, 1960. A note on the drawing contained the following statement: “14" x %" recessed holes are used to prevent interference with anchor screw heads.” This was drawn for the production of the welded units.

The first 500 window frames delivered to David were examined by David’s agents and found to conform to the specifications. The remainder of almost 4,000 window frames were made by the extrusion process in accordance with the “Window-Sketch” dated March 25, 1960, and revised March 26,1960.

All of the window frames were delivered to David and were installed by David in the buildings known as the University Apartments. Fasteners for the installation were selected and purchased by David. The first windows were installed in September 1960; in March 1961, after approximately 90 percent had been installed, David notified Wilke that the glass stops in many of the windows were popping out. David then proceeded to remedy the situation by having the glass removed by Hamilton Glass Company in order that David’s men could put holes in the glass stops so that the stops could pass over the interfering screw heads, then Hamilton’s men put the glass back in and reputtied the windows. The guess of the witness Hammerquist was that this corrective work was done on 50 to 70 percent of the more than 4,000 window frames delivered by Wilke. The total cost to David was $12,989.88, which included wages to its own men, payment to Hamilton Glass for glaziers’ time, to Economy Window Cleaning Company for cleaning repaired windows, and to Ace Hardware for cleaning materials. Wilke refused to accept any responsibility for any portion of the cost of any corrective measure, stating in its letter of March 20,1961, to David:

“Your contract with Wilke Metal Products called for Windows only which we furnished per approved Shop Drawings. Fastening Screws were selected and installed by your personel [sic] and Glass and Glazing was furnished by others than Wilke Metal Products and, as a great number of stops are acceptable, we cannot understand why you request backcharges for necessary corrections from Wilke and not your Glazing Contractor who certainly should have notified you long prior to completion of glazing, of the Screw Head-Glazing Bead interference.”

Wilke’s first contention is that David’s notice of the alleged breach of warranty came too late to hold the seller for damages for the alleged breach of warranty, since the buyer made no inspection, nor did he give notice until approximately six months after delivery of the window frames. Section 49 of the Uniform Sales Act (Ill Rev Stats 1961, c 121½, § 49), which was in effect at the time of this transaction, provides:

“In the absence of express or implied agreement of the parties, acceptance of the goods by the buyer shall not discharge the seller from liability in damages or other legal remedy for breach of any promise or warranty in the contract to sell or the sale. But, if, after acceptance of the goods, the buyer fail to give notice to the seller of the breach of any promise or warranty within a reasonable time after the buyer knows, or ought to know of such breach, the seller shall not be liable therefor.”

The defects which David alleges to exist in the extruded frames are that the holes were not recessed and were placed in such a position as to interfere with the stop. However, the evidence shows that the extruded frames were to be manufactured in accordance with the “Window-Sketch” dated March 25, revised March 26. In examining that drawing, this court cannot find any notation stating that the holes were to be recessed. Therefore, the only defect with which we are concerned is the allegation of the improper alignment of the holes.

In the brief filed in this court David states that the holes should have been “recessed and in the proper place. Neither defect, in and of itself, would have caused the interference and resulting popping, but the combination of the two brought about the unfortunate result.”

The evidence indicates that David had made inspections of the window frames made by the welding process in April of 1960, when they were first submitted, and had made two other examinations of these frames in May and June of 1960, at the time of their installation. However, David did not inspect any of the window frames made by the extrusion process when they were first delivered, but inspected them after approximately 90 percent of the frames were installed, at which time the alleged defect was discovered. David then notified Wilke of the defective frames. Since notice was given within a reasonable time after the buyer knew of the breach, the question is whether it was given within a reasonable time after the buyer ought to have known of such breach. Assuming that the defect did exist, causing a breach, the question is whether it was a latent defect which a reasonable inspection would not have revealed. In Smith v. Morrow, 230 Ill App 382, 388, the court said:

“In order to come fully within the scope of the definition of a latent defect, the defect must be hidden from the knowledge as well as from the sight and must be one which could not be discovered by the exercise of ordinary and reasonable care .... No defect is latent which can be discovered by the exercise of reasonable care, or which a reasonable inspection will reveal.”

It is important to note how the alleged defect was discovered. Mr. Schneider, vice-president of David Architectural Metals, had the glass removed from the window frame, then had the window stops removed. This enabled the inspectors to see that there was interference between the screwhead anchorage and the glass stop. By such removal the windows were placed in the same condition they were in when delivered to David, without glass. The defendant could have noticed the alleged defect by simply looking at the frames when they were delivered. Did David have a duty to inspect the window frames when delivered? In House of Price, Inc. v. Kliegman Bros., Inc., 126 NYS2d 764, 768, the court said:

“In reality, therefore, the question is whether one who buys by sample or description and receives into his possession such goods as are tendered by the seller without inspecting such goods before receiving them into his possession is under a duty to inspect such goods after receiving them into his possession, or whether such buyer is at liberty to sit back and inspect only if, as and when, it suits his convenience.
“I think such buyer is under a duty to inspect when he receives the goods into his possession.
“Pierson v. Crooks, 115 NY 539, 551, 22 NE 349, 352: ‘It is the duty of a purchaser to act promptly in making an examination of goods sent upon his order, to see whether they comply therewith.’ ”

In the case at bar David had a duty to inspect the window frames when delivered to see if they were manufactured in accordance with their agreement. An inspection at that time would have revealed the alleged defect, if in fact there was a defect. Notice given by David in this case was not timely because it was given six months after David ought to have known of the alleged breach.

David also claims that there was a custom and usage in the building trades relating to the lack of obligation of the defendant to inspect the goods. In the case before us David admits that it made no inspection of any of the 4,000 extruded windows before installation, and it was also admitted that David had installed 3,600 to 3,800 of the windows, and that the glazing subcontractor completed its work before any alleged defect was discovered. In support of this contention David off ered two witnesses; one Cassie — whose testimony, in the opinion of this court, was properly stricken from the record by the trial court— and Herbert Lee, who stated, with reference to the customs in the building trades with respect to window lights, that under the custom and usage in the building trades in existence at that time and place, there was no obligation for a purchaser and erector of window frames to notify a seller and fabricator of the frames of deviations from the plans and specifications in that a window did not contain a recessed hole where a hole was called for, or where a hole was improperly placed. On cross-examination the witness testified that there was no custom and usage in the trade with reference to determining whether or not the openings for screws or nails were according to plans and specifications, or for the purpose of determining whether or not any of the openings for nails and screws were recessed. His testimony did not establish a custom and usage with reference to the matters at issue in the present case.

Wilke also contends that in order for custom and usage to be admissible, it must appear that it has been uniformly acquiesced in for such a period of time that it is presumed the parties had it in mind at the time of making the contract, and that they entered into the contract intending that such custom or usage was a part thereof; and that it should be established by the testimony of several witnesses. As We have stated, David Called two witnesses — Cassie and Lee — to testify to the custom and usage of building trades relating to the nature of the obligation of a contractor to inspect goods delivered pursuant to a contract for fabrication. In F. B. Miller Agency, Inc. v. Home Ins. Co., 276 Ill App 418, at 427 the court said:

“A custom or usage to become binding upon the parties must have antiquity as well as uniformity and universality. Crawford v. Clark, 15 Ill 561. It must appear that it has been uniformly acquiesced in for such a period of time that it is presumed that the parties had it in mind at the time of making the contract and that they entered into the contract intending that such custom or usage was a part thereof. [Citing cases.] ... A custom should be established by the testimony of several witnesses.”

In Traff v. Fabro, 337 Ill App 83, 84 NE2d 874, at 88, the court said, citing Bissell v. Ryan, 23 Ill 566:

“ ‘It will generally be desirable when a particular usage is relied on, to establish it by the testimony of several witnesses; and if it be a well-established usage, as it ought to be, this will not be difficult.’ The rule announced in the Bissell case with respect to proof of a custom or usage has been consistently adhered to by the courts of our State. See Adam Groth & Co. v. Goss & Guise, 232 Ill App 450; F. B. Miller Agency, Inc. v. Home Ins. Co., 276 Ill App 418.”

The custom relied on by David was not established.

David contends that the question of time within which it ought to have known of the breach is one of fact for the trial court, and that findings of fact by the trial court will not be disturbed unless they are clearly contrary to the manifest weight of the evidence. This court agrees with that statement of the law. However, a review of the evidence indicates that the trial court’s finding that notice of breach of warranty by David to Wilke was timely, was against the manifest weight of the evidence.

In his brief in this court David cites Smith v. Morrow, 230 Ill App 382, which case is not applicable. He also cites Wainwright v. Elgin Windmill Co., 9 Ill App2d 574, 134 NE2d 44; and Mayflower Sales Co. v. Frazier, 325 Ill App 314, 60 NE2d 123. The Wainwright case, citing Mayflower, merely states that the question of what is a reasonable time is ordinarily a question of fact for the fury.

David did not prove at any place in the record the number of windows which allegedly had holes that were out of line. Even if the paid bills of Hamilton Glass were actually in evidence, considerable doubt is thrown on their accuracy by the fact that Alan R. Schneider, vice-president of David, testified that there had been an understanding with Hamilton Glass that David was only going to pay a proportionate share of the labor cost. Schneider also testified that he did not know how many windows were repaired in the occupied portion of the building, and there is nothing in the record which would indicate what apartments had windows which were repaired. There is no evidence as to how many of the holes were improperly drilled, if any.

