author: PRESIDING JUSTICE DOWNING

text:
    IQBAL AKHTER, M.D., et al., Plaintiffs-Appellants, v. SIRISH SHAH, M.D., Defendant-Appellee.
    First District (2nd Division)
    No. 83—429
    Opinion filed November 1, 1983.

      Douglas R. Carlson, Ruth E. Van DeMark, and Robert A. Strelecky, all of Wildman, Harrold, Allen & Dixon, of Chicago, for appellants.
    Peter G. Frezados, of Regas & Frezados, of Chicago, for appellee.
   PRESIDING JUSTICE DOWNING

delivered the opinion of the court:

In this interlocutory appeal, plaintiffs Iqbal Akhter, M.D., and I. Akhter, M.D., S.C., claim that the trial court erroneously denied their motion for a preliminary injunction in which they sought to enforce a covenant not to compete contained in defendant, Sirish Shah, M.D.’s, employment contract.

Plaintiff Iqbal Akhter, M.D. (hereinafter referred to as plaintiff), is an internist-cardiologist who, in 1978, formed and became the sole owner of the professional corporation of plaintiff, I. Akhter, M.D., S.C. (hereinafter referred to as the corporation). The corporation provides medical services to patients at several hospitals, but in 1980, derived the largest percentage of its income from work performed at Northwest Hospital in Chicago.

About mid-1980, defendant contacted plaintiff in regard to obtaining employment with him. At this time, defendant had only been licensed to practice medicine for one year and had just finished a fellowship. He had no private practice or clientele of his own. Defendant represented to plaintiff that he was attempting to purchase the practice of a doctor who worked at two hospitals other than Northwest.

After negotiations between the two parties, plaintiff drafted, and defendant signed, an employment contract dated August 4, 1980, which contained the following provision:

“COVENANT NOT TO COMPETE
Dr. S. Shah agrees not to compete against the corporation if for any reason he is no longer associated with the corporation as an employee of the corporation, each doctor will abstain from competing against the other by not practicing in the hospitals that the other party is on or prior to August 1, 1980.”

Plaintiff assisted defendant in applying to and obtaining staff privileges at Northwest Hospital. After plaintiff became dissatisfied with defendant’s performance, the parties signed a rider to the contract on September 28, 1981. In the rider, defendant admitted that because he was unable to join the staffs of several hospitals he applied to, he did not generate any revenue from them as was the understanding he had with plaintiff prior to the signing of the employment contract. Defendant’s percentage of the profits was therefore reduced. Further, defendant admitted that he did not move to a location closer to Northwest Hospital as was the prior understanding of the parties, but continued to live 30 miles from said hospital. No mention was made of the covenant-not-to-compete clause. Defendant was subsequently terminated from plaintiff’s employ on February 15, 1982, but nevertheless continued to accept referrals from physicians at Northwest Hospital and to practice there.

Plaintiff initiated this action for injunctive relief and for monetary damages against defendant on May 12, 1982. In count I of his eight-count amended complaint, plaintiff requested that defendant be enjoined from: (1) practicing medicine at Northwest Hospital; (2) disparaging plaintiff’s professional competence and standing; or (3) otherwise unlawfully attempting to divert referrals and patients from plaintiff.

Plaintiff filed a motion for a temporary restraining order or preliminary injunction, requesting that defendant be enjoined from practicing medicine at Northwest Hospital. At the hearing, plaintiff testified that the number of referrals he received from Northwest was 30 to 50 per month in 1981, and only five or six per month in 1982; also, the corporation’s income declined from an average of $58,000 per month for the last six months of 1981, to about $38,000 per month for the latter half of 1982. He admitted that there were 10 or 11 other cardiologists who practice at Northwest, and that it was possible that some of them also get referrals for cardiology work, but he stated he did not know if they were the same doctors from whom he received work.

The trial court granted defendant’s motion for a directed finding. In reaching that decision, the trial court found that: the covenant was “unenforceable and against the policies of the State of Illinois in that it is much too broad without specification as to what hospitals are involved”; that by plaintiff’s own testimony, the purpose of the provision was to avoid competition; and that all plaintiff seeks to protect “is the possible referrals that he may get by eliminating [defendant] at this juncture.” The court concluded that there was no protectible interest to be restrained, but that the case would continue as to the claim for damages. Plaintiff brought this interlocutory appeal pursuant to Supreme Court Rule 307(a)(1) (87 Ill. 2d R. 307(a)(1)).

I

Plaintiff strongly contends on appeal that the trial court, in denying his petition for a preliminary injunction, both misread the language of the covenant not to compete and ignored long-established II-linois law. Plaintiff recognizes that his burden of proof at the evidentiary hearing required that he establish by the preponderance of the evidence that: (1) he possessed a certain and clearly ascertained right which needed protection; (2) that he would suffer irreparable injury without such protection; (3) that he had no adequate remedy at law; and (4) that he was likely to succeed on the merits. (Baal v. McDonald’s Corp. (1981), 97 Ill. App. 3d 495, 499, 422 N.E .2d 1166, appeal denied (1981), 85 Ill. 2d 563.) The trial court concluded that plaintiff failed to prove that he had a clearly ascertained right which needed protection since the contract provision was unenforceable.

As plaintiff notes, our courts have recognized that the question of whether a contractual restriction upon the right of a party to practice his profession is reasonable is one of law which must be determined under the particular facts of each case. The following factors will be considered: (1) whether the contract is supported by valuable consideration; (2) whether the restraint imposed is limited or partial; (3) whether the restraint is greater than is necessary to protect the promisee; and (4) whether enforcement of the contract would be injurious to the public or cause undue hardship to the promisor. Bauer v. Sawyer (1956), 8 Ill. 2d 351, 355, 134 N.E.2d 329; Storer v. Brock (1933), 351 Ill. 643, 649, 184 N.E. 868.

There is no dispute by either party that the contract was supported by valuable consideration. Plaintiff, however, strongly contends that the trial court erroneously found the covenant not to compete provision unenforceable because it was “too broad” in that it “just says any hospital that they may practice in.”

In recent years, the courts in Illinois have expressed an abhorrence for restraint of trade and have instead encouraged fair competition in business, with the result that covenants not to compete in employment contracts have been carefully scrutinized. (Image Supplies, Inc. v. Hilmert (1979), 71 Ill. App. 3d 710, 713, 390 N.E.2d 68.) However, where the restraint is reasonable as to time and territory, the agreement is valid and injunctive relief is both customary and proper. Field Surgical Associates, Ltd. v. Shadab (1978), 59 Ill. App. 3d 991, 995, 376 N.E.2d 660.

Plaintiffs argue that although the terms of the contract state that each party will abstain from competing with each other by “not practicing in the hospitals that the other party is on or prior to August 1, 1980,” the parties at the time of the signing of the contract knew that this clause was limited to, at most, eight hospitals. In any event, plaintiff now argues he is only seeking an injunction to prevent defendant from practicing at one hospital — Northwest. While we are mindful that a court of equity may, under certain circumstances, modify a covenant so as to make it reasonable, it is the fairness of the original restraint imposed that is the relevant consideration. (Barrington Trucking Co. v. Casey (1969), 117 Ill. App. 2d 151, 156, 253 N.E.2d 36, appeal denied (1970), 42 Ill. 2d 586; L & R Insurance Agency, Inc. v. McPhail (1968), 92 Ill. App. 2d 107, 112, 235 N.E.2d 153, appeal denied (1968), 39 Ill. 2d 626.) However, where the original restriction neither provides a time limitation nor clearly identifies the hospitals in which the practice is to be prohibited, the restriction, which is too vague and ambiguous, should not be rewritten by the court.

The covenant not to compete clause in the instant contract did not specify any time duration. It could be in force for the lifetime of defendant. Plaintiff cites a supreme court case wherein a covenant with no time limitation was enforced (Storer v. Brock (1933), 351 Ill. 643, 647-48), and a subsequent case where the supreme court noted that agreements unlimited in time had been enforced in Illinois (Bauer v. Sawyer (1956), 8 Ill. 2d 351, 355). Although we glean from these cases that an unlimited time restraint is not by itself grounds for declaring a covenant void, we believe that in this case where it is not possible to determine which hospitals the covenant refers to from the face of the instrument, and where the covenant has no time limitation, it is too vague and indefinite to be enforced. As our supreme court has noted, “[t]o stake out unrealistic boundaries in time and space *** is to impose upon an employee the risk of proceeding at his peril, or the burden of expensive litigation to ascertain the scope of his obligation.” (House of Vision, Inc. v. Hiyane (1967), 37 Ill. 2d 32, 39, 225 N.E.2d 21.) For these reasons, we affirm the trial court’s decision denying plaintiff injunctive relief.

II

In light of our above ruling that the covenant not to compete, as drafted by plaintiff, is unenforceable, we need not address the additional bases upon which the trial court grounded its decision.

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

Affirmed.

STAMOS and PERLIN, JJ., concur.


source: Caselaw Access Project

license: Public Domain

text:
    JAFFE COMMERCIAL FINANCE COMPANY, Plaintiff-Appellant, v. PAUL P. HARRIS et al., Defendants-Appellees.
    First District (2nd Division)
    No. 82—2334
    Opinion filed November 1, 1983.

      Roger B. Harris and Judy B. Ludwig, both of Altheimer & Gray, of Chicago, for appellant.
    Glenn A. Schwartz and Mavis Hamilton, both of Landesman & Schwartz, of Chicago, for appellees.
   PRESIDING JUSTICE DOWNING

delivered the opinion of the court:

The issue in this case is whether a minority shareholder in a close corporation is entitled to any relief from an alleged freeze-out. Plaintiff, Jaffe Commercial Finance Company, contests the propriety of the trial court’s judgment holding that: (1) plaintiff was barred from equitable relief under the “unclean hands” doctrine; (2) the evidence failed to show a pattern of practice and an oral agreement between plaintiff’s principal shareholder, Joel Salk, and the individually named defendants, Paul and Ruben Harris (the Harris brothers), regarding their participation in and earnings from the defendant corporation, Harris Loan and Mortgage Corp. (Harris Loan); and (3) the evidence failed to establish a breach of fiduciary duty, or oppressive conduct, sufficient to warrant liquidation of the assets and business of Harris Loan. Plaintiff contends that these findings were contrary to the manifest weight of the evidence.