Wilke’s next contention is that the matters for which David claims damages could have resulted from negligence of David or the other contractor, or from weather conditions, rather than from the claimed breach of warranty. The testimony clearly indicates that there was more than one explanation for the loosening of the glass beads. Mr. Harold Heineg, witness for Wilke, had the opinion that it could be the interference between the fastening device and the glazing head or stop member; that it could also have been caused by built-up mastic underneath, or because of improperly seated beads at the time of installation; and that it also could be caused by the lack of recess, contingent on the location of the screw in the area.

John Sika, a witness for David, testified with reference to the damage being caused by the holes not being recessed, and stated that where the stop member had popped out they found it was caused by the hole not being recessed and being drilled off-center toward the inside of the building. But he further testified that it was possible if the glazier did not tap the stop long enough to snap it in, it would not be in a snapped-in position.

Hammerquist, a witness for David, testified that he was employed by David as an ironworker, and that he did not know how many windows were fixed; that it was maybe 50, 60 or 70 percent. He also testified that the popping took place after the installation and was caused by the weather; that aluminum expands and contracts more than steel, and the only reason he could give would be the expansion and contraction and the cold and warm weather.

In Condon v. Schoenfeld, 214 Ill 226, 230, 73 NE 333, the court said:

“It cannot be said that the existence of a certain fact may reasonably be inferred from the evidence when the existence of another fact inconsistent with the first can be, from the same evidence, inferred with equal certainty. The evidence must point to the existence of some particular fact rather than to the existence of another fact inconsistent with the first before it can be said that such evidence alone tends to prove the existence of the first.”

In Celner v. Prather, 301 Ill App 224, 22 NE2d 397 at 227, the court said: “It cannot be said one fact can be inferred, when the existence of another inconsistent fact can be drawn with equal certainty.” In the instant case, there is more than one possible explanation for the loosening of the glass beads. David therefore failed to meet its burden of proof in this regard.

At the close of all the evidence Wilke offered to file an amended reply to the defense and counterclaim to conform the pleadings to the proof, which motion was denied by the court. Considering the evidence as a whole, whether or not the court was in error in denying the filing of the amended reply is immaterial.

Wilke proved the allegations in the original complaint and the court properly made a finding in Wilke’s favor for $8,404.80. David did not by a preponderance of evidence prove the allegations in the counterclaim, and the trial court improperly found that David had proved damages in the sum of $12,989.88. Judgment was therefore improperly entered against Wilke and in favor of David in the sum of $4,585.00.

The judgment of the trial court is reversed and the cause is remanded with directions to vacate the judgment entered in the trial court, to enter a judgment in favor of Wilke on its original complaint, in the sum of $8,404.80, and to enter judgment against David on its counterclaim.

Reversed and remanded with directions.

DRUCKER and ENGLISH, JJ„ concur.


source: Caselaw Access Project

license: Public Domain

text:
    Richard J. Daley, Mayor and Local Liquor Control Commissioner of the City of Chicago, Plaintiff-Appellant, v. Andrew Thaxton, Licensee, and License Appeal Commission of the City of Chicago, Defendants-Appellees.
    Gen. No. 51,398.
    First District, Fourth Division.
    January 22, 1968.
    Rehearing denied and supplemental opinion April 17, 1968.
    Raymond F. Simon, Corporation Counsel of the City of Chicago, of Chicago (Sydney R. Drebin and Marsile J. Hughes, Assistant Corporation Counsel, of counsel), for appellant.
    Wexler & Wexler and Samuel S. Cohon, of Chicago (Samuel S. Cohon, of counsel), for appellee.
   MR. PRESIDING JUSTICE McCORMICK

delivered the opinion of the court.

This is an appeal from the entry of a judgment by the Circuit Court of Cook County on February 23,1966, which judgment affirmed the decision of the License Appeal Commission to reverse the order of Richard J. Daley, Mayor and Liquor Control Commissioner of the City of Chicago, revoking defendant Andrew Thaxton’s license.

On March 1, 1965, the Mayor, as ex officio Local Liquor Control Commissioner, began proceedings to revoke the defendant’s liquor license, charging that on September 19, 1964, during an altercation on the licensed premises, Susan Thaxton, barmaid and wife of the licensee, assaulted a patron — one George Griffine — with a deadly weapon, to wit; a revolver, in violation of the statutes of the State of Illinois and ordinances of the City of Chicago. The Mayor, as Local Liquor Control Commissioner, is authorized by section 5, article VII of the Liquor Control Act (Ill Rev Stats 1965, c 43, § 149) to revoke any license issued by him “if he determines that the licensee has violated any of the provisions of this Act or of any valid ordinance or resolution enacted by the particular city council, ... or any applicable rule or regulations established by the local liquor control commissioner or the State commission which is not inconsistent with law.”

On March 7, 1965, the licensee, Andrew Thaxton, was notified of a hearing scheduled for March 10, 1965. On showing on behalf of the plaintiff that George Griffine could not be located or served with a subpoena, the hearing was continued until March 23,1965. Finally, a hearing was held on April 6, 1965. On April 9, 1965, the plaintiff found that the charges were supported by the evidence received in the revocation proceeding and ordered Thaxton’s license revoked. Thaxton then appealed this order of revocation to the License Appeal Commission which heard arguments of the parties based upon the proceedings conducted by the plaintiff, and on May 14, 1965, entered an order reversing the plaintiff’s order of revocation. The plaintiff filed an application for rehearing with the License Appeal Commission, which application was denied on May 21, 1965. On June 24,1965, the plaintiff filed his administrative review action to review the final order of the License Appeal Commission. On February 28, 1966, the trial court entered a judgment affirming the decision of the License Appeal Commission. From this judgment the plaintiff appeals, praying that the judgment be reversed.

On September 19, 1964, Andrew Thaxton was the licensee of a tavern located at 2150 West Van Burén Street, Chicago, Illinois. In addition to operating the tavern the licensee worked for the U. S. Steel Corporation, 8900 South Chicago Avenue. His wife operated the tavern while he was working at the steel mill. On the evening of September 19, 1964, George Griffine was shot while in the tavern of Thaxton, and at 11:00 p. m. he was in the County Hospital being treated for a gunshot wound in the left side of his body near his groin. Police Officer James Stevens took a statement from Griffine, made a written report of it and called it in to his station.

Police Officer Eugene Williams testified that in response to a call he and his partner arrived at A & D’s Tavern, 2150 West Van Burén, to investigate the shooting of Griffine. He stated that when they arrived Mr. and Mrs. Thaxton were present, with several patrons; that he asked Mrs. Thaxton if there had been a shooting, and she said yes, that the person shot was called Poor Boy, whose name the police later determined was George Griffine. The witness testified that he had never at anytime seen Griffine.

Officer Williams testified that Mrs. Thaxton produced a .38 caliber revolver which she admitted having fired; that he examined the gun and determined, from Mrs. Thaxton’s admission and from smelling the weapon, that it had been fired; that there were five live cartridges and one spent cartridge in the gun. He stated that after Mrs. Thaxton gave him the gun he asked the reason for the shooting, whether she had been involved, and whether anyone else had been on the premises at the time. He stated: “Mrs. Thaxton did not answer my question as to the reason for the shooting, when we first came to the tavern. She was then in a state of shock. Later, she gave us the reason in the form of a statement. She came to the 13th District Police Station and made the statement.” (The statement does not appear in the record.) The gun was inventoried, sent to the crime laboratory, and subsequently destroyed.

The police officers then talked to Thaxton, licensee, and told him that from the information they had received there had been a shooting in the tavern. He said he had heard about it when he came in.

On October 19, 1964, there was a police court hearing on this matter. The charges were dismissed for want of prosecution when Griffine did not appear.

Andrew Thaxton, the licensee, testified as follows: He had operated the tavern at 2150 West Van Burén Street for five years; he also worked in the steel mill and his wife operated the tavern when he was working. When he was not at the steel mill he spent all his time at the tavern, which opened at 8:30 a. m., and closed at 2:00 a. m. On September 19, the date of the shooting, he came in later in the evening and did not know what had happened. The gun was his; he had had it since he opened the tavern, and it was registered. He knew George Griffine, who had been a customer of his for a long time.

On April 9,1965, the City of Chicago made the following finding:

“That on September 19, 1964, during an altercation on the licensed premises, Susan Thaxton, barmaid on the licensed premises, and wife of the licensee, assaulted a patron on said premises, one George Griffine, with a deadly weapon, to-wit: a revolver, in violation of the Statutes of the State of Illinois and Ordinances of the City of Chicago.”

It is argued that the plaintiff’s revocation order was not against the manifest weight of the evidence. On behalf of the plaintiff the argument is made in this court that the licensee’s agent, in firing the revolver, violated an ordinance of the City of Chicago, section 193-1 of the Municipal Code of Chicago, which provides in part: “. . . all persons who shall wilfully assault another in the city, . . . shall be deemed guilty of disorderly conduct, . . .” The charge upon which the license was revoked is of itself not sufficient, inasmuch as it only alleges that Susan Thaxton “assaulted a patron on the premises . . . with a deadly weapon . . .” Section 193-1 of the Code, the section upon which the plaintiff relies, provides that “. . . all persons who shall wilfully assault another in the city, . . . shall be deemed guilty of disorderly conduct, . . .” Nor is the order of revocation entered by the plaintiff sufficient in that it does not find that Susan Thaxton “wilfully” assaulted a patron. Since the entire finding is based upon the assault, we cannot carry over — as the City argues— the violation of another section of the Municipal Code prohibiting the discharge of a gun or pistol in the City of Chicago. The finding revoking the license of Andrew Thaxton was against the manifest weight of the evidence.

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

Affirmed.

DRUCKER and ENGLISH, JJ., concur.

Supplemental Opinion Upon Denial of Petition for Rehearing.