In the spring of 1972, the Harris brothers decided to incorporate Harris Loan, a retail installment loan business. They met with Joel Salk to discuss the formation aspects of this new venture, for Salk had acquaintances in the banking community who would operate as a beneficial source for lines of credit essential to the loan business; moreover, Salk had invaluable experience "with regard to management systems, internal controls and other operational aspects of the consumer finance industry.

On June 2, 1972, Harris Loan was incorporated with an initial capitalization of $100,000. Salk and the Harris brothers each invested $30,000 in this new business venture ($7,500 in common stock and $22,500 in subordinated debentures). A third Harris brother, Joel Harris, originally invested $10,000 ($2,500 in common stock and $7,500 in subordinated debentures); however, his interest was redeemed at an early stage because of his failure to assist in the arrangement for additional bank lines of credit.

At the formation of Harris Loan, it was agreed that Paul Harris would be president, and Ruben Harris would be vice-president and treasurer, and Joel Salk would be secretary. Thereupon, each was elected to his agreed-upon corporate office; each became a director of the Harris Loan Board; and, each was reelected annually from 1972 to 1978, when the events took place which culminated in this lawsuit. In addition, it was agreed that the Harris brothers were to conduct the day-to-day operations of the business on a full-time basis. Salk was to advise and consult as an outside director, set up administrative and accounting systems, and arrange for the procurement of bank lines of credit. As for compensation, it was determined that each of the Harris brothers was to receive a salary of $25,000 for the first year. There was no discussion with regard to dividends.

In 1977, negotiations took place for the purchase of the River Oaks Bank and Trust Company. Contracts of purchase for the bank’s stock were signed by Salk and the Harris brothers; however, a disagreement arose with respect to the proposed merger of plaintiff corporation and Harris Loan, harsh words were exchanged, and the Harris brothers were subsequently released from the bank acquisition. Salk then proceeded with the bank purchase, and informed the Harris brothers that he wished to sell plaintiff’s shares in Harris Loan. The Harris brothers, referring to a 1972 “buy/sell” agreement, offered to buy out plaintiff’s equity at $35,000, a price equal to the 1977 book value of the shares. However, Salk declined the offer, refusing to give up the stock for a price less than the alleged fair market value of approximately $300,000.

In an attempt to persuade the Harris brothers to buy plaintiff out at the fair market price, Salk informed them that the institution of a lawsuit would have a chilling effect on their bank lines of credit. As a result, the Harris brothers terminated further consulting services on the part of Salk; and, at a special meeting of Harris Loan shareholders on May 30, 1978, they voted him out as a corporate director. Leah Harris, the wife of one of the Harris brothers, was subsequently elected to replace Salk on the Harris Loan Board; and, on June 26, 1978, Ruben Harris was elected to the office of corporate secretary, thereby effectively ousting Salk from participation in the business of Harris Loan.

Five days prior to the June 26 Harris Loan Board meeting, plaintiff filed an action in equity to enforce an alleged agreement between the Harris brothers and Salk. Plaintiff averred that the three men agreed, at the formation of Harris Loan in 1972, to share equally the rights and responsibilities of ownership and management of Harris Loan; to each occupy, at all times, a seat on its board of directors; to invest approximately equal sums in its common stock, and much larger, but still approximately equal, sums in the subordinated debentures of Harris Loan; and, to receive equal returns on their investments, subject to the rights of the Harris brothers to receive reasonable compensation for their active management of the business. There were also allegations of a further agreement between the parties that Salk would be readily available for consultation, and that he would occupy, at all times, the office of secretary to Harris Loan.

Initially, plaintiff sought a preliminary injunction; however, on March 21, 1980, plaintiff was granted leave to file an amended complaint, which asserted that the Harris brothers’ conduct in freezing Salk out was “oppressive” within the meaning of section 86 of the Business Corporation Act (Ill. Rev. Stat. 1979, ch. 32, par. 157.86). Plaintiff thereby requested the entry of a decree liquidating the assets and business of Harris Loan; or, in the alternative, ordering the Harris brothers to vote for and restore Salk to his officership and directorship, and restraining the Harris brothers from interfering with Salk’s participation in the management of Harris Loan.

At the conclusion of trial, the court ruled that the exclusion of Salk by the Harris brothers was not a breach of fiduciary duty or oppression, but merely an exercise of their right as majority shareholders to “vote their strength.” Moreover, regarding the operation of Harris Loan, participation in it, and payment of income from it, the court held that plaintiff had not proved an oral agreement and, thus, was not entitled to equitable relief. Based on these findings, judgment was thereupon entered in favor of defendants on September 1, 1982. It is the propriety of this judgment which plaintiff now contests on appeal.

I

The threshold issue is whether the trial court erroneously concluded that plaintiff was barred from equitable relief under the doctrine of “unclean hands.”

It is a fundamental rule that one seeking equity cannot take advantage of his own wrong or, as otherwise stated, “[h]e who comes into equity must come with clean hands.” (See generally 2 Pomeroy, Equity Jurisprudence sec. 397 et seq. (5th ed. 1941).) The application of this equitable maxim lies within the sound discretion of the trial court; the doctrine is not concerned so much with the effect of plaintiff’s conduct, but with the intent with which the acts were performed. Regional Transportation Authority v. Burlington Northern Inc. (1981), 100 Ill. App. 3d 779, 786, 426 N.E.2d 1143.

Traditionally, the “unclean hands” doctrine has not been favored by the courts, for it is not a judicial straightjacket intended to prevent equity from doing complete justice. (Shadden v. Zimmerlee (1948), 401 Ill. 118, 127-28, 81 N.E.2d 477; Mascenic v. Anderson (1977), 53 Ill. App. 3d 971, 972, 369 N.E.2d 172.) Furthermore, Illinois decisional law provides that the misconduct on the part of a plaintiff which will defeat recovery in a court of equity under this rule must have been fraud, or bad faith directed toward the defendant in the very transaction being considered. Mills v. Susanka (1946), 394 Ill. 439, 445-46, 68 N.E.2d 904; Baal v. McDonald’s Corp. (1981), 97 Ill. App. 3d 495, 500-01, 422 N.E.2d 1166, appeal denied (1981), 85 Ill. 2d 563.

In the present case, it was argued by defendants at trial that lump sum amounts paid to Salk annually from 1973 through 1977 were, essentially, bill payments to Salk for his services as a consultant to Harris Loan. However, Salk characterized these bills as “shams,” admitting that they were prepared after payment had already been made so as to provide Harris Loan’s accountants with “back-up” or documentation. By the use of this procedure, plaintiff asserted that Harris Loan was able to deduct the payments to Salk as fees or commissions; and, as a consequence, the company paid less in taxes than it would have had the payments to Salk been made as dividends. The trial court, nonetheless, regarded this sham procedure as “deplorable”; thus, it concluded sua sponte that plaintiff was barred from equitable relief under the doctrine of “unclean hands.”

Defendants concede that Salk’s participation in this misconduct was not directed toward any one of them; rather, they urge that Salk’s acts were illegal and a violation of public policy. We are of the opinion that it is this concession which proves fatal to defendants’ argument for the application of the “unclean hands” rule. For, since plaintiff, through its principal shareholder Salk, has defrauded neither the defendant corporation nor the individual defendants, the “unclean hands” doctrine is clearly inapplicable to the transaction complained of in this litigation. (Mills v. Susanka (1946), 394 Ill. 439, 445-46; Baal v. McDonald’s Corp. (1981), 97 Ill. App. 3d 495, 500-01.) Moreover, pertaining to the sham billing scheme, we do not discern any malicious intent on the part of Salk which would necessitate invocation of the equitable maxim. (Regional Transportation Authority v. Burlington Northern Inc. (1981), 100 Ill. App. 3d 779, 786.) Since plaintiff is not guilty of inequitable conduct toward any of the defendants, its hands are as clean as the court can require; as a result, we believe that the trial court erred in concluding that plaintiff was barred from equitable relief under the “unclean hands” rule. In light of our review of the record in the present case, however, we regard this as harmless error.

II

Plaintiff contends that there was an actual agreement between the Harris brothers and Salk, by course of conduct and oral agreement, to the effect that each of them was to be a director and officer of Harris Loan; that each of them was to have a voice in the corporate management; and, that each of them was to receive income from the company in accordance with an agreed-upon formula. This formula, it is argued, involved a calculation representing a fair and reasonable remuneration for the full-time work performed by the Harris brothers each year. Regarding any excess compensation that either of them might receive during the pertinent fiscal year, plaintiff avers that a like amount was to be paid to Salk so as to provide him with an equal return.

Without question, the burden is on the plaintiff to prove by a preponderance of evidence all of the material terms of an alleged contract. (Lippman v. Harrell (1976), 39 Ill. App. 3d 308, 311, 349 N.E.2d 511, appeal denied (1976), 63 Ill. 2d 557; Cardinal v. Trendel (1973), 13 Ill. App. 3d 193, 197, 300 N.E.2d 612.) In considering whether there was an agreement between plaintiff and the Harris brothers, the trial court stated that such an agreement is “either clearly and unmistakeably discernible from their conduct, or it does not exist”; the terms must be “so clear and certain”; and, the parties “cannot expect the Court to find for you a contract that you didn’t take the time yourselves to memorialize.” Although we do not necessarily agree with the trial court as to the quantum of evidence necessary to prove the existence of the averred shareholder agreement between plaintiff and the Harris brothers, we are nonetheless of the opinion that the correct conclusion was reached.

For, when testimony is conflicting, as it is here concerning the veracity of the statements made by Salk and the Harris brothers, it is the function of the trier of fact to resolve these conflicts. (Gordon v. Dolin (1982), 105 Ill. App. 3d 319, 326, 434 N.E.2d 341.) As a result, the judgment of the trial court sitting as trier of fact in this cause — who observed the witnesses, heard the testimony, viewed the exhibits, and made careful and complete findings of fact — will not be disturbed by the reviewing court unless such findings are manifestly against the weight of the evidence. (Brown v. Zimmerman (1959), 18 Ill. 2d 94, 102, 163 N.E.2d 518; Thornton v. Rhodus Mobile Homes, Inc. (1982), 104 Ill. App. 3d 869, 872, 433 N.E.2d 699.) In addition, “[e]ven if the reviewing court disagrees with the trial court, or might have come to a different conclusion, the decision of the trial court will not be reversed if there is evidence to support it.” La Grange Metal Products v. Pettibone Mulliken Corp. (1982), 106 Ill. App. 3d 1046, 1052, 436 N.E.2d 645.

Regarding the instant action, there is adequate evidence in the record to support the trial court’s findings and judgment. The terms of the alleged agreement that plaintiff seeks to enforce are perpetual corporate officership and directorship, as well as a share in the corporate income; however, we agree with the trial court that the evidence appertaining to such an agreement is ambiguous and contradictory. For, the court could not ignore the following facts: (1) that Paul and Ruben Harris had a compensation package with identifiable components, whereas, Salk did not; (2) that Salk was paid as a consultant on bills that he signed and submitted as a consultant; (3) that Salk not only informed the Internal Revenue Service during an audit that he was a consultant, but that he filled out his tax returns in such a manner as to show that the income he derived from Harris Loan was commission income earned as a consultant; and (4) that Salk even admitted “there is no doubt that [his] role [was] one of consulting and advising.”

In essence, the trial court heard the testimonial evidence, examined the proffered exhibits, and concluded that “[cjommon sense tells me that there was never such an agreement.” Upon consideration of the record before us, we believe that this conclusion was not manifestly against the weight of the evidence. To hold otherwise would be tantamount to the assertion that a reviewing court is better equipped than a trial court to determine the credibility of witnesses and the weight to be afforded their testimony. Such a fallacy defies reasoned analysis and eviscerates our well-established standard of review.

III

Plaintiff next maintains that apart from the averred agreement between the parties to this lawsuit, the compensation and benefits received by the Harris brothers pursuant to their own determination is violative of their fiduciary duties as directors and majority shareholders of Harris Loan. For, it is urged that they have used their positions within the company to administer the corporate assets for their own personal gain, rather than to manage the business solely in the interest of the corporation and all of its shareholders. We disagree.

The law is uncontroverted that the individuals who control corporations owe fiduciary duties to their corporation and its shareholders. (Shlensky v. South Parkway Building Corp. (1960), 19 Ill. 2d 268, 278, 166 N.E.2d 793; Graham v. Mimms (1982), 111 Ill. App. 3d 751, 761, 444 N.E.2d 549, appeal denied (1983), 95 Ill. 2d 28.) The decision of joint adventurers to form and operate as a corporation, rather than as a partnership, does not change the fact that they embarked on a joint enterprise; thus, their mutual duties and obligations are similar to those of partners. (Tilley v. Shippee (1958), 12 Ill. 2d 616, 624, 147 N.E.2d 347.) These duties involve exercising the highest degree of honesty and good faith in the dealings and in the handling of business assets, thereby prohibiting enhancement of personal interests at the expense of corporate interests. Mandell v. Centrum Frontier Corp. (1980), 86 Ill. App. 3d 437, 450, 407 N.E.2d 821; Karris v. Water Tower Trust & Savings Bank (1979), 72 Ill. App. 3d 339, 353, 389 N.E.

We note that the issue of whether compensation is reasonable is a question for the trier of fact; and, that “[generally, unless the majority shareholders and directors are clearly managing the affairs of the corporation dishonestly or the compensation is so unreasonable as to constitute ‘waste’ or ‘spoliation,’ courts have not substituted their judgment for that of the directors. [Citation.]” (Romanik v. Lurie Home Supply Center, Inc. (1982), 105 Ill. App. 3d 1118, 1127, 435 N.E.2d 712.) In the case at bar, the trial court held that the evidence failed to establish that the salaries received by the Harris brothers were beyond the range of reason; as a result, the court concluded that there was no breach of fiduciary relationship. We find sufficient, evidence in the record to support this conclusion.

At trial, the court was made aware of the fact that during the fiscal years 1973 through 1982, the annual increase in the Harris brothers’ salaries averaged less than 11%. It was even conceded by Salk that the annual rate of inflation during this same time period was approximately 10%. Further, he could offer no opinion as to what a reasonable parameter of fixed remuneration would have been. It was disclosed during trial that beginning in 1973 and extending through 1982, the salaries paid to each of the Harris brothers ranged from $25,512 to $62,302. The lower court found this remunerative scale to be reasonable and justified, noting that Paul and Ruben Harris were educated men of business sophistication and intellect who conducted the day-today operations of Harris Loan for a period of 10 years.

For this finding to be held contrary to the manifest weight of the evidence, an opposite conclusion must be clearly evident. Since the presumption on appeal is that the trial court heard sufficient evidence on which to base its judgment, the appellant has the burden of demonstrating that the record fails to support such a judgment. (In re Special Education Placement of Walker (1982), 107 Ill. App. 3d 1053, 1061, 438 N.E.2d 582.) Plaintiff has failed to show that such was the case here; for, considering the evidence on the whole, we do not discern corporate waste or spoliation sufficient to render the finding of reasonable compensation contrary to the manifest weight of the evidence.

IV

Finally, plaintiff contends that the Harris brothers’ act of excluding Salk from the management, control and income of Harris Loan constitutes an oppressive freeze-out. It is thus urged that we remand this cause with directions to enter a judgment ordering liquidation of the assets and business of Harris Loan.

Section 86 of the Business Corporation Act provides in pertinent part that: “Circuit courts have full power to liquidate the assets and business of a corporation: (a) In an action by a shareholder when it appears: *** (3) That the acts of the directors or those in control of the corporation are illegal, oppressive or fraudulent ***.” Ill. Rev. Stat. 1979, ch. 32, par. 157.86.

It is well recognized in Illinois that the word “oppressive,” as used in this statute, “does not carry an essential inference of imminent disaster; it can contemplate a continuing course of conduct. The word does not necessarily savor of fraud, and the absence of ‘mismanagement, or misapplication of assets,’ does not prevent a finding that the conduct of the dominant directors or officers has been oppressive.” Gidwitz v. Lanzit Corrugated Box Co. (1960), 20 Ill. 2d 208, 214-15, 170 N.E.2d 131, citing Central Standard Life Insurance Co. v. Davis (1957), 10 Ill. 2d 566, 573-74, 141 N.E.2d 45.

In Compton v. Paul K. Harding Realty Co. (1972), 6 Ill. App. 3d 488, 285 N.E.2d 574, the court found an “arbitrary, overbearing and heavy-handed” course of conduct on the part of the corporate president, including his failure to call board meetings; his failure to consult with the plaintiff shareholder and officer regarding management of corporate affairs; his imperious attitude when questioned about his salary; and, his dilatory action in response to certain requests made by plaintiffs. The Compton court concluded that such conduct justified the trial court’s finding of oppression; thus, the order of dissolution was affirmed. Compton v. Paul K. Harding Realty Co. (1972), 6 Ill. App. 3d 488, 499.

In Gray v. Hall (1973), 10 Ill. App. 3d 1030, 295 N.E.2d 506, we noted that actions which might be oppressive under one set of circumstances will not be oppressive under others, e.g., the payment of large salaries to corporate officers might be justified where a particular corporation has large retained earnings. Gray v. Hall (1973), 10 Ill. App. 3d 1030, 1034.

With regard to the instant action, it is undisputed that Harris Loan is a close or closely held corporation. By definition, a close corporation is one in which the stock is held in a few hands, or in a few families, and wherein it is not at all, or only rarely, bought or sold. Galler v. Galler (1964), 32 Ill. 2d 16, 27, 203 N.E.2d 577; Wasserman v. Rosengarden (1980), 84 Ill. App. 3d 713, 716, 406 N.E.2d 131, appeal denied (1980), 81 Ill. 2d 600.

Our review of the record in the present case indicates that in 1977, due to a disagreement with respect to the proposed merger of plaintiff and defendant corporations, Salk informed the Harris brothers that he wished to sell plaintiff’s shares in Harris Loan. The Harris brothers offered to buy out plaintiff’s equity at $35,000, a price equal to the 1977 book value of the shares. Salk declined this offer, however, and refused to give up the stock for a price less than the alleged fair market value of approximately $300,000.

In an attempt to persuade the Harris brothers to buy plaintiff out at the fair market price, Salk informed them that the institution of a lawsuit would have a chilling effect on their bank lines of credit. As a result, the Harris brothers terminated further consulting services by Salk; and, at a special meeting of the Harris Loan shareholders on May 30, 1978, they voted Salk out as a director. The Harris brothers were able to accomplish this by outvoting plaintiff’s cumulative voting rights with their preferred shares. These shares were issued in 1973 at Salk’s request in exchange for $7,500 of their subordinated debentures, thereby avoiding plaintiff’s “pooling of interest” accounting requirement which would otherwise necessitate the filing of consolidated tax returns. Leah Harris, the wife of one of the Harris brothers, was subsequently elected to replace Salk on the Harris Loan Board. On June 26, 1978, Ruben Harris was then elected to the office of corporate secretary, thereby effectively ousting Salk from participation in the business of Harris Loan.

At the conclusion of trial, the court stated: “All that the majority did here is to vote their strength.” Thereupon, the court ruled that the evidence did not establish oppression or a breach of fiduciary relationship. We agree.