In the petition for rehearing in this court plaintiff points out that the opinion originally filed made no determination concerning the finding of the Mayor that State statutes were violated, and that the finding was proper. In support of that contention plaintiff cites sections 12-1 and 12-2 of chapter 38, Illinois Revised Statutes 1965, as follows:

§ 12-1. (a) A person commits an assault when, without lawful authority, he engages in conduct which places another in reasonable apprehension of receiving a battery.
§ 12-2. (a) A person commits an aggravated assault, when, in committing an assault, he: (1) Uses a deadly weapon.

Plaintiff then argues that since the word “wilfully” does not appear in the statute the Mayor’s finding is not defective.

However, the previous sections defining assault and aggravated assault must be read in connection with section 4-3, chapter 38, Illinois Revised Statutes 1965, which provides:

§ 4 — 3. (a) A person is not guilty of an offense, other than an offense which involves absolute liability, unless, with respect to each element described by the statute defining the offense, he acts while having one of the mental states described in Sections 4-4 through 4-7.

Section 4-4 defines intent as follows:

§ 4-4. A person intends, or acts intentionally or with intent, to accomplish a result or engage in conduct described by the statute defining the offense, when his conscious objective or purpose is to accomplish that result or engage in that conduct.

The Committee Comments to sections 4-3 and 4-4 of the Criminal Code explain that the former use of words such as “wilful” are encompassed within the phrase “with intent.”

In the instant case the trial court concluded that there was no evidence of the required intent, and we find no error in its decision that the finding of the Commission revoking the license was against the manifest weight of the evidence.

For the foregoing reasons, we adhere to the opinion as originally adopted, and the petition for rehearing is denied.

       Section 193-29 of the Municipal Code of Chicago provides in part: “No person shall fire or discharge any gun, pistol, or other firearm within the city, except upon premises used by a duly licensed shooting gallery, gun club, or rifle club, or in accordance with the provisions of section 193-32 of this code.”


author: MR. JUSTICE DRUCKER

text:
    Village of Oak Lawn, a Municipal Corporation, and People of the State of Illinois, ex rel. Village of Oak Lawn, a Municipal Corporation, Plaintiff-Appellant, v. Village of Bridgeview, a Municipal Corporation, Edward J. Barrett, County Clerk of Cook County, Illinois, and P. J. Cullerton, Assessor of Cook County, Illinois, Defendants-Appellees.
    Gen. No. 52,243.
    First District, Fourth Division.
    January 22, 1968.
    Gerhardt J. Gliege and Louis F. Cainkar, of Chicago, for appellant.
    Scariano, Gubbins and Pappas, of Chicago Heights, for appellee.
   MR. JUSTICE DRUCKER

delivered the opinion of the court.

Plaintiffs appeal from an order denying the prayer for relief in their petition for a writ of quo warranto and validating the annexation by defendant village of an unincorporated area bounded by 93rd Street, Neva Avenue, 95th Street and Harlem Avenue.

The following facts have been stipulated:

On November 1, 1962, a majority of the electors and landowners of a territory including the disputed area hereinabove described brought a petition in the County Court under the Illinois Municipal Code seeking annexation to the Village of Oak Lawn. On November 12, 1963, an order was entered approving the petition and submitting the question of annexation to the corporate authorities of Oak Lawn. No appeal was taken from this order. Six days later, on November 18, the owner of the disputed area filed a petition under section 7-1-7 of the Illinois Municipal Code with the Village of Bridgeview seeking to annex the disputed area to Bridgeview. The same day Bridgeview passed an ordinance annexing this disputed area filed a petition under section 7-1-8 of the County Recorder’s Office. On November 26 Oak Lawn passed an ordinance annexing the territory described in the court order including the disputed area. On December 23 certain residents of Oak Lawn petitioned the Village Board of Trustees to put the annexation to a popular referendum. The Trustees, however, found the petition invalid and had the annexation ordinance recorded on December 30, 1963. On January 9, 1964, a mandamus suit was filed to compel the Trustees to hold a referendum. On May 26,1964, the Trustees agreed to hold the referendum and the suit was dismissed. The referendum was held on August 15, 1964, and three days later an ordinance was passed declaring that the vote had favored annexation.

The Stipulation of Facts further states that “this action in quo warranto is properly brought to test the annexation over the disputed territory.”

Plaintiffs argue that an annexation petition could not be validly entertained by Bridgeview while a valid court order approving a petition seeking annexation to another municipality was in full force and effect. City of Countryside v. Village of LaGrange, 24 Ill2d 163, 180 NE2d 488, involves facts similar to those involved here. In that case a Countryside ordinance seeking the annexation of a territory to the north of the city was filed with the county court on February 23, 1961. On March 15 of that year LaGrange filed an annexation petition for the same territory. The court said at page 166:

Since Countryside’s annexation petition was on file in the county court prior to the purported annexation by the Village of LaGrange, it necessarily follows under the doctrine of the Touchette case that La Grange had no power or authority to effect an annexation of the same territory so long as Countryside’s petition was on file and undefeated.

Defendants do not dispute this principle but argue that where the first petitioner for annexation unreasonably delays, he loses priority, citing People ex rel. Village of Worth v. Ihde, 23 Ill2d 63, 177 NE2d 313, and City of Countryside v. Village of LaGrange, supra. In Worth a petition for annexation was filed with the Village of Chicago Ridge on November 23, 1957. On December 17 the Board of Trustees of Chicago Ridge held a meeting and tabled the matter “until further notice.” On April 14,1958, four and one-half months after proceedings with Chicago Ridge had been initiated and without Chicago Ridge having taken any steps to perfect the annexation, a petition was filed in the county court to incorporate the area into the City of Palos Hills. The court held that the four and one-half months of inaction resulted in the loss of priority in Chicago Ridge and, although Chicago Ridge had been first to file and first to perfect, that Palos Hills had jurisdiction of the disputed area. In Countryside, the validity of Countryside’s annexation was challenged on the theory that the outstanding petition for annexation with the Village of McCook prevented Countryside’s filing a valid petition for annexation with the county court. The Supreme Court pointed out that property owners of the area had filed a petition with the Village of McCook on June 8, 1960, and on February 23, 1961, when Countryside filed, over seven months had elapsed without McCook’s taking any action on the petition. The court said at pages 167 and 168:

. . . the long delay and inaction on the part of McCook deprived the Village of any priority which it might have acquired over the territory in question. The pendency of the McCook petition was therefore not a bar to Countryside’s annexation and the property owners’ objections to Countryside’s petition should have been overruled.

Defendants argue that since more than a year elapsed between the filing of the Oak Lawn petition in the county court and the issuance of the order approving the petition, Oak Lawn lost its priority. In both Countryside and Worth the Supreme Court held that it was the “delay and inaction” of petitioners which caused a loss of priority. In the instant case after the petitioners filed suit, hearings on objections were held and a final order of annexation entered. Although there were numerous continuances during the pendency of the case, we cannot find that the petitioners were guilty of inaction and delay since a final order was entered before Bridgeview passed its ordinance. Neither did the actions of Oak Lawn after the entry of the court order occasion delay or constitute “inaction.” The annexation ordinance was passed fourteen days after the court order was entered, the petition for referendum filed by certain residents was promptly ruled upon and found to be invalid, and the ordinance was recorded on December 30,1963. During the pendency of the mandamus suit against Oak Lawn which sought to require the Village to order a referendum in accordance with the petition previously filed, a referendum was ordered to be held on August 15, 1964, although the election could have been set for the next general municipal election on April 20,1965.

Bridgeview next contends that Oak Lawn lost its priority because it failed to perfect its annexation ordinance. The Municipal Code (Ill Rev Stats 1963, c 24) provides in section 7-1-5 that after the corporate authorities approve an annexation “this decision shall be effective after the expiration of 30 days, unless a referendum thereon is ordered by the corporate authorities or unless a petition for such referendum is filed.” Section 7-1-6 states in relevant part:

If the vote is in favor of annexing territory the corporate authorities, of their own motion, may order a referendum on the question. If the corporate authorities reject annexation, or do not order a referendum, then within the 30 day period, a petition may be presented to the corporate authorities requesting that the question of the annexation of the described territory be submitted to the electors of the annexing municipality .... The corporate authorities shall submit this question to the electors at the next general municipal election, or at a special election to be held within 90 days after the referendum election is ordered.

Bridgeview argues that since Oak Lawn did not order the referendum until May 26, 1964, (six months after the adoption of the ordinance) its ordinance is nugatory.

We believe that the determinative factor is the status of the Bridgeview ordinance on the day it was adopted. In City of East St. Louis v. Touchette, 14 Ill2d 243, 249, 150 NE2d 178, it was said:

... no proceeding for the annexation of a territory, or a part thereof, to any other municipality may be legally initiated after a petition for the organization of said territory into a city has been filed . . . (Emphasis added.)

It is indisputable that when the Bridgeview ordinance was adopted not only had the Oak Lawn petition been filed but a valid court order had been entered approving Oak Lawn’s annexation. While further procedures were required by statute, the time for the performance thereof had not yet expired. Subsequent alleged inadequacies in procedure cannot legalize Bridgeview’s illegal action.

The Circuit Court’s order validating Bridgeview’s annexation is hereby reversed and the cause remanded with directions to enter a judgment of ouster against defendant Bridgeview.

Reversed and remanded.

MCCORMICK, P. J. and ENGLISH, J., concur.

       The prayer also sought a declaration of the rights of the parties as well as injunctive relief against defendants Barrett and Cullerton. By agreement of the parties, all but the prayer for quo warranto were dismissed.

       Chapter 24, sections 7-1-2 to 7-1-6. The pertinent part of section 7-1-2 is:
      A written petition signed by a majority of the owners of record of land in such territory, and also by a majority of the electors, if any, residing in such territory, shall be filed with the county clerk of the county in which the territory is located, . . .