As we indicated earlier, a reviewing court is not inclined to reverse the decision of a trial court who can, with greater effectuality, determine the credibility of witnesses by hearing their testimony and observing their demeanor. In addition, where the outcome of a case is contingent upon the facts found in the record, we will not disturb the findings and judgment of the trial court in nonjury cases if there is any evidence in the record to support such findings and judgment. Swartzberg v. Dresner (1982), 107 Ill. App. 3d 318, 323, 437 N.E.2d 860, appeal denied (1982), 91 Ill. 2d 581; La Grange Metal Products v. Pettibone Mulliken Corp. (1982), 106 Ill. App. 3d 1046, 1052.

Contrary to the claim of plaintiff, we find ample support in this record for the trial court’s findings and judgment. For, unlike the situation in Compton, there has been no allegation here of failure on the part of the Harris brothers to call policy-making board meetings; nor can we discern a disarray of corporate affairs which would be indicative of an arbitrary course of conduct.

A shareholder in a corporation is entitled to participate in the management according to the amount of his stock. (Gidwitz v. Lanzit Corrugated Box Co. (1960), 20 Ill. 2d 208, 215.) However, we must agree with the trial court’s ruling that the majority, by merely voting its strength to effectively oust Salk from participation in the business of Harris Loan, did not act oppressively within the meaning of section 86 of the Business Corporation Act (Ill. Rev. Stat. 1979, ch. 32, par. 157.86). Since an opposite conclusion is not clearly evident from our review of the extensive record in the instant case, we are of the opinion that the trial court’s findings and judgment are not against the manifest weight of the evidence.

For the reasons set out herein, the judgment of the circuit court of Cook County is affirmed.

Affirmed.

STAMOS and PERLIN, JJ., concur.

      plaintiff corporation is a minority shareholder of the defendant corporation, and is engaged in the business of retail installment receivables. Joel Salk is the president and principal shareholder of plaintiff, and has acted on behalf of it with respect to all matters pertinent to this cause of action.

      We neither approve nor disapprove the alleged conduct, but merely conclude it does not fall within the “clean hands” doctrine.


author: PRESIDING JUSTICE WILSON

text:
    ROBERT A. CRINKLEY, Plaintiff-Appellant, v. DOW JONES & COMPANY, INC., et al., Defendants-Appellees.
    First District (5th Division)
    No. 81 — 495
    Opinion filed August 19, 1983.
    Rehearing denied November 28, 1983.
    Joseph Michael O’Callaghan, of Chicago, and William P. Treacy, Ltd., of Winnetka, for appellant.
    Frederick J. Artwick and James S. Whitehead, both of Chicago, for ap-pellee G.D. Searle & Company.
    Jeremiah Marsh and Michael M. Conway, both of Chicago, for appellee Dow Jones & Company.
   PRESIDING JUSTICE WILSON

delivered the opinion of the court:

This appeal is from a judgment of the circuit court of Cook County dismissing counts I, II, V and VI of plaintiff’s complaint which alleged libel per se. The issues presented are: (1) whether the trial court erred in its application of the innocent construction rule to defendants’ statements which allegedly imputed to plaintiff want of integrity in his business and the commission of a crime; (2) whether defendants’ statements constitute libel per se by imputing to plaintiff want of integrity in the discharge of his employment; (3) whether defendants’ statements constitute libel per se by accusing plaintiff of the commission of a crime; and (4) whether the innocent construction rule is unconstitutional as applied to multistate libel actions. We affirm in part and reverse in part.

The article upon which the complaint was based appeared in two segments on April 26 and 27, 1976, in the Wall Street Journal, which is published by defendant Dow Jones and Company (Dow Jones) and is circulated in Illinois and throughout the United States. The article reported a statement made by defendant G. D. Searle and Company (Searle) concerning plaintiff, a former Searle executive. The pertinent portion of the article stated:

“In another development, Searle disclosed that two top officers involved in the payment of $1.3 million to agents of foreign governments to win business abroad have resigned. William Owens, a director and group vice-president in charge of the medical instruments division, and Robert Crinkley, president of the radiographics division, quit in early February. A brief reference to Mr. Owens’ resignation was in the annual report but the reason wasn’t mentioned. A spokesman said the two were the only resignations to result from the disclosures about payoffs.
In February, after the resignations, Searle told the Securities and Exchange Commission that ‘certain members of corporate management were generally aware that some such payments were being made and, in some instances, authorized the arrangements to make payments.’
In reference to the possibility of a grand jury indictment and conviction, Mr. Searle refused to say that any officer found guilty would be fired. That would depend on ‘the nature of the trial and the accusation’ he said.”

Counts I, II, V and VI of plaintiff’s complaint alleged two counts of defamation against each defendant on the theory that the aforementioned statements were completely false; that they were known by Searle to be false; that in the exercise of customary, prudent and accepted journalistic practice Dow Jones could have ascertained that the statements were false; and that the Wall Street Journal failed and neglected to exercise such customary, prudent and accepted practice.

Counts I and II alleged a claim against Dow Jones based on libel. Count V alleged that the false statements made by an agent of Searle to Dow Jones were defamatory and sought damages for injury to plaintiff’s good name, credit and reputation, both personally and in the business community. Count VI sought additional damages for injury to plaintiff’s general good reputation for honesty and integrity.

In response, defendants moved to dismiss for failure to state a cause of action for libel or slander pursuant to section 45 of the Civil Practice Act (Ill. Rev. Stat. 1977, ch. 110, par. 45), now codified as section 2 — 615 of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 2 — 615). Defendants’ amended motions alleged that the statements are capable of a nondefamatory, innocent meaning. On January 21, 1981, the trial court dismissed the action with prejudice. The court commented tangentially that this case “invite [s] the incisiveness of the innocent construction rule.” The memorandum order thus does not credit the rule as the basis for the dismissal.

Plaintiff appealed and on his motion we granted a stay of oral argument until the Illinois Supreme Court rendered its decision in a related case, Chapski v. Copley Press (1982), 92 Ill. 2d 344, 442 N.E.2d 195. Subsequent to the court’s ruling, we granted defendants’ motion for leave to file supplemental briefs as to the effect of the Chapski decision on this appeal.

Opinion

Initially, plaintiff contends that the statements made by Searle in the article constitute libel per se and that application of the innocent construction rule would be improper. **&He contends further that even if the words are not libelous per se, he is entitled to special damages.

An allegation that a statement (1) falsely imputes plaintiff’s unfitness or want of integrity in performing the duties of an office or employment and (2) falsely accuses plaintiff of committing a crime is sufficient to support a defamation action against the person making the statement. (Bruck v. Cincotta (1977), 56 Ill. App. 3d 260, 371 N.E.2d 874; Welch v. Chicago Tribune Co. (1975), 34 Ill. App. 3d 1046, 340 N.E.2d 539; Bontkowski v. Chicago Sun-Times & Field Enterprises, Inc. (1969), 115 Ill. App. 2d 229, 252 N.E.2d 689; Grabavoy v. Wilson (1967), 87 Ill. App. 2d 193, 230 N.E.2d 581; Whitby v. Associates Discount Corp. (1965), 59 Ill. App. 2d 337, 207 N.E.2d 482; 33A Ill. L. & Prac. Slander & Libel sec. 27 (1970).) In determining whether a statement imputes want of integrity to plaintiff in his business or accuses him of committing a crime, the innocent construction rule must be consulted.

The supreme court held in John v. Tribune Co. (1962), 24 Ill. 2d 437, 442, 181 N.E.2d 105, that when considering allegedly defamatory language, the words are to be read as a whole and given their natural and obvious meaning. Words that are capable of being read innocently must be so read and declared nonactionable as a matter of law. The innocent construction rule as set forth by the supreme court in its most recent decision, however, requires that the statement be considered in context with the words and the implications therefrom given their natural and obvious meaning. If, as so construed, the statement may reasonably be innocently interpreted or reasonably be interpreted as referring to someone other than the plaintiff, it cannot be actionable per se. (Chapski v. Copley Press (1982), 92 Ill. 2d 344, 352, 442 N.E.2d 195.) Thus, the Chapski holding has modified the rule as stated in John in that the supreme court has discarded the language of the former rule that “words allegedly libelous that are capable of being read innocently must be so read.” (Emphasis added.) 24 Ill. 2d 437, 442.

The elimination of such broad language appears to be a significant change. We further note that the Chapski decision reaffirms the discarding of the English rule of mitior sensus (best possible sense). The court noted that the abrogation of the doctrine was a result of its artificial and strained application. (92 Ill. 2d 344, 349, 350.) The supreme court additionally modified the innocent construction rule by including the language that “words and the implications therefrom” are to be considered in context in determining whether language is actionable per se. The court acknowledged that the modification of the rule was an effort to rectify the inconsistencies, inequities and confusion occasioned by application of the John rule. The court further observed that the first amendment rights of media defendants have been expanded since John. (92 Ill. 2d 344, 351.) Finally, the court reasoned that a modification of the innocent construction rule “would better serve to protect the individual’s interest in vindicating his good name and reputation, while allowing the first amendment guarantees that ‘breathing space’ essential to their fruitful exercise.” 92 Ill. 2d 344, 351-52.

Applying the Chapski innocent construction rule to the facts before us, in our judgment the statements may be read as imputing want of integrity to plaintiff in his business. The words can be read as accusing plaintiff of making payments “to agents of foreign governments to win business abroad” and that the disclosure of the “payoffs” resulted in plaintiff’s resignation. Plaintiff alleges that these accusations are false and that they cannot reasonably be innocently interpreted.

A false statement which imputes that a person lacks integrity in the discharge of the duties of his employment is actionable as defamation. (See Colson v. Stieg (1982), 89 Ill. 2d 205, 433 N.E.2d 246; Makis v. Area Publications Corp. (1979), 77 Ill. App. 3d 452, 395 N.E.2d 1185; Whitby v. Associates Discount Corp. (1965), 59 Ill. App. 2d 337, 207 N.E.2d 482; 33A Ill. L. & Prac. Slander & Libel sec. 27 (1970).) Moreover, because the words in the case at bar in their entire context can reasonably be interpreted as imputing to plaintiff a lack of integrity, we hold that they are actionable per se. (Chapski v. Copley Press (1982), 92 Ill. 2d 344, 352, 442 N.E.2d 195.) Having so ruled, we find defendants’ rebuttal argument to be without merit. Defendants assert that plaintiff’s contention that the statements impute to him a want of integrity in his employment with Searle is not the only reasonable interpretation of the article under the innocent construction rule. Defendants further contend that the article does not say that plaintiff made any payments, that the payments were anything other than legitimate business expenses, or that the payments were immoral, unlawful or a violation of any duty owed to Searle. They argue that the article states that the payments were, in part, authorized by management and that the article reports plaintiff’s resignation, not his discharge. We disagree.

As aforementioned, Chapski holds that the implication of words are to be considered in their context in determining whether language is actionable per se. (92 Ill. 2d 344, 352.) We also note that in Sloan v. Hatton (1978), 66 Ill. App. 3d 41, 383 N.E.2d 259, this court stated:

“The same words uttered in one situation may be universally acknowledged as innocuous, but in another be unchallenged as amounting to libel or slander. Communication does not occur in a vacuum or void — it is employed in the normal course of human relations, in social and commercial intercourse.” (66 Ill. App. 3d 41, 42-43.)

Thus, an innocent construction requires a fair reading of the entire article which gives the words their meaning. Isolated words such as “involved,” “payment” and “payoffs” may not be taken out of context. We therefore do not believe it is reasonable to construe defendants’ statements innocently, given the context in which they appear, and their natural and obvious interpretation. The cases on which defendants rely in this regard are unpersuasive in light of the supreme court’s modification of the rule as stated in Chapski. (Valentine v. North American Co. for Life & Health Insurance (1974), 60 Ill. 2d 168, 328 N.E.2d 265; Kakuris v. Klein (1980), 88 Ill. App. 3d 597, 410 N.E.2d 984; Adreani v. Hansen (1980), 80 Ill. App. 3d 726, 400 N.E.2d 679.) The trial court’s order dismissing the counts alleging plaintiff’s lack of integrity was, therefore, improper.

It is next contended that the statements were defamatory because they falsely accuse plaintiff or committing the crime of bribing foreign agents to influence the decision of foreign governments. An allegation that a statement falsely accuses a person of committing a crime is sufficient to support a defamation action against the person making the statement. (Zeinfeld v. Hayes Freight Lines, Inc. (1968), 41 Ill. 2d 345, 348, 243 N.E.2d 217; Makis v. Area Publications Corp. (1979), 77 Ill. App. 3d 452, 456, 395 N.E.2d 1185.) It is not necessary that the words state the commission of a crime in terms of art or with the particularity of an indictment for such words to be libelous. (Catalona v. Pechous (1980), 83 Ill. 2d 146, 157, 419 N.E.2d 350; Jacobs v. Gasoline Retailers’ Association (1975), 28 Ill. App. 3d 7, 9, 328 N.E.2d 187.) Words are not actionable, however, if they may reasonably be innocently interpreted or reasonably be interpreted as referring to someone other than the plaintiff. Chapski v. Copley Press (1982), 92 Ill. 2d 344, 352, 442 N.E.2d 195.

In the case at bar, even assuming that the only reasonable interpretation is that the statements accuse plaintiff of bribing foreign officials, such conduct at the time of the articles’ publication in 1976 was not a criminal offense under the Illinois criminal code or under Federal law. Moreover, we note that plaintiff has conceded in his brief that the foreign bribery he claims he was accused of was not a crime. We conclude, therefore, that the words were not defamatory per se because they did not accuse plaintiff of a criminal violation. Plaintiff’s alternative contention that the article constituted libel per se because the average reader would mistakenly think he was accused of a crime and would not know that foreign bribery was a lawful act is without merit. Accordingly, the trial court’s determination that the statements did not accuse plaintiff of a crime was correct. Because of our resolution of this appeal, we need not address plaintiff’s other issues.

For the foregoing reasons, the trial court’s order dismissing plaintiff’s counts I and V (criminal conduct) is affirmed; the order dismissing plaintiff’s counts II and VI (lack of integrity) is reversed and remanded for proceedings consistent with this opinion.

Affirmed in part, reversed in part and remanded.

SULLIVAN and O’CONNOR, JJ., concur.

      Counts III and VII alleged causes of action against both defendants for interference with business expectancy. Counts IV and VIII alleged causes of action against both defendants for violation of the Uniform Deceptive Trade Practices Act. These counts were dismissed by a previous order of the trial court, which order was reviewed by this court in Crinkley v. Dow Jones & Co. (1978), 67 Ill. App. 3d 869, 385 N.E.2d 714. There, we reversed the trial court’s order of dismissal of the interference with business expectancy counts but affirmed the dismissal of the Uniform Deceptive Trade Practices Act counts.

      Although defendants’ original motions to strike and dismiss appear to attack the sufficiency of counts I, II, V and VI and to have been filed under section 45, the amended motions also raise matters properly treated under section 48(1X9- That section provides that if the grounds for dismissal do not appear on the face of the pleading attacked by a motion to dismiss,'the motion “shall be supported by affidavit *** [stating] that the claim *** is barred by other affirmative matter avoiding the legal effect of or defeating the claim or demand.” (Ill. Rev. Stat. 1977, ch. 110, par. 48(l)(i), now codified as Ill. Rev. Stat. 1981, ch. 110, par. 2 — 619(a)(9).) The question whether the allegedly nondefamatory statements are rendered nondefamatory by the innocent construction rule is, therefore, properly considered under section 48(1)(i) John v. Tribune Co. (1962), 24 Ill. 2d 437, 181 N.E .2d 105; Davis v. Keystone Printing Service, Inc. (1982), 111 Ill. App. 3d 427, 432-33, 444 N.E.2d 253; Nagib v. News-Sun (1978), 64 Ill. App. 3d 752, 757, 381 N.E.2d 1014.

      Plaintiff relies in part on this court’s ruling in the previous appeal of this matter that “the statement appears to have imputed want of integrity to plaintiff in his business, which may be actionable under a defamation theory.” Crinkley v. Dow Jones & Co. (1979), 67 Ill. App. 3d 869, 876, 385 N.E.2d 714.

      The bribery of an agent of a foreign government was not a criminal act until the enactment of the Foreign Corrupt Practices Act on December 19, 1977. 15 U.S.C. sec. 78dd — 1 et seq. (Supp. 1977).


author: JUSTICE CAMPBELL

text:
    V & V CEMENT CONTRACTORS, INC., Plaintiff-Appellee, v. LA SALLE NATIONAL BANK, Trustee, et al., Defendants-Appellants.
    First District (1st Division)
    No. 82—2299
    Opinion filed November 7, 1983.

      Frankel, McKay & Orlikoff, of Chicago (Jerome Meister, of counsel), for appellants.
    Ronald N. Hominick, of Hominick & Schummer, of Vernon Hills, for ap-pellee.
   JUSTICE CAMPBELL

delivered the opinion of the court:

Plaintiff, V & V Cement Contractors, Inc., brought this action against defendant, Meister-Neiberg Co., Inc., and La Salle National Bank, to foreclose plaintiff’s mechanic’s lien for the construction of a concrete retaining wall under an oral contract. Following a bench trial, a decree of foreclosure and sale was entered and a lien placed on the defendant’s property in the amount of $13,366.93, including interests and costs. Defendants now appeal claiming: (1) that plaintiff’s mechanic’s lien cannot be enforced since the improvement was constructed partially on property not owned by the defendants; (2) that the trial court erred in finding that payment under the contract was on a time and material basis rather than as a lump sum payment; and (3) that the trial court erred in denying defendants’ counterclaim for damages incurred as a result of plaintiff’s alleged defective performance.

The facts in this case are in dispute except for the following: In 1978 plaintiff and defendant, Meister-Neiberg, orally agreed that plaintiff would construct a concrete retaining wall on certain commercial property owned by defendant, La Salle National Bank, as trustee. Meister-Neiberg caused the construction site to be graded and the corners of the property to be staked by a surveyor. Plaintiff constructed the retaining wall in October 1978, providing all of the labor and material for the construction. Following construction of the retaining wall, plaintiff billed defendants $11,103.75 for the work and a dispute arose as to the cost of constructing the wall. Defendants then had the property surveyed and discovered that the retaining wall encroached on the adjacent residential property. Prior to trial a second survey of the property was conducted which showed an encroachment varying from one-third of an inch to 5.4 inches over a distance of 375 feet. It is to be noted that defendant, Meister-Neiberg, is not a stranger to the adjacent residential property. The trial court found that Meister-Neiberg was the contractor-developer of both the commercial and adjacent residential properties.

At trial, James Crouch, the foreman on the job, testified that the plaintiff was prevented from properly constructing the retaining wall due to muddy ground conditions. According to Crouch, he informed A1 Neiberg, defendants’ agent, that the ground was too wet and muddy to begin construction, but Neiberg insisted that plaintiff proceed with the work saying, “We got to get it done.” Dennis Vito, then vice-president and superintendent of V & V, corroborated much of Crouch’s testimony. Vito also testified that it was his duty to enter into contracts on behalf of plaintiff. Vito stated that when he was asked by defendant to estimate the cost of constructing the retaining wall, he gave defendant an estimate of $10,000 to $11,000.

A1 Neiberg, president of Meister-Neiberg, testified that he was quoted a price of $7,500 by Dennis Vito for construction of the retaining wall. Neiberg also stated that he was never informed by Vito or Crouch that the ground conditions were too wet to begin construction.