       Chapter 24, section 7-1-8. The pertinent part is:
      Any territory which is not within the corporate limits of any municipality but which is contiguous to a municipality and which territory has no electors residing therein, . . . may be annexed to the municipality in the following manner: a written petition signed by the owners of record of all land within such territory, . . . shall be filed with the municipal clerk.


text:
    Helen Peckler, et al., on Behalf of All the Members of Local 1006, American Federation of State, County, and Municipal Employees, AFL-CIO, a Voluntary Association, and a Class of Employees of the Bureau of Employment Security of the State of Illinois, Plaintiffs-Appellees, v. John Cullerton, as Director of Labor of the State of Illinois, Maude Myers, Director of Personnel of the State of Illinois, Defendants-Appellants.
    Gen. No. 52,040.
    First District, Fourth Division.
    January 31, 1968.

      William G. Clark, Attorney General of State of Illinois, of Chicago (Richard E. Friedman, First Assistant Attorney General, Richard A. Michael and Thomas D. Decker, Assistant Attorneys General, of counsel), for appellants.
    Kleiman, Cornfield and Feldman, of Chicago, for appellees.
   MR. JUSTICE DRUCKER

delivered the opinion of the court.

This is an appeal from an interlocutory injunction granting relief of a mandatory nature. Ten state employees as members of this class and officers of a union brought an action seeking injunctive and declaratory relief and the issuance of writs of mandamus against Maude Myers, Director of Personnel of the State of Illinois, and John Cullerton, Director of Department of Labor. The complaint alleged a failure on defendant Myers’ part to recognize the union represented by plaintiffs or to heed its petitions, and a refusal on defendant Cullerton’s part to conduct a public hearing to inquire into this dispute.

On January 24, 1967, plaintiffs moved for a temporary restraining order alleging that defendants had failed to take the action requested in the complaint and that the “continuing failure of defendants and/or the defendants’ delegated representatives to afford Plaintiffs and Petitioners any opportunity to present the demands, proposals and recommendations of the class of employees covered by the complaint and petition concerning their hours, wages and working conditions during the course of protracted litigation is likely to cause irreparable damage to Plaintiffs and Petitioners and permanently weaken constructive employer-employee relations between said employees and their employer.” The motion requested that defendant Myers be required (1) to convene a meeting for the purpose of receiving demands, proposals and recommendations covering hours, wages and working conditions by representatives of Local 1006, and (2) to agree to a schedule of meetings with the union representatives for the purpose of responding to the demands, proposals and recommendations. The motion further requested that defendant Cullerton be ordered to participate in said meetings in accordance with the spirit of paragraph 26, chapter 10, Illinois Revised Statutes.

Defendants filed a motion to dismiss on February 3, 1967, stating that the court lacked jurisdiction and that no cause of action was stated upon which relief could be granted.

Defendants also filed the following objections to the motion for temporary restraining order:

1. The motion does not allege facts which demonstrate that irreparable injury will result if a temporary restraining order is not issued;
2. The issuance of a temporary restraining order in this cause would not maintain the status quo, which is the primary purpose of such relief;
3. The relief sought by plaintiffs varies from the relief sought by the complaint, and no allegations of changed conditions are made;
4. A temporary restraining order may not be granted by a Court of this State.

On February 9, 1967, the court entered the following order which is the subject of this appeal:

This cause coming on to be heard on February 6, 1967, on the verified motion of plaintiffs for a temporary restraining order, and the Court having examined the verified complaint herein, said motion with plaintiffs’ supporting memorandum, the Objections to said motion and defendants’ Motion to Dismiss, together with supporting memoranda, having heard oral argument of the parties, and being fully advised in the premises,

IT IS HEREBY ORDERED that plaintiffs’ motion be granted, and an appropriate injunction writ issue without bond, in the following respects:

(1) Defendants John Cullerton (as Director of Labor of the State of Illinois) and Maude Myers (as Director of Personnel of the State of Illinois) are ordered to meet, personally or by their designated representatives, with representatives of Local 1006, American Federation of State, County, and Municipal Employees, AFL-CIO, on behalf of the 1,854 employees of the Bureau of Employment Security, State of Illinois, whose names appear in the Petitions attached to the complaint as Exhibit A, on March 2, 1967, in Room 1414, 160 North La Salle Street, Chicago, Illinois, at 1:00 P. M.;
(2) At said time and place plaintiffs shall present demands, proposals and recommendations in writing, pertaining to hours, wages and working conditions of said employees of the Bureau of Employment Security, to defendants or their designated representatives;
(3) Following said meeting the parties may meet at such times and places as are mutually agreeable, but, in any event, shall conduct at least one meeting no later than March 17, 1967, for the purpose of responding to any demands, proposals or recommendations which were submitted to defendants at the first said meeting;
(4) Within 14 days of the said second meeting, the parties shall report the results of said meetings to this Court.

Defendants contend that the court abused its discretion in granting the mandatory injunction. We must therefore determine whether in the instant case there has been a showing that it is an extreme case where the right is clearly established and extreme urgency exists for these are the rigid standards and limits of discretion in the issuance of a preliminary mandatory injunction.

The guiding principles relating to the issuance of a temporary mandatory injunction are well stated in Ambassador Foods Corp. v. Montgomery Ward & Co., 43 Ill App2d 100, 192 NE2d 572, at page 104:

There is a sound judicial skepticism concerning the need of a mandatory injunction even when its issuance is sought after a full hearing of the case. So much more so is this true when the court is asked to make such drastic use of its powers preliminarily. We are dealing here with “an extraordinary remedial process which is not a matter of right, but may be granted only upon the exercise of sound judicial discretion in cases of great necessity.” [Citing cases.] For a court to find that there exists the extreme urgency or “great necessity” justifying a mandatory injunction, the need for such relief must, indeed, be clearly established and free from doubt. [Citing cases.]

In Cleaning & Dyeing Plant Owners Ass’n of Chicago v. Sterling Cleaners & Dyers, Inc., 278 Ill App 70, at page 77 it was said:

The rule is that caution should be exercised in the issuance of a mandatory injunction based upon the sworn bill of complaint alone. The plaintiff must make out a clear case, free from doubt or dispute, as a basis for its issuance. Where, as in the instant case, complete relief may be afforded the complainant upon a final hearing, upon the facts stated in the bill, the plaintiffs are not entitled to a temporary injunction which is mandatory in character. [Emphasis added.]

And at page 80 the court said:

“In view of these authorities thus clearly limiting the power of a court of equity in the issuance of mandatory preliminary injunctions to very rare cases of extreme urgency, where the right is clear indeed and free from reasonable doubt, the obvious question to be determined is whether such an extreme case is made by the bill and exhibits in this case.”

The complaint (Count II) asks that defendant Myers be required to conduct negotiations affecting pay, hours of work or other working conditions with representatives of Local 1006. Exhibit A attached to the complaint is entitled “Petition for Collective Bargaining” and states that a controversy exists in that the employer has refused to recognize and negotiate in good faith with the authorized representative, Local 1006 of Council 34, American Federation of State, County, and Municipal Employees, AFL-CIO, in regard to wages, hours, and working conditions. The signers of the petition promise not to engage in any strike and then request that the Department of Labor should cause a hearing to be held. Exhibit B, attached to the complaint, is a letter dated November 22, 1966, addressed to defendants stating that a majority of the employees of the Bureau of Employment Security had authorized Local 1006 to be its exclusive representative for negotiating wages, hours and working conditions. It requests a meeting to discuss “mechanics and procedures” for conducting negotiations. Exhibit C, also attached to the complaint, is a letter addressed to defendant Cullerton alone asserting that petitions of 1800 employees are enclosed requesting that a public hearing be called under “Chapter 10, Illinois Revised Statutes.” Plaintiffs’ motion for a temporary restraining order again requests a public hearing “in order to expedite a settlement of said dispute and minimize the possibility of disruption of normal working conditions. . . .” It also alleges that defendants’ failure to afford an opportunity to present demands, proposals and recommendations is likely to cause irreparable damage to plaintiffs and “permanently weaken constructive employer-employee relations . . .” The motion also requests that defendant Cullerton be requested to participate in said meetings “in accordance with the spirit of the provisions of Chapter 10, Illinois Revised Statutes, paragraph 26 . . .” which is entitled “Duty in case of threatened strike” and sets out the procedures to be followed by the Department of Labor in that situation.

We can understand the trial court’s laudable interest in the peaceful settlement of the dispute between the parties, but we cannot sanction the use of the extraordinary remedy of mandatory injunction under the circumstances of this case. There was no showing of an emergency, no evidence of serious injury to the plaintiffs if the injunction were not issued and certainly no right clearly established. Under the pleadings is it clear (1) that section 20, chapter 10 of the Illinois Revised Statutes relating to controversies between employer and employee applies to state employees or (2) that section 26 of that statute can apply, even in spirit, to a threatened strike by state employees? Is defendant Myers obliged to deal with union representatives as bargaining agents for both union and nonunion employees by virtue of section 9(7) of the Personnel Code which requires the Director to “conduct negotiations affecting pay, hours of work, or other working conditions of employees subject to this Act?” Can the term “negotiations” be construed to mean conferences to “discuss the mechanics and procedures for conducting negotiations” when no specific demands or complaints about wages, hours or working conditions have been shown? The record contains no answer to these questions and we feel that until they and other questions relating to the rights of plaintiffs to relief are determined by the trial court, no showing has been made which would entitle plaintiffs to a temporary mandatory injunction.

Plaintiffs argue that it was within a court’s discretion to grant the temporary mandatory injunction relying heavily on Scholz v. Barbee, 344 “in accordance with the spirit of the provisions of Chapter 10, Illinois Revised Statutes, paragraph 26 . . .” which is entitled “Duty in case of threatened strike” and sets out the procedures to be followed by the Department of Labor in that situation. App 630, 101 NE2d 845, where a mandatory injunction was issued to preserve the status quo between joint owners of real estate who had contracted between themselves as to occupancy of parts of the premises and defendants had excluded plaintiffs from use of one of the common rooms and had commenced remodeling a flat in violation of that contract. Scholz is distinguishable since immediate relief was needed in that case to preserve the status quo and to protect the equitable rights of the complainant.

The order of the Circuit Court issuing an injunction writ is reversed.

Reversed.

MCCORMICK, P. J. and ENGLISH, J., concur.

       This paragraph is entitled “Duty in case of threatened strike” and sets out the procedures to be followed by the Department of Labor in that situation.

       The reference is to Illinois Revised Statutes, sections 20 and 21 of chapter 10.
      Section 20 in relevant part:
      When any controversy or difference not involving questions which may he the subject of an action at law or bill in equity, exists between an employer, whether an individual, copartnership or corporation, employing not less than twenty-five persons, and his employes in this State, the Department of Labor shall upon application as herein provided, and as soon as practicable thereafter, visit the locality of the dispute and make a careful inquiry into the cause thereof, hear all persons interested therein who may come before it, advise the respective parties what, if anything ought to be done or submitted to by both to adjust the dispute, and make a written decision thereof.
      Section 21 in relevant part:
      The application shall be signed by the employer or by a majority of his employes in the department of the business in which the controversy or difference exists, or by both parties, and shall contain a concise statement of the grievances complained of, and a promise to continue on in business or at work without any lockout or strike until the decision of said Department, if it shall be made within 3 weeks of the date of filing said application. As soon as may be after the receipt of the application the Department shall cause public notice to be given of the time and place of the hearing thereon; . . .

       Chapter 127, section 63M09 (7), Illinois Revised Statutes (1965).


text:
    Harry C. Alberts and Lillian S. Alberts, Plaintiffs-Appellants, v. Martin L. Gecht and Francey A. Gecht, Defendants-Appellees.
    Gen. No. 52,161.
    First District, Fourth Division.
    January 31, 1968.
    Rehearing denied February 16, 1968.

      Harry C. Alberts, pro se, of Chicago, appellant.
    Ronald A. Friedland of Levy and Brens, of Chicago, for appellees.
   MR. JUSTICE DRUCKER

delivered the opinion of the court.

Plaintiffs appeal from an order quashing an execution and from an order refusing to reconsider their motion to vacate an order of dismissal.

On January 3, 1962, a judgment by confession for $246 for rent was entered against defendants. On February 28, 1962, the judgment was opened and an order entered that “leave be and the same is hereby given defendants to appear and make defense herein, that a trial of this cause be had notwithstanding said judgment, that said judgment stand as security petition to stand as the affidavit of defense and that execution herein be stayed.” Thereafter a counterclaim for $200 was filed and on April 28, 1963, an amended statement of claim was filed realleging the confession as Count I and setting out damages to property in the sum of $630 in Count II. Subsequently an amendment to the counterclaim was filed alleging $5,000 damages by reason of rodent and vermin infestation of the rented premises. In 1963 and 1964 judgments by default were entered against defendants and their counterclaims dismissed. Each time these orders were vacated. On November 2, 1966, the case came up for trial and an order was entered:

This cause coming on in regular course for trial, the plaintiffs though called in open Court, come not, and fail to prosecute this suit. Wherefore, for want of prosecution of this cause, it is ordered that said plaintiffs be non-suited and that this suit be and it hereby is dismissed out of this Court.
It is therefore considered by the Court that the defendants have judgment herein as in case of non-suit and that the defendants have and recover of and from the plaintiffs, the costs by the defendants herein expended and that execution issue therefor.

On November 22, 1966, plaintiffs moved to vacate the dismissal order urging that the case was docketed in their attorneys’ files as being set for November 12 instead of November 2. The court denied the motion to vacate.

On December 16, 1966, an execution was issued on the confession of judgment of January 3, 1962, and on January 20, 1967, on defendants’ motion it was quashed. At the hearing on that day plaintiffs moved the court to reconsider its denial of plaintiffs’ prior motion to vacate the dismissal but the court refused to do so. Plaintiffs appeal from these orders.

At the time of the dismissal the judgment by confession for $246 and costs was still in force. (Farmers Bank of North Henderson v. Stenfeldt, 258 Ill App 428.) The petition to open the judgment alleged a $100 credit for failure of plaintiffs to turn over possession to defendants until eight days after the lease commenced. The counterclaim alleged a $120 credit and $80 for damages arising from the withholding of the premises; an amendment to the counterclaim alleged $5,000 damages for rodent and vermin infestation. On plaintiffs’ nonappearance defendants could have had an ex parte trial at which it would have been open to them to attempt to prove (1) either the $100 credit against the judgment or (2) their $200 counterclaim which included the $100 credit or (3) their $5,000 claim for damages. Under these circumstances, the judgment would either have been confirmed, been reduced by $100, or confirmed with judgments in favor of defendants on their counterclaims.

The order of dismissal did not vacate the judgment by confession nor did it adjudicate the counterclaims. Thus the dismissal order was not an enforceable or appealable order under section 50 (2) of the Civil Practice Act (Ill Rev Stats 1965, c 110, § 50 (2)) and is “subject to revision at any time before the entry of a judgment adjudicating all the claims, rights, and liabilities of all the parties.” The order quashing the execution is not appealable under section 50(2) since the other claims hereinabove mentioned are still pending.

Plaintiffs argued on appeal that since the dismissal order was not enforceable, the trial court could reconsider its order. This is true. However, the order was not appealable either and therefore we can only dismiss the appeal. Any further action in the trial court is the prerogative of plaintiffs.

Appeal dismissed.

MCCORMICK, P. J. and ENGLISH, J., concur.

       Now Rule 304 of the Illinois Supreme Court Rules.


author: CRAVEN, J.,

text:
    Herman R. Schloegl, Gertrude Schloegl and Karen Schloegl, a Minor, by Herman R. Schloegl, Her Father and Next Friend, Plaintiffs-Appellants, v. Lola Gertrude Nardi and Besse Lee Estrop, Executors of the Estate of Albert L. Perrine, Deceased, Defendants-Appellees. In the Matter of the Estate of Albert Lee Perrine, Deceased.
    Gen. No. 10,897.
    Fourth District.
    February 15, 1968.
    Rehearing denied and opinion modified March 18, 1968.

      Joseph P. Jenkins, of Chicago, for appellants.
    Foreman, Rammelkamp, Bradney & Hall, of Jacksonville (Robert E. Bradney, of counsel), for appellees.
   As Modified on Denial of Petition for Rehearing.

CRAVEN, J.,

delivered the opinion of the court.

This appeal seeks reversal of a judgment which quashed service of summons upon Lola Gertrude Nardi and Besse Lee Estrop, executors of the estate of Albert L. Perrine, deceased, and declared that estate closed. The facts are simple. The decedent, Albert Lee Perrine, prior to his death, was involved in an automobile accident on July 13, 1963, with a vehicle driven by plaintiff, Herman R. Schloegl, in which the other plaintiffs were passengers. On January 31, 1964, Albert Lee Perrine died testate of causes unrelated to the accident. An estate was opened and letters testamentary were issued to the defendants on February 5, 1964. A claim date was duly published in the “Winchester Times” on February 13, 20, and 27, 1964, setting the claim date as Monday, April 6, 1964. On June 19, 1964, a supplementary inventory was filed which listed as personal estate other than cash, goods, and chattels, the following:

“Insurance Policy #583-790, issued by Pekin Farmers Insurance, dated 7-18-62, effective to 1-18-64, affording, coverage for personal liability and property damage of $20,000.00 per person, $80,000.00 per occurrence plus $10,000.00 property damage and $500.00 medical payment, as well as other coverage; plus the obligation to defend Albert Lee Perrine, his heirs, executors and administrators, against liability within the policy limits, as a result of an automobile collision in which Albert Lee Perrine was involved on July 13, 1963.”

Thereafter, the estate was duly administered and closed. The final report of the executors was filed November 13,1964. On July 9, 1965, the plaintiffs herein filed a complaint alleging a tort action for each plaintiff against the decedent for injuries and damages suffered as a result of the auto accident of July 13, 1963. Plaintiff, Herman R. Schloegl, also filed a petition in the probate division of the court, which alleged that he was a bona fide creditor of the estate of Albert Lee Perrine, deceased; he had a claim for personal injuries because of the accident with decedent on July 13, 1963; that he had no notice of the opening or closing of the estate; that he was unaware of the death of Perrine; his wife and daughter also sustained injuries in the occurrence; and that the decedent was insured by an automobile liability insurance policy at the time of the occurrence. (Schloegl misnamed the insurance company involved in his petition, a fact which is of no consequence in determining this appeal.) The petition prayed that the estate be reopened and the defendants reinstated as executors. This petition was allowed without notice to the. defendants or to the insurance company. Service of summons in the personal injury action was had on both defendants on July 15,1965.

On August 12, 1965, the defendants filed a special appearance, moving to quash the service of summons and to quash any order entered in connection with both the law and the probate proceedings. On March 10, 1967, the court entered orders quashing the service of summons on the defendants in both the negligence action and in the probate division. The order in the probate division also vacated its prior order which had both reopened the estate and reinstated the executors, and further, declared the estate closed.