The trial court made extensive findings including: that the parties did not agree to a fixed price for the work, that the parties did agree the work would be done on a time and material basis; that the construction site was partially under water and muddy; that plaintiff advised defendants that the area was unsuitable for construction and that the trenching equipment would likely slip; that defendants ordered plaintiff to construct the wall immediately; that the wall met its purpose as to water control and soil erosion; that no losses have been incurred due to the encroachment; and that defendants were equally responsible for the encroachment; and specifically, in paragraph 14, that “[defendants’] failure to remove and reconstruct the wall since its construction in 1978 *** constitutes an acceptance of the retaining wall by [defendants].”

Defendants initially contend that plaintiff is not entitled to enforce its mechanic’s lien since the improvement was constructed partially on property not owned by defendants. They argue that plaintiff failed to perform under the terms of the contract; that any performance by plaintiff was not substantial performance; that the contract contained an implied warranty that the wall would be constructed in a reasonably workmanlike manner; that the work was not accepted by defendants; that plaintiff has caused the defendants to trespass on adjoining property; and that the trial court’s findings are against the manifest weight of the evidence.

Defendants have generally contested each and every one of the trial court’s findings and have urged that the trial court’s findings are against the manifest weight of the evidence. Defendants argue specifically that plaintiff failed to perform; that performance was not substantial; that the contract contained an implied warranty; and that plaintiff caused defendants to trespass on the adjacent residential property. Although a trial court’s holding is always subject to review, this court will not disturb a trial court’s finding and substitute its own opinion unless the holding of the trial court is manifestly against the weight of the evidence. (Schulenburg v. Signatrol, Inc. (1967), 37 Ill. 2d 352, 226 N.E.2d 624.) Underlying this rule is the recognition that especially where the testimony is contradictory, the trial judge as the trier of fact is in a superior position to that of a reviewing court to observe the conduct of the witnesses while testifying to determine their credibility and to weigh the evidence accordingly. The trial court’s determination will not be disturbed absent a finding that the trial court’s judgment was clearly against the manifest weight of the evidence. (Schulenburg v. Signatrol, Inc.; La Salle National Bank v. County of Cook (1957), 12 Ill. 2d 40, 145 N.E.2d 65.) For a finding of fact to be against the manifest weight of evidence, an opposite conclusion must be clearly evident. Telander v. Posejpal (1981), 94 Ill. App. 3d 616, 418 N.E.2d 444.

Defendants’ principal argument is that plaintiff was never instructed by defendants to construct the wall in spite of plaintiff’s warning that it was too wet to begin the work. There was, however, directly conflicting testimony presented at trial by witnesses, Vito and Crouch. The trial court could have properly found that the plaintiff had adequately performed in view of defendants’ instructions to proceed with the construction despite the muddy conditions. Furthermore, there was ample evidence to support the trial court’s finding that defendants were equally responsible for the resulting encroachment. Two experts in the construction field testified that a wall could move if constructed in a wet and muddy area with backfill exerting pressure against it. We cannot say, based upon the record before us, that an opposite conclusion from that reached by the trial court is clearly evident. Therefore, we conclude that the trial court’s findings were not against the manifest weight of the evidence.

Defendants also argue that plaintiff has failed to substantially perform under the contract. Defendants contend that because plaintiff failed to construct the wall wholly on defendants’ property, there was substantial deviation from performance so as to deny enforcement of plaintiff’s mechanic’s lien.

Generally, a builder is not required to perform perfectly; rather, he is held only to a duty of substantial performance in a workmanlike manner. (Brewer v. Custom Builders Corp. (1976), 42 Ill. App. 3d 668, 356 N.E.2d 565.) An important factor in determining whether a builder has rendered substantial performance is the actual receipt and enjoyment of benefits by the purchaser. Brewer v. Custom Builders Corp.

Here, defendants engaged plaintiff to construct the retaining wall in order to prevent water drainage and soil erosion on the property. Al Neiberg, defendants’ agent, testified that the retaining wall served those purposes. It is not disputed that the wall has never been replaced, altered or removed to this day. The surveys introduced at trial show that there was some lateral movement in the wall. Expert testimony established that the movement could have been caused by the muddy conditions under which defendants ordered plaintiff to perform. The surveys also show that the wall is constructed wholly or partially on the commercial side of the lot line as instructed by defendants. Based on the evidence presented in the record, the trial court could have found that plaintiff had substantially performed under the contract. The wall continues to serve its purpose and defendants have been enjoying the benefits of the retaining wall without attempting any structural alteration of it.

Defendants’ second contention is that the trial court erred in finding that the contract between the parties was based on time and material rather than on a lump sum payment. Defendants argue that the parties had not previously dealt on a time and material basis, and because the plaintiff did not attach supporting documents to the bill, the contract could not have been based on time and material.

Plaintiff counters by asserting that because no price was fixed in the contract, plaintiff is entitled to recover the reasonable value for the services and materials. Plaintiff relies on Fehr Construction Co. v. Postl System of Health Building (1919), 288 Ill. 634, 124 N.E. 315, which held that failure to fix a definite price for the material and work contracted for would give rise to an implied promise to pay the reasonable value for the work.

The trial court found that although there was not an agreed price in the oral contract, the parties had “agreed that the work would be done on a time and material-plus basis.” We are of the opinion that plaintiff presented sufficient evidence to establish that the plaintiff contracted for the work to be done on a time and material basis. Plaintiff’s complaint was broad enough to encompass an award on the basis of time and material. Plaintiff’s witness, Vito, testified as to the cost of the material used and the labor employed for the construction. Furthermore, at trial plaintiff presented numerous copies of time sheets, and job invoices as well as plaintiff’s written proposal for the work. The trial judge viewed the witnesses and had an opportunity to evaluate the credibility of their testimony. (Schulenburg v. Signatrol, Inc. (1967), 37 Ill. 2d 352, 226 N.E.2d 624.) Here, the finding as to the award of damages on a time and material basis was reasonable and based on the facts in evidence, and we see no reason to disturb the trial court’s finding.

Defendants’ final contention is that the trial court erred in denying defendants’ counterclaim for damages incurred as a result of plaintiff’s alleged defective performance. We do not agree with defendants’ contention in view of the trial court’s finding that defendants’ conduct constituted an acceptance of plaintiff’s performance. Defendants have not directed us to anything in the record which would indicate that defendants disapproved of or intended to reject plaintiff’s performance before plaintiff presented defendants with the bill for the construction. Nor did defendants present evidence that they communicated to plaintiff an intent to reject or repudiate the work. (See Brewer v. Custom Builders Corp. (1976), 42 Ill. App. 3d 668, 356 N.E.2d 565.) Furthermore, defendants are enjoying the benefits of the contract since the wall is still standing and serving the defendants’ purpose. It follows from defendants’ course of conduct that the trial court was justified in finding that defendants accepted the work as performed by plaintiff. Additionally, since defendants were also the contractors-developers of the adjacent property, the trial court could have properly determined that defendants had precluded themselves from seeking damages on the claim of encroachment since defendants insisted that plaintiff proceed with the work under less than ideal conditions. Accordingly, defendants are not entitled to relief as sought, and the trial court did not err in denying defendants’ counterclaim for damages.

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

Judgment affirmed.

BUCKLEY, P.J., and GOLDBERG, J., concur.


author: JUSTICE HEIPLE

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. RONALD SANFORD, Defendant-Appellant.
    Third District
    No. 3-83-0282
    Opinion filed November 9, 1983.

      Robert Agostinelli and Verlin R.E Meinz, both of State Appellate Defender’s Office, of Ottawa, for appellant.
    John A. Barra, State’s Attorney, of Peoria (John X. Breslin and Vicki R. Wright, both of State’s Attorneys Appellate Service Commission, of counsel), for the People.
   JUSTICE HEIPLE

delivered the opinion of the court:

Following a jury trial in the circuit court of Peoria County, the defendant, Ronald Sanford, was convicted of one count of rape and two counts of deviate sexual assault. The court imposed three concurrent sentences of 45 years’ imprisonment.

The defendant raises two issues on appeal: (1) whether he was improperly convicted and sentenced for two counts of deviate sexual assault based on a series of closely related acts, and; (2) whether the trial court erred in imposing extended-term sentences.

On October 5, 1982, Kathy Allen, a social worker for the Department of Children and Family Services, made an appointment with the defendant regarding his children. Shortly after the social worker arrived at the defendant’s apartment, she was taken at knife point into the bedroom where the defendant forced her to submit to repeated acts of intercourse and deviate sexual contact over a period of approximately 40 minutes. The defendant released Ms. Allen after taking money from her purse. Later that day, the defendant was arrested and charged with rape and two counts of deviate sexual assault based upon two separate acts of oral-genital contact with the victim.

The defendant, relying on People v. Cox (1972), 53 Ill. 2d 101, argues that multiple convictions for two counts of a single offense based on a series of related acts cannot stand. In Cox, the defendant was convicted of two counts of indecent liberties with a child; one count involving sexual intercourse, the other involving deviate sexual conduct. Both acts were committed upon one victim during the course of a single attack. The court vacated one of the convictions holding that where offenses arise from a single transaction based upon two acts almost simultaneous in time, involving a single victim, and each of the acts is among several proscribed by a statute, the conduct constitutes a single offense and only one sentence should be imposed. Here, the defendant’s two convictions for deviate sexual assault were based upon two acts with a single victim which were almost simultaneous in time. Also, the two acts were among those proscribed by the statute defining deviate sexual conduct. (Ill. Rev. Stat. 1981, ch. 38, par. 11 — 2.) Therefore, in accord with Cox, one of the defendant’s convictions for deviate sexual assault must be vacated.

Despite the clear holding of the supreme court in Cox and its close similarity to the facts in the present case, the State, relying on People v. Zeiger (1981), 100 Ill. App. 3d 515, argues that the Third District no longer follows the Cox rationale. After reviewing Zeiger, we find that it is based upon a faulty interpretation of Cox.