Thereafter, plaintiff Schloegl filed motions for rehearing and for leave to file an amended petition, which were denied by the trial court. This appeal resulted.

The central issue presented by these facts is: Were the plaintiffs required to file their lawsuit for personal injuries during the original administration of the decedent’s estate in order to have any judgment which they might receive in those actions satisfied out of the insurance policy which was inventoried?

This issue may be approached from two directions. First, is the time for filing of an action to recover damages because of the tortious acts of a deceased person in his lifetime limited to the period of administration of that deceased person’s estate? Second, did the act of inventorying the liability insurance policy have the effect of requiring the plaintiffs to file their suits for injuries received at the hands of the decedent during the original period of administration of his estate in order to receive satisfaction of any judgments they might receive in those actions out of the proceeds of the inventoried,policy?

The question of whether the period of administration became the period of limitation for filing the action for injuries must be answered in the negative. What if Perrine had died 23 months after the accident in question — would the statute of limitations have been extended until nine months after letters of administration had issued in that case? What if letters did not issue for years ? In these events, substituting the claim date in the estate for the statute of limitations would result in potential claims remaining alive as a matter of right for many years beyond the period specified by the legislature. The general statute of limitations is the sole governing statute which operates as an absolute bar to the filing of the action for the personal injuries. The administration of the decedent’s estate here bars the plaintiffs from collecting on any judgment that may be obtained from the property of the decedent which was inventoried and distributed. Union Trust Co. v. Shoemaker, 258 Ill 564, 101 NE 1050 (1913). See section 204 of the Probate Act (Ill Rev Stats 1963, c 3, § 204). If the causes of action asserted in the counts of the complaint filed by the plaintiffs are ever reduced to judgment, any satisfaction of those judgments must be obtained from assets of the decedent not inventoried and properly administered. Austin v. City Bank of Milwaukee, 288 Ill App 36, 5 NE2d 585 (1st Dist 1937). However, the prior administration of this estate is no bar to reopening the estate so closed to assert an action for damages otherwise properly brought within the ordinary statute of limitations applicable to the cause of action sought to be asserted. 4 James, Illinois Probate Law and Practice, § 204.4. It was, therefore, error for the probate division of the circuit court of Scott County to vacate its previous order which had reopened the estate of Perrine and reappointed the executors, and since the two-year statute of limitations applicable to actions for personal injury had not expired when the lawsuit was filed and summons issued for service upon the reappointed executors, it was error to quash said summons and dismiss the personal injury action.

Was the insurance policy an asset of the estate which has been administered and consequently is now no longer available to satisfy any judgment these plaintiffs might obtain? No. Section 172 of the Probate Act (Ill Rev Stats 1963, c 3, § 172) requires the administrator or executor to inventory the real or personal estate of the decedent. This policy was neither. It provided no funds for distribution to heirs or legatees. It provided no funds for the payment of claims of general creditors of the estate. It was, in the language of the plaintiffs, a “unique” asset. Insofar as it provided for indemnification from harm for judgments obtained, it protected the assets of the decedent. Within its limits and insuring clause it provided a potential fund for the satisfaction of any judgment obtained by; a claimant asserting a timely claim under the general statute of limitations. It was, at best, an inchoate asset of the estate of no intrinsic value which would make it subject to administration or distribution as an “asset” by the decedent’s personal representative. The refund for unearned premium which the executors obtained had no effect upon any rights or obligations incurred by virtue of the existence of this insurance prior to the decedent’s death.

The third-party beneficiary aspects of liability insurance contracts have been recognized by both the legislature and the courts. The legislature has provided that bankruptcy or insolvency of the insured shall not constitute a defense to the insurance carrier (Ill Rev Stats 1963, c 73, § 1000; Scott v. Freeport Motor Cas. Co., 392 Ill 332, 64 NE2d 542 (1946)), that companies writing automobile casualty coverage shall provide certain minimum amounts of coverage, and also cover all persons using a vehicle with the express or implied permission of the named insured. (Ill Rev Stats 1963, c 95½, § 7-317.)

Section 7-317 (f) of the Financial Responsibility Act (Ill Rev Stats 1963, c 95½, § 7-317 (f)) provides, in part, that no policy shall be cancelled or annulled by any agreement between the carrier and the insured after the insured has become responsible for loss or damage.

The Supreme Court of Illinois has stated:

“. . . under our statutes, . . . liability insurance is not merely a private matter for the sole knowledge of the carrier and the insured, but is also for the benefit of persons injured by the negligent operation of insured’s motor vehicle. (Citing case.) . . . .” People ex rel. Terry v. Fisher, 12 Ill2d 231, 238 (145 NE2d 588, 592-93 (1957)).

The effect of allowing the combined action of the executors and the insurance company to be effective in treating the policy as an asset of the estate is to allow their unilateral action to reduce the time within which the claimants were required to file a lawsuit to protect their cause of action. While not a violation of the above-cited statute, since the claims had not been liquidated and the insured’s responsibility to pay the loss fixed, this action is contrary to the rights of the Schloegls as potential third-party beneficiaries under the contract of insurance whose claims were known to the insurance company as disclosed by the supplemental inventory, and is contrary to the public policy of Illinois which recognizes that insurance policies are written for the benefit of both the person insured and the persons who have claims against that insured. The time for the Schloegls to file their lawsuits for personal injuries was governed by the two-year statute of limitations. Since the insurance policy insuring the liability of Albert Lee Perrine was in effect on the day of the accident, neither the insurance company nor Perrine’s executors, singly or in combination, could reduce the time for filing lawsuits to recover damages and reach the funds provided by the policy in the event of judgment by attempting to treat the policy as an ordinary personal asset, of the decedent.

The concept of a liability insurance policy as a “unique” inchoate asset of the decedent’s estate finds support in prior Illinois cases. In Furst v. Brady, 375 Ill 425, 31 NE2d 606, 133 ALR 558 (1941), the existence of such a policy, issued by a company licensed to do business in Illinois, which insured a nonresident who had been involved in an auto accident in Illinois and subsequently died with no other assets in Illinois, was held to be sufficient to support the appointment of an administrator in Illinois for the nonresident in order to allow an injured party to assert an injury action against the decedent here in Illinois. That decision was not based upon the concept that the insurance policy was property of the decedent subject to ordinary administration, but was bottomed on the concept that the insuring clause provided the personal representative with a chose in action with a situs in Illinois which would ripen against the insurance company in the event of judgment against the administrator in the underlying personal injury action.

In the Matter of Estate of Lawson, 18 Ill App2d 586, 153 NE2d 87 (3rd Dist 1958), reached the same result as Furst v. Brady, 375 Ill 425, 31 NE2d 606, 133 ALR 558 (1941), even though the insurance company covering the nonresident’s alleged liability was not licensed to do business in Illinois. The company in that case had appointed the Secretary of State of the State of Illinois as its agent to accept service of process upon it. This act was the only act connecting the issued policy to an Illinois situs.

We are not concerned, in the instant case, with the troublesome concept of whether the decedent had a sufficient connection with this state to justify appointing an administrator for him. In his lifetime, he was an Illinois resident with Illinois property, a fact which we have already held justified the reopening of his estate, even absent insurance, to furnish a legal representative against or through whom the alleged rights of the plaintiffs can be determined. Furst v. Brady, 375 Ill 425, 31 NE2d 606, 133 ALR 558 (1941); In the Matter of Estate of Lawson, 18 Ill App2d 586,153 NE2d 87 (3rd Dist 1958).

In the Matter of Estate of Palmer, 41 Ill App2d 234, 190 NE2d 500 (3rd Dist 1963), held that a closed estate must be reopened, upon application of a tort-claimant, to allow such claimant to assert a cause of action for personal injuries and property damage where the decedent’s liability was allegedly covered by insurance. In that case, the policy was not inventoried during administration and the trial court was instructed to determine whether the estate should be reopened upon the ground that the policy was an “after discovered” asset which had not been inventoried, or if the cause of action to the extent of insurance constituted a settled portion of the decedent’s estate. To the extent that this case appears to indicate that the inventorying of an insurance policy during the course of administration of a decedent’s estate could have the effect of barring a personal injury action not brought during the course of such administration, we decline to follow it.

The order of the. circuit court of the Seventh Judicial Circuit, Scott County, quashing service of summons on the defendants, is reversed. The order vacating the order of said court which reopened the estate of Albert Lee Perrine, deceased, and reappointed the defendants as executors is reversed, and these causes are remanded to that court for further proceedings consistent with this opinion.

Reversed and remanded with directions.

SMITH, P. J. and TRAPP, J., concur.


text:
    Sollie E. Hammond, Plaintiff-Appellee, v. United States Steel Corporation, a Corporation, et al., Defendants-Appellants.
    Gen. No. 51,932.
    First District, Fourth Division.
    February 21, 1968.
    Rehearing denied April 2,1968.

      Gerrard and Gerrard, of Chicago, for appellant.
    Charles B. Fiduccia, of Chicago, for appellee.
   MR. JUSTICE DRUCKER

delivered the opinion of the court.

Plaintiff sued for injuries sustained in a collision with a truck operated, maintained and controlled by defendants, United States Steel Corporation, Brada Cartage Company and Morris W. Shively. The collision occurred in the City of Chicago Heights when plaintiff’s car, heading south, struck defendant’s trailer-truck which had pulled out of a driveway of United States Steel Corporation on the west side of State Street making a left turn onto State Street. Defendants appeal from a jury verdict and judgment in the amount of $4,500 in favor of plaintiff, contending that their motion for judgment notwithstanding the verdict should have been granted because (1) plaintiff failed to prove negligence on the part of defendants and (2) the plaintiff was guilty of contributory negligence as a matter of law.

Plaintiff’s Testimony

At about six o’clock in the evening of October 27, 1958, he entered State Street at 26th Street, two blocks north of the scene of the accident. In the back seat of his car were his two grandchildren; his daughter-in-law was with him on the front seat. He was familiar with the area. He was wearing his glasses and his eyes were good; his windshield was clean and there was nothing to block his view of the highway — no hills, or curves, no building or trees. It was dark and the highway was unlit. Plaintiff was traveling south at between twenty and thirty-five miles per hour and at that speed he felt he could stop his car in eight or ten feet. When he first saw the tractor-trailer he was two or three car lengths north of it and it was crossing State Street at the time. After he saw the headlights he noticed the green and red lights atop the cab; this indicated to him that this was a tractor-trailer combination, and as he got closer he saw the trailer itself. The trailer was blocking both lanes; he tried to stop and swerved off the west side of the road to avoid hitting it; he struck the left rear wheel of the trailer which was extending into the driveway at the time of impact.

Plaintiff was seventy-two years old and sustained a broken jaw as well as injuries to his arm and his knee; it required twenty-one stitches to close the laceration of his lip and because of the injuries he was unable to plant his crops in the spring of that year and he still had headaches and dizziness.

Testimony of Plaintiff’s Wife

She arrived a short time after the accident from her home three or four blocks away; her husband was slumped over the wheel unconscious; his car was off the road, the front being off by four or five feet and the rear being off by eight or ten feet, The tractor was facing due north; the trailer was ten or twelve feet north of the driveway of the steel company and was blocking both lanes at an angle across the road. The lights on the car were out and the trailer had lights but they were not lit. She testified that her daughter-in-law and son were divorced and that an unsuccessful attempt had been made to locate her daughter-in-law in order to obtain her testimony.

Defendant’s Testimony

The evidence deposition of defendant Morris W. Shively was read into evidence. He testified therein that he was the driver of the truck involved in the accident; that it was a tractor-trailer combination; the trailer was forty feet long and nine feet wide and was carrying 24,600 pounds of structural steel. He said it was about six-thirty in the evening, it was dark but the view was unobstructed. Shively said:

I had lights burning on my equipment. Headlights, fire marker lights across the top of the tractor, Case marker lights on the side and in the back. Those lights are amber on the top of the tractor, amber on the sides and red on the corners. That is the sides of the trailer.

He stated that he pulled out of the United States Steel yard and out on the driveway leading to State Street, stopping six feet from the road; that he looked both ways and that he then saw plaintiff’s car for the first time about one-half mile away. He stated that in order to make a ninety-degree turn he had to go off the shoulder of the road on the east side, then after doing so he cut back in and that the collision took place immediately after he had gotten on his side of the road; that defendant hit the back end of the trailer. He said that at the time of the accident he was going ten to fifteen miles per hour, that the second time he saw the car it was seventy or eighty feet away and that no part of his equipment was in the southbound lane. He said that the damages caused by the accident prevented his moving the truck and that when the police arrived fifteen to twenty-five minutes later nothing was moved.

Officer Overstolz’s Testimony

Robert Overstolz testified that he was acting Police Chief of Chicago Heights, that the speed limit on State Street was not posted but it was about sixty-five miles per hour. He stated:

The truck was parked. It had a wheel possibly a wheel was in the center of the yellow line or white line and possibly a little bit over .... One tire may have been over the center line. It was the outside tire of the duals on the left side of the vehicle. The rear tire of the trailer with the exception of the outside tire, the rest of the vehicle was over to the east of the center line. . .

When asked whether he saw the truck’s lights he said that he noticed the truck’s taillights. He said there were no skid marks at the scene.

Defendants first contend that their motion for judgment notwithstanding the verdict should have been granted because plaintiff failed to sustain his burden of proving negligence. In the recent case of Pedrick v. Peoria & E. R. Co., 37 Ill2d 494, 229 NE2d 504, the Illinois Supreme Court reviewed the variety of rules governing the direction of verdicts and the granting of judgments notwithstanding the verdict. The court held that henceforth one rule would be applicable to both, saying at page 510:

In our judgment verdicts ought to be directed and judgments n. o. v. entered only in those cases in which all of the evidence, when viewed in its aspect most favorable to the opponent, so overwhelmingly favors movant that no contrary verdict based on that evidence could ever stand.

The complaint charged defendants, inter alia, with failure to properly illuminate the trailer, failure to yield the right of way and negligent obstruction of the roadway. Plaintiff testified that the trailer had no lights. Officer Overstolz testified that the trailer had lighted taillights when he arrived and Shively stated that the trailer had lights on the back and the sides. However, defendants’ photographs show that the forty-foot trailer was equipped with lights and reflectors on the tail but the side lights appear to be only at the rear corner. Plaintiff and his wife testified that the truck completely blocked both lanes; Officer Overstolz stated that it was only slightly over the center line. Since Shively said that his equipment was entirely in the northbound lane, we are asked to believe that plaintiff must have made a left turn into the rear of the trailer after passing the tractor. Finally, while Shively testified in his evidence deposition that the accident occurred “about the length of the tractor and trailer 42 feet 6 inches north of the driveway,” in another deposition he had stated that the accident took place “3 or 4 feet north of the driveway.” We believe that the jury could properly have inferred from this evidence that the truck was not adequately lit and that Shively was negligent in entering the highway. Under these circumstances we cannot say that the evidence “so overwhelmingly favors” defendants that a judgment notwithstanding the verdict should have been entered.

Defendants’ second contention is that plaintiff was guilty of contributory negligence as a matter of law. He calls our attention to cases in which courts have held that driving into a clearly visible object is contributory negligence as a matter of law. The application of the “clearly visible rule” urged upon us by defendants is discussed in Moore v. Bethel, 4 Ill App2d 270, 124 NE2d 352. The court said at page 275:

. . . [Pjlaintiff was not confronted with an unlighted object; but we are not prepared to say that the “clearly visible” rule automatically comes into operation when the standing object is admittedly lighted. The many variables present in cases of this sort, such as the kind of truck or vehicle stopped, number of lights on such vehicle, condition of the road and weather, type of warning signals, if any, and the presence or absence of diverting circumstances, and the nature of such diversion, if any, militate against the drawing of inflexible rules of negligence or contributory negligence.

In the instant case the night was dark, the roadway unlit, the trailer was forty feet long. There was evidence that the trailer was, at least partly, in the southbound lane, where plaintiff had no reason to expect it to be. The testimony as to the lights on the trailer was at best conflicting. Applying the standard of Pedrick, supra, we cannot say that this issue should have been taken from the jury.

The judgment is affirmed.

Affirmed.

MCCORMICK, P. J. and ENGLISH, J., concur.

       Ill Rev Stats 1963, e 95½, § 168:
      Vehicle entering highway from private road or driveway. The driver of a vehicle about to enter or cross a highway from a private road or driveway shall yield the right-of-way to all vehicles approaching on said highway.


author: MR. JUSTICE SCHWARTZ

text:
    In the Matter of the Estate of Elmer Szantay, Deceased. Marie Szantay Konopka, as Guardian of Rita Jean Szantay and Ruth Joan Szantay, Minors, Kathryn Elizabeth Szantay and Margaret Eileen Szantay, Petitioners-Appellees, v. The Northern Trust Company, Individually and as Executor of the Estate of Elmer Szantay, Deceased, Respondent-Appellant.
    Gen. No. 51,106.
    First District, Third Division.
    February 23, 1968.

      Bell, Boyd, Lloyd, Haddad & Burns, of Chicago (Charles T. Martin and J. William Hay ton, of counsel), for appellant.
    McKenna, Scovel and Gannon, of Chicago (Joseph D. Gannon and Philip J. McKenna, of counsel), for appellees.
   MR. JUSTICE SCHWARTZ

delivered the opinion of the court.

This is an appeal from an order of the Probate Division of the Circuit Court surcharging the executor of the estate of Elmer Szantay in the sum of $25,000 for the allegedly improper adoption of a profit-sharing plan for the employees of Sandee Manufacturing Company. Sandee’s stock is wholly owned by the estate and is its principal asset. The suit was brought by Marie Szantay Konopka, as guardian of Rita Jean Szantay and Ruth Joan Szantay, minor children of the testator, who together with two adult children were the principal beneficiaries. She charges that an unreasonable portion of the profits was distributed to employees under the plan, that the employees in fact designated their own compensation and that they did so in a manner contrary to the interests of the beneficiaries. The two adult children were also originally named as petitioners, but they do not appear to have continued in the litigation. Petitioner was given leave to file an amended petition in this court pursuant to Supreme Court Rule 362 (Ill Rev Stats, c 110A, § 362 (1967)), and the sole party petitioner named in the amended petition was Marie Szantay Konopka as guardian aforesaid. Respondent made a motion to file an amended answer, which motion was taken with the case and is now allowed.

Sandee Manufacturing Company was organized by the deceased Elmer Szantay who was president and owner of all its stock. On April 1, 1962, he and James Clemens, the sales manager, were killed in a plane accident. By his will the Northern Trust Company was named executor and trustee and was authorized to continue the business pursuant to the following provision:

“it is my wish that my Executor continue the operation of any business or businesses I may own at the time of my decease, using the same personnel then employed, as far as feasible, if in the opinion of said Executor it is or they are earning a fair return on the investment. . . .”

Pursuant to the express wish of the deceased, the executor continued the business, using the personnel then employed as far as possible. It contends that it earned an outstanding return on the investment after paying all expenses including salaries and profit-sharing incentive bonuses; that the total compensation paid including salary and incentive bonuses to fifteen employees was reasonable and that the executor received nothing by the adoption of the plan and should not be penalized for its stewardship.