In Zeiger, the defendant was convicted of two counts of deviate sexual assault based upon two deviate acts upon one victim which were almost simultaneous in time. Citing People v. King (1977), 66 Ill. 2d 551, the court held that Cox no longer applied to these facts. In so holding, the court ignored a significant distinction between the Cox and King cases.

In King, the Illinois Supreme Court held that multiple convictions and concurrent sentences should be permitted in cases where a defendant has committed several interrelated acts so long as the convictions are not for included offenses. However, in King, the court was discussing multiple convictions for separate and distinct statutory offenses. In Cox, the court was concerned with multiple convictions for the same offense. This crucial distinction has previously been recognized in People v. Boyd (1980), 87 Ill. App. 3d 978, 987, and People v. Walton (1973), 13 Ill. App. 3d 492, 495. In fact, the Third District Appellate Court has expressly found that King did not modify Cox. People v. Short (1978), 62 Ill. App. 3d 733, 736.

After reviewing the aforementioned authority, we are drawn to the conclusion that Cox and King were meant to co-exist, each dealing with different sets of facts. For these reasons, we choose not to follow Zeiger but instead find that Cox is controlling. Judgment will be entered accordingly.

The defendant next argues that the trial court erred in imposing an extended-term sentence because his offenses were not accompanied by exceptionally brutal or heinous behavior. In the alternative, the defendant argues that even if his conduct could be considered brutal or heinous, the 45-year sentences are still clearly excessive.

Absent a clear showing of an abuse of the trial court’s discretion, a sentence will not be altered on review. (People v. Cox (1980), 82 Ill. 2d 268.) The defendant has failed to demonstrate that his sentences were not justified by the facts of record and therefore constituted an abuse of discretion. Our review of the facts indicate that extended-term sentences were appropriate.

The defendant forced the victim to submit to 40 minutes of continuous sexual abuse during which 12 acts of sexual and psychological abuse took place which we need not enumerate here. It is sufficient to say that the defendant’s conduct was cruel, brutal, and degrading. Although the victim was not seriously harmed in a physical sense, the mental anguish and the strong possibility of harm which accompanied the defendant’s use of a knife to intimidate the victim is sufficient to support a finding of exceptionally heinous behavior. The sentences are affirmed.

The defendant makes the final argument that if one of his convictions for deviate sexual assault is vacated, the cause should be remanded for resentencing since the trial court may have been influenced by that conviction when imposing sentence on the remaining convictions. We find no reason to remand.

A case need not be remanded for resentencing where there is no indication that the sentencing court considered the vacated conviction. (People v. Wilson (1981), 93 Ill. App. 3d 395, 397.) Here, there is no evidence tending to show that the trial judge considered the extra conviction in passing sentence on the remaining convictions. Furthermore, we have reviewed the defendant’s sentences and found that extended 45-year terms of imprisonment for rape and deviate sexual assault are within the court’s discretion under the facts of this case.

Except for the vacation of the conviction and sentence on the second count of deviate sexual assault, the judgment of the circuit court of Peoria County is affirmed.

Affirmed in part; vacated in part.

STOUDER, P.J., and SCOTT, J., concur.


author: JUSTICE GREEN

text:
    THE VILLAGE OF PAWNEE et al., Plaintiffs-Appellants, v. J. THOMAS JOHNSON, Director of the Department of Revenue, et al., Defendants-Appellees.
    Fourth District
    No. 4—83—0220
    Opinion filed November 3, 1983.

      Thomas W. Kelty, of Pfeifer & Kelty, P.C., of Springfield, and John M. Myers, of Friedman & Koven, of Chicago, for appellants.
    Neil F. Hartigan, Attorney General, of Springfield (Imelda R. Terrazino, Assistant Attorney General, of counsel), for appellees.
   JUSTICE GREEN

delivered the opinion of the court:

The principal issue in this appeal is whether certain statutory provisions (Ill. Rev. Stat. 1981, ch. 24, par. 8 — 11—1; ch. 85, par. 902; and ch. 102, par. 34) require the defendants to credit municipalities with the interest income which accrues on tax receipts collected, invested, and distributed by the defendants pursuant to the Municipal Retailers’ Occupation Tax Act (Ill. Rev. Stat. 1981, ch. 24, par. 8— 11 — 1). We conclude that these provisions do require defendants to credit plaintiffs with such interest income.

On September 29, 1982, the plaintiffs, village of Pawnee and city of Springfield, municipalities which have allegedly levied taxes pursuant to the Municipal Retailers’ Occupation Tax Act (MROTA) (Ill. Rev. Stat. 1981, ch. 24, par. 8 — 11—1), filed a three-count complaint in the circuit court of Sangamon County against the defendants, J. Thomas Johnson, Director of the Department of Revenue of the State of Illinois (Director), Roland W. Burris, Comptroller of the State of Illinois (Comptroller), and Jerry Cosentino, Treasurer of the State of Illinois (Treasurer).

Plaintiffs alleged that although MROT receipts are kept in interest-bearing accounts after collection and prior to disbursement, defendants, and their predecessors in office, have failed to credit the plaintiffs with the interest income earned on such receipts.

Count I of the complaint alleged that by failing to credit plaintiffs with the interest income earned on the tax receipts, defendants, and their predecessors in office, have violated the provisions of the MROTA, section 2 of “An Act relating to certain investments of public funds by public agencies” (Public Funds Act) (Ill. Rev. Stat. 1981, ch. 85, par. 902), and section 1 of “An Act in relation to the deposit of public funds” (Public Deposits Act) (Ill. Rev. Stat. 1981, ch. 102, par. 34).

Counts II and III of the complaint, respectively, alleged that defendants' failure to credit plaintiffs with the interest income earned on MROT receipts constituted a breach of fiduciary duty and a constitutional violation of the General Assembly’s exclusive right to raise revenue (111. Const. 1970, art. IX, sec. 1).

On January 20, 1983, plaintiffs filed an amended motion for class determination (Ill. Rev. Stat. 1981, ch. 110, par. 2 — 802) seeking to include all Illinois municipalities within the proposed class.

On February 23, 1983, the trial court entered orders (1) allowing the plaintiffs’ motion for certification as a class, and (2) allowing defendants’ motion to dismiss in bar of action each count of the complaint for failure to state a cause of action. Plaintiffs maintain on appeal that the trial court erred in dismissing their complaint because each of the three counts properly states a cause of action.

The Director has the “full power” to administer and enforce the MROTA (Ill. Rev. Stat. 1981, ch. 24, par. 8-11-1). The MROTA also provides that the Director shall collect all taxes and penalties due under the Act and pay over all such receipts to the Treasurer, who holds these receipts as trustee. On or before the 25th day of each month the Director must certify to the Comptroller the share to be paid each municipality. The municipalities’ share is the amount collected during the second preceding calendar month by the Department for the municipality, less certain deductions including a 2% administrative charge which is to be retained by the Treasurer “to cover the costs incurred by the Department in administering and enforcing [the MROTA].” (Ill. Rev. Stat. 1981, ch. 24, par. 8-11-1.) The Comptroller is required to cause warrants to be drawn for each municipality in the amount certified by the Director.

We note, however, that the MROTA does not expressly provide a method for allocating interest income earned on MROT receipts. Plaintiffs argue that the MROTA must be construed in pari materia with section 1 of the Public Deposits Act (Ill. Rev. Stat. 1981, ch. 102, par. 34) and section 2 of the Public Funds Act (Ill. Rev. Stat. 1981, ch. 85, par. 902).

Section 1 of the Public Deposits Act requires only that a “treasurer or other custodian of public funds” must invest collected funds which are “not needed for immediate disbursement” within two working days at “prevailing [interest] rates or better.”

Because neither the MROTA nor the Public Deposits Act specifically addresses the issue of interest income earned on MROT receipts, an analysis of section 2 of the Public Funds Act is necessary for the resolution of this issue. Section 2 provides:

“To the extent a public agency has custody of funds not owned by it or another public agency and does not otherwise have authority to invest such funds, the public agency may invest such funds as if they were its own. Such funds must be released to the appropriate person at the earliest reasonable time, but in no case exceeding 31 days, after the private person becomes entitled to the receipt of them. All earnings accruing on any investments or deposits made pursuant to the provisions of this Act shall be credited to the public agency by or for which such investments or deposits were made, except where by specific statutory provisions such earnings are directed to be credited to and paid to a particular fund.” (Emphasis added.) Ill. Rev. Stat. 1981, ch. 85, par. 902.

Plaintiffs argue that section 2, as interpreted by the supreme court in City of Peoria v. O’Connor (1981), 85 Ill. 2d 195, 421 N.E.2d 912, provides that the interest income earned on funds invested by one public agency (e.g., the State Treasurer) on behalf of another public agency (e.g., the municipalities) should be credited to the public agencies for which the investments were made. On the other hand, defendants, relying on a reading of the entire last paragraph of section 2 and the legislative history of that section, argue that section 2 applies only to interest income earned on privately owned funds held by a public agency.

In City of Peoria, a township collector was designated, pursuant to statute, to collect certain taxes levied by various taxing authorities, including the county, the township itself, and other political subdivisions. The township argued that it was entitled to retain interest that had been earned on collected tax receipts prior to distribution of those receipts to the other taxing bodies. The supreme court disagreed, stating:

“The taxes received by the township collector result from assessments and levies by the county, the township, and other political subdivisions. The invested funds belong to those taxing bodies, and the township collector’s authority is only to collect and hold those funds until the time disbursement is required. His authority to invest these funds by virtue of being their custodian does not affect their ownership, for he is simply acting in a statutorily created fiduciary or agency capacity. The township may not keep the interest earned on these funds simply because a township officer collected and invested them on behalf of other public agencies. The clear language of section 2 [of the Public Funds Act] indicates that this income should be credited to the public agencies for which the investments were made.” (Emphasis added.) 85 Ill. 2d 195, 207, 421 N.E.2d 912, 917.