At the time of Szantay’s death, Sandee had a net worth of $137,999. In addition it had life insurance policies covering both Szantay and Clemens in the sum of $297,-387.94. The net worth of the company as of July 31, 1962, was shown as $460,603.64. The insurance proceeds were held by the company largely in the form of federal government securities and cash. The amounts thereof held in the years 1962 to 1965, inclusive, were as follows:

Year 7/31/62 7/31/63 7/31/64 7/31/65
Cash— $100,468.25 $106,811.14 $ 80,394 $ 28,751
U. S. Government
Obligations At
Cost— 125,000 224,262 298,783 298,297

By July 31, 1965, the holding in government securities slightly exceeded the original amount of the insurance proceeds. The interest on these securities was not subject to the bonus plan.

It appears that the sudden deaths of Szantay and Clemens caused great concern among the employees of the company. They urged the executor to continue the business and to adopt an incentive plan. The executor decided there was a good prospect of earning a fair return in excess of the amount which could be earned by selling the business and investing the proceeds. Having reached that decision, the executor after consulting the successor-president and others decided that an incentive plan was necessary to maintain the prosperity of the company and the continued employment and vigor of its staff. Negotiations with employees followed and a plan was agreed upon. The agreement defined that portion of the company’s income subject to the bonus plan as follows:

“Net profits shall be construed as being before income taxes and shall be the amount as determined by the company’s public accountants for audit purposes and reporting to stockholders. Nonrecurring or non-operating profits or losses, such as capital gains or losses, proceeds from life insurance policies, interest or gains on investments and other unusual items shall be eliminated.”

The first $25,000 of operating income, as hereinbefore defined, was to be reserved to the stockholders. Thereafter, fifty percent was to be set aside for the incentive fund. As proceeds from life insurance, interest or gains on investments were excluded from the plan, this gave added assurance that a substantial sum would be available for dividends. The plan further provided that the board of directors would select an executive compensation committee to consist of the president and two directors. The committee was to select participants other than those specifically set forth in the plan and to determine the amount of bonus to be paid to each participant. The actions of the committee were subject to unanimous approval by the board of directors. Distribution of the bonus fund was subject to the limitation that no participant was to receive more than fifty percent of his basic salary out of the bonuses derived from the first $100,000 of operating income earned by the company in any year. IE however the company succeeded in earning more than $100,000 in any year, fifty percent of the profit would go to the bonus plan, to be distributed to the employees without regard to their basic salaries.

The bonuses given employees under the plan for the three years 1963, 1964 and 1965 were respectively $69,-176.63, $87,707.33 and $36,648.76. The top three executives received total compensation as shown below:

Fiscal Year 7/31/63 7/31/64 7/31/65
Eobert Wehrheim, President $30,212 $36,111 $22,429
Charles McGuinness, Superintendent 19,155 19,279 14,489
Virgil Eathbone, Sales Manager 17,549 20,475 14,465

In support of its position that the incentive plan was necessary and desirable, the executor argues that the business is one in which special attention must be given to preserving customer-employee relationships and that the death of its two top men was especially disturbing to a business which depended on technical skill in production and on customer cooperation. The company produces extruded plastic products on a custom-job basis, the principal product being plastic light diffuser panels used as components in fluorescent lighting fixtures. Upon receiving an order, Sandee prepares a die and produces a sample of the item which is then submitted to the customer for approval. The company seeks approval of the sample product while the machinery is still operating so that it may thereby save setup time and increase the utility of its equipment. Close customer contact secures expeditious approval and is a significant factor in reducing production costs. For these reasons the executor concluded that some plan was required to keep the key men engaged in the operation of the business and in its opinion the only feasible arrangement was the profit-sharing plan.

As to the total compensation paid employees coming under the plan, two expert witnesses testified that the total compensations paid by Sandee in 1963, 1964 and 1965 were low. G. M. Baccash, manufacturing vice-president of Lind Plastic Products, Inc., testified that Sandee’s salaries were too low to attract qualified people. Elmer E. Mills, a consultant in the plastic industry, testified that the company’s salaries were low and that the total compensation, including bonuses, paid to employees was not out of line with industry standards. There was no testimony on behalf of the petitioner on this issue.

Net profits of $56,651, $66,126 and $47,196 were earned for the estate in three successive years, after the payment of all bonuses. Based on a net worth of $460,000 (including funds derived from insurance), the return was in the range of 10% to 14% per year. During the three years the incentive plan was in effect the company after paying all compensation had an average income from operations of $93,332 (before taxes). That was a marked increase over the average income from operations during the period 1959-1962, which was $36,880.

Petitioner contends that earnings for 1962, the year of the testator’s death, were substantially higher than the succeeding years after adoption of the bonus plan. Financial statements in the record show that a special tax credit amounting to $48,000 was largely responsible for the showing in 1962.

Petitioner charges that two officers of the company served conflicting interests since as members of the executive compensation committee they could determine their own bonuses. It appears however that the actions of the committee were subject to the unanimous approval of the board of directors and that the board had full authority to fix salaries, even for services of its own members. Ill Rev Stats, c 32, § 157.33 (1967).

Petitioner also alleges that the executor wrongfully concealed the adoption of the plan from her and from the beneficiaries of the trust. Concealment does not appear to have been the basis for the surcharge, and the receipts and disbursements of the company were ultimately disclosed pursuant to a court order entered July 28, 1964. The executor explained that Marie Szantay Konopka was divorced from decedent five months prior to his death; that custody of the children was given to decedent following the divorce and that petitioner was not appointed guardian of the minor beneficiaries until after the bonus plan was adopted. The petitioner was not herself a beneficiary and the executor was under no duty to apprise her of such business judgments. The executor after conferring with M. G. Kaufman, attorney for the estate, formed the opinion that the petitioner was not experienced in business and though she had been a nominal director of the company prior to the divorce, she had no special knowledge of the plastic extrusion industry. In addition the executor was advised that the petitioner might oppose the plan and jeopardize the continued operation of the business. It further appears that prospects for cordial relations between the petitioner and the attorney for the estate were rather bleak as he had represented Szantay in the divorce action.

The real issue here is whether a surcharge may be imposed against an executor as a penalty for its business judgment where no loss is shown to have been incurred by the estate and no ulterior advantage derived by the executor. An executor may continue the operation of a testator’s business when expressly authorized to do so by will and that direction will be respected by the courts unless it should appear to be highly disadvantageous to the estate. Where discretion is granted to a trustee, his decisions will be conclusive in the absence of negligence or fraud. Moore v. McFall, 263 Ill 596, 105 NE 723; See, Bogert, Trusts, § 571, p 168 (2nd ed, 1960). When a business is continued by a trustee, the profits become part of the estate or trust for which the business is being carried on and losses are a charge on the estate or trust property. The trustee cannot be charged if it has used prudence in carrying on the business. Bogert, Trusts, § 754 (2nd ed, 1960).

Petitioner cites Hatfield v. First Nat. Bank, 317 Ill App 169, 46 NE2d 94. There the court held that the chancellor ruled correctly in refusing to surcharge for losses occasioned by the estate when there was no showing of negligence. The rule as there stated is that a trustee receiving stock in a testator’s estate under direction to continue the investment will not in the absence of negligence, fraud or other improper conduct become liable for losses resulting from an honest mistake in judgment in the retention of the stock.

Petitioner also cites In re Estate of Busby, 288 Ill App 500, 6 NE2d 451, in support of her contention that the executor should be surcharged. In that case the testator died shortly before the great depression of the 1930’s, leaving a large investment portfolio. Many of the securities were pledged as collateral for loans and as the stock market declined, the estate’s equity in the shares diminished. The court held that the executor should not have continued to hold such speculative investments and that this caused a loss to the estate for which the executor was liable. In the instant case there was no loss, but on the contrary the business earned a substantial profit for the estate.

Petitioner further cites Taylor v. Errion, 137 NJ Eq 221, 44 A2d 356 (1945) in support of her contention that the adoption of the bonus plan was a breach of trust. In that case the testator owned substantially all the stock of the Taylor Provision Company. Errion, an employee of the company, was designated coexecutor and cotrustee along with the Trenton Trust Company. Following the death of the testator, Errion continued to manage the business and although his duties remained the same, the directors doubled his salary and paid him large bonuses. Certain securities owned by the company were liquidated against the express wish of the beneficiaries in order to provide more working capital and to pay the bonuses voted to Errion. The chancellor held that Errion had violated his fiduciary duty and removed him as trustee. The court did not remove the trust company from its position as cotrustee nor did it impose a surcharge. In no sense does Taylor v. Errion constitute authority for the surcharge imposed in the instant case.

Petitioner contends that the profit would have been much larger but for the adoption of the bonus plan. The fact remains that the net income of the company produced a fair return on the corporate assets. The apprehension that if the company prospers, an excessive return will be distributed to the employees must be subjected to the assumption that the executor-trustee, having all the stock, has control of the situation and can and should exercise due caution in the administration of the plan. There is ample evidence to support the finding that a less generous bonus plan would have resulted in numerous resignations, that replacements could not have been hired at the company’s existing wage levels and that the obsolete machinery it owned would have been sold at a loss. Wehrheim who was elected president appears to have been Szantay’s logical successor. He intimated he would resign unless the bonus plan was adopted. Counsel for petitioner argues that this revealed lack of loyalty to the company. It was nevertheless a fact with which the executor had to deal, as Wehrheim was under no contractual obligation to stay. A bonus plan appeared to the executor to be the solution. A business decision such as was here involved cannot be the basis for a surcharge.

The order of surcharge is reversed.

Order reversed.

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