Although the section is inartfully drafted by admixing two concepts within it, we agree with the supreme court’s interpretation of section 2 as set forth in the City of Peoria case. Moreover, in Shell Oil Co. v. Department of Revenue (1983), 95 Ill. 2d 541, 449 N.E.2d 65, the supreme court allowed taxpayers to recover the interest income which had been earned on taxes paid under protest. Although the plaintiffs there were private entities, the supreme court in the Shell Oil Co. case indicated that section 2 requires that the interest income earned must be given to the entities for which the investments were made.

The MROTA provides that the State Treasurer (1) holds the MROT receipts as trustee for the municipalities, and (2) is entitled to retain 2% of such receipts as an administrative charge. If the Treasurer is entitled to greater compensation, the legislature can increase the administrative fee which the Treasurer retains. Accordingly, we conclude that section 2 of the Public Funds Act, when construed with the MROTA and the Public Deposits Act, requires defendants to credit the interest income earned on MROT receipts to the plaintiffs and the members of their class, the ultimate owners of the receipts.

Each of the plaintiffs’ three counts requests (1) a declaration that defendants’ failure to credit the plaintiffs for the interest on the tax receipts is wrongful, (2) an accounting by the defendants of the amount of interest earned since 1943 on tax receipts collected pursuant to the MROTA, and (3) an order directing payment to the plaintiffs of interest which has been wrongfully withheld in the past by defendants.

Defendants argue that even if plaintiffs are entitled to the interest income earned on MROT receipts, the relief requested by plaintiffs is improper. Specifically, defendants argue that because plaintiffs do not attempt to define a particular fund from which they could obtain reimbursement of interest income earned on MROT funds since 1943, plaintiffs seek an impermissible monetary judgment against the State.

We note that in the Shell Oil Co. case the supreme court determined that the issue of whether an award of interest would be a money judgment against the State can be determined by examining the source from which the interest money would be paid.

Here, plaintiffs would be unable to recover for past sums of interest income which have already been placed by the Treasurer in the general revenue fund. However, an award of undistributed and future interest would be appropriate because (1) an award of such interest income would not result in a money judgment against the State since the Treasurer will pay the interest generated in his capacity as a trustee, and (2) the ultimate source of the interest income would be the bank or other entity with which the fund was invested. Shell Oil Co.

Accordingly, we conclude that the trial court erred in dismissing count I of plaintiffs' complaint for failure to state a cause of action. However, we agree with the trial court that counts II and III of the complaint fail to state a cause of action.

In count II plaintiffs argue that defendants’ failure to credit plaintiffs with the interest income earned on MROT receipts constitutes a breach of a fiduciary duty. Plaintiffs maintain that defendants owe a fiduciary duty because the MROTA provides that (1) the Director is to enforce the Act on behalf of the municipalities, and (2) the Treasurer holds the tax receipts as trustee.

We agree with defendants that public officials are protected when, in the performance of their public duties, they in good faith adopt a mistaken construction of a statute. No action will lie for a public official’s mistakes in judgment as to his duties under the law, absent a showing of wilfulness, or malice. (McCormick v. Burt (1880), 95 Ill. 263; 63 Am. Jur. 2d Public Officers and Employees sec. 289, at 799-800 (1972).) Here, no such wilfulness or malice was alleged in count II of the complaint. No cause of action would lie against the defendant, public officials, for past failure to make the required payments of interest to the municipalities.

Plaintiffs’ final contention is that defendants’ failure to credit them with the interest income earned on MROT receipts constitutes a constitutional violation of the General Assembly’s exclusive right to raise revenue (Ill. Const. 1970, art. IX, sec. 1).

We conclude that plaintiffs have failed to allege sufficient facts to establish that defendants have violated article IX, section 1. That provision pertains to the levying of taxes by governmental units. Here, plaintiffs do not allege any facts showing that defendants are unconstitutionally levying taxes. In addition, because we have concluded that the MROTA, the Public Funds Act, and the Public Deposits Act require defendants to credit plaintiffs with the interest income earned on MROT receipts, there is no reason to further address this constitutional issue.

For the reasons stated herein, we reverse that portion of the judgment entered by the circuit court of Sangamon County dismissing count I of plaintiffs’ complaint, and we affirm that portion of the judgment dismissing counts II and III.

Affirmed in part, reversed in part and remanded.

WEBBER, P.J., and TRAPP, J., concur.


author: JUSTICE KASSERMAN PRESIDING JUSTICE HARRISON,

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. PAUL TOLBERT, Defendant-Appellant.
    Fifth District
    No. 82—702
    Opinion filed November 9, 1983.
    HARRISON, P.J., dissenting.
    Randy E. Blue and Dan W. Evers, both of State Appellate Defender’s Office, of Mt. Vernon, for appellant.
    John R. Clemons, State’s Attorney, of Murphysboro (Stephen E. Norris and Mark A. LaRose, both of State’s Attorneys Appellate Service Commission, of counsel), for the People.
   JUSTICE KASSERMAN

delivered the opinion of the court:

The defendant, Paul Tolbert, pleaded guilty to two counts of burglary and on March 24, 1982, was sentenced to probation for a term of two years. On October 12, 1982, a petition to revoke probation was filed which alleged that defendant had committed a burglary on August 9, 1982. On October 12, 1982, defendant was in court and was personally served with the petition which tolled the period of probation under the provisions of section 5 — 6—4(a)(3) of the Unified Code of Corrections (Ill. Rev. Stat. 1981, ch. 38, par. 1005 — 6—4(a)(3)). After a hearing on the petition, the court found that defendant had violated probation. Defendant’s probation was revoked and he was sentenced to three years’ imprisonment. At the sentencing hearing, the following occurred:

“[T]he Court now sentences Paul Eugene Tolbert to three years in the Illinois Department of Corrections. He will be given credit for the time he has served in jail. I will also give him credit for time he has served on probation, which is very little, relatively speaking, because he wasn’t on very long when he committed the second act. ***
MR. BAERTSCHI [assistant State’s Attorney]: Judge, credit for time on probation until the time of the offense? Or until what time?
THE COURT: Well, he’s going to get credit for — okay. How much later was he arrested?
MR. BAERTSCHI: The offense occurred on August—
THE COURT: I think I can only give him credit until the offense occurred. That’s what I intended. I forgot he wasn’t arrested that time. From the time he was placed on probation until the commission of the offense, that’s what he gets credit for. And the time of his incarceration — total time of incarceration.”

The judgment and sentence order of the court states, in part, that the court “fixes the time of imprisonment at 3 years with credit for 61 days served and 138 days on probation to the date of the offense.

On appeal, defendant contends that he should be given credit for an additional 64 days served on probation from August 9, 1982, until October 12, 1982, while the State argues that the trial court statement was both a denial of and a credit for time served on probation. The State further contends that if the court has discretion to deny a defendant credit for all time served on probation (Ill. Rev. Stat. 1981, ch. 38, par. 1005 — 6—4(h)), the court has the discretion to deny defendant credit for only part of the time served on probation.

The issue raised by defendant’s first contention was addressed by the court in People v. Hollingsworth (1982), 89 Ill. 2d 466, 468, 433 N.E.2d 682, 683, in which our supreme court stated: “If the court does not expressly deny credit, the defendant is entitled it under section 5 — 6—4(h) of the Unified Code of Corrections (Ill. Rev. Stat. 1979, ch. 38, par. 1005 — 6—4(h)), which contemplates that credit will usually be allowed.” Our examination of the record in the case at bar leads us to conclude that the court expressly denied defendant credit for the 64 days in dispute. The trial judge expressly stated that it was his intention to give defendant credit for the time spent on probation only up to the date of the commission of the second offense.

Further, we conclude that the State correctly asserts that it is permissible for a trial court to deny a defendant credit for only part of the time he spent on probation under section 5 — 6—4(h) of the Unified Code of Corrections (Ill. Rev. Stat. 1981, ch. 38, par. 1005 — 6— 4(h)), which provides: “*** Time served on probation *** shall be credited by the court against a sentence of imprisonment or periodic imprisonment unless the court orders otherwise.” The courts previously have recognized the authority of the trial courts to grant only partial credit by affirming sentence credit granted to a defendant only for time spent in custody while on probation and denying him credit for time spent on probation but not in custody. (People v. Dixon (1976), 41 Ill. App. 3d 910, 354 N.E.2d 638; People v. Smithson (1978), 65 Ill. App. 3d 564, 382 N.E.2d 536.) Therefore, the court did not err in granting defendant only partial credit for the time he spent on probation.

The State concedes that defendant should receive an additional four days’ credit for time spent in custody on the charges for which he was convicted. Consequently, defendant is entitled to 65 days’ credit for time served while incarcerated.

For the foregoing reasons, the sentence of three years’ imprisonment is affirmed and the cause is remanded to the circuit court of Jackson County for the issuance of an amended judgment order and mittimus reciting that defendant is entitled to 138 days’ credit for time served on probation and 65 days’ credit for time served while incarcerated.

Affirmed and remanded with directions.

JONES, J., concurs.

PRESIDING JUSTICE HARRISON,

dissenting:

I respectfully dissent.

In People v. Hollingsworth (1982), 89 Ill. 2d 466, 468, 433 N.E.2d 682, our supreme court stated that “[i]f the court decides to deny credit for probation time, it should say so; the point should not be left to inference or interpretation. If the court does not expressly deny credit, the defendant is entitled to it.” In so holding, the court unequivocally rejected the notion that such credit may be denied by anything less than an actual statement to that effect. In the instant case, the court did not expressly deny credit at any time, and the majority’s interpretation of the court’s comments as a denial of credit runs contrary to the supreme court’s reasoning and adoption of a rule that makes it “unnecessary for anyone to try to figure out what the sentencing judge had in mind where he could have properly either granted or denied credit.” (89 Ill. 2d 466, 468.) For these reasons, I would remand for the issuance of an amended mittimus allowing defendant credit for the full time served on probation.